Katina Grays on d.light Design – d. light at the end of the tunnel
One of our first site visits was to d.light Design, a social business that manufacturers and distributes solar-powered lanterns to people living in rural poverty around the world. These lanterns are meant to replace the ubiquitous kerosene lantern, which is a threat to people’s safety and the environment. d.light is often cited as one of the world’s best examples of a social enterprise.
Journey participant Katina Grays is Associate General Counsel for Habitat for Humanity International’s Asia Pacific Region. In this post, she dissects the challenges that d.light will face in reaching its goal of touching 50 million lives in the next three years.
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Our visit to d.light was one of the site visits that I was really anticipating. I had been reading a blog by d. light’s founder Sam Goldman for the past several months. The company has also been prominently featured in several social enterprise publications as a success story.
Seeing the reality of d. light was quite different than the fairy tale that I had envisioned. They are essentially a product start-up company, albeit with a social purpose. Like many start ups, d. light is going through the typical pains of business that any start up goes through.
Two things stood out for me – (1) the price point of their products only allow them to touch the very top of the base of the pyramid segment and (2) the company has to create a clear, viable distribution system for its product.
d. light’s products range from $8-32 per light., which are durable and well-designed. Just as people use more than one kerosene lamp, they are likely to need more than one solar lamp. This means the costs could be $16-64 or more. At this price point, it will be hard to penetrate very deeply into the base of the pyramid segment. Ironically, it’s doubtful that the family of the kid in Benin who inspired this idea would be able to afford this product (more than half of the population of Benin falls below the poverty line). To the company’s credit, d. light is investing in research and development and continues to find ways to make the product more accessible. They still have a long way to go to truly meet their objective of eliminating the use of kerosene as a source of light.
How d. light gets its product to its customers is critical to the success of the company. Currently, the distribution of the products is very organic and ad hoc. They seem to be taking a “try everything under the sun and wait to see what works” approach. The lack of focus in their distribution seems to show that they haven’t quite figured out this critical element of their business. One of their key barriers in distribution is building trust in the communities where they sell the product.
Building trust and reputation in a community is a slow process that takes time. One strategy discussed was using partnerships with NGOs and other organizations that already have trust in the community. While partnerships with credible organizations might help build community trust initially, d. light needs to invest its own time and resources into that process as well, especially if they want to build their brand identity. Otherwise, the perception might be that’s the light that came from [insert name of partner here.] Community trust and a strong brand identity will be important when copycat products enter their market, a subject that founder Goldman recently blogged about.
That said, it was inspiring to see smart people trying to use a traditional product company model to solve a really critical social need. It remains a very unique company in that regard. But at just four years in existence, d. light is still near the beginning of a dark tunnel. They will have to work diligently to address the core business problems they face in order to continue to move forward. And the road ahead is long.
Personally, I want to see them succeed. With some attention and focus to core needs like affordability of the product and distribution, I believe the company can reach the light at the end of the tunnel.
