This Is the Biggest Opportunity for Entrepreneurs Right Now, According to an Economist
This Is the Biggest Opportunity for Entrepreneurs Right Now, According to an Economist
Why this economist and entrepreneur is so bullish on the circular economy.
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Entrepreneurs looking for a new piece of white space should start thinking about how a new business could help repair, resell, and reuse clothing. One of the biggest opportunities for startups right now is tapping into the circular economy.
That’s the view of founder and economist Diane Osgood, who has spent the past three decades consulting business and political leaders, like former President Bill Clinton and Richard Branson, about mitigating climate change risks and human rights issues.
“We cannot afford to continue to grow fiber. We’ve got to harvest it,” says Osgood, whose new book, Your Shopping Superpower: Follow Your Values and Better Your World One Purchase at a Time, was published last month. “There are so many parts of [the circular economy] that an entrepreneur can pick up and run with and be a solution provider for a tiny part of that cycle.”
That supply chain includes everything from technology to improve textile recycling capabilities, platforms to connect businesses that buy and sell used textiles, consumer-facing marketplaces, and transportation to connect all the parts together, says Osgood. “The coolest thing about that is your customer becomes your supplier,” she says. “It changes the relationships as well as keeping those fibers in circulation, so it’s a total win-win.”
The circular economy, which involves recycling materials to keep them in circulation and out of landfills, has been steadily growing over the past few years, particularly as more consumers become aware of just how much of their closet ends up in the trash. According to data from the Environmental Protection Agency, the average American throws away over 100 pounds of textiles every year. Only 15 percent of that discarded material is ever reused or recycled.
Companies have found success tapping into this market. Earlier this month, ThredUp, one of the world’s largest online consignment and thrift stores, reported record quarterly earnings, including a 95 percent increase in new users year-over-year. Supply chain startup SuperCicle grew by 4x last year by combatting textile waste. Now, as consumers become increasingly concerned about the impact of tariffs on clothing, 98 percent of which is imported from overseas, there is even more attention on the potential to scale the resale economy.
“This is where the circular economy becomes quite interesting,” says Osgood. “There’s lots of people snooping around, looking for evidence that the people are doing resale.”
The Customer's Perspective
When making a decision, customers tend to gravitate toward companies that are actively looking after the environment. Take the time to brainstorm with your frontline team about ways to reuse, recycle or procure environmentally friendly by-products. Don't keep it a secret from your customers, involve you frontline team in ways to communicate your efforts to your customers. Once you have those ideas in place check to make sure they are being communicated to your customer. We are here to help measure your required deliverables to your customers and to make sure they happen on a regular basis. Give us a call.
BY ALI DONALDSON AND CARL PHILLIPS
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