This paper argues that only fundamental innovations in the governance structures, technologies, and business models of companies will enable the full development of sustainable manufacturing. This argument motivates the development of an analytical framework that integrates the concepts of governance, eco-design, and business model. This framework is used to study the case of Welsh car designer Riversimple. In an attempt to redefine the foundations of individual mobility, Riversimple not only uses new technologies such as fuel cells but also introduces an alternative governance system and a new business model that deviates radically from the traditional car industry. Following an engaged scholarship approach, we study Riversimple through personal access to the company’s leadership team as well as systematic qualitative content analysis. Instead of assuming that one of the analysed components (governance structure, technology, or business model) determines the others, we assume rather co-evolutionary and mutual dependencies. That is, Riversimple’s governance structure can only be implemented successfully together with the technologies and business model applied, and vice versa, and all three components are in a state of dynamic development. Our analysis thus faces the challenge of the historic reconstruction of these components at Riversimple.

1. Prof. Dr. Peter Wells
Cardiff University | Centre for Automotive Industry Research
Dr. Florian Lüdeke-Freund
University of Hamburg | Faculty of Business, Economics & Social Sciences
Riversimple’s Way Towards Eco-Mobility:
Synergistic Innovation in Governance, Technology and Business Model
1st “New Business Models” Conference
Toulouse, 17 June 2016

2. www.SustainableBusinessModel.org 2
A Brief History of Riversimple
Source: http://riversimple.com
(pictures show technology demonstrator, not final product)
Wales-based car designer RIVERSIMPLE
founded by Hugo Spowers aims to bring
about “mobility at zero cost to the planet”
“Whole system design”
+ new technology
+ new business model
+ new corporate governance

3. www.SustainableBusinessModel.org 3
A Brief History of Riversimple
Source: http://riversimple.com

4. www.SustainableBusinessModel.org 4
A Brief History of Riversimple
2001: OSCar Automotive
founded by Hugo Spowers
2005: “Hyrban”
project
2006: “LIFEcar”
project
UK TSB: £900k
2018 (plan):
Fleet of demon-
strator vehicles
2008: Morgan LIFEcar 2009: Hyrban 2016: Rasa
2000 2016 20182005 2010
2009: “Hyrban”
unveiled
2007: OSCar became
Riversimple
2008: “LIFEcar”
unveiled
2016: “Rasa”
unveiled
2014: Move to Wales
Gov’: £2 million
CompanyProjectsMilestones
…
… …
…
…
…

5. www.SustainableBusinessModel.org 5
 Engaged scholarship (e.g. van de Ven & Johnson, 2006)
- Trying to overcome the rigour and relevance divide
- Reducing the gap between management theories and practical application
- Increasing the potential impact on business and other organisations
 Conducting research with rather than on organisations
- Problem-driven and contextually embedded research
- Research outcomes may include theory development
- Major consideration is the co-production of knowledge
 Systematic, qualitative content analysis (e.g. Bowen, 2009)
- Using public sources such as corporate publications, news reports
- Systematic inductive and deductive coding
- Complemented with personal access to corporate information
Research Methodology and Theoretical Framing

6. www.SustainableBusinessModel.org 6
 Focus on the triple-determination of corporate governance, technology, and
business model on the micro level …
… as embedded within the …
 Co-evolution of the wider contextual system, industry structure, consumer
behaviour etc. on the macro level.
Research Methodology and Theoretical Framing
Cf. Norgaard, 1994

7. www.SustainableBusinessModel.org 7
The Technology – “Hyrban” (2009)
 Concept car “Hyrban”
- Installed range: 220 miles (350 km)
- Top speed: 50 mph (80 km/h)
- Weight: 520 kg
- Number of passengers: 2
- Emissions, well-to-wheel: <31g CO2/km
Source: http://www.40fires.org
(pictures show technology demonstrator, not final product)

8. www.SustainableBusinessModel.org 8
The Technology – “Rasa” (2016)
 Prototype “Rasa”
- Installed range: 300 miles (480 km)
- Top speed: 62 mph (100 km/h)
- Weight: 580 kg
- Number of passengers: 2
- Emissions, well-to-wheel: <40g CO2/km
Source: http://riversimple.com
(pictures show technology demonstrator, not final product)

9. www.SustainableBusinessModel.org 9
 “A business model describes the rationale of how an organization creates, delivers,
and captures value.” (Osterwalder & Pigneur, 2009)
 “A business model for sustainability helps describing, analyzing, managing, and
communicating
- (i) a company’s sustainable value proposition to its customers, and all other
stakeholders,
(ii) how it creates and delivers this value,
(iii) and how it captures economic value while maintaining or regenerating
natural, social, and economic capital beyond its organizational boundaries.”
(Schaltegger et al., 2016)
 Organization & Environment special issue
“Business Models for Sustainability”
http://oae.sagepub.com/content/29/1.toc
The Business Model

