Entrepreneur magazine profiles an innovation with great potential to help the three billion people worldwide who use open fires as a primary cooking source.
Product designers and avid campers Alec Drummond and Jonathan Cedar were on a mission to develop an environmentally friendly camping stove. What they came up with uses half the wood of an open fire, reduces emissions by 95 percent and produces electricity to charge cell phones!
Their first product was the BioLite CampStove which is available now for US$129. But after their prototype won an award for its low-emission design, Drummond and Cedar realised that their innovation could provide a solution to a major global health issue.
An estimated two million people die annually from the effects of smoke from indoor fires used for cooking and heating. Drummond and Cedar figured that their technology could help lower this toll, as well as reduce deforestation by decreasing the amount of wood needed for fuel. Hence BioLite is developing a larger model, the HomeStove which is in early-stage testing in India, Ghana, Uganda and Guatemala.
Rather than a charitable model based on fundraising, Drummond, Cedar and new partner Jonathan den Hartog wanted to develop a market-based solution with a target price of $40. Entrepreneurial ventures in low-income regions are no different than they are anywhere else, Cedar says: “It’s like any other market – bring your best and find ways to communicate and solve challenges.”
Here’s what I like about this story.
First of all, this is very cool. What’s not to like about technology that lets you sit around the flames, telling stories, toasting marshmallows and charging your iPod? An interesting fact is that although 79 percent of the population in developing countries has a mobile phone (ITU Report 2011), lack of reliable electricity means many phones are often flat. Now you can add a wood stove to the solar panel and bicycle charging options!
This article highlights what I call the ‘multiplication effect’ (a topic to which I’m sure to return). If BioLite were seeking sponsors for their HomeStove, then the number of stoves that could be distributed (read: number of lives that could be improved) would be proportional to the funds obtained. Each dollar gifted would add to the number of stoves that could be given away.
But by using a market based approach, the profit incentive will encourage BioLite to expand their business. If they price their product low enough to attract customers but still make a profit, there is the potential for exponential growth (the multiplication effect). Sure, their customers need to find the money first. But if the product does the job, people will find the money to buy a BioLite HomeStove just like they did to buy their mobile phones, and they might then set up their own little side business charging their neighbours’ phones!
Just a few such companies achieving exponential growth could result in more good than all the charity in the world.
What’s your view on the effectiveness of aid? It seems to me that charity and aid has tried its best but has made little long-term difference in poor countries. While it has achieved much good and will always be needed, it is too often stymied by corruption, bureaucracy, inefficiency and greed. By using a different approach, business ventures have the potential to bypass government interference and directly impact consumers. And when the business idea has at its core the promise of improving people’s lives and reducing environmental impact, I’m quite happy for the company to make a profit while doing so.