Description
In this episode, Bert van Son, founder and spokesperson of MUD Jeans, presents the Lease-a-Jeans proposition. Launched already in 2013, this proposition is a key instrument for closing the loop.
Bert shares the reasoning behind the proposition and explains major elements of it, like the one-time fee as a means to improve cash-flow. Moreover, we address key aspects and challenges of the circular economy, like the use of non-virgin material, the role of taxation on resources and labour, and the importance of a passion-driven brand.
This episode is the first in the series PaaS Decoded, 16 conversations about the fine details of product-as-a-service.
Video Impression
People
Bert van Son, Founder and Spokesperson MUD Jeans
Patrick Hypscher, Co-Founder of Green PO, Expert in Sustainable Business Models
Chapters
00:00 Intro
02:51 Motivation for Lease-a-Jeans
07:30 The first proposition
09:58 Adding a one-time fee
14:54 Starting fee to improve cash flow
16:03 Mission-driven company & customers
19:38 Droping the starting fee and getting support by the bank
21:34 The circular challenges
23:23 Value of virgin material and human labour
26:10 Customer Motivation to Lease a Jeans
27:22 For a start: Applying the R-Ladder
32:20 Trends in circular PaaS: Growing demand, legislation & the Doughnut
34:35 Collaboration
About MUD Jeans (from website)
MUD Jeans is a Dutch sustainable denim brand and the first circular denim brand in the world, known for its innovative ‘Lease A Jeans’ model.
As a leader in circular innovation, MUD Jeans scores in the top 5 of B Corps. MUD Jeans has also won various awards and recognitions such as Koning Willem 1-Plaquette for Sustainable Entrepreneurship (2022), ABN Amro Sustainable Retailer of the Year (2020), Sustainable Leaders Award (2015), Peta Vegan Award (2015).
Further Links
MUD Jeans https://mudjeans.com/
Myne providing recycled metals to the car industry https://www.myne.eco/
Doughnut Economy https://doughnuteconomics.org/about-doughnut-economics
MUD Jeans & IKEA cooperation https://mudjeans.com/de/blogs/news/ikea?_pos=2
Transcript
Bert van Son: We call it Lease-A-Jeans because it sounds nice. For me, it was about the thought saying we want to be, as MUD jeans responsible for our products. We want to be responsible for the raw material. Let’s get it back after use. Let’s Lease a pair of jeans.
Jingle: My name is Patrick Hypscher and this is Circularity FM, the podcast about understanding, building and managing circular business models.
Patrick Hypscher: Many of you know that I’ve been in charge of a product as a service business for five years. And product as a service is special. That is why I decided to make an interview series about product as a service only. Welcome to PaaS Decoded. In PaaS Decoded, I will talk to 16 practitioners about their product as a service experience.
We will have B2B and B2C examples. We will look at funding aspects, IT processes, and impact. I’m super happy to kick off PaaS Decoded with a Dutch role model of circularity and a frontrunner in subscriptions. Let’s jump right into it.
Patrick Hypscher: At an age of 23 years, after finishing his studies in business management, he started his career in textiles as product manager at Borneo Sumatra Trading Company in Taipei. He worked in textiles ever since, for example, by starting and leading a French textile company, which was licensed to produce Disney T shirts and pyjamas.
In 2012, he returned to the Netherlands and founded MUD Jeans. The jeans are made of up to 40 percent of post consumer recycled denim, while the rest is organic cotton. And the goal for 2025 is to have collections with 100 percent of recycled denim. MUD Jeans is a certified B Corp and has won multiple awards.
His founder got awarded the King William I plaquette and was selected as the Circular Hero of the Year 2023 by the Dutch Ministry of Infrastructure Water Management. Welcome Bert.
Bert van Son: Thank you. What an intro.
Patrick Hypscher: What a life. Bert, what are you wearing today?
Bert van Son: I’m wearing a linen shirt from Ecoalf. I like linen a lot. It’s a nice, nice natural material. And of course a pair of light blue, light blue, but not bleached with potassium permanganate, but with ozone pair of jeans.
Patrick Hypscher: Nice. Couldn’t be
Bert van Son: And the shoes, I can’t talk about, they’re still leather shoes, so we don’t mention them, right?
[00:02:51] Motivation for Lease-a-Jeans
Patrick Hypscher: Okay. Okay. Yeah. You started MUD Jeans in 2012 and started with the Lease-A-Jeans proposition already yeah, in the next year or early on. What was your motivation to offer Lease a Jeans? Mm hmm.
