Ned is the co-founder and CEO of d.light, which is a leading provider of solar powered solutions for the 2 billion people worldwide, who do not have access to reliable electricity. Ned has been recognized by BusinessWeek, Forbes, the Social Venture Network and Asia Society and the World Economic Forum for his innovative leadership. He and d.light co-founder, Sam Goldman, were named social entrepreneurs of the year in 2014 by the Schwab Foundation for social entrepreneurship. Prior to d.light, Ned founded multiple startups in the San Francisco area, developing several products that reached global distribution.
Tiffany Harnsongkram: Thank you for joining us today, Ned. Could you start off by telling us about your journey to become an entrepreneur?
Ned Tozun: I never really thought of myself as an entrepreneur or a business person. As an undergrad I changed my major around seven or eight times. I could never focus or specialize. I came to realize that entrepreneurship checked a lot of the boxes for me because every day is different and you’re always learning. At the same time, I really wanted to do something that would make an impact for people, particularly people living in emerging markets. My dad immigrated to the United States from Cyprus. I have Turkish family there and where they are from – Northern Cyprus – is an unrecognized country. Utilities don’t really work most of the time. I had this experience going as a kid every other summer to visit my family there and seeing the massive contrast between Silicon Valley where I lived and Northern Cyprus where a lot of my family lived, including the lack of opportunities.
I am a technology optimist, so I saw technology as a way to help bridge that divide. I was really interested in this concept of social enterprise and business with a mission. At that time, there was a lot going on at Stanford around innovation for social impact. There was this program at the design school called design for extreme affordability, which, when I heard about it, I felt like, oh, that is what I am meant to do! As a result, I applied to business school there, not really thinking I’d get in. I got a place and then immersed myself in that world. In fact, I didn’t even get into that design for extreme affordability class, but I just kept showing up and eventually they let me in. And that’s where I connected with my business partner, Sam, who is an American guy that grew up in India, Pakistan, Latin America, and then his work was in West Africa.
We had lots of shared values, but very different in terms of our experiences and what we brought to the table. We partnered up and he was really passionate about the fact that so many people don’t have electricity. His neighbor’s son, when he was living in Benin in West Africa, was burned in a kerosene accident and survived, but was burned horribly. Sam realized that there’s 1.3 billion people in the world who still have to rely on kerosene for lighting. This really is an injustice – it shouldn’t be the case. He wanted to do something about it, so he and I joined forces and started d.light together.
What are the ingredients that you need to create a impact-focused business? How did you set it up?
Not all social problems can be solved with a business solution. Some need good policy, government intervention, and others need nonprofits, but in our case customers and people in our market were paying energy solutions that were terrible, and businesses were not seeing it as a market. There was a market failure and therefore there was an opportunity to really build a business. d.light is based around serving a market need – we provide solar powered products and appliances for people without access to electricity. We started with solar lanterns, but now have all kinds of stuff, solar home systems and appliances, and we finance products. It’s a pretty complicated business now and we’ve grown to a significant scale. We’ve reached over a hundred million people and have 1500 employees.
We focus on the triple bottom line – profit, people and planet. This has become more of a buzzword now, but we use it because we want to create a sustainable and healthy business because ultimately that’s going to create employment. It works with the engine of capitalism and that can lift people out of poverty. Having a sustainable business is important and you can scale if you have that. We also want to have a positive impact on all of our customers. The name of our company is d.light. That’s the emotion we want all of our customers to feel and we want to make a transformative impact on their lives, through our products. There’s also the environmental impact. By getting people access to these life transforming technologies in a way that doesn’t worsen climate change – it’s done totally through renewable energy – we can now provide all these amazing technologies without actually exacerbating the climate crisis.
Your company now works across many different countries. How do you manage the complexity of working across these different countries and their cultural differences?
Our products are being sold in 65 countries and we have people on the ground in about a dozen countries. Not everyone is in one place, so you really have to have good people and good systems and processes to manage that. We use the same structure in each country, although every country is going to have its own cultural flavor, which is great. We embrace that, but there are consistent d.light values that have to go across. Some of those d.light values might be harder in some cultures than others. For example, in China, value innovation was really hard for people because they were taught in school or at work to do what the boss or teacher says, even if it’s to run off a cliff. There’s the mentality that the leader knows what they’re doing, and you follow what the leader says. And if you don’t agree, you don’t speak up about it. We didn’t want to embrace that. We want people to speak up. We want you to be honest if you don’t agree with something and know that it’s safe to do so. We encourage ideas and innovation from all levels. It doesn’t matter if it comes from the leader or the most junior person. If it’s a good idea, it’s a good idea.
