Name: Coreorient Oy / PiggyBaggy (beta)
Founders: Harri Paloheimo and Heikki Waris
Industry: Multiple industries / ICT-enabled services
Main services: PiggyBaggy crowdsourced ride-sharing for goods; Smart service system development and consulting
Sustainability: PiggyBaggy lowers emissions and resource consumption by providing access to already existing mobility, similar to car sharing
Have you ever needed a particular tool to do some small task, such as drilling a hole in a wall or tightening a loose screw in a bike, but didn’t have that tool available? And then had to either spend a lot of money to buy that tool or a lot of time finding someone who could lend it to you? Or have you ever spent half a day trying to get some mundane task done, such as delivering a book to a library or returning a broken MP3 player back to the store?
I’m sure you have. And I bet you have some tool that you’ve only used a few times in your life, such as a power drill, lying around in your basement.
What if instead of owning expensive equipment, you could rent or borrow the tool you need, or pay someone else in your neighborhood to drill the hole for you? And how about if you didn’t always have to go to the library to borrow books, but could instead pay someone else to deliver the book, or use a library access point near your house?
What if you could live in a world with less stuff to take care of, less hassle over mundane things, and more time to do the things you really care for?
Moreover, what if in this world you could get things done by using fewer resources, less or no gasoline, and less energy. You would pay for services, instead of goods, and would have access to functionality and results, instead of having ownership of the damned power drill.
And even if you do want to own your power drill, the rest of it sounds pretty good, right?
A Finnish company called Coreorient, is trying to build that world.
Founded in 2011 by several ex-Nokia experts, Coreorient is a company that has been involved in developing services and technologies that help people get everyday things done more efficiently and using less time.
The company’s flagship service, PiggyBaggy, is a crowdsourced ride-sharing service for goods. The idea of PiggyBaggy is simple: let’s say you need to deliver a broken laptop to an electronics store for a fix-up. Instead of going yourself, you can use PiggBaggy to get someone in the PiggyBaggy community to deliver the laptop for you in return for a small payment. For example, someone might be commuting past your house and the electronics store and could, therefore, take your laptop on her way to work, giving you more time to do other things.
According to the CEO of Coreorient, Harri Paloheimo, the idea for crowdsourcing goods-delivery came to him when he was returning a broken microwave back to the store. As Paloheimo didn’t own a car, the journey to return the microwave involved taking several buses and a subway.
“When I spent half a day returning a broken microwave back to store, I remember thinking at one point that this doesn’t make any sense and that there has to be a more efficient way to get this done.”
Paloheimo began tinkering with an idea of a crowdsourced ride-sharing service for goods and even tried to get Nokia to do a collaboration with several existing ride-sharing companies. In the end, however, Paloheimo didn’t get the required support from Nokia headquarters and finally, he left Nokia in 2012 to lead Coreorient. The company had already been founded on paper in 2011 by his college, Heikki Waris. Although the men were taking a leap from a big corporation to run a small startup, being an entrepreneur felt oddly familiar to Paloheimo:
“I had been acting as an intrapreneur at Nokia for years before starting my own business. I had imagined that things would work in a more rational way outside big corporations, but I soon realized that the same pitching theater and powerpoint circus that I was used to continuing in the real world.”
Moreover, power points and pitching weren’t the only things familiar to Paloheimo. He was also very used to facing failure:
“They say that you can’t have success before going bankrupt a few times. Well, I hadn’t gone bankrupt, but I had experienced some big failures in Nokia. For example, having to disband a team you’ve lead feels a lot like going bankrupt to me.”
After initial difficulties, PiggyBaggy began gaining momentum and by the end of 2015 the service had over 1500 users and between 700-800 items delivered.
Aside from PiggyBaggy, Coreorient is also constantly experimenting with new concepts and service development and wants to take part in developing a Sharing Economy. However, Paloheimo makes clear that the company wants to avoid becoming similar to Uber:
“We want to frame ourselves as a second wave Sharing Economy startup. The first wave consisted of companies like Uber, which maximized value solely for their end-users. We, however, think about the Sharing Economy and our business from a broader perspective. We want to maximize value for all stakeholders and interest groups involved in our business, not just for ourselves or our customers.”
