Oct 18, 2017
BioLite: Changing the World with a Stove
BioLite Energy, a startup based in NYC, is on a mission to “bring energy everywhere”.
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Transforming the way people cook, charge, and light their lives off the grid, they develop and manufacture sustainable energy products for the outdoor recreational industry, as well as for emerging markets.
I walk into a quirky, hipster, quintessential Brooklyn building. I take a quirky, hipster elevator to a quirky, hipster office. This is Brooklyn, the air smells like fair trade organic coffee and kale. I’m here to interview the founder of BioLite Energy, an impressive company doing impressive things. His name is Jonathan Cedar, and he looks young. Dressed in shorts, a t-shirt, and Chacos, he seems to be the Casual Executive Officer. The office is massive, with an open space work plan. Jonathan doesn’t have a separate office—he shares a table with other co-workers. We sit down and he tells me his story.
The company was started by founders Jonathan and Alex, who were frustrated with the fact that almost all camping stoves required the use of fossil fuels. They had an idea to create a wood-burning stove that used thermoelectrics to create a smokeless fire. In 2008, they took their prototype to a combustion conference. This is when they learned they were onto something big, something capable of great change.
While there are other similar systems out there like Goal Zero’s solar panels and Jetboil’s (gas) stoves (both extremely commendable companies), Biolite’s mission, as well as their combination of cook, charge, and light is what makes them stand apart. Goal Zero helps with underdeveloped communities in Africa and provides them with charging solutions, as well as ways to lift themselves out of poverty. The Himalayan Stove Project is an organization that has a very similar mission to Biolite’s—to help reduce air pollution and to save lives by distributing clean cookstoves. An all-volunteer organization, it is based out of Nepal.
Half the planet lives in energy poverty, lacking safe and reliable ways to cook, charge, and light their lives; three billion people cook over smoky open fires every day, leading to 4 million premature deaths annually. These alarming numbers led Jonathan and Alex to create a business that provided safe and affordable energy to underdeveloped communities across the world—for those who needed it most.
TOJ: How did it all begin?
The Origin Story
JC: Half the planet lives in energy poverty, lacking safe and reliable ways to cook, charge, and light their lives; three billion people cook over smoky open fires every day, leading to 4 million premature deaths annually. These alarming numbers led us to create a business that provided safe and affordable energy to underdeveloped communities across the world—for those who needed it most.
I guess for me BioLite is a combination of many things that I’ve been interested in for a long time. I’ve always loved the outdoors ever since I was kid. I studied Engineering and Environmental Science in college. I was really into how energy sat at the intersection of a big engineering need but also a huge environmental impact. I was always curious about that. After college, I worked as an outdoor educator for a couple of years. I topped the engineering program for an oceanographic research program for college students. So I spent two years on ships in the Atlantic and the Pacific.
About two years into that, I read a book about product design and thought, wow, I’d really love to become a product designer. It was surprising to me that in my engineering studies, so much of what we did as projects for classes were product design problems but no one talked about product design as a profession. I was reading a book from the founder of a design firm called “Ideo” and it just made a lot of sense. I love solving these problems that you can hold in your hands and you can really feel like you understand the impact of your work on a fairly short timeline.
And so I went to work for a design firm in New York called Smart design. I spent about five years there helping companies basically invent new product lines for their businesses. I don’t know if you remember the flip video cameras—those one-button video cameras—we did the design work for those. We did a lot of work for a company called Oxo—they do ergonomic household products and helped them invent a line of office equipment—like reinventing the stapler and the scissor. We also helped them invent a line of juvenile products—like a high chair that transforms as your child grows. So instead of keeping it for six months and throwing it away, it works as a piece of furniture for five years. And so, it was a great experience in Design Process and also Design for manufacture. We helped our clients take things all the way from concept to manufacturing.
TOJ: How did you come up with the stove?
JC: It was at Smart Design that I met my co-founder Alex. He was a model maker in the model shop for the firm and was just an incredibly skilled craftsman. Really, this all started because I was excited to spend time with him learning his hands-on trade skills. He was also a pretty outdoorsy guy and so we talked a lot about skiing and backpacking. His brother had given him this tiny wood burning stove that used a battery powered fan. We just thought it was a very cool thing—but the product was really badly made. It didn’t really deliver on the promise but we loved the idea that instead of carrying petroleum with you camping, you could just find sticks and burn them and use a fan to promote better combustion. So we started thinking about how we could do that better. We knew we wanted to get rid of the batteries—so that it was truly an off-grid energy device. The combustion was okay from this thing but we read about these processes called wood gasification where if you heat the wood in a very particular way and blow oxygen in the fire you could cause it to burn like gas instead of a smoky wood fire. So we spent about two years trying to put those concepts together. At the time it was really just for us as campers and engineers, maybe with a little bit of an environmental bend because it was nice not to be using petroleum fuels but just natural wood. And about two years into working on this, we took our prototype to an advanced wood combustion conference in 2008, and that’s where we were introduced to the fact that half the planet was still cooking on these smokey open fires.
