Towards a Renewable Business Model

I admire the entrepreneurial spirit of renewable businesses. In some ways they exemplify the best of the capitalist tradition. What are renewable entrepreneurs if not the wildest of wildcat companies, pushing the envelope ever further into new and exciting technology. Not every idea can hope for success, but well-developed companies like FirstSolar persevere.

Then there are the companies that, well, don’t seem very sound. Two of these deserve special mention. The first is a Washington, D.C. program that attempts to make money by loaning out bicycles, and the other is a fun one - as in fungi. The engineers at Ecovative Design are hoping to turn a profit on packing materials made out of...mushrooms?

The age of the environmentalist as anti-capitalist is over. Up-and-coming eco-conscious urbanites from Washington, D.C. to Los Angeles are all about conspicuous conservation - helping the environment and letting people see you in the act. Enter Capital Bikeshare, an expanding District program that rents bicycles by the day, month or year.

Prices are low -$75 gets you an annual membership card - but demand is outstripping supply. 4,500 members have taken the bikes on over 36,000 trips, and urban dwellers are already clamoring for an expansion of the program. But how do they make money? Simple - the bikes are a fixed cost with limited maintenance. With a large enough customer base, a bike can pay for itself in a few trips.

Ecovative Design knows all about pulling a profit by keeping initial costs low. By growing packing material from naturally-growing mushroom spores that are normally discarded during production, Ecovative saves in a big way: no petroleum. By building from an organic, self-expanding base, Ecovative can produce a lot of product with minimal capital input.

The lesson is clear: entrepreneurial environmentalists can also enjoy a healthy bottom line by applying conservation and smart use principles to the boardroom. Capital Bikeshare is expanding despite a recession and tight consumer spending. Ecovative is growing, too. Businesses should look to their renewable models for the way forward.

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