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Coursework Brings Light to Poor in India

June 2004

STANFORD GRADUATE SCHOOL OF BUSINESS—An experimental class at Stanford University has given birth to a unique startup that promises to bring safe, affordable light to millions of people in the developing world who live without electricity.

Founded in early 2004, Ignite Innovations is currently working to produce samples of the Ignite Light, an affordable, solar-powered LED lamp designed to replace the dim and smoky glow of kerosene lamps in rural India.

However, Ignite Innovations is not a charity—it is a for-profit business. "Thinking of the poor as customers instead of the recipients of charity is a breakthrough," said Ignite president Matt Scott, a Fulbright Scholar who received his MBA from the Stanford Graduate School of Business in 2003. "Business is slowly awakening to a whole new market opportunity serving the 4 billion people who live on less than $1,500 per year."

For profit, yes, but Scott and his fellow entrepreneurs have a broader public-spirited vision spelled out on the company's website: "We're more than just light and more than just India. Our vision is to move beyond the drip-feed of charitable donations and engage the power of the private sector to unlock social and economic value in the developing world. Charity alone is not enough; we believe lighting the entrepreneurial flame of market forces is the best way of IGNITING the fire of social change."

Unremarkable as it may sound, clean, affordable lighting is something the developing world can't take for granted. As many as 1.5 billion people light their homes with kerosene, a dangerous, polluting fuel that's bad for their health and surprisingly expensive, eating up about 4 percent of a typical rural family's monthly income.

Gathering information like the cost of kerosene in India was a critical part of the research that went into the development of the Ignite Light. The work was conducted in spring quarter of 2003 for academic credit as part of Social Entrepreneurship Startup, a class in real world product and business development created by professors Bill Behrman and David Kelley of the School of Engineering, and James Patell of the Graduate School of Business. The class enrolled 21 business and engineering graduate students.

In just 10 weeks, class members conducted research into markets for lighting in India, Mexico, and China, studied low-cost technologies, and eventually developed and built several prototype lamps and drafted business plans to manufacture and distribute them.

The result was the Ignite Light, a sturdy but lightweight lantern that looks a bit like an iron. It's built around a light-emitting diode, or LED, which produces nearly 50 times the amount of useful light per dollar of a conventional bulb and up to 200 times more useful light than a kerosene lamp, the students calculated. Moreover, LEDs are sturdy and relatively cheap to produce.

The firm is now working to produce its first samples of the Ignite Light powered by batteries that can be recharged via a solar panel. Ignite has an Indian manufacturing partner and plans to source locally all of the materials for the lamps (with the exception of the LEDs), Scott said.

Eventually, Scott would like to see Ignite become a new kind of company, a hybrid consisting of a for-profit arm working closely with a nonprofit foundation. "Focusing on the world's largest problems is really exciting," Scott said. "To really do this requires a new way of thinking." His vision is to someday create a nonprofit foundation "that can afford to put social objectives first," said Scott, and provide resources to develop other products to benefit poor areas. One possible product could be a practical, affordable way to purify drinking water, another critical need in rural India.

Some students who completed the class have joined Ignite; but all class members still are committed to its success. Working on the project, they say, helped them develop many new skills, not the least of which was the ability to improvise.

During spring break of 2004, two class members spent eight days in India shooting scores of hours of video documenting lantern use and the need for affordable light. They have produced a 3-minute trailer for the documentary, complete with compelling score and stunning images of rural India.

Asked where he learned the skills to make the documentary, Scott Cannon, a graduate student in electrical engineering who was one of the photographers, said simply: "Trial and error."

Ultimately, the longer version of the film will be used as a marketing tool for Ignite and a case study for other classes at Stanford.

Also in India working to get Ignite Innovations off the ground is Ginger Turner, who received her master's degree in management science and engineering from Stanford in June 2004, who has spent much of the summer working to produce the first samples. Eventually, she will work on marketing issues, inviting rural Indians to field test the lamp and give feedback.

"Our mission is to make a high-quality product. Lots of products in the past have been dumped on rural users and haven't helped them much. We don't want our lamp to be another one of those," she said.

Ignite Innovations already has some venture funding and will look for more as it grows, inviting future investments from Silicon Valley.

For Scott, who decided to forgo a lucrative consulting offer, the past year has been something of a surprise. "This came out of left field. I never thought I'd start a business to sell light to customers in rural India. This is a movement proving you can do good things and have a financially self-sustaining life at the same time."

—Bill Snyder