25-11-2023
Entrepreneurship in the circular economy is like sailing on sand. You might not be able to sail the waters as you have trained to do, with your Ray-Bans on, margarita in one hand. However, sailing the sands is still very much sailing. You might need to adapt your boat a bit, put some wheels under it. The wind will still be blowing through your hair, just don't forget to put on some cool-looking Mad Max sunglasses instead. Sailing is sailing, whether it is on water or on sand, and we should think the same way about entrepreneurship in the circular economy. Entrepreneurship is entrepreneurship, you just need to put some wheels under your boat and start wearing some retro looking Mad Max sunglasses.
If you google for the definition of entrepreneurship, you will quickly find that entrepreneurship is the activity of setting up a business and taking on financial risks in the hope of future profit. But is that really all there is to it? Are you not an entrepreneur if you set up a not-for-profit business, with low personal financial risks, and the goal to maximize your impact instead? Sadly, profit is still the outdated primary driver of most companies today, resulting in most people living with a linear idea of what it is to be an entrepreneur. This linear idea of business needs to be challenged by a competitive alternative, because the rules of the game need to change to fit a post-growth society.
The alternative to profit-driven entrepreneurs are purpose-driven entrepreneurs, and it is the “drive” of people that pave the way for the rules to change. It is at this intersection of profit and purpose where a company’s orientation is decided, where creativity can flourish, and where artists start to boogie. Because if profit is no longer the primary goal of your company, how might this change your business model? Better yet, if profit is no longer the primary goal of your enterprise, how might a purpose driven entrepreneur tackle linear business challenges in ways profit-driven entrepreneurs can only dream of? In other words, how can purpose-driven entrepreneurs outplay the establishment by not playing by their rules at all?
Many possible routes are still waiting to be unearthed, but for now, let’s focus on a major business challenge that many start-ups encounter when scaling up their business. It revolves around what I like to call "the leaning tower of Pisa conundrum," which is visualized in the picture below. It represents an age-old business challenge of successfully scaling up your tried and tested pilot to industrial scales. It's the shock in the eyes of the owner when they realize that scaling their idea is not simply going to be copy/pasting their pilot into oblivion. It is the horror that sets in when they understand that they need to completely rethink and remodel their product, their plant, or invention in order to scale to industrial levels.
What works perfectly for your 1-hectare farm, 1 kg of feedstock, or 1-liter bioreactors does not automatically translate well to industrial scales. Error margins never scale accordingly. What might be acceptable error margins in the pilot phase, become unthinkable risks on industrial scales.
So, hypothetically, how might a purpose-driven entrepreneur tackle this challenge differently from a profit-driven entrepreneur? Well, this is where your circular creativity should come into play. Be insightful. Think radical. Your secret powers are exactly those attributes that are unthinkable in linear venture capital. Secret powers like stewardships, non-profits, horizontal organizational structures, increased autonomy, prioritizing employee happiness, to simply stop growing..., and of course, my favorite, decentralization.
How do purpose-driven strategies, like decentralization, help with the growing tower of Pisa conundrum? For example, contrary to building an ever-larger, more profitable, more scary looking, leaning tower of Pisa. A tower that needs more and more ingenious stabilizers to prevent an inevitable collapse. Alternatively, you could build many small autonomous towers of Pisa instead. Think about it…Beautifull little leaning towers of Copenhagen AND São paolo! Why not? Instead of putting all your eggs in one basket, in one big-ass tower, you use many baskets instead, and spread the risks of your venture falling down at the same time.
The downside? Autonomy needs to be shared, and that means sharing those lovely eggs as well.
The upside? The error margins of your idea, your invention, your pilot plant, suddenly remain acceptable AND scalable at the same time. Through decentralization you might actually be able to get away with copy/pasting your pilot into oblivion. Mind is blown… But that is not all. When decentralization is implemented correctly, the pace of innovation starts to ramp up as well, since many more heads will start to tinker on the same problem. Increased efficiency, simply because everybody has skin in the game. And if you are not careful, you might end up with a "straight" tower of Pisa instead.
When revenue streams stop being your key metric for success, it opens up new possibilities of becoming competitive. Purpose-driven business tools like decentralization, stewardship, autonomy, self-sufficiency, purpose, and even employee satisfaction are undervalued metrics these days. However, they are the secret weapons that we can use to our advantage, allowing us to compete with linear profit-driven business models.
Does this imply that wealth and money are redundant?
No, not at all. Today, wealth and money are still the lubricants in the engine we call our economy, and these lubricants will be needed for some time to come. We just need to realize that spreading business revenues more evenly is not only fairer, it might be the competitive edge of circularity, unleashing the secret entrepreneurial weapon the post-growth economy is searching for.
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