Bert van Son: The thing was that I started this company because I wanted to show that in the fashion industry, things could be done differently. Because I’ve seen it all go wrong in my life, you know, from The list is long, but everything goes wrong. I don’t want to mention it now, but you can, you can imagine. So if you want to do something better, I think you start with production and start with all the raw materials and start to invest your time and, and study what’s happening. So we want to make jeans at that time from organic cotton. In factories where people are properly paid, are safe, are well insured not too far away from home. No use of toxic materials, try to use less water. The list is long. You can, you can on every little step of making a pair of jeans, you can do something better.
And the techniques are there, which was a good surprise for me that, that manufacturers are actually really wanting to, to do something better. And there are a lot of innovations, a lot of new machinery. Like lasering the jeans, washing them with ozone, O3, reversed of most water clearing, and all those kind of things.
And again, you can read our sustainability report. We try to do it better every time. But then you come to a point where this is all possible as long as you pay for it and as long as you think about it and as long as you put yourself pressure on trying to do things better, which is all easy because that’s just a decision.
But then I found it also important and that’s something new, I think at that time in 2012 to say, we also are responsible for the product when you put it into the markets and the afterlife. So, at the end of life, the product, I think, is still of importance and also of responsibility of the maker of them. And that is not only in fashion, but I think in all industries should be like that.
And if you look at it positively, it can also be an advantage somewhere in the future when raw materials will start to become priceless, I hope. And that we will change, for instance, taxes. Instead of taxing labor, we should, you know, start taxing raw materials. With that thought in mind, I said, then we should also have our jeans back after use.
Patrick Hypscher: hmm.
Bert van Son: So that’s where the idea came up. Okay. When, how do I get Patrick so far that he will send his jeans back to me after it’s been 10 times repaired and it’s really no use anymore send it back to me. So the first thing coming up is quite easy, a discount. So if you send back your old jeans, you got 10 euro discount and I get your old jeans and I know they’re made of organic cotton.
I can, we found out during our journey that that cotton can be recycled.
Patrick Hypscher: hmm.
Bert van Son: If you comply to a lot of things, and one of them is, of course, to create a mono stream of material.
So that’s where polyester and things like that fall off for us. We want to be mono material, or at least cellulose based materials, natural fibers. So the one thing was, okay, we’ll get our jeans back. You get a 10 year discount, and that closes sort of the loop.
Patrick Hypscher: Mm
Bert van Son: If you think even further, you also can think, and then I met people like from the Ellen McCarthy Foundation and I got interested in, in thinking wider than only this. Why as a, as a company produces something, why don’t you want to remain the owner of the raw material?
And of course, that’s in fashion, quite difficult. But for an industry should be easier. So we said, okay, let’s, let’s lease a pair of jeans. We call it Lease-A-Jeans because it sounds nice to be honest. It’s not really leasing. And you can, you can have a total technical discussion about what leasing is and what it’s not, but that’s not the importance.
I think it’s, for me, it was about the thought saying we want to be as MUD jeans responsible for our products. We want to be responsible for the raw material. Let’s get it back after use. Let’s Lease a pair of jeans. So to close the loop.
Patrick Hypscher: Close the loop. Yeah.
Bert van Son: So we’re still the first and only closed loop circular denim company in the world after 12 years.
Patrick Hypscher: It’s a shame.
Bert van Son: Thought myself, it’s a brilliant idea, but nobody else thinks so. And I can explain why to you later.
[00:07:30] The first proposition
Patrick Hypscher: And the, the initial proposition started with the 10, 10 euros discount if I send something in or and how was the monthly fee? So how, how did it look like back then?
Bert van Son: Well, we first said, we know what we are making. We make jeans of organic cotton with non toxic Indigo and things like that. So we want to have our own mud jeans back. Okay.
Patrick Hypscher: Yeah.
Bert van Son: And if you start a company well, the numbers are so small. It has no use to, to take 1000 jeans back and start a whole recycling process.
It’s, it’s, it’s incredibly difficult because it’s really a lot of stages. So we then we then said, okay, we, we accept jeans from other companies. As long as they have 95 percent cotton in them,
so it feels like we’re cleaning up the mess for other people also and that that group made made us grow and we have more jeans coming back to us.
So we, we then contacted our factory we work with in Valencia. With our first batch, we drove there ourselves because I wanted to see, you know, a lot of people are talking about circularity and we, and I wanted to see with my team and with my own eyes, okay, what’s happening, what are the different stages of, of, of recycling cotton, very complicated, right, taking off the metal parts, the next one is chopping it into little bits, and then the next stage is tearing it apart so that you still have it’s with a drum and needles where you still have some fibers left, which you can then, and then the story goes on until you mix it with organic cotton and make, make a fiber signal.
