We live in a complex world, the days of black and white decision-making are over. And while there is little doubt as to whether or not that complexity exists, the real question is how do we deal with it. The answer to that question, as we will explore in this post, will depend on who you ask, Gen Ys or CEOs.

Back in 2010, IBM conducted a survey ‘Inheriting a Complex World: Future Leaders Envision Sharing the Planet.’ It was a global study that compared the insights from IBM’s annual CEO survey with its first ever survey of Students, over 3,600 Gen Y respondents from over 40 countries. What the study showed was that there exists significant discrepancy between Gen Y’s views and values on the world of business, and those of CEOs.

A large part of the study was dedicated to trying to understand how the different Generations will use data to aid in decision making, but a significant amount of research was also done to analyze the values and viewpoints of each group. Many intriguing insights that were shared in the three-year-old survey illustrate how there is a large Generational Gap between Gen Y and the Boomer/GenX-led CEO cohort:

  • in a question that asked what they thought would be the top three factors that impacted organizations:

Gen Y placed a much higher weight on ‘Globalization’ and ‘Environmental Factors’ than the CEOs

  • in a question that asked what they thought would be the top three leadership qualities:

While both placed creativity at the top of the list, Gen Ys placed much greater importance on ‘Global Thinking’ and ‘Sustainability.’

Fundamentally, the biggest difference between the two groups is that Gen Ys are born with a natural understanding that the world is interconnected:

Thus they recognize that the decisions made by a company cannot be calculated in a vacuum and measured only against shareholder wealth creation. The externalities (social, environmental and cultural) must also be taken into account and calculated.

What makes this report so interesting is that the qualities described by those in Gen Y are much more conducive to the #NewEraBiz. At the top end, this means creating global companies that generate profits for all stakeholders, act in the best interests of society, and focus on creating genuine relationships with customers rather than viewing them exclusively as profit centres.

To reach this level will require a new methodology of leadership, one that fosters creativity, harnesses collaboration and empowers employees.

The kicker in this situation is that both groups do not have equal opportunity. The CEOs are the ones with the power, who make the decisions and control the companies that drive our respective economies. Very little has actually changed in the world of business over the last three years at the top level, despite the new ethos that Gen Y brings to the table.

Furthermore, it’s been a pretty great last few years for Banks and Fortune 500 Companies. Profits are up, market share is increasing, and governments have given them access to ‘free’ money.

Gen Y’s, on the other hand, have seen their fortunes heading in the opposite direction. Youth Unemployment is skyrocketing past historic levels in countries all over the world, while many youth who are employed work for organizations that run counter to their beliefs. This generation has even been labeled by some as the ‘Lost Generation’ to reflect the loss of hope and disparity being seen by young graduates.

The real problem is that many Gen Ys are beginning to come to the realization that they will be the ones who are forced to resolve and clean up these problems being created by reckless businesses. One on side, this can be viewed as a great opportunity, but on the other side it is infuriating to witness the destruction from the sidelines.

Thus as Gen Y gets ready to ‘Inherit a Complex World,’ the question becomes when will ‘Future Leaders’ get the opportunity to put their talents to the test?

At a moment in history when many businesses are beginning to face an existential crisis, and reaching the crossroads where they realize their path is no longer sustainable, it’s time to focus on interconnectivity and sustainability as the drivers of future commerce. For the young Generation, who are born with an inherent understanding of these concepts, the golden opportunity to step up and grab the reins has arrived.

And while an awareness and inherent understanding of these concepts may not generate results in the next quarter, they can be used to drive long-term strategies that will enable businesses to survive the transition and thrive in a complex world. It’s part of the move to the #NewEraBiz and will open up a new array of paths for global business in our interconnected world.

How do you think we can bridge the Generational Gap between Gen Ys and CEOS?


+ BMBreakdown: ETSY
+ Time For BMi


PLAN – the Business Model

New York. New York.

Over the years New York has built up a larger-than-life repuation: from Broadway to Wall Street, the Yankees to the Juilliard, chances are if something big is going down, it’s happening in New York.

With that in mind, we recently headed there to see how the #NewEraBiz was blossoming in the Big Apple.

By #NewEraBiz we mean the new-era business, the one that’s designed to be open and collaborative in nature and make things move. The type of business whose collective spirit inspires others around it and ultimately helps form an ecosystem of brands and partners who are united by a common thread.

After doing several trips last year to explore a series of exciting new developments in the collaborative economy (yet to be defined), it was exciting to get back on the road and experience what’s happening first-hand.

If you have read any of our blog in the past, you will have maybe noticed that there are three key industries we have been focused on for industry-specific posts:

  • Finance: which includes crowdinvesting and the #NewFinance movement

+ The Redistribution of Dealflow

  • Food: which relates to organics and the #realfood revolution

+ A New Era of FOOD

  • Fashion: which relates to next-generation materials and #sustfash

+ Avant Garde: Moving Fashion Forward

Why these three?

Part of it is personal preference and part of it is collective importance. Of course there are numerous other exciting industries and important trends happening at the moment, but these three in particular really need to be redefined and reinvented before we are going to see real progress and ‘economic growth’ again.

That’s because everyone needs to eat (well!), (almost) everyone gets dressed in the morning and everyone needs to be bankrolled if they want to start a business. In a system where Big Ag dictates what we eat, Haute Fashion defines what’s stylish and Big Banks decide who gets money, you get big problems.

So what’s moving and shaking with the #NewEraBiz in New York?

FOOD is happening, and in a big way. It was certainly the focus on this trip.

#RealFood NYC

Whole Foods

There are several Whole Foods located in Manhattan (probably 5 or 6), all of them huge, and all of them are packed. The most reputable real-food market in the big-grocery business recently made headlines when they announced that all products in their stores would be GMO-labeled by 2018. Evidence that people are becoming increasingly conscious about what they eat can be seen right away when you walk into a Whole Foods in NYC:

Cooperatives

While Whole Foods (many times referred to as ‘Whole Paycheque’) is great if you fit into the affluent-urbanite category, the reality is that the majority of people just can’t afford to pay those types of prices for their food on a daily basis. Which is why it is exciting to see Food Cooperatives (Coops) emerging in many middle-class neighborhoods. One in particular, the Park Slope People’s Coop in Park Slope, Brooklyn was full of everything you could imagine when it comes to real food – local produce, organic ingredients, whole-grain baking, etc. – and the prices on several items were about half of what you would find in a Whole Foods.

