As an expat working in Laos for a German development organisation during the late 1990s, Andy Schroeter observed that nearly half the population was off the electricity grid and that the cost for the kerosene needed to run lamps was one of the highest expenditures for a household. He realised that an answer could be the basis of a bright opportunity with the potential to make both money and social progress.
Building Change
Schroeter did not have funding from a venture capitalist, nor did he have a clear technology solution. Laos was still recovering from the 20 years of war it had endured, and the government wasn't exactly set up to foster entrepreneurship.
But instead of seeking charitable contributions or support from a large NGO, Schroeter formed Sunlabob in 2000 with his own means. The mission of the firm was the same as it is today — to operate as a profitable, full-service energy-provider selling hardware and providing commercially viable energy services for remote areas where the public electricity grid does not yet reach.
Simple Trade
At this point, you might be expecting a dramatic story of innovation — how Schroeter invented a robust and inexpensive fuel cell, wireless energy transmission or perhaps cold fusion for the villagers of Laos. The reality is somewhat less glamorous but a lot more practical. Schroeter takes the most suitable alternative energy products available in the global marketplace and adapts and installs them in Laos. He is a reseller, an integrator and a (very) local distributor. These are business ideas that are as common as the sunlight that powers most of what he delivers.
Entrepreneurial Energy
While it is easy to equate the power of the entrepreneur with the creation of a radical new product or technology, people like Schroeter show us the real job a founder of a new venture performs — crafting a market opportunity by hand. Someone has to get up in the morning and find solar panels, thermosiphon heaters or wind turbines that will perform well in the rugged environment of Laos. Someone has to build an economic model so that customers in a country where annual per capita income is US$986 can realistically afford these products. Someone has to hire the people who can install and maintain the systems. And someone has to organise the company vacation to Vietnam for those same employees.
Schroeter shows us that there is no magical invisible hand of the market that does this: it is the visible hand of the entrepreneur that made Sunlabob happen.
Powering Growth
As Sunlabob moves ahead, the hand of the entrepreneur continues to be visible. The venture is commercially successful, having installed more than 10,000 systems in more than 450 locations around Laos, and it has been recognised for its social impact, winning an average of one international prize or award for each year it has been in operation. A few notable ones include the Schwab Foundation Asian Entrepreneur of the Year award at the 2010 World Economic Forum, the National Energy Globe Award 2009, Tech Awards Laureate 2008 and an Ashden Award in 2007.
The venture continues to apply more of the plain technologies that made it successful. Consistent with the simplicity that got Sunlabob started, it is growing with equally ordinary approaches. In addition to serving the entire country of Laos, Sunlabob has expanded services using the franchising model into Uganda, Cambodia and Tanzania and will soon be operating in Afghanistan. In 2010, it also established Sunlabob International Pte Ltd in Singapore with the intention of serving the markets in Southeast Asia and Africa and offering a better localisation service to its customers.
Real impact. Real business. Real simple.
Stuart Read is professor of marketing at IMD, Lausanne, and Nick Dew is associate professor at the Naval Postgraduate School. They are authors of Effectual Entrepreneurship.
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