And the smoke from those fires was killing more people than HIV, TB, and malaria combined. There were no good technologies to address this—you think about how much work was done to address malaria with bed nets or HIV with retrovirals. There’s so much good work being done in technology for health. No-one really even knows that this is a problem. At least, no-one in the US was talking about it. And so, at the same time, we won the award for the cleanest stove they’d ever seen (which was kind of an accident but a happy one). We had this moment where we said, wow, maybe what we’re working on for the US may be beneficial for a much higher need for customers. It was that point in 2008 when we kind of decided that we would make this our business to try and create these stoves for rural communities. We knew it was going to take a long time to solve the needs of 3 billion people. Especially because, these are people with not a lot of money in hard to reach places, without well-developed retail networks. So if you looked at all that together, sure we had a really good technology, but all these other pieces were going to take a long time to build to a sustainable scale.
TOJ: How did you get into emerging markets?
JC: “What if we build the camping product we originally set out to build and we used the revenue from that to reinvest in taking the rural markets to a scale that they could sustain themselves? We weren’t trying to be dependant on philanthropy because, sometimes people are interested in spending their philanthropy dollars here and the next minute, they’re interested in something else. It didn’t feel like that was the way to solve the needs of a few billion people. Whereas if we could really focus on market-based methods, understand how much value we could deliver to the end user, and work within the context of the market, we felt like if we could get that model right, then it could scale organically to reach a lot of people. A recreation business could give us the time and resources to do that whole incubation. And so that was the idea for the business. In 2009, I quit my job and moved to California and started working with academic communities that were doing technology for development. I also got accepted into a Mumbai based incubator called Dasra. I was the only non-Indian in the program which was great for me because the whole idea was to learn about the market, all with social businesses trying to serve the rural poor. So I spent a year and a half partly in this incubator, partly in this academic community in California, writing a more detailed business model for the company and getting to know our customers. I was spending more time in the village, showing them prototypes, and trying to understand what the distribution networks might look like for the product like this—how much people would pay for it and what kinds of food people cook. For example, it’s very different to cook chappatis then it is to boil rice. The stove had to operate differently to do both of those things.
At the end of a year and a half, I thought I had enough info to really start the business—we raised some money from some VCs and we got started. In 2012, we launched our first camping market product and it was a phenomenal success. We sold them just through our website—we thought we would sell a few 1000 of them and we sold 30,000 in the first 6 months. We didn’t pay for any marketing or advertising—it just sort of happened via word of mouth which spread quickly about the company. It was pretty amazing, by the beginning of 2013, REI had picked us up and did a huge marketing campaign for the company. We had orders coming in from 40 different companies (on the website), just through e-commerce. And by the end of 2013, we were probably in 50-60 countries with retail representation. And so the business was off to a really good start and that idea of having a strong enough recreational business that we could move capital into the emerging markets was really kind of playing out.
At the same time, we were refining our technology for the product we called the HomeStove, and so we spent from 2011 to 2013 getting that product right—it went through four major generations of prototypes and market tests. Finally in 2013, we took the product to market in Orissa, India. With a partner called Greenlight Planet, a solar lighting manufacturer and distributor, they ran a network of 7000 rural sales agents (not just in Orissa but across most of Northeast India—operating in five, six states). And then in Uganda with more of a traveling-road-show-market kind of approach. We learned a huge amount about how much people were willing to pay for the product, how they were using it, which features were working well and which could be improved but fundamentally, what we saw was great—people were excited to pay for a product that basically delivered LPG like cooking but at a very small fraction of the cost. And that was kind of the value proposition for our rural customers—save time and money collecting fuel, save a lot of time cooking since the stove is a lot more efficient, and have this aspirational quality that feels like LPG. Well up until the recent LPG schemes, it’s been really inaccessible to even low-income customers, even with subsidies. And so we could be this aspirational choice, but at a cost that was more similar to a cellphone than what you’d pay for an LPG connection. And so, I guess that’s kind of the origin story.
TOJ: How do people in emerging communities afford this product?
Very nice, how much?
JC: We sell the stoves for a little over $50. One of the things that we’ve learned is that people love the product—that’s the great thing, we care about health, everyone cares about health, but when you have very little income, you don’t necessarily spend for health. Our customers are definitely not spending for climate change. Even we don’t spend for climate change. So really the customers are purchasing based on averted fuel costs, convenience of electricity, and access to charging mobiles—so you don’t have to walk to town to have to charge. Also the aspirational value—feeling you’re moving up the energy ladder as a family. We also found that most of our customers needed some amount of consumer financing and so we shifted our sales model and started to partner with microfinance organizations who can provide the loan capital to the end user. We work with a group called Fullerton, our main partner right now. Those are the guys who have the rural agent networks and who can do the collections, and the credit assessments of the end users. What we do is we work alongside with their existing loan operations and help bring a durable goods product portfolio to their network. And that’s something that the solar lighting industry has done a really good job of demonstrating. That’s largely our model for distribution now, not just in India but in Kenya and Uganda as well.
