You run into all the shit that every company runs into...
...in that economic chain. And everyone thinks only of the short term and money.
No better place to feel like a consumer than here.
A Ferrari phone.
Five years ago I saw the iPhone 9 here. For five simcards.
It gave off a nice light too. Good LEDs.
For me the essence of making a phone was to get into the systems.
Designing is about getting into the dark matter...
...and making changes there.
The dark matter is all the complex systems.
Phones have a lot of dark matter. It's just a starting point.
But if you want to change the dark matter:
The economy, the systems that make phones into what they are...
...you must to get into the system.
You can make a phone on your own in your backyard...
...and say 'look, I did it.' It'll take 200 or 300 years.
We'll have to get a little older first.
But then it's an art object, a priceless symbolic thing in a museum.
I want to challenge the economic system.
So I'll have to start a business with a commercial interest...
...and get into that economy.
So we're not going to make a phone ourselves.
We'll start a company that makes phones in a different way.
So the solution must be found in the economy.
Why phones? Why not peanut butter or something simple?
Phones to me are the ultimate paradox.
A recent study done by Vodafone says that one in three people...
...will answer the phone even during sex.
That tells you something about our relationship with phones.
It's such a personal thing. We're constantly in touch with everyone.
It's about being connected, to the whole world.
But we don't know much about our phones. It's a very complex object.
Plus, it's one of the most competitive industries in our economy.
The biggest companies in the world are in that market.
It's the perfect object to unravel in order to understand the world.
In the end it's my story that counts: I'm going to produce a phone.
People will think I'm nuts. But they'll be interested.
If you make fair chairs, they'll think you're a hippie.
Everywhere in Shenzhen you see these boxes coming out of buildings.
They're bought and sold, they go to factories that make products.
The nice thing here is that you actually see and feel this chain.
Components, semi manufactures, everything is traded here.
We've stopped wondering where things come from and who made them.
Milton Friedman was an economist and economic philosopher.
He wrote a fantastic essay: I, Pencil.
It describes the global economy and markets through the eyes of a pencil.
What a wonderful way to explain our market system.
But it also shows we're completely alienated...
...from what happens behind the scenes.
It's great how we can make all these things without understanding them.
That's what industrialisation has done. Division of labour, market mechanism.
People everywhere make, sell and trade things without knowing...
...what the final product will be. Something comes out of it:
A phone, a lamp, whatever. A pencil.
And we all worked on that together.
But what I find a bit distressing about this video...
...is that it refers to the invisible hand, the price mechanism.
The economy itself ensures that things are produced.
It's said to link all the nations on earth, all people.
But that human link is gone now.
The invisible hand also obscures the way humans are linked...
...by the economic system.
That's the crux for building new insights and relationships...
...and restructuring the economic system.
The market system as such is fine. We can do a lot with it.
But the driving forces behind it need to change.
That can only be done if everyone in the chain cooperates:
From consumers to investors.
They expect certain things from businesses.
But they should realise there are other ways to organise the system.
They're making a movie.
They take it apart right here. No problem.
The components are out in the blink of an eye.
That many? - Yes, it's unusual.
Move it up. - I'd better not.
Is it a Sony? - No.
Then what? - I can't see.
Normally it takes two minutes to disassemble a phone.
With this one we're on five or six.
Maybe it's because we've never seen one like this before.
They even have long nails to unscrew those tiny parts.
I love how they still repair them. Westerners don't do that anymore.
They replace a whole block, or maybe a screen.
But if one resistor is broken, they throw the whole phone out.
But this guy here has components from other phones...
...so they have this recycling industry with usable components.
In our economic system that's too expensive.
Legislation and certification make re-use way too complicated.
Here they do it, but repair at this level in the West is impossible.
I'm getting nervous now. Will it ever work again?
He's dissembled it down to the bone.
It's a whole different outlook on products...
...and how to keep them alive.
I'm sure their phones last longer than ours...
...if repair at this level is possible.
Understanding the smartphone chain starts with the components:
The materials, what's it made of, by whom, and where.
It's absurd when you realise that everything we humans ever make...
...all industrial products, start out as a rock. A mineral.
And that we can make products out of them like phones, buildings...
...bridges, you name it.
When you go back to the mines, you see...
...that rocks are cut out by hand, 30 metres under the ground.
That's the start of complex products like phones.
One phone contains over 40 minerals. Some come from East Congo.
Millions of people were killed there...
...in conflicts over mining the minerals for our phones.
Coltan, copper, gold. And what happens in those mines is horrendous.
Hello. - Hello sir, how are you?
Are you coming all the way down here with a camera?
Is it illegal for underage people to work in the mines?
