D a n a   B l e c h ,   J o h n   C o o g a n ,   F r a n k   M a r i n o ,   T h i b a u t   M e n t h e ,   A l e x a   T e s t e r m a n  

Investor  Proposal  

CookClean  An  Alternative  Solution  to  Eradicating  Hazardous  Cook  

Stoves  and  Promoting  Global  Health  

February  29  

08  Fall  

 

2   INVESTOR  PROPOSAL    

 

Business  Summary  CookClean  Incorporated:    

Our  main  offering   is   a   service:   a   community  micro-­‐lending  model   for   affordable,   cleaner,  

faster  and  more  efficient  cook  stoves.  People  living  in  rural  villages  and  towns  in  India  do  

not  enjoy  access  to  the  electric  grid.  Many  households  spend  a  significant  portion  of  their  

income   on   solutions   that   are   expensive   and   severely   damaging   to   users’   health.   Our  

business   model   reaches   the   poorest   of   the   poor,   allowing   any   household   to   affordably  

finance   Envirofit’s   clean   stove   solution.   Our   target   customers   cannot   afford   the   costs  

involved   in   switching   from   kerosene   to   high‐efficiency,   clean   stoves   directly.   They   can,  

however,  afford  small  daily  or  weekly  amounts,  and  therefore  require  and  benefit   from  a  

business  model  that  fits  their  spending  patterns  and  meets  this  need.      

The  CookClean  Foundation:  

To  complement  the  CookClean  for-­‐profit  social  enterprise,  we  have  a  501c  non-­‐profit  arm  

that,   in   addition   to   accepting   tax-­‐deductible   donations,   also   receives   a   percentage   of  

CookClean's  profits.  Our   foundation  trains  community   ambassadors  to   educate,   empower,  

and  promote  global  health  knowledge  and  awareness  within   their  own  communities.  We  

accomplish   this   through   the   provision   of   clear   and   comprehensible  education   resources,  

skill   training,   and   business   incentives   for   ambassadors   to   not   only   become   micro  

entrepreneurs,   but   community  health   educators   and  promoters  with   the   goal   of   creating  

disruptive  change  within  their  own  communities.    

 

INVESTOR  PROPOSAL   3    

Market  Analysis  Energy  Poverty  and  Hazardous  Cooking  Practices  

For   nearly   half   the   world,   cooking   over   an   open   fire   is   an   everyday   reality   and  

struggle.    Aside   from   the   devastating   environmental   effects   of   deforestation   and   toxic  

emissions,   the  poor  bear   the  highly  disproportionate  burden  of  disease  and  death  due   to  

respiratory   failure,   tuberculosis,   low  birth  weight   for  newborns,  and  severe  burns.  These  

problems   also   disproportionately   affect   women   and   children,   as   they   primarily   cook,  

collect  biomass  used  as  fuel,  and  inhale  smoke  and  toxic  emissions  in  the  household1.    In  a  

study   conducted   by   the   World   Health   Organization   (WHO),   fuel   stoves   can   be   held  

accountable  for  800,000  to  2.4  million  premature  deaths  annually.    To  make  the  scope  and  

impact  of  the  problem  stark  and  palpable,  indoor  cooking  smoke  is  the  number  one  killer  of  

children   under   the   age   of   five   ahead   of   AIDS,   malaria,   malnutrition,   and   water-­‐borne  

diseases2—which  is  preventable  merely  with  the  use  of  a  clean  cooking  stove.    

Region  of  Focus:  India  

In  India  alone,  120  million  households  cook  their  meals  every  day  by  burning  biomass  fuel  

such   as   kerosene,   wood,   animal   manure,   or   agricultural   waste.    The  WHO   estimate   that  

indoor  air  pollution  kills  over  half  a  million  people   in   India  each  year,  with  56%  of   these  

deaths  occurring  in  children  under  5.    Based  on  these  statistics,  we  can  conclude  that  India  

alone   accounts   for   around   or   greater   than   half   of   all   premature   deaths   annually   due   to  

                                                                                                               

1  Source:  www.inforse.dk/asia  2  Source:  www.theparadigmproject.org  

 

4   INVESTOR  PROPOSAL    

indoor   pollution   and   fuel   cook   stoves.    For   this   reason,   the  first   market   that   CookClean  

intends  to  target  is  the  rural  poor  in  India  living  on  less  than  $5  per  day.      

