Meet Shedrack Charles, an electrical and automation engineer who graduated in 2017 with five years of working experience in the renewable energy and technology sector, which was a key to the foundation of NEXTEC International Engineers Group. The company is a startup founded and registered in 2020, and the sole goal was to do research and development in different sectors here in Tanzania. The company’s vision is to become the leading technology company in the country and neighboring countries; the mission is to simplify people’s day-to-day activities by conducting research and development and developing technologies that reduce operating costs while increasing revenues and earnings. Their tagline is ‘emerging technologies for a better tomorrow.’ They are based in Arusha, but they have been carrying out our projects in various regions depending on where we identify the problem.
The Gap and Inspiration behind
Shedrack reveals that as the business expanded, it increased its emphasis on the agricultural and renewable energy sectors. They have created two products that make daily farming and fishing easier and less expensive. He explains that while there were five co-founders when the business started, only he is left as the sole founder because the others were hired. “Running alone was no longer an option because, as you are aware, being an entrepreneur takes work. This forced me to look for other partners to work with, bringing our team size back to five people—two women and three men,” added Shedrack.
Shedrack explains that they currently have two products; one is called the NSwitch and is used by farmers. “We are trying to promote irrigation agriculture as the primary method and a better scheme for farmers to come from where they are at the moment to grow fast and earn more because climate change and other factors have been contributing to lower yields recently. So, to promote irrigation agriculture and assist farmers in lowering operating costs, we created a device that enables farmers to monitor and control all ongoing irrigation activities even when they are not physically present and are entirely offline. He explains that they install the device in their farms and integrate it with the irrigation infrastructure, as well as the water pumps and tanks, so they can communicate with their irrigation infrastructures even when they are not physically present using standard text messages. The device provides feedback and keeps them up to date on what is happening at the farms, especially on their irrigation infrastructures. “By doing so, they discovered that they had reduced their energy and water bills, and some of them did not have to hire many caretakers to take care of their day-to-day activities when they were not physically present, as well as it gave them the freedom to do other things and be more productive.”
The second product is currently in operation in the energy sector; installing Microgrids in areas the national electric grid has yet to reach. According to Shedrack, there are at least fifty islands in Mwanza alone, and NEXTEC has visited and spoken with at least eight of them. He explains that fossil fuel is prohibitively expensive for fishermen, and this has been a driving and enabling factor in their ability to set up one operational microgrid that serves up to 60 fishermen, providing them with clean energy. Because fishermen require adequate lighting when fishing at night, the power supplied by NEXTEC has been advantageous, allowing them to charge the batteries and use them in their daily activities. They have been able to avoid using fossil-fuel-powered generators due to this. “We were able to set up a grid that costs at least half what they used to pay for fossil fuels and has helped them save operating costs while maintaining their earnings.” He added.
Investing in the NEXTEC
Shedrack agrees that business investment, especially among young early stages entrepreneurs, is a significant challenge, particularly in Tanzania. “I have interacted with many people from other countries, especially investors. Some are offering to invest in businesses here in Tanzania. Still, they are hesitant because the startup and investment policies are unclear, making them worried they will lose money on things like double taxation and other similar problems,” explains Shedrack. In his case, though, Shedrack had been employed for three years before he turned to start up a life- changing company.
He started by traveling to remote places in Tanzania to find out what problems they were facing concerning his field of expertise and the solutions he could bring to those societies. He explains that by utilizing his knowledge and experience in engineering and renewable energies, he used his savings to design and develop the products mentioned earlier. He further explains that the two products have been promising, and after some time, he started to see the payback of his hard work and commitment. Shedrack explains that as the product made a difference in the community, he later managed to secure funding and grants from Jakaya Mrisho Kikwete Foundation, Westerwelle Startup Haus in Arusha, and most recently from OpenMap Development Tanzania, which has helped him develop the products and having the business stay afloat till today.
