How Open Source could Create 10x Better Circular Businesses

Publication Date: 

Monday, 18 December 2017 - 1:08pm

Author: 

Jaime Arredondo

Some people think it’s extremely complex and expensive to transition to a circular economy, especially at the scale and speed we need to solve the current problems related to food, energy, pollution, toxic chemicals, transportation, and climate change.

Companies hold an important role, in moving from contributing to many of these environmental problems to solving them. But to devote resources to the circular economy, businesses need to justify to their boards that it will be financially beneficial over the long term to do so. And creating circular solutions sometimes feels like a barrier to profitability and convenience. If businesses can find new ways to work smarter, not harder, they can dramatically increase the chances of spreading a circular and profitable innovation. The key is sharing circular innovations in open source.

Fortunately, there are plenty of others to learn from. Businesses all over the world can take inspiration from two different kinds of organisations: franchises and open source companies.

These organisations have found success through a simple innovation: documenting their processes and sharing it with their community of users, so that they can re-use it and benefit from it. This approach could help accelerate the pace of change in the shift to a circular economy. 

Thinking like an Open Franchise

Before releasing any new innovation, most organisations make huge investments, developing products and services for months or years on end until they actually share the result with the public.

This is a pretty expensive and wasteful way of doing things. A smarter, cheaper and faster way of going about it is to build new circular solutions in the same way a franchise would develop their own businesses. This is by starting and refining a prototype that users love. Once users love the prototype, a small group of co-creators build new use cases on top of it and help it spread. Throughout, the processes and checklists are documented and shared so others can reproduce it and benefit from it. This way the documentation can help build a larger ecosystem than any company could build on its own.

The Repair Café organisation is an example of this. Their first volunteer workshop to help people repair their objects was held on October 2009 in Amsterdam. People found it so useful that the Repair Café Foundation decided to spend its next five months building and documenting a handbook with steps and checklists on how to create and run other Repair Cafés.

By RaMa2016, via Wikimedia Commons

Thanks to this simple handbook, in just eight years, 1400 Repair Cafés emerged worldwide, following the best practice of the first prototype. Instead of the initial Repair Café trying to hire more volunteers, buy more tools and rent more spaces, they instead documented how they did it so others could take up the same cause of repairing products and keeping them in use, and multiply their impact 1400-fold.

Even more well known is the non-profit TED. This is another great example of an organisation exponentially spreading its impact. TED share an enormous volume of recorded talks about technology, culture, science and academia for free distribution. However, its team host only eight TED events each year.

By documenting and sharing their organisational playbook with step-by-step guides and templates – how to find and deal with volunteers, staff, speakers, sponsors, branding, videos and so on – they’ve empowered other people to organise over 2000 events each year.

TED gives its handbook to any independent event organiser. They license their TEDx event for free if the organisers shares the content created during the event through creative commonsIt’s a win-win for TED and for the local organisers. TED gets thousands of hours of incredibly valuable video content they can publish on their website, and local TEDx organisers benefit from a tried and tested processes for organising a conference, as well as the brand’s reputation – crucial for attracting participants and sponsors. Applying an open source approach has helped TED multiply the number of events they could run on their own by 250 times, reach over 90 million monthly views through its TEDx generated content, and attract major sponsorships with multinational brands. 

In a commercial context

This all sounds well and good for a non-profit. But can it really apply to a commercial entity?

The answer is a resounding yes, and Adafruit, Sparkfun and Aleph Objects are three prime examples. These companies started creating hardware kits in open source so anyone can study, modify and even sell them. They have also been active at nurturing their users to become a community of co-creators where members remix the work of others, expanding the initial core offer and boosting demand for hardware kits.

By using similar recipes to TED or the Repair Café, These companies have all been in the Inc 5000 list of fastest growing SMEs. Sparkfun was listed in 2012 with an average growth of 282%, Adafruit has been in the Inc 5000 list for 3 years in a row with an average growth of 742% and Aleph Objects has been in the list in 2016 and 2017 with an average growth of 1,166%. 

Here’s the kicker: they all did it with no external investment. By leaning on their communities and making it as easy as possible for others to reproduce their results, these pioneering organisations all understood that they can achieve a much larger impact than if they tried to do it by themselves.

It’s tempting to assume that what’s possible for a startup might be out of reach for an established, incumbent business. In fact, some household names are starting to understand the benefits of sharing their circular innovation in open source.

Levi Strauss has spent nine years perfecting techniques for reducing the water used to make a pair of jeans or a denim jacket. Now the company has decided to make all of those techniques open source. If everyone adopts them, they claim the industry could save 50 billion litres of water. For the moment Levis has just shared the documentation in open source, which is already a great step.

But simply putting an open source label isn’t a magic bullet. Creating and opening innovation documentation is an important start, but it’s only half the battle. An organisation can’t just hope others will follow.

To be successful in this approach means connecting and enriching the rest of the community, either by inviting and interacting with peers on forums or meetups, by giving easy steps to join the initiative, or by nurturing a platform that allows and promotes external contributors to demonstrate new use cases for their innovation. This way they can attract more quality contributions and keep a pace of innovation that no competitor can catch up to.

To really reap the rewards of creating in open source and to get others to follow in their steps, Levi’s has to actively nurture and involve a community of textile manufacturers who would benefit from their innovation to save millions of litres of water.

Adidas is on a similar threshold. The sportswear giant has also opened itself to open source regarding their gear made of ocean plastic waste, but mainly towards engaging with consumers and athletes on the final design of products. Now Adidas has the chance to create a really circular ecosystem. There’s an opportunity to open the actual process of creating large-scale fibres out of nylon fishing nets. Adidas and its green chemist partner could benefit by becoming the community hubs for innovation and use this position to create even more awareness, demand and use cases for ocean waste materials.

Getting started with circularity

We know that businesses have to make change happen fast to create a regenerative, circular economy. But no business is able to – or needs to – create the whole circular economy by itself.

If it’s able to develop a useful circular solution on its own, document and share it openly, then an organisation can create the first stepping stone others can build upon. By nurturing a community of peer co-creators, businesses can offer a win-win deal to help spread and market its innovation, hundreds of times faster and cheaper than it ever thought possible.

To think and create an open strategy, visit the Open Source Business Diagnostic here. For more on how to integrate open source strategies into your organisation, visit boldandopen.com.


This article is from an external Circulate contributor and therefore the views, opinions and positions expressed by the authors do not necessarily reflect those of Circulate or the Ellen MacArthur Foundation

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