What if we Harnessed Consumer Spending towards Impact?
“60% of global GDP is consumer spending – imagine what we could do if we harnessed that towards impact?”
“Companies will change overnight when their customers vote with their spending – far faster than any protest or regulation. That is what we are doing with ACT.”
Great conversation with my friend Thomas Jepsen founder of ACT Cooperative Corporation AS during my visit to Oslo.
“I think the potential for human collaboration around our greatest challenges is a big unlock that I think goes through the connected consumer. I think once we see how much money we can actually move together we will see a big unlock.”
Podcast Transcript
Jacob: [00:00:00] All right, I’m here in Oslo with my friend Thomas Jepsen with ACT. I’d love to have you introduce your company and tell us about the impact you’re looking to make in the world.
Thomas: Yeah, great. Thank you for inviting me. I think the funny thing about today is that we mostly hear about someone else trying to fix climate change and deforestation and it’s never about how we can do something.
It’s always about someone else. Like governments or green tech. And at the same time we, the shoppers, we wield 60 percent of the gross domestic product. And we are really a powerful entity if we could just coordinate the way we shop. We could have a tremendous impact. What if we could connect the shoppers around buying tomato A over tomato B because it’s more environmentally friendly produced and maybe the people are treated better?
That would be a really simple decision to make for everyone. And we would be able to allocate our combined spending power to the value chains that actually matter. If [00:01:00] you had to pick one metric for societal transformation or impact, it’s actually the amount of money you can move in what direction, who’s moving it, and how fast is that money moved.
And so we would like to get that really large impact by uniting shoppers. So ACT is basically a collaborative marketplace for sustainable shopping where anyone can add any product from any store in three seconds. And that makes it possible for us to then use that knowledge to then allocate the spending power from tomato B to tomato A because it’s more climate-friendly or it could be other metrics too.
Jacob: Paint for me a picture of what that would look like on a practical level for a consumer. I walk into a grocery store and then what happens?
Thomas: Yeah, so actually before you go to the grocery store, you probably make a shopping list. If you are among the 54 percent of people who make shopping lists. You would add tomatoes and carrots and Gruyere cheese to the list and it [00:02:00] would press optimize and you can then set a program selector for example, the best combination of CO2 and price, if that’s what you care about or price only, whatever you like.
And then you hit optimize and then it will then look into all the stores around you and then figure out which is the best shopping scenario combination for you. And it would then be trying to get you to buy the best tomato A the best, carrot A the best, or the alternative in each product category. And the reason why that is interesting is tomato B would see, hey, tomato A is selling more, they’re higher rated. Maybe we should do something because otherwise, we won’t sell our tomatoes, right? We’ll try to get maybe solar panels, and then Tomato A will see, hey, the hell, now taking us over. And we want to then also maybe get thermal power in order to get higher rated.
And that way you create this compound competition over time that can yield probably the biggest impacts, all motivated by our combined spending power as shoppers.
The major energy consumption in tomato [00:03:00] production is the heating of the greenhouses. It’s like 75% of the energy footprint. So the one question, if you really need to ask one question, it’s how do you heat your greenhouses?
For example, in Holland, it would most likely be, heated by fossil fuel, natural gas. And if it’s produced in Spain, it will probably most likely be heated by the sun depending a little bit on season, but it would be like 3 to 10 times difference between tomato heated with fossil fuel and one that’s made of heat by the sun
Jacob: So as much as ten times as much carbon impact in one tomato versus another.
Thomas: Yes.
Jacob: And if everybody suddenly bought tomato A instead that cumulatively could be huge, right? That’s the whole premise.
Thomas: That’s the whole premise. Plus you would be having a ripple-up effect on the entire value chain.
Producers will start thinking a lot about what suppliers they use, and how they use the water footprint. They will probably start thinking ahead as well. And try to minimize the climate impact and the impact on the environment in [00:04:00] general. So that they basically get better at what they do.
Jacob: You talk about Tomato A versus Tomato B, and it’s obviously broader than just tomatoes, but do you have a certain area of focus right now?
Because you could do every product on the planet, but that gets unwieldy. Where is your focus starting?
