What are disruptive business models & how to integrate them in you project

Mar 12, 2021 06:22 · 2733 words · 13 minute read

Welcome to the 11th Rubzimo Café Talk, the third cycle dealing with sustainable issues.

00:16 - My name is Justin Casimir. I´m the project coordinator of the Rubizmo project.

00:21 - Rubizmo is about rural business models, innovative business models for rural areas, looking at the food value chain, bio-based value chain and also the ecosystem services.

00:36 - The project started more or less three years ago. We are in the last months of the project.

00:45 - This is the third cycle, and today Julie Le Roux from GreenFlex will talk about disruptive business models and how to integrate them in your project or in your company.

01:05 - We have had two really interesting presentations from Camille Poutrin and Appoline Abauzit, also from GreenFlex.

01:16 - They will be available quite soon on our YouTube channel.

01:20 - Have a look at the YouTube channel. There are already some of the previous talks online.

01:29 - Just to remind you, next week, we will be going to Italy and visit the Caviro wine production.

01:38 - They will talk about they integrated circular economy into their business.

01:46 - Will be very interesting. You won’t have to book any flights. You won’t have to do any PCR test.

01:53 - You just have to sit at home and follow us to this online study visit.

02:00 - I think it is time for Julie to introduce herself and tell us a bit about disruptive business models.

02:09 - Thank you, Justin. Hello everyone. I’m Julie La Roux. I’m working at GreenFlex like Appoline and Camille, Today, I’m going to present you the main disruptive business models.

02:23 - First, I will have a quick introduction on the classic economic model and its limits.

02:29 - Then, I will be able to present you a little bit more about the main disruptive business models and to conclude we will have a quick talk about a new conceptions of economy inspired by the sustainability of our ecosystem.

02:48 - For the presentation, we only have 15 minutes, so I will not be able to go deeply into the presentation of each disruptive business model, but if you have questions, don’t hesitate to ask them at the end.

03:06 - Today, our economy is based on a linear model, which can be summarised as “mine manufacture, and throw”.

03:14 - First, we are extracting raw materials such as oils, minerals and all kinds of water and energy to produce goods.

03:25 - and the equipment that’s useful for our daily life.

03:29 - The manufacturing of these products consumes a lot of energy and water.

03:34 - To distribute the goods to consumers, we are also consuming more energy.

03:40 - At the end of the life of the products, there are several ways of treatments, but most of the time products go to land fills or energy recovery.

03:50 - To sum up, we are extracting raw materials that are most of the time limited resources to produce some goods and equipments that are going to be thrown away in landfills, most of the time.

04:04 - This is a linear economic model that is based on an unlimited and low cost availability of resources which we all know is entirely false because we only have one planet and its resources are limited.

04:22 - This linear economic model leads to major environmental issues.

04:28 - First of all, we have natural resource depletion.

04:32 - The digging up of minerals and oils leads to the depletion of fossil resources but also minerals.

04:40 - All the goods and equipment produced have most of the time short time use.

04:47 - We could take, for example, planned obsolescence, which reduce the life expectancy of the products, for example, your phone or your dishwasher and in addition we sometimes also want to buy more products because we want to have the last iPhone or coffee maker and they succeed to make you think that you need a new coffee maker or iPhone.

05:17 - This leads to an accumulation of assets and it increases the volume of waste to be treated.

05:25 - We have resource depletion and the accumulation of waste to be treated, and also we have greenhouse gas emissions and other pollutions that are produced when we are manufacturing goods.

05:43 - To address these environmental issues, there are disruptive business models that are being developed to reach greater sustainability.

05:57 - Here is an overview of disruptive business models, placed depending on their product lifecycle.

06:04 - As you can see, there are two main disruptive business models.

06:08 - First is bio-economy, which is basically the use of bio-resources, which can be a new ones or end-of-life products.

06:16 - By using these kind of resources, you can, first, reduce the amount of waste produced, but also the extraction of minerals which are limited, because you are using renewable resources instead.

06:32 - The second business model is Circular Economy, which is a business model that aims to reduce the use of resources, which can be bio-resources and mineral resources in order to preserve our natural resources.

06:48 - As you can see with the arrow, which shows the flow of materials in these scheme the conditions of these business models intend to reduce the extraction of materials, but also the amount of waste produced in order to limit the environmental impact.

