Environment friendly products are the need of the hour. And making them affordable to the economically weak segments takes it that much closer to a cleaner atmosphere. This is something that D.light Design, a Cayman Islands-based company is achieving with their solar lanterns for the rural India. As electricity is still a scarcity for the rural masses, the alternative has so far been the less environmentally friendly kerosene lamps. It is needless to say that kerosene fumes are harmful and associated health hazards are a major problem. The World Bank studies indicate that breathing kerosene fumes is equivalent to smoking two packs of cigarettes a day.
“The idea for D.light first came out of the ‘Entrepreneurial Design for Extreme Affordability’ class at Stanford University’s Design School. Four of the five founders of D.light participated in this class as graduate students at Stanford, and, as a project group, explored energy-related solutions for the developing world,” says Cheng-Tozun.
This is where D.light Design (D.light) is making a difference through innovation. Apart from being environment friendly, these lanterns are also cost-effective when compared to kerosene lamps, which has a recurring fuel cost. A family spends on an average Rs 150 to Rs 200 on kerosene every month, when their daily wages don’t exceed Rs. 60. The solar lantern offered by D.light – cheapest costing Rs 500 – is a one time investment. The only necessity is availability of ample sunlight, which is found in abundance here. “They derive savings from no longer having to purchase kerosene. Their household income may increase due to the extended workday, children can study for longer hours and families no longer need to use dangerous, polluting kerosene that can cause respiratory infections and burns from fire accidents,” explains Dorcas Cheng-Tozun, Director of Communications at D.light. With three products – the Nova series, Kiran and Solata – in their kitty, D.light hopes to implement their vision of quality with extreme affordability in their lighting solutions.
The journey so far
Started in 2007, D.light was a concept nurtured in one of the best universities in the world. “The idea for D.light first came out of the ‘Entrepreneurial Design for Extreme Affordability’ class at Stanford University’s Design School. Four of the five founders of D.light participated in this class as graduate students at Stanford, and, as a project group, explored energy-related solutions for the developing world,” explains Cheng-Tozun. Indulging in a bit of field research, a trip to Myanmar brought a little clarity to their cause. They realized that lighting, more than anything else, was a very significant need for families without access to electricity. As a very straightforward solution, solar lighting that is bright, clean and safe could have a major impact on the quality of life for off-grid households.
After developing various prototypes that
were tested through South and Southeast Asia, traveling to off-grid areas in India, Cambodia, and Thailand, the need for quality solar lighting solutions world over at affordable prices was confirmed. The company continued to refine the product, resulting in D.light’s first product – the Nova.
The transition of their product into reality wasn’t simple. “We entered a series of business plan competitions, and were fortunate to win several of them, which netted our first funds and led to additional funding opportunities,” says Cheng-Tozun. Another early challenge was to decide where the company should be based. While all the founders were located in Silicon Valley, they strategically decided that they wanted to be closer to their customers, suppliers, and distribution partners. So Sam Goldman, Founder and CEO of D.light, opened an office in India, and Ned Tozun, one of the other founders and President of D.light, opened one in China. They later opened another office in Tanzania to serve the East Africa region.
Reaching out to the customer
While designing products, they had to constantly bear in mind the needs of the customer. “Our end consumer was a family living in rural India. It was important to consider various factors including their living conditions, daily income and the need for a solar lamp,” explains Sam Goldman, one of the founders of D.light Design. They felt that some of the existing solar lighting solutions were over-designed for their customers. “They have extra features and components that are not only unnecessary, but they make the product more expensive and out of reach for the customers,” explains Cheng-Tozun. It can cost anywhere upwards of US$ 50. When D.light design their products, they constantly balance the features their customers want at a price that they can afford.
“We spend a lot of time talking to our customers to understand what matters most to them and how much they would be willing and able to pay for our products,” says Cheng-Tozun. While the concept sounds simple, there is a need to minimize costs on all fronts. A strong operational system has to be in place to make this work.
“Affordable design and finding the best suppliers and manufacturers who understand our requirement of high quality and low-cost are essential in this process,” opines Goldman.
The economics
D.light received their first round of funding of US $6 million from both the U.S and Indian investors, including Mahindra & Mahindra, Nexus India Capital, Acumen Fund, Garage Technology Ventures, Draper Fisher Jurvetson and Gray Matters Capital. While their funding announcement was made in November 2008, their investors had decided to invest in them much before the recession. “That being said, raising money from VCs can be challenging in any economic climate. I think D.light was successful because Sam and Ned had a vision from the very beginning to build a global company that would change the world,” asserts Cheng-Tozun. Not only could the proposed business have massive financial and social returns, D.light benefited from the growing interest in both cleantech and social enterprises among investors, who saw this as a very promising area.
“D.light’s vision is to become the leading provider of consumer electronics for families without access to reliable electricity,” states Cheng-Tozun. In the coming years, one can expect to see expansion in D.light ’s distribution worldwide and in their product line. “While we can’t specifically name our upcoming products, we are coming up with interesting and game changing lighting solutions from D.light and plan to expand into other product lines,” says Goldman.
