Transforming service standards across Nairobi's informal childcare market through innovative technology to benefit the most underserved
Pitch us on your solution
Our vision is to promote universal access to safe, affordable slum-based daycare throughout East Africa. Our aim is to create a replicable model for upgrading slum daycares, giving improved, standardized and profitable childcare and generating additional value from the network.
Additional value is generated by registering all children and parent-clients on our app network, where we can create additional opportunities for value creation by building an alternative BoP distribution network. We are already providing asset financing for products that encourage health and wellbeing of children plus savings to the home to businesses and parents alike based either on their business revenue or client payment history. Beyond improved daycare, our goal is to diversify our product basket and introduce FMCG products that parents buy poor quality of at a premium every day (eg porridge, pampers) to stimulate the daycare heconomy and generate revenue to support network costs.
What is the problem you are solving?
Tiny Totos gives slum-based daycares in Nairobi the knowledge, business tools, capital investments and network they need to transform quality, profits, and reliability of childcare service provided to lower-income working mothers. The Kenyan government provides no free daycare for preschool children. Unskilled women fill this vacuum by opening daycares in their homes, typically without any formal childcare qualifications, business management skills, or adequate space. With standards poor and most daycares unregulated, children below 5 spend their days in squalid conditions, failing to meet their developmental milestones, lacking stimulation, access to basic nutrition. Daycare owners also earn little; with service poor, mothers' work is constantly disrupted. With up to 4,000 daycares attending to an estimated 175,000 children in Nairobi, the impact of poor quality preschool care reverberates throughout lower-income communities impacting 600,000 people in total and society as a whole. Tiny Totos provides business and childcare training and capital investments to daycares who sign up to our support, resulting in them tripling revenues and quadrupling profits. To support scale, we have designed an innovative user-friendly app to help owners better manage their businesses, share information with parents, and build network strength from a previously fragmented, substandard market.
Who are you serving?
Our key beneficiaries are women and preschool children in slums, the most vulnerable and excluded inhabitants of cities on all variety of socio-economic levels, including from the digital economy. Daycare is used by women in the vulnerable years after becoming a mother, when their ability to hold down a job is deeply impacted by the demands of being their child's primary caregiver. The mother-clients our daycares typically come from households that earn anywhere from $50-250 USD a month, who spend no more than $25 on childcare per month and therefore cannot afford the $30 minimum spend required for a 'house girl' to stay at home with their children. While mobile penetration is increasing, 50% do not own a smartphone and most do not use mobile money due to relatively high transaction fees. Their children have the worst health indicators in the country, with 12 % higher mortality rates than children in affluent urban / rural areas. Stunting, the result of chronic undernourishment is high, up to 47% vs 20% national average. Daycare owners are typically jobless and under skilled; daycare is a default livelihood pursuit not a vocation, for which they earn little, and receive no support.
What is your solution?
Our strategy of developing a scalable, replicable network of safe, profitable, stimulating slum daycares that unlock working women's earning potential and the growth potential of children under 5s is achieved through a thoughtful, incentives-based intervention model that provides locally-market based incentives for owners to partner with us to upgrade and sustain improved quality daycares without creating dependency. After 4 years of trialling and refining our intervention model we worked for 3 months in early 2019 with an EY operations consultant to unpick and define the building blocks of our intervention model that help underskilled female micro-entrepreneurs in slums transform their businesses and themselves. We have developed a business manual for our daycare franchise approach, which clarifies step by step, month by month, the type and degree of support we need to provide partner daycares in order to continuously grow business and ECD knowledge and expand our network without sacrificing quality. Our phone-based app is a critical tool in this process, without which we could not function at scale in remote, hard to penetrate fragmented urban communities, and without which we could not generate opportunities for additional value and network cost recovery. The app functions as a business and reference tool for managers and parents alike, and a virtual team field management system for our staff. By reinforcing the client social network and collating data across our growing partnership base, it generates opportunities for revenues from sales, marketing, data, services and research to support network scale.
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Where is your solution team headquartered?Nairobi, Kenya
Our solution's stage of development:
Describe what makes your solution innovative.
