Michael Schneider, CEO of Fluidesign, Fluidata and Nesting

I’ve been listening is disbelief to the debate taking place on capital hill this week. GM, Ford, and Chrysler for the past 25 years have been making mediocre cars, and until relatively recently were actually getting away with it. Now, due to a global slump in demand, they are being harder hit than quality companies like BMW and Toyota, and are pandering to the government for a bailout.

The capitalist in me doesn’t want these companies to get one cent. In business, if you make products people want, you do well. If you make, well, shitty products, the opposite happens. These companies have wrapped themselves in mediocrity for decades and are now asking for a bailout. Part of me wants us to let them fail, and not reward companies for producing poor quality gas guzzling cars that no one wants.

Stepping back from this debate and looking at the very sobering numbers on the number of Americans out of work and the overall health of our economy, it makes me think twice. These companies SHOULD improve or fail. But, is now the time to prove this point? I believe that psychology is important, and I’m concerned that while it’s right to let them fail, that the American public (and the World for that matter) can’t take another big blow. Not right now. We need to recover a bit before we pull this plug (or a miracle happens and they actually produce cars that people want). And therefore, I think we should consider paying for mediocrity for a little while. It’s potentially far cheaper than the alternative.

I’ve been watching the past couple of weeks as the world economy has taken a nose dive, fear has run rampant, and trillions have been “lost.” Fluid isn’t immune, and we’ve had to make hard (and sometimes painful) adjustments. But we’re getting through it.

My advice? Sell your way through this economy. Deals are still out there - they may be harder to find, and they may be for 20-30% less, but they’re still there. Adapt (quickly) by becoming lean in your operations, lower your pricing a bit, and sell like crazy. If you’re VC funded, check out Sequoia’s take.

That’s what we’re doing. So far, so good.

Having become increasingly invested in solving the problem of global warming over the last few years (starting with the 2006 release of Al Gore’s Inconvenient Truth), I am convinced that the only way to truly solve the problem is through economics. Companies and individuals are simply not going to combat global warming in a meaningful way unless it’s profitable to do so, as much as we’d like to believe otherwise. I believe the notion of tree huggers around the world uniting in one giant force to solve this problem – simply for the sake of solving it – is counter to capitalism and unfortunately not realistic. That being said, everyone has a huge incentive to solve the problem, and I believe we can do so, and profitably.

Imagine walking into a grocery store, market, clothing store, book store – really any consumer-facing retail store – and seeing everything labeled and given a rating – based on the amount of carbon emitted in the production, transportation and disposal of that product.

Let’s take one product – detergent. Today consumers are loyal to a brand or simply choose the cheapest one available. Brand loyalty comes from a variety of things – they like the way the detergent smells, they like the colors on the bottle, they like the way it cleans, they think it’s the “best,” etc. Price shoppers are more black and white – they constantly look for the best bargain and switch to it, regardless of the brand.
In either case, the consumer is really choosing between – let’s face it – nearly identical products.

Now, imagine this same exact scenario, with all of our preconceptions about brands and our price sensitivities – only this time with the benefit of knowing how much carbon was emitted in the production, transportation, and disposal of the product.

What if a product wasn’t just the cheapest but was also the lowest carbon producer (ie. the best for the environment)? Would you be willing to pay a few extra cents – even a dollar more – for a product that is the most eco friendly? What if consumers began fighting global warming with their collective pocket book, choosing products based on their lowest carbon emissions?

Just imagine the burden that would create on companies, if this information were presented to consumers in an easy-to-understand way. Their sales and profits would be under pressure, and with consumers making a decision with their pocketbook, they would have to change, or die. It would be a race to the most “ecofriendliness” in every product (and potentially service) category.

With a universal system applied to all products (and services), showing us the carbon “tax” on our buying decisions, I believe consumers – who want to do the “right” thing but don’t have the information to do so right now – would gravitate towards the lowest carbon products (and services), creating a paradigm shift and forcing companies to adapt – and be more environmentally conscious.

This may not be the only way, but I know one thing for certain – as long as I don’t have the environmental impact information – I can’t proactively make an environmentally conscious choice.