Meet the Entrepreneur Who’s Making Clean Water Accessible Across Haiti
Using a decentralized water treatment and distribution system, Jim Chu, the founder and CEO of dloHaiti, is bringing safe, affordable water to thousands on the island. Chu recently participated in diaspora engagement roadshows hosted by USAID INVEST, which encouraged members of the Haitian diaspora to invest in the country’s private sector.
Jim Chu loves flying. The Silicon Valley entrepreneur and investor began paragliding in 1993. Over the last two decades, he’s participated in the sport all around the world.
“My favorite place [to fly] would have to be the Indian Himalayas,” Chu says. “You’re right up against the mountains, so on good days you can see some well-known trekking trails. You can see corn drying on people’s roofs. The landscape is this intensely lush green. People live all over in that area, and they tend to be very welcoming, so you can land anywhere and usually get a ride.”
Chu flies planes, too. He recently became interested in Alaska bush flying, where short takeoffs and landings are common because the rough terrain often lacks prepared takeoff and landing strips.
These days, however, Chu’s hobbies are the less adventurous part of his life. As the CEO of dloHaiti, a water treatment and production company, he has spent the last seven years working daily to expand the accessibility of clean water throughout Haiti.
Haiti’s Water Crisis
Nearly 70 percent of Haitians do not have access to clean water. Waterborne illnesses cause more than half of the country’s deaths each year, and one in five children die from diarrhea — a preventable disease.
The Haitian government provides only undrinkable water through its infrastructure, so private companies dominate the water market. These companies locate their water treatment facilities near the cities and use large trucks to deliver water to other areas. As a result, the water provided to customers outside of the cities is often limited in quantity and variable in quality.
“If you happen to live close to the city, you at least have water, even if it isn’t that clean or reliable,” says Chu. “But if you live somewhere farther out, you get served by dirty and unreliable trucks, so those folks end up going without clean water; moving toward the city, which means the country experiences mass urbanization simply because people need water; or paying a lot more for unreliable water of questionable quality.”
In a country where 60 percent of people live on less than US $2.00 a day, most water companies charge US $1.25 for a five-gallon jug.
“It’s mind-boggling how lack of clean water hinders a country,” says Chu. “The typical Haitian will pay 50 times more for a liter of water than an American does, so most people either go without or spend a lot of time trying to find affordable water. That burden usually falls on women and children, so children miss school and women miss out on opportunities for earning an income. But more often than not, people just go without clean water and suffer through the waterborne diseases that result.”
The Journey to a Private Sector Solution
Chu has no background in water treatment. From 1996 to 2003, he ran marketing and business development departments for Cisco Systems. Since 2005, he has been investing in and operating numerous start-ups in Silicon Valley. For 20 years, he had a typical Silicon Valley tech career. Then, by chance, he stumbled into his work in Haiti.
After the country’s 2010 earthquake, Chu traveled to Haiti as a volunteer with a non-governmental organization (NGO) distributing clean water to those in need. He later became the CEO of Life Giving Force, a nonprofit providing clean water throughout Haiti.
Chu ran the nonprofit for nearly two years, but he became disheartened with its lack of lasting impact. “The NGO model wasn’t working, and neither was aid,” says Chu. “Their best outcomes were only band-aids.”
Many NGOs must attempt to serve both the people writing their checks and their beneficiaries, according to Chu. Unfortunately, serving the demands of the former doesn’t always align well with the needs of the latter. For instance, a donor might want to build a water facility in a location that doesn’t provide access to the greatest number of people. Chu discovered that NGOs and development agencies weren’t always business-friendly, and in worse case scenarios, they crowded out business solutions and prolonged problems.
“I was trying to make a change within the development world, and I wasn’t getting anywhere. I was frustrated by the bureaucracy of it all — the long timelines and red tape,” he says. “I wanted to do something meaningful, to have an impact, but mostly I was in Haiti, thinking, ‘I’m pushing paper. I’m just a bureaucrat. I’m not solving the problem.’”
In 2012, Chu decided to partner with the IFC, the private investment arm of the World Bank, to launch dloHaiti, an investor-driven social business designed to make clean water accessible in underserved Haitian communities via a market-driven model.
“I decided to apply a business lens to this development product, to create products and services that are valuable to the customers who need and want them,” Chu explains. “I call them customers, not beneficiaries, because we need to create value to keep them as customers. When I was volunteering, I saw that most people could pay — and wanted to pay — for water. The problem was that they couldn’t get it: it was too far away to be convenient or too expensive. That’s the problem we needed to solve, and we knew many Haitians valued the solution enough to pay for it.”
dloHaiti: A Decentralized, Market-Driven Model
dloHaiti is a decentralized water kiosk venture. The company manufactures its own water brand, Ovive, which it produces at accessible water facilities — called kiosks — using a reliable treatment process.
dloHaiti doesn’t operate in well-served urban areas or remote, rural areas. It builds kiosks in underserved towns and peri-urban areas, which have growing populations and a high demand for water. In these regions, the market conditions are ideal for a commercially viable water business serving a significant number of people.
Each kiosk uses energy-efficient water treatment technology, operating on 70 percent clean energy. The kiosks have a three-kilowatt solar power system that powers everything on site, including the pump, filtration units, lamps, and more. Because it doesn’t depend on costly grid or generator power, dloHaiti can reduce the cost of its products and operate in areas without grid connections. Every site is economically self-sufficient: they no longer require a subsidy to operate.
