Solar Ear: Low-cost hearing aids, solar battery chargers
400 million need hearing aids in the developing world, how Solar Ear is closing the gap
The World Health Organization (WHO) estimates that about 600 million people are hearing impaired. Of these, two thirds reside in the developing world. In its more severe form, this disorder keeps otherwise healthy children from going to school and limits occupational opportunities for adults. About 9 million hearing aids manufactured globally, but their cost – sometimes upwards of $3000 – is often prohibitive; only 12% are sold in developing countries. To help bridge this gap, Solar Ear is assembling and distributing low-cost hearing aids and battery chargers. Here, Howard Weinstein, Solar Ear’s co-founder, discusses how the model is expanding the customer base for hearing aids and creating employment opportunities for the hearing impaired.
CHMI: With communicable diseases (and now NCDs) taking center stage in global health, hearing loss and the affect it can have on an individual and community is frequently overlooked. Tell us a little bit about the need that Solar Ear is trying to fill.
HW: Hearing loss affects people of any age. Children with hearing loss are largely unable to go to traditional schools. By getting a child a hearing aid before the age of 3, he/she can learn to communicate and have the opportunity to go to a public school. This is important because it’s only through education that you can break the cycle of poverty. For an adult working in industry and who often loses their hearing due to industrial noise pollution, a loss of hearing means a loss of their job. For seniors, loss of hearing tends to isolate this person from friends and family and it leads to depression. According to National Institutes of Health, the loss of hearing costs a person over $930,000 over their life time.
Additionally, people who are deaf have little chance at any meaningful employment. At Solar Ear we hire, train and educate people who are deaf to make the hearing aids. We also want to show society that people who are deaf and who speak in sign language have a better than average hand -eye coordination. This special ability is a required skill when doing any sort of micro-soldering on any electronic component. By leading from example, we want and have succeeded in having people who are deaf hired by other companies who require this skill.
CHMI: You design low-cost hearing aids and solar-powered chargers. What is your operating model? How have you been able to lower the cost of a generic hearing aid from over several thousand to under $100 for NGOs and $165 to consumers?
HW: We run a professional sustainable business. We help other NGOs globally replicate our program, yet we all buy together, which lowers the cost of the final product. Our hearing aids start at a cost of $40 and we buy the components from the exact same place as the hearing aids that sell for US $3000 or more. Of equal or greater value to the consumer is our universal rechargeable hearing aid battery, which costs $1 and lasts 2 to 3 years versus the 1 week of a traditional battery. Over the life of a hearing aid, a consumer can spend over $300 just on batteries.
CHMI: How do your products reach the people most in need? I imagine even $165 for a hearing aid is still more than what many can afford.
HW: You are right. First of all, many of our customers are NGOs who help people living at bottom of pyramid. The NGOs buy our products at a price which is 40% less than the price you mentioned above. Furthermore, in USA for example, 77% of American cannot afford a hearing aid. This percent is obviously higher in developing countries where the average selling price is over $2,000USD and incomes are far lower. By having a hearing aid with batteries which a consumer can buy at $165, we offer the Walmart-type consumer an opportunity to buy an affordable high quality product.
We are also developing the first non-prescription iPod-style body-worn hearing aid which will sell for under US$30. For this product, we will also employ micro-entrepreneurs to test people's hearing and sell this new product.
CHMI: What is your current reach?
HW: We presently sell to 39 countries from Botswana and Brazil. We are beginning operations in Jordan, China, and India this year. We have sold over 36,000 hearing aids, 60,000 solar chargers, and over 100,000 rechargeable batteries. We have also created more than 60 jobs for youths who are deaf.
CHMI: You've also mentioned your desire to expand internationally. To which countries do you plan to expand? How do you go about entering a new market?
HW: We will shortly expand to Panama, Ethiopia, and undertake a joint Native American’s in USA and First Nations in Canada (Inuit) venture in 2012. We plan to open 3 more per year over next 5 years, prospectively in Vietnam, Ghana, Russia, Philippines, Indonesia, another one in China and one in Kashmir.
When entering a new market, we look for an NGO partner who has 3 qualifications: 1) understands and works with people who have a disability, 2) understand that we are running a social business and not a charity, and 3) invests at least 20% of required funds.
It’s also important that the partner organization can cover over 300,000,000 people. Given that there the prevalence of hearing impairment is 6-15%, this kind of scale enables them to become self sustainable. We also look for a partner that can work in a duty free zone. For example, from Botswana, we can export to 11 SADAC neighboring countries duty free; from Brazil, we can export into Mercosol duty free; the US is part of NAFTA, so we can ship into Mexico as well as cover all of the US.
CHMI: The question most often asked about the health market innovations profiled by CHMI is sustainability. Is Solar Ear sustainable? If yes, how did you reach sustainability?
HW: Yes, we run a sustainable social business and work on an 100% mark-up versus the traditional 2,000-5,000%. Our initial grant covers our overhead and allows us to buy parts for first two years of operation. By selling high quality products and backing them up with world class customer service (and hard work!), we become sustainable in the third year. This year, Solar Ear Brazil will generate over $300,000 in positive revenues.