Rethinking the Economy
I’ve always been a fan of the three Rs – reduce, reuse and recycle – after all I spent 10 years of my working life as a recycling coordinator.
But another R has me really excited – Rethink.
That’s just what a lot of entrepreneurs are doing these days, rethinking how to provide people with the products and services they need while doing less damage to the environment and at the same time making use of the new technologies that are connecting use in ways we never thought possible.
It’s all about offering services instead of products and it will change the way we live and interact with one another.
I first understood this radical rethinking while researching the concept of zero waste and I learned about Ray Anderson, the chairman and founder of Interface, Inc.
Ray’s company made carpets that were petroleum and glue intensive; they were environmentally unfriendly, to put it gently.
One day in 1994, Ray was asked to explain how his company was reducing its environmental impact and he realized Interface had no plan for that. It was, as Ray wrote in his book, “a spear in the chest” moment.
Ray and Interface began the journey to climb Mount Sustainability with zero waste as the destination.
Today Interface is a world leader in designing, producing, and selling environmentally responsible modular carpet and broadloom and has kept more than 100,000 tons of carpet from ending up in landfills.
The idea was simple. Carpet didn’t wear out all over, just in spots. Yet when it showed wear, new carpet was ordered and a lot of waste was created.
Ray and Interface took that problem, started selling carpet tiles, replacing only the worn tiles, and taking back the old tiles to remake into new tiles.
Then the research and development began to make the carpet out of natural materials.
The company reformulated the take-make-waste industrial model and turned it into a copy of nature’s closed-loop, no-waste cycle – literally biomimicry in action.
It was the beginning of the sharing economy, a questioning of the old ideas of “each of us has to have one” and “we all need more” and “there’s no point in working together”.
Steve Case saw the possibilities one day in 2003 after he stepped down as chairman of AOL Time Warner. For Steve, the sharing economy was all about being disruptive and throwing out all those old ideas.
Steve asked himself:
“Why do people buy a vacation home that costs them $100,000 a year in which they spent an average of 17 annually?”
Today his company Exclusive Resorts has a real estate portfolio over $1 billion and for a membership fee you can access to one of hundreds of large homes in choice locations, from Peninsula Papagayo in Costa Rica to the Eden Club in St. Andrews, Scotland.
Then Steve asked:
“Why do we all buy cars that cost us $20,000 or more and then pay to park them for 20 out of 24 hours a day?”
Today his company Zipcar gives members access to thousands of cars and trucks in convenient locations in 15 major urban centers and on more than 150 college campuses in the United States, Canada and the United Kingdom.
(Of course, we have Kootenay Carshare with vehicles to share in Fernie, Kaslo, Kimberley, Nelson, and Revelstoke so we’re already part of that revolution.)
Zipcar just announced last month that it was investing $13.7 million in Wheelz, Inc., the first peer-to-peer (P2P) car sharing company targeting college campus communities.
Now even Ford and General Motors are getting into the sharing mode. Bill Ford’s Fontanalis Partners, a firm that invests in “the future of mobility,” invested last month in Wheelz, and GM Ventures is backing RelayRides, another start-up that recently announced it is rolling out its service nationally.
Steve’s next big thing is LivingSocial, a variation on Groupon, with more than 45 million members in 25 countries. LivingSocial helps people around the world find, share and enjoy great local deals and new experiences and I hope it soon becomes part of the Nelson scene.
Steve Case was revolutionizing sustainability so it was no wonder he named his business Revolution.
Seattle and Berkeley have tool libraries, where people can borrow a lawn mower, power saw or drill. Netflix is another example of the new sharing economy that allows us to do more, own less, and rent the rest.
AirBnB allows people to share their homes or apartments with visitors; RelayRides, Share My Ride and getaround allow people to rent their cars for a few hours or days; ThredUp is a place where parents buy, sell and share children’s clothes, toys and books.
Need money? Prosper.com and Lending Club connect people who want to lend money with those who want to borrow.
Of course all of the above are brought to you by the two inventions – the computer and the Internet – that make sharing so easy.
These two ideas are helping many ideas verge, as in joining together and changing the world.
March 14 to 16 will see the VERGE conference in Washington, DC where corporate leaders, policy makers, and thought leaders will showcase the growing examples of the convergence taking place in energy, building, information, and transportation.
I’ve participated in a couple of VERGE webinars and it is truly inspiring how leaders in those different industries are working together to make each other better. Don’t worry if you can make to Washington; just sign up for the virtual conference like I did.
When I was in the recycling business, I always had it in the back of my mind that one day there would be no need for recycling depots since we would have invented ways to reuse everything. For me, it was about finding the way to move up the hierarchy to a better place.
That’s what the sharing economy is all about – rethinking how we do business so we can do better by the planet and future generations.
The diggers, drillers, and purveyors and processors of poisons are going to have to rethink their business models and better have a Plan B for their existence. The Stone Age didn’t end because we ran out of stones; we just came up with a better idea.
The sharing economy will probably be a smaller economy, but that can be a good thing. Business as usual is not sustainable.
Remember, just two years ago, you had to buy a copy of the Nelson Daily News to find out what is going in Nelson and area.
Now you’ve got thenelsondaily.com and no newspapers to recycle.
Michael Jessen is a Nelson eco-writer and owns the consultancy Zero Waste Solutions. He is also the Energy Critic for the Green Party of British Columbia and can be reached by e-mail at email@example.com
RESOURCES – Read the foreword to Ray Anderson’s book Business Lessons from a Radical Industrialist at http://www.interfaceglobal.com/pdfs/Foreword.pdf
The Atlantic article How Steve Case and His Company Are Driving the Sharing Economy can be read at http://www.theatlantic.com/business/archive/2011/11/how-steve-case-and-his-company-are-driving-the-sharing-economy/247997/
The Revolution family of companies can be found at http://revolution.com/
Kootenay Carshare is at http://www.carsharecoop.ca/
Register for the virtual VERGE conference at http://www.greenbiz.com/events/2012/03/verge-2012