Purifying water locally is more cost-effective than using water trucks. A five-gallon jug of Ovive costs 40 cents, 85 cents less than the country’s other water brands. By relying on a local distribution network, in which residents of the local community work as delivery agents and distributors, dloHaiti can expand the customer base for each kiosk and reach areas that large water trucks fail to serve because of economic or logistical reasons.
Customers who live within 500 meters of the kiosk can collect water directly from the source. For those customers and vendors located within five kilometers of the kiosk, dloHaiti offers delivery and distribution. The company focuses on improving the supply chain for vendors so that they can make Ovive available to more people. It offers distribution services for those vendors located between five and 25 kilometers away. It also provides “just-in-time” inventory so that vendors don’t have keep their liquidity tied up in inventory, which makes merchants more likely to sell water. As a result, water is available locally when people need it.
The Challenges of Running a Business in a Fragile Country
While Chu is passionate about his company, he’s also upfront about the challenges of running a business in Haiti. For starters, the infrastructure needed to run a successful operation is often lacking. Finding reliable, affordable electric and water providers can be difficult or prohibitively expensive.
“It’s a massive amount of money for a generator, which makes it nearly impossible to become an entrepreneur unless you already have money or a wealthy family member willing to contribute,” says Chu.
Financing, likewise, can be a problem. Unlike in the U.S., most Haitian banks won’t allow an individual to act as the personal guarantor for a small business loan, which makes finding start-up capital challenging.
“There are obstacles at every step,” Chu explains. “Intuitively, I knew that it wouldn’t be as easy to start and run a business in Haiti as it is in the U.S., but I underestimated the enormity of it. You’ll encounter days where your office space goes for 24 hours without power.”
Internet access is also an issue. Usually, businesses must pay one internet service provider an exorbitant amount of money for reliable service. However, because Chu worked for Cisco Systems, he knew how to install a multi-WAN router at his office so that he can use the service of multiple internet providers. That way, if one goes down — “and they always go down,” says Chu — he won’t lose internet access. Many people starting a business would not have the experience or know-how to navigate that hurdle.
Regardless of these challenges, Chu believes, and has shown, that it’s possible to run a profitable business in Haiti. Moreover, by starting a business in Haiti, he has positively impacted the life course of thousands of individuals.
Beyond Profits: What It Means to Be a Social Business
dloHaiti is a social business, which Chu defines as a company that ensures that positive social impact results from the activities it undertakes.
Arden’s Cherelus, an operations and facilities manager at the company, explains that unlike the country’s other water producers, dloHaiti is embedded in communities they serve, and transparency with them is important. Because many people don’t understand how water is treated, dloHaiti’s kiosks have glass windows through which people can watch the process.
The company also hires local staff. It employs more than 100 people in permanent jobs, mostly in non-urban areas where an 80 percent unemployment rate is the norm. It creates jobs directly through the treatment facilities and indirectly through the network of distribution and delivery agents.
dloHaiti has created a series of programs that provide micro-credit for in-kind loans, such as financing inventory for re-sellers and vehicles for distributors. It’s even launched the Haiti Opportunity and Prosperity through Entrepreneurship (HOPE) Micro-Credit Note, a social impact bond issued by the U.S. Delaware legal entity, to support more micro-credit programs.
dloHaiti now operates 10 kiosks and serves 150,000 people. Chu plans for dloHaiti to serve more than a million people in Haiti by 2030. He’s also founded a sister company, Untapped, to spread the decentralized water treatment model to other developing countries. Combined, he hopes the two companies will serve more than 100 million people by the end of the next decade.
Private Sector Engagement: The Future of Development?
“Private sector engagement is crucial to lifting people out of poverty. I can’t stress that enough,” says Chu.
Ironically, Chu is the co-founder of the global nonprofit, Watering Minds, which works with local partners and donors provide clean water to schools in Haiti, Cambodia, India, and Ghana. Nonetheless, he believes that the private sector is needed to solve the world’s toughest development challenges.
“It’s mostly about scale,” Chu explains. “I don’t believe charity or aid ever truly scales to the amount needed. That really requires private sector capital. Unless we bring that capital to Haiti, we won’t see change that serves everyone in need.”
Chu believes the development sector is becoming increasingly willing to work with the private sector to find sustainable ways of solving social and environmental problems. Likewise, he thinks that there’s a growing interest within the business world to work in emerging markets, where development agencies can provide valuable local knowledge and expertise.
He recently participated in a roadshow hosted by USAID INVEST, an initiative that mobilizes private capital for development. The Haitian diaspora contributes roughly one-third of Haiti’s GDP in remittances, so Haiti INVEST organized five diaspora-engagement sessions throughout the U.S. and Canada to encourage the Haitian diaspora to invest in Haiti’s private sector. The sessions showcased entrepreneurs, like Chu, who run businesses in Haiti.
“The model of Haiti INVEST is a great idea,” says Chu. “It’s helping to ‘grease the wheels’ on the transaction costs of investing in Haiti. It gives entrepreneurs a platform to talk about their businesses and connect with intermediaries. Among the diaspora, there are almost certainly people who will be interested in investing if they are made aware of the opportunities.”
In founding dloHaiti, Chu intended to create positive development outcomes for the people of Haiti, but “it needed to be done in an economically sustainable and market-friendly way,” he says. “We couldn’t rely on subsidies and be sustainable. It’s important to create something that does return some value to investors; otherwise, you’ll never scale. If you don’t attract commercial investment, well, then, you’re just another NGO.”
To learn more about INVEST’s work in Haiti and elsewhere, check out our website.