Coops function differently than traditional grocery chains. To be a member, and therefore purchase goods at the Coop, you must put in a volunteer shift every month and pay an annual membership fee. Thus Coops don’t pay the same labour expenses as a traditional grocery chain. They also markup their items at a fraction of what traditional chains would, and in many cases, depending on how the Cooperative is setup, will redistribute profits to the members.

The Coop structure is a very promising development in the #collaborativeco and something we will be researching in greater depth during the months ahead.

Outdoor Markets

Outdoor markets were everywhere. In Manhattan, in Brooklyn, everywhere. And they were packed, everywhere.

The reason for this is simple, as the real-food revolution is all about bringing the farmer’s food directly to the table.

Farmers and food vendors are able to take their product directly to the consumer, which helps the farmers cut out the middleman. From a consumer’s perspective, it is very reassuring to not only see the people making the food, but to hear their stories. In a world where food has been commoditized, among other things, outdoor markets bring everything back to earth.

The hallmark of the NYC outdoor markets is organic everything – from slushies to sandwiches – and an increasing array of biodiversity in crops like beans, tomatoes (heirloom tomatoes to die for) and others.

Artisan Vendors

Artisan is a buzzword that food-marketing mavens have definitely caught onto, so watch out. At the core, however, it relates to the craft of making or manufacturing the food to the highest of its potential.

One example is chocolate. Thanks to the whole industrialization and globalization of food, many ‘chocolate bars’ on shelves aren’t actually chocolate anymore. They have been cut with every filler, sweetener and artificial flavour imaginable and labeled chocolate bar. That’s why companies like Mast Brothers have come to fruition:

In the heart of Williamsburg, Brooklyn, they handcraft chocolate bars using the best beans from around the world.

Artisan is about bringing food from the source to you. So the story is a key part of every artisan vendor’s strategy – if they don’t have a story, they aren’t artisan. Luckily NYC is teeming with artisan vendors like Mast who are the real deal.

#SustFash NYC

After spending quite a bit of time Europe last year researching the New Era of Fashion, it was quite an interesting to contrast the action over there to New York.

+ A New Era of Fashion

While New York is a big and very important fashion market, they are definitely far behind Europe when it comes to ‘sustainable fashion.’

This can be seen not only in the lack of consciousness about #sustfash for the average New Yorker, but also by the lack of marketing initiatives on the businesses part, meaning it’s not top-of-mind for consumers (yet). After a long stroll through the Fashion District, there was very little evidence of any ‘sustainable fashion’ marketing and whatever we came across was put up by brands we were already familiar with. Certainly there are no brands targeting the young generation, a big missed opportunity, especially when you compare the ‘sustainable fashion’ movement to organic food.

On the other hand, there are many young artisan and upstart designers who are coming to market in the US with a ‘sustainable’ focus. Additionally, there are a few cool initiatives being done to knit together these emerging designers and give them more resources to move to market. Overall though, it looks like NYC has some work to do in the #sustfash market, especially compared to #realfood.

#NewFinance NYC

Only this year did we start writing a little bit about #NewFinance in the US.

+ Funding the Niche

That’s because the big story was, and continues to be, the rolling out of the JOBS Act, which will effectively legalize everyday Americans to make equity ‘crowd’ investments in early-stage American startups and small businesses – at least that’s what it set out to achieve.

Undoubtedly crowdinvesting is the future frontier for finance, but each country is taking their own approach to it. While the UK has focused more on a case-by-case basis (ie. Seedrs), the US has opted for a full-legalization approach, which is causing delays and a lot of ambiguity.

+ The Seedrs Report

Now many are saying that the JOBS Act is so watered down that it will be up to States to come up with their own regulations to legalize true crowdinvesting. Until something moves in one direction or another, however, the real stories related to #NewFinance will be happening outside of the Big Apple.

Overall

NYC provided a great opportunity to see the #NewEraBiz coming to life, in food anyways. To actually see and feel this change is very exciting because a of its magnitude, which will eventually flip ‘business’ on its head. The tides are turning and the Bull is no longer behind Wall Street.

And:

  • While major fashion brands continue to plunder ecosystems and drive species to extinction to make designer clothes & handbags, we need to wear our values on our sleeves.

  • While major banks continue to hide behind their bodyguards and funnel money from public sources into private ventures, we need to put our money where it matters.

  • While mega food brands of the world continue to pump hormones and chemicals into our food and call it wholesome, we need to pull up our chair to a different table.

Because like Socrates said:

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.”

By focusing on the new, and truly collaborating, we can create a whole new era of business and make it an unforgettable journey in the process. It will take new business models, strategies and everything else, but there’s no use trying to pretend anymore that the old way still has legs.

The summer months provide a great time to chill out, sit on the patio and think things through. So take advantage because September, the time to start fresh, will be here in a heartbeat.


+ BMi: FOOD
+ Time For BMi


PLAN – the Business Model


+ BMi Services

The word on the street these days is sustainability – everybody’s thinking about it, everybody’s talking about it – but few are doing anything about it; in the business world anyways. That’s why in today’s blog we are going to talk about #sustainability as a strategy and show why it’s not just wise, but essential, to get serious about sustainability.

A few months back we talked about The New 20%. The essence of the post was that in today’s world, most brands are so irrelevant that the average consumer wouldn’t care if 80% of them ceased to exist tomorrow. That means that only approximately 20% will survive as we shift to a new economy, becoming The New 20%.

+ Reality Check – The New 20%

Why?

The majority of companies have always operated on, and continue to operate on, the assumption that the only thing that the average consumer cares about is that a product/service does what they want and is available at as cheap a price as possible. Thus they have outsourced production to China, replaced real materials with cheap synthetics and plundered precious ecosystems for scarce inputs, all the while thinking consumers wouldn’t care.

But they were wrong. People do care. And now the game is changing.

