Going beyond the status quo - creating bigger, better, bolder, faster, and cheaper solutions
The way to make a big difference in 2020 is to build a new kind of enterprise, one that can make an major social impact while also making a profit. - Jeremy Leggett, Founder SolarAid and SunnyMoney
Going beyond the status quo - to create bigger, better, bolder, faster, and cheaper solutions
SunnyMoney wants to transform lighting in Africa Millions of people in Africa could benefit from better lighting solutions Light increases productivity and enriches life Adequate light sources are widely available in Africa, but millions of people rely on expensive off-grid lighting Access to light also means access to energy SunnyMoney is working to bring affordable off-grid solutions to Africa SunnyMoney is a social enterprise that evolved out of SolarAid SunnyMoney offers micro-lighting solutions SunnyMoney has had a hard time building scale SunnyMoney needs to address many challenges to achieve their goal The market isnt aware of the product, and potential customers are hard to reach Potential customers dont quickly see the benefits Many customers cant pay up front, or over time The supply chain cant respond quickly, and SunnyMoneys batteries have an expiration date SunnyMoney needs new and better solutions to achieve wide-scale, transformative impact Are there new customers and experiences to target? Are there new ways to deliver SunnyMoneys solutions? Are there new offerings that SunnyMoney can bring to the market? Are there new ways to produce SunnyMoneys solutions? Are there new business models? Are there new partners to collaborate with? 3 3
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Can SunnyMoney get off-grid solar power and light to one million households by the end of 2013? 15
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10 10 7 7 7 5 5 5 5 8 9
11 11 11
4 4 4 4 3 3 3
2 2 2 2
Mean = 10
Figure 1. Reliability of the African Power Grid Source:WB/IFC Enterprise Analysis Unit (2006-2008)
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Death by Candlelight On August 22, 2009 at the Idodi Secondary School in the Iringa Province of Tanzania, many of the 460 girls at the boarding school had been studying in their dormitories, using candles as their only source of reliable light. One student accidentally knocked over the candle by her bedside. The flames quickly engulfed her mattress and the mosquito net surrounding it, and rapidly spread throughout the entire dormitory block. As the young women scrambled for their lives, some became trapped. Twelve died and 20 others were seriously injured. The dormitory itself burned to the ground. Many children die each year as a result of fires that are started by candles or unchecked kerosene lanterns, despite having readily available alternatives, such as solar powered lanterns. In fact, SolarAid had just installed solar panels on the Idodi school itself the June before. As Idodi started to rebuild, SolarAid donated its micro-lantern kits to the school so students would no longer need candles.
Table 1. Overview of Artificial Light Sources Source The Grid SUNNYMONEY Solar Lamps Solar-powered lamps Solar lamp systems Battery-Powered Lighting Flashlights (torches) Lamps powered by large batteries Flame-based Lighting Candles Fire Kerosene (paraffin) lamps Low initial investment Frequent (high) repeated costs Indefinite lifespan Sturdy design No need to charge or recharge
Offering
Cost
Low initial investment Frequent (low) repeated costs Indefinite lifespan Infrastructure externally maintained
High initial investment Negligible costs over time Panel with significant lifespan; battery with moderate lifespan; charges rapidly (3-5 hours) Moderate light from single lamp (40-60 lumens) Lasts up to 6 hours Limited delivery access Disparate distribution channels Select locations in several countries in Africa
High initial investment Negligible costs over time Varying effectiveness and durability; similar lifespan to SunnyMoney offerings
Convenience
Performance Access
Grid yields 500- 1000 lumens any time of day Extremely limited grid access Urban and some peri-urban locations only
Moderate light from single lamp (40-60 lumens) Lasts up to 6 hours Difficult distribution Rarely localized access Minimal market size
Flame yields 10-100 lumens Unsafe and dangerous Unpleasant smoke Widely available (local) kerosene/ flame light source Distribution established Little to no support required
We are at peace. There are just over 200 children between the ages of 3 and 12 years old at the orphanage in Nairobi, Kenya which also operates as a school. While the majority are in foster care programs, a little more than a third of them live full time in Cheryls Childrens Home. The orphanage needs to pay for food, water, fuel and electricity to keep operating. It is often strapped for cash, and has trouble keeping up with the bills. When they fail to pay, the electricity company cuts off the electricity, usually without warning, by simply cutting a cable. The orphanage, located in a dangerous area of Nairobi, is plunged into darkness, spreading fear among its young inhabitants. At the end of 2010, SolarAid, with the help of donors, installed solar panels at the school. When Rose Shiga, the Homes manager, was asked what difference solar power made, SolarAids management was surprised by the answer. Expecting to hear that children were now able to read in the evenings, or that they now could better afford food, water and medicines since they no longer needed to buy electricity or purchase kerosene, Rose stated, We are at peace.there is no fear because whatever happens we have light. When SolarAids Director of Fundraising and Marketing, Richard Turner then asked his young friends what they wanted to be when they grew up, the responses he received made him smile: a newsreader, a journalist and a pilot. SolarAid had not just brought them light for the present: it had taken away fear, and given them hope and dreams for the future.
