LUMIR

A LIGHTING SOLUTION

MANAGEMENT INNOVATION, TECHNOLOGY,

AND ENTREPRENEURSHIP

Chae Hea Seong 29318701

Daniel Simanjuntak 29318075
Haga Sudipta 29318034
Rayendra Yustian 29318137
Ratty Utari 29318050

Master of Business Administration Program

School of Business and Management
Institut Teknologi Bandung
2019
 I. Introduction
A. Background

Electricity is one of the primary needs for modern human being. In big cities around the world,
we cannot imagine how we could live without them. Right from the simple things such as light
up our houses in the darkness of the night, to the more complex things such as national
security, these things need electricity. However, not all of the population in this planet can enjoy
the privilege of having electricity. In fact, there are still 1.3 Billion of people still lack access to
electricity1.

Now imagine that your house is having a blackout. It is pretty interrupting our daily activities
even though it only last for a couple of hours, and in big cities like Jakarta, it is regulated that the
electricity cut-off can not be more than 3 hours2. This condition happens every time in the rural
remote areas that have no access to electricity. Their daily activities like studying, working, and
harvesting seems normal within the daylight. But within nighttime, they are struggling to get
enough light to do their activities.

To overcome their lighting problem, they use the technology that is ancient and inefficient, which
is kerosene lamp. The usage of kerosene lamp isn’t as simple as imagine. The energy sources
is inefficient, polluting and unhealthy. Per unit of emitted light or heat, the user of Kerosene lamp
pay higher prices than the privileged, including the time they spend obtaining or collecting fuel.
Kerosene lamps convert only 65 percent of their energy to light.

Kerosene is far more expensive than electric lighting. Cost of useful lighting energy services
($/lumen hour of light) for kerosene lighting is 325-times higher than 'inefficient' incandescent
bulb, and 1625-times higher than compact-fluorescent lighting3. One lamp consumes 0.04 to
0.06 litres per hour, and the daily usage at three to four hours. 1 litre of kerosene per week x
$1.00 USD= $52.00USD/year. 96 billion litres of kerosene/year at a cost of $96 billion USD/year
– is the estimated cost of kerosene in developing world. (assuming kerosene $1.00 USD/litre).
In comparison, the total energy use (all sectors and fuels) in Austria, Sweden and in the UK is
estimated at 38 billion litres4.

Kerosene lamps cause local and indoor air pollution - a nasty mix of particulates, carbon
monoxide and carcinogenic gases. Smoke from kerosene lamps is responsible for respiratory
infections, lung and throat cancers, serious eye infections, cataracts as well as low birth
weights. Acute respiratory infections like influenza and pneumonia kill nearly 2 million children in
developing nations each year, more than the annual number of all deaths at all ages from all
causes in the European Union5.

1 World bank, 2016

2 https://finance.detik.com/energi/d-2245667/pln-pemadaman-listrik-tak-boleh-lebih-dari-3-jam
3 Mills, Evan, 1999
4 Mills, Evan, 2002
5 SELF Magazine, 2002
The World Bank estimates that 780 million women and children breathing kerosene fumes
inhale the equivalent of smoke from 2 packs (40 sticks) of cigarettes a day. Shockingly, two-
thirds of adult female lung-cancer victims in developing nations are non-smokers6.

Using another method of energy production seems like not in favor of those who are living in the
rural remote area. There are some of the methods which are solar panel and simple generator.
But those methods still have some constraints. For example, solar panel only efficient enough to
power their need of electricity in the daylight, and as we know, with the average of rainy days in
Indonesia, for example, is 3000 mm per year7. It will cause them hard time to obtain electricity in
that condition. And for simple generator, it will be expensive to own and to run.

II. Problem Statement

Having the fact there are 1.3 billion people that have no access to electricity, the challenge is
how we can provide a cheap, efficient, environmentally friendly and economical lighting product
to support their daily activities?

III. Analysis
1. Product Introduction

Knowing the danger and inefficiency of kerosene lamp, we want to offer a solution that is
simple but effective. We think of giving the good side of the alternative energy method
and take away the bad side of those.

That is where Lumir came in. Lumir is an initiative that is only has one purpose, which is
to bring the beauty of the light to everybody by resolving the light shortages and
delivering the beauty of light. Lumir has been started since it realize that 1.3 billion
people in the world still lack access to electricity.

