BioLite Business Model
Clean energy for off-grid households
Social Impact Mission
We said it first, we will say it again: BioLite didn’t start as a socially-oriented project. In fact, the shift kind of happened casually along the way. Nevertheless, the company is widely known today for its main social mission: bringing safe and affordable energy solutions (i.e. HomeStove), as opposite to dangerous alternatives like smoky indoor fires.
At the same time, since open fires are responsible for 25% of global black carbon emissions, BioLite rightfully claims to also fulfill an environmental mission: reducing greenhouse gas emissions.
Beneficiaries + Customers
When it comes to BioLite, we must admit that the line between the so-called “beneficiaries” and “customers” gets quite thin. In a way, BioLite’s customers truly are both eco-conscious, outdoor enthusiasts (in developed markets) and off-grid communities (in developing regions such as India and sub-Saharan Africa). Regardless of markets and geographic locations, both segments actually pay to use BioLite’s products.
However, since HomeStove target markets are still on their way to become fully economically self-sufficient, we can state that off-grid communities are also BioLite’s main beneficiaries.
“Both segments are customers, but some customers are customers more than others”. It makes some sort of sense, doesn’t it? Now, jumping into BioLite’s core interventions, the company offers a wide array of products. Ranging from solar panels to batteries, from lamps to campfire accessories, BioLite has it all. Most products, however, are targeting developed countries. For the sake of our case study, we chose to focus on the two flagship items: CampStove (portable stove for camping and backpacking) and HomeStove (low-cost, biomass cooking stove).
Value for Beneficiaries
After months spent on figuring out how to get off-grid communities discovering and embracing HomeStove, BioLite successfully managed to deliver concrete value to its beneficiaries. To begin with, HomeStove technology provides clean and safe energy to families and individuals, the majority of whom live outside city centers. Apart from reducing toxic emissions and improving users’ overall health conditions, the product is in line with cultural practices. Finally, HomeStove ensures a good return on investment, as it pays for itself within six to seven months.
Value for Customers
What about the other target, the so-called “recreation market” customers (or just outdoor enthusiasts)? Well, BioLite provides them with the similar benefits: affordable prices, portability, full integration with other tools and gears, in order to benefit from smokeless fires and additional electricity to charge devices. In a nutshell: convenience, efficiency and eco-friendliness.
BioLite uses a wide range of channels to get customers discovering, evaluating and purchasing their products? In developed markets, BioLite sells both online and offline, partnering with well-known retails stores dedicated to outdoor activities. In developing markets, online channels are set aside, with local distributors that act as both intermediaries and “feedback collectors” for further improvements of the products.
As you imagine, building an international business that serves two very different markets requires sharp skills and tons of action. When it comes to describing BioLite’s most strategic activities, we like to share the same ones listed on the company website: developing the technology (R&D), manufacturing products, building markets (including after-sales services) and measuring impact. Yes, you’ve read it right: measuring impact. We love the fact that, unlike others, BioLite considers it as a fundamental activity for its operations!
Key Resources + Key Partners & Stakeholders
“Technology, technology, technology”! In terms of most important resources, BioLite’s innovative thermo-electric technologies surely come first. Nevertheless, we would suggest other resources to be key factors behind BioLite’s success: design & product portfolio, international distribution network, organizational culture and, finally, the business model itself.
BioLite wouldn’t be able to generate meaningful impact by working on its own. In this sense, in developing markets key partners surely are local distributors and the so-called “Burners“. Burners are locals who first receive training form BioLite, then travel from village to village to give HomeStove demonstrations and sell the product. Moreover, since 2018 BioLite acquired EcoZoom East Africa to expand its reach of impact and address the environmental problems caused by burning charcoal. And finally, BioLite can count on Acumen to provide both financial resources, management assistance and consulting services.
BioLite’s cost structure can get quite articulated due to its international reach. Nevertheless, we decided to narrow down its main cost items into three, obvious pillars: R&D activities (pretty much everything that deals with developing new products and technologies), manufacturing and distribution.
Revenue Engines + Surplus
As we said earlier, both customers and so-called “beneficiaries” directly purchase BioLite products. Because of that, BioLite revenue model is a traditional direct sales model, even though local intermediaries and retail stores are often the middle men making all this possible. By selling CampStove and other outdoor gears in western markets, BioLite generates and reinvest its profits to fuel its R&D activities, in order to come up with new solutions for developing countries.
From its humble beginning as a camping stove project, BioLite quickly evolved into something much bigger than that. As a matter of fact, this social enterprise doesn’t just create affordable and durable portable stoves: BioLite leverages its technology to improve millions of lives around the world.
To summarize, thanks to a business model called “Parallel Innovation“, the company designs and manufactures a wide array of products meant for two very different targets: outdoor recreation users and off-grid communities in developing countries. “Recreation and need”, served at the same time.
Sure, BioLite is still at a transitional stage, but it is definitely on the way to bring safe energy and light to off-grid households while protecting the environment and tackling global climate threats.
About the Author
I’m Marco, an Italian business practitioner with previous study and work experiences across Australia, Netherlands, Spain and Vietnam. Having a background in economics and business management, since 2018 I’m happy to support social entrepreneurs and impact startuppers refine their businesses and scale social impact.
At Social Business Design, I mostly write about business design, financial modeling and growth hacking, sharing useful tools and insights gathered during 5+ years of on-field experiences.
Apart from talking about social business, I love hiking, reading, eating Asian food and taking pictures while I’m traveling. If interested, feel free to get in touch with me through my channels! 🙂
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