Category S1
Product
Phone Charger? N
Supplier D.Light
RRP $7.43
Entry Level
S10
D.Light
$10
Barefoot Power
$20.25
Greenlight Planet
$28.13
D.Light
$50
Barefoot Power
$36.75 $57.75
Barefoot Power
$95.25
Macro Range
PowaPack 15 Watt
Barefoot Power
$222.30 $322.50
Rural households, rural offices, rural dormitories, rural classrooms and clinics
SunnyMoney has had a hard time building scale SunnyMoney currently sell lights in four countries At present SunnyMoney operates in four African countries: Tanzania (43 million people) Kenya (41 milllion people), Malawi (16 milllion people), and Zambia (14 milllion people), which have a combined population of close to 114 million people.17 Between 2006 and 2011, SunnyMoney reached a total of 215,000 households and sold 46,000 lamps. In 2010/11, it generated $400,000 in revenues, of which the sales of solar lamps accounted for 79 percent. To build sales, SunnyMoney has been experimenting with a number of different sales, marketing and distribution models but with limited success. In Tanzania SunnyMoney has trained and developed door-to-door local entrepreneurs. They hired teams to drive from village to village in off-road vehicles to demonstrate how the lights work: it took five teams seven months to reach 80 percent of Tanzania, but along the way SunnyMoney lost time and money to equipment breakdowns and personnel changes, adding significantly to the expense. SunnyMoney has also sold lights through various wholesalers and other social enterprises and organizations, including foundations. In one instance, for example, they sold lamps to the Anne K. Taylor Fund, which in turn sold the SunnyMoney lamps to the Maasai in Kenya and northern Tanzania in order to raise revenues to fund their community programs. SunnyMoney has also used more traditional fastmoving consumer goods retail channels, but with little success. Shopkeepers have little incentive to keep the lamps on hand since there is little to no demand for them from their customers. In Malawi, SunnyMoney has been working with Concern Universal (CU), an international development organization that enables community-led development primarily in Africa.18 In an effort to promote entrepreneurship in sustainable energy products as a way to combat deforestation and climate change, CU sponsors entrepreneurs who produce and sell energyefficient clay stoves. In July 2009, SunnyMoney started supplying CU with their micro-solar products which are then distributed through the existing network of clay stove entrepreneurs. More than 600 lamps have been sold this way.