Tiny Totos stands out as incredibly unique in a childcare / early education space traditionally dominated by NGOs and research entities due to our social enterprise approach and reliance on innovation technology to improved knowledge dissemination and standardisation of service in the fragmented informal daycare economy so that value is increased for all. NGO players tend to assume that in order to upgrade childcare service one must upgrade childcare knowledge alone, while failing to address business and institutional sustainability of daycares on which improved care depends first. We treat daycares not as beneficiaries, but as businesses. We recognise that however poor, daycare provision is high as parents need it. We assume parents would pay more if service was better, giving more returns to owners, and investment in better care of children. We believe in market transformation through social entrepreneurship and tech, not charity.
Describe the core technology that your solution utilizes.
Digital technology can transform the childcare sector in critical ways. First we create information exchange across a fragmented economy and empower the technologically and socio-economically disadvantaged daycare managers and parents to access critical knowledge to elevate service delivery.
We achieve this through a text messaging and survey response system that communicates across the client network, an online map we created showing location of daycares in the community with opportunity for users to rate provision of service, and a custom-built phone-based app, that enables daycare managers to perform daily tasks like taking attendance, taking payments, tracking revenue and expenses and getting access to learning content, and for parents to follow the care given to their children, and be part of their lives even when out at work. By sharing information traditional knowledge fragmentation in the market can be overcome and new synergies created between businesses and clients created, generating unprecedented opportunities.
Second, we use machine learning algorithms to determine the credit worthiness of parents and daycare managers to provide them access to capital, products and services that further improve child health, using revenues and payment data as indicators of credit-worthiness. Technology is enabling us to create a network of informal daycares where previously they existed in isolation, recreating the same mistakes, lacking access to knowledge or capital to improve services to mothers and children or revenue for themselves. Technology allows us to transform an informal economy and increase value for users through shared experience and economies of scale.
Please select the technologies currently used in your solution:
Why do you expect your solution to address the problem?
Our work aims to aggregate and uplift an existing market in the slums - preschool childcare services - to provide better outcomes for children, working mothers and managers involved in it. As a result of improved childcare, managers can earn more money, children grow up in safer environments and working mothers can pursue work without the handicap of unstable, erratic childcare. The market for childcare already exists, the demand in the market is clear, the supply is plentiful (3500-4000 such micro businesses exist in Nairobi alone) the population under 5 is the largest in the 4.5M city, of whom over 50% live in slums. We are not creating a problem or a market - we are merely aligning needs and solutions that already exists to help avoid the same avoidable mistakes being made over and over, side by side, in childcare centres across the city. What managers, mothers and children really need is knowledge, capital and networks to improve the service they all depend on - our platform deals with the knowledge and network needs to then create from disaggregated markets an aligned community of clients and providers who collectively generate value and capital that could not and did not exist when each struggled in silos, alone. Over the long-term as we prove the viability of this market uplifting and aligning approach, we intent to replicate it in cities and countries in sub-saharan Africa and beyond.
Select the key characteristics of the population your solution serves.
In which countries do you currently operate?
In which countries will you be operating within the next year?
How many people are you currently serving with your solution? How many will you be serving in one year? How about in five years?
As a condition of partnership, Tiny Totos trains daycare partners in rigorous data collection on children registered, frequency of attendance, payment for services and how much (day of daycare, meals, late pick ups, nightcare etc). We require complete data transparency and access to daycare records at all times. We also conduct health and development assessments of children, and survey parents' baseline understanding of childcare and nutrition at point of partnership and future intervals to track understanding and behaviour change. For example, a parent who never spent money on nutritious meals for their child who now is and responds to text surveys stating their behaviour changes is a response to heightened awareness plus access to service supported by Tiny Totos shows evidence of caregiver attitude changes that will benefit children for a lifetime. To date, we have:
- Served 5,132 children at our daycares
- Sold 93,850 meals
- Trained 3,000 women in ECD, business and tech
- Positively impacted over 20,000 people in Nairobi's slums
- Partnered with 55 daycares
- Almost tripled average daycare revenue from $108 a month to $315
- Grown monthly max revenue from $450 to $1100
- Secured financing allowing us to scale to 20,000 children by 2021.
What are your goals within the next year and within the next five years?
So many futures depend on accessible, and affordable childcare to unlock the potential of working women and preschool children.Growing interest in supporting improved ECD for the poor is growing. Our market-based model will prove catalytic in unlocking capital that is seeking new solutions to support improved childcare and economic opportunities for BOP communities.