Targeted  Indian  States:  

Within  India,  we  plan  on  targeting  Uttaranchal,  Madhya  Pradesh  and  Uttar  Pradesh  because  

these  states  suffer  from  extreme  cases  of  both  low  income  and  inadequate  access  to  energy.    

These  three  states  have  a  combined  population  of  approximately  279  million  people  and  an  

average  yearly  income  of  $500  USD  or  $1.40  per  day.      

Wealth  (GDP  per  Capita)   Energy  Access  (kWh  per  Capita)  

   

Critical  Regions:  States  in  bold  suffer  from  both  low  income  and  energy  access  (shown  as  red  on  both  maps)  

• Uttaranchal  • Jammu  and  Kashmir  • Madhya  Pradesh  • Bihar  • Uttar  Pradesh  

• Uttaranchal  • Chhattisgarh    • Madhya  Pradesh  • Assam    • Uttar  Pradesh  

Please  visit:  http://jacoogan.com/india  for  more  information.  

 

INVESTOR  PROPOSAL   5    

Product  Offering  Envirofit  

Launched  in  India,  May  2008,  Envirofit  International  manufactures  and  sells  clean-­‐burning  

cooking  stoves.  They  have  reached  60,000  customers  in  their  first  year  of  operation  alone.  

Their  solution  has  the  potential  to  reduce  CO2  emissions  by  over  400,000  tons  and  prevent  

over  85,000  kg  of  black  carbon  from  entering  the  atmosphere,  all  while  generating  income  

savings   of   $18   million.   However,   the   problem   that   they   and   other   similar   enterprises  

continue  to  face  is  the  cultural  disconnect  and  low  adoption  rate  long-­‐term.    According  to  

the   International   Network   for   Sustainable   Energy   (INFORSE),   “although   improved   cook  

stove  projects  (ICPs)  have  been  implanted  in  Asia  since  the  1950’s,  too  many  projects  over  

a  long  period  of  time  have  experienced  consistently  low  adoption  rates.”    

Clearly  the  technology  exists,  but  disruptive  innovation  requires  more  than  just  a  technical  

solution—it   requires  marketing   and   the   community   itself  must   value   such   initiatives.     It  

must  be  seen  as  an  opportunity,  a  prospect  of  betterment  and  hope,  where  the  community  

has   a   stake   in   successful   implementation.     As   other   successful   social   enterprises   have  

demonstrated,   without   the   engagement   and   initiative   of   local   communities,   the   project  

lacks   value   and   commitment   within   the   community   itself.     Without   such   value,  

sustainability   long-­‐term   is   unlikely   because   ultimately   the   responsibility   lies   within   the  

community—not  CookClean—  to  maintain,  promote,  and  sustain  such  progress.

We  plan  to  purchase  Envirofit’s  G-­‐Series  stove,  which  is  an  inexpensive  and  durable  model,  

and  provide   investment  packages  to   local  micro  entrepreneurs  within  these  communities  

to  become  ambassadors.    The  stove  we  plan  to  sell  (see  attached  product  brochure)  is  made  

 

6   INVESTOR  PROPOSAL    

out  of  metal,  which  is  stronger  and  cheaper  to  produce  than  traditional  ceramic  stoves,  and  

burns   the   same  materials   (like  wood)   that   people   are   already   using.   The   difference   lies  

within  the  unique  and  innovative  combustion  chamber  that  uses  up  to  60%  less  fuel  than  

other   stoves   and   slashes   toxic   emissions   by   up   to   80%.     Envirofit's   G-­‐Series   can   be  

purchased  for  $25  and,  although  it's  expensive  for  many  families  who  survive  on  $2  to  $5  a  

day,  CookClean’s  sliding  scale  micro   finance  model  makes   them  accessible  and  affordable  

on  a  wide  scale.  The  stoves  also  offer  households  fuel  cost  savings  and  drastic  reductions  in  

toxic   indoor   air   pollution,   in   addition   to   the   stove’s   five   year   life   span,   compared   to   the  

typical  six  month  life  span  of  most  ceramic  stoves.    

