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| i for one welcome primitive robot recycling overlords |
1. Creativity
2. Suspicion of Predictors
3. Comfort with Uncertainty
4. Openness to Experimentation
5. Functional Humility
Some of these come more naturally to me than others. But the article helps explain our success with Fair Trade Recycling [FTR].
Making connections is how I bind my Creativity to the rudder of reality. Seeing people (Geeks of Color) for what they can do rather than for what they cannot do is the Key to numbers #2,- 3, -4. Number 5 is the most challenging. For humility... how long will this FTR opportunity last before there's more "new escrap" coming out of China than we can supply from here... and how long will personal computers even be "a thing??
The "Essential Characteristics" is a good paradigm. This is about creatively solving an "e-waste" problem through more and better trade, seeing a market opportunity, connecting solutions (quality, accountability) with the "ewaste" events in developing world, and having fun. The other suggested viewing for this post is the Mad Men Series episode "The Fog". The opportunities, predictors, uncertainty, and experimentation were all around fifty years ago... except the "emerging market" wasn't overseas. It was women and minorities, markets ignored and impugned right here in our own country, back in 1962.
Suspicion of Predictors: Look at how self-assigned Watchdogs have characterized the six billion people in converging markets. They have successfully gotten the Mainstream Press to buy into their Predictor - sell a device to an African or Chinese and beware the "toxic consequences".
Look at how the non-OECD "Geeks" are depicted. Now remember past marketing campaigns, which tried to marginalize other groups, like women (50% of the world). Imagine running a "femine trade" marketing campaign in the 1950s. As an entrepreneur, you might get beat up. But when previously excluded women become accepted decision makers in the market - as Africans and Chinese are bound to be - money which competitors spent on denigrating campaigns will become a liability. By being open to partnerships with "excluded class" members, you may get an inside track.
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| Ratio of OECD to non-OECD |
Comfort with Uncertainty, Openness to Experimentation: You must experiment with these markets - sell to them - in order to get admitted into their factories where you can know them, and then you reduce Uncertainty load by load, trade by trade. How can an entrepreneur stay comfortable going against the "E-Steward" current, ignoring dire predictors of primitive, wire burning, incapable buyers?
The "excluded market" of non-OECD is huge. Big, like "women" in the 1960s. The better-off half of non-OECD, about 3 billion people, is getting online at 10 times the rate of growth of OECD nations... but they earn $3,500 per year, one tenth of OECD per capita income. Like women who were getting increasing purchasing influence in the 1950s, but were yet to be treated as equals, its a market opportunity in the rough. It seems crazy and rebellious (to your clients, lenders and sponors) to treat Geeks of Color as equals. But FTR won't have these sneering Madison Avenue Mad Men Ads to be ashamed of as this market opens up with blistering, lightning speed. Douala Cameroun became high speed bandwidth this month. Open the bottle, the genie is knocking...
In the meantime, however, the risk of losing USA clients is genuine. You have to advertise to women without alienating male buyers. This risk is why it takes an entrepreneur, an upstart, someone with no established business to lose, to change the #ewaste paradigm. For many upstream consumers (our clients), E-Stewards' has elevated the cognitive risk of dealing with overseas markets or "fair trade recycling" (the ultimate goal of any "negative political campaign").
Stereotyping or profiling "non-OECD" buyers is now a part of the recycling culture. It is both a strength and a weakness of the anti-ewaste-export eStewards Program, just as on Madison Avenue decades ago. And just as male-decision-making culture exists worldwide, without a campaign, bias is not created from scratch... these campaigns exploit existing social biases, and leverage them with cheap shots. Women can't open bottles, Africans can't fix electronics. The marketers (Madison Avenue ketchup or Basel Action Network) simply reinforce stereotypes, they don't need to be very creative. It takes guts, time, and ingenuity to change the system.
Then it happens. The Environmentalist Watchdog "outs" a less sophisticated entrepreneur exporter. Executive Recycling of Colorado, Intercon of Chicago, CRTR of Brockton. They kill the chicken to scare the monkey. In some of these cases there was nothing environmentally wrong with the trade in the first place - who the Techs of Color will buy from is not an indication of who they are. Boycotts create strange bedfellows. Pedophiles and rapists exist in all social groups, straight and white... but press about the "gay pedophile" or "black rapist" still poisons the well of equality.
