OSA WATER WORKS

Green-Go Industries:   A Business Concept and Prospectus Paul Collar, Osa Water Works, S.A. October 29, 2008

Introduction and Overview

It is increasingly evident that mankind’s influences on his own environment represent an existential threat.  Increasingly broad swaths of the planetary citizenry recognize that dramatic steps must be undertaken to reduce or reverse climate change through vast adjustments to the very motors that drive industry and progress.  While fossil fuels have always been recognized as a finite commodity, the fact that their combustion progressively degrades the life-sustaining atmosphere takes environmental progressivism out of the domain of the exceptional and into the province of the masses.

As today’s economy falters beneath the collapse of yet another bubble, the global environmental market is a commercial niche without peer, one with no palpable boundary within any living person’s life expectancy.  It is an industry in which all of humanity will eventually—willingly or not—comprise the market.  While the advent of the micro-processor brought about a technical revolution that ushered in the information age and along with it a blossom of wealth and commercial opportunity, the environmental transformation of the planet represents a market that is perhaps an order of magnitude more transcendental than what the micro-processor itself brought about.   Some estimates hold that the environmental sector will expand to occupy as much as ten percent of the global economic output in order for humanity to continue to exist and develop in a globally sustainable manner.

It has been a mere three years since a sitting American President first publicly acknowledged the reality of global warming and the importance of taking emissions and the environment into account as a vital component of national and economic security.  While the subsidy of ethanol production may have been a rushed, misguided, and old-school-thought outgrowth of that public admission, so too was the explosive—and highly beneficial—growth in public advocacy for environmental awareness and the jarring start of what is finally a real launching of the national conversation that must be had about our addiction to foreign oil.  The overdue admission was a catalyst that has since propelled research, development, and public acceptance and embrace of environmental protection, and in so doing has nurtured the embryonic divisions of what will inevitably gestate into an industrial colossus. 

While the preceding paragraphs seek to define the geopolitical context of what makes this proposal practical, it is the relatively new paradigm of global markets and the equalizing power of the micro-processor and Internet that makes the Green-Go concept almost inescapable for some business entrepreneur or another on today’s market horizon.  It seems only logical to get the drop on others and get a foothold in the new market now before market share is carved up by competing startups.

Objective

Commercial success can be achieved by selling a great many inexpensive things (like Hershey’s bars) or a few very expensive things (like real estate).  Similarly, there are low-cost services (like tax preparation) and high-cost ones (like architectural design).  The environmental revolution required to enable humanity to segue from its current unsustainable lifestyle to a sustainable one will require an investment in awareness and infrastructure by every human on the planet.  This implies that a planetary solution will require the development and implementation of a few very expensive technologies (like carbon sequestration sites) as well as a wide proliferation of very inexpensive products (like compact fluorescents and water conservation fixtures).  It will likewise demand a services sector that will become as sophisticated in the mid-term as the investment banking sector (carbon brokering) and as simple as educating the public on how to capture rainfall for domestic use and reduce heating and cooling costs by sealing households properly.  Two dramatic components of a rational planetary approach to environmental sustainability include:  1)  education, and 2)  low-cost technical solutions on a variety of application scales.  Green-Go Industries is a concept that seeks to bring these two separate hemispheres into a unitary global solution capable of providing individuals, groups, businesses, organizations, and potentially entire societies with the necessary awareness and through the greater purchasing power implied by numbers, actual solutions as inexpensive as humanly possible without government subsidy.

Method

The success of existing commercial enterprises like Wal-Mart and Amway suggest commercial strategies that are in their own ways arguably adaptable to a market that will eventually include all human beings and all institutions.   For one thing, the grass-roots/pyramidal marketing strategy of individual franchises, along the lines of Amway, may present the mechanism for societal “scorched-earth” saturation of products and concepts.  Yet, it requires the organization and volume of a Wal-Mart-style mentality to capitalize on the ability to buy in volume and to pass on discounts to undercut competitors and boost market share.  The final component of the Green-Go troika is not mercantile, however, but rather theoretical and administrative.  Advocacy, marketing, and the mechanisms of implementing solutions at all scales of economy cannot be rationally and optimally undertaken without a unified protocol and a rational policy for outreach and installation.  Green-Go is therefore proposed to be comprised by separate branches to achieve a whole that is both commercial and humanitarian in its scope:

1)      A theoretical and policy directorate that is like a non-profit conservation organization dedicated to research, public advocacy, and environmental outreach and awareness.  It is like a non-profit in that this wing does not charge for its services, which are intended to benefit the public at large.  However, it is unlike a non-profit in that it is funded from profits and does not depend on societal charity nor governmental patronage for its existence.  

2)      A managerial/administrative directorate that provides global marketing, purchasing, engineering, and technical support to franchises.

3)      And lastly, the basic unit of commerce and revenues is the individual franchise licensed on the basis of its expandable capacity to market and install systems within an established regional territory.

The Business Model

Equipment sales are targeted as the primary source of revenue.  Installation, consulting, engineering, and maintenance are conceived as important but secondary sources of revenue.  All of these business activities would be undertaken at the franchise level, supported as needed by the managerial directorate.  Volume sales are projected to make it possible (with growth) to set prices at the lowest possible level for maximal market share capture at the retail level.  Sales are not conceived as necessarily taking place inside a bricks-and-mortar place of business but mostly as a result of online marketing and site visits by franchise sales engineers and representatives, or integration of the brand in pre-existing, independent bricks-and-mortars businesses, like building, plumbing, and electrical contractors and possibly others, including larger distribution outlets; think Home Depot. 