The  CookClean  Social  Enterprise  Description  &  Design  

CookClean   is   a   for-­‐profit   social   enterprise   that   utilizes   a   bottoms-­‐up,   micro   finance  

community  based  model  focused  on  education  and  engagement  in  communities  dedicated  

to  sustaining  widespread  change  in  clean  technology  solutions.  CookClean  aims  to  connect  

the  poor  to  cleaner  stoves  by  partnering  with  Envirofit  and  promoting  the  company’s  eco-­‐  

friendly   stove   technology.    For   communities  willing   to   commit   the   time  and  resources   to  

actively  engage  and  educate  their  residents,  CookClean  will  provide  the  means,  resources,  

and   skills   to   help   them   do   so.   According   to   INFORSE   Asia,   other   similar   eco-­‐projects  

reinforce   the   importance   of   active   community   engagement.   “The   last   4½   years   of  

experiences   in   the   ‘eco   village  development  project’   has   shown   that   unless   a   community  

has  ownership  of   a  program  and   is   involved  at   all   levels   from  planning,   implementation,  

monitoring  and  evaluation,  long  term  sustainability  is  not  possible.”      

 

INVESTOR  PROPOSAL   7    

CookClean  aims  to  directly  address  and  tackle  these  obstacles  preventing  long-­‐term  impact  

and   adaptation.     Similar   to   other   successful   community   engagement  models,   if   the   three  

states   we   target   accept   the   terms   of   the   project   initiative   and   express   interest,   we   will  

commence   a   project   by   selecting   four   volunteers   from   twelve   villages   within   these  

communities,  for  a  total  of  48  volunteer  ambassadors.    This  group  goes  through  a  training  

and   education   seminar   where   they   learn   the   skills   and   responsibilities   of   becoming  

community   ambassadors   and  micro   entrepreneurs.     They  meet   at   least   once   a  month   to  

learn   about   the   necessity   of   eliminating   indoor   pollution,   as   well   as   the   health,  

environmental,  and  economic  opportunity  and  benefits  this  affords  the  entire  community.    

Participants   in   the   initial   ambassador  program  are   responsible   for  organizing,   educating,  

promoting,  and  eventually  recruiting  village  members  and  future  ambassadors.  Incentive  is  

created  for  micro  entrepreneurs  not  only  financially  as  entrepreneurs,  but  through  impact  

indicators   all   ambassadors   must   satisfy   which   require   and   encourage   educating   and  

reaching  the  most  inaccessible  and  the  poorest  of  the  poor  in  order  to  achieve  the  greatest  

impact.  

Impact  Measurement  

The   impact   of   CookClean   will   be   measured   in   several   ways:   the   number   of   households  

equipped,   the  amount  of  money  saved  by   families  using   the  cleaner  stove,   time  saved  by  

women   who   typically   travel   long   distances   to   collect   wood   and/or   other   biomass   fuels,  

number   of   recruited   ambassadors   and   stoves   sold,   and   future   positive   health   effects   for  

clean  households.    For  our  initial  implementation  of  the  CookClean  model,  we  will  choose  

to   define   impact   as   high   frequency   of   use   and   overall   adoption   rates   in   addition   to   the  

 

8   INVESTOR  PROPOSAL    

number  of  new  ambassadors,   educational  and   training  events,   and  outreach  programs   to  

increase   awareness   and   change  within   the   community.   To  measure   this   impact,   we  will  

have  our  micro  entrepreneurs  conduct  simple   interviews  with  each  of   their  clients  when  

they   collect   their   small   weekly   payments   and   record   the   client’s   usage.   Similar   to   the  

Grameen  model,   community   ambassadors/entrepreneurs  will   serve   as   the   lenders.     This  

does   not   imply   simply   selling   stoves,   but   rather   going   through   training   and   continued  

support   to   effectively   impact   the   communities   and   their   clients.     Weekly   visits   should  

ensure  that  all  questions  are  answered,  sanitary  conditions  are  improving,  and  the  stove  is  

being   adapted   comfortably   into   daily   life.     Micro   entrepreneurs  will   also   chronicle   their  

clients’  likes  and  dislikes  of  the  clean  stoves,  which  allows  us  to  improve  and  adapt  future  

models  to  cultural  preferences  and  needs.    

