Episode 4

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Published on:

18th Nov 2020

Ep.004 - The First Five to Say "Yes" - Sandeep Patel

[00:00:00] Sandeep: I, I think, you know, you have to keep on struggling to really get the right people who are motivated by what you are saying, speaking in their language, changing the communication so that they get convinced and what works and what doesn't work. So when you get the first five to say, "yes," by then, you will know what works and what doesn't work.

And figuring that out is the most important part.

Clement: We have the chance today to speak to Sandeep Patel, founder of Nepra and Let's Recycle. Sandeep is a successful serial entrepreneur who has always been fascinated by the waste issue our society has created and too really challenged. He's the pioneer when it comes to waste management in India.

Today, Sandeep solves more problems than he could have imagined when he started. He works with people experiencing some of the most intense poverty on the planet and inspires their family's life with [00:01:00] determination, trust, and care. In solving the waste problem, he tackles gender inequality, unemployment, and poverty.

Giving us a strong lesson of humility, perseverance, and accessibility, here's Sandeep Patel.

Laura: So, Sandeep, I'd love to hear from you in your own words. What is Nepra? What is Nepra all about?

Sandeep: We started thinking all about sustainability. For us, Nepra is about sustainability. It was coined from two words, "Neha" and "Pranali." Those are Indian words where neha means love and pranali means system. So love thy system was the logic behind Nepra and all the business we do is surrounded to sustainability.

And for us, any action we take has to be people-centric as well as environmental-centric. [00:02:00] So that's what Nepra stands for us.

Laura: So when you say it's about sustainability, it makes me think of a couple of things right away. Either you're saving something or you are fixing something...it's like there's two, almost like two strands of sustainable businesses out there, ones that are producing goods that are sustainable and others that are cleaning up the mess of other people's goods.

And it's, it's, it's really interesting that... actually, this is our first podcast with a entrepreneur who's in the waste management space. So can you speak to a little bit as to why you even fell into this sustainability space in the first place? What made you turn to this?

Sandeep:  Right. So, no, I, I did my masters from Leeds business school in the UK.

And since that time I was very keen on waste management and retail. When I came back to in India in 2002, it was too early for waste management and I had no idea how to go about doing it. So I did a lot of [00:03:00] businesses in the past, which came my way and I, I could see businesses as an opportunity coming my way rather than going away from me.

So I did a lot of businesses, which initial days allowed me to learn a lot of things. But in 2006, Nepra was born. Well, you know, for me, it was calling from day one, that waste is something which I want to do. And I don't know, you know, it was always something like a magnet, which was pulling me towards it.

And it's a problem of magnitude, which people always complained about. I could see everybody complaining about it, but nobody really looking at a solution. And I think that really gave me a big challenge and I wanted to solve that challenge.

Laura: Interesting. Was there, was there a moment in time that you can pinpoint that you feel really launched you in that direction?

Was it...was it a day where there was just too many complaints and you realized, okay, something needs to be [00:04:00] done. Yeah. What was the catapult to even, it's one thing to make you want to study, you know, sustainability, but it's another thing to want to dedicate all your time, all of your efforts and as an entrepreneur, almost just... you know, give up part of your life to pursue solving this problem.

Can you pinpoint a moment?

Sandeep: So, you know, the, one of my businesses was of activated carbon manufacturing. When I was starting that activity, there was a industrial unit, which I had visited where the land was highly acidic. And, you know, the previous owner had poured a lot of acid on the land.

So my leg completely went almost two feet inside the land. And I was, you know, in acidic water for at least five minutes. That really gave me a very stark perspective of how degradation of environment is being done by industries by not being compliant. So that day I still recall that I was shaken up a bit about [00:05:00] how much damage people are doing in the name of industrial development by not being ethical.

And, uh, I had decided that whatever I'm going to do, is going to be right for the environment and the people, because, you know, the kind of acidic, if the concentration has been high, I would have lost my legs on that particular day because of the acid burns, you know.

Laura: Yeah, I can imagine that hitting you personally, pretty hard.

I think very few people who are in the sustainability space that I know have ever had, I guess, that physical close tie to seeing just exactly how bad the situation might be. And for you, it was only for, like you said, a few moments. That's not necessarily true for everybody who's living near and close to these waste zones.

That's pretty scary.

Sandeep: Yup. Yup. And I think, you know, but it's, it's, it is about feeling the pain that's when you really try solving it, you know? Yeah. So essentially, you know, it was more about, uh, feeling the [00:06:00] pain jointly, uh, and you know, trying to solve that problem. That, uh, forced me to think about, you know, what business to do and what not to do.

And that's where Nepra was born in 2006.

Laura: So when you said you were working in, uh, activated carbon or is that right? So, but right before Nepra, that was the space you were focused on.

Sandeep: So let me take you through the journey.  (Sure, yeah)  I came back in India in 2002 and the biggest risk I took was getting engaged in 15 days.