We will launch a product that is suitable for most people, which is Lumir K. Lumir K is a
LED Light that is powered by a regular cooking oil that is cheap, efficient, and can be
found anywhere.

2. Technical Analysis

6 Op Cit.
7 https://www.bps.go.id/statictable/2017/02/08/1959/jumlah-curah-hujan-dan-jumlah-hari-hujan-di-stasiun-
pengamatan-bmkg-2011-2015.html
Lumir K is a LED light that use cooking oil as its fuel. It uses seebeck effect which is the
conversion of heat directly into electricity at the junction of different type of
semiconductor. When there is a temperature difference between the joints, the electron
energy levels in each metal shifted differently and a voltage difference between the
junctions created an electrical current. So that's how we can turn on the LED only with
the heat of the cooking oil. Also since the cooking oil is not a stable heat source, we had
to stabilize the thermoelectricity. By our patented technology, we could stabilize the
electrical power and makes it possible to operate by small flame without flickering. The
heat from the flame rises into the heatsink, where the temperature difference occurs.
Then it generates thermoelectricity which is the power for the LEDs at the top. Right
above the heatsink, there is a main tube like chimney which makes proper airs to flow to
support combustion.

For the cost of operating itself is very cheap, Lumir K only uses 1L of cooking oil to light
up the LEDs for 200 Hours, that is equivalent to one month of usage. With provided fuel
tank of 100 ml, one refuel can light up to 20 hours. It means that using it for a month will
only cost the user 1 US$ for the price of the average cooking oil or 12 US$ per year. In
comparison, One kerosene lamp consumes 0.04 to 0.06 litres per hour, and the daily
usage at three to four hours. 1 litre of kerosene per week x $1.00 USD=
$52.00USD/year. Means that using our product will save the user up to 40 US$ per year.

For the module construction, we are very optimistic to say that it can last up to 10 year of
continuous usage. We use ABS plastic as the exterior shell of the module as it is cheap,
but strong enough to handle the heat generated from the fuel and the LED light itself.
For the LED housing, we place it high enough to make sure the LED light’s performance
will not get interrupted by the heat and the smoke of the cooking oil. And lastly, for the
LEDs, we use LG innotek’s 1 watt LED lamps that is equivalent to 8 watts of standard
bulb. It means that it will be cheap and easy to run at the same time also bring brighter
light with up to 98 lumens.
In comparison to other lighting method, In the case of kerosene lamps, only 10 % of the
energy from the fuel is used for illuminating because the flame itself is a direct material
that emits light, the rest of the 90% of the energy is just wasted, scattered in the air.

If we can imagine to only take the good side of the other energy production method,
which is solar system and generator, and take away the bad side of it so it can be used
anywhere and anytime

While we provide harness 90% of the heat energy to bu utilised, by simple logic, it
should be very economical.

Our product can be used anytime and anywhere while solar lamps has a big weather
constraints in many areas where the average rain days are more than 160 days. We can
see for the table and figure below to understand the details.
 PESTEL Analysis
Politic
Lumir K is a Start-up company. It’s produce a new product to the market. Replace the
Karose Lamp to new product. Because of it’s a new product it begin will small company.
Economic
Maintenance Cost for this product is still low. Because the product can last long. It’s
around 20 years. Lumir K only uses 1 liter of cooking oil for 200 hours, which costs
about $1 for a month. 80% Savings of fuel costs. The lamp is powered by affordable
cooking oil and palm oil that local people can easily purchase anywhere.
Social
Net working with KOICA(Korean International Cooperation Agency), Industrial Bank of
Korea, and SK
Technology
Compared to kerosene lamps, it provides 2.6 times brighter light while reducing the fuel
consumption by 80%. Moreover, it can be used for a long period as its main part,
Thermoelectric modules, can work for more than 10 years. You don’t charge it. No
noise. It’s always usable.
Environment
It reduces the emissions of CO2 and CO that threaten the user’s health and the
environment up to 92.8% and 85% respectively.
Legal
This product still production in Korean so it will conduct the Asean-Republic of Korea
Free Trade Area as their legal activity.
This product also will involve with Custom Regulation in Indonesia. Export and Import
Policy between Korea-Indonesia also.

3. Market Analysis
Market Analysis is the qualitative and quantitative assessment of a market. In analyzing
the market, we use TAM(Your Total Available or Addressable Market) SAM(Your
Segmented addressable Market or Served Available Market) SOM(Your Share of the
Market, Your Target Market) market analysis.