TOJ: How did you explain the concept to rural communities?
It’s all about flipcharts.
JC: We train the BioLite staff who work within these distribution and finance networks to tell our story—a lot of it is demonstration based. It starts with a picture of what your kitchen probably looks like now, stories like your phone’s out of battery, your eyes burn from the smoke, but maybe your family would be happier if you could keep your phone charged and nobody’s eyes burned of smoke and you could save wood—instead of using this much, you could use that much. We have these flip charts that they use to tell the story, and then they light the stove and everyone gathers around and asks questions. So it’s very much like a story-telling process. We spend a lot of time working with our sales staff on refining their pitch for the product.
The thing is 50 dollars is still a ton of money in these communities. We always try and figure out what the comparison is. I think it’s an imperfect comparison since $50 to a family that only makes $1000 a year is a much bigger deal than if you scaled it to someone else’s income. It’s not as big a purchase as buying a car for that family, but it’s not discretionary income either. We were thinking it’s sort of like purchasing a laptop. A purchase you think a lot about—you probably only make one, maybe two purchases like that a year in a wealthy home. So for the customers, they see it, they like it, our sales team follow-up, and they think about it for a while. Often times, they’ll see another demonstration nearby, a lot of the times we have to get in front of the customer two or three times until they’re convinced. But being able to have a loan is really helpful. Not just for the cash availability but also for the risk management. One of the things we have to overcome is that we’re an unknown company with unknown people. And this is a really big purchase, so you don’t want to feel like if you purchase it, and it breaks, what are you going to do and where are you going to go?
One of the ways we’ve really managed to keep customers happy is with our customer service. Our staff reach out to our customers two weeks after they’ve purchased the product and see how they’re doing and if they’re enjoying it. Then again several weeks after that. Then we’ll go visit them in person if they’re having problems or are unhappy.
TOJ: What are your plans for the future?
JC: One of the things that have been really valuable for us is the introduction of electricity to our products—that’s really been the most compelling need for under electrified communities. It’s our sense that the main families that were cooking on wood were the ones that didn;t have access to electricity. And so, we’re now trying to, over the next several years, create the off-grid home of the future. And so, what will your home look like, if instead of your government building all these large-scale pieces of energy infrastructure for you, water that comes out of a pipe, electricity that comes out of a wall, gas that comes out of a wall—what would that look like if the individual had to own the infrastructure to do that? And that’s what we’re working towards. So a few years ago, we introduced our first lighting products—LED, rechargeable lights that can be recharged by our stoves or by solar panels. We also launched solar panels. And, similar to the stoves, we launched them in the recreation market first, and then the rural markets. We’ve been selling our recreation market in limited test markets, in rural communities to try and understand the needs of the customer better. We want to help people cook, charge, light, refrigerate, have clean water—all these basic energy enabled services, and do it in a way where you don’t have to wait for your government to have enough money to build it for you. You can just build it and buy it at an affordable price for yourself.
Our Rajasthan program manager was just on TV with the minister of energy who was saying we really want to work together with you to bring this across India. My sense is that the need is so big and governments are trying so hard to keep up with the demands, that we offer a very inexpensive way to build access for citizens. So, mostly we’ve had governments really trying to help us.
1% of the off-grid markets own solar lanterns, and 0% own advanced cooking mechanisms. The need is so huge. I don’t think there’s anyone in the US that are doing the same thing. Certainly not anyone who is investing in recreational markets and emerging markets in the same way. I think one thing that really differentiates us from other product manufacturers, either in recreation markets or in emerging markets is that we’ve got an incredibly robust technology development team. With 20 engineers and designers on staff, we really get to invent more advanced technologies than other players are able to invest in. So that really differentiates the technologies that we bring to market, along with taking this “ecosystem” view of energy. Goal Zero is a solar company, and I have tons of admiration for them and BD (but BD is a climbing company)—they make headlamps and lanterns. MSR is a mountain safety company. I think we’re really the first people to say energy is a category of needs and we want to solve for energy holistically, in the same way that Camelbak solves for hydration holistically. We think that’s our opportunity and I don’t think anyone has quite defined themselves that way before. I think the same thing in the emerging markets context—we definitely make the most advanced stoves that anyone’s ever seen for emerging market customers. But there have been other stove companies and there have been plenty of solar lighting companies, some of which are doing very nicely now.
I don’t think anyone has defined the problem as saying energy poverty is what we are trying to solve for and so it’s not about cooking or charging or lighting—it’s about the way those things all work together to help keep people productive and safe and comfortable and entertained. It’s a different approach to the problem.
Photos ©: Himraj Soin