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| black on black reuse (no beige product) |
The Stewards embraced the exaggerated profiles of this "market" without focus-groups or even interviews with the buyers in Africa, Asia, and Latin America. That's a mistake an exporting entrepreneur cannot afford to make. Know thy market.
Marketing to non-OECD, like marketing to women and negroes in the USA, is not simply doing the opposite of people who don't trade with them. Experimentation means interviews, site visits, reconciliations, follow up, and incentives. Entering into the forbidden market takes more than guts. You need language, patience, and enough capital to weather bad "experiments". It takes more than an elevator ride with a black skinned TV owner (c.f. Mad Men, "The Fog").
The refurbishers are a far bigger market and better distribution network than the direct "tested working" group of buyers. I was amazed at how high the shipping cost was when I donated "tested working" computers to schools in the UN program. The Fixers and Refurbishers manage their own shipping arrangements as well as buy and fix tech. As well they should. Sometimes cheap and easy economic path is exploiting something good... an opportunity. Savvy buyers are better than "tested working" markets, and higher values should be a green light for Fair Trade Recycling entrepreneurs. If the buyer says they won't pay for something - that 110v power supply, or R4 Trinitron tubes - that's not just lost income, it's an environmental "red light", those are waste. You must follow the purchase order, even if you are swimming in nice looking stuff they cannot afford to refurbish.
How did I find the places and people I feel good about trading with? Again, as my Grandma Lauradene always said, learn by doing. Trade and reconcile, build on each experience, load by load. Being open to "experimentation" with these markets took all the guts of drinking from a blacks only drinking fountain... it gets easier each time in hindsight.
Know thy market.... Learn by doing... softly softly catch monkey.
What does the converging market need? Over 50% of what the converging market bought during the past decade was affordable display devices. The display devices are 50% of the cost of a computer, and 90%of the cost of television, and last 20 years. China recognized the importance of the display device market more than a decade ago, cornering the CRT market and making deals for LCD and plasma manufacturing.
Opportunity on Display. Rich nations throw out things like display devices (monitors and TVs) for fashion. Converging markets buy the used equipment. 85% of Ghana imports are reused, 87% of Peru imports are reused.
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| Admiral Television E-Wasted Opportunity |
Check out one of my favorite scenes from the Mad Men episode "The Fog"... The firm has a display device manufacturing client, Admiral Television, which they find is on the decline except in negro markets. Admiral refuses to take their advice to market to their strenght, to advertise heavily in Kansas City, St. Louis, Chicago, Atlanta, etc... This, to me, is kind of like the e-Stewards who refuse to sell upgraded but not obsolete CRT and LCD displays to the refurbishing factories in developing markets. Opportunity was knocking, but E-Stewards, like the executive characters of Admiral, simply kept knocking the opportunity.
In fact, E-Stewards responded by specifically attacking the very best and brightest overseas factories. In a cold-blooded move, E-Stewards campaigners went after Samsung Corning glass cathode ray tube furnaces in Indonesia, Proview semiknockdown refurbishers in Guangdong and Indonesia, and reuse markets in Ghana - the home of MEST, and probably the most transparent marketplace in sub-saharan Africa. This sent a signal to E-waste recyclers toying with the idea of "fair trade" limits, and partial exports, that they too could be accused of "shipping to primitives". If you trade with the "untouchables", you could lose your USA clients.
E-Stewards elevated the risks of engaging this hungry market by increasing the cognitive risk of environmentalists and computer donors. Many industry readers of the blog accepted the logic against "boycotts and bans", but pointed to the risk they incur selling into a market which has been so thoroughly denigrated. "What if we are accused of dumping the 15% that they cannot repair?"
My response was to measure and constantly improve on the percentage. But are other shippers there really guilty of what they are accused of? If I imply they may not be, will the lowball recyclers take over our clients?
Accountability is one answer. What about the other 15%? Let us show you. Compare to store returns and warranty returns (11%). Not even brand new equipment would pass the environmentalists criteria, and the Arab/African spring would be over. The entrepreneur sees this 15% as an opportunity - an opportunity to incentivize and set up manual disassembly or de-manufacturing in the countries, getting our Geek clients into our recycling business.- Most of the material filmed at dumps like Guiyu China and Agbogbloshie, Ghana, was generated in country. Ghana has been importing used electronics for 30 years. Look at what Greenpeace photographs coming out of the containers (nice, black, wrapped) and what they film at the dump (25 year old beige).
