The Business of Impact
Can markets and mission work together? We’re about to find out.
I would’ve never guessed that our company, founded and headquartered in NYC, would open its first brick & mortar store in India. But in the late fall of 2015, that’s exactly what happened. Fast forward to February 2016 and I’ve just returned from a two week trip to Odisha, India where I spent time shadowing our Program Managers and manning our brand new store. I drank the chai cooked on our stoves out front, I watched our local staff demo our lights in a makeshift ‘darkroom’, and I watched potential customers flow through the shop eager to learn how they could bring energy to their home.
This store represents so much for BioLite — years of hard work, for sure, but more importantly, the vision that a new way of doing business can go after one of the biggest challenges of our time: energy poverty.
Five years ago, I was in a much different space. I had spent years building my career as a product designer, helping large companies design products that incrementally improved user experiences for problems that already had pretty good solutions. The work was fun, creative, even challenging at times, but I couldn’t help but feel that the substantial resources we had been given as professional engineers and designers could be applied to improve the lives of people whose needs had not been solved over and over.
This is where my journey with BioLite began. In 2006, my co-founder Alec and I set out to solve a problem of our own. As avid campers, we were tired of rationing gas and batteries out on the trail. On those same trails we found sticks everywhere, inspiring us to design a stove that could burn wood as cleanly as gas. But as we began to research clean wood combustion for the campsite, we quickly discovered a much larger need.
Half the planet still cooks over smoky wood fires — the emissions from these inefficient fires kill more people than HIV, Malaria, and TB combined. Imagine having an open campfire burning in your home for three hours, every day. No chimney, no vents, just a big fire billowing smoke through your home. For 3 billion people, that’s a daily reality.
I was shocked. Why hadn’t I heard of this problem? Why wasn’t more being done to solve for this crucial need?
And there’s more to it: these same families most often lacked access to electricity. They were forced to burn dirty and expensive kerosene for lighting and pay local kiosks meaningful fractions of their income to charge cellphones, a new essential technology for everyday life.
Today there are 2.3 Billion families living in “energy poverty:” they lack modern, safe, and affordable ways to cook, charge, and light their lives. This directly impacts their health, economic opportunity, education, and gender equality.
As an engineer, where others saw problems, I was trained to find solutions so we began experimenting. Our early trials on improved wood combustion demonstrated that thermal energy from fires could be converted to electricity using thermoelectric devices. If we harnessed this correctly, we could use that power simultaneously for cleaner combustion and electricity access. That’s when the BioLite HomeStove was born. And while we were nowhere near ready to launch that first product, we asked ourselves if this technology-led approach to improving fires fundamentally improved cooking, what other challenges could we address?
What if we built a company dedicated to inventing solutions to energy poverty as a whole?
In 2009 we took the plunge. Alec and I quit our jobs and dedicated our careers to build BioLite. As it turned out, the technology was only the beginning. We needed a team that could run high quality, efficient manufacturing, manage international logistics, and hardest of all, build markets for these technologies in hundreds of villages across India and Africa.
But before we could even begin building that team, we needed to find a business model that could support the substantial time, team and resources necessary to solve problems as difficult as decentralized energy access.
With nearly 3 billion people living in energy poverty, whatever model we chose needed the ability to grow to substantial scale. We began our search by examining models other companies had used:
- Grant Funding: With limited funding available for technology for development, and the uncertain timing and amount of funds, this seemed like a challenging way to promise a staff the career security necessary to tackle hard problems over the many years it would likely take us to make progress.
- Cause-Marketing: TOMS had garnered popularity with their “Buy One, Give One” program and Patagonia had inspired many companies in the outdoor industry with their “1% For The Planet” program. But as we took a closer look, the scale of our problem just didn’t fit; even if we gained as much traction as TOMS and gave away a stove for the equivalent number of shoes they had sold, we would still have addressed less than 1% of the total need.
At the same time as we were examining these philanthropic approaches, cellphones were propagating at unprecedented speed across low-income, un-electrified parts of India and Africa. For the first time, companies were starting to prove that there could be commercial markets for advanced technology with low-income customers, and that these commercial approaches were scaling exponentially more quickly than any philanthropic initiative ever had.
What if we took a market-based solution and created a new model for impact?
We started to focus on the concept of Social Enterprise. Under this model, we could align our social mission — access to energy — with our customers’ preferences and their willingness to pay for such a product. By connecting our mission directly to our company’s economic success, we would be forced to find a financially sustainable, and therefore scalable, solution to create impact.
We would treat users as discerning customers, not charity recipients. We would reinforce local economics instead of disrupting them.
But in order to build a commercially scalable social enterprise, we required the near term revenue that could set us up to scale in the long term, and that’s when we got to brainstorming, what if we used our experience with camping and our aspirations to help improve energy poverty to mutually reinforce one another?
As we began to understand the synergies between our camping and emerging market customers, our business model emerged: Parallel Innovation.
If we invested deeply in the core technologies that transform access to energy and embed these technologies in relevant products that serve both outdoor enthusiasts and off-grid families. We could then reinvest revenues from our camping market into our work in India and sub-Saharan Africa.
This would help us incubate those emerging markets to the scale which they could sustain their own future growth. And unlike philanthropy, the success or failure of our work lay entirely in the hands of our users in both markets. It was a form of Social Enterprise, bolstered by the merging of two distinct audiences, bonded by the common need for off-grid energy.
This Parallel Innovation model blended near-term financial viability with the potential for long-term impact and, in 2011, created the confidence we needed among venture capital investors to help us get our start by hiring our team and producing our first product.
The Long Road Ahead
It’s five years later and our team and our technology portfolio have grown. We’ve opened up operations in the US, three African countries, and across India. We’ve launched our outdoor products in major retail stores and distributed over 10,000 HomeStoves worldwide. But it has been our users that have ultimately fueled the vast majority of our progress. By voting with each purchase, they tell us whether our technologies are up to snuff. They share feedback to point us in the right direction, and most of all they give us the energy to keep focused on really tough but important problems.
I’m incredibly proud that our community has helped us grow to this point but we still have a long way to go. We’re still figuring it out, and we want our community along for the ride. That’s where our new publication, The Road To Impact , comes in.
Over the next year we’re doing a real-time pulse check on how things are going here at BioLite; we’ll dive into the nitty gritty of the business and share the successes and challenges of our work. We hope to provide useful insights to fellow social enterprises, raise awareness around energy access, but most importantly we hope to spark conversation among those who believe impact is possible.
So what do you say? Help us with that spark and tell us: what do you want to see in the year ahead from BioLite?