How could you reconcile the social agenda - make radios freely available - with the commercial challenges of running a business? What problems do you think Freeplay/Lifeline Energy face in trying to sustain the business?
CASE STUDY 2
Exploring Innovation in Action: Power to the People - Lifeline Energy
Trevor Baylis was quite a swimmer in his youth, representing Britain at the age of 15. So it wasn't entirely surprising that he ended up working for a swimming pool firm in Surrey before setting up his own company. He continued his swimming passion - working as a part-time TV stuntman doing underwater feats - but also followed an interest in inventing things. One of the projects he began work on in 1991 was to have widespread impact despite - or rather because of - being a 'low-tech' solution to a massive problem.
Having seen a documentary about AIDS in Africa he began to see the underlying need for something which could help communication. Much of the AIDS problem lies in the lack of awareness and knowledge across often isolated rural communities - people don't know about causes or prevention of this devastating disease. And this reflects a deeper problem - of communication. Experts estimate that less than 20% of the world's population have access to a telephone, while even fewer have a regular supply of electricity, much less television or Internet access. Very low literacy levels exclude most people from reading newspapers and other print media.
Radio is an obvious solution to the problem - but how can radio work when the receivers need power and in many places mains electricity is simply non-existent. An alternative is battery power - but batteries are equally problematic - even if they were of good quality and freely available via village stores people couldn't afford to buy them regularly. In countries where $1 a day is the standard wage, batteries can cost from a day's to a week's salary. The HIV/AIDS pandemic also means that household incomes are under increased pressure as earners become too ill to work while greater expenditure goes towards healthcare, leaving nothing for batteries.
What was needed was a radio which ran on some different source of electricity. In thinking about the problem Baylis remembered the old-fashioned telephones of pre-war days which had wind-up handles to generate power. He began experimenting, linking together odd items such as a hand brace, an electric motor and a small radio. He found that the brace turning the motor would act as a generator that would supply sufficient electricity to power the radio. By adding a clockwork mechanism he found that a spring could be wound up - and as it unwound the radio would play. This first working prototype ran for 14 minutes on a two minute wind. Trevor had invented a clockwork (wind-up) radio! As a potential solution to the communication problem the idea had real merit. The trouble was that, like thousands of entrepreneurs before him, Trevor couldn't convince others of this. He spent nearly four years approaching major radio manufacturers like Philips and Marconi but to no avail. But luck often plays a significant part in the innovation story - and this was no exception. The idea came to the attention of some TV researchers and the product was featured in 1994 on the BBC TV programmer Tomorrow's World, which showcased interesting and exciting new inventions.
Amongst those who saw it and whose interest was taken by the wind-up radio were a corporate finance expert, Christopher Staines, and a South African entrepreneur, Rory Stear. They bought the rights from Baylis and received a UK government grant to help develop the product further, including the addition of solar panel options. In South Africa, the details of the invention were featured in a new broadcast and heard by Hylton Appelbaum, head of an organisation called the Liberty Life Foundation, who saw the potential. Even in relatively rich South Africa, half the homes have no electricity, and elsewhere in Africa the problem is even more severe.
Liberty Life is a body set up by a major South African insurance company and Anita and Gordon Roddick, the socially conscious owners of the Body Shop. Part of the work of the Foundation is in providing access to employment for the disabled and a third of the company's factory workers are blind, deaf, in wheelchairs, or mentally ill. Through Applebaum, Liberty Life provided the $1.5 million in venture capital that founded the company. Baygen Power Industries (from Baylis Generator) was set up by Staines and Stear in 1995, in Cape Town. Sixty per cent of the shares were held by a group of organizations for the disabled, a condition of Liberty's support. Technical development was provided by the Bristol University Electronics Engineering Department. Shortly thereafter production of the radio began in Cape Town by BayGen Products PTY South Africa.
It came on the market at the beginning of 1996 and one year later around 160,000 units had been sold. Much of the early production was purchased by aid charities working in Rwanda and other African countries where relief efforts were underway.
This was not a glamorous product - as a New York Times article described it, 'It is no threat to a Sony Walkman. It weighs six pounds, it's built like an overstuffed lunch box, and it has a tinny speaker. But its wholesale price is only $40 and it gets AM, FM, and shortwave, meaning it can pick up the British Broadcasting Corporation or the Voice of America, so a circle of mud huts can zip back into the Information Age with a twist of the wrist.'
(Source(s): Donald G. McNeil Jr., New York Times News Service, 1996)
The impact was significant. In 1996 another BBC TV program, QED, featured the radio and at one point showed footage of Baylis, Staines and Stear together with Nelson Mandela who commented that this was a 'fantastic product that can provide an opportunity for those people who have been despised by society'.