Recruitment   of   new   stove  micro   entrepreneurs  will   be   a   key   indicator   of   this   program’s  

impact,   as   growing   numbers   of   ambassadors   increases   access,   education,   and   ultimately  

change  throughout  these  villages.    It  also  demonstrates  individuals’  and  communities’  stake  

in  improving  the  health  and  conditions  of  their  own  community.    Research  and  experience  

supports   our   prediction   that   the   extent   to  which   a   community   values   and   invests   in   the  

successful  implementation  of  clean  technology  correlates  with  long-­‐term  sustainability  and  

overall  adoption  rates.      Our  first  impact  goal  will  be  achieved  when  we  have  successfully  

transitioned   5%   of   the   households   within   our   designated   regions   (Uttaranchal,   Madhya  

Pradesh  and  Uttar  Pradesh)  from  using  hazardous  and  economically  draining  biomass  cook  

stoves  to  affordable,  safe,  eco-­‐friendly  cook  stoves  which  we  predict  we  will  achieve  within  

the  first  five  years.    Our  ultimate  goal  is  to  eradicate  the  use  of  hazardous  stoves  entirely.  

 

INVESTOR  PROPOSAL   9    

Financial  Model  Qualitative  Analysis  

Our   solution   generates   revenue   by   selling   stoves   using   a   microfinance   model   that  

empowers  micro  entrepreneurs  to  create  businesses  selling  clean  stoves  to  those  most   in  

need.    Entrepreneurs   initially  purchase   stoves   through  us  by  paying  $25   typically  over   a  

30-­‐week   period,   broken   into   $1   per  week   installments.   Naturally,   once  we   begin   selling  

these   stoves   in   our   target   market,   we   will   adjust   financing   schedules   to   maximize   our  

impact   and   optimize   profit   and   re-­‐investment   potential.   Once   ambassadors   comfortably  

transition  into  the  role  of  micro  entrepreneur,  they  are  encouraged  to  grow  their  business  

and  buy  more  stoves  under  the  same  original   financing  terms  to  scale   their  business  and  

impact.  Regardless  of  how  long  we  allow  for  repayment,  we  will  eventually  receive  a  total  

of  $30  on  our  initial  $25  investment.    Estimating  other  expenses  to  be  factored  in  as  well  as  

the  average  length  of  time  for  repayment,  we  predict  a  20%  rate  of  return,  which  we  feel  

represents  a  safe  and  sustainable  reason  to  pursue  funding  from  a  social  impact-­‐investing  

firm.  

Quantitative  Projections  

Of   the  nearly  300  million  people  within  our   target  market   (Uttaranchal,  Madhya  Pradesh  

and  Uttar  Pradesh)  we  hope  to  gain  a  5%  market  share  over  the  next  5  years,  meaning  total  

stove  sales  of  15  million  units.  After  a  lifespan  of  5  years,  (as  opposed  to  6  months  for  clay  

stoves),  users  will  likely  need  to  replace  or  repair  their  stoves  and  hopefully  will  return  to  

their   community   ambassadors   to   do   so   through   CookClean.   This   means   that,   once   our  

business  is  mature  and  stable,  we  predict  an  average  of  3  million  stoves  sold  per  year.  At  a  

 

10   INVESTOR  PROPOSAL    

total  price  of  $30  per  stove,  these  sales  will  earn  CookClean  $90  million  in  revenue.    Each  

stove  costs  $25,  meaning   that  our  annual   cost  of  goods  sold  will   equal  $75  million.    This  

leaves   us   $15  million   dollars   in   operating   profit   that  will   be   used   to   fund   future   growth  

through   marketing   (selling   expenses)   as   well   as   cover   our   general   and   administrative  

(G&A)   costs.   Assuming   $5  million   in   selling   expenses   and   another   $5  million   to   run   the  

company  (G&A),  CookClean  will  generate  $5  million  in  net  income  per  year.    

