Fairphone: the myth busting social startup building a new phone

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Fairphone
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The French thinker Roland Barthes was fascinated by mythologies. Not fantastical ancient Greek ones; more everyday ones.

Of particular interest to Barthes was the Citroen DS (a play on the French word ‘Déesse,’ for goddess). The DS came to represent the epitome of French automotive ingenuity.

In its marketing, Citroen made every effort to conceal the “technical and typically human operation of assembling”. It worked. The DS became a myth; a cultural distortion of “the imperfect logistics of building the car, bringing it to market”.

Dig in your pocket and you might find another powerful myth: your cell phone. With its careful marketing, sleek aesthetics and revolutionary industrial design, it can be hard to picture your phone as, again, a “technical and typically human operation of assembling”.

We stay away from the word ‘ensure’. It’s impossible to ensure in these complex supply chains. Because a supply chain isn’t owned by a company, it’s owned by the economy.

The everydayness of the cell phone has blinded us to an extent that it’s an incredibly complex bit of kit. In particular, the phone’s innards consist of a whole array of materials (from the well-known tin to the obscure tantalum). Of the 83 stable and non-radioactive elements in the periodic table, at least 70 can be found in smartphones.

At the other end, consumer demand for phones is insatiable. Estimates suggest that, as of 2017, there are 4.77bn mobile phone users on Earth. That’s a lot of minerals. Meeting this demand - and no doubt, a lust for mountainous profits - have meant exploiting key reserves of rare earth minerals, often found in conflict zones and unstable countries.

It’s into these shark infested waters that the plucky social enterprise Fairphone enters. Based in Amsterdam, the 70 person company wants to change the way mobile phones are made, sold and bought.

Started as an awareness campaign in 2010, the organisation started trading in 2012. “You can talk about what’s going wrong, but you can’t change much because you aren’t a part of the system,” says Fairphone’s co-founder and product and resource efficiency manager Miquel Ballester Salva.

Salva, a hirsute and soft-spoken Spaniard, studiously avoids high-minded talk that has infested the way founders speak of their startups. There’s no mention of ‘saving the world’. In fact, Salva openly admits Fairphone is a long way from cleansing its supply chain of all malpractice. “There might be child labour in our supply chain,” he says.

“We stay away from the word ‘ensure’. It’s impossible to ensure in these complex supply chains. Because a supply chain isn’t owned by a company, it’s owned by the economy.”

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Saying that, Fairphone has made extensive, transparent efforts to change things one step at a time. “There are issues in the cobalt supply chain, there are issues in the lithium supply chain, there are issues everywhere. But you can’t do everything at once,” says Salva. Through working with artisanal and small-scale mining initiatives, the company has secured four key supply chains of the so-called ‘conflict minerals’.

“We’ve put ourselves in a very vulnerable position calling ourselves Fairphone and at the same time saying ‘it’s impossible’. Sometimes things look good, sometimes not so good - but that’s the exactly the philosophy of Fairphone, to render the journey in the most transparent way. We want to foster more awareness in the consumer and create social innovation in the industry.”

The aim is incremental change. The only way to make a fair phone, according to Salva, is to keep adjusting it and keep putting targeted pressure on supply chains. Late last year, Fairphone announced a shortlist of ten materials that offer the greatest potential to further research supply chain improvement: tin, tantalum, tungsten, gold, cobalt, copper, gallium, indium, nickel, rare earth metals.

There is no one single organisation - and that includes Fairphone - that can tackle the environmental and social issues we are going through.

This intense focus on things the industry would traditionally consider externalities is thirsty work, distracting from the arduous task of scaling a business. But according to Salva, it isn’t Fairphone’s goal to become the biggest company in the world. “My personal opinion is that if something gets too big, things go wrong. A company that gets too big, in my experience, can no longer do things in the right way,” he says.

“Our goal is not to grow limitlessly. It is to grow, indeed, to a nice scale where we can influence the supply chain and push our projects forward. We want to be taken seriously by our industry.

“I do accept we live in a market economy, and capitalism is the system we have. We can argue in favour or against. But ultimately, just because we are in this system doesn’t mean we should take it to its extreme. For me, it's about having a mission as a company and the footprint we want to leave in society. And, of course, make sure that we’re financially viable so we keep existing.”

Fairphone’s is currently rolling out Fairphone 2. As the name suggests, it’s the second generation of smartphone they’ve created. The device was designed around the company’s four pillars: fair materials, fair manufacturing, environmentally sustainable and built to last (i.e. doing away with what is called planned obsolescence in the industry).

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The immediate priority is to increase sales, which they’ve managed to an extent. Fairphone 1 shipped 60,000 devices and Fairphone 2 has already shipped 65,000. The company has largely funded itself through pre-sales. Consumers put themselves on a list, pay the upfront cost and get the phone at a later date. It’s a variety of DIY crowdfunding and it’s helped Fairphone minimise the amount of investment necessary.