We measure success through these metrics:
- business indicators
- stakeholder engagement
- parental attitudes and behaviour
- child well being
Our top goals are to Consolidate, Replicate, and Market our model to generate additional partnerships and returns that promote network sustainability.
What are the barriers that currently exist for you to accomplish your goals for the next year and for the next five years?
As we roll out this support programme, we are aware that by getting involved in the informal economy, rather than make things better, there is risk we could actually make things worse.
How? If we distort markets through subsidy, make owners dependant on our support, give clients excuses not to pay. We have to be careful to strike a delicate balancing act between need to monitor and report while maintaining a healthy distance. Technology can help us do this.
How are you planning to overcome these barriers?
With our expanded app we will:
1. Help daycare partners understand their businesses better. Owner managers can input all the business data they collect onto their phones‚Äì registration, payment, attendance--and instantly see and compare performance. Now, we are flipping the information flow on its head. Access to an instant, analytical app platform professionalizes their businesses, and gives them opportunities for self-analysis and growth.
2. Add value and incentives to the network and manage these at scale. Over the past 18 months we have piloted asset finance loans to both managers and parents for products like products like clean cookstoves, water filters, and pressure cookers that extend wellbeing of children to the homes and save money and time.
3. Improve information flow on children's wellbeing to parents, and reduce risk of children being harmed, abused, neglected - at home or daycares - by increasing transparency of care and layers of oversight when previously, care was entirely unsupervised. We also have a child protection policy in place to guide partners' care.
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Hybrid of for-profit and nonprofit
How many people work on your solution team?
Why are you and your team best-placed to deliver this solution?
Tiny Totos is based in Nairobi, Kenya. We have a back office in Westlands and a small field office in Buru Buru; our current remit is focused entirely on Nairobi and our team of 15 plus 9 part time is drawn entirely from Nairobi, with only one non-Kenyan (Emma) in the team. We are uniquely positioned to deliver on our mission, as we have assembled an incredibly strong and experienced team of individuals to serve in our staff and Board teams with a variety of skills set that collectively enhance our innovation goals and position us for success. Briefly:
Team: This includes Emma Caddy (MBA, 20 years' development / impact investment experience globally with 10+ in Africa, expert SME judge for World Bank, Sankalp, others); Joseph Walumbe CFO with background in banking and Microfinance; Moleen Ute COO; long experience with Field Operations gained at Bridges International Academies, where she helped roll out ops in Uganda; John Makau, Technology & Systems Manager with graduate degree in business analytics and work experience in customer UX and EY; Martina Adega, Field Coordinator, a trained nutritionist with multi-year experience at USAID.
Board: Includes Biju Mohandas, Head IFC Subsaharan Africa Health & Education; Robin Bidwell, CBE founder of ERM the global consultancy who scaled the company from 3 employees to 40,000 in 140 countries; Mary Ann Musangi, CEO Haco Industries, a Kenyan-based FMCG company with background in marketing at Coca Cola; Stephanie Draper, representative from the Draper Richard Kaplan Foundation, one of our funders.
With what organizations are you currently partnering, if any? How are you working with them?
We are partnering with Skyline Design, a Nairobi based tech company, to develop our tech solution. Also with companies like Soy Afric and Countryside Dairy to add new products to sell to the parents alongside childcare.
What is your business model?
Our business model is to build a franchise of individually self-sustaining micro childcare businesses that collectively, allow us to access a growing network of working mothers who beyond childcare, buy similar products and services every single day, paying a premium for poor quality products. Our goal is once these individual struggling businesses are making more money, and by extension, give more support and stable services to their clients, create an alternative distribution network to BoP customers that gives them so much more than higher quality childcare; e.g. access to affordable, fortified porridge, access to finance for health enhancing and cost saving household goods such as water filters and clean cookstoves, using their payment history for childcare as an alternative collateral. With small margins for sales of these products, plus loans to businesses and membership fees, we calculate that we will be able to meet costs of running the network in 3 years’ time, supplemented by marketing contracts, data and research on our BoP customer base, licensing / advertising through our mobile app, CSR and HR support services. As all of our income streams are modest, it is important that we diversify as we are not aiming to make money from margins, but from numbers.
