frugal value: designing business for a crowded planet

CARINA MILLSTONE

DESIGNING BUSINESS FOR A CROWDED PLANET

21.05.14 IIED

The challenge of the crowded planet

The Planet The Crowd The Anthropocene

• Global steady-stateeconomy “sized”within planetary limits

• Resource contraction and convergence

• De-growth and good growth

• Resilience

What does responsible business look like on the

crowded planet?

Business models that require and drive frugal products and services

about my project

1. The purpose of business

2. The nature of products and services

3. Business models

4. Scale, place and growth

5. Ownership, profit and financing

6. Operations

7. The limits to business and alternatives

8. Transitions

“If I had asked people what they wanted, they would have said

faster horses.” Henry Ford

1. the purpose of business

Could business innovate to help meet the challenge of the

crowded planet?

On the crowded planet, business innovates for frugality.

Efficiency

Sufficiency

Frugality

Requires innovation in• Technology• Organizations/

Institutions• Behaviors/ Lifestyles• Relations/ Society

Offering efficient and sufficient products and services to customers

Finding ways for making such products and services commercially viable by developing…

Business models that require and drive frugal products and services

Frugal innovation creates a new kind of value.

On the crowded planet, business offers efficient and

sufficient products

2. the nature of products and services

Products can be designed for frugality...

90%

10%

…through the incorporation of attributes for efficiency and sufficiency.

PRODUCTNaturally

- inspiredHumane

Job-efficient

Operation

Skill-supporti

ng

CulturalFunction

Non- proxy

Frugally-normativ

e

Lifelong

InfluenceDwindling

Streamlining Path-

Independent

3. business models for frugality

On the crowded planet, business models require and

drive frugal products and services

creation of a high-volume of products

#1: the product creator and steward

creation and stewarding of frugal products

#2: the product retailer and sustainer

retail ofhigh-volumeof products

retail and aftercare of

frugal products

#3: the product renter

rental of selected products

broad rental offrugal products

#4: the service provider

sales of products and provision of

services

broad provision of frugal

services & product services

#5: the product and service matchmaker

businesses“doing business”

households exchanging

amongst themselves

models and product lifecycle

product flows today

models and product flows

#1 product creator & steward

HHH HHH HHH HH HHH HH HH H H H

#2 product retailer &sustainer

HH HHH H

#3 product renter HHH

HHHHH HHH

HHH

#4 service provider

HHH HHH HH HHH HHHHHH

#5 product & service matchmaker

HH HHH HH HHH

BUSINESS MODEL

models and product attributes

job-efficient

naturally-inspired

humane

skill-supporting

dwindling

streamlining

path-independent

non-proxy

lifelongfrugally-norm

ative

ATTRIBUTE

#5 product & service

matchmaker

#4 service provider

#3 product renter

#2 product retailer

& sustainer

#1 product creator

& steward

the toy

• create frugal toys• toy repair and remanufacturing

• only stock frugal toys• second-hand toys• buy-back programs• repairs

• toy rental

• toy subscription• entertainment services• play centers

• peer-to-peer toy market• barter• gifts

• leasing and servicing• taxi services

#5 product & service

matchmaker#4 service provider

#3 product renter

#2 product retailer

& sustainer

#1 product creator

& steward

the car

• fuel-efficient cars• refurbishment and

upgrades

• secondary market• buy-back programs• repair services

• short and long term rental market

• peer-to-peer rental• peer-to-peer rides

Products and business models

for frugality are insufficient.Organizational design is an integral part of frugal value.

4. some conclusions..

1. How do we consider scale?

2. What is the best ownership structure for different sectors?

3. When is providing products and services on a commercial basis detrimental to frugality?

some questions…..

The crowded planet requires frugal innovation by the private sector

On the crowded planet, business creates value by offering products that promote efficiency and sufficiency of resource use

…and developing models that require and drive such products

Appropriate form, ownership structure and scale are integral to frugal value.

Please get in touch at carina@frugalvalue.net