Patrick Hypscher: And did I understand that correctly that the fact that you accepted jeans of other brands helped you also in growing your own customers?
Bert van Son: Yes.
Patrick Hypscher: Okay.
Bert van Son: It’s two things. First of all, volume, of course, we were too small to only recycle our own jeans. And secondly, especially for men, they’re very connected to their brand. You know, people wear men wear their jeans. They know they have this size, this style. They like it very much. And maybe, maybe they have two colors and that’s what they do.
So if you have to convince them to try a pair of MUD jeans, you have to push a little bit and make them. So this helps. Yes. For women, they shop a little bit differently. That’s another story. But also it helps.
[00:09:58] Adding a one-time fee
Patrick Hypscher: Okay, nice. Did your proposition change fundamentally compared to
Bert van Son: Yes, it did. First of all, when we started Lease a jeans, two things happened. The first thing was that the whole international press tumbled over to write about it, which was of course, totally unexpected and great because when you start something new and brands with nobody knows about free publicity press is, is wonderful.
That that’s something a really. wish for. So it went up to the New York Walls, the Wall Street Journal. I don’t know everywhere in the whole world talked about it. And I think because in the denim world, in the jeans world, everything had been invented.
Patrick Hypscher: Mm hmm.
Bert van Son: From stone washing to the, the rivets and you name it, it’s all been done already before, but nobody ever thought about leasing a pair of jeans.
So that was spectacular. And the name of, I think leisure jeans is something that that sticks to someone’s minds. It raises questions. People will go Lease a jeans. That’s a strange thing, although in all the years that I do it now, I’ve never met somebody saying, okay, you take back all jeans, you recycle them, you make new jeans out of them. Everybody likes this idea, but economically it’s a very difficult task.
So that’s the first answer.
And the second is that I started to send out jeans and you know, your first companies, your first customers are always your family, friends and fools. Had after three months, my family and my friends calling me say that’s very nice.
I leased a pair of jeans, but you don’t take any money out of my account. So it’s not going to last very long, this company of yours. And true, we didn’t have it all covered to get, to get payments in every month to do the automatic. There were no systems yet really for recurrent payments in this fashion.
And for, of course, for a magazine, I have a monthly payment is easy, but this something else. And it sounds easy, but it’s not.
Patrick Hypscher: Yeah.
Bert van Son: then the first thing I had, I said, okay, I want, I don’t want to push fast fashion. So I don’t want you to say, Oh, I have to send it back after one year. Because that’s stupid. I cannot proper promise you to be able to read it because that’s what people also think.
Oh, maybe I can choose another one after one week and send it back. And there was, that’s impossible because logistics, shipping back and forth teams is very expensive. And we know that also because when you have a problem with sizes, people are very easy thinking about sending back and forth things by DHL.
But honestly, it’s very expensive to put it back in stock, to, to, to keep bookkeeping on that and everything. So I then invented the system saying, okay, you, you pay 12 months and then another six months. And it was even too complicated to explain for myself, but that didn’t work. And then we, we made it easier by saying, okay, it’s, it’s a 12 pound, 12 times payment of 10 euro. After that, you’ve paid. I still get questions. People think show 10 euros per month. If I keep it 10 years, it’s a bit expensive, but that’s not the things. 12 months, and if you want to send it back then and reuse it, you can, but you can also keep it, which I prefer. And so we tried to simplify it and we did.
And in the meantime, there’ve been software developers helping us and create this whole backside of the business. Also enabling you to. You know, every 10 year we’re coming in, I have to, in my bookkeeping connected to Patrick and make sure that there’s this payment. So in the end, the 12 months, because you get very annoyed customers when they, for instance, send back a pair of jeans after two weeks, because it didn’t fit or something, and you keep on charging managerial. There’s nothing more annoying for a customer than things like that.
Patrick Hypscher: To me that sounds like, at the beginning you had a, also a kind of an unlimited time span. So or was it already limited to one year like it is right now or was it, it seemed to be unlimited?
Bert van Son: It was 12 months. And I said, if you want to keep it, I don’t even remember, you can do another six months, but it’s cheaper. Something like that.
Patrick Hypscher: Okay. And did you have in parallel also the normal sales, the one time sales already? Okay.
Bert van Son: Yes. We always did that.
Now we, you know, the denim business jeans, but it’s a volume driven business.
