December 30, 2008.  While the green business world is loaded with opportunity, realizing that opportunity can still be a challenge.  As one of the best known green business experts, Joel Makower has been helping green businesses large and small for over 20 years.  In addition to acting as the executive editor of GreenBiz.com and directing events produced by Greener World Media which he cofounded, he is the author of the recently published book “Strategies for the Green Economy”, relating the lessons of his years of experience for green businesses everywhere. 

Joel Makower (JM):  Overall, there are two principal opportunities.  You can create the green version of an existing business model, or you can invent something new, a new product, technology, or service.  Almost every business has some kind of green counterpart these days.  Insurance, dry cleaning, travel agents, office products, lawn care, and others all have green versions.  It depends on what kind of business you want to be in, using green as a competitive advantage.    I don’t know if most people want to start a green business, but if they want to start a business, creating a green version may be a part of the value proposition.  I want to be a dry cleaner, for example, and be environmentally responsible, to differentiate myself in the market.  Green can help a business be more conspicuous.  The first question is,What do you want to do, and then how does being green fit into that? 

JM: Few consumers will go out of their way for the sake of Mother Earth.  Green tends to be a tie-breaker, or a bonus of some sort.   Anything you can do to help people save money and reduce costs will do well.  For consumers at least, saving energy is the easiest way to also save cash.     

For the large companies, businesses like Waste Management help them manage their materials more efficiently, a new business model for them that is very different from their traditional model of being a waste hauler.  They found that there were upstream opportunities that help their customers cut costs and improve efficiencies. It’s possible that you can create those kinds of opportunities for smaller businesses, focusing on one niche, on one type of business.  Businesses have started out doing this for hospitals, for example, consolidating their purchasing for bed sheets, cotton swabs and other material, keeping things in stock, and handling waste.  From there, they work to reduce waste.  One way to go is to look for other niches in your community to build this kind of business. 

GC: How is the green market changing?  Are there more mainstream products green today?

JM: It depends on the product category.  For cleaning products, yes, with products like Green Works from Clorox becoming mainstream.  Also, things like energy efficient light bulbs are becoming mainstream.  Organic cotton clothing though has not had great uptake, compared to the clothing market as a whole.  Green clothing tends to be eco-chic, upper end.    

The real opportunities are not in what consumers buy, but in less obvious things behind the scenes.  There’s a company here in Oakland that created 100% recycled paper alternative to the clothes hanger, and is marketing it to clothing manufacturers like Nike and Gap, selling millions of them.  It’s the niche opportunities like this that are largely untapped. 

In most markets green is still a niche.  There is still a great opportunity for entrepreneurs to help customers do things better, faster, and cheaper, to reinvent the current generation of products.

GC: Will there be a broadly accepted certification standard for green businesses in the future?

JM: There are lots of efforts to do this, with bigger players getting in.  There are big differences between certifying green products, and certifying a green business.  All cars are basically the same, with the same parts, so certifying a car or another product is straightforward.  It’s hard certifying a business though, because businesses vary so much.  The way a business works depends on where they are located, for example.  It’s hard to buy green power if your utility does not offer it.  Coming up with that kind of standard has proven to be extraordinary difficult. 

To date there has not been much of an appetite for creating a ubiquitous green seal, and as a matter of fact the opposite has taken place; the number of environmental seals has multiplied as areas like building, tourism, fair trade, and organic.  Rather than trending toward a uniform label, things are moving more toward multiple labels. 

Some things will be come so commonplace that it will be expected, like a UL safety label.  The fact that something is packaged in recycled material is no longer a differentiator, for example, so some people don’t bother to label this anymore. 

A lot of what has taken place on the manufacturing side isn’t something you can put on a label.  A company that starts recycling water on the factory, for example - how do you put that on the label?  Recycling water may have a real eco-benefit, but it’s hard to tell this story, or put this information on a label or in marketing material.  

GC: Being quantitative in ads and other marketing, basing statements on solid facts, seems like a good way to avoid greenwashing, but does it really produce a reaction in consumers?

JM: It depends on the product and it depends on the consumer.  The same consumer could have different standards for different products, for example.  Or one standard for household products, but not others.  The overall rule is to be specific, but not so geeky that people don’t get it.  You need to allow people who want this information to get it -  on-line is the easiest way, ‘to find out more click here’.

It’s important to avoid general claims like ‘eco-friendly, or ‘Made with mother nature in mind’.  You need to be specific about the attributes.  Some people just want to know that it’s better than the other products, all other things being equal.  How much of the product is recycled?  Relatively few people ask a lot of questions or really look for detailed information, but they tend to be vocal if they find you being disingenuous, so it’s best to address them.  It’s good to have the details clearly and specifically available to those who want to access them, so that people who want to can get more information. 

GC: Are there eco-initiatives that don’t get talked about?

JM: Some stories can be hard to tell.  At the end of the day, most of efforts amount to being less bad.  When you talk about environmental efforts you sometimes illuminate problems that people did not know about.   Some people tell the story in a more limited way, putting it on their website, and telling employees.  Maybe it’s something their salesman talks about with customers, but not through big labeling, signage, or ad campaigns.

In a perfect world, the conversation would be ‘Wow I really like this product, and it works and it costs well, and by the way this is eco-friendly’.  When this happens, green seals the deal. 

GC: What is the importance of honesty and transparency in green marketing?   

JM: There are three key questions that I ask - ‘What do you know, what are you doing and what are you saying?’  First, consumers want to know that you understand your environmental impacts.  Most companies do not know, or know just the part contained within their walls.  Sometimes the activities that take place within your walls is a small part of the story.   For traditional blue jeans, for example, the biggest life-cycle impacts come from growing cotton and washing jeans at home — two things that jeans manufacturers don’t control.   So, what do you know?

Now that you know, what are you doing? Ask yourself if you are really “on the case.”  Do you have a plan?  Does it have tangible goals and timetables?  Even if it’s years in the making, what are you doing?

And finally, what are you saying? Are you talking about these things openly and honestly, not just claiming “hey, we’re green,” but saying ‘Here’s what we are doing,what we’re committed to, and where we are in the journey.” 

I think a customer wants to know that you understand your problems, have a plan in place to do something about it, and are talking honestly about it.     

GC: What trends does 2009 hold for green businesses?

JM: It’s going to be harder for some businesses with the recession.  A lot of people feel that they can only pay attention to environmental issues in better times.  Eco-issues take a back seat for some, and it can be harder to stand out.  Some of these products come at a price premium that will be a tough sell in a recession. 

But much of “going green” has to do with efficiency — lowering costs and waste and risks. Those goals are timeless and actually might increase during tough times.

GC: How important is the green aspect of products?   

JM: The real question is ‘How does green equal better?’  That is, how does making the green choice become a no-brainer, because it’s just clearly the better choice?  The fact that it’s a better choice, that’s where we need to get, that you choose green dry cleaning because it cleans better, not just because its green.  You buy the green car because it’s more fun to drive or a better deal.  Until it’s about that, it’s going to be a niche audience.

The iPod was not green, but it sold just because people liked it.  It was a better product that people liked.  It changed the way people related to music. It didn’t gain popularity because we were running out of plastic for CDs. It was simply better.  That’s the bottom line. The question should be ‘How can you make green a no-brainer?’