Our product belongs to the energy market and our Total Available Market is those
1.3billion people in the world with no access to electricity. The approximate value of the
total available market reaches to 27 billion US dollar.
Our product is a type of an alternative energy source and according to the World bank,
the percentage of alternative energy source out of the total electricity consumption is
about 17.5percent. Thus our Serviceable Available Market can be calculated as 17.5%
of our TAM, that is 4,700million US dollar.
Finally, our target market is the alternative energy market in developing countries in Asia.
Aroung 53% of the people with no access to electricity lives in developing countries in
Asia, and so our SOM can be calculated as 53% of SAM, that is 2,500million US dollar.

We chose this industry because it is very big in size and our product with its innovative
technology and efficiency, can be the best alternative of our chosen market.

Our final users are definitely people who do not have access to electricity, specifically
light. However, they may not be able to afford to buy our product because of money
problems and accessibility reason. Under these circumstances, we have chosen our
target customers as follows:

1. CSR. CSR stands for Corporate social responsibility, also known as corporate
sustainability. It is an international private business self regulation. Nowadays
most of listed companies follow CSR. CSR strategies encourage the company to
 make a positive impact on the environment and benefit the society and
underprivileged sections. Considering our product as environmentally friendly,
economical and efficient, companies with CSR could provide our products to our
final users. Thus, companies with CSR could be our primary target customer.

2. NGOs. Non governmental organization. They are active in humanitarian and

social to effect changes. KOICA(Korean international cooperation agency), and
the World Bank are examples of NGOs which actively working on bringing light to
unprivileged people in the world.

3. Government in developing countries. It is the govt responsibility to build the

infrastructure and provide the electricity. However, this required a lot of budget
and time length. So it can be their alternative way to have their people to get
access to light.

4. Value Analysis

This section explains the value that our product offers with Value Proposition Canvas as
the tool to analyze it. This tool is useful because it breaks two most considered
perspectives, customer perspective and the product perspective. It helps us to think a
more structured way so that developers can easily explain the product to the customer
and the customer can also easily understand.

Product Perspective Customer Perspective

Although the product perspective is depicted on the left side, analyzing the canvas is
started from the right side which talks deeply about what the customers do and what
they feel in doing it.

As already mentioned earlier, our most customers are companies, government

 institutions and NGOs. We target relatively low proportion of individual segment. What
these big institutions, especially companies, like to do is Corporate Social Responsibility.
While one of government’s main tasks is developing rural areas or village in order to
raise their locals living standards. They have common goal to induce locals to use
energy wiser and more effective especially in terms of lighting.

However, they may sometimes find pains to do so. For example, a company wants to
build infrastructure like irrigation system. It is very nice and much needed by the locals
but it requires more time, cost and any complicated process involved such as approval
from the local government. As for the locals or the end users side - especially children -
they cannot compete well with those who live in more developed city because they can
only do activities like reading, doing homework in the daylight. On the other hand,
children in cities can do that up until midnight since electricity has been more developed
there.

On the other hand, the gain side from the customers is what they expect from what they
do can make them happy. Basically, they are satisfied if the product helps them save
time and money. They want an effective product without complicated procedures which
can provide primary needs - in this case lighting - and improve locals’ productivity.
Companies which do CSR would also consider its impact to the environment and locals
feel enthusiastic to meet the company’s representatives giving this product.

Finally, this part explains the values our product could offer which can be seen from the
left side of the Value Proposition Canvas. To relieve those pains mentioned before, we
offer you a portable LED lamp. So before, the government completely develop electricity
in those rural areas, companies do not need to build something but give an alternative
source of light. We believe it does not require complicated procedures and time
consuming. Unlike candles or kerosene powered lamp, it has more than 10 years of
lifespan and ability to illuminate approximately 25m 2 room. Moreover, it helps children
read better without any annoying disruption like accidental fire at night.

Lastly, companies, governments, must be very happy if locals’ needs are fulfilled. With a
very simple and easy to use product, locals can boost their productivity. Instead of
kerosene, it only needs cooking oil and lighter to light their house. Moreover, the LED
lamp is interchangeable and companies have not to worry about the environment
anymore because this product is less of CO2 and CO.