Although appearing basic and low-tech there is a surprising amount of invention in the product. Baylis filed no less than 13 patents covering the mainspring and gears that drive a little dynamo. The spring mechanism is not a simple clockwork type but is more closely related to the kind used in rewinding auto seat belts. A double-spool mechanism keeps its tension constant, which is crucial, and the gearing is sophisticated.
Baygen continued to develop products around the energy needs of developing countries including wind-up torches and small generators. The company renamed itself in 1999 as the Freeplay Energy Group and has taken the original concepts into a wide range of new product areas.
Although founded on strong social entrepreneurship principles the business has grown through expanding markets in both developing and advanced economies. At an early stage in their life they realized that dependence on government, international and charitable aid providers posed problems in terms of business sustainability and in 1997, following investment by the US General Electric Company, they began diversifying into commercial markets, modifying the product designs to suit this shift. One of the casualties in this shift has been the Cape Town factory - after five years manufacturing was outsourced to plants in China where labor costs are lower.
The company became commercially successful, and sold over 3 million units of their basic radio models, raising an additional $45m in capital on the way. Product development began to embrace a wider range of power options including solar cells, and an increasing range of applications including torches and lighting, small-scale generators and mobile phone chargers. Emphasis remains on replacing battery and fixed-line power applications with rechargeable or self-generating approaches - an approach which, given increasing concerns about sustainability in the advanced industrial economies, is opening new possibilities for market growth.
Typical of their current products is the Lifeline radio, a multi-band, self-powered radio 'designed specifically for providing dependable access to information across a broad range of humanitarian projects. The radio does not require batteries or mains electricity and can be used practically anywhere. Engineered to operate in the harshest of rural conditions, it is rugged, robust and easy to operate. It offers excellent FM/AM/SW reception and runs on wind-up energy and solar power. Fully charged, it can play for up to 24 hours. The Lifeline radio was field tested in various developing countries as part of an extensive research and development program to identify and create a radio that truly meets the requirements of these unique and diverse applications.'
Since its launch in 2003 over 8 million people have received Lifeline radios and the product has had a marked impact on the lives of many others - neighbors, friends and families, etc.
Using the Products
The scope for application is wide since it meets the basic human need for communication and enables a wide range of information, education and community-building activities. Some examples from the radio side of the business include:
• A project (funded by various development agencies) using communication satellites and FM radio technology to communicate weather, agricultural and health information to nomadic communities and villages across Africa. The pilot is built on a model in the village of Bankilare, outside Niger's capital, Niamey, and combines a WorldSpace satellite receiver, a laptop, Freeplay radios, a transmitter, solar panels and other equipment. Information is downloaded from the Internet via a satellite connection. It is then rebroadcast via a community FM radio station powered by solar energy. Villagers, nomads and farmers living in remote and poorly served areas receive broadcasts on Freeplay radios. The aim of this project is to provide timely information on the weather, with implications for crop planting and livestock care, availability of water, market prices for crops, associated diseases, health and disaster mitigation. This is just as important for the nomad as for the farmer. As stated by a nomad: 'I do not depend on the rain that falls on my head, but on streams running from the hills when they flood. So just tell me when it will rain in that distant land and I will know what to do'.
• In Madagascar the Ministries of Communication and Health, working with various aid agencies, developed a radio drama series for women's listening clubs. Wind-up radios, funded by Rotary, were distributed to clubs who provided regular feedback on the programs. The series is aimed at improving health education, family planning and AIDS prevention. Similarly in Ethiopia people living in remote communities in Ethiopia's Harar Province are tuning in twice weekly to a radio serial drama aimed at creating awareness and prevention of HIV/AIDS - a project funded by the Centers for Disease Control and Prevention.
• According to the Zambian Ministry of Education (MOE) 800,000 Zambian children are unable to attend school. They cannot afford it, are orphans, live too far to walk to school or are girls who are kept at home. The attrition rate of teachers poses another problem - two teachers are dying of AIDS for everyone who is trained. The MOE, together with the Educational Broadcasting Services, is using Interactive Radio Instruction to help fill the educational void. Each morning thousands of primary school learners listen to the lively English and math program learning at Taonga Market on the radio. To assist with the lesson, adult mentors from the community are trained to use radio as a teaching aid. The Peace Corps in Zambia purchased Freeplay radios for their volunteers to distribute. These volunteers are trained in the mentoring process and then train community mentors, enabling the program to reach deep rural areas. In addition, Rotary UK is helping to raise funds to bring more radios to community schools.
