TEDxPittsburgh
Daniel Schnitzer: Inventing is the easy part. Marketing takes work
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Solar-powered LED lightbulbs could transform the lives of rural Haitians, but as Daniel Schnitzer found, they don't simply sell themselves. At TEDxPittsburgh, he shows how smart health and energy products for the developing world are useless unless the market works too.
Daniel Schnitzer - Founder and Executive Director, Earthspark International
Daniel Schnitzer is the founder of EarthSpark International, a company dedicated to helping create clean energy supply chains in Haiti. Full bio
Daniel Schnitzer is the founder of EarthSpark International, a company dedicated to helping create clean energy supply chains in Haiti. Full bio
Double-click the English transcript below to play the video.
00:11
So, without romanticizing this too much:
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imagine that you light your home
with kerosene and candles every night,
with kerosene and candles every night,
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and that you do all of your cooking
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with charcoal.
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This is how the world's
two billion poorest people
two billion poorest people
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cook and light their homes every day.
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This isn't just inconvenient,
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this is inefficient,
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it's expensive,
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it's harmful to human health,
harmful to the environment,
harmful to the environment,
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and it's unproductive.
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And that's energy poverty.
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So let me give you a couple of examples.
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I work in Haiti,
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where about 80% of the population
lives in energy poverty.
lives in energy poverty.
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The average household
spends 10% of its income
spends 10% of its income
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on kerosene for lighting –
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that's an order of magnitude greater
than what the average US household spends
than what the average US household spends
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on electricity to light their homes.
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The 2008 hurricane season in Haiti caused
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about one billion dollars in damage.
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That was a sixth of their GDP.
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The damage was so severe
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because the primary energy fuel
in Haiti is charcoal,
in Haiti is charcoal,
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which is made from trees,
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and has left the country
almost completely deforested.
almost completely deforested.
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Without trees, the country can't absorb
heavy rains and massive flooding,
heavy rains and massive flooding,
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as a result.
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So in the industrialized world,
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we built walls that protect us
from the externalities of our energy use;
from the externalities of our energy use;
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we can afford to clean up acute
environmental disasters;
environmental disasters;
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and we can also afford
to adapt to chronic conditions
to adapt to chronic conditions
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like climate change.
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That's not the case for Haiti.
They can't afford this.
They can't afford this.
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The only way they're going to lift
themselves out of energy poverty
themselves out of energy poverty
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is by adapting fuels
that are more efficient,
that are more efficient,
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that are less expensive,
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that are better for human health,
better for the environment
better for the environment
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and that are more productive.
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So it turns out that those fuels
and technologies exist,
and technologies exist,
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and this is an example of that.
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This is a solar LED lightbulb
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that we sell for a retail price
of about 10 dollars in rural Haiti.
of about 10 dollars in rural Haiti.
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That's a payback period
of less than three months
of less than three months
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for the average Haitian household.
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The prescriptions to solve energy poverty
seems pretty straightforward:
seems pretty straightforward:
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you develop these technologies
that have a great return on investment,
that have a great return on investment,
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and people should be snatching them up.
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But that's not the case.
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The first time I ever went down to Haiti
was in August of 2008,
was in August of 2008,
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sort of on a whim,
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and I was fielding surveys
in the rural south of the country
in the rural south of the country
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to assess the extent of energy poverty.
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And at night, I would go around sometimes
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and I would speak with the street vendors
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and see if they were interested
in buying these solar LED lamps.
in buying these solar LED lamps.
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One woman who I encountered
turned down my offer,
turned down my offer,
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and she said, “Mon chéri,
c'est trop Cher,”
c'est trop Cher,”
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which basically means,
“My dear, it's too expensive.”
“My dear, it's too expensive.”
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But I tried to explain to her,
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“Look, this is going to save you
a lot of money,
a lot of money,
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and it's going to give
you even better light
you even better light
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than what you're using
now with the kerosene.”
now with the kerosene.”
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So I didn't make the sale,
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but I did learn a really important lesson,
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which is that technology, products,
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were not going to end energy poverty.
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Instead, access was going to.
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Specifically, there are
two types of access
two types of access
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that are going to end energy poverty:
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there's physical access,
and there's financial access.
and there's financial access.
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So, physical access --
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what does that mean?
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It's very expensive for low-income
households in developing countries
households in developing countries
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to reach major centers of commerce.
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And it's basically impossible for them
to order something off Amazon.com.
to order something off Amazon.com.
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“The last mile” is a phrase
that's normally associated
that's normally associated
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with the telecommunications industry.
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It means that last bit
of wire that's necessary
of wire that's necessary
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to connect the customer to the provider.
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What we need for ending energy poverty
are last-mile retailers
are last-mile retailers
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that bring these clean energy
products to the people.
products to the people.
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The kerosene and charcoal value chains
already figured this out:
already figured this out:
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those fuels are ubiquitous
across the entire country.
across the entire country.
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You can go to the most remote
village in Haiti
village in Haiti
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and you will find somebody
selling kerosene and charcoal.
selling kerosene and charcoal.
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So the other type of access: financial.
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We all know that clean energy
products, technologies,
products, technologies,
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tend to be characterized
by higher upfront costs,
by higher upfront costs,
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but very low operating costs.
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And so in the industrialized world,
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we have very generous subsidies
that are specifically designed
that are specifically designed
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to bring down those upfront costs.
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Those subsidies don't exist in Haiti.
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What they do have is microfinance.
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But you're going to severely diminish
the value proposition
the value proposition
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of your clean energy product
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if you expect somebody in Haiti
to go out, get a microloan,
to go out, get a microloan,
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go back to the retailer,
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and then buy the clean energy product.
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So the prescription to end energy poverty
is much more complicated
is much more complicated
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than simply products.
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We need to integrate financial access
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directly into new, innovative
distribution models.
distribution models.
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What does that mean?
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That means bundling consumer credit
with the retailer.
with the retailer.
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This is really easy
for Bloomingdale’s to do,
for Bloomingdale’s to do,
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but it's not so easy for a rural
sales agent in Haiti to do.
sales agent in Haiti to do.
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We need to redirect cash flows
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that are going now
from the diaspora in the United States
from the diaspora in the United States
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through Western Union
wire transfers in cash
wire transfers in cash
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directly into clean energy products
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that can be delivered to or picked up by
their friends or family in Haiti.
their friends or family in Haiti.
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So the next time you hear
about a technology or product
about a technology or product
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that's going to change the world,
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be a little bit skeptical.
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The inventor Dean Kamen,
the guy who invented the Segway,
the guy who invented the Segway,
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a genius by any standards,
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once said that his job is easy,
inventing things is easy,
inventing things is easy,
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the hard part is the technology
dissemination --
dissemination --
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it's getting those
technologies and products
technologies and products
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to the people who need it most.
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Thank you.
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(Applause)
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ABOUT THE SPEAKER
Daniel Schnitzer - Founder and Executive Director, Earthspark InternationalDaniel Schnitzer is the founder of EarthSpark International, a company dedicated to helping create clean energy supply chains in Haiti.
Why you should listen
A PhD candidate at Carnegie Mellon University’s department of Engineering & Public Policy, Daniel Schnitzer co-founded EarthSpark International in 2008. Honored by the Clinton Global Initiative in 2010, EarthSpark International works in Haiti to develop markets and aid local entrepreneurs in creating a supply chain for safe, clean and renewable energy. It also played a vital role in relief efforts after the 2010 earthquake. Before this, Schnitzer worked for KEMA Inc., an energy consulting firm, at which he focused on renewable energy policy and efficiency.
More profile about the speakerDaniel Schnitzer | Speaker | TED.com