DESIGNING CIRCULAR

SOLUTIONS USING THE

BUSINESS MODEL CANVAS

© Finch & Beak - Breda, 5th October 2017

The data is clear: if we carry on using the Earth’s resources at the
current pace, mankind will need five planets by 2050. Although the term
“circular economy” is not prevalent yet in all boardrooms, awareness of
Foreword
sustainability risks and opportunities is growing among senior
management. However building and scaling the business case remains a
major challenge.

So why did we publish this small guide? The answer is simple: to shorten
the time-to-value for the much awaited transition, the available resources
need to be applied as quickly and as effectively as possible. Not an easy
feat as designing for circularity means breaking with existing principles
and processes. It was in that context that we decided to develop a guide
applying worlds’ most frequently used business model innovation tools to
the circular economy challenge.

We hope this guide will help you design and deliver many sustainable
ánd successful value propositions!

Jan van der Kaaij

Managing Partner Finch & Beak
Table of Emergence of the Circular Economy 3
Following the logic of the waste hierarchy 4
Contents Value Proposition Design revisited 5
Applying the Value Proposition Canvas 6
Archetypes for Circular Business Models 7
Towards the Business Model Canvas 8
Here is one we made earlier 9
In case you need help… 10
 One of today’s biggest challenges for our global economy is to

Emergence of decouple economic growth from the increasingly emerging

resource constraints. In the fall of 2015 the European
Commission adopted an ambitious Circular Economy Package.

the Circular Its aim is to help European businesses and consumers make the
transition to a stronger and more circular economy in which
resources are used in a more sustainable way.

Economy Due to factors such as natural resource constraints, population

growth, and climate change impacts, corporations are forced to
move from a traditional, linear approach towards a circular one.
Consequently the drive for circular economy is increasingly
regarded as a must-win-battle.

To size the opportunity: By adopting Circular Economy

principles, Europe can take advantage of the looming technology
revolution to create a net benefit of €1.8 trillion by 2030. This
would be accompanied by better societal outcomes and halving
the carbon dioxide emissions compared with current levels.
 As early as 1975, the European Union’s Waste Framework Directive

Following the introduced for the first time the waste hierarchy concept into the
European waste policy.

logic of the Waste It emphasized the importance of waste minimization, and

the protection of the environment and human health. Following the
1975 Directive, EU policy and legislation adapted to the principles

Hierarchy of the waste hierarchy following the five waste hierarchy levels.
1. Prevention
2. Minimization
3. Re-use
4. Recycling
5. Energy Recovery

Based upon this existing waste hierarchy, the archetype business

models can be modified to the specific situation by defining the
Example:
most relevant impact from the value chain as well as setting a
A brewery aspires to address its water waste (=impact). By the specific target.
year 2020, the company aims to reduce its usage from 6 to 4
litres per litre beer produced and their waste water produced
Once impact and its associated target have been set, the value
should be a 100% drinking quality (=targets).
proposition (re-)design process can commence.
 Since its conception in 2012 the Value Proposition Canvas

Value Proposition has been applied worldwide to help design products and
services your customers want. Focused on creating
customer value the Value Proposition Design approach

Design revisited complements and integrates perfectly with the ”Business

Model Canvas”.

A typical challenge with designing circular economy

solutions is that traditional approaches for business model
(re-)design focus exclusively on economic value. It omits
the impact that products and services have on society.
Applying the
Value proposition canvas helps companies to deliver value that
is truly based on customers’ needs. First you need to
understand your customers: What tasks and problems they are

Value Proposition
trying to solve? What undesired situations do they face?

That is where the impact and target from the waste hierarchy

Canvas
come in: to help select the right jobs, gain creators and pain
relievers to create propositions that are forwarding
sustainability.

After recognizing customer’s jobs, pains and gains in the

specified sustainability arena, you need to think how your
product or service can help customers to do their jobs, enhance
customers’ gains and relieve pains. So pain relievers are the
description of how you eliminate the negative emotions and
avoidable situations. In turn, gain creators are a description of
how your product creates and enhance gains and deliver the
added value for your customers.

Source: itpaalto.net and expressiveproductdesign.com, adapted

 In general there are 5 archetype business models to consider when
Archetypes for looking for circular solutions:

Circular Business
• Circular Supplies: supply fully renewable recyclable, or
biodegradable resources that support circular production and
consumption systems.

Models
• Resource Recovery: eliminate material leakage and maximize
economic value of product return flows.
• Product Life Extension: extend the current lifecycle of a
product by means of repairing, upgrading, and reselling.
• Sharing Platforms: stimulating collaboration among product
users increasing productivity of the assets.
• Product as a Service: products used by one or many
customers by means of a lease or pay-for-use arrangement.

Applying these stereotype business models is not as straightforward

as it might seem. Designing for circularity is almost by definition a
value chain partnering approach involving many players. On top it
requires uncommon and out-of-date push marketing thinking as the
resource and waste streams already exist.
 The Business Model Canvas, developed by Alexander Osterwalder,

Towards the is a visual representation of business models. The Canvas provides

a holistic view of the business as a whole and is particularly useful
in lean startup and change situations as is the case with circular
Business Model solutions.

Canvas
The Business Model Canvas provides a common language to teams
through which they can evaluate existing processes and bring
innovation into their business models.

The Canvas consists of a simple graphical template describing nine

key components: customer segments, value propositions, channels,
customer relationships, revenue streams, resources, activities,
partnerships, and costs.

From the circular Value Proposition Canvas, the value proposition

and selected customer segments can be used to fill the Business
Model Canvas to make the most effective choices in areas such as
resources, partnerships and customer segments.

For more information: watch https://www.youtube.com/watch?v=QoAOzMTLP5s

Here is one
we made
earlier

© Finch & Beak, 2017

In case you
need help…

Finch & Beak and its partners have used their best efforts in
collecting the information published in this document. Finch &
Beak does not assume, and hereby disclaims any liability for any
loss or damage caused by errors or omissions in this proposal,
whether such errors or omissions result from negligence, accident
or other causes.
 CIRCULAR DESIGN USING THE
BUSINESS MODEL CANVAS

© Finch & Beak - Breda, 5th October 2017