So I'm a risk taker at heart, and -

Laura: It sounds like it!

Sandeep:  Then before that I had opportunities of getting into travel business, air ticketing and passport. I had my IT company where we had recruited almost 750 people... again, from the bottom of the pyramid, with the textile measures and GOV trained a lot of people from the economically poor section and gave them a salary of almost a hundred dollars when the average salary was $40 - 50 at that particular [00:07:00] time. Then I got into chemical training and then into activated carbon. So I did a lot of businesses between 2002 to 2006, which gave me a lot of insights into how, how to build my waste management business.

And in 2008, I chose to exit from all the business because I felt the time was right to get into waste management. Maybe I did it a little bit too early. I was almost bankrupt in 2012. And that is when I could manage to survive by raising my first round of money, which again, I almost lost in two, three, four months because of a fire in my facility, but then post that we have been surviving and growing.

So we have a lot of learnings or failures.

Laura: Well, it sounds like you said at the beginning -- you are a risk taker and it doesn't seem to scare you off, which is good because, in my opinion, waste management is not a, how do I, how do I put this [00:08:00] lightly? It is not necessarily the sexiest field to go into and it doesn't... it's not for the faint of heart.

At least as someone who is looking in from the outside, it seems like you need quite a lot of grit to work in this space.

Sandeep: I agree with you because if I look back in my journey, if you asked me to take the same journey again, I would be hesitant, but maybe I was a fool.

Laura: But we need more fools, right? Because if not, no one's going to be solving for these things.

Sandeep: So I'm trying to encourage more fools in the space now. So, you know, there are a lot of things I'm trying to do to encourage people and support them. [So] that they don't suffer the way we suffered in the journey and made a lot of mistakes. So I think I will be paying back to the community in that particular way of helping a lot of entrepreneurs getting into this space.

Clement: And what would you recommend for an entrepreneur that wants to enter into waste management?

Sandeep: So, you know, I think be strong, uh, you'll see a lot of failures, but keep seeking the answers because if you stop seeking the [00:09:00] answers, you will always have challenge because waste is a very dynamic...but simple industry.

So if you are able to connect the dots, you will finish your journey. So that's the most important part, you know, finishing the journey because I think daily, we had had thousands of failures. We had made a lot of mistakes, but it is about building trust and transparency with people that will get you success in this life.

Laura: And finishing the journey, for you, what do you mean by that? Is it, is it a certain level of accomplishment, a certain level of, like, problem being solved? Is there like a data point that you think of when you think of finishing the journey for Nepra?

Sandeep: Yeah, so, I think, yeah, so it's not about Nepra's journey, I would say it's the journey to solve a particular problem. Because you know, every day in waste management, there is a new challenge.

Either. It is product, it is a process or it is people, it is machinery, I need to scale... so every time and every scale you will have a different challenge. So, you know, I have seen my journey. There is no standard [00:10:00] day. I've seen it, that I have two types of same day in my life. Every day, there is a new challenge.

So it's about completing that particular challenge on that particular day or in next few days, or few months, or six months or 12 months. But you have to have multiple milestones going for multiple challenges, which you need to keep on solving. So it's a journey.

Clement: And in your journey, then, you said there is daily challenges.

What was the hardest challenge that you faced and would you do differently if you could do it again?

Sandeep: See, I don't think it could have been done differently because I never knew what other options I had. So, as an entrepreneur, I am content with whatever happened with me. So yes, definitely, uh, I think if I do the same thing again today, and if I was 15 years back then the situation is much easier than what it was 15 years back.

So this sector has evolved, the level of awareness has evolved. So for me, yes, we've started [00:11:00] ahead of time. We had a lot of challenges, but that allows me to be, actually, you know, having more failure stories, which allows me to be more successful as well, because we don't need to repeat those mistakes. So I don't regret anything because that's the most important part in waste that, you know, you should not regret doing anything.

If you have made a mistake, I think you should learn from it rather than regretting it.

Laura: So do you feel like, if you're focused on waste management anywhere in the world right now, it is such a complex systemic issue that's extremely challenging and that touches upon many social systems, very many environmental systems.

Do you feel like more than maybe other industries, specifically for entrepreneurs in the impact space, more than other industries, this is where you need to almost learn to... love to fail or learn to love this like trial and error and there's, everything is quite new it's so... so little has been done and so little has evolved and [00:12:00] it's almost like you just have to be able to scrape your knees even more in this space.

Sandeep:  So, you know, I would say that every city or every country would have its own different challenges. So if you ask me today, if I go to the U.S. Or Europe and I do the same business, I think I'd be more successful than I am in India.

Just because, you know, the ecosystem is more mature over there and my learnings have evolved, but at the same time, I'm in a market where, you know, uh, it's like the story where, you know, you go to a city and nobody really is wearing shoes and you'll go and sell the shoes. Either you look at it, that nobody will buy it because nobody wears it.

