Jun 18, 2008

Stanford Graduates Bring An Idea And Rays Of Light For Rural India

Rural India is the new developmental marketplace as some new age entrepreneurs fuelled by venture funds take it upon themselves to shed some light on the India that still lives on without electricity.

My father's oft repeated story that he learnt his alphabets by the light of a kerosene lamp has become a home grown cliché. But like most, it is a true cliché. India has come a long way since then because I am writing this article on a word processor on a computer.

Today, his family may have outgrown his own cliché, but this is daily truth for many parts of rural India. 60 per cent of rural households still make do without electricity. We as the modern child take power and its supply for granted. This is the dichotomy of 21st century India. A country which ignites a thousand tonnes of propellant to launch a self made rocket into space cannot ignite light in some parts of its land.

There are two pressing crises to deal with today in rural India. The first is of course electricity and the second is supply of clean drinking water. The first is perhaps more paramount because without it the second might not flow. It is not that India is apathetic to this cause for rural development because initiatives continue to be taken to fill the void between rural and urban India. The Electricity Act 2003, which allows for the first time in India a private utility to produce and distribute power, provides a glimmer of hope not only for the country but more so for the rural areas. The government is pushing the cart and now gradually private enterprise has come in to lend a hand. Whether as philanthropic initiatives or as a socio economic experiment, change is in the air.

One such has come from faraway America. A start up company founded by graduates of Stanford Business School, D.Light Design aims to put in its bit to resolve the problem and earn a bit along the way. As a source they have used solar energy, something which is available in India all year round. The means is called Nova Light. It is simply a LED (Light Emitting Diode) based lamp that D.Light says will run for 40 hours on a single solar charge.

D.Light plans to sell the light for $15 to $30; the higher price includes both the solar charging panel and an AC charger. The men behind this unique quasi-business initiative are Ned Tozun (President of D.Light), Sam Goldman and Xianyi Wu. The three classmates believe that they can make an impact and create a profitable business out of it. So far they have raised $1.6 million in convertible notes from venture capital firms Draper Fisher Jurvetson, Garage Technology Ventures, Nexus India Capital and Indian firm, Mahindra and Mahindra. Enough to fund their prototypes and road testing in the dust bowls of India's rural heartlands.

Bill Reichert, managing director at Garage Technology Ventures believed the trio had a wining formula when he decided to invest in them. He says.

"If you want to light up the world, you've got to offer a solution that fits the needs of the people you're selling to."

The genesis of the idea happened in Ned Tozun's mind back in Stanford when he took a class at the Stanford Design School called "Design for Extreme Affordability." The class was full, but Tozun kept showing up anyway. Eventually, the professor let him join the class, which focused on rapid development of prototypes. Tozun followed up with the same persistence he displayed at Stanford. His company has brought out three models or versions based on his LED design.

The Comet is similar to the Nova but is stripped down. It might sell for $18 to $16. The Vega, is a compact fluorescent designed for families who live in areas where electricity is sporadic. The Vega will sell for $10 to $16. To cater to the lowest denominator of the poor in rural India, Asia and Africa Tozun's company realizes the importance of keeping costs low.

People who earn a wage of $1 a day would find it prohibitively difficult to earn and save the double digit dollar amounts. As a first step, D.Light is manufacturing the units in low cost labor area of Shenzhen, China. D.Light is also partnering a nonprofit group in India which plans to sell one version of the LED lights for just $1 apiece to Dalit families (formerly called the "untouchable" caste) in the state of Karnataka. Donations will be sought to cover the remaining costs.

India's rural development will have to use such innovative solutions to bridge the cost and development divide. A lot of similar companies to D.Light are experimenting with alternative sources of energy like biomass, ethanol and of course solar energy.

The solutions will not only address the power issue but the effects of illumination will also cancel out the over dependence of rural India on kerosene. A fuel which has been traditionally used not only in India but also in Africa, is dimly lit, spreads noxious fumes and is an environmental hazard. It is estimated that kerosene lamps kill or maim millions of children per year, and are a leading cause of indoor air pollution. Over a five-year period, one kerosene lamp releases one ton of CO2 into the air (equivalent to driving a car from San Francisco to NYC).

President Ned Tozun proclaims,

"Our mission is to eradicate the use of kerosene. People leave the kerosene lantern on low all night long as a kind of night light, and they wake up and cough black soot."

It could be a vision statement for a company which hopes to be a frontrunner amongst the rural vanguards. If their efforts succeed, it could spell a new paradigm shift for companies. Socio-economic development could become a new thrust area for new age entrepreneurs and businesses. Ultimately, light might arrive at all the doorsteps of those living in the darkness of rural Africa and Asia.

Also, posted by me on DigitalJournal.com

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