SunnyMoney is also starting to work with CUs microfinance organization (CUMO) to nominate and capitalize these potential entrepreneurs. In another instance of partnering, at the Satemwa Fair Trade Tea Estate in Malawi, the Joint Body of the Workers Council, representing workers interests and having budget authorization, sought advice on providing micro-solar products to tea workers in the estate. By the end of Q1 2010, SunnyMoney had supplied all 1,800 permanent tea workers with micro-solar products. With a constant in-flow of seasonal workers, SunnyMoney is discussing the prospect of providing products to new entrants, or additional products to the local community. In Kenya, SunnyMoney works with Smart Solar, who in turn is a local distributor for Barefoot Power, a for-profit enterprise with an extensive distribution network that makes its products available within Uganda through a network of solar entrepreneurs and works with other social enterprises in Kenya, Tanzania and India to help distribute its products. Barefoot Power provides SunnyMoney with the majority of its product range, including its popular Firefly Mobile and Powapack models. It works with other suppliers such as d.light to provide the smaller S1 models and Greenlight Planet for the larger models. SunnyMoney has had success distributing through local schools Of all the channels tried, only one has demonstrated the promise of providing the scale needed to reach SunnyMoneys ambitious goal. Mafia Island, Tanzania is 30km long and 15km wide and lies just off the mouth of the Rufiji River in Southern Tanzania. Most of its 45,000 residents make their income fishing from the sea. Roads are rugged with few vehicles; everyone walks or rides bicycles. Very few residents living outside the district capital have access to electricity or running water. Work stops at sundown, and children lucky enough to go to school sit beside flickering candles or smoking kerosene lamps to do their homework in the evenings. It was here, in what has been described as one of the least developed parts of an undeveloped country that SunnyMoney witnessed one of its most surprising successes.19 Battery powered LED lights were SunnyMoneys biggest competitor for Mafia Island customers, although product quality and battery capacity are low. The entry price point for an LED battery light in the Mafia Island market was TSH2,000 (approximately US$1.25), with very poor quality batteries selling for 10 cents to 20 cents each.
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How to sell solar lights? How to sell these products in Africa at scale is the nut to crack. No one has succeeded as of yet: the question is why? What can we do differently? There is no doubt that solar will replace oil, but the question is when, and what can we do to accelerate the process? How do we make more people aware? The more we sell, the more aware they become. Volume drives more volume. - David Battley, Director of Business Development, SunnyMoney
SunnyMoney needs new and better solutions to achieve wide-scale, transformative impact
In order to find solutions to help SunnyMoney scale, we must consider each piece of the innovation value chain (see figure on page 13). What does SunnyMoney need to do to create a wealth-generating ecosystem that results in a sustainable solution to provide solar lights over the long-term in Africa? Andrews and his team will have to consider new combinations of the elements of the value chainnew markets, new offerings, new distribution channels, new partnerships and new business models to meet their ambitious goal. Are there new customers and experiences to target? While building its product portfolio and experimenting with distribution models, SunnyMoney has created opportunities to pitch solar lighting to a wide variety of customers, from individual households to community hospitals. For the most part, SunnyMoney effectively targeted the customers and markets with which it was able to establish a special point of access, but not necessarily those with whom they might establish a special value proposition. Can SunnyMoney learn from Apple Computer and UnderArmour? Across multiple generations of Apple products, selling directly to public school systems has been a core element of the companys marketing strategy. Apple products have consistently won the support of teachers, administrators and students because they are intuitive to use and make learning easy. Schools are valuable early adopters for Apple because students and teachers who use Apple products often become passionate advocates for
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Can SunnyMoney get off-grid solar power and light to one million households by the end of 2013?
SunnyMoney wants to transform lighting in Africa by replacing increasingly-expensive fossil fuels with affordable, renewable sources of power and light, but their journey is just beginning. To accelerate that transformation, SunnyMoney needs solutions that will allow them to scale rapidly and that will bring the African off-grid solar energy market to a critical tipping point in terms of awareness, affordability, distribution, and supply. The question now becomes: can we help SunnyMoney get off-grid solar power and light to 1 million households by the end 2013?
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ACKNOWLEDGEMENTS The authors would like to thank Jeremy Leggett, Steve Andrews, David Battley, Gerrard Graf, John Keane, Pepijn Steemers, Richard Turner, Linda Waume and the staff of SolarAid for their extensive support, responsiveness, and encouragement. Special thanks to Kerry Herman, Howard McNally, Ahmad Ashkar, and Stephen Hodges, President of Hult International Business School.
The Center for Innovation, Excellence and Leadership vision is to Make Innovation Management a critical business discipline in corporations and business schools around the world. Its mission is to help corporations and individuals develop world-class innovation management capability while driving significant business impact. IXL Center delivers this through Training, Coaching and Advisory services to create innovation breakthroughs and to build the innovation capabilities of individuals, teams and organizations. Clients achieve bigger, bolder, better results more quickly and cost effectively though blended learning and action learning programs, its Certified Innovation Manager (CIM) program and collaborative research projects. IXL Center is a global community of innovation thought leaders and practitioners with offices in Boston, Dubai, London, San Francisco, Shanghai, So Paulo and Seoul.
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