We have raised $1.5m, with core operating capital secured to 2021. We are registered as a company limited by guarantee, allowing us to generate returns from financing and sales of products that benefit women and children, provided profits are reinvested in the business of the business.
What is your path to financial sustainability?
Our path to financial sustainability is outlined above; building a network of customers requiring and receiving above market standard, regulated, safe and stimulating childcare services who we can then access via the mobile app we have developed and the network of trusted businesses we have amalgamated to sell additional products and services that we know they pay a premium for every single day. Moreover we will provide access to fair, affordable financing for products whose ticket price is higher than they can afford, using alternative credit rating of their payment for child care as our indicator of trustworthiness. No other entity in the market will know these women as well as we do - based on their customer payment history. We intend to reward and support them for the effort they put into paying for their child's self keeping, irrespective of whether they have a fixed job, own property, use mobile money or not. All these micro customer payments and purchases will in aggregate, meet our financial sustainability. In some respects we see ourselves as an Airbnb or Uber - aggregating and aligned an under utilised resource and giving more value to owners / providers of the resource and users of it through association and network.
Why are you applying to Solve?
If we were named a Solver, we would:
1. Roll out in Tanzania, to test application of the model in a new market and determine degree of localisation needed prior to replication.
2. Work with our tech partners at Skyline to position the app for patenting and white label licensing with partners in different markets.
3. Partner with local network providers to provide accessible internet around the daycares to remove any technological impediment to them using the systems
4. Scale the apps' ability to connect the network to providers of affiliated services - insurance, products, finance - to create further value from membership
What types of connections and partnerships would be most catalytic for your solution?
With what organizations would you like to partner, and how would you like to partner with them?
We would love to partner with technology companies, marketing companies, companies that can help us scale.
If you would like to apply for the GM Prize on Community-Driven Innovation, describe how you and your team will utilize the prize to advance your solution.
We definitely want to be considered for this opportunity. We will use this prize to invest further in improving our technology platform, and ensuring that all clients and managers of daycares have access to its benefits (intranet hubs, phone financing etc). We will also invest in training up community members to create content themselves so that we do not rely only on TTK, but we create viral social communities that can help drive the conversation on childcare from the grassroots up. Hardware, software, knowledge, access will be the key pillars of investment should we be fortunate to win here.
If you would like to apply for the Innospark Ventures Prize, describe how you and your team will utilize the prize to advance your solution. If your solution utilizes data, describe how you will ensure that the data is sourced, maintained, and used ethically and responsibly.
We would use this prize to collect and allow citizens to collect real time data on their actual socioeconomic circumstances to empower their demand for social change. The communities we work with are in many respects invisible, their inner workings are opaque, how much working mothers earn, how many children are inoculated, how many children are stunted, malnourished - this is information that is largely beyond the reach of the state. As a result of these huge data gaps caused by socioeconomic barriers - eg low inoculation rates because working mothers have limited knowledge of its importance and even less time to miss work to take children for vaccinations at health centres that are only open during the working day - society and most importantly children suffer. We plan to access data through these trusted yet entirely neglected informal institutions in the slums - which make up 83% of child-facing institutions - and help communities access, understand and eventually, campaign for improved services that align with their realities.
If you would like to apply for the Morgridge Family Foundation Community-Driven Innovation Prize, describe how you and your team will utilize the prize to advance your solution.
We would like to apply for this prize so that we can invest in finding solutions to the childcare and child services gap that exists in Nairobi. Our assumption is that the cost of a private sector model for decent childcare is less than assumed if we take a franchise approach to the problem. Our goal is to build a technology platform that functions as a management tool for the businesses we work with, a knowledge platform with creative content to drive lessons and stimulation, and a parent access point for mothers to gain understanding of opportunities and knowledge around childcare services and improvement that they otherwise wouldn't have. The dearth in decent ECD care and services is dramatic in Nairobi as in urban slums elsewhere and condemns entire generations and societies to a life time of unrealised potential. If we can help unlock potential through a uniformed platform approach that builds on an already existing, trusted economy than the potential for change and replication reaches far beyond preschool children of Nairobi to cities all across the developing world. Investing in a user friendly technology platform is paramount.
- Emma Caddy Founder, CEO, Tiny Totos