Above, is the Revalue Business Canvas, developed for individuals or groups who are in the early process of designing a start-up or diversified business, based around the principles of the Blue Economy and Circular Economy.
Find out more in the Video, and in the Question & Answers below.
Select HD 720p in the option bar to see the video in higher resolution.
Questions & Answers
Q: Where do I start!?
A: It depends... if you have already gone through the process of deciding what your business is going to be, then maybe you need to start with some specific training/coaching to help get you up-to-speed in the technology and processes specific for that type of business. After this training, or if you know the business technically already, then you can literally start from the ground up - from the Infrastructure elements along the bottom and left of the canvas, and then the material recapture elements along the top right of the canvas. At the first sketch, this will probably highlight more questions, than answers, and so each square will require some time for research to bring data, and potential options back to the canvas. This type of canvas, without research, is unlikely to be filled in a one-day group event for example, although if you have the specific expertise in the room, then a lot can be done... After understanding the context and input possibilities, then the design of the business structure, thoughts about the team, equipment, and production processes can be looked at. All these elements will evolve over time, and through experience, so the canvas is not static. The first main challenge is to identify the minimum viable: product, production facility, team, collaborators and customers, and budget.
Another place to start, could be to first watch the videos on understanding the Linear Economy, and then the Revalue Economy; so that, a mental image is built around how these systems can work, the terminology, and the relationships. The Revalue Business Canvas is used within the Multi-loop Method - a project management tool, and can be used throughout the top 'Mapping' phases - and even in the Evaluation phases.
A: Both Canvases that you mentioned are great tools for forming the 'Why' and the 'What' of the business, however, particularly for those businesses involving some form of production, the technical part of 'How' also needs to be looked at in greater detail. And so, they are complementary. There are some small over-laps with the section on customers, however, the rest goes further to help sketch out the potential supply chain, the revalue chain (capture of wasted resources); the specific production technologies and processes, and the company structure for example.
Q: I understand the Canvas helps to show 'flow,' but what types of flow are you talking about?
A: There are seven main flows through the value chain, which also flow through the economy in general:
Financial Capital, Information & Expertise, Technology, Workforce, Materials/Components/Products & Energy, Pollution & Contamination, Influence & Power
Financial Capital, is looking at the flow of money, the credit, debts, rents, payment for services etc in the value chain. Potentially every square can be a 'value added' activity, and so, money can be made at each interface of nearly all the activities. Information & Expertise, this is clearly a lacking commodity in the circular and blue economy, and in any regenerative or innovative activity; and so, even though some costs of inputs into the potential new business may be low, the cost of (and time required for) this input must not be neglected. Here, the international open-source movements are helping, to some extent, to reduce this bottle-neck. Technology is linked to Information & Expertise, as this can be linked to management processes (or a type of recipe) as well as a physical capital good. Materials/Components/Products & Energy of all types, are flowing through the system, and understanding them at a chemical, biological or physical level at each stage is key to managing Blue or Circular style businesses. Pollution & Contamination, highlights the potential 'negative externalities' that can flow from one activity to a following activity or outside into the surrounding environment, or come in from outside. And finally Influence & Power, is the only one which is arguably not a flow, except it is an important influence on the flow (rate, quantity, quality...), and so it is listed as another key element to bare in mind.
Q: It looks like there are a lot of boxes, couldn't it be simpler?
A: Arguably, Blue or Circular Economy style businesses have, basically, more to consider than a linear business. In particular, the local context of the company becomes far more important, and so it necessitates a larger field of vision.
Q: Do we really need to go so large in scope - and look at the infrastructure elements for example?
A: Blue and Circular Economy businesses are built around greater efficiency use of Raw Materials and Energy, inside the company and externally in the supply chain. This, by its very nature, often requires a greater focus on place - locality, local contacts, local resources, local customers. For example, transportation costs will always be a critical barrier in reverse logistics in the supply chain, and for delivery to the final customer, especially for small companies. And so, supply of wasted resources and the final market, may have to be local - or even hyper-local, within biking distance for example. This hyper-local choice of wasted resources, can reduce options, and will therefore, require a greater level of trust and communication, with a greater diversity of local collaborators and potentially customers, than with a traditional linear business; Trying to manage the flow (rate, quantity, quality...) of the 'wasted resources' as an input to the supply chain, is not like buying virgin materials from the commodities market for example. In most cases these suppliers are not suppliers as a trade, they are either the general public or working in another area, so they are not focused on the flow issues that Blue and Circular Economy businesses are.
Q: Are there any other interesting tools to look at?
