A portable solar lantern brings light to needy areas – and launches a business.

Sep 14 2018 | PayPal editorial staff

An idea for doing good can evolve into a good idea for a business. LuminAID, which creates portable solar-powered lanterns, was started by 2 Columbia University architecture students as a project to design a disaster relief aid device for Haiti.
“We focused on lighting because it’s something that can really benefit the locals and aid workers,” says Andrea Sreshta, who cofounded LuminAID with Anna Stork. “We came up with the idea to make flat, rechargeable solar lights. You don’t need batteries, and it’s a safer alternative to using candles or kerosene lamps.”

Start with a prototype.

As with any product idea, you need to go start with a prototype. “We literally went down the street to Radio Shack to get some parts and made the first versions of our lights at the kitchen table,” Sreshta says. About a year after they began working on prototypes, Sreshta and Stork happened to be attending school in Tokyo when the 2011 Tōhoku earthquake and subsequent tsunami happened; they were able to quickly build lights and get them to affected communities.
“At that point, we realized there could be a business need for our lights,” Sreshta says. Beyond the market for disaster relief agencies or nonprofits aiding impoverished communities, the founders saw potential in selling the lights for camping or emergency kits.
Consider alternative funding methods.
Realizing you have a business idea is a good start – but then you have to find money to get the business off on the right financial foot. “We were students when we started the business,” Sreshta says. “We didn’t have any business experience – and we also didn’t have any money.” For Sreshta and Stork, the solution was crowdfunding. Crowdfunding can be a smart way to see if your product idea has legs; it also offers a way to test variations on your product and get feedback from potential customers.
With orders from 25 countries – and a small cushion of funding – Sreshta and Stork were ready to formally launch LuminAID. They sold the first commercial version of the solar-powered lights via their ecommerce site in 2011, using PayPal as the company’s payments processor.
Seek out new sales channels.
The founders wanted to keep their product in front of potential customers, ensuring slow but steady order growth. “We attend all types of tradeshows where people can buy our lights on the spot,” Sreshta says. To easily capture those sales, the founders and their five employees use PayPal Here to accept debit and credit cards, as well as PayPal. “From my experience, people tend to spend more when they know they can pay with a card instead of cash, which helps increase sales,” Sreshta says. “Since tradeshows are hectic environments, it helps that PayPal Here card swipe technology is small and easy to use. Each LuminAID staffer at a tradeshow can process sales using just their smart phones and the PayPal Here card reader.”
Selling to wholesalers is another way for small business to add new revenue streams. “That’s a whole other layer for us,” Sreshta says. The business has set up wholesale accounts with camping supply retailers, for example, since their customers are part of a target market for LuminAID lights. For wholesale accounts, the company uses PayPal partner Xero for bookkeeping and invoicing. Since Xero is integrated with PayPal, Sreshta and Stork can easily keep track of progress on payments against invoices – very helpful for a small team.

Build on product success.
In addition to seeking out new sales channels, growing businesses need to create new products that build on initial successes. As LuminAID grows – tripling in size every year since its 2011 launch – the founders have beefed up the product line. The “Smart Solar Garden,” solar-powered garden lanterns in origami-inspired shapes, were funded through a crowdfunding campaign. As with their original campaign, Sreshta and Stork are using crowdfunding to bring in money to manufacture and distribute the lights.

Giving back to good causes.
When a business grows beyond its launch concept of doing good, it’s immensely satisfying to reconnect to its origins. Globally, 1.6 billion people live without electricity. To address this problem, Sreshta and Stork created the “Give Light, Get Light” program, which lets customers buy 2 lights and donate one of them to partner nonprofits, which then distribute the lights to needy communities around the world.
“It’s been a really good way to connect with our customers,” Sreshta says of the program. “So many people write us to say how they’ve used our lights in all sorts of places around the world. It’s gratifying to support these efforts any way we can.”

The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.

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