Have you heard of FridgeFlix? No? And the Alliance Appliance? Not that either…? Well, that’s probably because they haven’t been created yet.
FridgeFlix and the Appliance Alliance were invented during a hackathon at the World Economic Forum’s summer meeting in Tianjin, northern China, a few weeks ago. Dreamed up by software developers, a hackathon is a collaborative event in which a group of people try their hand at developing or modifying a project or strategy in a short period of time. I was part of a group of five very different people – from the head of the WWF in Norway to an expert in the shared economy and a senior vice-president of a large beverage company. Our challenge was to help a technology company make more of its products compatible with the circular economy.
There was a heated debate and we almost broke up. We couldn’t agree on whether our ideas made current consumption smarter and more resource-efficient or simply created new and unnecessary consumption. But then it happened: we invented FridgeFlix.
FridgeFlix is a one-stop-shop application that allows private customers to rent all their home appliances – freezer, washing machine, microwave, etc. Think TV on demand, with household appliances. This is the first step in transforming housekeeping from products to services. We imagined how the service would include a trade-in mechanism for old devices, if you wanted to switch from product to service in a home that was already equipped.
To be able to provide the customer with all these devices, we needed a bigger forum. This led us to the invention of the Appliance Alliance, an association that could offer all these services and even extend to services such as security and lighting. We even imagined that in the not-too-distant future we would no longer have televisions, but television broadcasts directly on the walls of our homes, a development that this business model could easily adapt to.
This business model has many advantages. From the consumer’s point of view, housekeeping has a fixed price. If something breaks down, you don’t suddenly have an unexpected cost. Appliance Alliance could also reduce consumer costs by supporting the consumer’s energy bill and negotiating with utility companies on their behalf.
From a business perspective, it’s an incentive to design products that last as long as possible and are as energy efficient as possible. The incentive to consider the total cost of ownership would be very clear. All the materials could be salvaged from the devices and the company would have a much closer relationship with the consumer. In this way, we convinced skeptics that Appliance Alliance had the potential to reduce energy and resource consumption. If a government wanted to support this development, it should simply require a 10-year warranty on all household appliances.
As a former environment minister in Denmark, I found it interesting to start working with companies as a spokesperson for business and growth. I have placed a lot of hope in the idea of the circular economy and developments like the shift from product to service. I think this is going to happen with dramatic speed and change consumer behavior much more radically than any legislation. A friend of mine said, “Every product is a service just waiting to happen.”
But you have to think carefully. This involves tons of dilemmas: how to incentivize end users to adopt environmentally friendly behavior when they don’t own the product; how to switch to consumption of toll resources instead of wages; how to maintain a reasonable level of taxation in a sharing economy where people rent their private homes or bring people in their cars without destroying this intelligent movement. I could go on.
The circular economy is taking off. CEOs understand. CFOs get it. The finance ministers almost understand. This is everything environmentalists and environment ministers have dreamed of for so many years. I urge you all to go out there and embrace it. Improve it, make it more efficient, smart and fun. It may be you who will make FridgeFlix a reality. It’s our way of changing the world.
Ida Auken is a Danish politician and member of the Danish Social Liberal Party. She was Denmark’s environment minister from 2011 to 2014. She tweets @IdaAuken
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