Navigating the “valley of death”: Barriers for circular startup

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School of Business | Master's thesis
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Circular Economy, with its emphasis on regenerating resources and minimizing waste, has drawn increasing attention as a promising solution to address the pressing environmental challenges of our time, while also providing economic value. Within this framework, early-stage companies that prioritize circularity, commonly known as circular startups, have emerged as pivotal actors. Despite some differing perspectives in the existing literature about the concept of circular startups, their significance in driving the global transition towards a Circular Economy has been acknowledged. This research aims to delve into the challenges faced by circular startups during their early stages, a critical phase often referred to as the "Valley of Death". The study adopts a qualitative research approach, conducting in-depth interviews with 10 circular founders in Finland to gain comprehensive insights into their experiences. Building upon the work of Henry et al. (2020), which recognizes circular startups as a distinct category of startups, this research focuses specifically on this unique group. By utilizing the Kirchherr et al. (2018) framework for barriers to Circular Economy transition, the research identifies four primary challenges faced by these startups: cultural, market, regulatory, and technological barriers. Additionally, the study uncovers a fifth essential barrier - the significance of a strong founding team for the success of circular startups. Findings from the interviews confirm the distinct nature of circular startups within the realm of impact-driven businesses. Circular startups are characterized by their commitment to advancing Circular Economy principles throughout the value chain. As catalysts for the transition towards a Circular Economy, these startups prioritize circular business models, aiming to minimize waste and maximize resource efficiency. Understanding and addressing these challenges are crucial for supporting circular startups and fostering a successful transition towards a sustainable and Circular Economy. Tailored solutions such as funding schemes and piloting opportunities must be developed to assist circular startups in their growth journey and capitalize on their potential to accelerate the principles of circularity, contributing to a more sustainable future. This research aims to provide valuable insights that contribute to shaping supportive ecosystems for circular startups and furthering the global transition towards a Circular Economy.
Thesis advisor
Chliova, Myrto
circular founders, circular startups, valley of death, circular economy
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