Reverse Resources. Circular fashion.
Creating a new business logic for the textile industry
ClimateLaunchpad finalist Reverse Resources won third prize in the 2015 National Final in Estonia and gained entry into the Climate-KIC Accelerator. Soon afterwards they landed a €150k grant in the Global Change Award. Currently they’re running pilot projects with H&M and Tesco, while other interested brands are lining up.
“ClimateLaunchpad helped us develop our environmental idea into a sharp business case.”
The idea behind this success? Basically, they develop software that creates an online marketplace for textile leftovers in the fashion industry. It enables industrial remanufacturing for global fashion brands. They offer a waste inventory service for large textile manufacturers. The information about those leftovers is made available to brand designers.
Annually 80bln garments are made worldwide. During production billions of tons of materials go to waste. Industrial remanufacturing takes this waste back to production by giving new design input. Remanufacturing clothes that way uses 80% less water and energy compared to conventional mass-production.
“We create a new business logic for the fashion industry.”
Almost given up on the idea
Ann Runnel, founder of Reverse Resources: “What I’m doing now used to be a side hobby. I had worked with an remanufacturing designer for five years and did my master thesis about decrementation in the textile industry. I was fascinated about the idea, but it wasn’t my job.
With my background in economics, I knew there was a business solution in it. But I didn’t know how to explain it. I mainly talked about the environmental aspects. We’d done some concept testing, but the idea remained mostly hypothetical. I had been unsuccessfully searching for a funding or support scheme for this idea for over a year. I had almost given up on the whole idea.”
Reverse Resources’ climate impact
The potential climate impact of Reverse Resources and remanufacturing is huge:
- Billions of tons of textile materials currently go to waste in the fashion industry. Remanufacturing takes these leftovers back into production.
- Remanufacturing uses 80% less water and energy than conventional mass production.
Finding and pitching the business angle
At that point ClimateLaunchpad came along. Ann decided to apply with two ideas. Her ClimateLaunchpad coach advised her to go for the idea of textile remanufacturing, as this one was really promising. And so she did.
“There is no such thing as waste in the textile industry - only a valuable resource that presents unexplored business opportunities.”
What we learnt during Boot Camp wasn’t really new for me. When you study economics, you know the theory. But the real boost came from putting things into practice. What I didn’t realize is that things in the business world happen very fast and need to be concrete and super efficient. As a researcher, you go around and try and explain your idea to people long and thoroughly. People didn’t want to listen and I got the feeling nobody really cared. But the truth turned out to be that actually we weren’t telling it right. We weren’t selling the business side.”
Ann really enjoyed the energy and fun during the competition, but had a hard time in overcoming her stage fright. “The pitching is hard, I have horrible stage fright. Turns out that ClimateLaunchpad wasn’t even the worst of it. Afterwards I had to do so much pitching, I still do. The competition was good practice.”
“The pitching is hard, I have horrible stage fright. The competition was good practice.”
A defining moment during the competition’s Boot Camp was when they had everything ready: the idea, the case study, the proofs, the story.
“One to one mentoring was awesome for working out problems.”
“But we didn’t know how to package it. The first pitch during the Boot Camp went terrible. Two days later we had packaged it differently and got great feedback from our coach. We had nailed it. He told us to ‘go for it’. That was a great moment.”
ClimateLaunchpad pushed Reverse Resources to think big and try to imagine the business in a few years time. Ann: “The financial forecast gave us a revenue of €5mln in 5 years time. When we entered the Global change award, the scope of the project grew 10 times bigger. The financial forecast now says €50mln in 5 years time. Quite a difference in how big you dare to think.”
Reverse Resources pitch at ClimateLaunchpad Grand Final
Pilot projects with H&M and Tesco
As we speak Reverse Resources has just come back from Bangladesh where their pilot project with H&M is moving along great.Tesco is another pilot partner and they are talking to a number of other brands. There’s a big interest in their concept.
Software is usually developed to simplify or optimise something a client is already doing. Reverse Resources is actually helping brands and suppliers do something they have never done before and so build a new market: “It’s not only our software that we are developing in pilot, we first have to show brands and buyers that remanufacturing makes sense.Watch the video for the Global Change Award
It’s fascinating to witness this mind shift with big brands. Last week we had a meeting with a large supplier. They welcomed us in their factory without knowing what we do. In a one-hour session we explained everything about remanufacturing and our concept. Their instant feedback was: ‘We’re in, we’re going to do that with you.’ It’s experiences like that that make it so rewarding to do this.”
The global change award came with a €150k grant. “We used it to bring all pieces together. We now have a subcontracting partner for developing software. Our core team is talking to brands and designers. We work with an remanufacturing designer, who has experience with running her own brand and collections.
"Our aim is to grow the profit margins and market potential of upcycling fashion drastically."
So much has happened since joining ClimateLaunchpad, it’s been a journey filled with small and big victories. The biggest milestone we reached so far is being able to show that remanufacturing is a market worth exploring. Our aim is to grow the profit margins and market potential of remanufacturing fashion drastically.”
Best advice: find the business aspect in your idea
Ann recommends anyone with a green idea to join ClimateLaunchpad: “You should definitely do this, even if you’re not sure about the business aspect in your idea. ClimateLaunchpad is the place to help you discover just that. Don’t waste too much time on figuring it out yourself.”
– Ann Runnel, founder of Reverse Resources