Thomas: We have a pilot in a grocery store in Oslo where we have an entire tech stack set up and everything we can. It’s a click-and-click marketplace, you can add products to a shopping list. You can use it as a normal shopping list.
You go through the store and you cross them off the list and you put them in your cart or you can sit at home, and add them to the list. I took personally 15, 000 pictures of products, which you need in order to actually assess a lot of the data that we want to assess, and then connect them up to barcodes and so on. That’s a lot of, work.
Jacob: Tell me about the traction you have so far, where are you at in that process is this just a napkin sketch in your head? Is it a fully-baked app ready to go that I can download from the app store? Where the journey is it right now?
Thomas: So [00:05:00] it’s in early access. It’s what you call it on Google Play. So if you have an Android you can download, but you need a special link to do that, otherwise you won’t find it on Google App Store. So we have a few customers so far we’ve raised 450, 000 euros, and we used that to develop that app.
Now we’re looking ahead, it’s basically just a Shopify solution. And the next steps will be much more focused on data gathering and mapping of grocery stores. Our analysis shows that we can map the entire world of grocery stores in less than five years, which is substantial.
Of course, we start with Norway, so Norway in less than one year. But we’ll probably… As soon as we have that tech ready and scalable, we’ll start scaling in Europe first.
Jacob: Tell me about the data gathering aspect of it because that seems like a critical linchpin for this being feasible or not.
Thomas: Absolutely. So the data gathering is basically we take the life cycle assessment and [00:06:00] we cut it up in smaller microjobs and then we outsource it to the end shoppers. And end shopper in each of those microjobs takes maybe 40 seconds to do. And we need around 20 data points per product in order to put the product on the platform and then say, okay, this tomato A is better than tomato B, for example.
Jacob: This i s maybe a bad comparison, but is it like Wikipedia? Crowdsourced information gathering?
Thomas: Yeah, you could say Wikipedia for food information, but you could also say, for example, Google Maps for grocery shopping, because we have in store navigation as part of the mapping of the grocery stores.
So once we have mapped the grocery store, you can actually use the app to navigate in any store. And if you find a store that doesn’t have navigation, you can add it in five minutes without having any integration with a retailer. So that’s why it’s possible to map Norway in less than one year. Because it’s all driven by the end shoppers.
Jacob: What’s the biggest hurdle you’re facing right now?
Thomas: So we are currently fundraising. We would like to develop that [00:07:00] technology for mapping grocery stores and for gathering the data. And that’s of course a lot more behind ACT than just a marketplace.
So I think the potential for human collaboration around our greatest challenges is a big unlock that I think goes through the connected consumer. I think once we see how much money we can actually move together we will see a big unlock.
So we’re looking for basically getting those conversations with investors that understands that, hey, this is a very big combination of a large potential impact and also a large return of investment as grocery shopping app that goes across all stores, basically.
We’re also looking for recruiting people. So we’re looking, of course, very tech heavy for developers back end and front end. We’d like to expand to iOS, as well as Android. And also need some testers and DevOps people. We are also looking for advisors to help us with the fundraising efforts so that we can improve our messaging
Jacob: An investor has a lot of [00:08:00] options where to put their money, especially in the last few years, with just impact is a lot of people are jumping on the bandwagon. Why would an investor choose to put their money into ACT versus other options?
Thomas: So I think the potential monetary impact that we can have as consumers, like 60 percent of the GDP is the potential upside that we can potentially move. We are crowdsourcing data. That means we have a potential very large data gathering capacity, and we could potentially partner up with an existing carbon accounting company, for example, who needs a crowdsourcing arm for really going deeper in the data and going wider in the data.
But they should choose us because that impact, but also we have a democratic organization, which is very aligned with shoppers if you ask them to help you, they need to have a very big reason, and I think the reason is that we are basically more democratic than other companies, we want to represent that future that we want to see happen in the future.
My dad. He’s a [00:09:00] pioneer in mapping the Greenland ice. I’m Danish myself and my dad was mapping the Greenland coastline and. I’d like to say that I’m walking his footsteps in a way by make it possible for us to map the insides of the grocery stores.
And that is data that is very hard to get to like products, prices, in store locations. And then all you derive data that you can get like nutritional information and ingredients that we can then use to help people choose their products really easily.