Recently a study – The ReGeneration Roadmap – was completed to better understand how much consumers care. Naturally, one of the study’s main sponsors was a corporate juggernaut (cough SC Johnson) whose main interest is to further enhance it’s greenwashing capabilities ; however, the study, which included over 6,000 consumers across six countries, did reveal some illuminating insights into the future of purchasing.

The majority of respondents said ‘we need to consume a lot less to improve the environment for future generations.’ In this light, alternative consumption patterns are emerging (#DIY, repair, reuse, etc.). In developing countries, 60% said that they would be willing to pay more for products with social and environmental benefits, versus 25% in developed countries.

Globally, consumers agree that they would purchase more products that are socially and environmentally geared if:

  • 75% would buy more if it performed as well or better than the alternative
  • 70% would buy more if it didn’t cost more
  • 64% would buy more if the company’s’ claims were more believable

Interestingly, there is some discrepancy between the barriers to ‘sustainable consumption’ in developing versus developed markets. In developed markets, price is the key barrier, while in developing markets the problems relate more to performance and not knowing the benefits.

Perhaps one of the most interesting insights revealed relates to the tribal dynamic, where 54% of consumers in developing markets would purchase more sustainable products ‘if it connected them to a community of peers who share their values and priorities.’ This insight coincides well with what we see emerging as part of our research into the collaborative economy, especially in industries like fashion, where the social aspect of purchasing is becoming more and more sought after.

+ BMB: Fashion 2.0

While we can see how the consciousness around purchasing is undergoing a dramatic shift, we certainly don’t expect it to stop. In developed countries, ‘having a lot of material possessions is important to my happiness’ was true for 49% of respondents (vs. 23% for developing). In developing countries, 77% said that ‘shopping for new things makes me happy’ (vs. 48% in developed).

It goes to show that, while cutting down on consumption is certainly an imperative, we also need to focus on consuming better. The more conscious the consumer, the more pressure there is on brands to develop products/services that are in-sync with the world around us. And rather than just consume, consumers (for a lack of a better term) want to play a part in the regeneration, with more than two-thirds globally saying that they are:

‘interested in sharing their ideas, opinions and experiences with companies to help them develop better products or create new solutions.’

That’s what we call co-creation, and it is the most powerful force that next-generation brands can tap into.

So given that the rules of the game are changing and the lines are being redrawn, who are these new consumers and how can companies connect with them?

Image taken from Green Africa Directory

The study broke down the market into four key segments:

  • Advocates (14%): highly committed to sustainable purchasing

28% Brasil. 15% India.

  • Aspirationals (55%): style & status seeking, aspire to purchase more sustainably

53% China. 42% India. 35% UK.

  • Practicals (34%): price and performance minded

43% Germany. 37% UK. 36% US.

  • Indifferents (16%): the least engaged

22% US. 18% UK.

Developing markets present huge opportunities for ‘sustainable brands.’

For those brands who want to be at the forefront of this movement, it is the two leading segments that are the most intriguing.

The Advocates are willing to pay extra for socially and environmentally-driven solutions. They feel a sense of guilt about their impact on society and always try to do the right thing; they believe others should follow their example. The interesting thing about this group is that while they are relatively small in size, they have the potential to disproportionally influence others by taking action on issues and causes they care the most about.

+ 81% are interested in sharing their ideas and experiences to help companies develop better products and advance solutions;

+ they are fact seekers, so if you try and BS them, there will be ramifications.

The Aspirationals are referred to in the study as the ‘persuadable middle,’ meaning that while they are materialistically oriented, they aspire to purchase more sustainably. This is the group who is actively seeking info online from social networks, along with their family and friends, in order to help inform their decisions. Despite the fact that they care more about style (65%) and social status (52%) than the other segments, they are the biggest market segment of all four and they sincerely want to use their purchasing power to make good things happen.

+ it’s as much about people as the product for them, so brand socially;

+ to reach them, brands need to design new business models with fewer impacts.

New Business Models. That’s the point we want to focus on.

To make #sustainability as a strategy work, it has to be embedded in the heart of the business model. It has to come from the core.

Many companies try and tack on something that they think will be perceived as sustainable into their product or service and then market themselves as if they are ready to reinvent the world. The problem is that consumers can sniff out these half-hearted initiatives in a heartbeat, leaving the integrity of the brand in question and planting doubts about how sincere the company to change the future.

Instead companies need to be willing to redefine their value proposition to consumers and in many cases redesign the entire experience. To put it succinctly, bold brands need to march out there and move sustainability to the core of their strategy, putting short-term profitability on the line and exposing itself to potential failure. The upside is that they are the only ones who will be around in the future.

+ Business Modelling 2.0

Who’s out there doing it now?

Osklen, a Brazilian-based pioneer in luxury fashion, is one prime example that we have talked about several times before on the blog.

+ Avant Garde: Moving Fashion Forward

At the grassroots level, there is FAIR Spirits, a France-based company producing the world’s first line of fair-trade certified spirits. The video below takes us into the heart of Bolivia to see the company’s production facility for its Quinoa Vodka:

The team at FAIR has thought through multiple dimensions beyond just the product itself; from the inputs, to the workers, to the dispersion of wealth, it’s a company that’s designed to make a difference.

At the top level, NIKE’s Material Sustainability Index initiative is one of the best examples of a sincere effort that we have seen from #bigbusiness. The company has been working with the Sustainable Apparel Coalition and Duke University to create an open API for a global sustainable-materials database, giving ‘future makers’ the ability to find and source top-quality sustainable materials.

You can read more about the specifics of the project on the RhOK website (Random Hacks of Kindness):

+ RhOK: Nike MSI brief

This open R&D venture by Nike reflects a serious effort by the company to make #sustainability as a strategy work, and makes us at least consider that this company wants to be around in the future. Despite the numerous social and environmental hurdles that still face the company, it’s clear that they are making moves from the core:

+ Nike Sustainable Business Report

Using materials as the key focus, they are going on the offensive with sustainable innovation and working towards their vision of a closed-loop business model. Whether you agree with their vision or not, they have at least aligned the pieces to make it happen.