We encourage ideas and innovation from all levels. It doesn’t matter if it comes from the leader or the most junior person. If it’s a good idea, it’s a good idea.
– Ned Tozun
Being an entrepreneur can mean that a huge amount of self is intertwined with your company. How have you managed your own ego and the drive for success?
For me this has been an ongoing process because I think ego can show up in different ways. It can be wanting material things, but it also could be wanting outward success and recognition. I struggled a lot with linking my own identity to how the company was doing: if the company was doing well, I would feel really good, but if the company wasn’t doing well, I wouldn’t. One of the things I’ve really been learning in the last few years is how to disassociate my own sense of personal self-worth with the ups and downs of the company so I can be a better leader and because it is a healthier way to live. There’s a lot of value in having a sense of detachment. It doesn’t mean you’re not engaged, but that your ego or self-worth is not tied in with your business.
Picking up on what you just said about becoming a better leader, what else have you learned about leading a company and creating a company culture?
It’s something I grew to learn because at the beginning we were very focused on the mission. We ended up burning out people, including ourselves. I now appreciate how important it is to build team culture. Especially as you grow beyond just a few people into multiple countries with many team members. How do you create a culture that makes the right kinds of decisions? You need to help people prepare for the marathon, not just the sprint. We’ve always talked about delighting our customers, but a key thing now that we talk about, and have a lot of initiatives around, is delighting our people. If we delight our people, we will also delight our customers. These things are very interrelated.
We’ve done a lot of work thinking about how to build the right kind of culture at d.light. We do a lot to reinforce our values through rewards, recognition and talking about it. What’s cool is that they have sunk in even at the frontline level; people really care about these values. I’ve learned that as you get bigger, you need to make the communication as simple as you can – the simpler the better. Our values are called iHOPE. I is innovation. H is honesty. O is optimism. P is passion. E is empathy. We do a lot of sub-activities based around these letters, as at this stage my partner Sam and I can’t do everything. We have to create the strategy and then build the team that’s going to execute it and be making the right decisions at their level. Ultimately, you have got to hire the right people and build the right culture.
If we delight our people, we will also delight our customers. These things are very interrelated.
– Ned Tozun
How do you make sure you hire the right people? What is your strategy there?
I’ve failed a lot at this over the years. In the early days we had very high turnover. Sometimes people who interview really well don’t turn out to be that effective. They’re good talkers, but not so good when it comes to fitting in or performing. We try to use our values as a way to filter. We look for people who exhibit innovation, honesty, optimism, passion, empathy and we have things that we use to try to identify those elements. For senior roles I have to work with them in some capacity before hiring them. I also make sure to do significant reference checking, including back channel referencing. Sometimes you have to go behind the scenes to find out about a person’s record and whether there has been an integrity issue. I’ve had some hires or people that I was really impressed by in the interview process where I found out through references that there was an integrity issue, so I didn’t hire them.
In your opinion, what are some of the key entrepreneurial qualities?
Grit and perseverance. That’s the number one thing I look for in the entrepreneur. It’s taken a lot longer to get here then we initially thought when we started. Having investors who have that patience has been helpful, because you have to constantly reevaluate the problems. For example, we thought we were solving the problem of getting people light, but then we realized we also have to solve financing for that customer. How do you finance a product for them because they can’t afford it all upfront?
Entrepreneurs need an ability to adapt, continually learn, be questioning, think and not be rigid. You also have to be able to think about your customer’s needs. I don’t live without electricity. I don’t live in a village in rural Kenya. You need humility to really listen to your customers and what the customer says today may be different from what they tell you in a year, because their lives are changing. It’s crucial to be constantly open to getting feedback and not thinking you know all the answers.
It’s important to know that it’s a marathon. It’s not a sprint. I talked about how I nearly burned myself out, as did my partner. This led us to hire an external CEO, which ended up being a really bad decision. If you are making decisions from a place of being burned out, you’re not making good decisions. I’ve learned a lot about battery technology as an entrepreneur. And I think we’re a little bit like batteries. Because with batteries, once they’re empty, believe it or not, you can actually keep sucking more energy out, but you damage the battery permanently. You won’t recharge properly again after that. I think that human beings are like that too. You can feel empty and you can keep going sometimes, but I have found for myself that my capacity to recharge is then lower. You need to make sure to recharge yourself properly and take care of yourself because if you’re going to make a transformative impact, it’s not going to be over a month or over a year, or even over a decade, it’s going to be over a really long time. You have to be doing it in a way that’s sustainable for yourself, for your family, for your relationships, or it’s just not going to work.
Thank you for your input Ned!