07:09 - The first business model that I’m going to present is circular economy.

07:13 - There are three kinds of this business model, but I will present them later.

07:21 - Circular economy is a business model inspired by nature in which resources have no longer a single life but an infinite number of successive lifes because there is no concept of waste in nature.

07:35 - Here is a vision of circular economy developed by the Ellen MacArthur Foundation.

07:41 - This scheme shows that in our economic model, there are two kinds of cycles, the biological cycle displayed in green and composed of bio-resources and the technological cycle represented in blue that’s mainly composed of products manufactured by humans, such as phones, TVs, dishwashers or computers.

08:06 - In this cradle vision materials are considered as nutrients, which at the end of their life can either return to the biological cycle, to the green cycle, or can be recycled and reused by the industry thanks to the technological cycle.

08:28 - The scheme also shows that there is another two aspects to improve waste treatment.

08:35 - First, you have to maintain and repair your products, such as your dishwasher, for example.

08:41 - Then you have to reuse and refurbish your products.

08:44 - For example, if you are moving from one place to another, instead of throwing away your dishwasher, you can give it or sell it to another person.

08:54 - Then, at the end, you have to recycle the components.

08:58 - To recycle your product, you take its components to manufacture other products.

09:04 - This is the last treatment because you consume more energy, water and resources to do so.

09:12 - For environmental reasons, it is way better to first repair than reuse and refurbish and only last recycle.

09:23 - Here is a very good example of circular economy.

09:27 - It’s a start-up, Fungus Sapiens, that chose mushrooms to produce materials with various properties by recycling biowaste.

09:37 - For example, they can produce edible and medicinal mushrooms but they can also manufacture biomaterials such as packaging, clothing, insulation and different kind of furniture.

09:51 - With the waste and co-products, they can produce fertilizers and other kinds of clinical substrates that can clean water and damaged soils This is a very good example of circular economy which shows how you can produce very good products with high added value from waste.

10:15 - Inside circular economy we also have another business model, called Industrial and Territorial Ecology.

10:22 - It’s a share of resources between company, for example, the waste produced by one company can be reused by another company to produce goods.

10:32 - This will decrease the amount of waste produced and the extraction of new minerals and resources by reinforcing the flow between end of life products and manufacturing, as you can see in the scheme.

10:49 - There are two main categories of industrial symbioses.

10:53 - For example, you have alternative synergies which basically is the exchange of materials, energy and water between companies.

11:03 - For example, a data centre releases heat that can be reused by the public pool close to them to heat the pools.

11:12 - Or, an industry produces cardboards that can be reused by another industry to produce paper instead of cutting trees to produce paper.

11:23 - The other kind of symbiosis is mutulization of goods and services.

11:30 - For example, an industry doesn’t necessarily need a truck every day to run its activities.

11:36 - So, instead of having one truck per company two or three companies can share that truck to run their activities.

11:45 - It reduces the costs, but also the use of resources.

11:49 - Maybe you heard of the Kalundborg Symbiosis, it’s one the best known example of symbiosis.

11:55 - It started like 40 years ago. It’s in Denmark and now it involves nine companies, including the municipality.

12:05 - We also have a very good example in France called Biovallée.

12:09 - It’s an example of industrial symbiosis in rural territories.

12:14 - There are three kinds of synergies that were developed.

12:18 - First, valorization of waste and co-products between companies.

12:23 - They are also sharing the profits to develop soft mobility and the optimization of water treatment.

12:33 - The third business model is collaborative economy, which is basically the exchange of goods and services between consumers.

12:41 - That’s why this business model is placed between the distribution of goods and the consumption.

12:48 - By sharing goods and equipment, you can increase the product utilisation and reduce the use of resources that should have been necessary to produce other goods.

13:03 - Basically, as I said, it’s the sharing of goods between consumers, but it can also be the sharing of knowledge and services between individuals.

13:15 - These actions can be done through money transaction or not, if it’s a donation, and most of the time you use a digital communication platform like an application or websites.

13:31 - There are four types of collaborative economy that can be distinguished.

13:37 - For example, you have Co-use. I think you all know about blablabar and airBnB.

13:42 - We also have another example for rural areas in France, called Agri Echange.

