I met up recently with Whit Alexander, a co-founder of board game company Cranium which they sold last year to Hasbro. He has provided the seed funding for a new social business venture called Burro.
Whit believes that there is a huge opportunity to develop quality branded products and a distribution channel optimized for the bottom of the pyramid (4B+ people who live on < $2/day). His goal is to deliver products at reduced cost to these customers which also improve their lives.
Their first business line is renting rechargeable batteries starting in Ghana. Why, you might ask?
- Long-term cheaper. Rechargeable batteries are cheaper to operate over their life-time than the traditional non-rechargeable disposable batteries.
- Multiple benefits. Batteries can power lights which lets a shop stay open longer and kids to perform homework when it’s dark. Also, mobile phones and radio … important communication tools … all require batteries. Batteries are a regular budget item for most families globally.
- Better for environment. Growing issues created by disposed non-rechargeable batteries.
Here’s how their model works:
- Burro purchases rechargeable batteries from low-cost Chinese manufacturers.
- Burro sets up centrally located branch offices to store and recharge batteries.
- Burro hires independent battery rental reps who signup customers to monthly rental agreements which cost the equivalent of 3 non-rechargeable batteries each. Customers are provided unlimited recharging of their AA batteries along with an adaptor case (see photo) to allow batteries to operate as popular D-size batteries.
Currently they are operating a pilot in Ghana to demonstrate the business model and get the kinks figured out. Once they’ve got the model figured out, they plan to expand their branch network plus to offer additional products through their growing distribution channel.