Business breakdown
3 Unexpected Strategies From a $60M Ethical Tech Brand (Fairphone)
3 Unexpected Strategies From a $60M Ethical Tech Brand (Fairphone)
The basics
Fairphone is an impact electronics company based in Amsterdam that builds modular, repairable smartphones using fair materials and ethical labor practices.
Since starting in 2013, they’ve grown to $60M in annual revenue and have sold over 400,000 fair trade phones.
Plus, they are the first (and maybe only?) e-waste neutral smartphone company in the world.
They won’t be the biggest phone company in the world, but they’re proof that ethical products can work, and that values-led business doesn’t mean thinking small.
But how big of a problem is the smartphone world really?
Next, a bit of perspective.
The big picture
The path a phone takes to get to your hand is a long and troubling one.
We’ll break it down into a few categories:
Waste
53.6 million tons of e-waste is produced each year, with only 20% properly recycled. For context, e-waste makes up just 2% of global solid waste but causes 70% of the toxic waste in landfills.
Materials
Smartphones rely on conflict minerals, often sourced from areas with very exploitative environments.
People
Workers from the mines to the assembly floor often earn less than a standard living wage.
Emissions
Just making one device generates around 70kg of CO2, mostly from mining, materials, and global shipping.
And if that wasn’t enough, the electronics industry’s model is built on “planned obsolescence”, with phones lasting just 2-3 years before going to landfill (or your desk drawer along with the old Zune and iPod Nano).
Side note: millennials, it’s ok to get rid of your Apple product boxes.
I know they look nice but it’s getting out of hand!
Apple will even recycle them for you I promise.
Get’s off tiny soapbox.
Anyway, Fairphone’s mission is to change all of this.
The solution
Fairphone builds phones that are:
Modular: components are easy to swap out and repair yourself
Built with fair materials: ethically sourced components
Produced in fair factories: ensuring ethical labor practices
Supported for longer: offering 5-year warranties and 8-year software updates
E-waste neutral: recycling one phone for every phone sold
They’ve picked apart the entire supply chain, one that thrives on secrecy, and built trust and transparency straight into it.
Fairphone makes money from:
Phone sales
Accessories and spare parts
Refurbished phone resales
Their business model is profitable because their phones last longer, not despite of it.
It was a big risk, but it’s paid off.
The impact
Fairphones sustainable business model has delivered:
55.5 tons of e-waste out of landfill
944 tons of CO2 emissions avoided (just in 2023)
$950,000 in living wage bonuses to factory workers
Phones that are made from 70% fair and recycled materials
100,000+ lives uplifted across mining, manufacturing, and recycling industries
But they didn’t start with huge budgets, major backers, or a deep electronics expertise in the beginning.
Here’s how they did it.
The strategies
Fairphone didn’t start with a product, it started with a big question.
Can a modern smartphone be built fairly and profitably?
Turns out, a lot of people were interested in finding out.
The movement launch
Fairphone sold 25,000 units before even making a single one.
No prototypes, no ad spend, no expensive ad campaign.
Bas van Abel, Fairphone’s founder, launched a crowdfunding campaign.
I know what you’re thinking. “Crowdfunding isn’t a strategy”.
And you’re right.
But this isn’t a “post and pray” strategy.
Bas succeeded by:
Starting with a cause: “trying to build the world’s most sustainable phone” is a nicer sell than “here’s a new phone to buy”.
Building credibility first: Bas spent years in social impact and sustainability advocacy, building his network and authority.
Activating networks: after years of building his network he had built in distribution (through NGOs, impact blogs, climate leaders, etc.) to get the campaign the momentum it needed.
Staying radically transparent: risks, costs, challenges, everything was on the table.
Using these levers, Bas attracted advocates instead of customers.
He found the people who believed in the world he was trying to build, and invited them to join the mission.
Radical transparency as a differentiator
Fairphone made a decision from the beginning to be as open and transparent as possible.
And it’s proven to be a key tool in building trust (and really shedding a light on the mainstream competition).
About everything.
Full cost breakdowns, from materials to labor
Supply chain maps and sourcing reports
Progress, setbacks, and impact updates
Through this strategy they:
Built immediate credibility with their customers
Made the complex world of electronics more approachable
Created content that picked up even more distribution through journalists, NGOs, and foundations
In an era of greenwashing, bold transparency about the things everyone else is hiding can be a competitive edge.
Partnerships for sustainable scaling
I see impact founders time and time again, trying to do literally everything.
And I get it, any founder needs to wear all the hats, but finding aligned partners early on can 10x your leverage.
Not to hyperscale. But to focus on what you do best and grow while helping value-aligned partners do the same.
Fairphone didn’t try to build everything alone.
They partnered with:
NGOs like Fair Cobalt Alliance for material sourcing
Open-source software groups to extend their phone’s lifespan
Telcos to leverage existing distribution
Through a shared mission, Fairphone utilizes partnerships that don’t feel like transactions.
The thing I love about this company’s journey is that when other companies are relentlessly chasing growth at all costs, they are relentlessly chasing their values.
And it’s working.
Fairphone isn’t going to be the biggest phone brand in the world, but they just might be the most important one.
Honestly, this deep dive has made me reflect on my own tech choices.
So much of conscious consumerism is tied up in food, clothing, and household items (at least for me).
But I rarely think about the phone I carry around all day, let alone how it was made.
Even if you’re not building a new business, I hope this essay brings a bit of perspective on the systems we’re part of, and how we can shape them.