Naturally,  scaling   to  3  million  units  will  be  no  easy   task,  but   the   table  below  summarizes  

what  we  believe  are  reasonable  growth  projections  over  the  next  5  years.  

Year   2012   2013   2014   2015   2016  Target  Market  (Pop)    300,000,000      300,000,000      300,000,000      300,000,000      300,000,000    Market  Share   0.01%   0.05%   0.10%   0.25%   1.00%  Sales  (Units)    30,000      150,000      300,000      750,000      3,000,000    Revenue   $900,000     $4,500,000     $9,000,000     $22,500,000     $90,000,000    Cost  of  Goods  Sold   ($750,000)   ($3,750,000)   ($7,500,000)   ($18,750,000)   ($75,000,000)  Operating  Income   $150,000     $750,000     $1,500,000     $3,750,000     $15,000,000    Selling  Expenses   ($50,000)   ($250,000)   ($500,000)   ($1,250,000)   ($5,000,000)  G&A  Expenses   ($50,000)   ($250,000)   ($500,000)   ($1,250,000)   ($5,000,000)  Net  Income   $50,000     $250,000     $500,000     $1,250,000     $5,000,000    

In  order   to  benchmark  our   financial  performance,  we  compared  our  operating  and  profit  

margin  drivers  to  the  financial  performance  metrics  of  Room  2  Read  in  the  table  below.  

CookClean   Margins   Room  2  Read3   Metrics  CoGS  /  Revenue   83.3%   Program  Expenses   84.5%  G&A  /  Revenue   5.6%   Administrative  Expenses   6.9%  Selling  /  Revenue   5.6%   Fundraising  Expenses   8.5%  Profit  Margin   5.6%   Profit  Margin   0.0%  

                                                                                                               

3  Source:  http://www.charitynavigator.org/  

 

INVESTOR  PROPOSAL   11    

Management  Team  

Dana  Blech   John  Coogan   Alexa  Testerman  Chief  Executive  Officer   Chief  Financial  Officer   Chief  Operating  Officer  

     

Thibaut  Menthe   Frank  Marino  Chief  Technology  Officer   Chief  Stove  Giver4  

   

                                                                                                               

4  Source:  BlakeMycoskie.blogspot.com  

 

12   INVESTOR  PROPOSAL    

Appendix:  References:  

1. First  Stoves:  http://www.firstenergy.in/  

2. The  Paradigm  Project:  http://www.theparadigmproject.org/more-­‐about-­‐the-­‐problem  

3. Aprovecho  Labs:  http://www.aprovecho.org/lab/index.php    

4. US  EIA,  India  Country  Analysis  Brief:  www.eia.doe.gov/cabs/India/pdf.pdf,  

5. Central  Electricity  Regulatory  Commission:  http://cercind.gov.in    

6. Government  of  India,  National  Statistical  Organization:  http://mospi.nic.in/    

7. Government  of  India,  Ministry  of  Power:  http://powermin.gov.in/    

8. The  Registrar  General  Commissioner,  2011  Census  of  India:  http://censusindia.gov.in/    

9. UN  Eco-­‐friendly  Fuel  Efficient  Stove:  http://www.unv.org  

10. Envirofit  Clean  Stoves:  http://www.envirofit.org/  

 

 

 

 

INVESTOR  PROPOSAL   13    

 

Statement  of  Work    

Name   Contribution   Signature  

Dana  Blech   Business  Name,  Initial  Business  Proposal,  Business  Model,  General  Research    

Thibaut  Menthe  

Financial  Modeling,  Design,  Impact  &  Sustainability,  Market  Segment,  Logo  Design    

John  Coogan   Financial  Modeling,  Market  Sizing,  Charts  &  Maps,  Graphics,  Organization    

Alexa  Testerman  

Financial  Modeling,  Impact  Research,  Introduction,  Impact  &  Sustainability    

Frank  Marino   Stove  Research,  Impact  Measurement,  Creative  Design,  Cultural  Research