The Jaza Model
In the early days of a company the conditions are uncertain. The market is unclear, the customers unknown and the product somewhere between a hope and prayer. There’s never enough resources, no clarity around tasks and the list of things to learn is never ending. If you’re lucky, you figure some piece of the puzzle out only to find that success in one aspect leads to demands from another. It can be disorienting, frustrating and often feels like you take two steps forward only to take one step back.
But this is the job of a startup. The whole point is to learn how to solve a problem that hasn’t been solved before. If the solution was known there would be no opportunity.
The job of a start-up is to learn about the problem, the solution and then how to make money.
If you want to understand the problem you have to be willing to listen. I love spending time at Hubs just waiting to see who shows up. It doesn’t take long for someone to walk up to the Hub with a blue battery pack and their opinions: a customer will always tell you what they need. The good news is that listening to their problems and acting on their needs will always lead to a better business.
At Jaza we’ve been blockheaded in this regard a few times, and will most certainly be again, but this is what we know for sure:
- Our customers will always want a cheaper solution
- Our customers will always want more energy
- Our customers will always want the ability to power more things
We could easily spend the rest of our lives trying to make our solution better in these three key domains.
Furthermore, because we expect our customers to come back to us every 1-3 days, It would do us well to provide great customer experience and to make their time getting a battery as quick and painless as possible. Any research and product development we do should improve on one of the three customer focal points, or improve how we deliver our service. Anything we learn should benefit our customers.
The next one is a bit harder to nail down, the solution.
We’ve done a lot of experimentation in this regard, and it’s taken a few hard lessons to get to something that works for our customers. They like powering the appliances that they already have, and they like the amount of energy we currently provide, as long as it’s priced right. I know we’ve landed on something special with our offering because every time I ask the leadership team what we should change I can hear the exhaustion in their voices, ‘we’re good, our customers just want us to deliver on the service they were promised!’. We’ve got waitlists at each Hub and we’re running full tilt to keep up with the demand.
The last job of a start-up is to discover a highly repeatable business model.
A business model is a fancy way of saying the way your company makes money. The goal is to create a process that you can do over and over again. Once you’ve got something worth doing more of, things start to get easier and you can scale and grow a big, meaningful business. The quest for a repeatable business model is why I’m willing to go from 10 Focus Hubs, to 2 Hubs at 300 customers right down to 1 Focus Hub. I’m searching for the Hub worth building a thousand times and I know it’s out there.
So what is the Jaza model?
The model is pretty simple — we make all of our investment upfront into the core infrastructure required to power our customers. The Hub, the solar equipment and the batteries are all purchased before a Hub goes live. We look at population data to pick a location, and once the lease is signed we’ve already made a pretty significant bet on that location. All of these costs are fixed, and we will work to bring these costs down over time, though either bulk orders or heroic engineering feats.
The next step is where our business happens. For the most part we’ve already made our investment, and if our job is done right our Hubs will print money for the next 100 years. We could sit back and collect swap revenue for the rest of time. There are no other inputs required with one exception: a great Jaza Star.
You’ve all heard it a million times, but this is why it’s true. The Jaza Star is the most important person in the company because she is the defender of our future cash flows. Everything else in the Jaza-verse could go away, including the CEO, but as long as there are Hubs, a healthy stock of Jaza Packs and a Jaza Star then we are making money forever. If it’s 1,000,000 TZS a month for 100 years then a single Hub will make 1,200,000,000 TZS and Jaza is the greatest business that ever was.
It’s that simple. We invest in a Hub for the future swaps. The way we guarantee those swaps is through happy customers. 100% of our investment, our time and our energy is there to serve the Jaza Star, so she can collect on our business for the years to come. If we do it right, then we put some Stars on the Map. If we build something great we can continue to serve our customers for the next 100 years.
