I grew up listening to stories of my uncle taking apart his toys the moment my grandmother brought him home. With a handy screwdriver, he’d get to work — more interested in the machine that made his toy dog bark and chase its tail than just enjoying a barking dog. Last year, I spotted my uncle’s son doing the same and realised the apple hasn’t fallen far from the tree.
The only difference is that his son has inherited a world, and toys, that don’t allow him to do this quite as easily. At least not well enough to be able to put the toy back together. Increasingly, companies are manufacturing products that cannot be repaired. Even when repairs are possible, they are only possible to be carried out by the original manufacturer.
And it’s not just repairs. More and more companies have adopted means to keep their customers tied to them forever. Through subscription services and periodic updates, we are never able to stray too far from the company selling us our phones, our computers, our cars and even our exercise machines.
The week, The Global Tiller looks into what Business Insider is calling "the death of ownership". How is modern software allowing us to not own what we buy even after we’ve paid for it? What are some laws that governments are introducing to counter this practice and what could be some consequences for us, the consumers?
If you’ve ever broken your iPhone screen and didn’t want to pay an arm and a leg to have it repaired, chances are you have gone to your neighbourhood repairman and gotten the job done. After all, it is your phone and you can fix it however it pleases you. But Apple caught on to this practice and introduced a feature in its iPhone 13 that disabled the FaceID if it was repaired by a third party. So unless you were ready to give up the facial unlock feature, you are forced to go back to the Apple store to have your screen repaired.
Apple is, by far, not the only company employing such tactics. Farmers also find themselves beholden to the manufacturers of agriculture equipment that come preprogrammed with sensors to prevent unauthorised changes to the product. Inspired by Tesla which pioneered over-the-air software updates on its cars, other car companies, such as BMW, Toyota, Ford, Lexus and Subaru, are also trying to make billions by charging monthly fees for features like heated seats and remote unlocking.
Imagine paying to have additional features installed in your car and then having to pay every month to have the right to use them. We are not too far away from this kind of a world:
Imagine the start of a hypothetical summer Monday, some time in the future. You remotely start your coffee machine ($5 a month for the app to schedule brewing in advance and another $25 for recurring delivery of compatible pods) while you hit your stationary bike for a quick workout ($30 a month for access to classes). When you're ready to head into the office, the smart thermostat automatically turns down the air-conditioning (a $10-a-month feature) as you use an app on your phone to remotely start your car (which costs you $20 a month). And if you want to get any of that fixed? Put away your screwdriver, because you'll have to go to the manufacturer for even a minor tune-up.
But this reality is not as far fetched as we may think. The global market for e-commerce subscriptions is expected to increase from around $73 billion in 2021 to some $904 billion in 2026. So not only will we continue to pay for streaming services and meal delivery kits but will also find monthly bills in our inboxes for our tea kettles and toasters.
Tech companies insist that they make it harder for users to open their products and carry out repairs to make sure the product maintains its quality. They also fear that opening up devices could expose company secrets, reduce cybersecurity protections or put the safety of customers at risk.
Fortunately, their arguments have not worked on governments across the world who have been fairly proactive in ensuring consumer protection. The 'right-to-repair' legislative movement is seeking to make it easier and cheaper for consumers to fix their products by requiring manufacturers to share repair information, provide diagnostic tools and supply service parts. In Europe, manufacturers are legally required to supply spare parts for up to 10 years while several US states have passed some version of right-to-repair legislations, such as New York and Colorado. In India, the right to repair protections extend across several industries, such as farming equipment, mobile phones, consumer durables and automobiles.
The momentum has been so strong that even Apple has rolled back on its earlier update and it now allows consumers to repair their own iPhones and Macs, even if they replace their broken screen from a third party.
Still, the movement has a long road ahead. According to a study conducted by researchers at National University of Singapore, there may be unintended consequences of the right-to-repair legislation. Manufacturers may lower the prices of new products to flood the market and make it cheaper to buy a replacement than go for repairs. Of course, this would accumulate e-waste and have widespread implications on the environment.
