Pentatonic is leading the way in sustainability, the first circular economy company. They work with leading brands to create beautiful and useful products from items that would have otherwise been waste.
What is the Circular Economy?
The principles of a circular economy have only been formalized for around sixty years. However, it tackles two of humanity’s biggest problems, scarcity of resources and a vast excess of waste. In the last two years, it has received backing from across the world, including the United Nations and the World Economic Forum.
Business from agriculture, oil, gas, and manufacturing are all identified as areas that ought to be looking at developing a circular economy.
Jamie Hall and Johann Boedecker created Pentatonic in 2015. Jamie had become convinced that the circular economy was the only way forward during his 20-year career as a marketer for leading brands such as Nike, Levi, and Ben Sherman.
Johann came from a very different background, overseeing alternative supply chains and advanced material technologies in Taiwan and Greater China. He had become fascinated by the manufacturing processes while he was there, and it was that culture that drew his initial interest. He says that at the time, he wasn’t sitting around saying, “I must save the planet.”
Johann saw the possibility of using emerging technologies to move in the direction of creating a circular economy. They met when Johann was consulting for Jamie when Jamie was at Nike. Jamie was intent on doing more for the planet. While open to the idea, the brands were slow to change.
Jamie is also fascinated by brand evolution, history, and culture alongside his passion for the planet.
The two became good friends and decided to set up a company together. However, it was a slow burn start. Jamie’s gardening leave and relocation to Europe took time, and he was unable to do anything bar be introspective at first, despite how excited they both were.
In the early days, their first clients were all people whom Jamie had worked with, but now the network has expanded, and for the past 18 months or so, they have been working with people right outside their own network. They were determined not to demonize brands but instead to address their willingness to change and take steps toward recycling and creating a circular economy a small part at a time. Neither of them believes in lecturing others; they are not evangelists, but that doesn’t make them less passionate or committed.
Major brands are recognizing the need to meet sustainability targets. Pentatonic turns the need into achievable realities. They offer a consultancy service to speed up a process that would have otherwise taken years of in-house R and D.
On some projects, they collaborate and slightly leverage. They don’t own any of the suppliers but work in close collaboration. Pentatonic use a network of small manufacturers and freelancers. Most of the suppliers have never worked together like this on a product, and they are often using products in a new recycled form or that are entirely new.
They find the most successful projects have been when they are working with an expert in that particular field, for example producing furniture with someone who already makes furniture. Johann says that it takes a team to innovate; it is never just one individual.
Pentatonic use cutting edge technology to offer design solutions to meet the circular economy. They don’t just use up waste but create beautiful and functional items from it.
Their clients are as high profile as the designs are innovative. Perhaps best known is the Pebble cutlery. They have worked with Nike to create customer chairs from old football jerseys and Burger King to use-up its old, single-use plastic toys into trays and games. They worked with Johnny Hoxton to create a recycling logo necklace and pendant from old consumer electronics such as computers and smartphones. For Starbucks, they turned waste into luxurious accessories.
Johann says that they have constantly had to adjust their approach to the company and structure. They have had several investors but are not VC backed, which he feels would be wrong for a company continually evolving. This way, they can grow in a semi-organic with targeted investment as needed and relevant. Up until 2018, all their staff had equity, and they both retain majority ownership of the company. They have a super strong team and a flat organizational structure, which Johann says takes a great deal of pressure off Jamie and himself.
Monetizing what they do has also had to be flexible. Some work is done for royalties on the pieces sold. Others are a joint venture when Pentatonic takes equity in the business, but no cash changes hands. They also do consultancy, which delivers cash flow. The consultancy work also enables them to go into companies and talk to people, which, Johann says, is how you start change without starving in the process.
They have learned to be flexible in both their approach and in their funding. The answer, Johann says, does not always lie on an excel sheet.
The Post Season Campaign
Pentatonic have also launched the Post Season in response to the spiraling poverty caused by the pandemic. They are hoping to collaborate with fashion and apparel brands at all stages to put their waste back into the circular economy, working with them to put them through recycling processes and distribute the resulting clothing back through non-profit organizations.
As in all circular economy-based problems, there is a lack of supply combined with excess waste. Many companies had unused stock, or mills were full and could not store with production at a halt. Yet, poverty was creating a desperate need for clothing.
They didn’t want to launch with a massive project but instead started a series of conversations with those involved to see what could be done. While their original aim was one project, what has happened is small groups of brands getting together and working toward achieving solutions. Johann says it will be towards the end of 2021 until actual products emerge, but they are excited, having had a much greater engagement with the project than anticipated.
Other plans for the future
2020 was a challenging year for Pentatonic, just as it was for most companies. In the second quarter, they contracted, but since then, and overall, for the year, they have grown. Demand for their expertise in the circular economy, their products, and geographical demand have expanded. There has been growth both in the Far East and B2B and B2C in the US. They have also seen growth in the financial services too so new areas are opening up to exploring the possibilities of a circular economy.
Johann says that this means they are very excited about 2021 but also aware of the challenges their planned expansion will bring. They need to pick the right people and the right location for their manufacturing in the US and develop teams that are so good they don’t require visiting in person continually. They plan to continue their policy of keeping using local manufacturers to the demand, which keeps down costs and is, of course, more environmentally friendly. However, customer service will remain in-house as always.
How can entrepreneurs prepare for the circular economy?
I was keen to find out how other companies can adapt and get ready for this change in approach. Johann says it depends on the size. If you are starting out, you are evolving and learning along the way in any case, so it is easy to adapt.
It is harder for established companies who find it difficult to change course. However, companies like Nike and Starbucks, whom they work with, will be around in the future, so they know they need to stay relevant. Change is just a slow process in any vast corporation.
It is all a learning process. Johann cites solar cells. He says these were initially only worth using on an island and even then brought a waste problem being full of different parts and super glue. Despite that, he says, they are worth pursuing. The circular economy will not be achieved overnight. Some things bring rewards in 3-4 years, and others take much longer.
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