The Venom Value Cycle seeks to use customers as suppliers to benefit all.
Venom made such high-quality computers that customers didn’t need to come back. Now the company is offering a novel buy-back program for existing customers which pays them US$400 ($500) for their old computers - even if they’re five-to-seven years old! It’s a sustainable business model that helps reduce waste, energy and landfill. We asked CEO, Jaan Turon to explain how the program came about and what’s best about it.
E-waste has always bothered me since the very beginning of the personal computer revolution. However, currently, it is fast becoming a global problem. The biggest question right now is, what do we do with all this waste? It absolutely requires more than just a band-aid fix.
Venom’s manufacturing roots stem from our parent company’s humble beginning, all the way back when we created the IBM Certified Used program (Yes, right here in Australia). We quickly had the program officially implemented worldwide in 2003. I remember going to New York in my early 20s to convince people at Big Blue that their end-of-lease equipment had more to offer. Soon, customers benefited and we managed to add significant value to an asset which otherwise had a $1 book value.
IBM was pleased, it made economic sense and all involved had definitely made money. We upcycled some bits and recycled others. We took some of the worthy ThinkPad’s that still had some life in them which was at the end of their lease, cleaned a little, repaired others, modified some, upgraded them and sold them as IBM Certified used equipment. We learnt a lot as well. The only problem was that Big Blue IBM then became one of the first to believe that the “PC was dead” and they sold off their personal computing division to Big Red, Lenovo. With that went their value-adding, end-of-lease program and Lenovo canned the certified used program in 2005, going off in pursuit of the race to the bottom. The chase for market share by selling cheaper computers was on.
The mobile revolution
Bigger and better things happened for us. The mobile computing revolution took off, laptop computers became affordable and it wasn't until about 5 years later that all the other PC manufacturers also started to declare that the PC was dead. Mobile phones got smarter, the iPad made sense and Microsoft was still patching Vista. It was however blatantly obvious to those on the ground, that there are people still craving a good PC! Others did not regard the PC as dead, more that it just needed to become meaningful and worthy again.
In that same period of 2010, we thought about intelligent performance and what that meant in computing terms. It was looney looking back at it now, but it made sense to us. Our CAD, CAM and engineering desktop computers needed to go mobile, our customers made it known so. Long story short, the BlackBook was born at the same time everyone was declaring the PC was dead. Silicon Valley’s finest were all boasting about how it was the end of an era and we were crazy enough to think otherwise and launch into the manufacturing of notebook computers.
The PC was never dead, we all know this now, however, what is dead are bad PC's. The race to the bottom, the one where computers got cheaper and affordable but not necessarily better, have produced computers where the components were not worthy of being put into anything more valuable than a pizza box . Actually I am being unfair, pizza boxes are much easier to recycle and can be reused, trashy PCs can’t be. Venom has completely avoided this as the relative newcomer, we had to be better because our customers demanded it besides, people tend to not be very forgiving to the newcomer who has go above and beyond just to get noticed.
Multinational computer manufacturers, (all the household names) were pumping out computers nearly as fast as today’s fashion outlets that produce clothing for the 52 fashion seasons a year that they themselves also created. This new 52 fashion cycles a year clothing is so bad, that even charities don't accept the items of so called clothing just after a few weeks of wear as anything other than landfill. These clothes don't qualify as "re-sellable” and hence are creating more waste instead.
The solution for e-waste is a simple one really. In the same way that a 30 year old Volkswagen has a smaller carbon footprint than a Volkswagen you have to replace every 5-7 years, the key is longevity.
The high-quality product paradox
Longevity is something that has scarred Venom, we believe the first to experience this problem was Panasonic, it’s known as the Panasonic syndrome, where you make something that is so good that lasts so long, none of your customers ever have to buy anything from you again. This is a problem for large companies with large market share that need to produce profits for their shareholders every quarter. This is not a problem for smaller companies looking to disrupt the larger ones though who grow market share by attracting new customers and start out with relatively low market share.
The BlackBook Zero family - our business focussed notebook computer - gives us some further clues. Recently surveyed and complied data tells us that after five years of use (we do this annually) some 95% plus BlackBook customers are still using their high-performance Venom BlackBook. We are proud of this statistic.
Carbon credits, recycling taxes, instant asset write-offs, depreciating assets are all magical terms and commercial concepts that accountants, policy makers, politicians, economists love throwing around and conjuring up. They came up with these concepts at a time when consumerism was new and on the rise. The only issue is, in the real world, while the asset may have been written off and reduced to a negligible value on paper. It still exists in the physical plane and making people pay extra to fix the problem does not mean that the waste has disappeared:
It is still in our environment, energy was spent making it and energy and resources must still be utilised again to get rid of it. The environmental harm off the balance sheet, is very present.
The problem also extends to solar panels for example: who is counting the energy input for the materials used and consumed in China where most of these panels are being made? Is China not also on earth? Who is going to subsidise the torn down, recycling and disposal of these panels at the end of their usable life? While the taxpayers most likely will pay for the end, what about the energy cost from start to finish? Even when it has been paid for there is still an actual energy cost that the planet has paid for. High energy technology having more energy spent on it to turn it into a low energy recyclable material does not sound smart when worded as such. Prevention is always better than a cure. Can we utilise energy inputs and outputs better? I think we can, we can also do it in a cost effective manner.
Re-use is better than recycling
What do you do with that Notebook computer that is reaching its end of life?