A: Yes, there is some great work being done by Wiithaa, with their Circulab Board and Roadmap. And a very good tool developed by the Scottish Institute for Remanufacture (SIR) in collaboration with HSSMI, called 'The Remanufacturing Competency Checklist.' The second tool mentioned here, could potentially be used directly with (and at the same time as) the Revalue Business Canvas, when developing Reverse Engineering activities (i.e., Maintenance, Refurbishment, Recondition, Remanufacture). A third tool that also dives into circularity business development is from Sustainn, called the Circularity Canvas. Look to the column to the right for more tools, under 'Other Tools.'
Non-Linear - Loops, Circles or Cascades
One key strategy within the Blue Economy and Circular Economy is the use of one or multiple outputs of one activity as the input(s) for another. The output and input can be used within the same company, or be transferred between two (or more) companies. This changes the predominant linear 'extraction - transformation - use - disposal' process of industry and consumption, to a more circular, or multiple loop process.
On the one hand, this can slow down resource use and eliminate some wastes (and the related environmental, social, and economic costs), and on the other hand, it can create a cheap, free, or paid-to-take, input (a company might pay someone else to take the wasted resource(s) off their hands i.e., in the case of tipping fees); This creates the potential for a company to be competitive in the market by lowering significantly some of their input costs. These cycled outputs to inputs, can be goods or components which can be reverse-engineered (Maintained, Refurbished, Reconditioned, or Remanufactured), or materials which can be recycled (Functional Recycling, Down-cycling, Upcycling).
Upcycling as an example
The Blue Economy has further developed this low-cost input concept, and also integrated it within a strategy, briefly mentioned above, called 'Upcycling.' Upcycling, is the development of an entirely new income stream, or even an entirely new business or cluster of businesses, built around the lost potential embedded in the waste or secondary outputs from an industrial or agricultural activity; effectively 'cycling up' the waste to a new valued product. Here is an example, of wasted resources from a coffee plantation being 'Upcycled,' to produce, firstly mushrooms, and then with the spent mushroom substrate, animal food:
"…only 0.2% of the coffee plant is used. This means that 99.8% of the coffee bush is wasted. This equals a factor of 500. That is the total “potential” value added if things are done with the rest of the coffee plant... Well, it turns out that after coffee waste has been used for growing mushrooms the biomass waste it produces [also] becomes much richer with amino acids. Chickens and pigs love it."
Pauli, Gunter. (2010) ‘ZEN and the Art of Blue: How to connect the quality of your life to the Blue Planet Earth.’ Convergent Publishing UG (haftungsbechränkt). Berlin, Germany.
Having access to a 'wasted' resource doesn't necessarily make it cheaper than buying virgin raw materials - even if it given for free. Many more issues need to be addressed than are currently in the linear, just-in-time, uni-directional value-chains.
What is the location, quality, quantity and timing of this waste resource, for example? With waste as a input, trust, communication, and locality become far more important. Communication and trust, as with quality and timing can vary far more. And locality, as the volumes are usually smaller and multi-source, so the relative cost of logistics can be higher than bulk, large scale node systems used in linear virgin material supply chains.
Five Kingdoms of Life
What is the cost of extracting the material/component of value or cleaning/treating it, to bring it up to the standard of an equivalent virgin material/component? One solution developed and promoted by the Blue Economy has been the use of the 'Five Kingdoms of Life' concept (the taxonomy of life has evolved, and continues to evolve, but the principles are the same), where nature is worked with as the extracting agent, not only doing so at low cost, but also in the process generating another valued output at the same time. As mentioned previously in 'Upcycling,' mushrooms were used to breakdown the waste coffee plantation biomass to produce animal food - and in the process also produced mushrooms...
"This ingenious system reuses everything by cascading from one energy and matter seeking species to another, switching kingdoms at a rate we had never imagined. At each interface of production and consumption the functionality of the matter and its energy changes, but the value improves for the one that considers this a worthy input. Whatever is waste for one species, is a nutrient or energy for another species … belonging to another kingdom. Each time matter cascades, different chemical reactions, different exploitations of pressure, size, temperature and mechanics permit different results, unparalleled in efficiency at that time and place, using whatever resources are at hand.”
Pauli, Gunter. (2010) ‘ZEN and the Art of Blue: How to connect the quality of your life to the Blue Planet Earth.’ Convergent Publishing UG (haftungsbechränkt). Berlin, Germany.