Jacob: Talk to me about the business model. How does that all work?
Thomas: We earn a transaction fee from the grocery stores when they integrate with us. We map them and so in return the shop will get higher rated products because now ACT is part of the value chain and all the shoppers will see that this shop is now contributing to the ACT movement.
We ask the shoppers to ask the retailers to integrate with us. That’s the way drive this very fast if we get that user driven, it will be like 1000 times faster than a normal sass .
Jacob: This gives the consumer, their typical spending power gets to [00:10:00] go towards impact without having to spend necessarily any more, right?
They can shift that discretionary spending into things that align with their values and the ability to do that instead of have to make a donation to try to make change but just like picking up a different tomato suddenly Is a way that you can take action towards, the world you want to create.
Thomas: Let’s say you put the donations to some charity, you would have to take that money out of your budget, right? But if you have the choice between buying Tomato A or B, right? You can allocate all your spending power. The entire food spending power, and if we go into non food, that could be even more, right? It’s just a super big potential there for human collaboration And you can bake so much into the purchasing decision between tomato A or B, right?
It can be workers rights, which is very related to inequality, right? And it could be biodiversity, deforestation, it could be water footprint, it could be CO2 as we’re doing right [00:11:00] now. and that gives me a lot of hope just how much impact we can have, all of our shoppers. If we just coordinate the shopping, that’s going to be really interesting dynamic. I think.
Jacob Yeah, , we haven’t been able to mobilize around that information, right? But if we could shift that buying power, towards making the world better, that could be incredible.
What does an ideal investor look like for you right now?
Thomas: The people we have on our platform, our cap table right now, they’re really smart investors that understands that the potential for impact with consumer power is super big. And if you can charge a transaction fee and in the process of doing that, then their return of investment can be really big as well.
Yeah, people that are interested in both the impact and the return of investment And probably it has a little bit of technical, are not so scared about the technical platforms.
Jacob: If there was a tech founder that’s had an exit and is looking for some positive places to…
Put their capital if they’re aligned with that [00:12:00] purpose and they have a tech background or understanding that might be a good match.
Thomas: That would be a great match. Yeah, someone who knows the business and or the field or at least the scaling of large platforms and wanted to see something beautiful happen.
Jacob: How can the community be a resource to you right now?
Thomas: They can use the app once we get it out there. That will take at least half a year from when we get the funding to it becoming a really available resource. They could follow us on LinkedIn and Facebook. Our webpage is doube A double C double T (aacctt.org). If they want to work in the company as a developer or a lifecycle assessment specialist or tester or DevOps and maybe advisor, that’s those are the great options. Just reach out.
Jacob: What are you most excited about looking forward?
Thomas: I really would like to see this in the hands of people and when they start to see how much we can do together, if we work together, I think that that everyone will [00:13:00] see the amount of money extrapolated to a year that we together are shifting.
For example, my little daughter, she’s 13 years old, right? And she says, ah, dad, you’re working too much. She’s right about that. But then I tell her, yeah, you know what, you can be a combat action hero. What does that mean? That means that you can probably invite 10 of your family members, and you can probably call each of them to have them also invite 10.
Yeah, she could do that, probably will take her a week to do that, right? And then, do you know how much money you would be shifting if you did that? No? Let’s see, 100, 000 euro every year. That’s a lot of money for a little girl who just helped adding some people to shop more sustainably. So I think that’s my hope to see the young generations become the action heroes they ought to be. That’s why we call it ACT. We want people to become actors.
Jacob: I’d agree, businesses will change when their customers tell them with their dollars or their euros they want something different, they’ll change overnight, as soon their product doesn’t sell, they ask why and they [00:14:00] want to change and they do something about it. And if we can send that loud of a signal collectively as consumers that’s how we actually have a voice and power to make a difference
Thomas: And it can go as fast as we want. That’s the thing, right? We are participating on the future. We all want to see it’s going to be so much fun to pick up those stories.
Jacob: Excited to see it get traction and see it come to life.
Thomas: Great. Yeah. Me too. Thanks.
Jacob: Thank you, Thomas
Thomas:Thank you, Jacob.
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