The basics
Fairphone is an impact electronics company based in Amsterdam that builds modular, repairable smartphones using fair materials and ethical labor practices.
Since starting in 2013, they’ve grown to $60M in annual revenue and have sold over 400,000 fair trade phones.
Plus, they are the first (and maybe only?) e-waste neutral smartphone company in the world.
They won’t be the biggest phone company in the world, but they’re proof that ethical products can work, and that values-led business doesn’t mean thinking small.
But how big of a problem is the smartphone world really?
Next, a bit of perspective.
The big picture
The path a phone takes to get to your hand is a long and troubling one.
We’ll break it down into a few categories:
Waste
53.6 million tons of e-waste is produced each year, with only 20% properly recycled. For context, e-waste makes up just 2% of global solid waste but causes 70% of the toxic waste in landfills.
Materials
Smartphones rely on conflict minerals, often sourced from areas with very exploitative environments.
People
Workers from the mines to the assembly floor often earn less than a standard living wage.
Emissions
Just making one device generates around 70kg of CO2, mostly from mining, materials, and global shipping.
And if that wasn’t enough, the electronics industry’s model is built on “planned obsolescence”, with phones lasting just 2-3 years before going to landfill (or your desk drawer along with the old Zune and iPod Nano).
Side note: millennials, it’s ok to get rid of your Apple product boxes.
I know they look nice but it’s getting out of hand!
Apple will even recycle them for you I promise.
Get’s off tiny soapbox.
Anyway, Fairphone’s mission is to change all of this.
The solution
Fairphone builds phones that are:
Modular: components are easy to swap out and repair yourself
Built with fair materials: ethically sourced components
Produced in fair factories: ensuring ethical labor practices
Supported for longer: offering 5-year warranties and 8-year software updates
E-waste neutral: recycling one phone for every phone sold
They’ve picked apart the entire supply chain, one that thrives on secrecy, and built trust and transparency straight into it.
Fairphone makes money from:
Phone sales
Accessories and spare parts
Refurbished phone resales
Their business model is profitable because their phones last longer, not despite of it.
It was a big risk, but it’s paid off.
The impact
Fairphones sustainable business model has delivered:
55.5 tons of e-waste out of landfill
944 tons of CO2 emissions avoided (just in 2023)
$950,000 in living wage bonuses to factory workers
Phones that are made from 70% fair and recycled materials
100,000+ lives uplifted across mining, manufacturing, and recycling industries
But they didn’t start with huge budgets, major backers, or a deep electronics expertise in the beginning.
Here’s how they did it.
The strategies
Fairphone didn’t start with a product, it started with a big question.
Can a modern smartphone be built fairly and profitably?
Turns out, a lot of people were interested in finding out.
The movement launch
Fairphone sold 25,000 units before even making a single one.
No prototypes, no ad spend, no expensive ad campaign.
Bas van Abel, Fairphone’s founder, launched a crowdfunding campaign.
I know what you’re thinking. “Crowdfunding isn’t a strategy”.
And you’re right.
But this isn’t a “post and pray” strategy.
Bas succeeded by:
Starting with a cause: “trying to build the world’s most sustainable phone” is a nicer sell than “here’s a new phone to buy”.
Building credibility first: Bas spent years in social impact and sustainability advocacy, building his network and authority.
Activating networks: after years of building his network he had built in distribution (through NGOs, impact blogs, climate leaders, etc.) to get the campaign the momentum it needed.
Staying radically transparent: risks, costs, challenges, everything was on the table.
Using these levers, Bas attracted advocates instead of customers.
He found the people who believed in the world he was trying to build, and invited them to join the mission.
Radical transparency as a differentiator
Fairphone made a decision from the beginning to be as open and transparent as possible.
And it’s proven to be a key tool in building trust (and really shedding a light on the mainstream competition).
About everything.
Full cost breakdowns, from materials to labor
Supply chain maps and sourcing reports
Progress, setbacks, and impact updates
Through this strategy they:
Built immediate credibility with their customers
Made the complex world of electronics more approachable
Created content that picked up even more distribution through journalists, NGOs, and foundations
In an era of greenwashing, bold transparency about the things everyone else is hiding can be a competitive edge.
Partnerships for sustainable scaling
I see impact founders time and time again, trying to do literally everything.
And I get it, any founder needs to wear all the hats, but finding aligned partners early on can 10x your leverage.
Not to hyperscale. But to focus on what you do best and grow while helping value-aligned partners do the same.
Fairphone didn’t try to build everything alone.
They partnered with:
NGOs like Fair Cobalt Alliance for material sourcing
Open-source software groups to extend their phone’s lifespan
Telcos to leverage existing distribution
Through a shared mission, Fairphone utilizes partnerships that don’t feel like transactions.
The thing I love about this company’s journey is that when other companies are relentlessly chasing growth at all costs, they are relentlessly chasing their values.
And it’s working.
Fairphone isn’t going to be the biggest phone brand in the world, but they just might be the most important one.
Honestly, this deep dive has made me reflect on my own tech choices.
So much of conscious consumerism is tied up in food, clothing, and household items (at least for me).
But I rarely think about the phone I carry around all day, let alone how it was made.
Even if you’re not building a new business, I hope this essay brings a bit of perspective on the systems we’re part of, and how we can shape them.
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200+
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200+
thinkers, builders, and investors
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200+
thinkers, builders, and investors
