BioLite Business Model
Clean energy for off-grid households
Imagine living in an off-grid community and cooking your meals on smoky, harmful indoor fires, inhaling toxic smokes leading to lung cancer and death. Unfortunately this is what millions of people around the world are experiencing every single day.
When Jonathan Cedar and Alexander Drummond first met in 2006, they shared the same passion: portable stoves and thermo-electric technologies. But little did they know that, eventually, this passion would help them launch BioLite and provide clean energy to hundreds of off-grid communities.
Problem in context
Truth to be told, BioLite first started as for-profit project, aimed at designing more efficient camping stoves. Nothing about social entrepreneurship or unprivileged communities at that time. Soon afterwords, the two founders realized that they could easily adapt their products and technologies to serve a greater good.
According to the World Health Organization, billions of people around the world still cook over biomass fires. Due to this, open fire cooking causes COPD and heart diseases, leading to over 4 million deaths per year. What’s more is that those people also lack access to electricity and to clean household energy. Thus, they are often forced to pay substantial amounts of money to buy expensive kerosene lamps, reinforcing the problem of smoke inhalation.
Once decided to tackle this problem, BioLite turned into something more than just an innovative, design project. It soon became a game-changing social enterprise, manufacturing clean, affordable energy systems for off-grid communities around the world. As a matter of fact, BioLite’s core products are biomass-burning stoves that cut fuel consumption in half, while reducing toxic emissions by 90% and generating electricity from the waste heat of the fire. Check out their website to find out more about these wonderful products.
BioLite business model
Pretty much with the exact same product, BioLite serves two very distinct customer segments: outdoor recreation users and off-grid households (in emerging markets). Main common trait? Both markets share the same need for reliable and safe access to energy.
Thanks to a unique “product line subsidization” model (also called by the founders “Parallel Innovation” model), BioLite developed energy technologies that are applicable to both markets. As a matter of fact, for the first target (outdoor recreationalists) BioLite developed a compact, portable stove called “CampStove“. For the second target (off-grid communities), the company developed a stove with a slightly different design, called “HomeStove“.
In a nutshell, the profit gained from the CampStove markets allow the company to cultivate its business in developing countries. This is something we often see in mission-related social enterprises (check our article about to learn more about this topic!). However, in the upcoming years, HomeStove product line is expected to become self-sustainable and economically independent. As a consequence, the business model might change too.
De-coding BioLite: Social Business Model Canvas
As always, we decided to take advantage from the Social Business Model Canvas to unpack BioLite business model.
Let’s take a closer look to each section of the Canvas ?