LivingPackets hopes to nurture a circular economy with its smart parcels – TechCrunch
More than ever, people are getting the essentials of life – good news for Amazon, but bad news for the environment that must bear the consequences of the resulting waste. LivingPackets is a Berlin-based startup that wants to replace the well-known box with a more intelligent alternative that is smarter, safer and possibly the building block of a new circular economy.
The main product created by LivingPackets is called The Box and is exactly that: a box. But not only any Box. It is reusable, durable, digitally locked and monitored. It has sensors and devices on a smartphone that make it traceable and versatile, and an e-ink screen on which the destination or content can be updated as desired. A prototype that was shown at CES and several other locations met with great interest, but the company is still far from producing The Box’s V2, which has been improved in many ways and used on a scale of hundreds of thousands can.
Sure, it costs a lot more than a box. Once a LivingPackets Box has been used a few hundred times for return and local distribution purposes, it is balanced with its paper-based predecessor. Cardboard is cheap to make again, but it doesn’t last long – and that’s not the only problem.
“If you think about it, online transactions are still risky,” said co-founder Sebastian Rumberg. “The physical transaction and the financial transaction do not take place in parallel: you pay in advance and the seller sends something in vain. You may or may not get it, and you say you did not receive it, so the company must claim it from insurers. “
“The logistics system is overloaded. DHL and other airlines are frustrated, ”he said. “People in e-commerce and logistics know what they miss and what their problems are. Demand has grown, but there is no innovation. “
Indeed, it seems strange that delivery has become much more important to practically everyone in the past decade, and especially in the past few months, but almost the same as it has been for a century – except that you might get an email if that Package arrives. LivingPackets aims to improve this by completely reinventing the package and leaving things like theft, damage and missed connections in the past.
“You have full control over everything,” he said. “You know where the package is, what happens to it. You can look inside. You can say I am not at the delivery location right now, I am in my office and just update the address. You don’t need filler material, you don’t need a paper label. You can see when the seal is broken and when the item was removed. “
It all sounds great, but cardboard is simple and, although limited, proven. Why should someone switch to such a stylish device? The business model has to take this into account, so it does – and a few more.
At first, LivingPackets doesn’t really sell The Box. It offers customers and fees per use – “packaging as a service” as they call it. This prevents the possibility that a company will shy away from the upfront costs of several thousand of them.
As a service, it simplifies many existing vulnerabilities for dealers, consumers and logistics companies.
Among other things, tracking and insurance are much easier for traders. As co-founder Alexander Cotte explained, and as many readers have certainly learned, it is practically impossible to know what happened to a missing package, even if it is something big or expensive. Better tracking can initially reduce the loss, and the question of who is responsible, where it was included, etc. can be easily identified.
For packaging and delivery companies, the standard form factor with adjustable interior makes these boxes easy to pack and difficult to mix or damage. Tests in European online retail have shown that processing time and costs can be reduced by more than half. LivingPackets also pays for the pickup so that delivery companies can amortize costs without changing the route. And in general, more data, more traceability is a good thing.
The most obvious improvement for consumers is return. You do not need to print a label or prepack a label. Just notify it and the return address will automatically appear on the packaging. In addition, there are possibilities as soon as there is an essentially prepaid box in the home of a consumer: for example the sale or the donation of an old telephone or laptop. LivingPackets will enter into partnerships where you can simply throw your old equipment in the box and get it in the right place. Or a consumer can stick to the box until the item he sells on eBay is purchased and ship it that way. Or a neighbor can – and yes, they work on the public health side with antibiotic coatings and other protective measures against the spread of COVID-19.
The idea that underpins all of this and that has been anchored in this company from the beginning is to create a real circular economy, create decentralized value and reduce waste. Even the box itself is made of materials that can be reused if damaged if damaged. In addition to the market efficiencies achieved by converting packages into traveling IoT devices, reusing the boxes can reduce waste and CO2 emissions. Once you’ve crossed the first hundred uses, The Box pays off in several ways. Early pilots with carriers and retailers in France and Germany have confirmed this.
This philosophy is reflected in the unusual financing form of LivingPackets: a combination of bootstrapping and crowdsourcing equity.
Cotte and his father founded the investment company Cotte Group, which was a good starting point for bootstrapping. However, he found that each employee received less than competitive wages in the hope that the company’s profit-sharing plan would be implemented. Nevertheless, with 95 employees, even the most conservative estimate, it is several million a year – this is not a small operation.
So part of the light is the ongoing crowdfunding campaign, which was attracted somewhere north of 6 million euros by individuals who only contributed 50 euros or even 20,000 euros. This, Cotte said, is mainly used to finance production costs, while he and the founding team essentially funded the R&D period. Half of future profits are earmarked to repay these contributors many times their investment – not exactly the business model you see in Silicon Valley. But that’s exactly what it’s about, they explained.
“Obviously, all the people who work for us believe in what we do,” said Cotte. “You are now ready to take a step back to create value together and not just to draw value from an existing system. And you need to share the value you create with the people who helped you create it. “
It is hard to imagine that these new boxes will replace even a noticeable part of the truly astronomical number of boxes that are used every day. However, incorporating them into some key sales channels could prove that they are working as intended – and improvements to the well-oiled machinery (and deep-rooted paths) in logistics can spread like wildfire once the myriad of companies that do the work Industry touches, realizing that there is a better way.
LivingPackets’ goals and means may be utopian, but that could be the moon thought necessary to displace the logistics business from its current, decided methods of the last century.