A breath of fresh air: How Envirofit is doing social good with a for-profit model

Wednesday February 8th, 2017 - Smart Villages

Interview with Ron Bills

CEO, Envirofit

Location: Across the developing world

“People want to be treated as customers, with dreams, desires, and aspirations, not as aid recipients”

Ron Bills is Chief Executive Officer and Chairman of the Board for Envirofit, a global social enterprise that has revolutionized the way we think about energy access and development and, more importantly, household cooking. Envirofit stoves are designed to reduce indoor air pollution, a major environmental and health hazard that kills more people than HIV, malaria, and TB combined. Over the past 14 years, Envirofit has served more than 5 million people in East Africa, West Africa, Asia, and Latin America.

Ron Bills’s background is in engineering and business, and he has worked on some of the most innovative projects in automotive technology and aerospace, leading business units for Yamaha, Polaris, Martin Marietta, and CEO of Segway. In 2005, in conjunction with the Engines and Energy Conversion Lab at Colorado State University, he grappled with the question of how to take ideas conceived through university-based research and launch them into viable businesses. He says he “got bit by the bug” of puzzling out how to achieve sustainable change, and in 2005 he transitioned to lead Envirofit, a new start-up. In describing that decision, he says he realized there just isn’t enough charity to meet all the world’s needs, and he had seen too many good ideas fail when it came to scaling up. The solution? Doing social good using a for-profit business model.

Envirofit started in 2004 with engine retrofit kits in Southeast Asia, changing from carburetors to direct injection, a switch that cut emissions by 70% and reduced the amount of fuel used by 35%. In fact, that’s where Envirofit first got its name, as a portmanteau of “environment” and “retrofit.” But Bills began to think about the ubiquitous cookstove, used by half the world’s population who burn biomass for fuel on a daily basis—wood, charcoal, cow dung, and agricultural waste—and the indoor air pollution and health and environmental problems that result from it. There was a huge market opportunity here, he realized, that no one was focused on. In 2006, at the Skoll World Forum—an annual event for social entrepreneurs convened by Jeff Skoll, the first president of EBay—Bills presented his idea of leveraging for-profit businesses to address environmental and other social change problems. “People looked at me,” he laughs, “like I had horns on my head.” At the time, the notion of using traditional business principles in social change initiatives was not widely appreciated. But Kurt Hoffman of the Shell Foundation found his presentation intriguing, and approached Bills with the question, “What do you know about cookstoves?” It just so happened that Bills could reply, having just completed a cookstove project at Envirofit Labs, “We know a lot.”

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Soon a pilot program in India was designed to learn from many of the failures Bills had seen in the past. Too many products, he explains, are designed in a lab and then go straight to market. But designers are “too close to the product” and often have fatal flaws because they don’t anticipate particular consumer needs or habits. “We learned,” Bills explains, “that we don’t have the best ideas—our customers do. We have to listen to them.” So, he and his team spent a great deal of time and money on understanding what customers need, and also what they like. This included focus groups, in-field trainings, and eventually trials, which he notes are not often done in developing countries because of the added cost and time. With insight gained through ground-level research, Envirofit was able to develop and tweak its products until they found what worked, both technologically and commercially. Bills credits a conversation he had early on at a meeting in Denver with Muhammed Yunus, who pioneered the concept of microfinance. After Bills described his cookstove business idea, Yunus told him, “Never forget, poor people like beautiful things, too.”

But beyond their aesthetic appeal, Bills’s interest in energy-efficient stoves developed into a passion, as he was “amazed at what a simple product could do” to impact people’s lives. The stoves have multiple benefits, alleviating symptoms from household air pollution and reducing the need for fuel, saving people both time and money. He recalls talking to one woman in Kenya, for example, who lit up with a big smile as she told him, “This stove has been amazing for us, because I’m no longer getting headaches when I’m cooking. And we saved enough money to send our older son to high school, to pay for his school fees.” The money saved on fuel costs is substantial: $179 million from 1.3 million stoves. Bills likes to go back to customers after they’ve had the stove for some time, and ask them how they use it, what they like about it, and if they’ve had any difficulties. “Customer care is our number one priority, and we are not just here to sell stoves—we are committed to adoption of the stoves as well,” he says proudly.

Another major impact of Envirofit is the opportunities the company provides women, who are not only the main focus of the product but also a major entrepreneurial force in cookstove adoption. Since women do the majority of the cooking, they are deemed credible by interested consumers. Bills sees women’s involvement as a win-win: “Women are our strongest asset in terms of growing this market, and the women who sell stoves have an opportunity to gain an income themselves.” Since its founding, Envirofit has created approximately 2,500 direct and indirect jobs. Envirofit’s training program complements women’s experiential knowledge with sharpened business skills. Jessica Alderman developed Envirofit’s women empowerment program, which builds agency and teaches women how to manage money, how to present yourself as a businessperson, and other basic sales and business skills. Not only can women can make a good living selling stoves, Bills notes, but these are transferable skills.

Bills says he is guided by this principle: “people want to be treated as customers, with dreams, desires, and aspirations, not as aid recipients.” The growth and success of Envirofit—with 5 million customers served—is a testimonial to Bills’s business acumen, earning him the recognition of 2016 Schwab Entrepreneur of the Year. In addition to the jobs that have been created and the money saved by Envirofit’s users, the larger world also benefits, as the use of Envirofit’s clean cookstoves has conserved as many as 52 million trees while preventing 22 million tons of carbon dioxide emissions.

—Erin Martineau, http://www.emartineau.com/