The business Process
NEXTEC follows a unique approach to customer interaction by actively visiting communities and villages and immersing themselves in the local culture. Shedrack, a representative of the company, explains that this process involves spending at least a week with the community to gain insights into their way of life, economic activity, income levels, challenges faced, and their specific needs. By listening to the community’s input, NEXTEC is able to understand the kind of products or services that are in demand and what can be done to help people overcome their challenges. To ensure that their products and services meet the needs of the community, NEXTEC collaborates closely with local authorities and the people themselves. They use the feedback they receive to develop a viable business case and product that will benefit the community. Once the product is developed, it is delivered for testing to ensure that it works effectively. When NEXTEC is satisfied with the results, they move on to the paying phase.
This approach has been successful in both sectors that NEXTEC is working in. The company has been able to develop products that address specific needs and are highly beneficial to the community. By focusing on the needs of the people, NEXTEC has been able to establish trust with their customers and build long-lasting relationships. This approach can serve as a model for other businesses that aim to create innovative solutions that are tailored to the needs of their customers.
The Competitive Advantages
Shedrack agrees that there is real competition in the innovation and technology sector. He explains that although huge companies invest and provide services in the industries they operate in, there is little competition, especially in the products they develop and supply. In the agriculture sector,
Shedrack shares that while other providers’ products might sometimes require additional operating costs like internet bundles and monitoring, they at NEXTEC are working on cutting off these costs. “Our product is completely offline and only uses SMS, which is considered a normal item in a Tanzanian’s mobile phone; this means they are using what they already have to get something else, thus reducing operating costs.” He elaborated.
He further shares that there is significant competition in the energy sector, especially in the renewable energy industry; however, NEXTEC’s differentiating factor is how they manage relationships with their target customers. He shares the process of being part of the community you are planning to deliver your product, which not only makes you part of the community but also helps you build a bond and trust with that community.
Achievements and Challenges
Shedrack expresses his pride in developing the two products and, more importantly, in being among the first to establish and operate a Tanzanian-owned operational Microgrid. “These two products inspired one of the Japanese companies that manufacture and supply water pumps, with whom I was speaking, to send representatives to Arusha to learn more about the products and see how we can enter into a Memorandum of Understanding for them to become suppliers of irrigation infrastructures fitted with my device.” Shedrack elaborated. “Of course, these are things I take to heart,” he added.
“To be honest, building NEXTEC has been a huge challenge in financial terms and teamwork.” Shedrack says. He explains that not having a team to work with early on was a massive setback in ensuring that the company’s vision and mission became a reality. Further, he shares that he has learned from his startup and others that convincing people to believe in your idea is the most challenging part because many people are hesitant to give their all because they are unsure whether it will succeed or fail. But the good news is that if you believe in your idea and are willing to demonstrate how it will work, you will eventually find a team.
Enhancing operations and the Long-term goal
Shedrack, like other startup founders, is interested in the talk about startup policies; this includes but is not limited to taxation and investment policies. Shedrack explains that there are many kinds of unnecessary instruction, procedures, and activities to be done, which hinders many young people from implementing their ideas due to the fear of the unknown.
He urges the government and the innovation ecosystem as a whole to work with startups in setting up and provide reasonable regulations in terms of taxation, laws, and guidelines on starting and running startups themselves that will make it easier could have been easier. With proper and straightforward regulations, it will be easier to attract current reluctant investors and youth looking to employ themselves with their talents and create employment opportunities for others. NEXTEC aims to deliver the NSwitch to 1.5 million farmers in Tanzania within the next five years. And in the energy industry, they aim to have at least 50 operational microgrids but also serve at least 2000 fishermen.
Advice to innovators and Final thoughts
Shedrack shares that innovation entrepreneurship takes work. He explains that you need to put in much work, be patient, and have a high tolerance. He urges startups to invest more in research and to understand the customers their products target. He further explains that you need to make sure you know what your product will be and how it will impact lives before you can start looking for funds and grants because it will become challenging to manage the funds if you do not have I place a near-perfect operating model.
To read more about our reports featuring Startups in Tanzania https://bit.ly/ImpactTechTZ2021-Report and http://bit.ly/TECHTZ2022