13:49 - It’s a web platform to exchange services between farmers linked to farm equipment.

13:57 - For example, let’s say you are a farmer and you have a crop that need to be trimmed but you don’t have the equipment to do so, but I do, I can go to your farm to tear the land and in exchange you have to give another service to me or another farmer.

14:13 - Let’s say, for example, you will lend me equipment to earn co-products.

14:18 - It’s basically connections between farmers.

14:22 - We also have Barter, which is another kind of collaborative economy, and we also have co-developments, which is the sharing of knowledge and services to develop goods and services.

14:35 - For example, we have AGRIfind, which is a network of farmers that collect and diffuse data to inform other farmers about pests and diseases of crops.

14:47 - This optimises the agronomic decision making because a farmer will know if they have to treat their crops or not and when they should treat them.

15:02 - The last business model inside circular economy is economy of functionality.

15:08 - Instead of selling a product, a company sells the use of a product and no the product itself.

15:15 - It changes the habits of consumption of the customers.

15:21 - As I say, economy of functionality is selling the use of a product and not the sale of goods.

15:27 - Basically, instead of buying a product, you rent a service.

15:32 - By favouring rental over sale, the company remains the owner of the goods, which encourages them to extend the life expectancy of their products because they remain the owner of the good.

15:48 - This also reduces the consumption of resources because products last longer.

15:54 - We have two examples. The first one is Tale Me. They propose rental of clothing.

16:00 - for maternity and children. When you are pregnant, you change your clothes quite a lot over nine months.

16:12 - It is the same thing with children when they are growing up.

16:16 - Instead of buying the clothes, you can rent them and once you are finished with them, they will be rented to another customer instead of being thrown away.

16:29 - The second example is Michelin, which is one of the best known examples of economy of functionality.

16:36 - Instead of buying tires Michelin customers pay for the use of the tires, for the travelled kilometers.

16:49 - Once the customer reached a certain amount of kilometers, they can change their tires. So, Michelin takes back the used tires and replaces them with new ones.

17:03 - The used tires will be recycled by Michelin to build new tires instead of using new resources to build the new tires.

17:14 - Michelin has a very strong, positive environmental, but also economic impact with this.

17:25 - The last business model is bio-economy, which is basically the use of bio-resources.

17:30 - As I said earlier, it can be new bio-resources, for example, wood that you can take from the forest instead of using sand to construct buildings, or it can be end of life products or co-products such as bio-waste.

17:49 - Using bio-resources can limit waste production, but also the extraction of mineral sources which are limited, by using renewable resources instead.

18:02 - Bio-economy brings together all activities related to the production, use and processing of bio-resources.

18:11 - There are many areas of application for example the production food, but also the production of energy can be due to the valorization of bio-waste thanks to Monetization.

18:27 - It can be uses for chemicals also, because you can produce for example, fertilizers, aromas, pharmaceuticals with bio-resources, and it can also be used to produce traditional or innovative materials, such as hemp, concrete or a straw insulation for the building sector.

18:50 - Here’s a famous example of bio-economy in a rural territory in France.

18:56 - It’s the bio-refinery of Pomacle Bazancourt.

18:59 - A cooperative is collecting co-products and crops from farmers to feed the bio-refinery, which will transform these resources into various products.

19:12 - It can be basic products such as food, sugar and starch, or it can be high added value products such as pharmaceuticals, alcohol and cosmetics.

19:25 - These were the main disruptive business models, I wanted to\ present you, that can be developed to reduce our environmental impacts.

19:34 - To conclude, I’m just going to mention a new area of economic models that have been developed by economists.

19:42 - First, we have the social and solidarity economy, which was developed in the 80ies, that places people and the community in the centre to address social issues, It is about recording business models that address social and environmental issues.

19:58 - Maybe you heard about the regenerative economy, the blue economy and the symbiotic economy.

20:05 - By drawing inspiration about the sustainability of our ecosystems and issues - that is their principle - they take into account some or all of the disruptive business models that I presented you today.

20:22 - If you are interested, I recommend you to read the symbiotic economy, because it’s a very good example of how you can develop a symbiotic relationship between a natural and prosperous ecosystem and an intense, human activity.

20:40 - Thank you for your attention. .