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Business Models for Solar Lighting at the Base of the Pyramid

Ted Ladd Net Impact Annual Conference slides at pubs.tedladd.com. Business Models for Solar Lighting at the Base of the Pyramid. Logos for Hult, CBS, Case, CTO. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion. Agenda.

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Business Models for Solar Lighting at the Base of the Pyramid

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  1. Ted Ladd Net Impact Annual Conference slides at pubs.tedladd.com Business Models for Solar Lighting at the Base of the Pyramid Logos for Hult, CBS, Case, CTO

  2. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Agenda • Business Model Canvas • Exercise: Solar lanterns with micro-finance • Exercise: Solar lanterns with pay-as-you-go • Exercise: Community solar for health clinics • Exercise (if time allows): Micro-enterprises • Conclusion

  3. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Business Model Canvas Osterwalder and Pigneur, www.businessmodelgeneration.com (2010)

  4. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Lean Canvas Maurya, A. Running Lean. (2012)

  5. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Social Venture Canvas Social Networks Ladd, T. “Business Models at the Bottom of the Pyramid: Leveraging Context in Undeveloped Markets”, AOM Proceedings (2014)

  6. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Base of the Pyramid 1.6B w/out electricity 4B @ <$2/day

  7. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Solar Lanterns

  8. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Typical Problems in BOP • Reaching the customer • Marketing • Distribution • Reverse route • Returns • Feedback • Affordability

  9. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Self-Help Groups

  10. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Exercise 1 • In teams of 4-5 • Sketch a Lean Canvas for ESAF • 10 minutes in team • 10 minutes reporting surprises, challenges, and mitigation strategies

  11. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Impact of Social Networks • Self Help Groups of peers • Critical mass • Solicit product and service providers and lenders • Group loans, individuals use and repay • Peer pressure to repay • Distribution • Feedback • Repayment ? Affordability

  12. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Problems with Micro-finance • Indebtedness • Customer cash flow • Continuing customer relationship

  13. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Potential Solution in Pay-as-you-go • Connection from phone to lantern • “Light” minutes

  14. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Exercise 2 • Pay-as-you-go model in Lean Canvas • 5 minutes in team • 10 minutes reporting surprises, challenges, and mitigation strategies

  15. Problems with PAYG • Overlapping failure points • Distribution • Repeat customer usage • Fixed cost of IT infrastructure • Unstable cash flow for company

  16. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Community Solar • More efficient in larger installations • Health clinics as critical infrastructure

  17. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Exercise 3 • Lean Canvas for venture selling solar power AS A SERVICE to health clinics • 10 minutes for team work • 10 minutes to report surprises, challenges, and mitigation strategies

  18. Problems for Community Solar • Chicanery -> stranded or appropriated assets • Complex international loan arrangements • Lumpy capital • Independent projects undermines scalability?

  19. Solar Sisters (if time allows)

  20. Exercise 4 • Lean Canvas for micro-enterprise models • 5minutes for team work • 10 minutes to report surprises, challenges, and mitigation strategies

  21. Challenges of Micro-enterprise • Scale • Hiring, training and distribution • Incentives for local culture • Local market saturation • Focus for category reputation

  22. Business Models 1: Micro-finance 2: Pay-as-you-go 3: Community solar Conclusion Conclusions • Power of business modeling • Focus on key elements • Ripples across elements • Testable hypotheses for customer interactions • Control>prediction (effectuation) • Limitations of typical business modeling • Ignores context, culture, competition, networks • Neglects scenario planning • Private solutions for core needs

  23. Ted Ladd Ted@TedLadd.com www.LinkedIn.com/in/tedladd slides at pubs.tedladd.com Solar Lighting at the Base of the Pyramid Logos for Hult, CBS, Case, CTO

  24. Sample: 30 entrepreneurs

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