Building a circular future requires a system where ideas and visions turn into reality. Circular economy is not only about recycling. It opens up five interesting business models, which increase the value of materials, products and services. The service models also provide many benefits compared to traditional linear models like increased loyalty and improved customer service. 

Increased value is generated for example by minimizing the use of resources, recollecting and reusing products and materials, through repair and maintenance of products or maximising their usage rates through collaborative models. Besides enhancing or streamlining your current businesses, circular business models can also mean completely new revenue streams.

We at LOOP want to accelerate the transition towards circular economy and believe that growth companies are one key component in doing so. By screening the growth company landscape, we can identify what are the new technologies and business models that will disrupt the future. 

We looked into the Nordic startup landscape and selected 5 circular startups, who demonstrate how circular business can be done in practice. These startup examples demonstrate also very well that circular economy companies can’t be put in a box but instead they operate simultaneously in several of these business models.

Eat Grim is a Danish startup that has created a platform for ugly and surplus fruits & vegetables and offers them as-a-service to their customers.  Simultaneously recovering and unsold products. Finnish Sharetribe is enhancing the sharing economy with their marketplace software for communities to sell or rent goods and services. Swedish company Renewcell turns used clothes into Circulose, a new biodegradable raw material, thus both minimizing the use of resources and recycling used products. Icelandic startup Verandi recycles high quality raw materials that would otherwise go wasted and turns them into cosmetic products. Norwegian Grin has created a return and collection system for used products to recollect products and extend the product life cycle. 

There is a lot of talk around circular economy, but how to actually move from the top level discussions to concrete actions? In the Spring of 2020 LOOP hosted a webinar series to share learnings from brave Nordic organisations who have actually made the change towards circular economy. We gathered 3 key learnings for you to get you going with circular economy.

1. Eat the elephant one bite at the time

Circular economy is a massive topic and it can feel challenging to get started. One great example of how to get going bit by bit is Fiskars, who has explored the circular opportunities by identifying more than a hundred circular ideas and choosing a dozen of them to prioritise on and explore them further. Eventually Fiskars chose 4 of the circular opportunities to pilot based on customer feedback and business viability. With this agile customer-focused approach they were able to get a clear plan to move forward with and their Vintage model and Rental service were out in the market rapidly.

Another example comes from the construction industry, where achieving circularity is also a huge challenge, but can be solved one solution at a time. One case example of this is Looping, a Norwegian startup developing sustainable and durable transport packaging for the construction industry. Piloting together with larger construction companies, Looping develops reuse as-a-service solutions to gather data and learn about optimal ways of reducing plastics in the construction industry. Their solution will not tackle all the industry’s problems but is a concrete action towards reducing and recycling plastics in a sector that accounts for one third of global greenhouse gas emissions.

2. Collaborate with new types of partners

As circular challenges are often systemic, circular economy can’t be built alone. Therefore, new types of collaborations are needed. This can be scary as the partners are usually not from your traditional value chain, the one you have been collaborating with for decades. Rather, the circular partners can be start-ups developing circular solutions or also larger companies from another industry, tackling the same challenges you are also trying to solve.

The Collection of tomorrow, done in partnership between Bergans of Norway, the company who invented the backpack as we know it today, and Spinnova, the Finnish start-up developing the most sustainable fibre in the world, is a great example of new types of collaboration that circularity requires.

New types of collaboration models were also needed when covid-19 changed the market for restaurants overnight. Stockholm-based restaurant The Restaurant Lab and food service wholesaler Martin & Servera applied circular design methods to utilise the food that would have been otherwise wasted, to prepare meals for hospital workers and school children.

In both of these cases the key factor for achieving successful and agile collaboration between small and a big established player, were clear common goals, understanding of each other’s roles and business models and open communication.

3. Test the model in real life as early as possible

As circular solutions are very often new to the market and represent a novel way of working for your organisation, it is important to get feedback from the potential customers as early as possible. This way you start learning immediately. Instead of long internal planning processes, aim to get out in the market as soon as possible to validate both the technical and customer feasibility.

Very often, this means high uncertainty and getting out in the market with a solution that is not yet 100% ready. Spinnova and Bergans showed the way here by launching a concept made out of Spinnova material that is not in commercial stage yet. By getting the product out to customers for real-life usage, they will gather crucial feedback of the product and engage with early adopter customers. Instead of waiting for everything to be perfect and polished, they have an open dialogue with their customers that is hugely valuable for their future success.

The same approach applies also on the big scale in the manufacturing industry. Volvo has set the target to have 25 % of all plastics in their new cars made out of recycled materials by 2025. It is an ambitious target for a premium car manufacturer. Volvo took an agile approach to this big challenge and decided to get going by building a demo car. In the process they learnt a lot about the topic, reached out to old and new suppliers, identified barriers and opportunities and understood how to build the roadmap forward to reach their target.

