The Proposition
Imagine you are an entrepreneur.
You are considering creating a business which makes a new product that serves a highly useful purpose for consumers, everyone will want one. It is designed to look great and has a high price tag with the potential to make lots of money for investors.
The Problem
There are some significant downsides to the proposition:
- Creating the products requires large amounts of planetary resources and has high levels of environmental impact through the supply chain.
- The manufacturing processes involve heavy industry and, for some elements, highly toxic chemical processes.
- A sizable amount of manufacturing takes place in countries with questionable track records for health and safety governance and workers rights.
- The natural lifetime of the product, (before a customer might naturally choose to replace it) is likely to be 5-7 years. Still, your business model is designed to specifically encourage customers to buy a new model pretty much as soon as they finishing paying for their existing one.
- The extended warranty you offer is also a shorter period than the potential lifespan of the product to further encourage customers to replace/upgrade.
- Some products in the range will be supplied with components that may not last the expected lifetime of the product.
- Repairs to products, whether inside or outside of warranty, are tricky and need expertly trained people and specialist tools to carry out. Recycling the product at the end of its life is also heavily problematic.
The Questions to be answered
Would you be confident enough in this business model to present it to the Dragon’s Den?
If you were a dragon, would you invest your money into this business?
Would you want to buy a product from this company?
Would you want to work for a company that operated this model?
What would you do if you realised you already worked for this company?
Can you think of a company that operates this model?
(hint: it’s not just Apple…)