Hi from trainee week in the forests of Småland! Tonights discussions on the flat earth society, satellite communication and travels got me thinking about circularity. It’s a hot topic in physical product development, and already a working business model for a number of companies. Circularity is about reusing, before we recycle materials in it’s basic form. Easily explained, it could go like this:
You buy a pretty grey sofa for $1000 to go with you Scandinavian-white apartment. 5 years later it looks worn down and you’re eyeing the latest trend of green velour sofas with golden legs. Instead of buying a new sofa for $1000, you go to a business that will help you reupholster it with green velour and new golden legs for $300. The materials used for your sofa is either reused (directly in the form of, for example, a woven mat) or recycled into its basic components where it can be used as either filling, or to make a new textile.
You continue to use your sofa for another 5 years. Then, at 10 years old and worn down, the seating is not as nice and comfy as it was before. You decide to sell it for $200 to a company that recycles the basic parts of it: wood, textiles, filling, metals etc. You get $200 to buy your next couch, while the company sells off or use the gathered materials to create new furniture. Only when each part is too worn out to reuse, it is recycled.
The goal of this is to have as little virgin materials as possible in each product. That way we don’t need to harvest new resources in order for us to build new products. Assuming of course, that the amount of energy needed to create a circular product is less, than creating a product based off virgin materials. Maybe it will end up being a mix between both?
So with that short background, consider this: I’ve moved 4 times in the last 3 years. 2 of those times was across 2 continents, which meant that I had to buy completely new furniture, because it would be too expensive to ship my existing furniture. We move more often than before. We stay shorter in each place than before. We see a tendency that we rather rent and lease than buy.
This raises the question: what does the future look like for the interior design business in a world where people don’t want to own things?
Let me start out by saying that I would be totally down with renting a newly furnished apartment with my favorite interior design trend! It would save me a ton of hassle every time that I move with buying, transporting, assembling, maintaining and selling. Plus it would ensure that I can update my entire interior design preference on regular basis.
Ah, but then you ask yourself: what happens to the company’s profit when you don’t want it anymore after 2 years? Surely I haven’t paid of the entire cost of a furnished apartment so quick. And you’re right! Here comes the brilliant part. A vast amount of people in this world are in desperate need of kitchens, appliances, beds and furniture. But they also have very limited resources. So limited in fact, that they are not even a part of your customer segment from the start.
So what if all those things that I used for 2 years, could get reupholstered, repainted and refreshened (if necessary), and then leased for a smaller amount of money? What if we could redo this cycle 3 or 4 times? What if a kitchen could have 4 lives, used by 4 different families, with 4 different situations? What if we could provide working and sanitary kitchens to the bottom of the pyramid?
This is very hard to achieve. We (every product development business) need to challenge our supply chains, manufacturers, sellers, product developers and engineers. We need to innovate and optimize every part of ourselves. This is not an easy change to make for a company: to figure out how we can reuse our own products. But consider the monetary gain if you manage to be the business that 1) sells the sofa, 2) reupholsters it and sells it again, 3) reuse its components and sell a new product, 4) and reuse the recycled materials in the end? There’s a clear demand in the market for it from the customers side, and companies are after all already doing this and growing quickly.
I think it’s a fantastic brain tease! And I’m so glad that the company I work for is actually working full time with this, with the goal to have all products be fully circular or made by renewable materials by 2030. Sorry for this last thing making the entire entry sound like a pitch. I just think that’s a great goal!
And speaking of circularity, what’s up with flat earth society?