Yes. - This country is dying anyway.
Is this cassiterite? - Yes.
The coltan, the cassiterite, everything, they're taken from Bisie.
I know the area. I've been there.
I think we all know the stories.
They are on display there in the most graphic way.
The kind of warfare they have there...
...comes with rape and the total destruction of entire villages.
And lots of child soldiers, drug addicts.
The Mai-Mai in particular are completely crazed.
They're brainwashed.
Could you say that you as a designer were so shocked...
...that you thought: I can't do this, I have to stop?
This is so big, I don't want to get my fingers burned?
No. On the contrary. It was...
We know there's a lot of shit going on in Africa.
So was I shocked? No. I knew this.
I knew thousands are killed there.
So it's linked to my phone, but that's not shocking. We knew that.
But we don't realise it or feel it. It doesn't hurt us.
Because the human link is gone.
I want to restore them via this object. The object goes through the chain.
As a person you can't. But the phone starts at ground level.
So that's the basis.
So no, not shocked. I'm sad, it's horrible. But we already knew this.
Our numbers are small but symbolic. We can set a trend here.
We can make the story known.
Do you have the rock? - Yes, in the back.
This rock. This is a rock I took from the mine in Congo.
It's convinced lots of people of my story. This makes it tangible.
This black line here is cobalt. It's used for batteries.
This rock was the only tangible thing we had in our pursuit.
We had no clients yet.
People were keen to see what we idiots were doing.
We'd employed a few others by then and started the business.
People wondered if we would really produce a phone.
I went to KPN and I threw this rock on the board room table.
In some crazy way I'd gotten an appointment with the board.
So I was talking to the very top of KPN and I said:
I'm turning this into a fair phone.
I signed a contract for 1000 non-existing phones.
Our business was a few days old. We'd never made a phone before.
And the cost was unknown.
So I had a deal, and luckily that attracted more people.
They were like: If KPN buys them, I want them too.
Then we had crowdfunding to get the money.
After one week, 5,000 people had bought a fairphone.
After 3 weeks it was 10,000 and we had 3.5 million in the bank.
I panicked. I knew nothing about making phones.
We were not prepared for this economic insanity.
But one of the things I learned from crowdfunding...
...and from starting a business: it's all about the story.
Of course we checked if we could do it in Europe.
Because China is a really complicated country.
We wanted to solve the mineral issue.
We didn't need labour issues and human rights issues as well.
But the thing is: all the suppliers in that chain...
...sometimes up to six layers deep of component manufacturers...
...are in China.
So even if we assembled in Europe, everything would still come from China.
And we wouldn't have a clue about the workers.
So you were stuck with China? - Well, stuck...
We had to work with China, but I want to put that in perspective:
Those guys really know what they're doing.
Great party here with all those lights.
What a mess. Look.
There's one asleep down there.
They are taught this in school, to have afternoon naps.
If you walk around a factory in the afternoon...
...the whole line of workers will have an obligatory nap.
Offices. Everywhere. In China they all have power naps.
All these stands belong to factories.
The factories produce hundreds of thousands of items.
Factories, you say? They look like shops.
These are the factories' salesmen.
This area is entirely focused on electronics.
So all the factories in the country...
...put a salesman here permanently. It's like a trade fair.
And the whole world comes here to shop.
It's not just aimed at the Chinese.
Loads of smartwatches.
No better place to feel like a consumer than here.
A profusion of stuff.
And this isn't the only place like this in town. There are 30 or 40.
All full of this type of stand.
You have to assume the agents are all bastards, in principle.
They really are... I'm sure there's a few good ones.
The standard agent out here who does business for Western companies...
...links them to factories here. That's his job.
But they grab their margin at every turn.
They're traders, in fact.
They'll do whatever they can to get money out of it.
We told ours from the start: We don't want that.
Easily said, but you know they won't obey.
We said in the contract: We'll pay you well for your work...
...so you won't have to waste time on backhanded deals for yourself.
But he did that anyway, of course.
That was a business lesson I had to learn.
It's in their blood.
I felt bad for my clients too.
I wanted to do an honest deal, but then this type crossed my path.
That's how it works. Then I wanted to get rid of him.
But if I did, I'd have no contacts in China and he'd have free play.
It was a problem for our mission.
I'd had a few emails from Mulan by then.
She said: I must work for you guys.
I studied sociology, I have an MA in sustainability.
She's from Taiwan, so she speaks the language.
She loved what we do. It was her calling, she said.
So I called her and said: We have a problem.
We're in China and we need someone here permanently...
...who can supervise production, sustainability and work conditions.
Do you want to do it? She said: Great.
She cooked some meals for her husband, stuck them in the freezer...