The solution going forward is not to curtail this legislation but to ensure that the regulations around manufacturing and overall e-commerce subscriptions are flexible enough with the ultimate goal of consumer, not profit, protection.
Until next time, take care and stay safe!
Hira - Editor - The Global Tiller
Dig Deeper
If rethinking the idea of ownership and our need to possess fascinates you, you may enjoy this report by the Finnish Innovation Fund Sitra:
…and now what?
We recently bought a new car and it was quite a learning curve to navigate this: from discovering the wonders (weirdness) of American credit scores to all the questions you have to think about as you will now own a piece of industry…it has been a journey. So if someone had come to me and told me: you’ll just have to pay that many dollars per month and everything will be covered, I would have gone for it.
That’s the benefit of a subscription model: you use and you don’t need to care much. It’s not yours, so someone will take care of the hassle of maintenance…you’re here just to use the service. For the consumer it’s comfortable. For the business, it’s a regular revenue stream. It’s actually an important component of the circular economy.
In a linear economy in which you buy your own stuff, you buy, you use, you throw away, and you buy a new one. The circular economy model questions this perception and our need to own, to have properties. Think about it. Do we really need a car (the physical good) or do we need transportation (the service)? Do we need a bulb or do we need light? Do we need furniture or do we need comfort?
Many (if not all) situations can be reoriented to have a service focus. By moving away from ownership and focusing on the service aspect, we return the power back to the manufacturer but on more equilibrium terms. The expert knows what they manufactured and how to repair it, so when we take away the element of ownership, right to repair becomes an obsolete concept. If the product you 'rented' or 'subscribed to' doesn’t work, you just take it back to the manufacturer, who will exchange it, and may eventually refurbish it to lend it to someone else at a lower price, for example.
In this circular system, we can build economies of scale and rationalise production on the basis of usage and not the number of units sold. In theory, this model could help us rethink our economy and the way we consume.
But, as Hira pointed out above, the subscription model doesn’t always work and ends up feeling more like a trap. So are manufacturers really committed to making sure their product is of high quality even after they’ve sold it, or do they just want to keep selling to the same person again and again?
As an entrepreneur, I have faced the same question and dilemma as those companies. When I started my company, I had to look for a financially sustainable business model. So I looked around to people doing pretty much the same thing as me (obviously without the same quality 😉). And many of them were relying on a subscription-like model: hook your customer up to your services, make them need you or just trap them into a repetitive cycle to a point where they even forget that they’re paying you every month. All you have to do is show up every now and then, show them you’re doing something and that’s it. As long as the subscription is not too expensive, to a point where it’s too visible on the quarterly report, you’re good to go.
For my part, I chose not to do that. I made sure that they were free to go and to come back whenever they wanted. And if they were to come back it was for something new and different, and because they enjoyed the experience the first time.
It seemed to me that the subscription model was making lazy entrepreneurs. There was no longer a need to innovate, as long as you maintain dependency. You don’t have to create anything new as you put the responsibility of stopping the relationship upon the customer. And that’s what many companies do now. It’s not about thinking of our economy as a service-driven one, but a rentier one, where people owe you money out of habit.
It’s a dangerous system. Once you get people hooked, it’s hard for them to leave so they can’t play the competition to force you into a better offer or better products. Eventually, you don’t have to propose anything new, just maintain the comfort and, dare I say, nurture the numbness in which customers already are and keep making money.
But this is neither entrepreneurship nor is it innovation, and it’s definitely not what’s needed in a world where, more than ever, we need creativity, new solutions and new models to adjust our world, our consumption habits and our needs for a brand new world.
Having said this, we know The Global Tiller comes into your inbox out of habit, because you’re on our mailing list, subscribed (for free!) since some time. But we hope that you know that, each time, we are making sure that we bring you new insights, new ideas and new questions. It’s all crafted out of our will to evolve and innovate, and not just to numb you into reading something that doesn’t make you see the world around you from a different perspective. Does it?
Philippe - Founder & CEO - Pacific Ventury