Overall, these few examples go to show that #sustainability as a strategy is no longer reserved for the eco and organic brands of the world. It’s something that every company needs to take seriously and start embedding into their strategy. While the types of moves required to make this work are not for the faint of heart, those that move now will at least have a pulse when the dust settles.

Have you seen any great examples of #sustainability as a strategy?


+ The Entrepreneurship Era
+ The Redistribution of Dealflow


Building Blocks – PLAN – the Business Model

The proverbial ground underneath the fashion industry is shifting, the vaunted halls of the world’s most established fashion empires are shaking. After decades of dominance and the creation of storied brands with enough clout to develop the very definition of style, the walls are starting to crumble. That’s because a new era of avant-garde fashion enterprises are moving in and seeking to redefine what it means to be fashionable – and today we will look at what a few of these companies are doing and why it’s working.

While the majority of world’s biggest luxury fashion brands continue to embarrass themselves and jeopardize their future in the name of ‘haute couture,’ a new breed of brands are emerging to make style sustainable. In other words, they are not plundering precious ecosystems, driving mammalian species to extinction or filling sweatshops in Asia with malnourished workers to get to the top of the fashion food chain. Instead these brands are using natural materials, faux furs and the labour of professional seamstresses to create garments of haut qualité.

Performance metrics based on environmental destruction and use of toxic chemicals for top luxury brands as reported on the Fashion Duel.

+ The Fashion Duel

Moving into their place is a new set of leaders in the fashion revolution, as they make the transition from competing only on ‘eco and ethical’ characteristics to going head-to-head on style. While ‘La Mode Ethique’ (ethical fashion) is certainly a growing and respectable market, we think it is the brands that are taking the ‘sustainable fashion’ fight to the mainstream who are the true leaders of the charge. After a (brief : ) blog on ‘The New Era of Fashion’ back in December, we are coming back to look at three companies who are moving fashion forward on a few different levels:

+ A New Era of Fashion

Osklen

Target : high-end fashion market in Brazil and the US

+ www.osklen.com

Osklen is a raw and rugged luxury brand that takes its inspiration from the beautiful beaches and lush rainforests of Brazil. Originally started by designer Oskar Metsavaht in the ‘80s, the Osklen line is inspired by nature and uses a range of natural and exotic materials to create collections of great quality and durability. What makes Osklen special is that it competes at the highest level of fashion, in the luxury market, but plays within nature’s rules. That’s because Mr. Metsavaht understands that design is, and always will be, the most important part of the clothes; however, he also knows that a brand does not need to break every ethical boundary to get there.

The company has gone far beyond creating a line of sustainable clothes in order to break the design-ethics paradigm in the industry. They have partnered with the Italian government on the Traces Project to advance the research and development of renewable materials that can be produced in a sustainable way. They have also setup Instituto E to share information related to next-gen fashion principles and build a network of partners to help turn Brazil into a global leader in sustainable development.

Early last year the company did a fashion show in honour of A21 (embedded below) and then followed that up with a first-time appearance in the New York Fashion Week with its Spring/Summer ’13 collection.

Nueluxe

Target : global luxury market

The name says it all. Nueluxe is bringing a stable of new luxe brands to a network of luxury-loving professionals who want it all : style, sustainability and substance.

While not strictly limited to fashion, Nueluxe has been going about its business of adding to its already impressive network of avant-garde ateliers from all over the world. Luxury brands are bar-none the worst when it comes to social, environmental and ethical performance, as they seem to stop at nothing to meet their uber-rich clienteles’ sophisticated tastes. That’s why Nueluxe is the seeing the opportunity to bring in a new wave of luxe brands, the ones who can create unmatched experiences without compromising the species that surround it.

+ Nueluxe : Wear

After all, that’s what sustainability is all about. Instead of allowing a few of the world’s wealthiest to consume a resource to extinction, the future of luxury is about creating experiences that future generations will be able to enjoy as well.

Members of the Nueluxe community can use the platform to learn and connect with the brands at the forefront of this change, and gain access to exclusive discounts and product offers. Check it out!

+ www.nueluxe.com

Modavanti

Target : everyday fashion buyers who are conscious about their purchases

+ www.modavanti.com

Derived from the Italian words ‘moda’ and ‘avanti,’ Modavanti is an online boutique that sells fully sustainable clothing lines. One of the major factors that separates Modavanti from other similar online retailers is the site’s design and branding. The site does not scream green, or sell clothes that are heavy on sustainability but light on style; instead it has created a store that looks like a real fashion store.

Modavanti makes sure there is real substance behind the brands you are buying. Beyond just selecting and stocking the brands, they have created a clean and colourful system to show the specific ‘sustainable charareristics’ of each brand. What’s even better is that they actually educate you about each characteristic on their Sustainability page.

Modavanti is showing what being fashion forward is all about. Unlike bloggers and industry insiders who write and tweet mindlessly about the hot colour for 2014 (pink, purple, yellow …), these guys have a vision for what the future of fashion will really look like … bellissimo!

What are the common threads that connect these brands?

None of the aforementioned companies incorporate eco or ethical into their name, or brand heavily around these themes. Rather they try and come out with a strong brand image that resonates with traditional consumers while at the same time educating their market about what they need to know.

The whole ‘eco and ethical’ category is very niche and represents 5% (at most 10%) of the market. For those brands that want to really make an impact on the mainstream market they need to embed sustainable principles into their collections and not try and win consumers over on strictly ‘ethical’ branding arguments.

People who are purchasing clothes are primarily interested in the style and price. If the clothes don’t look good, the average person is not going to buy them, even if they were made using organic materials from a poor rural village in India. If you want them to pay more because they were made using sustainable practices (research suggests they would pay a 10% premium, verus 25% for tailor made#), you need to educate them as to why and develop a premium brand image. It doesn’t conjure up images of sexiness and style to talk about ‘eco trousers’ or an ‘ethical short sleeve.’