10. www.SustainableBusinessModel.org 10
The Business Model
• Affordable eco-mobility
• Personal mobility as service
• No hassle of ownership
• A car that lasts
• …
• Start-up: seed / venture
capital
• Major revenue stream:
monthly leasing fee
• …
• Distributed manufacturing
network with small facilities
• Open source approach
• Local provision of cars owned
by Riversimple
• Local refuelling network
• Refuelling for free
• …
“Use-oriented PSS”
“Designing a car for this business model requires us to sell performance, not just cars.” (Hugo Spowers)

11. www.SustainableBusinessModel.org 11
 According to Claessens (2006, p. 93), corporate governance is …
1. “… concerned with a set of behavioral patterns – the actual behavior of corporations, in
terms of such measures as performance, efficiency, growth, financial structure, and
treatment of shareholders and other stakeholders.”
… as well as …
1. “… concerned with the normative framework – the rules under which firms are operating,
with the rules coming from such sources as the legal system, the judicial system, financial
markets, and factor (labor) markets.”
 The behavioural perspective applies to the analysis of single firms.
 It deals with how a company’s behaviour is directed and controlled …
 … and how claims of shareholders and further stakeholders are handled.
Corporate Governance

12. www.SustainableBusinessModel.org 12
Corporate Governance
Source: http://riversimple.com

13. www.SustainableBusinessModel.org 13
Preliminary Results
 Managed co-development and co-evolution of a whole ecosystem
- Technological artefact & infrastructure – Car & local refuelling network
- Business model – Eco-mobility as an all-in service
- Corporate governance – Open and stakeholder inclusive
 Addressing major barriers* to sustainable business model innovation
- Environmental and social externalities – How to provide zero impact mobility?
→ Offering eco-efficient mobility as hassle-free, all-in, fee-based service
- Capital intensity and long lead time – How to finance RD&D?
→ Patient capital from purpose-driven seed capital investors and public funding
- The power of incumbents – How to overcome path dependence of one century?
→ Non-exclusive, open source and network approach to create a “movement”
*Cf. Wüstenhagen & Boehnke, 2008

14. www.SustainableBusinessModel.org 14
Preliminary Results
 Business model innovation orientations* employed
- “Maximise material and energy efficiency”
→ Light-weight construction, high-efficiency fuel cells and engines
- “Deliver functionality rather than ownership”
→ Riversimple owns the car, users pay an all-in fee
- “Develop scale-up solutions”
→ Open source approach, local, replicable production network
*Cf. Bocken, Short, Rana & Evans, 2014

15. www.SustainableBusinessModel.org 15
THANK YOU!
More about SBMs on
www.SustainableBusinessModel.org

16. www.SustainableBusinessModel.org 16
Literature
Bocken, N.; Short, S.; Rana, P. & Evans, S. (2014): A literature and practice review to develop sustainable business model
archetypes, Journal of Cleaner Production, Vol. 65, 42–56.
Boons, F. & Lüdeke-Freund, F. (2013): Business models for sustainable innovation: state-of-the-art and steps towards a
research agenda, Journal of Cleaner Production, Vol. 45, 9–19.
Bowen, G. (2009) ‘Document Analysis as a Qualitative Research Method’, Qualitative Research Journal, Vol. 9, No. 2,
pp.27–40.
Claessens, S. (2006): Corporate Governance and Development, The World Bank Research Observer, Vol. 21, No. 1, 91–
122.
Norgaard, R. (1994): Development betrayed. The end of progress and a coevolutionary revisioning of the future.
London, New York: Routledge.
Osterwalder, A. and Pigneur, Y. (2009): Business model generation. Amsterdam: self-published.
Schaltegger, S.; Hansen, E. and Lüdeke-Freund, F. (2016): ‘Business Models for Sustainability: Origins, Present Research,
and Future Avenues’, Organization & Environment, Vol. 29, No. 1, pp.3–10.
Schaltegger, S.; Lüdeke-Freund, F. & Hansen, E. (2016): Business Models for Sustainability: A Co-Evolutionary Analysis of
Sustainable Entrepreneurship, Innovation, and Transformation, Organization & Environment, No. online first
February 25, 2016, http://dx.doi.org/10.1177/1086026616633272.
Van de Ven, A. and Johnson, P. (2006) ‘Knowledge for theory and practice’, Academy of Management Review, Vol. 31,
pp.802-821.
Wells, P. (2013): Business Models for Sustainability. Cheltenham: Edward Elgar Publishing.
Wüstenhagen, R. & Boehnke, J. (2008): Business models for sustainable energy, in: Tukker, A.; Charter, M.; Vezzoli, C.;
Stø, E. & Andersen, M. M. (Eds.): Perspectives on radical changes to sustainable consumption and production.
System Innovation for Sustainability. Sheffield: Greenleaf Publishing, 70–79.