An Economic Times article profiles Harish Hande, the Managing Director of the Solar Electric Light Company (SELCO) in India. Having been inspired by small-scale solar power initiatives in the Dominican Republic in the early 1990s, Hande registered SELCO in 1995 to provide similar services to the bottom of the pyramid across India. Hande has faced a number of obstacles since the company’s inception including dealing with investors who did not have the same commitment to the company or mission. This led him, in 2005, to buying back many of their shares, which had amounted to 90% of the company. Since then, Hande has dealt only with social investors. SELCO, in turn, has a profit of approximately $1.6 million and has projected revenue of $4.8 million to $6 million between 2013 and 2015.
Unable to ignore the poorest of the poor who live in abject darkness, Harish Hande decided to put his Master’s in solar power to good use. Today, the 44-year-old MD of Solar Electric Light Company or SELCO, retains the same inclusive elan while reminiscing how his company continues to light up lives at the bottom of the pyramid.
The lure of social enterprise
After a trip to the Dominican Republic in 1991 while doing his Master’s in the US, Harish Hande realised he wanted to do something in the socioeconomic space. His professor at the University of Massachusetts told him to study rural electrification in the Dominican Republic, where he came across households using solar power paying small amounts of money. In 1993, upon returning to India and doing field work in Karnataka and Sri Lanka, Hande realised that affordability could be defined in many ways beyond Excel sheets. He registered SELCO in 1995.
Hande still feels that despite the fact that there are 40,000 banks in India, people don’t take advantage of them. He wanted to create good aftersales and access to third-party financing to make solar power affordable. A 4-light solar system in 1994 cost Rs 15,000 and the only way to make it affordable was if banks financed it.
When Hande headed back to the US, he wanted to do research in large solar (projects). But he switched to small solar after his Dominican Republic experience. A group of friends, including SELCO co-founder Neville Williams, also helped him change his mind. A 1993 meeting with Williams, a former journalist and an anti-Vietnam War activist in Washington, deeply influenced Hande.
Working the equilibrium
Hande’s credo is to maintain equilibrium among stakeholders. For him, the all-time classic social entrepreneur is the street vendor – “she never cheats and carries on sustainable delivery…But Kingfisher, despite possessing the best brains, is in a spot. SELCO started the same year as Lehmann Brothers. We are here, they are not.” He says we need to look at the poor as clients, not beneficiaries.
All for intervention, which either increases income or the quality of life, or both. Hande is yet to see a VC who puts money in companies started by non-English speaking entrepreneurs because of the ‘Excel sheet mindset’. “VCs are looking at entrepreneurs who know to make Excel financials and Powerpoint presentations. Thousands are left out of the ecosystem”.
In 2005, Hande had a set of early investors whose investments changed hands. The new set of investors didn’t have the same commitment. To get that lot out, he faced 18 harrowing months as they held 90% of the organisation. They got embroiled in a case and gave Hande back the shares. That event made him chase only ethical investors.
Run the numbers
Today, the Rs 16 crore SELCO has a profit of Rs 80 lakh with projected revenues of about Rs 24 crore in 2013-14 and Rs 30 crore in 2015. So far, Hande has pumped in $3.2 million into the company.
Personal career goals
Replicating the SELCO model across India and creating six labs by 2016-17 as centers of innovation for the poor.
Toughest call to date
Firing a dedicated employee over a trivial issue.
Moment of pride
An employee who came to clean the table and serve coffee in 1998 is today SELCO’s Bangalore office branch manager, talking to bank chairmen and providing solar solutions.
Job in a line
“Fun and addictive.”
“Boundaries are man-made. Why are we so possessive on those lines?”
Lesson for the corporate world
Equity. Processes are important but there are also individuals who are working. Don’t equate people with commodities.