Or you can say, you know, nobody wears it, it's a huge market. So I'm in a country where, you know, there's a huge opportunity for doing effective waste management. And I am the guy who's, you know, setting new trends and benchmarks. People look up to our failures and what we did right after those failures as a new benchmark of how to go about doing the business.

[00:13:00] So that's how, you know, uh, it's different, you know?

Laura: Yeah. You're willing to see opportunity where others might just see giant, booming challenges.  (laughing)

Sandeep: So, you know, by nature, I'm one person. So if you give me a challenge, I will give you a business model out of it.  (laughing)

Laura: Well, Hey, you know, if, if that offers stands, we'll have to have another call where I just throw some challenges your way.

Sandeep: No, definitely. I'm open to that.

Clement: And so you say you learn a lot and if you were doing it again in the U.S. you would be successful because you've learned a lot on the system, on how to better do waste management. What do you think you have cracked in this system?

Sandeep: So, you know, the value chain and the level of segregation, which derives more value, typically all in the Europe and U.S., you know, the model is more designed on charging the government or the people for doing waste management.

Whereas in India, our model is we don't [00:14:00] charge, but we might end up paying and still we can be profitable. So we know exactly where the value in the waste lies and what kind of value addition needs to be done. So if I take the money from the people in a market like U.S. and Europe, and I still make money from the level of segregation I do, I can make more money than anybody else.

Clement: Okay.

Sandeep:  In those markets.

Clement: So that means you feel that you have really kind of valued the waste. When in Europe and U.S., we don't value the waste, we pay for the collection and kind of hiding it from the society or... but you actually value the waste and so you could benefit from the collection fees from the government, as well as the value of it.

Sandeep: So, you know, in Europe and U.S., historically all the waste was going from U.S. and Europe to China or coming to India, the paper waste is coming to India and plastic has been stopped. So, you know, when the waste [00:15:00] is being collected and shipped in a mixed form, the value is not recovered in a very high way.

Whereas, you know, in our case, what we do is we not only collect, but we also segregate, to a very detailed level, where the recovery rates are much, three times higher than what they normally recover in Europe and U.S. So for us, we are able to create that circular economy. Whereas, you know, the circular economy is only done halfway in Europe or U.S., but definitely this, you know, China ban and all those activities have really forced all the companies in Europe and U.S. to rethink on the strategy of circular economy.

And a lot of infrastructure is going to come up, but, you know, with the consumption versus the kind of infrastructure, there is a long way to go.

Laura:  So, can you maybe explain a little bit more for someone who is unfamiliar with India or about the waste management in India? Can you explain a little bit more about what is the difference and what are some of the logistics like, well, how does it work? Can you take us from someone throwing something out at home or at an [00:16:00] office all the way through this circular economy structure that you've created?

Sandeep: So, you know, India is still about 20 years behind what happens in Europe and U.S. in the case of creating of infrastructure and the whole value chain of processing and all that.

But in the last four to five years, because of the government initiative of Clean India Movement and Swachh Bharat Abhiyan, the government has been alocating a lot of money on increasing infrastructure creation and projects related to waste management. So a lot of changes are happening at a very fast pace. So what I see, which normally would have happened in 20 years now would happen in the next five years.

That's where India is moving so fast. Now in India, presently, what happens is, uh, you know, people are requested or made it to segregate the waste at source. The success ratio of that would be hardly 15, 20% actually on ground. But if it is not segregated, either the cleaner [00:17:00] of the building or premises or the person who is in the value chain of collecting the waste and taking it to the landfill site or a processing plant, would try to recover as much recyclables, which he can, you know, recover from that waste and sell it in the market, which is typically the rack picker or the bottom of the pyramid, which is working in the value chain.

As an employee or as a processor, they try to recover the recyclables and they go and sell it to the unorganized sector guy. And they make anywhere between, you know, $5 to $10 per day from the waste streams, they also make salaries or they are just making $10 per day of revenue from selling of the waste.

So that's the unorganized sector. Part of it, the balanced waste, which is collected from households and commercial establishments by the mid body, to a great extent was being dumped on a dump site, but lately a lot of projects are coming up, either for processing into [00:18:00] compost or into dry waste recovery or for waste to energy.

So a lot of projects are coming up, which will help cities become zero waste to landfill probably next 10 years.

Laura: Wow. That's acceleration.

Sandeep: Yeah.

Clement: And how do you manage working with so many players, so many independent workers in your business currently?

Sandeep: So we are a tech-driven company from day one, you know, I always believed in technology.

So from all the mistakes which we ever made during the journey, we have been constantly doing a business process, reengineering and imbibing that into our software. Which is completely mobile-driven and cloud-based so that every single stakeholder in our organization gets to use the software in his role.

So that information is captured at source and we provide the information in the process way to the next guy. And it allows us to control all the moving parameters [00:19:00] in a very smooth way. And we get control over such a dynamic and such a distributed process, you know,...

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