DIEM - Your Bank of Things
Profit sustainably off your own assets.
Courtesy of Geri Cupi - Founder & CEO of DIEM; Forbes 30 under 30
What service does DIEM provide?
We like to call DIEM ‘Your Bank of Things’. It gives opportunities to people to liquidate their fashion items (with electronics and other categories to follow), using a price algorithm which values an item almost instantly. You can cash out the item, DIEM buys it from you, and you can use the money in your DIEM account to buy anything you like.
After cashing out their items, the user sends the items sold to DIEM’s facilities. They don’t sell the items to another customer. Rather we buy the items from them and sell it to other customers. Essentially, we’re a market maker, in financial terms, that is trying to change the relationship people have with their assets - your wealth is not only cash in a bank account but also the liquefiable assets you own.
Describe the evolution of DIEM from seed to launch
We had a soft launch in September with about 100 registered users testing the software and making sure everything ran smoothly. By the end of the year, we will onboard 5,000 users. The scale of development has been extremely dynamic and rapid, also in response to external environment. Because of COVID-19 and a potential recession or depression, we’ve witnessed people trying to liquidate items in their home. By creating DIEM, what we’re doing is simply making their lives easier by allowing them to liquidate their items quicker. We’re also showcasing our mission and belief that sustainability and capitalism can coexist. Ideally, instead of throwing away that old item that’s sitting in your wardrobe, you can put it back in the market. That cycle of events will reduce the number of items being produced and lower the environmental footprint of everyone. Plus, offering quick cash out of items prevents you from having to wait weeks or months before receiving your cash when you use other resale sites.
Where did the passion for commercial sustainable activity come from?
DIEM is my fourth start-up. Initially, I built JOOK which was my entry into the fashion world. It showed me how much of a negative impact the fashion world has on the environment - the second largest polluter in the world after the petroleum industry. After that, I built Social DNA with my brother. It was focused on upcycling old designer jackets before we sold the business. MonoChain was built with that same ethos and purpose because, if you think about it, if your country is in a war, you will think of what you can do to help your country. What I see now is the world at war in a state of a climate emergency and so, as an entrepreneur, all I can do is build organisations that help fight this battle.
In fighting that war through start-ups, what have you learnt about people’s attitudes towards sustainability?
From mid-2019 to now, we’ve seen a massive shift in companies attitudes towards sustainability from a defensive stance to an offensive approach. That is being driven firstly by a change in consumer attitudes because we’re seeing more consumers care about the environment, especially Gen Z. As a result, there’s a lot of reactionary movement taking place in the market, even with firms who’ve been around for 100 years and act like sustainability is in their DNA when we all know it’s not.
Elaborate on the ethos that sustainability and capitalism can coexist.
In MonoChain’s world, for example, we believe a business can behave sustainably and make shareholders happy. Being realistic, if you’re a public company, you’ll be judged according to profit and, often, sustainability is seen as a cost and not seen as a revenue driver. Building MonoChain, however, enabled brands to build their e-commerce solution - they can monetise more items that exist within the ecosystem. At the same time, they produce fewer items while witnessing their revenue go up. In the case of DIEM, we have evolved this to extend as a more comprehensive service (including financial services) to the final consumers. Instead of keeping something in their house which they’re not using, they can put it back into the system and use the cash to travel, buy something they like or do a master’s degree. By allowing them to capitalise on their assets, we also enable them to have a positive impact on the environment.
Does technology play a bigger role than humanity in bringing those two concepts together?
I think it’s a collaboration between both. Tech can influence people to behave in a certain way, but at the end of the day, consumers are the ones who make the final decision. More transparency about products that are being consumed will result in consumers having more power. However, if consumers decide to spend their money on less sustainable brands at the same price as sustainable brands, they don’t care about sustainability and probably just want a better deal or don’t relate to the purpose of the brand.
We have all witnessed the repelling effect of ‘greenwashing’ that exists whereby companies pretend to be more sustainable than they are. They put more money in their advertising efforts to exaggerate their sustainability credentials. That ends up confusing consumers and makes consumers even think sustainable companies are also greenwashing. This perpetuates a cycle of distrust, which we can only break with systems that guarantee an ultimate transparency to the consumer.
Does capitalism present a challenge to coexistence with sustainability and vice versa?
The reason why you haven’t heard about this expression (sustainability and capitalism can mutually exist) is because of capitalism. It’s a matter of perception. For example, as CEO of a public company, there’s a tendency to be focused on short-term decision-making whereas sustainability is a long-term play. Shareholders are pushing quarterly results. It takes a couple of organisations who are visionary and think about climate change and how to change their business to adapt and reduce their footprint. They are the ones who will be around in 2050.
How do you hope DIEM will help people to see that they can make money while saving the environment?
At the end of the day, we’re a tool on people’s hands. The decision of whether to use it is up to them. For the consumer, instead of keeping something in their home that is essentially a waste, it’s better to bring it back to the market. And if they want to buy a new thing, even better if it’s from the secondary market. That creates an ecosystem where fewer things are being produced when each of us has too many things in our houses. I, for example, recently moved to a new house and donated 70% of my wardrobe. These are things that have been there for a year or two and it doesn’t make sense for me to keep anymore.
Ideally, we want brands to be involved where if a product doesn’t have demand, it can be off cycled. Or, for instance, a leather bag can be a leather seat on an aeroplane because potentially the materials for those things are the same. In effect, that means we can keep those materials for longer. If you increase the lifespan of a fashion item by 9 months, you reduce your carbon footprint by 20-30%. So, by using DIEM, you will be able to liquidate your items while behaving in a sustainable manner.
How do you measure success for DIEM from non-financial and financial standpoints?
For us, the social mission is paramount - placing the social impact ahead of the bottom line. We’re very socially driven as a business and we know that we’re not going to be for every type of investor. We want to make sure our mission leads the business and we're willing to take a stand for what we believe. We target investors who care about the environment because they will become shareholders as well. Towards the end of last year, we started to see a shift in the market generally where investors seemed to care more about sustainability. The top funds are changing where they put investors’ money, and that’s going to change the types of start-ups that are going to be built in the next couple of years.
How do you see the start-ups you’ve built complementing and challenging each other?
For me, it’s the whole journey. Through JOOK we understood how the fashion world works and how to build a consumer-focused business. Social DNA helped us understand what the actual value of things really is. With Social DNA, we actually upcycled jeans from the 1950s - believe it or not, the quality of those jeans is better than those today. Later, when we were working in MonoChain, we found that those jeans sell for thousands on eBay, but we had sold them for €300 and thought we had done well! Similar to us, we know that there are people who don’t understand the value of the things they have like their grandfather’s clothes from the 60s or 70s. DIEM allows them to realise the value of those things.
What is your growth plan for DIEM over the next three years?
We started as a UK business, but the goal is to grow in the EU and the U.S. in the next three to five years and do so step by step. Watch this space!
Geri Cupi - Founder & CEO of DIEM; Forbes 30 under 30