This is especially important if you want to target generation Y. People in our generation expect things to have certain qualities and are not willing to sacrifice quality just to fit a certain ethical profile. The new breed of ‘sustainable brands,’ those whose end products are in-sync with their social and environmental surroundings, will find Gen Y to be a very big and receptive market. But to hit that market, brands need to still provide the emotional benefits that the ‘unsustainable alternatives’ would provide. When it comes to fashion, people just want to look good and rep brands that match their lifestyle.

Just like the food market has made the move to everything organic, fashion is in transition to become its own version of ‘sustainable.’ There has been a lot of recent movement at the top levels, thanks to campaigns like Detox fashion, despite the fact that many of the traditional luxury players seem to hobbled by their heritage. But the movement at the bottom is exploding, and by the time many major labels reach fully sustainable levels (by 2020 according many Detox responses), a new crop will be arising. So suit up and lace ‘em on, because the fashion revolution has begun.

Do you agree or disagree that avant-garde fashion enterprises should steer clear from being too focused on ethical and eco?


+ A New Era of Business : Fashion
+ Business Model Breakdown: Fashion 2.0


Building Blocks – PLAN – the Business Model

The New Era of Business reports are focused on the future of important industries and include examples sourced from around the world.

Fashion forward – it’s a term typically used to describe the trendsetters in the fashion world, the fashionistas – but in today’s blog we are going to look at it from a different perspective, the future of fashion. Arguably the most unsustainable industry in the world, it’s time to put a new face on fashion and redefine the rules of the runway. Fast forward to a new era of fashion.

Fashion touches us all. The threads of the fashion world are sewn around us from our very first moments on earth. But the clothes we wear are not what they used to be. What started as a cultural tradition of artisan handiwork passed down through the generations has become a mass-market business of shipments being passed down the supply chain. The pressures of globalization has flipped fashion on its head – thoughtful fashion is out, fast fashion is in.

The time has come to redesign the system and move fashion forward. Within the wreckage lies an unprecedented opportunity to build an entirely new stable of brands who can bring sustainability to the world of fashion without sacrificing style and sensuality. Fashion forward begins from the bottom up.

Recently, we attended the second annual Beyond Fashion Summit in Berlin. The workshop brought together a series of experts, designers, and entrepreneurs from around the world to lead a debate about how fashion is evolving and what the future holds in store. The theme for the event was ‘Hypernature,’ a term loosely used to describe how sustainability, technology and fashion might interconnect as we move towards a new era of fashion.

While many new ideas and concepts were introduced, one theme remained constant, the industry needs to change – radically. The behemoths who dominate today’s fashion markets have built their brands behind a manufactured illusion of glitz and glamour without regard for the social and environmental consequences; a seismic shift is required. That’s is why in this post we are going to look at the future of fashion from three angles:

  • Raw Materials
  • Textile Production
  • What it Means to be Fashionable

In each part, we look at high-level examples of brands who are catalyzing the change. We will follow that up with a look at our Market Beacons, companies who we think are redefining what it means to be fashion forward. Then we will look at how to take action and turn the sparks we are seeing today into a full on fire.

Let’s start with the materials.

The Raw Materials

To reinvent the fashion industry, we need to start with the core components, the fabrics and dyes used to produce the clothes. The fashion industry generally has two options to choose from when it is selecting materials to use for its designs, natural and synthetic. Natural materials are sourced from the natural world and include fabrics such as cotton and wool, whereas synthetic materials are created using chemistry and include materials such as polyester and nylon. Once the materials are selected, the majority are then dyed using an array of chemicals, many which have toxic properties.

Just because some materials are natural and others synthetic does not mean that one is necessarily better than the other. On one hand, polyester, the most widely-used material, is synthesized using an energy-intensive process that requires large amounts of crude oil; cotton, on the other hand, grows naturally on cotton plants but requires a huge amount of water (2,000 L to produce the average T-Shirt) and large amounts of pesticides (10% of all pesticides and 22% of insecticides are sprayed on cotton globally). This environmental impact, coupled with the social externalities from these industries, is why we need to take a hard look at the materials used to make the clothes we wear everyday.

So who’s entered the market to start shaking things up:

People Tree : Fair trade and organic cotton

People Tree is an organization that is focused on bringing fair trade to fashion and helping to expose the realities that make the majority of the world’s biggest fashion brands so immensely profitable. Founder Safia Minney started her career in the advertising industry, but it didn’t take her long to see behind the curtain and realize what fashion was really about.

People Tree’s garments are produced using 100% organic and fair trade cotton from rural farmers in the global South. Cotton can be grown as a rotational crop, reducing water consumption by up to 60%, and without the use of heavy pesticides. The company, which started in Japan in 1991, has spread throughout UK and Europe, with over 450 Stockists and ever-expanding inventory of fair-trade artisan garments.

+ http://www.peopletree.co.uk

Rubia : Natural Clothing Dyes

Rubia produces 100% natural dyes derived renewable sources. The madder plant, which was used as a dying agent as far back as 1350 BC, is the primary agent used to create Rubia’s dyes; the plant was phased out of production last century as synthetic agents began to reach the market, but is making a comeback thanks to its environmental and chemical properties. The resulting dyes, which are produced in powder form, come in a variety of different colours and can produce a level of quality beyond that of synthetic compounds.

+ http://www.rubiapn.nl/

Ploughboy Organics : Waste to wearable

Ploughboy Organics is taking the waste from one of the world’s most controversial substances, tobacco, and turning it into clothing. Using their patent-pending technology, they are turning the waste from the tobacco plants into their Onatah Fibers and Avani dyeing agents. Scheduled to be released in 2013, Ploughboy is taking a waste from a previously unthinkable source and transforming it into a fiber with brilliant and enduring properties. The reused tobacco fiber contains 30% vanillin and has 29 colours that are lightfast, colourfast and meet all testing standards. Because tobacco can be grown anywhere where the tundra does not freeze, there is an abundant source worldwide.

+ Ploughboy Organics

————-

While it’s not expected that we are going to suddenly return to 100% organic materials, or start making the majority of our clothes out of tobacco fiber, the transformation has to start somewhere. In the same way that only a few years ago organic food was seen as a high-end item, organically sourced materials may start out in higher-priced garments before becoming the norm over the long term. Here are a couple of examples of companies in the market who make it easier to source and evaluate materials:

Source4Style

+ http://www.source4style.com/

a hip site dedicated to helping designers source sustainable materials from around the world

Blue Sign

+ http://www.bluesign.com/

a material rating company dedicated to tackling the problem of material inputs, they have created their own proprietary black, grey, blue rating system to help brands manage and control the inputs in their production process.