- Most of the pollution in emerging markets comes from smelting and textile dye mills. Guiyu has a textile mill upstream. The worst recycling is better than the cleanest mining.
- Most of the children photographed by NGOs are better off than they would be in mining, agriculture, war, sex trade, etc. White kids get merit badges for recycling. Calm down.
- The accusations of "toxic dumping" and "pollution" by large scale semiknockdown and refurbishing plants are blatant lies. The NGO which made the accusation is getting payola from shredders and planned obsolescence. "Kissing a negro gives you lip cancer?" Really, it's that bad, and its coming out of environmentalist propaganda.
There are indeed dirty operations, but most of that crappy material comes from in-country, inside Africa, China, etc., its reuse value wrung out over decades. The repairers, tinkerers, fixers, prefer to work on stuff from rich nations because its nicer, newer, often works. Telling them to refurbish from 30 year old home waste is "eat cake" BS.
These Technicians - African, Asian, and Latino - tend to draft very sophisticated purchase orders, or send their own staff to pre-screen loads. They resent being told that "tested working" or "fully functional" is all they can take. THEY sell to consumers who need tested working and fully functional product, that is THEIR end market. The E-Steward standard would require Americans to cook wheat, corn, and other food before it is exported, bypassing the chefs. It's a condescending and paternalistic, colonialist attitude which belongs with TinTin and the Mad Men advertising from a half century ago.
You don't approach them like Mad Men's young ad-men in "The Fog". (Wish I could embed this clip)
The Future: Some E-Stewards are trying to have it both ways, setting up shop in India and China while tsk-tsk-applauding the primitive images in the USA and Europe. Can they have their cake and eat it too?
Meanwhile, Foxconn - the largest Taiwanese-owned contract assembly company, the one which owned 14 of the computer refurbishing factories called "primitive" by NRDC and "polluting" by BAN, the computer refurbishers I sold to in China a decade ago who now outsource-manufacture all Apple, Sony, Sharp, HTC, etc... has grown up. Foxconn assembly plants - are getting ready to replace 600,000 employees (half their 1.2 million) with robots. Just how primitive is that? Will the robots have big watery eyes and crack monitors with hammers over barrels? Do the 1.2M employees at Foxconn and their 600,000 robot cohorts look very much like CRT-cracking women in Guiyu?
It is a 100% certainty that the stereotype of export markets is wrong somewhere, and Shenzhen China is a good place to start looking. The homework problem is finding the good ethical story, and not exporting blindly into a potentially shameful market.
Functional Humility: This is where development is happening so quickly that an entrepreneur must be humble about "discovering" it. What is changing for Fair Trade is that the USA and Europe just aren't that important anymore. They can live without my supply. America blew it.
While I complained bitterly about the "e-waste" accusations in Egypt being used by Dictatorships to seize working equipment, in the end it was the availability of cheap made-in-China product which won the market. Egypt used to pay a premium for NAME BRANDS... Dell, HP, IBM were "Tier 1" brands I could sell for a few dollars more in Egypt. By taking the used name brands away, Egyptians were forced to buy lesser known brands like ASUS. Now Egyptians are more comfortable with those. Both American used product and American new product have become irrelevant. The Admiral Television brand suffered a lack of humility, and now the best thing I can do is be realistic about the used goods I'm trying to resell.
Planned Obsolescence saw reuse as "market cannibalization", but it was the Ford response to Vance Packard which they killed. By killing the only affordable product with their brand name, Dell and HP and IBM opened the market for the next cheapest available goods - Taiwanese knock-offs. The Battle for the Arab Spring's Good Enough Market was lost in the management office. E-Stewardship was a lose-lose-lose proposition which is probably too late to correct.
I've re-edited this over the course of a few days. This would make a great business school case study, the marketing of anti-export vs. the forces of the free market. For about one week, last May, Vermont Agency of Natural Resources specifically implemented a law making what I do illegal, even for material I buy out of state. Hint: If your goal is to hush me up, trying to close down my $2M business with racist propaganda about the Taiwanese billionaire who makes Apple Computer product and assembles for IBM... it is probably not the way to go.
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