Circular start-up development: the case of positive impact entrepreneurship in Poland

• Pages: 339-358
• DOI: https://doi.org/10.1108/CG-01-2020-0043
• Date: 11 November 2020
• Published date: 11 November 2020
• Subject Matter: Corporate governance,Strategy
• Author: Boleslaw Rok,Monika Kulik

Circular start-up development: the case

of positive impact entrepreneurship

in Poland

Boleslaw Rok and Monika Kulik

Abstract

Purpose –The purpose of this paper is to explore how circular start-ups design and implement

innovationinto their business models to increasetheir positive impact.

Design/methodology/approach –This qualitativestudy is based on an exploratory multiple-casestudy

involving six circular start-ups with positive impact in Poland. Data gathering took place via in-depth

interviewswith start-up founders.

Findings –The analysis demonstrates that three factors, which are strongly interconnected, can

significantly influence the development of a circular start-up. The firstis the purpose-led motivation for

circularity as a solution, mostlyconcentrated on the environmental education of different marketactors.

The second factor is built on the aim to increase the positive impact by addressing the most pressing

social and environmental problems. It determines the impact on society as well as on the environment

and the extent to which its model can be scaledup. The third factor is driven by the understanding of the

purposeof the innovation, concentrated on the businessmodel innovation regarding circularity.

Practical implications –This paper demonstrates the benefits for diverse stakeholders and the

importance of usingcircular business models in start-up development. Circularitycan be perceived as a

main partof the new approach to improve sustainability.

Originality/value –Circular start-upsrepresent a new phenomenon in the entrepreneurial market.While

the structure and logic of the circular business model in start-ups are significantly unexplored in

the managementliterature, this model is viewed as a crucial step in the direction of increasingthe positive

impact of start-ups. From a theoretical and practical perspective, it is important to understand the

differencesand similarities in this area withindifferent markets.

Keywords Sustainability, Start-ups, Sustainable innovation, Circular economy, Positive impact

Paper type Research paper

1. Introduction

The concept of a circular economy has been created in response to the challenges rela ted to

the depletion of natural resources and increase in volumes of waste. It d escribes an economic

system capable of regenerating itself in the life cycle of production and consumption, in which

waste is subsequently used or reused as raw materials in the production process (Kirchherr

et al.,2017

). From this perspective, the circular economy is based ona paradigm shift, as any

waste can become raw material. The World Bank estimates that the circular econo myo ffers an

alternative that can yield up to $4.530tn in economic benefits by 2030, ye t only 8.6% of the

world is currently applying this circular system (The Circularity Gap Report, 2019).

Business plays a pivotal role in the transition to the circular economy (Lu

¨deke-Freund et al.,

2019;Urbinati et al.,2017). A shift in business models is considered by a number of

researchers to be the key factor enabling the transition from a linear to circular economy

(Ellen MacArthur Foundation,2015;Bocken et al.,2013;Ghisellini et al.,2016).

Boleslaw Rok is based at

the Positive

Entrepreneurship Research

Lab, Kozminski University,

Warsaw, Poland.

Monika Kulik is based at the

Department of

Management, Kozminski

University, Warsaw,

Poland.

Received 31 January 2020

Revised 1 July 2020

24 September 2020

Accepted 29 September 2020

DOI 10.1108/CG-01-2020-0043 VOL. 21 NO. 2 2021, pp. 339-358, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 339

However, it has been pointed out that such transition is easier for small- and medium-sized

enterprises (SMEs) than for large companies established already in the market (Bocken

et al., 2013;Stewart and Niero, 2018). The available research indicates that start-ups are

major actors in the circular economy innovation system (Bergset and Fichter, 2015;

Hockerts and Wu

¨stenhagen, 2010;Pruijsen, 2019;Rizos et al.,2016). This type of business

can serve as a motivator for other market players (Hoffre

´n and Apajalahti, 2009;Hansen

et al.,2002

), particularly in the case of radical innovation (Henry et al., 2020;Hockerts and

Wu

¨stenhagen, 2010), and can positively contribute to the development ofthe technological

innovation system in the circulareconomy. Hence, analysis of the factors which can support

circular innovation and the emergence of start-ups involved in this processis essential.

We use these insights within our explanatory qualitative case research, prese nting how

practitioners in Poland have developed circular-oriented start-up s. Our findings show the

crucial role of strong personal motivation to achieve circular value. This is es pecially valuable

in the initial period of building a start-up position in t he market. The biggest challenge in the

periods that follow is focusing on developing and assessing the collaborative and system-

oriented business models in the process of transition (Brown et al.,2020) and determining how

to integrate ecosystem perspectives into circular-oriented innov ation (Konietzko et al., 2020).

Our study takes a step towards a better understanding of the role of entrepreneurs’ personal

motivation in transition into the sustainable circular economy and circular enterprises as an

important part of this new economy. It can provide additional insight into business mode ls of

circular start-ups. We believe there is a gap in the existing literature w ith reference to the

identification of potential drivers for innovative solutions i n sustainable entrepreneurship. There

is also a gap in analysing the specific enablers of sustainability ap proach in small enterprises

(Amankwah-Amoah et al.,2018;Lu

¨deke-Freund, 2019).

We would like to fill the gap by integrating these concepts with the previous findings from

selected case studies. The purpose of this paper is twofold: firstly, to explore the factors

which motivate circular start-up founders in their path towards sustainability, and secondly,

to identify and explain the components of the circular business model innovation. We

discuss how start-up founders use the concept of circular economy and how it affects the

business models of their enterprises. In our opinion, start-up design is based on both

economic and ecological values and is driven by entrepreneurs’ personal motivation to

maximise their positive impact and build sustainable value. These motivations could be the

key to the emergence of circular business model innovation. By presenting actual business

models developed and adopted by sustainable entrepreneurs, we add to the current

knowledge on circular start-ups.

This paper is organised as follows. Firstly, based on the liter ature review, we outline the

concept of sustainability in business, focusing on small- to mediu m-sized companies,

particularly start-ups. We take a closer look at the process of combini ng economic, social and

environmental goals during firm development, and we analyse attitudes to wards sustainable

innovation, especially with respect to business models. We focus specifically on ci rcular

innovation, as it seems to provide a response to one of the greatest challenges we face now.

Then, we present our research design and sample characteristics. Next, usi ng qualitative

research tools, we analyse six cases of circular start-up s in Poland. Finally, we present our

empirical findings and discuss the motivation of sustaina ble start-up founders and the change

factors driving the development of circular start-ups and analyse the tran sition processes that

the surveyed entrepreneurs undergo. Conclusions and limitations are pro vided in the last part

of this paper.

2. Conceptual background

In the academic literature, the concept of corporate sustainability includes the company’s

tangible contribution to the achievement of societal goals, environmental protection, social

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