The Nordic circular economy ecosystem LOOP is committed to building the innovation of tomorrow through cooperation — The future is right around the corner and we don’t have time to only think, analyse and write reports. We need to act and to design solutions, says Maria Klint from Antrop. 

LOOP was initiated in 2018 to accelerate the transition to circular economy by Avanto Ventures, Nordic Innovation and the Finnish Innovation Fund Sitra. During the first two years it became clear that there is a need for an ecosystem helping companies in taking the circular economy from strategy to action. 

This year, to speed up the change from linear to circular even more, Avanto Ventures joined forces with like-minded companies in the Nordics; Antrop in Sweden, Agens and Startup Norway in Norway and ArtRebels in Denmark. With this unique Nordic collaboration, knowledge can be shared faster and new unexpected partnerships found which will accelerate the transition towards a circular future.

LOOP is an ecosystem of innovators for the circular economy: corporations, startups, investors, and experts come together in an effort to create solutions and actively build a sustainable future. Through LOOP, companies can get help with piloting and scaling their circular business ideas fast. 

Virginia Vegas, Investment Program Director at Startup Norway says they have chosen to enter the LOOP ecosystem as great change is best achieved through cooperation with others. 

— We are very happy to work on this project with other Nordic counterparts. No matter how much Norway can do to support a greener and more sustainable planet, we will not achieve transformative change by acting alone. That is why we think it is very important to cooperate on a Nordic level on this matter and lead the way to a circular economy at the European level and the global level, says Vegas.

Learning-by-doing transformations

Circular economy is a big topic and most of the solutions are new. Therefore, getting started can be difficult. The LOOP approach is to identify the circular opportunities and rapidly start validating them on the market. You can spend endless hours planning new approaches on your own but the only way to understand the viability of the new solutions is to test them in real life.

Maria Klint, Service Designer and Facilitator at Antrop says LOOP is the answer to a need in our societies: LOOP is not looking for the perfect solution that will solve all our problems right away, but rather stepping stones for a new stairway. Perhaps some of the solutions will inspire others to come forward with their ideas?

— Many brilliant minds are focusing on strategy, analysis, and planning for a circular economy. LOOP gathers expertise in how to quickly get ideas on the table, identify collaborations and prototype and test hypothesis. We believe that learning-by-doing will speed up the transformation to more circular solutions on the market. The future is right around the corner and we don’t have time to only think, analyse and write reports. We need to act and to design solutions. We’re not saying this is easy, but it is necessary. And that’s why LOOP exists, says Klint. 

Collaboration is the key to get things going

Innovation is here to lead the way on thought-change. Moona Pohjola, Head of Ecosystems at Avanto Ventures says circular economy can’t be built alone and that is why LOOP focuses on bringing companies, big and small, together to find and test new solutions. Growth companies are developing new circular solutions continuously and collaboration with corporations may accelerate their development and penetration. 

— Circular economy is an ecosystem game. To make the transition from linear to circular, new types of collaborations are needed. By working together, corporations and startups are able to get the circular solutions rapidly on the market. LOOP has different methods of facilitating these new types of collaborations. LOOP digital ecosystem is one tool to connect people working with the circular economy in the Nordics to get discussions on-going and share latest circular solutions from growth companies. 

Maria Klint says LOOP is there to help the companies willing to indulge in such opportunities for change, whatever the maturity level in circular economy. 

— Maybe you’ve just begun your conversion to circular economy and want inspiration, or a boost from the starting line. Maybe you’ve already made some progress, but need help to concretize or realize your ideas. Wherever you may be in the process, we can customize support that leads to your next step, says Klint.

Creating sustainable values for the future

Marthe Haugland, Senior Innovation Adviser at Nordic Innovation says there are great advantages coming from changing non-circular business models. Nordic Innovation is the ‘innovation arm’ of the Nordic cooperation, and Haugland says they identified the circular economy as an important focus area where the Nordics could gain a competitive advantage by transitioning early on, the Nordic countries already have strongholds like a digital population, large bio and raw material resources and a willingness to change.

— There are several industries that have a large potential to change and use circular business models in their operations. A circular business model will bring you closer to the customer (you solve the customer need) and you will use less (raw) materials, saving money, as well as finding new revenue streams. This can really be a competitive advantage for the early movers. Sectors with a large environmental footprint like the construction, food and textiles are important industries, where showcasing solutions that actually work both in an economical and environmental way is important and can help others to change as well, says Haugland. 

She adds that Nordic Innovation’s ambition with LOOP is to help companies take the circular economy from strategy to action.

— Nordic Innovation’s aim is that LOOP will match startup solutions with corporate challenges to create new solutions and circular ventures that are both scalable and will contribute to the transition to a circular economy in the Nordics. LOOP helps companies create new value, which is one of Nordic Innovations goals; sustainable value creation, says Haugland. 

Full article by Benedicte H. Tandsæther-Andersen from Startup Norway can be found here: https://medium.com/startup-norway/four-industry-experts-of-loop-on-creating-a-community-for-circular-economy-70523111b850