• In early 2000, hundreds of thousands of Mozambicans were displaced by catastrophic flooding. One of the items that people lost were radios - often the only access to information. Various donor agencies including the Freeplay Foundation distributed over 7000 radios and a daily program called Ndhambi was created in the local language, Shangani. Ndhambi covered information on health, sanitation, hygiene, the location of landmines, obtaining lost ID documents and title deeds, governance, tracing and contacting lost family members, as well as agricultural assistance, all of which were of great importance during the post-flood period.
• During the crisis in Kosovo in 1999, DFID and the ICRC purchased over 40,000 Freeplay radios to distribute to refugees on the move and in camps in Albania and Montenegro. Here the radio played a part in helping to find missing relatives and to inform of the location of landmines, contaminated water supplies and booby-trapped villages.
Broadening the Base - The Freeplay Foundation
In 1998 the Freeplay Foundation was established as an extension of the group's commitment to empowerment and development. The Foundation operates as an independent organisation with its own Board of Trustees but it still receives an annual grant from the Freeplay Energy Group with which it shares some managerial and administration resources. The balance of funding is raised from various donors and used to support a wide range of development and implementation projects. Working primarily in Africa, the Freeplay Foundation promotes access to radio broadcasting in rural and remote areas through alternative energy solutions. It seeks 'to advance economic progress, promote community development and help eradicate disease, famine and conflict'. It does this by continuing the original wind-up radio mission - supporting or initiating projects that harness appropriate and alternative energy solutions that deliver information and education through radio broadcasting.
The Foundation facilitates access to specialists who can provide the four components vital to the sustainable success of any radio communication initiative:
• Software - quality radio programming directed at a targeted audience;
• Hardware - radios that allow sustainable listening access to all groups;
• Structured distribution - a planned and coordinated distribution of radios, in consultation with communities;
• Project monitoring and evaluation - measuring effectiveness against set objectives.
The Future - Lifeline Energy
Building on their extensive experience and recognizing the potential was much wider than the core radio and related products associated with the original business the company changed its name in 2010 to Lifeline Energy. Their vision is 'to develop a range of practical, fit-for-purpose products using innovative and appropriate technologies and distribution approaches that the poor can apply to their daily lives.' As they point out, fewer than 5% of the 500 million people living in rural sub-Saharan Africa have access to any form of electricity, so this is an urgent imperative.
A key new product development in this direction has been the Lifelight - an innovation developed in response to an urgent need. Poor families rarely have access to electric lighting and many - especially children and women - suffer because they use firewood, kerosene and candles. This raises major issues around health, fire risk and wider environmental consequences; as the company puts it, 'it is tragic that in 2010, well over 100 years after the invention of the light bulb, millions of people in the developing world are still in the dark at night'.
The concept underpinning the Lifelight is the use of bright, highly fuel efficient LEDs, which can last for thousands of hours and are relatively non-toxic compared to fluorescent lighting. At the same time there is scope for bringing in the same wind-up and solar technology in which the company has extensive experience.
Significantly they recognize the need for a sustainable business model and their vision now incorporates many of the lessons they have learned about scaling and spread. They are trying to work with a virtuous cycle - 'researching and assessing what the extremely poor want and need; creating fit-for-purpose products that people can afford; and then ensuring their distribution through various channels including the ability for women to earn income and create jobs by selling or renting lights and providing charging services to those without electricity'.
An important dimension of this is opening up the possibility of reverse transfer of technology - from the lessons learned under these extreme conditions creating alternative solutions to the energy needs of the advanced industrial nations - for example, rechargeable power supplies for computers and mobile phones.
Despite the change of name the underlying commitment to social entrepreneurship goals remains the same:
Lifeline Energy improves the quality of the lives of vulnerable populations through dependable and environmentally friendly technologies. We are committed to providing renewable energy alternatives to those most in need.
In order to reconcile a social agenda with commercial challenges, one would first have to consider the reasons why one would take on this particular social agenda - making available radios that produce their functioning power through a wind-up mechanism, in order to transmit educational lessons to impoverished populations with no electricity.
One major business related reason why one would do this is the fact that if you educate a human being so that he or she becomes a productive person in society, that person no longer is a liability, but an asset, to their country, and to the world in general. If that impoverished human being does not know about such things, they still have to eat, be clothed and sheltered, which would require resources, but there is a minimal amount of return for that outlay of resources. But if you educate that person's mind - then that one's potential to produce value increases dramatically. That person could not grow food for herself and others, or make clothes and build houses that would last, to treat diseases and invent things, to manufacture computers and machines, to write books and poetry and songs, to create art and dance, and a myriad of other things. And also importantly, he could teach his children to love to learn, and model that they have value and potential that they could contribute to their communities.
Given an understanding and acceptance ...
The expert determines how to reconcile the social agenda. The problems for Freeplay/Lifeline Energy faces to sustain a business is given.