How do circular start-ups achieve scale?

Dihui Han, Jan Konietzko, Marc Dijk, Nancy Bocken

The scaling of circular initiatives is vital to the transformation towards circular businesses. However, empirical research on how circular start-ups scale is lacking. Circular start-ups are distinct from traditional start-ups, which are solely based on a growth-centred scaling logic. This study aims to understand how circular businesses scale up. A three-step flexible pattern matching approach is used to synthesize a new perspective on scaling formed with extant literature and empirical data. We found circular start-ups scale through both commercial and impact activities. This means their strategic aims to scaling are not limited to revenue generation, but also include system-level changes such as influencing new regulations. Based on 22 interviews with innovators from 19 circular start-ups, we observed three strategies to scaling: 1) commercial, 2) phased and 3) synced. Additionally, we identified generic commercial and impact scaling initiatives organized into the eight elements of the business model canvas. This study contributes to the current circular innovation literature in three ways. We contribute to the understanding of circular start-ups and their growth in two ways: 1) by identifying how circular start-ups scale, and 2) how the type of start-up influences scaling behaviours. Beyond the theoretical contribution, this study can guide practitioners in their scaling efforts to help accelerate the circular transformation.

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