That’s easy, big multinational computer companies, simply turn it into landfill or recycle it or just simply let someone else recycle it. Recycling though is not as environmentally friendly or economically beneficial as it sounds, most of it is very energy inefficient and the general process is a big waste. You are turning something of high energy value back into something of low energy value by spending more energy in the process. Why not make things that last longer? Well the Panasonic syndrome is one reason. A clever work around that some computer and phone manufacturers have employed is to conveniently update the software on your device so it slows down just around before a new product launch, all done under the guise of improvements of course. If it’s a consumer product, make it last accordingly, if it’s a business product make sure it lasts accordingly. The asset value at the end of its financial and physical life on paper is $0 anyway, so why bother right? That is the problem, the fiscal responsibility has been absolved, it’s someone else’s problem now, not the accounting and finance departments. But the pizza box worthy laptop is still sitting there on someone’s desk with its destiny being for it to be turned into a toothbrush or just landfill.
We can’t wait for accounting and business law to change, asset depreciations are here to stay, governments need the spending and business needs the stimulus. Carbon credit is just kicking the can down the road, you make the new customer pay for it while you still have the asset that has been made so poorly to deal with, it’s pretty much e-waste after a year or so and its book value of $1 after depreciating matches it. The main problem of course is it has not magically disappeared, it is still there in your inventory record, physically speaking it is on earth, somewhere.
Customers to become suppliers
I know, you're thinking ok, what’s the answer then? The answer is to make our customers our future suppliers. Turn the figure 8 on its side, you have an infinite loop. Let’s make our customers become our future suppliers. It starts at the design stage, way before we have even costed our designs, before we decide on what it is we are going to make, before we even know who is going to use this computer. It starts with, where will this end up? Where do we start for it to end, back with us again?
For this to work, firstly we have to make a worthy device, a worthy notebook computer. This is so when our customers do become our suppliers in the future, they have something worth selling back to us.
From day one, the very first Venom BlackBook was made with this design consideration. Our BlackBooks are fully serviceable, they can be fixed and maintained when needed, if required, drives can be removed, data protected, upgradeable. Our batteries can be easily replaced, they have not been glued in (yes, the world’s biggest premium laptop manufacturers, glue some of their batteries in so they can be thinner, have fun replacing them!). Our drives, processors, memory, screens, everything really, is very carefully selected and put together: we choose the best. It turns out that if it was the best five years ago, it would still be very good five years later. Our customers are a testament to this. Someone’s really well loved BlackBook is still a really good notebook computer 5 years later. It can now also become someone else’s pre-loved BlackBook. Our customers who have written their assets off, now are in possession of something that has intrinsic value, and not potential landfill.
Venom’s upcoming Zero is going to be 40% lighter and offer 120% more battery life. These features will definitely be extremely beneficial to those who desire such key benefits. The older BlackBooks can find a new home and the current BlackBook owner can move onto a new BlackBook with new exciting features and benefits. The best part is however, even five-to-six years later, the previous owner is going to be paid a fair value that can make up to 20-30% of the new purchase price of their new BlackBook. Anybody can offer a trade in on a one-to-three-year-old machine but can you do so when it’s five-to-seven years?
We can, we do, this is a world’s first we believe. We are effectively adding another loop to that horizontal 8 I mentioned earlier. Our previous customers with a new BlackBook, and our new customer with that pre-loved BlackBook are both benefiting, everybody wins. Nobody is losing and nobody is really paying the price for the other, because the BlackBook in question is worth it. Our customers are winning, they are financially benefiting and the planet is truly being saved. It’s a win-win-win scenario. We have been able to get three life cycles out of some of our most popular BlackBooks so far! That's huge!
That is how we pay around $400 USD ($500AUD) to our customers directly for a five-to-seven-year-old BlackBook, if they decide to trade in. Why? Simply because we can. We can because with a little bit of love, these BlackBooks can go onto a new home and not a hole in the ground. They are all worth it.
Taking the pain out of trade-ins
Trade ins are painful, the process is never fun, and we know this, moving all that data across, ensuring your data is safe and so on, it can be a real challenge. That is why our trade in program is a post purchase trade in program: we will pay you directly, wherever you are, 30 days after you have received your new BlackBook, giving you ample time to move your files to your new machine.
Our Resellers and partners also have access to this program, we can offer 20-30% of the value of a new deployment through the post-purchase, trade-in, buy-back scheme. Meaning deploy your new BlackBooks and after they have been rolled out, return the trade ins and we will pay the customer directly.
We will be launching the Venom Value Cycle Trade in Program online through a global portal on shopvenom.com later this year, at the moment you will need to contact your Venom representative or send us a message to get involved. But the process is easy, simply get a new i7 Venom BlackBook from shopvenom.com, and within 30 days return to us your old i7 Venom BlackBook that turns on and boots into Windows and we will pay you directly into your account!
All those things we learnt during those early IBM years were not a waste, we plan to trade in other worthy notebook computers as well. In the future we will trade in non-Venom branded worthy notebook computers, they may not fetch as much as ours (they can only blame themselves for this). However, the market is huge and varied and we should be able to find a home for them also. As long as it’s not a hole in the ground or a conveyor belt feeding a shredder. After all, this planet is our only home and Mars is still going to be a 6 month trip only possible every two years at best, and that’s only if SpaceX succeed. E-waste needs to be addressed altogether, while we at Venom didn't create the problem, we at Venom want to come up with a holistic solution. It starts with making worthy products. Here’s to Intelligent Performance.