Samir Shah, a classmate at Darden, guest blogs today on a visit our class had from Chip Ransler, co-founder of Husk Power Systems, which delivers power to over 50,000 rural Indians in a financially sustainable, scalable, environmentally friendly, and profitable manner. Samir’s post below:
Look around your immediate location. Take a second to analyze what’s there, the purposes those things serve, and how they could be made better. It might be a small issue like the ergonomics of your computer mouse, or something more significant, like the difficulty of keeping documents organized (As you might have guessed, I am looking around my own desk right now). Take another second to think about how you would fix it, and what you would need to accomplish that fix.
So what stinks? And how can you make it less stinky? Chip Ransler, co – founder of Husk Power Systems recently discussed this idea with our Entrepreneurial Thinking class. He felt that ‘what stunk’ was the fact that 350 million individuals in rural India lived lacking reliable electrical power. What stunk even more is that these individuals could not be part of the economic revolution currently revitalizing and invigorating much of the country. Rice, a large agricultural product, produces a waste product, rice husks, which were also being wasted. That stunk too.
Now what do you do? You found something that stinks, something that needs a solution. Ransler and his partners found a way, through technology and the free market, to develop a power system that used rice husks to generate electricity for villages in rural India. Facing obstacles like working with clients who are not easy to reach, ‘not in tune’ with paying for electricity (read: they usually steal it), a 40% payment default rate, and a corrupt government, Husk Power has grown to reach these rural Indians and provide power solutions to more and more people.
It has been largely successful, and the exact details of their growth story are made clearer on the company website. The story of Husk Power Systems is inspiring and compelling, and Ransler brought forth some key ideas in developing solutions for problems that stink. So what ideas are relevant for aspiring entrepreneurs and creative thinkers?
- Get it done. Put your feet to the fire and get your idea out there. You need to have passion that borders on insanity and be willing to go to the mat for your idea and vision. Be ready to sacrifice (Ransler, along with his partners, lived in rural India for months at a time to get the system running properly), adapt, and give up what is secure. Finally, talk to people. Then, talk to more people. After you finish talking to everyone, find some more people to talk to. Communicate your idea so that you can find a way to put things together.
- Know your customer and frame your idea properly. Husk Power wasn’t giving away electricity, but selling power units to a market that had a demand for energy. They tailored their product to their market, and made sure it was a sustainable way to earn revenue, grow, and maintain the initial objective of fixing what stinks.
- Ransler talked about the concept of second and third right answers. I probably need more time to digest this idea, but he noted that while developing a power solution was the first right answer, subsequent right answers came from adapting ideas to develop the target market – for HusK Power, this included selling smaller amounts of power, and having customers prepay for power, bringing the default rate from 40% to 0%. These second and third right answers have helped Husk Power develop and grow, reaching more people in an ever expanding market, which has in turn helped them develop their technology and infrastructure and continue the cycle upward.
Ransler didn’t talk much about the effect of injecting this power system on rural Indians. I can only imagine how the company has allowed thousands of people to expand their productivity. He did give us one quote from a local resident, who noted that “We gained independence from England 60 years ago, but it feels like we just gained our independence today”. I have to admit, this quote choked me up just a little bit – the image of rural Indians being empowered was an inflection point in the presentation being made – things didn’t stink as much for these folks anymore.
Having visited India, and having family who grew up in lower class areas of the country, I can empathize with this quote, and it made me stop thinking about the story of entrepreneurship and start thinking about the power of the free market to fix what stinks. In what some might call the heart of human poverty, an idea and product have been developed to promote social good and economic development.
So what stinks? What can you do to fix it?