Case: Embrace infant Warmer: sometimes a business start is a Matter of life and Death introduction When Rahul Panicker, Jane Chen, and Linus Liang enrolled in Design for Extreme Affordability, a course taught in the Design School at Stanford University, little did they know that the class would change their lives. And little did they know that a short three years later, premature babies born in rural India, who often don't survive because of hypothermia, would have a new chance at life because of a product they designed. The Design for Extreme Affordability class draws students from across the Stanford campus. The goal of the class is to develop solutions for formidable, real-world problems. The project Panicker, Chen, and Liang were assigned was to develop a low-cost infant incubator for use in developing countries. This was a topic that the three knew nothing about. They were electrical engineering, MBA, and computer science students, respectively. To get started, they did some simple google searches.
They learned that millions of permature babies are born annually in developing countries. About a million of them die, often within 24 hours. The biggest cause of death is hypothermia. Premature babies don't have enough fat to regulate their body temperature. As a result, they can literally freeze to death in a room that is at room temperature. Nearly half of the world's low-birth-weight babies are born in India. Hospitals have incubators that provide consistent, life-saving heat to premature babies. But incubators cost up to $20,000 a piece. The obvious solution was to drive down the cost of incubators. The team could systematically reduce the cost of traditional incubators by eliminating nonessential parts and using cheaper materials. Rather than moving forward, Liang got funding for a trip to Nepal to study incubators in developing countries. While visiting a hospital he noticed something that was odd. Many of the incubators were empty. He then learned the sad truth. About 80 percent of the premature babies born in the developing world are born in rural villages. They never are brought to a hospital and placed in an incubator. Even when they are, they're often taken home before the baby is ready to leave due to family needs back at the village. Back at Stanford, the team grappled with what to do with the insight. The easier road ahead would be to redesign the traditional incubator, to make them more affordable. But that wasn't the answer. The harder challenge was to find a solution for saving premature babies where they were born-in rural villages.
Early Prototypes The team tackled the harder challenge: How to create a baby-warming device that doctors and parents in rural villages could use to save premature babies? The team set to work and started creating rough prototypes of an original design. The earliest prototypes were made using old sleeping bags, baby dolls, and blankets. The design was a portable infant warmer that looks like a tiny sleeping bag. The warmer opens in the front, allowing mothers to nurse their babies and maintain intimate contact. The bag contained a pouch of wax-like phase-change material that keeps the baby warm for up to six hours at regular body temperatures. It required just 30 minutes of electricity to heat the pouch, an ideal situation for areas where the availability of electricity is spotty. To provide additional warmth, mothers would be instructed to hold their babies as much as possible against their skin. This activity prompted the team to call the product "Embrace." The class ended and the team had a decision to make. All had promising prospects. In the end, the team members couldn't walk away. The lives of premature babies were at stake. They would move forward and continue to work on what was now known as the Embrace Infant Warmer. embrace infant warmer The team, now joined by a fourth Stanford student, Naganand Murty, took the prototye to India to solicit customer feedback. They used rapid prototyping techniques to iterate on feedback and zero in on the attributes that are of highest relevance and value in a rural setting. Some of what they found out was suprising, and would have never been learned had they remained in California. For example, they found that women in India believe that Western medicine is very powerful, so they routinely cut back on the recommended dosages of Western medicines, just to be safe. That knowledge impacted early prototypes of the Embrace Infant Warmer.
The early prototypes instructed mothers to set the temperature at 37 degrees Celsius. What they found was that the devices were being set at about 30 degrees. To solve the problem, they preprogrammed the ideal temperature into the device and just put an oK and Not oK switch on it. Commenting on the decision to go to India rather than remain at Stanford to build out the Embrace Infant Warmer, Chen told Helen Walters, who wrote an article on Embrace, "There are so many nuances that are critical to design and effective implementation, so many nuances that you don't understand unless you're there and living and breathing the culture every day." Talking to potential customers raised other issues. For example, they learned that villagers wanted different pricing options-like an option to rent the device. Commenting on changes that were made as a result of feedback from rural villagers, Chen said in an HBR blog post, "Entrepreneurs often fall in love with their original product idea or business model and fail to listen to customers. We (meaning the Embrace team), on the other hand, have no qualms about modifying our product features and pricing again and again until we find a solution that delivers the highest value to our customers at the lowest cost for them." gaining Momentum The initial prototypes of the Embrace Infant Warmer were a success, which emboldened the team to keep working. Additional field resarch took place, involving village mothers in every aspect of design, from the straps on the warmer to the instructions printed on its front. Spending time in homes in rural India produced additional insights. "oftentimes the mother-in-law is the decision maker," Chen said in the same interview as the one cited above. As a result, they determined a way to involve mother-in-laws in the process of using the Embrace Infant Warmer. In December of 2010, Embrace was featured in a segment of the ABC News show 20/20. The show contained images of a five-pound baby girl in India named Nisha, the first child to use the Embrce Infant Warmer in a clinical trial-and maybe the first life saved by the device. The Embrace Infant Warmer was formally launched in April 2011, after completing clinical trials. It went through more than 60 iterations before a final
design was settled on. All manufacturing is done in Bangalore, India. Some of the parts are outsourced, but the final assembly and quality testing is done by the company. To ensure distribution, Embrace is partnering with multinational medical devices companies like gE Healthcare and with local Ngos. An organizational structure has also emerged. Embrace has both a nonprofit arm, which donates its baby warmer to those in need and runs educational programs, and a for-profit side, which sells the baby warmers to government entities and private clinics. It's a two-pronged approach that the founders hope will allow the company to prosper, grow, and save an increasing number of premature babies. embrace today As of the end of 2013, roughly two and a half years after launch, the Embrace Infant Warmer had been used on about 10,000 babies.
Panicker and Chen lead Embrace, while their Stanford classmates and co-founders have moved on. The company is private and doesn't disclose financial information, other than to say that its margins are sufficient to keep growing and try additional products. The Embrace Infant Warmer is not only used in rural villages. Its also used in hospitals and clinics, to move premature babies from location to location and to use when a premature baby is born and all of the traditional incubators are already in use. In addition to continuing to improve the Embrace Infant Warmer, the company has aspriations to tackle some of the other factors that cause infant mortality. other potentially fatal conditions include meningitis, pneumonia, infections such as sepsis, and diarrhea. To fully appreciate the heart of Embrace and the company's goals, visit its website at https:// embraceglobal.org or Facebook page at Embrace. A particuarly heart-warming portion of its website is titled "Spread the Warmth with Embrace." A $25 donation provides the life-saving warmth of an Embrace warmer to one low-birth-weight or premature baby.
Discussion Questions
1. What target market does Embrace seek to serve and how attractive is that market?
2. What examples of primary research that Embrace's founders completed appear in the case?
3. What actions did Embrace's founders take to solicit feedback from prospective customers and what did they learn from these efforts?
4. If you were asked to conduct a financial feasibility analysis for Embrace, what issues would you consider to complete this analysis and why are those important?