Simpa is a fascinating profile – a sophisticated business model, inserted in to a complex ecosystem, a bold mission (to expand clean, safe, and sustainable energy services to 20 million people by 2020) and a stellar management team (including our very own Fuqua alum and CASE Scholar, Simpa co-founder and VP of Business Development, Mike MacHarg).
After a year of operation, Simpa has a successful, ongoing pilot in India and $1.3 million in private investment. Read Clark & Dees’ post (below) to learn more about Simpa and the choices that they have made as a start-up serving the base of the pyramid. Then join in the discussion at http://bit.ly/caseduke
Starting Up – Simpa and Eco-Systems by Clark & Dees
No social entrepreneur enters into a vacuum. And the corollary: every new social venture enters into territory in which someone is already working. Existing players might be serving certain populations poorly, or not leveraging opportunities to do things more equitably, but every eco-system has points of stasis and resistance, and institutions that have interests that pull markets, institutions, and governments in certain directions. This is one of the reasons we urge social entrepreneurs to consider their venture from an eco-system point of view, even in the start-up phase.
Our next start-up example is inserting itself ambitiously into a value chain, with a hybrid business model that links together partners who have not worked together in quite this way before. Its hypothesis is that it can add value to all the other members of the chain, and accomplish its mission goals at the same time.
Simpa Networks is a start-up technology company with a bold mission: to expand clean, safe, and sustainable energy services to 20 million people by 2020.
Simpa is developing a product and business model that aim to make sustainable energy choices “radically affordable” for the 1.6 billion Base of the Pyramid (BoP) consumers who currently lack access to electricity. Simpa does this by addressing the prohibitive upfront cost of solar energy – introducing a pricing model that allows households to purchase home energy systems over time, in small, irregular, and user-defined increments over their mobile phones.
Simpa has a two-part business model: it designs and distributes home solar systems, and it brokers a new kind of mobile phone-based micropayment system. The company’s current business model thus straddles two blocks in our business model typology, in our full profile here. After a year of operation, Simpa has had early success in its pilot programs in India and has raised over $1.3 million in private investment.
Below is a diagram of Simpa’s business model. It is explained in more detail in the profile link above.
Read Simpa’s profile and help Mike MacHarg, co-founder of Simpa and Duke/Fuqua grad, think about the following questions:
1. Hypothesis Testing: What are the strengths and weaknesses in Simpa’s evolving business model? What are the key hypotheses Simpa is testing?
2. Multiple Customers: Of all of Simpa’s value chain partners, who are its primary customers? What does those customers need to see for this to be successful? Which customers or partners are likeliest to be the most difficult to work with?
3. Risk Management. Imagine you are preparing to invest start-up capital from an impact investing fund in Simpa. What are the key risks you’d like to see Simpa address in the next year?