Effectuation Stories

          Case studies, lessons and stories about Effectuation!

          Social Success Made Simple

          Fearless Leader
          Long before such topics as sustainable energy, carbon emissions, rural electrification and self-funding social ventures were fodder for the popular press, Andy Schroeter was actually doing it. In Laos. As an ex-patriot working in Laos and Vietnam for a German development organization during the late 1990s, he observed that nearly half the population was off the electricity grid and that the cost for the kerosene necessary to run lamps was one of the highest expenditures for a household. An answer could be the basis of a bright opportunity with the potential to make both money and social progress.

          Building Change
          But an answer wouldn’t come easily. Schroeter did not have funding from a venture capitalist with deep pockets nor did he have a clear technology solution. Laos (formally "Lao People's Democratic Republic") was still recovering from the 20 years of war the country had endured from 1954-1975, and the socialist government wasn’t exactly set up to foster entrepreneurship. But instead of seeking charitable contributions or support from a large NGO (non-government organization), Schroeter formed Sunlabob in 2001 with his own means. The mission of the firm was 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 invents 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, find solar panels, thermosiphon heaters or wind turbines that will perform well in the rugged environment of Laos. Someone has to build a (rental/leasing) economic model so that customers in a country where per capita income is US$986 per year can realistically afford these products. Someone has to hire the people who can install and maintain the systems. And someone has to organize 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 5,500 systems in more than 450 locations around Laos. The venture has been recognized for its social impact, winning an average of one international prize or award for each year it has been in operation (a few notables include 2009: National Energy Globe Award, 2008: Tech Awards Laureate, 2007: Ashden Award). And the venture continues to apply more of the plain technologies that made it successful. Consistent with the simplicity which 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, Singapore, and Tanzania and will soon be operating in Afghanistan. Real impact. Real business. Real simple.

          *Quoted from company materials, January 2011.
          British Airways Business Life
          Relevant Principles:
          Bird-in-Hand (Means)
          Affordable Loss
          Crazy Quilt (Partnerships)
          Pilot-in-the-Plane (Control vs. Predict)

          PDF 50X50-1BABL Sunlabob

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