5. Strategic Marketing Plan

This is still small projection because this product is still new.
 In the early Innovators it’s around 2,5%. Risk tolerance adopting new technologies
which may ultimately fail. This stage the innovators will taking risk, youngest age, has
great financial liquidity, have social and have closest contact to scientific sources and
interaction with other inovators.Financial resource still face a failure in this stage.
Early Adopters it’s around 13,5%. Early adopters are typically younger in age, have a
higher social status, more financial liquidity, education or more advanced, and more
social than late adopters. Realize judiction choice of adoption will help Lumir maintain
central communication.
Chasm
There is a possibility that this product will only until this stage because it’s replaced by
other subsidiary product and more advanced product. It’s also normal happen in start up
company. All startup product required a technology to cross the chasm. All included the
features, interfaces, and third party products and services to garner the references to
sell the new technology to a broad and demanded by the customers.

And other stage there is early majority it’s around 34% it’s usually longer stage than the
other. Late majority which this product will decline it’s around 34%, and last stage
laggard consist of 16 %.

6. Strategic Business Plan

The business model canvas is used to see what our company can deliver by
differing the customer segments, customer relations, channels, value proposition, key
activities, key resources, key partners, cost structure, and revenue streams. For Lumir,
we start from the value proposition that has been narrowed down from the Value
Proposition Canvas. The first value that we try to solve is to provide primary light needs
to the rural people that are currently living in darkness or depend on kerosene lamps.
Creating a safe light source is important for people in rural areas because kerosene
lamps can cause health issues due to the fumes that they create during use. The
importance of environmentally friendly is also important because through the use of
Lumir in households, people could save not only their health but also the environment
because Lumir K emits 92.8% less Carbon Dioxide (CO2) and Carbon Monoxide (CO)
compared to traditional kerosene lamps. The fact that Lumir K uses cooking oil as their
fuel source also helps creating a cost effective product, especially considering people in
the rural areas that don’t make a predictable income for their households. This also
reflects to our customer segments that we target with the realization that the rural people
could not afford this light solution. We target companies who has movements in
Corporate Social Responsibilities (CSR), Government sections, and non-profit
organizations to distribute our product. These organizations and companies has the
resources to reach out to more people through their networks. By providing these
products to the rural areas, people could have a better quality of life and as time goes
along, future development extensions from Lumir K could be developed based on how
the end user responses. The way that Lumir K will be marketed to rural people depends
on government, companies, and organizations channels where their existing
infrastructures will be used. The key activity of this business is introducing Lumir K to
rural people who are in need of lighting solution and through this introduction, community
education can be held so that the people have a better understanding of what a safe and
valuable environment is. Creating this product requires patents and financial incentives
from stakeholders so that Lumir K can be sustained for the future and be developed
further for better innovations. Key partners for Lumir K requires the involvement of
government or nonprofit organizations because the target end user are in different
countries, hence requires the product to be accepted as an import product with local
governments. In order for this product to be delivered to the end user, there are several
implementation aspects needs to be undergone. First vendor/supplier partnerships is
important for packaging, LED, casing, etc. for the creating and assembling this product.
The last is the revenue stream for Lumir K depends on the sales that will be generated
from the proposed consumer (CSR Companies, Governments, and NGOs)
 IV. Conclusion
It is unbelievable that there are still 1.3billion people in the world without electricity.
Because of lack of access to electricity, specifically light, people around the world, espcially in
rural communities in developing countries struggle. Reliable light access empowers
considerable benefits, enabling people to have access to better life. For this reason, we bring
the REAL INNOVATIVE product, Lumir K, which is the best alternative

I FINISHED THE CONCLUSION ALREADY - DANIEL=--- Why didn;t u put it then?

I put it in word- ok~

REFERENCES

Andy Rachleff. 2014. Startups Always Have a Chasm to Cross. Retieved from
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Mills, E. (1999). Energy efficiency Options for Insurance Loss Prevention.

Mills, E. (1999). Developing a next generation community college curriculum for energy
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https://finance.detik.com/energi/d-2245667/pln-pemadaman-listrik-tak-boleh-lebih-dari-3-jam

https://www.bps.go.id/statictable/2017/02/08/1959/jumlah-curah-hujan-dan-jumlah-hari-hujan-di-stasiun-
pengamatan-bmkg-2011-2015.html

https://data.worldbank.org/indicator/eg.elc.accs.zs

Rogers. 1982. The 5 Customer Segments of Technology Adoption. Retrieved from

https://ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-technology-
adoption/.

Osterwalder, Alexander. (August 29, 2012). Achieve Product-Market Fit with our Brand-New
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