The right Product, the right Time
Part 3 of the series: “How to make People want to pay for Green”
This is a five-part series, you’ll find the link to each individual post at the end of this one.
Let’s say the year is 2016 and you’re shopping for a smartphone. Something in the area of 500€ because you just don’t see much sense in spending more.
You’re an avid reader of The Verge and you come across 2 phones reviewed as follows:
Which one should you buy? Seems like a no-brainer, really.
If we reveal the brands of said phones:
Because the carbon footprint and labour practices of the brands you buy matter to you, you’ve quickly looked these two up online…
Fairphone extensively describe how their products are highly repairable, how they’re trying to reduce their direct and indirect emissions and source ethically manufactured components. But you also find forums calling BS and invoking greenwashing because Fairphones still contain PVC, BFCs and phtalates.
As for OnePlus, you find, well, nothing. Especially nothing on their website; maybe just one or two questions on community forums that received no official answers. What you know about the consumer electronics industry leads you to assume the human conditions under which the cobalt and lithium for OnePlus devices were mined is probably not of much concern to them.
Fair to assume Fairphone is the greener option, then… The Verge even says “Buying one is a vote for a world where we’re honest about the damage our consumption does to others, and where we […] make an effort to fix this.”
But really, 29€ over budget for a phone with specs of devices 250€ cheaper? You sure want to do your part, but does it really have to come at the expense of HD video and playing the latest games with your friends?
Feed the rich
What if that 2016 Fairphone had been designed with the specs and price of a different market segment? Something like this:
1,155€ is definitely a lot of money. Even iPhones had only just about hit the 1000€ mark back in 2016. What’s great about (most) people willing to sink 1000€ into a phone however is that their willingness to buy as the price increases (otherwise known as price elasticity) is pretty high.
Show an up-market consumer a phone that performs as well as an iPhone AND is the opportunity to move further up Maslow’s pyramid BUT is more expensive and you’ve still created a compelling value proposition backed by a powerful mission.
“But Yannick, selling Green to rich people is not making progress towards a better world”, I hear you say.
While I definitely agree on the need to make Green consumption a cross-income-category priority, I’m convinced there are three good reasons to target new consumer Green products and innovations at rich customers first.
Reason One: Rich consumers are the ones wreaking the most environmental havoc in the first place. Let us illustrate with a nifty dinosaur graph recently published by Oxfam (1):
The authors estimate that the World’s richest 10% were responsible for 52% of consumption-based emissions (2) between 1990 and 2015. Not only that, if everyone else’s emissions fell to zero and the top 10% stayed on the same trajectory, our collective carbon budget before reaching 1.5°C of global warming would be depleted around 2035 (which is damn soon!).
Reason Two: Rich consumers are great tools for R&D amortisation. Shipping the first version of any new product costs a lot more money than shipping the second version, itself costing more than the third, etc…
Given that price elasticity is higher among rich consumers, it is less painful for them to pick up v1 since the price premium is a much smaller share of their disposable income. The social capital (prestige) associated with being an early adopter also softens the blow.
Reason Three: Rich consumers set trends. The richest (and most famous) among us are still significant drivers of what aspirational consumption is made of at any given moment.
Something Elon Musk perfectly understood when he launched the Tesla Roadster.
He was quite clear in his Secret Master Plan:
Are we really in need of another high performance sports car? Will it actually make a difference to global carbon emissions? Well, the answers are no and not much. However, that misses the point […] Almost any new technology initially has high unit cost before it can be optimized and this is no less true for electric cars. The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.
The nutshell version was:
Build sports car
Use that money to build an affordable car
Use that money to build an even more affordable car
While doing above, also provide zero emission electric power generation options
With the following result:
And:
Whether Will.I.Am and George Clooney with their Roadster or the likes of Tom Cruise with his Prius (first launched in 1997 in Japan), the self-congratulatory nature of the purchase seemed loathsome to many.
But pragmatism dictates using scale and speed of adoption as leading success metrics. It’s not like we have a lot of time left to significantly reduce our emissions and if celebrity self-congratulatory endorsements buy us time, then cool!
From a societal perspective, the halo effect of one Green and super-hyped brand can be enough to significantly accelerate the rate of transition to more desirable consumption patterns with all of the industry incumbents racing to play catch-up. An average-spec’d product with an above-average price tag and no high-profile endorsement is a lot less likely to achieve that.
It’s not easy being Green
Back to Fairphone and fast-forward from 2016 to today.
The new Fairphone 3+ was reviewed by the Guardian in August 2020 with the following choice of words:
I want to be clear: this is a 3.5-star device with 1.5-stars awarded for sustainability, repairability and ethical manufacturing. You’ll get a far better smartphone experience from a Pixel 4a or an iPhone SE for similar money. But ultimately you buy the Fairphone 3+ because you support the ideals, rather than looking for a value-for-money smartphone.
Getting better. But still nothing irresistible or industry-shattering.
It might feel more “right” to root for Fairphone than Tesla. For the go-slow, step by step, innovation for the people approach. Not least because starting by making products for the 10 or the 1 percent just sounds disingenuous when you’re talking about our climate and environment. But notions of morality and the calendar collide here, unfortunately. To put it bluntly, atmospheric concentrations of CO2 are increasing much faster than Fairphone is making its products desirable.
In that sense, pricey, over-funded and over-hyped products sound like the embodiment of everything unsustainable with capitalism but they are likeliest to drive rapid industry change, provided they deliver on their promises.
And “provided they deliver on their promises” is paramount here, because on the negative end of the speed / funding / hype spectrum you’ll find “pulling a Theranos”. Such tactics not only destroy your project but mire your entire industry in cynicism, to the detriment of everyone else trying hard the honest way.
Quick to appear, cynicism is also quick to spill over and very hard to get rid of. You’ll nonetheless need to face it with every single legitimate claim you have to greenness and improvement.
Aaaaaaand… that’s what part 4 is all about!
Notes & Sources
- “Confronting Carbon Inequality: Putting climate justice at the heart of the COVID-19 recovery”, 2020. Download the study in 🇬🇧, 🇫🇷, 🇪🇸 here: https://oxfamilibrary.openrepository.com/handle/10546/621052
(methodology of emissions distribution by ventile is detailed there) - Focusing on consumption-based CO2 emissions is useful because focusing on emissions happening only in your country (production-based) masks the emissions embedded in the goods that were produced elsewhere and imported. Therefore, consumption-based emissions start with emissions caused by national production, subtract emissions from exports and add emissions from imports.
