⭕ The Circular Economy ⭕
Plus the best content from around the web.
Each week we share business ideas and opportunities that you can use to build your next big business. You’ll also find tweets, articles and a lot more to keep you updated on the latest business trends.
This week you will find:
Business Opportunities in The Circular Economy
TID’s 3-2-1 (3 Tweets, 2 Podcasts, 1 Article)
TID’s Book Recommendation
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⭕ The Circular Economy ⭕
Have you ever seen the garbage mountain outside Delhi? It looms high across the Delhi-Meerut highway and highlights the excesses of our modern 'take-make-waste' lifestyle. Each time we order from Amazon or the fancy new D2C startup, you contribute to making these garbage mountains slightly taller, getting us closer to the future envisioned in Pixar’s Wall-E.
What is the Circular Economy?
The circular economy is a rejection of our production model as it stands today - it tries to build “a no-waste industrial chain that promotes economic growth using the least amount of non-renewable natural resources as possible.” As the image below illustrates, in the circular economy, products are designed so that they can be easily reused or recycled after their use.
For example, let’s say you buy a new pair of shoes. When you get bored with those shoes, they can be passed on to someone else. In the next phase, when the shoes are worn into the ground, they can be dismantled into distinct parts for upcycling, recycling, or composting. Therefore, your impact on the natural world is minimal - “a circular model values continuous cascades of material reuse as well as the functional benefits of the natural world (carbon capture, water filtration, etc).”
If you want to go deeper into the philosophy of the Circular Economy - you can read the ‘Principles’ section of our own research or read one of the articles that we link in the resources section.
Why are we talking about the Circular Economy?
In our 3rd ever episode, from July 2020, we spoke to Akhilesh Bhargava who has built Circular Economy products himself and has invested in several businesses in the space. At that time, we did not dive deep into the topic because we didn’t think that people would find the topic interesting. However, interest in the circular economy has been steadily increasing to the point where it was mentioned in the 2022 Budget speech.
From the budget:
The Circular Economy transition is expected to help in productivity enhancement as well as creating large opportunities for new businesses and jobs. The action plans for ten sectors such as electronic waste, end-of-life vehicles, used oil waste, and toxic & hazardous industrial waste are ready.
Opportunities in the Circular Economy Space
Helping large Businesses meet their ESG reporting requirements through Traceability technology for plastics and other recyclable products. This is Akhilesh Bhargava’s product - he gives big buyers of single-use plastic complete traceability of where their plastics have come from so that they can tell their customers and investors that they use 100% recycled plastic. However, traceability is an extremely difficult task - you have to tie together the garbage collectors, recyclers and manufactuers using a single technology platform so that you can show the full cycle.
Housing, Food, and Mobility
Household expenditure in these 3 areas taken together (housing, food, and mobility) accounts for more than two-thirds of average household spend in India, both in urban and rural areas. Therefore, these areas are the low-hanging fruit in terms of opportunities.
Using regionally appropriate, renewable, non-toxic materials and retaining construction materials at their highest value reduces demand for non-renewable, virgin materials and hence reduces GHG emissions and energy use. Jans Bamboo is an example of using Bamboo for the construction of structures and furnitures using Bamboo, a non-toxic material.
Infrastructure for effective nutrient and material cycles. Innovative solutions for wastewater and solid waste management to keep nutrients and materials flowing through the system, rather than being dumped into landfills or leaked into the environment. Plenty of composting startups such as Sanjeevani S3 are building commercial and residential scale projects.
More resource-efficient agricultural practices enabled by technology. Agri-tech was another topic mentioned in Budget 2022. Lots of innovation happening in this space using drones, hyper-spectral imaging and even just simple YouTube content in regional languages to improve farming systems.
Natural Farming - also mentioned in the budget, twice! The main goal of Natural Farming to create a sustainable farming system that is in complete balance with nature and the local environment. Sahil has a friend who sets up Natural Farms for others - here’s their instagram.
Digitally enabled asset-sharing solutions - the Circular economy believes in less consumption and more sharing of assets. Instead of buying expensive assets for the farm, can we use digital resources to enable sharing and/or leasing of the equipment instead? Grip Invest is already doing something similar.
Peri-urban and urban farming. Bringing food production and consumption closer together by increasing agricultural activity in and around cities reduces food transport and associated costs (such as food waste, fuel, and environmental externalities). You’ll find a list of startups already operating this model in our post about high-tech agriculture.
Electric vehicles. Taking a systemic approach to fitting EVs into the city electricity grid can make EVs part of the energy system and support renewable energy production. This transition to EV’s will require a lot of products and services which still aren’t available in India.
