Want to Fight Poverty? Give Someone a Stage
MBA Team Reaches Finals of Hult Global Case Challenge
Ask a young person today, “How can you make the world a better place?”
Few will reply, “Go to business school!”
We aim to change that, because it turns out that “how to change the world” is exactly what business schools teach. Whether that’s for better or for worse, of course, depends on what students do with that knowledge.
In our case, it’s reinventing the way the world’s poorest families light their homes. Our team was a finalist in the 2012 Hult Global Case Challenge, which this year focused on global poverty solutions in housing, education and energy. After winning the regional energy final in San Francisco, we flew to New York City in April to compete against five teams from other top global universities. We were competing for a $333,000 prize to pilot our plan.
Here is the challenge: right now, in rural Africa, 140 million families can’t flip on the light switch when it gets dark. They have no electricity, so most burn dirty and expensive candles or kerosene lamps. There are good alternatives, but the price is high. For the rural poor, a solar-powered lantern can cost half a month’s wages.
With this in mind and a fresh perspective, we began by deconstructing the solar lantern — literally. We removed the solar panel, charging circuit and battery, which account for 70 percent of the cost. The lanterns need electricity, so we designed solar-powered charging shops for rural communities in Kenya. A centralized charging station is far more efficient than leaving individual lanterns outside all day where they can get broken, stolen or rained on.
Here’s how it works: When a customer buys a lantern, the shopkeeper lends her a fully-charged battery for free. Three days later, the customer brings back the depleted battery. The shop exchanges it for a freshly charged one for 20 cents. That’s half of what many Kenyans pay for three days of kerosene.
Why would a customer come to this shop? Because we’re also charging cell phones. More than half of rural Kenyans own cell phones, even though many can’t charge them at home. Some regularly travel three hours by bus and pay 20 cents (or more) for the recharge. That’s $40 per kilowatt hour, which is more than 200 times what we pay in the U.S.!
With families spending so much on kerosene and phone charging, it’s no surprise that our idea can be profitable. And once one charging shop pays for itself, the profits build the next one in another community. This sustainable business model can save customers money, improve their lives and replace polluting and dangerous kerosene.
Of course, everything won’t work exactly as we expect. But through this competition, we collected feedback and insights from an incredible array of experts: UC Davis professors and engineers; consultants at McKinsey, IDEO, and Jump Associates; funders at Omidyar Network; and NGO workers and business people across Africa.
We didn’t win at the global finals, but we’re inspired to move forward. This business model needs to be tested. There are 140 million families in Africa alone who are waiting for cleaner, brighter light.
Keith Weissglass, Adam Baillie, David Fisher, Emma VanGenderen and Evan Howell are 2012 UC Davis MBA graduates. Follow them on Twitter @GSMCaseTeam. This article was adapted from theirblog in the Huffington Post @ www.gsm.ucdavis.edu/hulthuffpost