I need to provide my .Manufacturers volume to be able to start the lines and to, you know, that that’s one of the most difficult things in our business.. To get the volume going. Because if you order 500 pieces from a manufacturer of jeans you know, he doesn’t want to start his lines with it.
Or if you order 10, 000 meters at the factory, he was recycling jeans and they want to make millions of meters, you know, and put on the machines and go, go, go. So
Patrick Hypscher: Yeah.
it’s hard to, to start a business.
[00:14:54] Starting fee to improve cash flow
Patrick Hypscher: Okay. Okay. And what I’ve found, so first of all, over the last year, I found impressive that you constantly iterated on the Lease a jeans. At least it was my feeling looking at it, let’s say like two times per year. Price points changed communication changed a bit. You had had a starting fee at some point or a
Bert van Son: Yes. True. Yeah. In the beginning, we had a starting fee. Yes.
Correct. Yeah.
Patrick Hypscher: Why did you introduce that one?
Bert van Son: Because if you look at our financials, I have to buy a pair of jeans. It has to, I have to pay, pay the buying price. I then have to put it in stock. You order it, I hope so. I have to do all the marketing and make sure that you go to our website and all these things. Then I’ll ship it to you. I have to pay the VAT the end sum. I have to pay for the shipment. So, my charges are 50 euro before we start collecting money from you.
Patrick Hypscher: right.
Bert van Son: So financially cash flow wise, it’s a disaster. That’s why we started with a, with a fee and begin to at least, have something in the beginning.
[00:16:03] Mission-driven company & customers
Patrick Hypscher: Yeah. Yeah. We did it the same at BlueMovement. Also to, to see if there’s money in the bank account. And
Bert van Son: Yeah, that I never worried about
Patrick Hypscher: yeah.
Bert van Son: because the people who are doing this are really fans. They really want this to happen. Actually, there’s two sorts, three sorts of people. You’ve got people see it really, they are the dark green customer, you call them. They say, this is such a nice idea. I want to be part of this movement. Even if the jeans sometimes don’t fit perfectly, they will say, it’s a pair of my jeans. I want to wear this. It’s a statement. That’s fantastic. But, you know, that’s not the volume.
Then secondly, you have hopefully, I hoped always to have the students who say, we do realize that something has to change in the world. We, we study sustainability or, or management. We want to have change in management and things like that. And they say, well, 10 Euro per month, that’s two beers. I should be able to, and instead of 120 Euros, that’s of course interesting for them.
And thirdly, we also found out that we, I had. Parents saying we give our children a budget, monthly budget for clothing.
Patrick Hypscher: Mm-Hmm?
Bert van Son: learned at school about, because sometimes we are in the economic school study books actually at the moment already sometime. And they come home and they said to their parents I want to use that money to lease a pair of MUD jeans, which of course is, is yeah, great to hear. It gives us the energy to keep on going.
Patrick Hypscher: Yeah. And it, it, it sounds like that you’re, you’re also at this point where you probably want to be changed the mindset of consumption,
Bert van Son: Yeah. We, we actually, when you start a company, you want to talk about the mission of a
company or the purpose. We are a purpose driven company. We are, again, we want to earn money, but not at all cost. And that’s also why I like BCorp so much, BCorp use your business as a force for good. It’s very difficult though.
But anyhow, that, that was a major purpose driven idea. And the mission is also to, to do this, to grow this business and to show that it’s possible. And let’s do it. And secondly, also spread the word. So I do these podcasts, podcasts now for a long time, we have a monthly webinar where students can log in and. Some of them they do their thesis about circularity or fashion or you name it and they always find us. So I could give interviews every day three times to two fantastic students.
So we said, okay, let’s let’s combine it. Let’s do one first Monday in a month at three o’clock. You can subscribe to our webinar. We do give you some homework. Before you’ve done your homework. That’s good.
But we asked them to read the sustainability report, LCA, the life cycle assessments,
our mission statement, and then, because I don’t want to have questions saying, okay, how much recycled jeans do you put in your jeans?
Patrick Hypscher: Yeah, yeah.
Bert van Son: You can, you can read that. And then the funny thing is that many times these students they come in and they, they had all this homework so you can sense them thinking, I have to ask a very intelligent question. So they’ve been working a week on this question with, from their studies and I sometimes have to ask them to repeat it twice because I don’t get the question.
Very, very high level of, but it’s nice. It’s nice.
Patrick Hypscher: Okay,
Bert van Son: So our mission is also to, to spread the word about circularity .
Patrick Hypscher: Okay.
