Powerful Sustainable Business Trends Converge at VERGE
The VERGE conference last month was a heady mix of both inspiration and rapidly accelerating best practice at the intersection of energy, buildings, transportation and IT.
You can find complete coverage (and videos) at greenbiz.com. Here are some of the things that stood out for me -- not just because they're interesting (though they are), but because they also hold important strategic challenges for business -- and perhaps for your business.
Collaborative consumption is the leading meme taking on the ecological imperative but generally daunting business challenge that I've long talked of as "More value. Less stuff.":
- If, all things behind equal, more throughput means more impact; and
- if, all things being equal, more throughput means more profit; and
- if most businesses think their purpose is to maximize profit (It's not, but that's a story for another time); then
- business needs to figure out how to deliver more value -- and make more money -- selling less stuff!
How? Some businesses are reinventing their value propositions around value delivered, not stuff delivered, while other businesses lose share in the face of that competition. Consider: the world's major hotel chains built global networks on the order of half a million beds in 50-70 years. The collaborative consumption networks of CouchSurfing.com, AirBnB.com and their ilk built a network of more than 1.5 million beds in less than seven years.
"Unused value = Waste," according to Lisa Gansky, author of The Mesh and host of meshing.it. LooseCubes & Honest Buildings arbitrage that unused capacity. Since we only use our cars (our second largest asset) eight percent of the time, they're perfect for sharing. Robin Chase of BuzzCar noted that the average ZipCar is used by 30-50 people; 40% go on to sell their own car or not buy another; all drive 80% less. Great news for ZipCar. WhipCar, BuzzCar, CityCarShare, GetAround et al. Possibly not such good news for Detroit et al.
The interesting question of course: what are the potential risks and upsides for your business?
Energy was the thread running through everything at VERGE. ("Energy is eternal delight," as Wm. Blake knew well.)
Amory Lovins, ever the phrasemaker, made sure we understood that the future of energy is "Netted Islandable Microgrids." (the EnerNet? the InterGrid?) Drawing from his newest book, Reinventing Fire, he observed that we can triple the energy productivity of US buildings at a 33% internal rate of return, and double industrial productivity at a 21% IRR. His recommendation: "If you can't solve a problem, make it bigger." The secret: "Big savings can be cheaper than small savings, through integrative design." But does your CFO know that? (I still encounter companies that should know better referring to sustainability investments as costs, when they are in fact investments that should be evaluated like any other investment.)
Amory noted four key elements to energy futures: Policy. Design. Strategy. Technology. "Focus on outcomes, not motives," he advised. "And don't wait for Congress." To which I'll add this: while many people are frustrated by the energy policy logjam in Washington, others are investing now in the new energy economy, since it doesn't all depend on policy.
Jon Koomey of Stanford University predicted that we'll not only see more & better mobile computing, sensors, controls -- with customized data collection -- but we'll see more cool gear running on ambient energy flows. A lot of this is about changing people, according to CBRE's Dave Pogue. I'm not so sure. My mentor Bucky Fuller, used to advise "Don't try to change people; reform the environment." One of the most effective ways to do that, in my experience, is with well designed feedback, and Pogue seems to concur, noting for example that separately metered buildings 21% more efficient than single meter buildings. In fact, according to IBM "building whisperer" & VP Industry Solutions Dave Bartlett, there's 40% savings to be gained by "listening to buildings holistically."
Many of these opportunities hinge on Real Time access to Open Data linked through Smart Grids. (Remember "Netted Islandable Microgrids?" That's what we're talking about.) "Decentralized or centralized?" Steve Case pondered. "Distributed!" he responded. "Build speed and scale from excess capacity and common platforms." (An echo of Gansky's "Unused value = Waste.")
Tim O'Reilly, who observed that data science job growth is "going vertical," posed an equally important question, but left it unanswered: "How to ensure that the emerging global brain does good, is moral?" As my physics professors used to say, that exercise is left to you to work out.
Jennifer Pahlka's brilliant approach at Code for America is to see government as a platform; CFA recruits development teams that compete to work with participating cities on projects that "can benefit from web-based solutions." Brilliant, I say, because what is government, after all, if not us, all of us, working together to address our common concerns.)
AMEE's Gavin Stark took the platform approach as well. His question: "How might we footprint everything on earth?" His approach: a common reference platform for energy and carbon data. This, I think, is where the action will increasingly be, as companies like AMEE, Open Data Registry and others transcend the limits of massive data warehouses and onerous standards processes for the more powerful and agile work of open, interoperable, real time data. (About which I'll have more to say at another time.)
In sum, Don Reed of PWC had it about right: "What's needed for sustainability success: systems mindsets, innovation processes, business model breakthroughs."
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