How We Got Here And How It's Going: A New 10 Part Series from BioLite
Hi - Jonathan here.
When we started BioLite, it was with the mission to bring Energy Everywhere: as professional engineers and designers, we hoped and believed we could invent solutions that would one day change the lives of millions of people living in energy poverty.
But we also realized that we needed the partnership of a broad community to support, coach and encourage the long journey ahead. And to our great pleasure and deep appreciation, you, our community, joined in our mission. You’ve purchased our products, given us honest and open feedback, and most of all, provided us with the confidence and momentum to continue to go after some really hard problems.
This is your journey too, and we think you deserve a full, unfiltered, behind the scenes look into the daily work of building a new kind of energy. With this in mind, I’m proud to announce The Road to Impact, a year-long 10 part series from BioLite in which our community will ride shotgun for each step in the process of building an impact business. We want to show you how our rocket scientists (yup, actual rocket scientists) engineer combustion, how our products are manufactured, how our users across India and Africa inform our designs; we’ll go on the road with our distributors and learn what makes a great pitch and how we train and support rural customers; we’ll talk about the micro-loans that are helping make energy ownership possible for even the lowest income customers, and at the end we’ll measure our impact to date.
Throughout 2016, we’ll be delivering a new chapter of “The Road to Impact” each month, and you can see a full outline of what’s to come. I am honored to be the author of our first chapter, “The Business of Impact,” a brief history of how BioLite came to exist, and how you, our customers, became the core of achieving our mission. We’re excited to share this journey with you and grateful for your continued guidance, ideas, and partnership as we continue down the long Road to Impact.
Onto Chapter One!
With warm regards,
Jonathan Cedar CEO and Co-Founder
The Road to Impact, Part 1: The Business of Impact
When my co-founder Alec and I decided to build BioLite, it was with the aspiration to solve important problems. We spent the first part of our careers helping large companies design products that incrementally improved user experiences for problems that already had pretty good solutions. The work was fun, creative, challenging at times, but we 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.
Our journey began in 2006 as a pair of friends tinkering on nights and weekends, initially looking 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 biomass (aka sticks) just about 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 for clean cooking and energy access in developing countries.
Energy Poverty and The Need for a New Kind of Grid
It shocked us that half the planet was still cooking on smoky wood fires and that the emissions from these inefficient fires was killing more people than HIV, Malaria, and TB combined. It's like having an open campfire burning in your home for three hours, every day.
Why hadn't we heard of this problem? Why wasn't more being done to solve for this crucial need?.
These same families most often lacked access to electricity, and so 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. These families live in "energy poverty" – they lack modern, safe, and affordable ways to cook, charge, and light their lives. Affecting health, economic opportunity, education, and gender equality, access to energy is one of the most critical enablers to human development.
As engineers, where others saw problems, we saw opportunities. Our early experiments on improved wood combustion demonstrated that thermal energy from fires could be converted to electricity using thermoelectric devices; we could then use that power simultaneously for cleaner combustion and electricity access. And while we were nowhere near ready to launch even our first product, if this technology-led approach to improving fires fundamentally improved cooking, what other challenges could we address if we built a professional company dedicated to inventing solutions to energy poverty as a whole?
Finding the Business of our Business
In 2009 we quit our day jobs and dedicated our careers to building BioLite with the mission of bringing Energy Everywhere. As it turned out, 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 build that team, we needed a business model that could support the substantial time, team and resources necessary to solve problems as difficult as decentralized energy access. We began by examining the models other companies had used to address large public interest problems. With nearly 3 billion people living in energy poverty, whatever model we chose needed the ability to grow to substantial scale. Our first thought was to pursue grant funding. But 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 professional staff the career security necessary to tackle hard problems over the many years it would likely take us to make progress.
We then examined funding our emerging markets through an internal, cause-marketing approach such as the “Buy One, Give One” model. We knew that our technologies had great application in camping markets, after all, that’s where we originally started and it was a user group we knew well from direct personal experience. 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 to development, 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.
So, we began to look to a market-based solution.
A New Model for Impact: Parallel Innovation
Rather than philanthropy, we started to focus on the concept of a “Social Enterprise”. Under this model, we would 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. This approach treated users as discerning customers, not charity recipients, while reinforcing 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 it all came together:
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.
We could invest 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, respectively. We could then re-invest revenues from our camping market into our work in India and sub-Saharan Africa, helping us incubate those emerging markets to the scale and 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
Over the past five years, our team and our technology portfolio have grown, but it has been you, our users that have ultimately fueled the vast majority of our progress. You vote with your purchases to tell us whether our technologies are up to snuff, you send us emails and share feedback to point us in the right direction, and most of all you give us the energy to keep focused on really tough but important problems.
We kicked off our new series with this chapter because we wanted to get one thing straight before we went any further in our story: no one holds more sway over the work we do than our customers and community members. Your support is directly built into the core of our business, and will continue to be the engine that drives us forward. The chapters that follow in the year ahead are all made possible by us all believing that Energy Everywhere is a mission we can accomplish, together.
Stay tuned for Part II of our series, where we dive deep into the motivations behind Energy Everywhere and why energy access is one of the most transformative opportunities of our time.