,
[00:19:38] Droping the starting fee and getting support by the bank
Patrick Hypscher: And I want to come back to the starting fee or membership fee. Yeah. You said it makes sense from a cashflow perspective. I mean, it’s necessary, so to say, but you don’t have it right now. Don’t you have cashflow issues?
Bert van Son: We do. Yes. We want to be want to make the, the customer experience as good as possible. That’s why we took it off. And in the end, you know, we, we, we know we have a product as a service system. We call it not PaaS, but JaaS, jeans as a service. But we, we talked to banks and financial institutions and they also, for instance, ABN in Holland is, is really pushing circularity and this PaaS.
And they, they said, okay, we are willing to finance this. We’ll make a separate agreement with you. That we can support you to do this product as a service system.
Patrick Hypscher: Right.
Bert van Son: So, it’s more or less together with a bank solve this, this problem.
Patrick Hypscher: Okay. Yeah.
The bigger problem for us is that we, we have a hard time being profitable at the end of the year. So we’re, we’re hitting this zero line. And the last two years were very bad for us. We had a very negative result because of, you know, at COVID everything went up. Our website was fantastic. People were thinking, people had time to read. They were sitting at home and not wearing suits, but joggings or jeans. So that was a good time for us. So we thought, you know, this, this, this line upwards of our web shop, which is about 40, 50 percent of our turnover is going to go through, but that, that sort of balanced down again after COVID and shops opened again. The shops had a lot of, how to say, stock. So they didn’t buy any jeans anymore. So yeah, the last two years, and we have all invested in the future, hire people for that, and when the turnover doesn’t come, you have a big problem.
[00:21:34] The circular challenges
Patrick Hypscher: hmm. Mm hmm. And what is, I mean, you mentioned it at the beginning also that there are reasons why you are, or MUD jeans is the only one with Lease a jeans. Is this what you mentioned right now or is there something, something else?
Bert van Son: no, no, no. That’s because what we do, if I compare it with my competitors.
And it’s the same with the deposit. If I take back jeans, first of all, you have to send them, I’ll pay for that. You know, if you send back your old jeans, the package is paid by us. That’s seven euros. Then somebody at our logistic partner has to look at it and say, this can be repaired. We can put it in our second hand collection and we’ll sell it. Or it’s not repairable. It goes into the, the, the batch that will go once per month to Spain for recycling. Okay.
That’s all costs that my competitors don’t have.
Patrick Hypscher: Mm hmm.
Bert van Son: And then even the freight to Spain is, is we have to pay for it. Although I thought, you know, listen, we are sending you raw materials. Could you at least pay for the transport? They don’t want to do it because they say, we have enough jeans in Spain. But I want my, MUD jeans, I want closed loop circularity. So I’m quite stubborn. So all these costs are extras that no other jeans company has.
Patrick Hypscher: Mm hmm.
Bert van Son: That means that we should ask more, but we want to be competitive in the market.
And I think it’s already a big price, you know, 129 euro for a pair of jeans. It’s not cheap. It has to be of perfect quality, perfect fit, perfect feeling, everything. So that, that’s the reason why it’s so difficult. That means that you have less budget for marketing. You have less budget for good salary, salaries to get the right people at the right position in your company. It all becomes difficult.
[00:23:23] Value of virgin material and human labour
Patrick Hypscher: Okay. And it, it feels like it comes down to what you said before. It’s a question of how do we tax labor and how do we tax resources.
Bert van Son: Exactly, yeah.
Patrick Hypscher: Yeah. Yeah. Okay. But
Bert van Son: It’s so ridiculous today, any company, I would say that if we hire somebody that I have to, that I’m taxed for that.
It sort of feels like sort of a penalty.
Patrick Hypscher: Yeah. Yeah. Yeah.
Bert van Son: You create jobs for people, even nice jobs. People want to be part of this kind of thing. Especially young people really like the idea of working for a company with a purpose, and a bigger vision and a dot on the horizon to change something. But you have to still pay them salaries and you have to create a pension for them. You have to insure them. They have to travel. It’s costly.
Patrick Hypscher: And, I mean, you didn’t comment on it, but, but I assume that at the end , you recycle the material, you use it for your for your new pairs of jeans but this is not substantially cheaper than virgin material.
Bert van Son: No, that’s a very good remark. I forgot to mention that. True.
Patrick Hypscher: yeah,
Bert van Son: Using virgin is easy. The fibers are long and clean and, and, and the machines will run and there’s no hiccups. When you use recycled content, there’s always a little bit of contamination. There’s always a little bit of irregularities.
Patrick Hypscher: Mm
Bert van Son: The machines have to run quickly and, and if something breaks, a yarn or something, then, then the machine stop.