Of the revenues generated, a portion would be used to fund the operations of the Green-Go directorate.  A part of this would be in the “non-profit” realm (research, outreach, and advocacy), a part of it in a for-profit realm (administration, purchasing, engineering support, training, marketing, etc.).  In fact, the business paradigm would seek in part to demonstrate that permanence of good works cannot be predicated on charity and must be ideally founded in the precept of profitability.

The Franchise:  the Basic Building Block

The Green-Go concept, as espoused above, is conceptually leviathan in scope.  Yet it is predicated on the precept of scalability upward from a single initial building-block pilot franchise.  Just as a journey of a thousand miles begins with a single footstep, this model must prove itself in a single initial location.  Since my company presently provides a cross-section of envisioned goods and services at this time in Costa Rica, the next step would be to expand that capacity to one or more other locations through partners willing to sink significant personal effort into training and business development.  Once the model can be demonstrated through profitability in the implementation of a couple successful franchises, a directorate steering partnership should ostensibly have the information necessary to refine a long-term business strategy for expansion as a brand and possibly for the solicitation of capital venture investment as needed.

In practice, a franchise would offer the following minimal qualities to undertake operations.

1)     Basic business capacity for marketing, sales, customer relations, and routine business administration practices 

2)     Ability to personally undertake installations and maintenance or to have a sub-contractual capacity to satisfy this fundamental service requirement.

 3)     Operational capital to gain a market foothold or an alternate existing revenue source so that fledgling franchises are not dependent upon immediate sales for survival in the first year of operations.

 4)     Ability and willingness to collaborate reciprocally with a directorate that provides marketing, engineering support, procurement, training, and merchandising.

The Directorate:  a Policy, Managerial, and Administrative Board

At the directorate level, a platform of rational program development must necessarily include the following resources and capacities:

1)     A robust web presence (www.solar-you.com for marketing and a separate web site for outreach) that fills several key functions:

a.      Direct marketing of components and kits

b.      Self-help guides to design, engineering, and installation

c.      Interactive web-design tools to assist visitors in viability assessment.

d.      A resource center for sustainable living concepts at residential, institutional, and community scales.

e.      A section devoted to advertising franchise distribution and brand promotion.

2)     A rational definition of the markets and technologies to be promoted, marketed, and installed, and a rational process for targeted expansion and rollout of new goods and services.  

a.      Immediate target business activities

                                                              i.      Grid-tie micro-power generation systems:  solar, hydro, and wind.

                                                            ii.      Water conservation and purification systems

                                                          iii.      Passive and active solar hot water heating

                                                          iv.      Rainfall capture and utilization

b.      Expansion alternatives

                                                              i.      Heat pumps and cooling/heating offsets

                                                            ii.      Air exchange engineering

                                                          iii.      Fuel cells

                                                          iv.      Mobile and backup power systems

                                                            v.      Duty-free offshore light manufacturing and assembly

1.      Modular home filtration units

2.      Solar hot water heating systems

                                                          vi.      General residential / commercial green engineering for residential retrofits and for first-time construction.

3)     Engineering, technical, bidding, and procurement support

4)     Training for installers and sales engineering.

5)     Research support, promulgation and publication

6)     Environmental advocacy and outreach.

Summary Conclusions

The Green-Go concept elucidated in these pages is a skeletal vision for an organization that could expand under successful franchise pilot projects and skilled directorate administration to other regions of the United States as well as other parts of the world.  Certainly the evolving market, now concentrated in industrialized societies, will eventually extend to all corners of the planet.  The success of the overall enterprise at whatever scale it attains would likely not be a measure of the strength of the individual franchises, nor the sum necessarily or their parts.  Instead, the ultimate success of the endeavor would ultimately be ideally measured through the directorate’s success in outreach, education, promotion, advocacy, and lobbying toward personal responsibility, business practices, economic integration of environmental protection, and changes in overall awareness of carbon- and waste footprints on personal, corporate, institutional, and even regional, societal, and national scales.

A vast market for environmental goods and services has been brought into existence in part from unsustainable overpopulation and in part from unintended consequences of a fossil-fuel industrial paradigm.  The continued existence of mankind depends upon an environmental transformation of society on a scale that dwarfs all human endeavors achieved to date.  The environmental revolution and the resultant environmental age is presently in its infancy, if not still at a seminal stage, and the hydra’s head of economic opportunity for the private enterprises that will rise to seize this day offers conscientious, intelligent, and ambitious commercial enterprises a nearly limitless market opportunity. 

The business of providing environmental goods and services is sufficiently variegated and decentralized so as to make it accessible to upstart companies with little or no venture capital.  The Green-Go concept in fact requires nothing more than human industry and the leveraging of a modest portfolio of initial installation contracts into a commercial snowball of ever expanding diameter.

For those that have an existing business capable of sustaining a diversification into this market or that have the financial independence or operational capital as well as the interest and basic business skill set and technical interest level to explore the alternative of setting up an exploratory Green-Go franchise, I welcome your contact so that we can discuss how we might take the idea to the next step.

Further Exploration and Development

Contact me:  pdcollar@racsa.co.cr

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