In the weeks leading up to the Sustainable Brands Innovation Open (SBIO) finals on June 4th, where the runner-up will be decided via live online public vote, we will get to know our 11 semi-finalists. Today, meet CREW.
More and more studies are showing that many consumers are willing to pay more for socially responsible and eco-friendly products — but what if it were the other way around? What if consumers were rewarded for purchasing products that met their demands while also rejuvenating the planet? A startup called CREW (Connected Resourceful Empowered World) has devised a system to do just that: The company’s goal is to provide a distribution channel for innovative “ecopreneurs” who want to evolve capitalism into a force for good.
Shah told Styler, “We need 100,000 people to sell $10 trillion in cleantech products by 2020 to mitigate the worst impacts of climate change — and that is just in the US, according to the International Energy Agency. It is not going to happen through traditional distribution. We need a new type of network and you should build it.”
With the current paradigm, over half of the retail cost of a product goes to advertising, distribution and retail mark-up, Styler says. CREW is designed to remove all of those layers and reward the people and the companies who join CREW — the money stays in the network just as it used to stay in our local communities.
In the first scenario, the wealth is concentrated, Styler says. With CREW, the wealth is distributed to everyone in the network who helps get the solution to market. Members have a vested interest in the success of the companies.
The idea grew from Styler’s 25 years in network marketing, both as a distributor and the president of two direct sales companies. In the normal network marketing model, companies find a niche market, then pay high commissions to convince people to sell a product to their friends (often for an inflated price) in the hopes of one day becoming wealthy.
Styler found two problems with this model: 1) most people never get wealthy and 2) making money off of friends and family feels slimy. Styler changed the model — removing the commissions and adding profit-sharing. That icky feeling of making money off our friends is transformed into a contagious “barn raising,” where we are all in this together.
“This is not some socialist ideal — it’s Distributed Capitalism,” Styler said.
Each Member pays $33 per month and receives $30 to spend on the network's "impact products." If you don’t spend it that month, the money accumulates in your “piggy bank.” The $30 of value a Member receives only costs CREW $20, because vendors give CREW a discount (vendors still make 67 percent of the retail price — more than they would by selling through retail stores). CREW then takes that “extra” $10 and puts it in an investment fund to finance further innovation.
CREW is the “accredited investor” in these companies, and the members receive profit-sharing for their results. This is significant, Styler says, because the SEC has specific rules for who can invest in startups. Since CREW Members never invest (they buy products), CREW can share profits based on their actions of helping to build the companies and the customer base. Simple as that.
To illustrate, when CREW has 100,000 members, $3 million in socially impactful products and services will be sold and $1 million in social impact investing will happen every month. The funded companies receive both the money to launch and a built-in customer base with the CREW. The profit-sharing creates a cycle of rewards in which every active Member can participate financially in the next big thing.
“Crowdfunding is an event. CREWfunding is a relationship. We provide funding, distribution and ongoing sales from Members who have a vested interest in the success of the businesses on the network. CREW turns passive consumers into active stakeholders,” Styler concluded.