But it’s not just in the making of the product. For a small company, getting their product to market isn’t always “business as usual”, says Salva. “You have to play politics too. You have to get your network right and speak to the right person at an organisation. If we would be following the regular procedure as a company we would be buried under humongous contracts we can’t fulfil.

“The general feeling is that we need to grow our sales to get to the influence where we don’t need to play political games. We can go to a supplier and say ‘okay, we’re a nice initiative but we’re also an interesting business partner’. For that’s important that we grow, that’s what we’re focusing on.”

I do accept we live in a market economy, and capitalism is the system we have. But ultimately, just because we are in this system doesn’t mean we should take it to its extreme.

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Despite intense competition in the market, Salva is hopeful. A Fairphone 2 comes with a stiff upfront cost of around £395. For that price, you can buy a far more technologically impressive device. Asked about price, Salva wryly rebuts: “I always ask, are the other smartphones too cheap?

“Yes, if you look at it from only specs perspective - it’s more expensive. But it’s also a modular device that you can repair very easily. People in the electronics industry look at the price and specs, and environmental and social concerns are low on the agenda.

“I think companies on the market compete on other things: who has the thinnest device, who has the best performance, we’re competing on another thing. Therefore they don’t share information, they don't collaborate. Sustainability is nothing without collaboration. There is no one single organisation - and that includes Fairphone - that can tackle the environmental and social issues we are going through.

“We are one organisation, but we’re trying to create momentum so that others will join us. Not just our competitors, but also our suppliers.” In essence, Fairphone isn’t creating a product as much as it is creating an ethos; an ethos that can be bought, replicated and redeployed.

It’s a transparency Barthes would’ve approved of. There’s no glimmering sheen here, no distortion. “We’ve been through very good times and very difficult times. We thought we were going to die three or four times. But we got through it.”

Salva remains convinced that Fairphone is on the right side of history with Fairphone’s mission. “Twenty years ago no one would buy Fairtrade coffee because they thought it tasted disgusting - but now it's hard to find coffee that isn’t Fairtrade certified. I think we’ll get there with electronics as well.”

 

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About Francois Badenhorst

Francois

Francois is the deputy editor of BusinessZone and UK Business Forums.

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08th Feb 2017 12:05

There is a pile of problems and fairphone is a nice solution. I hope the phones come-around second-hand and cheaply by the time my current phone conks-out.

Another solution to the waste and conflict-zone problem is to buy more second-hand stuff. That's bound-up in the Barthes myth thing; the advertised brand, the sense of a new phone being more proper than an old one. It's also bound-up in the complexity of phone contacts and this is something that government could help with. If it introduced a tax on locked mobile phones, then most new mobiles would be unlocked, more phone contracts would be sim-only pay as you go, and more of us would find it easier to buy old mobiles. There is a blog post about the current system here:
http://veg-buildlog.blogspot.co.uk/2016/01/no-such-thing-as-free-phone.html

A third way of solving some of the wad of problems is to buy electronics made in a democratic welfare state like the UK. I hope that someone reading this takes-up the idea and starts producing one, or a kit for one. At the moment, publicists get-away with using words like "UK manufacturer" -
https://en.wikipedia.org/wiki/List_of_mobile_phone_makers_by_country
- to mean a range of different things and are cagey about whether the people who made a phone enjoyed things like democracy, human rights, or a health service.

Thanks (2)
to veganline
08th Feb 2017 14:30

" If it introduced a tax on locked mobile phones, then most new mobiles would be unlocked, more phone contracts would be sim-only pay as you go, and more of us would find it easier to buy old mobiles."

This is a great idea. It has struck me in the past how wasteful the current system must be. Especially considering how [***] resource intensive manufacturing phones is.

As regards to producing the phone in a place like the UK, though. Wouldn't make the cost of producing the phone astronomical? Ultimately, these devices are usually assembled in places in China not because the company necessarily wants to - but because it's the most affordable.

Now, of course, we can leap that hurdle and say, like Miquel did in the article, that the profit motive should not be king. But then you get into really choppy philosophical waters.

De-emphasising the profit motive would fundamentally undermine the global free market system we have now. Whether that's a good thing or a bad thing is up to the individual to decide.

But I'm pretty sure we'd have an incredibly tough time persuading large corporates of the merits of anti-globalisation.

Thanks (1)
to Francois
09th Feb 2017 13:31

Francois wrote:

I'm pretty sure we'd have an incredibly tough time persuading large corporates of the merits of anti-globalisation.

The current leader of the free world seems to be giving it a shot though...

Thanks (1)
to therbert
09th Feb 2017 13:50

Ah yes, who can forget Darth Orange. For all his bluster about nationalism, Donald is actually anti-globalist for very selfish reasons.

He's not reminiscing about the Good Ol' Days in the conventional sense. He misses it because it was the golden age of a particular kind of small time bully.

Men like Trump are a punch line among the erudite, Davos attending technocrats like Hillary Clinton. Donald resents it so much, with his small hands and bulbous head.

Make America great again should really be read as Make angry old school capitalists great again.

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