Intermediate Technology for a Human Scale
A regenerative system to extract value can mix biology (five-kingdoms of life), physics (vortex, gravity, energy, machines...), chemistry (water being the primary solvent), and management. For small production entrepreneurs to be price competitive with large-scale production, the technology (capital goods) generally need to be cheap, so that these small companies can enter into a developed market in the first place. This means that the technology for a small-scale producer will not be the same as the large-scale producer. E.F. Schumacher (1973), in 'Small is Beautiful' Published by Blond &Briggs Ltd, gives this type of technology a name: 'Intermediate Technology.' He discusses it in terms of the developing world, but it is also appropriate when looking at small, local companies, that use low-cost technologies, to be price competitive with large-scale, high-tech systems, which need to be...
"...fairly simple and therefore understandable, suitable for maintenance and repair on the spot. Simple equipment is normally far less dependent on raw materials of great purity or exact specifications and much more adaptable to market fluctuations than highly sophisticated equipment. Men are more easily trained; supervision, control, and organisation are simpler; and there is far less vulnerability to unforeseen difficulties."
Blue economy solutions that work with the five-kingdoms of life, use biology at the centre of the process, but they also often need some physical, chemical, management elements to be part of the system; and it is the physical and chemical that can be the most costly part of the whole solution; and so it is important that the biological solution is combined with a affordable physical and/or chemical solutions.
John Kenneth Galbraith, discusses the point from the perspective of the physical capital goods:
"The small competitive firm cannot afford the outlays that innovation demands. An economic system consisting of such firms would require, rather, that we reject the technology which, since earliest consciousness, we have been taught to applaud. It would require that we have simple products made with simple equipment from readily available materials by unspecialised labour. Then the period of production would be short; the market would reliably provide the labor, equipment and materials required for production..."
Galbraith, John, Kenneth. (1985 Edition) ‘The New Industrial State.’ Princeton University Press, 41 William Street, Princeton, New Jersey 08540
Some high-tech physical technologies do 'trickle down' to affordability (GPS from the US Navy, now available to the public for instance), making some technologies accessible and relatively low-cost; removing barriers of entry for some types of businesses; and the potential of 3D printing will continue to change production scale dynamics.
And so, the innovation of blue- circular- economy production companies is often in the development and management of this mix of relatively low technologies, to produce a similar or higher quality product, at a similar or even lower price; that also potentially have a lower ecological footprint, and create more jobs/per unit of output.
Remanufacturing as an example
Companies wanting to develop reverse engineering activities, such as 'Remanufacturing,' have the same principle issues as any of the other revalue activities. Timing of 'waste' goods/components being one, quantity and quality variations being another important factor, and thus being dynamic enough to be able to deal with this flux through the entire organisation. Within the re-working process (which would be within the box labeled 'Materials/Goods Production'), the technical skills of the workers will often need to be of a higher skill than those of the original production; due to the quality variabilities, fault finding and repairing requires greater skills than assembly, and they may be re-working more than one product and/or brand; closer in-fact to the skills of maintenance workers, hence why After-Sales-Services have a strong potential to diversify their businesses into Revalue activities like remanufacturing or renovation.
Behind the Canvas
This canvas has come out of working in innovation, in industry, with more than half of the time working in developing circular economy style projects (including product-service-systems), with the last few years also researching in the blue economy and regenerative agriculture.
The first thing that becomes apparent to a traditional company when starting to work in the Blue or Circular Economy, is that it demands not only a view of the entire company, but also a greater view of the context around it. With the specialisation and departmentalisation within most companies, this view is not often easy to puzzle together. One of the interesting strengths of the Business Model Canvas has been its ability to show to a company in a simple way, what they actually do now as a collective group, not even mentioning what they are thinking of doing in the future... The larger, more holistic view of a business is complex, as there is more to consider, and it requires a greater amount of generalisation than specialisation - at least in visioning, if not in practice.
The Canvas is free to use with a creative commons license, so please use it and credit the source, and give feedback (it's still in Beta). These tools improve with use and feedback - learning is another form of loop as well (design, make, evaluate)...
Download the latest Revalue Business Canvas.
Here are a list of some other tools, within the theme of circularity (or at least a more systemic way of thinking), that have been developed by other groups, that can compliment the canvas, or look at the issues, or parts of the issues, in a different way altogether.
Agency of Design: Designing with Energy
Arup Foresight: Foresight by Design
Circle Economy: 3 Essential Steps to Financing Circular Business Models
EPSRC Centre for Industrial Sustainability: Tools
HSSMI and SIR: The Remanufacturing Competency Checklist
IDEO & Ellen MacArthur Foundation: Tools coming soon
Jamie Evans (University of Cambridge): Circular Economy Toolkit
Nesta (and others): DIY Development Impact & You
Okala: The Ecodesign Strategy Wheel
ResCoM: Platform and Tools
Sustainn: Circularity Canvas
We all design: Design Process (p6)
Zero Waste Canada: Circular Economy Business Toolkit