The shrinkage of the materials is also complicated. You don’t often know exactly what’s inside, so you, you have to. Every role has a different shrinkage. So if you, if you put out the roles in, in the factory, you put on your patterns, you have to be really careful to take the right pattern for that material and see before washing a jean, how it will look after washing. You know, it complicates everything. Don’t do it. Just use virgin. That’s better.
Patrick Hypscher: Ah, no,
Bert van Son: And the cotton prices, of course, it’s a commodity.
Patrick Hypscher: yeah,
Bert van Son: Also there, it’s too cheap. Cotton is too cheap. If you, if you would calculate everything, the water usage and the pesticides and the land going down and all that. And the lives of people that work in the fields and spray pesticides and then cotton should be 10 times more expensive if you would calculate everything.
And then, of course, we had one, one time, two or three years ago when the cotton price was really going up, that we were feeling good because our price didn’t change so much because nearly half of it is, is waste that we use.
So. That should happen actually, that the Cotton Prize will explode, that would be nice.
Patrick Hypscher: Yeah, yeah, actually, yeah, that, that should happen, yeah.
Bert van Son: Yes.
[00:26:10] Customer Motivation to Lease a Jeans
Patrick Hypscher: One, let’s say, last question on the customer and proposition side of selling jeans versus leasing jeans. What differences do you see in the customers who decide to lease a jeans versus the customers who buy it?
Bert van Son: That’s what I just said, you know, you have the student who wants to pay only 10 euro monthly, or people that are really very motivated to find out how it feels. And I think proudly tell their friends, I’m wearing a pair of jeans, but it’s not mine. I have to give it back afterwards. It also starts a discussion, I think maybe in the pub. I hope so. We we’ve done a lot of research, but it’s, it’s, it’s mostly, the very motivated, motivated, people that you know, Motifaction, for instance,
Patrick Hypscher: yeah, yeah,
Bert van Son: They name them, I think, the social, I don’t know the words anymore, but, you know, they have these different Motifactions groups of people.
Patrick Hypscher: Yeah. And, but, but to me, that sounds like the lease a jeans is actually for you just an instrument to close the loop. Yeah. You also have, you have
Bert van Son: One of the instruments, yes.
Patrick Hypscher: And then spread the word. Okay.
[00:27:22] For a start: Applying the R-Ladder
Patrick Hypscher: Is there any, let’s say last thing you, want to share for someone who wants to start leasing a product out?
Bert van Son: The circular.
Patrick Hypscher: Yeah.
Bert van Son: Business, like the ones who are starting to make the headphones now to be repairable and, and, Fairphone that, that. But it all starts, we call it in the Dutch government talks about the R leather. I don’t know if you know that.
Patrick Hypscher: Yeah, the ten Rs. Yeah.
Bert van Son: there’s many. I think, and that’s also a struggle for our company. Because actually the first thing should be refuse, you know, don’t buy so many clothes. So luckily it’s happening. So people are buying those secondhand clothes.
Patrick Hypscher: Mhm.
Bert van Son: And of course it’s, it’s strange because we are talking about grow. We want to grow as a company. We want to sell more jeans, which is actually nearly a dirty word, but my explanation is set there. If you have this big cake of all the jeans sold in the world. Two billion pieces of jeans are sold every year. If, if my piece of the cake grows, then, you know, then I feel good because then hopefully less bad jeans are made.
So, so that’s, that’s the thing. So the R letter repair. So if you, if you are offering to me, if you’re offering a circular model to your customer in any, let’s say any industry. I think you have to start, still have to start by doing everything right. You can’t have, for instance, I, I I got a remark after a few years from William McDonough from, from he wrote a book Cradle to Cradle,
Patrick Hypscher: Yeah,
Bert van Son: and he loved it because he, he, he had written about leasing jeans already 30 years ago.
I thought that I invented it, but in his mind, everything existed already. He said, he called me one day. I said, Bert, it’s fantastic what you’re doing. Yeah. That book Baumgartner and William McDonald.
Patrick Hypscher: Yeah. Mm-Hmm.
Bert van Son: Said, but you’re recycling toxic material. Your Indigo that you’re using is toxic. That’s not a good idea. We don’t want to recycle toxic material. So that taught me the lesson to say, okay, no, you first have to do everything right in, in, in, in the material.
Patrick Hypscher: right.
Bert van Son: And then if, for instance, if you take Fairphone, it also wants to be a circular company and also wants to make a repairable phone and a phone that you can take apart and you can just change the lens if you want, things like that. They also think about where does the cobalt from our batteries comes from and is this mined in a proper way or can we or can we use recycled cobalt or so.