Textile Production

Once the materials have been produced and the designs selected, the clothes go into production. While it may be natural to assume that only a few exploitive brands would engage in child sweatshop labor, as Nike did in the ’90s, the reality is that the process is as common now as it ever was. Countries such as Bangladesh compete to be the low-cost textile producer and setup factories in slums where child workers work 100+ hour weeks for a barely livable wage. Fashion editor Liz Jones wrote a story in the Daily Mail two years ago, ‘The Real Price of your £5 jeans,’ detailing the practices of fashion megabrands such as Primark who exploit child labour to make fast fashion as profitable as it is.

The whole cycle of textile production needs to redesigned from the ground up, and that starts with transparency. Rather than outsourcing production to foreign countries and using child labour to pump out cheap, generic garments, we need to return to the era of the artisan and localize aspects of production. And with so many clothes already on the market, many old clothes can be recycled, upcycled or simply rebranded (ie. vintage) to give them new life.

IOU Project : The return of the artisan

The IOU Project is a new social enterprise created by Kavita Parmar that is designed to bring back the story to the heart of the clothmaking process and connect consumers to the garments they purchase.

By sourcing fair-trade garments from artisans in countries such as India, the company endeavors to decommoditize fashion by focusing on the supply chain. While currently selling their garments online and through trunk sales, they will eventually be trying to white-label their platform to major fashion brands.

+ http://iouproject.com/

Junky Styling : upcycled

Junky Styling is a UK company that deconstructs and reconstructs men’s garments, including suits, blankets and anything else they can source from local charities and agents. They then remake and remodel these old clothes into a sexy, sassy collection.

For those consumers who have treasured olds garments that they loathe to part with, Junky Styling offers Wardrobe Surgery, a process whereby they will take the old garments and restyle them into something completely new and unique. Junky Styling is transforming would-be throwaways into something worth showing off.

+ http://www.junkystyling.co.uk/

Remei : end to end transparency

Remei is a Swiss company that has been committed to fair trade and sustainable fashion since its inception. Using their own bioRe® philosophy, the company adheres to stringent social and ecological requirements throughout their entire production process, which is audited by independent institutions.

To take their process to the next level, Remei is developing an end-to-end online system to show consumers the traceability of each and every garment produced by the company, including production, transportation and distribution. Starting in mid 2013, a consumer will be able to buy a garment and scan a unique QR code on the label to see the origins of the product.

+ http://www.remei.ch/en/

———————-

While it won’t be feasible for every fashion label to implement end-to-end transparency, or source 100% of production from artisans, it all begins with a step in the right direction. Examples of big brands who are incorporating these principles into their actions include:

Top Shop

+ http://www.topshop.com/

In July of this year, Top Shop introduced it’s ‘Reclaim to Wear’ collection in it’s Oxford location in London. The new collection is made from upcycled materials from surplus stock and production offcuts in collaboration with eco-fashion label From Somewhere.

Patagonia

+ http://campaigns.ebay.com/patagonia/

Last year, Patagonia, maker of high-end outdoor apparel and one of the most sustainable companies in the world, launched their Common Threads initiative, allowing customers to resell old Patagonia jackets online through a partnership with eBay. Beyond being a well-thought out move sustainability wise, it was also a brilliant branding move by demonstrating the durability and endurance of Patagonia’s products.

What it Means to be Fashionable

While it’s great in theory to create fashion that is in-sync with the world around us, it won’t matter unless we change the culture around fashion and redefine what it means to be fashionable. Nobody wants to wear clothes made from toxic materials using exploitive labour practices, and yet the majority of the clothes we wear are precisely that. Why? Because it’s cool to do so. Fast fashion is chic, it’s stylish and it’s cheap, in the same way that ordering a Big Mac is filling, delicious and light on the wallet. We feel good for a brief period in the moment and then regret it soon afterwards. Why do we do it?

To try and reach the (unobtainable) image of beauty and stylishness fed to us by the media. We are surrounded by sexy models whose photos are fixed-up on Photoshop to make us believe in flawlessness and fed celebrity endorsements that paint luxury as must-have social symbols. Lost in the process is the natural beauty of people, the importance of individual style and the connection to the real designers.

It has to change. Fashion should be fun, energizing and customized. The days of traditional tailoring and hand-sewn everything may be gone, but the old-school principles can be reapplied to make a new era of fashion come to fruition. Here are a few examples of what needs to be done:

Sustainable and Eco → Sexy and Stylish

Most people don’t want to buy something that screams ‘Save the Whales’ or ‘I am Eco,’ nor do they want to buy a wardrobe full of hemp clothes and carry a purse made of burlap. Fashion being fashion, is meant to be sexy and give people the confidence to step out everyday and do what they do best. Rather than striving to be ethical or eco, brands need to embed these principles into the brand, be transparent about their activities and focus on giving consumers what they want (stylish clothes).

Earlier this year, the Brazilian company OSKLEN launched its A21 collection in accordance with the Rio +20 Sustainability conference in Rio de Janeiro. Founder Oskar Metsavaht believes that the best way to advance the sustainability agenda is to embed it into the collection rather than letting it define it, and promote a mindset of consciousness about the world around us. Check out the funky collection below by one of the world’s premiere fashion brands (embedded above).

Mass-Market Generic → Customized and Co-created

The new era of fashion is all about customization and co-creation. To reverse the trend of fast fashion, brands need to get customers involved into the design process and build a community around a line of customized and creative apparel. Crowdsourcing certain elements of the production process will not only help develop more inspired designs, but also help create a deeper sense of connection to the clothes that are produced for everyone involved.

UK-based SketchStreet has created a platform to co-create design collections, which was built around the idea of ‘Let’s Do it Together.’ Everyday designers submit their designs to the site, which are then voted upon by the community. From there, samples are created, pre-orders are made and then the garments are sent into production. The new designs are then added to the company’s online Shop, making the SketchStreet collections fully co-created.

