Barefoot Power: A market led social enterprise providing renewable electricity to rural areas

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Barefoot Power manufactures and distributes quality solar energy solutions, affordable to communities that do not have any, or even reliable, access to the grid.  Founded in 2005, their initial focus was to replace unhealthy, harmful kerosene lighting methods used in developing countries through the provision of affordable lighting products, specifically designed for low income populations.  However, recognizing the importance of access to information, Barefoot Power has responded to communities in vulnerable areas with solar powered products that now include light, phone charging and radio functions.  A charged phone enables individuals access to information and mobile money, which can assist them both personally and in the growing of their business.

In their first round of funding, BiD Network and partners helped Barefoot Power secure investment exceeding USD 1,000,000 – after recently closing their second round of funding following an injection of almost USD 6,000,000, BiD Network took the opportunity to speak with their Global Marketing and Product Development Director, Joyce DeMucci, to find out what has been going on and what’s next for Barefoot Power.

The Barefoot Approach –  A Complete Solution: From Grassroots to Ashden Awards

When considering recent developments at Barefoot Power, two accomplishments stand out as both significant and impressive breakthroughs. Firstly, their winning of the prestigious G20 SME Finance Challenge award in 2010, which resulted in President Obama announcing they would receive grant funding. Secondly, their winning of the Ashden Awards in May was a notable achievement. The Ashden Awards credit and praise sustainable attempts to improve the lives of others, and the selection of Barefoot Power acknowledges the work Barefoot is doing, providing a cleaner alternative to conventional lighting methods, such as kerosene lamps, principally in Africa. As Joyce goes on to state, “Barefoot has affected the lives of 2 million people and about half of that was accomplished in the past 12 months alone”, a fact that further extenuates their growing impact.

The acquisition of the prestigious Ashden Award has enabled Barefoot to focus on the ground marketing support for their distributors, as well as affording them access to valuable consulting resources to scale the business more effectively.

In addition, Barefoot has once again received Lighting Africa certification for a light and phone charging solution, as well as two home energy kits. Lighting Africa accreditation ensures products being provided to off-grid areas are of the highest quality. But while acquisition of this quality standard certificate is extremely significant, it is Barefoot’s distribution strategy, which makes products accessible via importers down to micro franchise businesses, that is the major differentiator from their competitors.

Barefoot Power currently distributes in over 20 countries and is focused on diverse and supported distribution strategies, a range of quality product offerings, and a growing post sales customer service center program. It is through encouraging micro-franchise entrepreneurs in countries, and supporting them effectively, that Barefoot aim to supply and service their products for years to come. Marketing support, agent training, technical training, and identification of which distribution model or models that may work, are all included in this package of support.  Though the model used by Barefoot is highly contingent on the market it is being employed in. The approach undertaken for micro-franchise entrepreneurs, wholesale dealers, non-government organizations and other non-profit organizations is modified extensively, based on the local country requirements.

Thus far Barefoot have trained over 2,000 individuals both entrepreneurially and technically. The micro franchise entrepreneur training is between 2 to 3 days long, and participants learn how to build their own Barefoot Power franchise, being shown how to sell and market products. In this way Barefoot encourages entrepreneurship in the host countries it engages with. The technical training program is usually 1 or 2 days long, after initial dedication has been demonstrated, more technical training is received and the tools given to troubleshoot customer problems, expanding the services offered by their business and allowing it to meet the demands of the local customer. In addition, a variety of financing alternatives are offered to remove any upfront costs barriers to purchasing the product, which consumers may encounter.

Barefoot apply a tailored distribution model, taking into account intricacies relevant to particular localities. One distribution model cannot be adopted for all the countries in which Barefoot operates. Barefoot get deep into villages through engaging in partnerships, with importers, retailers, NGOs, telecommunication companies, and through the training of micro-entrepreneurs.  Joyce states; ‘We offer a complete solution, we don’t just give them the product and run.  We work with our partners to establish programs in each country that will ensure that our solar energy solutions get to the people.’
While large organizations may have more available capital to utilize, they also have more projects they’re attempting to launch, meaning they cannot devote as much attention to specific projects as is perhaps necessary. A lot of awareness is required when launching any product, especially in emerging markets, the complete solution offered by Barefoot is an example of this awareness. The grassroots approach of Barefoot gets to people quicker. Joyce believes Barefoot, ‘provide an energy solution to meet demands that are not met as governments struggle to provide the necessary infrastructure. Barefoot Power can impact one million people in Uganda. Governments and big companies are slow to react, instead we’ll expand slowly but surely and consistently.’

Funding, Growth and Future Impact

Recently closing a second round of funding with an injection of capital reaching USD 5.8 million, has given some leeway to Barefoot and allowed some reflection in order to contemplate objectives. Looking at this second round of funding, the impact of of BiD Network and the initial round of angel investing clearly remains an important factor in the company’s development as numerous BiD Network partners, namely Oikocredit and the d.o.b. Foundation, remain involved in the project while many of the initial investors from the first round of funding, connected via BiD Network, have reinvested.

Barefoot expanded, broadly speaking, in reaction to opportunities. Now they are focusing and refining their efforts to ensure that their model scales effectively. As Joyce reiterates; ‘It’s all well and good getting an order for a container, but unless the infrastructure is in place to service and monitor the products, you are not going to get another order.’ As such, Barefoot aim to ensure accounts are with them for the long term.

Another important aspect of Barefoot’s product development is that it remains deeply entrenched in local community feedback, with the current product line tweaked and revised through such feedback and with some ‘pretty cool stuff’ in development as we speak – all of which produced as a result of 5 years of requests, observations and demands from consumers and retailers of Barefoot products. It is important to maintain a subtle parity between users’ needs and wants in this regard, as it is all too easy to over design a product.

Barefoot Power has adopted patience in emerging markets, an approach that is working.  The company is on track to impact 10 million people by 2015.  When considering the future of Barefoot, Joyce stated, ‘Do I think we’ll get there? Absolutely. Are there risks? Absolutely. I can honestly say this is the only company I’ve worked in where you can say I didn’t make my sales target because of unrest in a country. But, we’ve tripled sales in past 3 years, and we are on the right track.”