...and said: 'Honey, I'm going to China.' She stayed for two years.
Fair factories don't exist. Or everyone would do their production there.
If you ask people: What is fair, in your opinion?
You'd get different replies in Congo or China or the Netherlands.
Even among different individuals.
But if you ask: What is unfair? you'll get lots of similar answers.
That's a kind of universal value, what is unfair.
One important thing in manufacturing is that everything looks the same.
Cosmetically. You want a smooth battery, for example.
That cosmetic finish is all handwork.
To make sure everything looks fresh for the consumers.
Most coatings are purely cosmetic, to make it look better.
Or so it won't stain. For touchscreens obviously that's necessary.
But who cares if the casing gets a little smudgy?
So you use no coating, you have less waste material...
...and fewer health hazards.
Lots of Chinese factories can't do coating in a safe, healthy way.
It's a decision you can make as a designer.
So it gets a bit smudgier. But the process is cleaner.
What strikes you when you walk into a factory?
I always want to know if the workers are relaxed.
If they all look like, oh shit, what's happening...
It's different when you come in and they giggle...
...and they look to see who the tall people are. That's just curiosity.
Another important thing is the cafeteria.
Does everyone sit together? Do workers and management mingle?
Do they chat together? I want to feel the atmosphere.
There are overtime issues. People work too much.
There are problems with temps. But the biggest problem in China is:
It's one of the most capitalist countries I know...
...but there's little or no protection of the work force.
There are no unions.
The law is very clear: The only union is the state union.
So there's no freedom.
You can't go talk to your manager about unfairness.
You can't go on strike.
This is the Foxconn recruitment office.
Foxconn has a bad reputation after a number of incidents.
People say it symbolises what's wrong with China.
The question is, what did they do after all those bad things were in the news?
The suicides of factory workers who said the pressure was killing them.
The mental pressure mainly.
Foxconn is known for its military system.
Would you talk to us? - I don't speak English.
Chinese is fine. - OK, what do you want me to say?
How do you think it will be?
I haven't been inside yet. I'm not sure what to expect.
Whatever happens, you just keep a positive attitude.
And then it will be fine, right?
This young man arrived yesterday and he got the job.
He lives hundreds of miles away.
But he's starting tomorrow. I think he's pretty happy.
They come here because they have no choice. They need the money.
It's that simple.
Everything changes when you are the company and you make the product.
You run into all the shit that every company runs into...
...in that economic chain. And everyone thinks only of the short term and money.
It's the strangest thing.
I started out with such passion and so much intensity...
...to make this product. And now I'm losing my way.
I want to succeed. I must make it succeed.
But I'm building something I can't control anymore.
Before you know it, it's grown into something you didn't want.
I'm hardly focused on the mission anymore, on why we do this.
I'm trying to control a growing enterprise.
Suddenly I have 100,000 clients and a 10 or 20 million turnover.
I'm responsible for the staff and for the product.
I'm only focused on the money and on surviving.
So I'm starting to wonder: What did I get myself into?
When did you realise you'd gone from designer to entrepreneur?
Well... When I found myself at the Health Authority's crisis centre.
That's when I realised.
Only then? - Only then.
Yes, I have... It was such a...
You begin, and it's a rocket, and it was launched.
And you give it everything you have.
And you keep doing that.
Of course I sometimes felt like, wait a minute.
I'm doing things I've never done before, all day long.
Can I really do this? I was insecure sometimes.
But up to that moment I had never thought: I'm afraid to do this.
I had enough hope and strength...
Or arrogance if you like. Up to that point I had been able to do anything.
I may have felt insecure sometimes, but I could do it.
We were doing the impossible.
But one day I just keeled over.
And then I realised that for a long time I'd been doing...
...something I didn't want and wasn't able to.
Mulan was frustrated by the distance.
Physically, but also because she didn't know what was happening.
Because the work was growing? - Yes. We're in a phase...
...where we realise: Wait, money is key here.
We need to survive.
Even sustainable businesses must make money.
One of the tough things you have to solve is...
...when you have no money to pay the wages of your own staff...
...financing a social programme in China loses its priority.
Someone has to take the first step.
Attempt the impossible and be called a nutter.
Which is good, because most people like nutters.
Joining them is a lot harder though.
Did fair trade chocolate become the biggest business ever? No.
They didn't conquer the market. But they set something in motion.
What we did won't affect this particular chain very much.
But it tells the big companies: Look guys, this is possible.
You can get your minerals from war-free zones in Africa.
You can organise programmes in China. You can recycle phones.
When you just do it, defying all economic principles...
...and show that your business won't go under...
...it's proof that the sustainable business model works.
And that customers actually want that.
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