Paloheimo emphasizes that Coreorient wants to take part in developing business models and win-win-win structures that maximize value for both consumers, the company, and the society at large. As an example of this, Paloheimo talks about Coreorient’s collaboration with the city of Tampere:
“We got funding from the European Social Fund to find ways to activate youngsters that are in danger of becoming marginalized. We are now trying to find ways to use crowdsourcing as a medium for involving young people in society and to help them find a job. Although we use crowdsourcing as our main tool, it doesn’t necessarily involve PiggyBaggy or ride-sharing”, says Paloheimo.
According to Paloheimo, Coreorient has been involved in many similar projects all around Finland. The different experiments have also enabled Coreorient to test different assumptions about the markets and their customers, which helps the company to refine its ideas and services. Armed with this experience, Coreorient is now looking outside Finland to Europe and beyond.
“The experiments we’ve conducted in Lahti, Jyväskylä, Helsinki, and Tampere have confirmed us that our systems and main concepts work. However, now the time for experiments is over and we need to make decisions about where and with whom we want to go on with this. Finland is getting small for us, and we’re potentially looking to expand to Denmark, or maybe India.”
At the moment Coreorient is looking for partners and collaborators to make this expansion happen, while also continuing to develop their core service concepts.
PiggyBaggy Business Model: Sharing Platform
Value proposition: “Ride-sharing for goods. Convenient. Sustainable. Secure.”
Main customers: 1) People who need help in getting items delivered. 2) Businesses that need low-cost options for purchase delivery.
Revenue generation logic: Two options: 1) Subvention-based: online businesses will pay PiggyBaggy for using it in purchase delivery, 2) Transaction-based: end customers of second-hand online marketplaces will pay PiggyBaggy for using it in purchase delivery.
According to Accenture’s business model framework, PiggyBaggy has a sharing platform business model. A sharing platform is either an online or physical platform that facilitates the sharing of resources and decreases the overcapacity of assets. In PiggyBaggy’s case, excess capacity is people’s time and mobility. PiggyBaggy enables individuals and businesses to tap into the existing mobility in order to get items delivered.
Accenture’s (2014) 5 Business Models for a Circular Economy.
PiggyBaggy is an excellent example of the power of IT and the internet to create new ways of organizing human activity. What PiggyBaggy actually does is that it uses the internet to provide access for tapping into excess mobility and time – something that would have been near impossible to do 20 or 30 years ago. By creating the PiggyBaggy platform, Coreorient has essentially created a new marketplace where the supply and demand for mobility and time can meet.
For example, I might need a book delivered to the library, but I don’t have enough time or I’m otherwise unable to go to the library myself (lack of time and mobility). However, there are hundreds of people going past my house and the library every day, many of whom could pick up my book and return it without making a major detour (overcapacity of time and mobility). PiggyBaggy allows me to delegate my tasks to these people, therefore putting the overcapacity of time and mobility into good use.
According to Harri Paloheimo, Coreorient has at least two potential revenue models for PiggyBaggy. One is based on a subvention model, where PiggyBaggy would essentially enable businesses that do home delivery to lower their costs by using the PiggyBaggy community to deliver customer purchases. Paloheimo elaborates:
“In EU and in Finland it costs approximately 15 euros to deliver a product to a customer. At the same time customers are on average only willing to pay 5 euros for the delivery. This means that businesses lose 10 euros on average per packet delivered to consumers. Our idea is that we could lower these costs and get paid for doing so.”
The other option would be to use a transaction fee-based revenue model, where the customers would be individuals shopping at second-hand marketplaces. Usually, in second-hand shops the end-users arrange the delivery of items themselves, but by using PiggyBaggy they could use crowdsourcing to get their items delivered. PiggyBaggy would charge the transporter around 15-20 percent of the fee he or she received from the customer.
In both revenue models, PiggyBaggy lowers the costs of transportation while also reducing emissions and pollutions from cars by decreasing the overall number of car trips.
But PiggyBaggy is not the only service that Coreorient has been developing. The company has been experimenting with a concept called smart containers. A smart container is essentially a shipping container that is used as an access point for different services and resources. For example, smart containers in Kalasatama, Helsinki have been equipped with library services, organic food services, recycling services, and electric car charge points. Furthermore, the containers can be used as PiggyBaggy delivery points.
How are PiggyBaggy and the Smart Containers connected? Paloheimo shares a vision of a global network of community-run smart service points, connected by crowdsourced goods delivery. According to Paloheimo, this kind of network of services and crowdsourced transportation represents a viable alternative for today’s centralized mass manufacturing and transportation.