+ http://www.sketchstreet.com/

Model Mashups → Small Touchups

Many of the photos we see on billboards and in shops are no longer just moderately Photoshopped images, they are full on mashups. A few image touchups here and there might be necessary, like a pimple on photoshoot day, but to fully manipulate images to create a certain image of beauty is beneficial to nobody. The return of real models photographed as their natural self will help bring the expectations of what we need to look like down to earth.

Leni’s Models Management was the first ethical model agency to be launched. Former model Eleni Renton saw the effects that industry practices were having on young models and decided to create an agency around being natural. Beyond just finding the models contracts, the agency educates young models about how to manage themselves, eat properly and live life. The company’s mission is to ‘promote a more realistic image for women and reject the ‘size zero’ look.’

+ www.lenismodels.com

Market Beacons

PUMA

Puma, known for its stylish sports apparel, has started to bare its teeth in the ultra-competitive shoe and clothing industries, but with a slightly different strategy than its competitors – transparency. The company has taken reporting on its P&L statement (Income Statement) beyond just the typical greenwash jargon, and shown some new metrics to demonstrate the company’s environmental and social impact. In 2012, they reported on the overall environmental impact of the company’s activities on their P&L, but in 2013 they will take it to a whole new level by reporting on the impact of each individual product and displaying the overall environmental cost information on the price tag.

Along with reporting on their products, they have several design initiatives aimed at reducing the collective impact. Two years ago, they launched the Clever Little Bag initiative (embedded above) in collaboration with renowned designer Yves Behar. In 2013, they will be introducing a line of biodegradable shoes and shirts. PUMA is pushing the envelope in the world of sport and lifestyle fashion and building themselves a sustainable advantage in more ways than one.

+ www.puma.com

Fashion.me

Fashion.me is a new Brazilian startup that is fusing together fashion with the social web to create a collaborative platform where users can create their own looks and style collections using a range of designer labels. Conceived by two former investment bankers as an experiment, the original Fashion.me site was launched as a gift to the duo’s wives in 2008.

As of June, the company had 1,000,000 users in Brazil, and raised capital earlier this year from Intel Capital to finance their expansion into the US. Users can create their own looks from a few million different labels, interact with other users on the platform and even dress up virtual models. The site is bringing the fun back to fashion and showing the enormous potential enabled by collaborative platforms.

+ www.fashion.me

EF (Eileen Fisher) Lab– concept store

Eileen Fisher is an elegant women’s fashion label based out of the US that has built a strong following through its focus on simple design. The designer launched an Eco Collection that uses a variety of organic materials sourced from diverse countries such as Peru. To expand the company’s impact, they have created several philanthropic initiatives to support women’s entrepreneurship.

To merge the company’s vision together, they opened up the EF LAB store in New York in 2009. The LAB is unique because of the product assortment it offers: new clothes, last season’s clothes, samples and recycled clothes. To incentivize recycling, the EF Foundation setup the Recycling Reward program out above), which rewards customers for recycling gently used clothes. Any profits from the Recycling program are donated to one of the company’s philanthropic initiatives. The EF Lab demonstrates how a combination of creativity and vision can come together to bring sustainability to the consumer level.

+ www.eileenfisher.com

Catalytic Clothing

The future of fashion will include creative uses and applications of high-level technology. One promising technology is nanotechnology, an advance that enables scientist to manipulate matter at a molecular level. Catalytic Clothing is a new project based out of the UK that is striving to reinvent what’s possible with fashion by creating a fabric that can clean the air while being worn.

Started as a venture between designer Helen Storey and chemist Tony Ryan, it is a large-scale partnership between the University of Sheffield, University of London Arts and the London College of Fashion. The goal is to use photocatalysts on their Catalytic Clothing to break down pollutants in the air. These catalysts are activated in the wash cycle, and have been applied to the first generation of products in the Field of Jeans project. The idea is that multiple people wear the products, air quality can be vastly proved. Who said fashion is only about style?

+ Catalytic Clothing

Action

Fashion forward begins with the individual. The choices we make when we buy clothes, the way we talk about fashion amongst our friends, it all adds up.

The greater impact, however, comes through entrepreneurship and the creation of new models to build a sustainable ecosystem. The Blue Ocean opportunity that lays ahead is enormous and can be approached from numerous different angles.


+ BMi: FASHION
+ Time For BMi


PLAN – the Business Model

Energy – it powers our society and fuels the advancement of civilization. But in our world today, it’s not sustainable. We continue to burn fossil fuels at an unprecedented pace, while the global energy industry continues to push the exploration of coal, heavy oil, and shale gas reserves. The time for change has arrived – and thanks to the advent of crowdinvestment, we can make strides towards reinventing the way we produce energy and move towards a fully sustainable model of consumption.

“If we don’t do something about this (energy) it could take your future away” (29:15)

Former US President Bill Clinton kicked off last week’s One Young World summit with a bang. In the midst of a hectic Democratic campaign schedule, Clinton arrived in Pittsburgh, USA to shed light on the biggest problems facing the world in front of 1,300 youth delegates from around the world. The basic roots of the problems relate to one of three core issues: inequality, instability or unsustainable development. While the challenges may seem daunting, each presents an extraordinary opportunity, in particular the latter:

“Changing the way we consume and produce energy and use local resources could be the greatest economic opportunity this world has ever seen” (29:30)

The question is how?

Clinton gave three high-level examples of countries that have undertaken sustainable development agendas in the Western Hemisphere:

  • Mexico – the rapid development of the eco economy in Mexico City
  • Costa Rica – a hydro power program that provides the country with 92% of its energy and a future green car industry
  • Brazil – ‘the worlds finest biofuel, cane ethanol,’ which apparently has limited negative environmental affects

While these are great initiatives, they are top-down government lead initiatives and only represent a tiny fraction of what will be required in the future. Luckily, many factors are starting to align that will help bring renewable-energy initiatives to the masses, including the democratization of finance through crowdinvesting.

