D.I.Y. RENEWABLES
Opportunity Analysis & Market Research
In order to successfully develop and deliver a product that answers a real societal need, it is important to gain an understanding of some target market, and identify a niche that needs to be filled. In order to gain this sort of insight, it is essential for an entrepreneurial effort to have quality methods of gathering data.
D.I.Y. Renewables used two main methods of gathering data on the target markets and on potential customers: personal interviews and an automated online survey. The rationale behind this approach was that the online survey would be able to gather a large amount of data quickly, and could allow D.I.Y. Renewables to make broad-strokes judgements on how to further develop the Biodigester product and the group's business approach. However, the group was also aware that relying on a survey would create blind spots in the data.
Surveys have the fundamental problem of relying on their creator's existing knowledge of a topic and being able to ask the correct questions that return insightful answers. While a survey does a very good job of gathering numbers and statistics, novel thoughts and innovative ideas can easily be blocked out by over-reliance on such techniques. In order to compensate for this weakness, D.I.Y. Renewables also conducted several face-to-face interviews with potential customers using a more relaxed approach. The interviews were intended to use the survey as a general guide for questioning, but interviewers made an effort to allow the potential customers to speak their mind about the product and about their needs. This approach would allow the customers to introduce new ways of thinking, show D.I.Y. Renewables their unique perspectives, and perhaps introduce a concept that the group would not have been able to think of otherwise.
Interview Videos
The following videos were recorded by D.I.Y. Renewables members Titilope and Alex, and have been posted here for the benefit of those interested in the technology.
Interview #1 (Titilope)
Interview #2 (Titilope)
Restaurant
Interview #3
(Alex interviewing Benjamin)
Restaurant​
Interview #4
(Alex interviewing Lilian)
Restaurant​​
Online Survey Results
D.I.Y. Renewables distributed an online survey powered by the free survey service at www.typeform.com. This service allows the user to easily build and distribute a survey and get detailed analytics on the behavior of those who took it, as well as quantitative statistics on the results themselves. Using the TypeForm survey, D.I.Y. Renewables was able to gather 83 unique responses out of 125 unique user visits.
The survey can be found here: https://diyrenewables.typeform.com/to/PH4wDE
The results to the survey can be found here: https://diyrenewables.typeform.com/report/PH4wDE/keqw
However, these results do not include the short-answer quantitative questions included in the survey that require the taker to enter a number, such as the questions asking what size gas container they typically buy, how long it takes them to use, how much money they pay, and how far they travel to purchase their fuel. The reason these questions were left in the form of short-answer submissions was due to the international nature of the survey, and the lack of standard metrics for measuring fuel volume, and the inherent difficulty in automating a survey to deal with this.
The survey was distributed to potential customers all over the world, so answers were being gathered in different units such as Nigerian naira, United States dollars, Indian rupees, and of course both imperial and metric weight and volume measurements. However, access to this kind of quantitative data allows D.I.Y. Renewables to get an idea of the expected volume that a household Biodigester biogas generator would be expected to process, as well as the likely price that the average customer would be willing to pay for one.
Conclusions
For the purposes of this analysis, we are focusing on our exploratory market limited to Nigeria. Using the information gathered from the face-to-face interviews and survey results, D.I.Y. Renewables was tasked with evaluating the amount of entrepreneurial opportunity the Biodigester offers and re-evaluating its goals for the product. This was in itself a challenge, since the potential market for this product is so large. Biogas generation technology potentially answers a problem experienced worldwide by almost everybody - easy access to energy - and as such the market cannot be easily and accurately filtered to a specific industry. However, D.I.Y. Renewables was able to learn a few important things from the surveys and interviews.
A major problem faced by the average consumer in Nigeria is the unreliability of the power grid. Even places operating in an official capacity, such as offices and restaurants, often face power outages and consequently cannot rely on their electrical appliances. This means two major things for D.I.Y. Renewables. One: Unless electrical infrastructure in Nigeria improves drastically within the next decade, there will be continuing demand for fossil, or at least alternative fuels, which plays a large part in solidying the potential market for biogas. Two: The potential for electricity generation is an enormous draw. If a method can be developed to easily link the Biodigester technology to an electricity generator in order to passively generate and store electricity, the product will be much more appealing to Nigerian customers. For this reason, D.I.Y. Renewables needs to further develop the Biodigestor concept with electricity generation in mind in addition to its established heating and cooking applications.
Another opinion commonly reported by the face-to-face interviewees was that they were not comfortable accepting the technology without practical demonstration. In order to convincingly market this technology to consumers, D.I.Y. Renewables would need to provide sample prototypes to customers. These customers would be strategically selected in order to advertise the product and build demand in the market before the product is officially available. Once potential customers gain practical experience with the product and understand how they would be able to incorporate its use into their everyday life, they would be able to make an informed decision about their fuel expenditures. If the Biodigester is, in fact, a product that would save them time and money, they would logically proceed to purchase one, and other customers would follow their example. To quote the interviewed customer in Interview #1, this is "more about comparative cost analysis and comparitive benefits". The role of D.I.Y. Renewables is to develop a product that makes financial sense to purchase. The group would then aim to apply for a grant in order to produce 10 prototype Biodigesters which would be gifted to assorted customers, and their experiences would be documented for future improvement of the product.
With that having been said, D.I.Y. Renewables also needs to analyse the financial size of the biogas generator market. However, as has been mentioned doing so with concrete quantitative results is difficult due to the fact that everybody is a potential customer. D.I.Y. Renewables is aware of the need for a detailed market analysis, but the survey results can be used to very roughly create a scaling factor to narrow down the market size. As a rough example, it was reported that 65% of people have the very conservative estimate of 2 cubed meters of space necessary to house the Biodigester tank and accessories. Also, 82% of polled customers showed either strong or moderate interest in recycling their own waste material, with the remaining customers being more likely to pay a small premium for pre-packaged gas. If D.I.Y. Renewables decides that it will initially only target the customers who are currently using gas, and as such own and are familiar with the associated appliances and hardware, then it can further narrow down the market to 84% of those polled - those currently using natural gas in the form of LPG, biogas, or other natural gas. Compiling only these metrics to create our scaling factor gives us 45% (.65*0.82*.84). This factor will continue to shrink as information on the costs of Biodigester production, service, and delivery is discovered, as well as to account for niche industries under the larger natural gas market umbrella that are incompatible with this kind of micro-utilities application.
If biogas technology is able to gain a foothold within a local market and proves itself as a worthwhile energy alternative, then it can expand into the greater Nigerian natural gas market. The greater natural gas market in Nigeria is valued, again by a Business Wire report, to be over $50 billion USD. Any small control over the natural gas market, while being a lofty goal, is certainly lucrative enough to warrant further development and investigation.