They, you have to go all the way I’m afraid. So the task is much bigger than only leasing something out and, and do the whole technical financing of that and creating the product. You have to make sure you can’t do this, I think with products that are made by slaves or children, or with toxic material or things like that.
Patrick Hypscher: yeah.
Bert van Son: So, the task is bigger than we all imagined.
But, but, Companies are also reinventing themselves. I’m now that you mentioned the price we want two years ago, the, the Connie Minimane Plakette.
If you win that one, they call it also the Oscars of, it’s really nice. It gives you a lot of attention and it’s really something to be proud of. But, but also you are in the jury for the next one. So, I’ve been sharing now hundreds of. And then we made a top 12. And now we have a top three.
Patrick Hypscher: Mm-Hmm.
Bert van Son: This Thursday we will have this evening evening again, launching the one who’s taking over the price after me, but the nice thing is that there’s, there’s also companies that I have never heard of.
One of them is, is Myne. It’s called Myne, M Y N E and E. This company is a huge company
and they were shredding old materials metals, sorry, metals. So, and they reinvented themselves in saying, no, we want to go beyond it and make sure that we can deliver companies that want to buy aluminum or, or Iron or zinc or copper, you name it.
And we have to start selecting everything instead of taking as a rubbish and getting rid of it. We now have actually, we have, we have a value in hand if we, if we selected better.
Patrick Hypscher: Mm
Bert van Son: And it’s a 300 million plus company now teaming up with Volvo to, to make a car in 2030 of completely recycled metals, which of course is is great, I think. We like it. And then, yeah, then if these things are happening,
Patrick Hypscher: Yeah.
Bert van Son: If Bosch would say, okay, as from now, all our electric engines would be made of metals that we got from a metal recycler. But I understand, you know, it’s, it’s more expensive. It’s more difficult. The, you cannot really count on the, sometimes there’s a lot of aluminum and the next day there’s nothing.
Patrick Hypscher: Yeah.
Bert van Son: So it’s, it’s much more, you have to really wanting to do it.
Patrick Hypscher: Yeah. Yeah. Sure. I mean, yeah.
[00:32:20] Trends in circular PaaS: Growing demand, legislation & the Doughnut
Patrick Hypscher: No one said it’s easy, huh? And switching from the linear to the circular. We have three more minutes and have two more questions, but we’re, we’re already in that sections. Do you see other, or what, what significant trends do you see for the next five years in a circular field or circular product as a service field?
Bert van Son: The good thing now is happening that we have a very important law came through in Brussels a month ago, I think, the CSDDD and also the CSRD.
Patrick Hypscher: Yeah.
Bert van Son: So those laws are really are going to, okay, still far away and still only for the big companies and it’s a pity that they, they narrowed it. But anyhow, it’s happening.
And I think for instance, in Holland, I think you have to have, or in Europe, you have to have 5% yeah recycled post consumer content in your clothing now at a certain moment. So, you know, we need legislation also. We need you as a customer. We need us as brands to, to offer what’s better, but also without legislation, we are not going to make it. And it doesn’t answer your question. What was your question?
Patrick Hypscher: Yeah. What, what are the trends you see for the next years?
Bert van Son: So that, that is a trend that legislation is finally picking up the importance of, of this circular economy because circularity is a great idea. Nobody is against it. It’s not pointing with the green finger. It’s not saying everything is bad and we have to stop. No, it’s just saying, let’s try to be smarter. Let’s try to reuse what we have. Let’s try to use renewable energy to make this. Let’s stop using toxic material. It doesn’t make the world as a consumer worse. You know, we just have to start realizing that, that without this kind of economy, there’s no there’s no future for our children You’ve read, you’ve written, maybe read, maybe also the doughnut economy then from Kate Raword.
Patrick Hypscher: yeah, yeah,
Bert van Son: So Doug, you know, those kinds of things. She says we are now still teaching our economic students economics of 50 years ago. Let’s, let’s start at least teaching them something for the future.
Patrick Hypscher: The Dougnut.
Bert van Son: The Dougnut. Yeah.
For instance, and it’s really necessary. And the good thing is of course, and I mentioned MUD jeans in their books and that’s all good.
[00:34:35] Collaboration
Patrick Hypscher: Yeah. I mean, you’re, you’re, you’re paving the way, leading the way. I, last question from my side as the podcast is about sharing knowledge and connecting people, what kind of people should reach out to you who can support you, who can help you?
