Waste - racing to the bottom or the top?

Developing our waste processing plant, I am reminded of Seth Godin's blog post: The race to the bottom. In short, we can chose a race to the bottom or a race to the top.

The race to the bottom

This race is pretty clear cut. It involves bigger landfills, older trucks, cutting corners wherever possible to wring every last cent out of the business. Eventually, the last cent wrung out of the business is yourself. 

It assumes that the customer doesn't care what happens to their waste, and is purely driven by price. Of course, once you've created this race then it is self-fulfilling. You have convinced the customer that the only thing that matters is price.

Every market has its own race to the bottom, and every race to the bottom ends up at the bottom. You can only hope that race doesn't consume the whole market. 

In the field of waste management, but also in most other fields, you rely on regulators to protect you against the worst of the race to the bottom. Regulators can even call the race off (if they wish).

The race to the top

This race is also clear. It involves fewer landfills and more waste processing. It is probably more labour intensive as it seeks to extract every last resource from the waste received. Unlike the race to the bottom, it builds new businesses upon its success. 

Reprocessed material adds value and jobs to the economy - a recent report "The Australian Recycling Sector" estimates that

• 0.15 to 0.3% of all Australian jobs are in the recycling
• The sector has annual turnover of between $6-10 billion dollars, of which more than half is from the sale of recover materials
• A tonne of waste recycled creates more jobs than a tonne of waste landfilled

This race assumes that customers ultimately want good service, and are prepared to pay a little above the bottom of the market to receive it. Sell a vision and you will be surprised what you bring with you. Of course, it may be that the customers need some prodding.

For example, if you are building a waste processing plant, your key customers are waste collectors. Their customers are other businesses who sell, ultimately, to consumers. And consumers can be very influential in persuading businesses to lift their game. Selling the vision should not be confined to your immediate customers, but rather across all of society. It is the grand narrative that you want people to buy, not a selfish little "what's in it for me".

The race to the top is all but untouched by the regulator, but rather driven on by your customers and your ability to keep innovating.

Where would you rather be?

Long term, there is only one race you want to be in. The race to the bottom is easy. It is also a race to your own destruction. Sure, not now, but in a few years time (depending on the speed of change in the market).

The race to the top is hard. It requires a great ability to tell the story. It needs supporters, fans, followers. It needs a virtuous cycle of creating people who care, who in turn create more people who care. 

For all of this, the race to the top is the only sustainable race. When the bottom racers have collapsed, spent after slugging it out in the ditch, you remain strong and profitable.

And what do I do?

It is pretty straightforward - you can just keep spreading the word. Keep up your belief that the wrong thing is wrong, no matter how much people seek to persuade you otherwise. 

This and skim across my blog from time to time. In between digressing through some personal ramblings, I hope that the blog can keep inspiring ideas on what is right, what is possible, and how the bad can be replaced with the good.