Crowdinvesting, unlike crowdfunding, allows individuals and investors to take an equity stake in a company. While the donation-based crowdfunding model is useful for a variety of early-stage creative, social and entrepreneurial projects, it is not ideal for projects that require a large amount of invested capital, like a renewable energy project.

+ Strategy Sessions – Crowdinvesting + The Entrepreneur

As crowdinvesting becomes legalized, new opportunities will be open for everyday people to help bring renewable energy projects to life. What type of projects are we talking about?

Wind, solar and hydro projects are the earliest examples. Abundance Generation in the UK, for example, has created a unique crowdinvestment platform (using convertible debentures) that allows UK citizens to invest as little £5 in renewable energy projects. How does it work?

Project creators post their project on the platform and define the amount they are looking to raise. All of the information related to the potential investment is posted on the project page, allowing potential investors to evaluate the merits and drawbacks of the investment. As an example, two projects are open on the site right now, a solar project (seeking £500,000 to £1,000,000) and a wind project (seeking £300,000 to £1,400,000):

https://www.abundancegeneration.com/projects/

If the posted projects get enough of the crowd’s support, then the project creator receives the funds while all of the ‘crowd investors’ receive their stake in the project, in this particular case a percentage of future returns. It’s a new model of investment for energy, where rather than raising large amounts of capital from a few funds, energy entrepreneurs can raise small amounts of money from a large number of people to fund future-focused endeavours.

And this is only the beginning. We need to think bigger, much bigger.

Trillion Fund, a new crowdinvestment site in the UK, is in the process of creating a large-scale platform for renewable energy projects. Trillion’s mission is to bring renewable energy to the same scale as fossil fuels over the coming decades:

“we aim to influence a trillion dollars of investments – a mind boggling number, but we believe this is the scale of ambition and investment required for the cost of renewable energy to reach parity with fossil fuels.”

It’s a bold vision, but it is exactly the type of scale we need to strive towards in order to become a sustainable economy. Beyond the large-scale economic potential, we have an unprecedented opportunity to shift our antiquated industrial production methods towards a brilliant clean-energy future.

While government and large-scale initiatives like the Clinton Global Initiative are a good start, we need to get the crowds involved to bring it to the scale the world requires. As the democratization of finance continues around the world, we will finally be able to work collectively to move sustainable development beyond concept status. 2013 will be a big year for these types of initiatives, so look for energy-focused crowdinvesting platforms in an economy near you.


+ BMi: FINANCE
+ Time For BMi


PLAN – the Business Model

Sustainable growth – it is a term that has become the focus of the brightest business minds’ around the world; however, there is one issue – in today’s environment, it is an oxymoron. Politicians and economists want us to focus on growth in order for them to try and repay the mountain of debt that they piled on in the name of ‘prosperity.’ Environmentalists and activists, on the other hand, want us to focus on sustainability and preserving the planet. The problems is that we can’t just pick one or the other, we need to do both simultaneously. That’s why in today’s blog we are going to explore the term sustainable growth and discuss how to turn it from an oxymoron into the new standard for business.

A few weeks ago, I was browsing the Internet when I stumbled across the Capital Institute’s website, which brands itself as the Future of Finance. Started in 2009 by the former Managing Director for JP Morgan, John Fullerton, the Capital Institute aspires to spark discussion about the role of finance in our society and what business will look like in the new economy. One video in particular, called the Biospheric Reality (embedded below), caught my attention and inspired me to start to think deeper about the role that both business and financial institutions should play in our society.

Among a number of great concepts that were illustrated in the video, the one that really struck me was the analogy that compared our financial system to the biosphere. In Mother Nature, when the environmental ecosystem starts becoming highly unbalanced, a period of chaos ensues. That is what is currently happening in our global economy. Following the period of chaos, a higher order emerges and the entire ecosystem starts to rebalance itself over a period of a number of decades. This is what lays ahead in the next several decades for our global economy.

In our last blog, Finance 2.0 – Wall Street Meets the Web, we discussed how the new crowdfunding movement will be a key catalyst in the creation of a new financial ecosystem. But this is just a small component of the whole, as the global shift that has begun is composed of a series of movements and new paradigms that are all contributing to reshape our economic landscape. The motivator for the entire shift, in my opinion, is the desire to rebuild our economy around the principle of sustainable growth.

But what is sustainable growth?

Sustainable growth is a philosophy that recognizes that economic growth (in today’s terms) is constrained by our finite resource base; therefore, despite the fact that economists’ models are based on the principles of infinite growth, we have to recognize that the environment (ie. our planet) that nourishes our existence is in fact composed of a finite amount of resources. The sustainable-growth model focuses on ‘growth’ (in an economic sense) that is balanced with our social and environmental surroundings.

Rather than looking for opportunities to profit at the expense of both people and the planet, the new paradigm is built on the premise that we can make profit while improving the lives of people and the state of our planet. Instead of trying to find opportunities in every crevice of the globe just to keep the current economic model alive, we should instead focus on redefining what we are trying to achieve in the first place. In the video above, John Fullerton parallels this to the Copernician moment, which happened centuries ago when everyone on the planet realized that the world was not flat as they had been brought up to believe.

So what does sustainable growth look like?

First we need to plant the seeds to the first trees (businesses) that will begin to sprout their first leaves (profits).

The (sustainable) growth of the tree (business) will unfold until it has fully blossomed (profit threshold).

At that point, other businesses in the external environment (the forest) will take notice and begin to follow the sustainable-growth model – a new forest (new industries) will begin taking shape.

The businesses who fail to adopt the principles of sustainable growth will inevitably fail and a full-growth forest (interconnected industries) will develop – then one day the forest will merge with the surrounding ecosystem (global economy) and mark the beginning of an entirely new economic paradigm.

That’s how we see the sustainable-growth model in the new economic environment. It remains to be seen how quickly this new growth model starts to become implemented, but we expect that a business that takes root one decade from now will not look, or think, anything like the businesses of today. It’s time to turn sustainable growth from an oxymoron into the new standard for doing business.


+ Building Blocks for the New-Era Business
+ Finance 2.0 – Wall Street Meets the Web

Crowdfunding Strategy – Summary


PLAN – the Business Model