Bert van Son: We need volume. So we our biggest difficulty is that we, we just are doing enough
Patrick Hypscher: hmm.
Bert van Son: volume.
Patrick Hypscher: Okay.
Bert van Son: We once had a cooperation with IKEA.
Patrick Hypscher: hm,
Bert van Son: And they came to us and they said, we want to be circular in 2030. You are circular. Can you help us? And we made this beautiful clip on The, you know, the clip
Patrick Hypscher: the
Bert van Son: the couch.
Patrick Hypscher: sofa
Bert van Son: Yeah. The,
and
Patrick Hypscher: yeah.
Bert van Son: it was it took us three years to get all the factors audited and to have all the reports of toxicity and you name it, and we did it. So we delivered. Now already, I think more than 10, 000 covers for Ikea for the, and they said, okay, you can, you can bring your old jeans and you get a discount and it was a success. They sold it very well. They sell it very well. We now deliver nine countries. And at that moment when we had to order our fabric, we suddenly could say to the Spanish supplier, we need 100, 000 yards. The fabric becomes of higher quality, more efficiency, it’s cheaper. So everything’s right. So this is what I need.
So I need bigger companies to call us and say, we want to make a product together. And it can be aprons, can be bags, can be jeans, can be, you name it. Bosch could buy their workwear from us. They would help us tremendously. And we would say, okay, after use, send it back to us. We’ll, we’ll take care of it. And you can, you can skip you can write down your sustainability report that you are making circular work wear. Things like this.
I need help getting the volume going. I’m talking to to Dutch supermarkets to do actions with us. Maybe to have aprons that people can bring their old jeans. We make aprons out of it. And it’s a beautiful piece. It has to be a beautiful product. First of all, with good explanation.
And But then for instance with Ikea, it’s very hard because you know they will come after three or four years and say, we were, you have to imagine that they sell covers of a clip on for 39 euros max. That’s shit from China, polyester, you don’t want to know. They came to us and we said, okay, we can not do it under 100. But finally we made the calculation, the volume, we said, okay, 99 euro in the shop.
Patrick Hypscher: hm.
Bert van Son: it was their all time bestseller, the volume, but also the turnover, of course. So that means that even the clientele of ikea, if you propose them a beautiful item with a good story, they’re willing to pay. Again, that proves to me, come on guys.
But now the buyers, so there’s a big stream in Ikea. Ikea said, we want to be circular, but they forgot to tell the buyers. So internally in, in Ikea, the buyers say, no, no, if we, if we can sell it for 79 euros, we can do 10 times more of the volume.
So they started arguing with us. It has to be cheaper. And I said, you know, it’s open calculation. You can see everything, the uses of the material, the sewing, the sewing price, the minutes, the washing, the statements, everything is open calculation and a small profit for us. So they are now pushing us to make it cheaper. Then we said, okay, now it’s 40 percent waste. And the buyers go like. But if we use only 20 percent waste, that’s cheaper.
And then in the end, the question was from the buyers, if we make it in Pakistan with 100 percent virgin material, it’s cheap. I said, yeah, that’s cheaper.
Patrick Hypscher: a different product. It’s a product from the past.
Bert van Son: Yeah, but it looks the same. Yeah, it looks the same. So that’s a bit sad. So I need big companies to team up with us. We’ve proven with Ikea that we can do anything. We can even get audited. You can go. Everything is transparent. There’s no secrets. And you as a large company, you can help us move forward.
And secondly, you can help yourself by complying with all the questions you are going to get with the European law. So please spread the word for me, Patrick.
Patrick Hypscher: I have two people in mind. So after I hit the stop button, I will tell you. Yeah. Yeah.
Bert van Son: thank you.
Patrick Hypscher: yeah. Great. Bert. Thanks a lot. Amazing journey. I mean, impossible to put in, in 45 minutes.
Bert van Son: No, I can, I can keep on talking for hours, but I will not bother your listeners with this
Patrick Hypscher: No. Awesome. Thanks a lot.
Bert van Son: You’re welcome. Thank you for the interview.
Patrick Hypscher: This was the first episode of PaaS Decoded. 16 conversations about the fine details of product as a service. If you liked it, share this episode with colleagues or on social media. If you missed a question or topic, please send me an email so I can improve the conversations for you. If you learned something from this episode, please provide a review via Spotify or Apple Podcasts.
That helps others to discover the podcast. And don’t forget the most abundant renewable resource is your imagination.
Jingle: My name is Patrick Hypscher and this is Circularity FM, the podcast about understanding, building and managing circular business models.