Monday, October 29, 2007

Leasing the undercoating?

As we continue to reinvent the wheel, we're adding new spokes to hold it all together. From the organically turned compost sprouts new (and yet to be thought of) jobs/concepts/commodities.

For instance, this excerpt from Springwise:

...Norway’s two-seat, electric-powered Think City car—set to go on sale in the coming months—will come with an owner financing package unheard of in the auto industry. Consumers will pay an estimated USD 15,000 to 17,000 for the vehicle, but the company plans to lease the Think’s battery. And for good reason: on its own, the battery would cost an estimated USD 34,000, more than the price of a low-end luxury vehicle in most countries. Moreover, the Think battery’s useful life will depend on how the vehicle is used. Meaning: if Think owners were compelled to buy the battery along with the car, they’d be assuming risks few vehicle buyers would tolerate.

The workaround Think has devised is a USD 100-200 per month bundle that will include the battery lease plus other services such as insurance and mobile internet access. The latter will enable the company to remotely monitor the battery’s remaining useful life. As the battery’s ability to recharge declines with age, the company will automatically offer owners the chance to replace it or alternately keep the battery in exchange for a lower monthly leasing fee.

Leasing a battery?

Not a bad idea, only I've always been the kind of guy that is/was/still is afraid of over-bundling, be it a cell phone contract, airline mile-purchased plane ticket, satellite radio automatic contract renewal, magazine subscription, etc.

I'm just waiting for the day when I'm pained to find out that the Think car you purchased can ONLY work with the "locked-in" batteries they lease, thus killing the chance at open market competition.

So why is this entrepenewship so special? Apparently, it runs against the grain of every established business model.

For quite some time, businesses have based their profitability on the bottom line and nothing more. Waste reduction interested businesses if, and only if, the waste could be used to make more of the end product, thus helping the bottom line. The actual work involved in counting non-profitable waste post-production took time.

And we all know that time is money.

Unfortunately for the old schooled, there will no longer be much of a choice.

In the future if you waste, waste is just as expensive (if not more) than time.

A proposal from an article in Business 3.0 from FastCompany:

A good start [in greening the market] would be reducing the income tax and augmenting it with graduated taxes on ecologically harmful activities, along with federally consistent mandates requiring companies to take greater responsibility for their own waste streams and for their products at end-of-life. These reforms would align both consumers' and businesses' understanding of a given product's total cost to the planet, and allow both to make more informed decisions.

Practicing such "true cost" economics will unlock a powerful wave of product redesign, much of it hidden from the consumer's eyes, as companies seek to lighten their own burden when they get a product back at the end of its useful life. A focus on the total life cycle will amplify an entire nascent branch of creative engineering: Design for low-cost disassembly will become as important as design for low-cost assembly, with elements such as lead-free solders, modular construction, snap-fit rather than epoxy-based joints, and biodegradable plastics becoming the norm. Consumers would benefit from products that last longer, are easier to fix when they break, and become the basic inputs to other industrial processes when they're taken out of commission.

By attaching economic value to the elimination of waste, we also increase the likelihood that innovators will seek out and discover that rarest of capitalist prizes: the twofer. Enterprising 21st-century capitalists will make a name and a fortune for themselves by getting paid twice--once for eliminating some bit of a harmful waste stream, and a second time for spinning that waste into industrially useful gold.

While the extravagantly hedge-funded might be shaking in their John Lobb Ghillies, afraid to clip some of the weighty branches from the family tree (all the while knowing full-well the tree is a danger to their Hampton estate), able-minded visionaries like Fredrick Musonda of Zambia are leading change for the benefit of their families, their country, and the environment.

Developing nation or forward thinking?

Fredrick's vision-turned reality:

Living in Lusaka, Fredrick Musonda noticed two things. Increasing demand for the most common fuel, charcoal, was supplied by native trees ‘carbonized’ in simple, but inefficient, earth kilns. And the local sawmill, using logs from eucalyptus plantations, simply burned the waste from its operations. So he started a company to manufacture charcoal from sawmill waste in more efficient kilns.

This was an important step in a country where demand for charcoal, already 900,000 tonnes a year, is rising by 4 per cent annually. This growth, together with inefficient production methods, increases deforestation – and the associated soil erosion, water pollution and biodiversity loss – leading Zambians to an unsustainable energy future.

When others continue to change the way we work / spend / design / live, what happens to those businesses/governments that continue to focus on the exhausted / squandered / antiquated / dead?

Does the future have room for the large-scale? Grandiose? Corporate conglomerate?

Looks like even WalMart gets the idea.

Welcome to the non-industrial revolution.

All aboard.

Or not.