Content about the Circular Economy
Building knowledge and capacity around the circular economy will take time. People like Zitin Munshi are making content that makes ideas around the circular economy much more accessible to people. However, we’re still very much in the early stages of content around this topic - you can start now.
Resources to Learn More about the Circular Economy
Streaming is not an easy business - this graph shows what % of a platform’s users leave each month. We would love to see these numbers for India. Netflix probably has a much higher churn in India where it has been struggling compared to Hotstar, etc.
Elon’s meme illustrates another problem emerging with the streaming wars.
Some great suggestions in this list.
An interesting analysis on the common characteristics of various multi-bagger stocks in the past decade. However, please don’t make any investments based on a tweet.I studied around 15 companies which have given Multi-bagger returns (10X, 15X and even 100X) in the past 8-9 yrs. Most had these in common:- 1. Were available at cheap valuations: - P/E < 10 - EV/EBITDA < 7 - P/B < 2 2. Were small in size: - Market Cap < 1000 Cr continued....
On the completely opposite end of the investing spectrum, Chamath was the posterchild for SPAC deals over the 2 years starting with Virgin Galactic at $19.50 per share. Lots of retail investors were excited by opportunity to buy into early-stage businesses which were previously unavailable to them. The SPAC bubble has burst and Virgin Galactic (along with the rest of the asset class) is in free fall, it’s trading at $8.40 right now. Be careful before investing in risky asset classes like SPAC’s.
Bonus Tweet: Absolutely hilarious - slightly not safe for work. Sahil listens to this on repeat to get pumped for work.
Future of Education & Real-Estate in India, How to do angel investing right - A conversation with a polymath ft. Dr. Ritesh Malik by The Indian Dream
That’s a long title! But it was the only way we could fit all the qualifications of Dr. Ritesh Malik. He’s a Medical Doctor who built a co-working space Innov8 that sold to Oyo and is now an avid investor who even helped start Plaksha University! We speak to Dr. Malik about:
The Problem with the Education System in India
Why Edtech (in its current form) is just a pill and not the solution to the education system in India? Why we need hybrid infrastructure (Physical + Virtual) rather than just virtual education.
How the Real Estate Market has evolved in India and why Shared Economy (Co-working, Co-living, Co-retail, shared warehousing) are the future?
Why Dr. Malik has invested in 75+ companies and his thoughts on Angel Investing
The Importance of Community Building in Angel Investing
Since we’re on the ed-tech theme, here’s one more Tweet for you.
Ramki @ramkidThis slick ad for Akash Byju's glorifies exactly that which is most reprehensible about the coaching system. Dazed students being whiplashed by militaristic teachers to make them 'win'. And that is sadly why this ad will probably work. Learning be damned. https://t.co/0mocCkwWHW
If you’re interested in the business & tech side of Podcasts - we highly recommend listening from 37:00 minute mark of this episode for the next 20 minutes or so. It goes through the entire tech stack for Podcasts, why Spotify has been acquiring so many niche Podcast tech companies over the past year and what Spotify’s long term goal with Podcasts may be.
A famous article from the Harvard Business Review which we recently re-read. it’s easier to hold to your principles 100% of the time than it is to hold to them 98% of the time.
This article is all about finding purpose in your life and career and redirect it to the things that matter. For example, you may say that your family is important to you but you constantly make micro-decisions that favour your career over your family. As a result, in the short run you are improving your career but impacting your family life in the long run. Awareness of the impact of these decisions is what matters first.
We shared this article with a friend who has made a similar change in his life and he said:
You are right, that I am now more intentional about what I want to do with my life. Previously I was working on auto-pilot based on what I had observed while growing up without any recognition of what I really wanted to do.
One of the best quotes from this article is that “it’s easier to hold to your principles 100% of the time than it is to hold to them 98% of the time.” This statement holds true when you’re trying to build habits, relationships or even the processes at your organisation - every time you make an exception, the question arises on where the line will be for the next exception.
We highly recommend this article for everyone - whether you’re just starting out your career or towards the end of it, this article may help you provide a framework to the decisions that you make on an everyday business.
Book Recommendation of the Week
You’ve probably heard of this book at some point.
This book was the start of the public interest in Behavioral Economics which later led to books like Nudge. Behavioral Economics is the study of psychology as it relates to the economic decision-making processes of individuals and institutions. Thinking, Fast and Slow provides you the foundations of behavioral economics and how it relates to the possible buying patterns of your target audience.
This book is the starting off for a better understanding of your customers. Use the other books from Tweet #2 to deepen your knowledge.
That’s it from us this week! Share this with your friends, family and colleagues who want to stay on top of Market Trends and Business Ideas & Opportunities!
Until next week!
Sahil & Sid