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Scaling Sanergy: Growing a Promising Sanitation Startup

MIT Sloan > LearningEdge > Entrepreneurship > Scaling Sanergy: Growing a Promising Sanitation Startup
Anna Waldman-Brown and Georgina Campbell Flatter
Sanergy was installing 100 new toilets per month in the slums of Nairobi, Kenya, but David Auerbach’s team still had a long way to go before reaching their targeted economies of scale (at which point they could provide sanitation services to all Nairobi slum residents at less than one-fifth the cost of a running-water sewer). Now that Sanergy’s for-profit arm was finally generating revenue, it was time to consider the next steps to grow the company. Economies of scale in collection and conversion processes would allow Sanergy to sell waste-converted products to farmers at greater volume and profit, but first they had to install many more toilets, which in turn demanded additional funds.
Learning Objective
To generate class discussion on the challenges entrepreneurs and startups face when scaling an early-stage success in an emerging market; consider costs and benefits of saturating the current market versus expanding to new markets, and of researching and diversifying product line vs. pushing proven product line more widely.
Could be taught in the following course(s)
strategy; leadership; entrepreneurship; emerging markets; sustainability