Thursday, November 6, 2008

Entrepreneur Journeys by Sramana Mitra

I was happy to get extracts of the book written by Sramana Mitra and the permission to publish it on my blog. Sramana Mitra is a Strategy Consultant in the Silicon Valley and has a knack of lucidly explaining the jargons on her blog.

Lighting the Way to India

An excerpt from Entrepreneur Journeys (Volume One) by Sramana Mitra, now available from below the fold.

While greed is infectious, it hasn't touched Harish Hande. Unlike many entrepreneurs, Hande didn't dream of great wealth, luxury or power as he built SELCO India, a rural solar energy company. At a time when his fellow Indian Institute of Technology engineering alumni were drifting aimlessly into the domestic IT industry, Hande stayed focused on his major: energy engineering. After earning a PhD from the University of Massachusetts, Lowell, Hande headed back home in 1993 to provide reliable, clean energy to un-electrified areas in rural India.

"We believe that in anybody's daily life, reliable energy, like solar electricity or solar lighting, can lead to a better quality of life," Hande says.

SELCO, short for Solar Electric Light Co., sells small-scale, modular solar photovoltaic systems to households and businesses in villages in the southern Indian states of Karnataka, Kerala and Andhra Pradesh.

He started small, buying one solar-lighting system with $300 he had left over in scholarship money. Then, to find workers for large scale installations, he went to village TV stores in Karnataka. Hande described what he was doing, and asked if anyone was interested. They were, since many of them relied on candles and kerosene lamps after sundown. This gave him confidence that he could build a team, and that there was a substantial market for what he wanted to do.

Since most rural Indians are poor and can't afford to pay for SELCO's systems out of pocket, Hande needed to obtain bank financing. In late 1996 he was able to convince Malaprabha Grameen Bank in Karnataka to finance 100 solar-lighting systems. "Probably because they were getting fed up with me more than anything else," Hande jokes.

He then leveraged the bank's backing to get other banks to finance more solar-lighting systems. "That was our biggest code to crack, since our entire model is based on banks providing the financing," Hande says.

In addition to providing a source of safe, clean lighting to rural people, SELCO also helps them generate much-needed income. With light after dark, they can keep shops open later and stay up at home working on crafts. Some of his customers told Hande they can now make two to three baskets a night, selling them for 30 rupees each.

This gave Hande the idea to create a business plan for a tribal community in Karnataka, with four-year bank loans under which they would pay for their solar-lighting systems with the proceeds of basket sales.

So far, SELCO has installed close to 100,000 solar-lighting systems, and in the process, it has brought light to people who were considered too poor to be part of the capitalist system.

I use the term "light" both literally and metaphorically, since Hande's thinking went far beyond solar lighting installations. What he did was innovate at a much deeper level by connecting energy services to income generation.

Sadly, Hande says few of his fellow Indian Institute of Technology energy engineering alumni are working in alternative energy. "When I went back to IIT last year, all 26 seats in energy engineering went to [work in] software," he says. "There is an extreme shortage of energy engineers."

I recently wrote an open letter to IIT students asking them to look beyond software – to do something electrifying, following Hande's example.
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