Starting a social enterprise is hard. As a startup, you face tremendous uncertainty. Your business is full of leaps of faith, fundamental ideas about your company that you hold but can’t yet prove. Paramount among these is the following: Customers will like the service we’re providing and will be willing to pay for it.

NextDrop informs residents in India about the availability of piped water in order to help them lead more productive, less stressful lives. After three months of providing text message updates to residents in Hubli, using information sourced from utility employees who operate local valves, we believe we’ve created a service that people want and are willing to pay for. Never was this clearer to us than after what happened recently.

‘Is this nextdrop?’

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B.V. Nadgir visits NextDrop.

It was around 11 a.m. in the morning, a hot day in Hubli. Four members of our six-person team were working in our office in Lingrajnagar. Our office is on a dirt road in a residential neighborhood, about half a mile back from the main two-lane highway that connects the twin cities of Hubli and Dharwad. From the dirt road, it’s difficult to see our office. The only thing to distinguish it from the other residences is a NextDrop sticker on the door.

“Namascara,” a man said, appearing at our open door. “Is this NextDrop company?”

B.V. Nadgir, a branch manager at a local bank, had come by our office because he wanted to sign up for our service. Why did he take the trouble to come looking for us, we wondered? Why now?

The day before, water had been provided to his area. Because of a scheduled pipe repair, the utility had provided water to his area one day early in the late afternoon. It would normally have reached his home the following morning. Because of that change, his family had missed most of the water, only collecting water for half an hour. For many of our customers, it seems that knowing about a single disruption in the schedule is worth the cost of 10 rupees for a monthly subscription.

What we’ve learned

In the spirit of sharing our progress on testing our leaps of faith, below is a comprehensive update on our progress and current status since our Knight News Challenge award last June. We’ve learned a lot already, but there’s a long way still go!

Leaps of Faith:

  • Customers will want/use the NextDrop service
  • Customers will pay for the service
  • Utilities will want/use the NextDrop service
  • Utilities will pay for NextDrop
  • Valvemen will inform the NextDrop system in a timely manner
  • We will find ways to verify the accuracy of this information

Customer (Household) Facts:

  • 1,027 registered customers receiving NextDrop service as of November 18
  • Collected revenues from 95 paying customers (10 rupees per month for service)

Customer (Household) Learnings/Conclusions:

  • Acquisition Costs (costs to NextDrop to register customers for a free one-month trial): 50 rupees
  • Key drivers of the costs: Intern/employee salaries
  • Main reason some households did not sign up for NextDrop service: Did not trust NextDrop

Utility Facts:

  • Partnership signed with Hubli Municipal Corp. on Sept. 30, 2011 acknowledging NextDrop as an officially sponsored value-added service
  • Utility live Dashboard launched October 28

NextDrop Product Facts:

  • 662 Water events reported in 22 separate valve areas (as of November 11)
  • Nine active valvemen reporting water events

Challenges:

  • Shifting water schedules: The water is now being provided once every three days, and in some areas every other day (as opposed to once every five days). This could make the NextDrop service less valuable to households. Resolution: Hubli is a testing ground for the service and our proof of concept. We anticipate learning enough in Hubli to move to at least two other cities by June 2012.
  • Verifications: To verify the accuracy of reports from utility employees, we tried calling random people as soon as we received a valve open notification. However, people picked up the call but immediately put it down. We found out that since water came at 5 a.m., people were not paying attention to what they were doing. So when they received a random call, they would pick up and hang up. Resolution: We are now signing up six to eight people per valve area (~250 people) to be official NextDrop “verifiers.” Our hypothesis is that if they know to expect a call, they will answer and verify. We’ll have to find ways to incentivize the verifiers to do this. We’re also looking into low-cost sensors as an alternative strategy.

Social Impact:

  • Because we’re committed to understanding the impact of the NextDrop service on households, in November we found a Ph.D. student from UC Berkeley to run a rigorous impact evaluation for us starting June 2012.
  • Customer feedback, taken from a phone survey in June 2011:

“My father and mother both are employees and I am going to college, we don’t know water supply schedule, while getting your SMS we came to know water supply, on that time we call to the neighbor fill the drinking water. Always we open the tank valve but drinking water we will inform to the neighbor.”

“I am going to college on that and my parents are employees, when I get the SMS from NextDrop I will inform to my parents then they will come to home and fill the water”

“When we are in the home we will know water flowing, but if we in outside and night time your SMS is very useful.”

“Once all the family members went to marriage party in near to Hubli (one hour journey), when I get the SMS from NextDrop I came to know that water is flowing, suddenly I send my younger brother to home and fill the water because next day all the relatives are coming to the home, if we missed the water we have to wait again 6 to 8 days. Your service is very useful on that time.”

“Once we went for relatives’ function, so we are waiting bus in bus station when I get your SMS on that time we send one person to home and fill the water.”

“Once I went for market I got SMS from NextDrop then I called my son (he was in outside) go to home and fill the water. On that it’s useful.”