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Students will apply a circular design strategy to solve a linear business design problem. They will learn what the circular business model canvas tool is and how to use one to create their own circular business model. They will work in teams to solve an existing business challenge of their choice and redesign the business using the circular business model canvas. They will sketch their final business model to give a visual of how their business idea is circular, and then share with the rest of the class.

Lesson Prep & Curriculum Alignment

Prep time: 10 – 15 minutes

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Display the lesson slides for the class and create a discussion about what they already know about circular business models and how to identify solutions to customer problems. Ask students the guiding questions in the PowerPoint slide notes.

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Print out the ”Circular Business Model Canvas” and “Circular Solution”, one for each team, along with the “Redesign for Circularity” handout.

Follow the instructions in the lesson on how to fill in each section of the “Circular Business Model Canvas”. The slide notes at the bottom of each slide will have instructions on how to fill in the section.

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Key Learning Outcomes and Curriculum Alignment:

Science - Earth and Human Activity: Communicate solutions that will reduce the impact of humans on the land, water, air, and/or other living things in the local environment. Things that people do can affect the world around them. But they can make choices that reduce their impacts on the land, water, air, and other living things.
English Language Arts and Literacy: Participate in collaborative conversations with diverse partners about topics and texts. Follow agreed-upon rules for discussions. Use words and phrases acquired through conversations, reading and being read to, and responding to texts. Present information, findings, and supporting evidence clearly, concisely, and logically such that listeners can follow the line of reasoning.
Social Studies - People, Places, and Environments: The study of people, places, and environments enables us to understand the relationship between human populations and the physical world.

SDG Alignment

Lesson Prep & Curriculum Alignment

Prep time: 10 – 15 minutes

Lesson plans are designed to be flexible and responsive to the evolving needs of your classroom. Lessons are editable and customizable to meet the different individual student and classroom contexts. A PowerPoint version with teacher instructions and a printable PDF lesson are available for download.

Flexible and adaptive lesson

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The Lesson

Lesson duration: 90 minutes

Split into groups of 3-5 and prepare a poster board or use the “Circular Business Model Canvas” handout for the exercise. Using sticky notes on a large poster board is recommended.

Pick one of the scenarios from the “Redesign for Circularity” handout to use for the canvas.

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When finished with the canvas, sketch your circular product and business model and share your circular innovations with the class.

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Fill out the “Circular Business Model Canvas” in your group and apply one or more circular design models to your business model.

Go through the slides using the examples to walk students through the “Circular Business Model Canvas” so that they can become familiar with each of the segments and business elements.

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Prepare the PowerPoint presentation

When you are ready to present the lessons to your class click on Slide Show on the top menu bar then select Presenter View. In Presenter view, you can see your notes as you present while the audience see only your slides.

The notes appear in a pane on the right. The text should wrap automatically, and a vertical scroll bar appears if necessary. You can also change the size of the text in the Notes pane by using the two buttons at the lower left corner of the Notes pane.

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Business Model Canvas

(Slide Duration: 5 mins)��Ask Students:

Has anyone heard of the Business Model Canvas? If so, what is it, and what is it used for?

Tell students:

The business model canvas is a visual representation of a business model, highlighting all key strategic factors. In other words, it is a general, holistic and complete overview of the company’s workings, customers, revenue streams and more.

The business model canvas is a great tool to help you understand a business model in a straightforward, structured way. Using this canvas will lead to insights about the customers you serve, what value propositions are offered through what channels, and how your company makes money. You can also use the business model canvas to understand your own business model or that of a competitor.

The business model canvas is a shared language for describing, visualizing, assessing and changing business models. It describes the rationale of how an organization creates, delivers and captures value. The canvas consists of 9 key segments of a business:

1. Customer segments: List the top three types of customers. Look for the segments that provide the most revenue.

2. Value proposition: What are your products and services? What is the job you get done for your customer?

3. Revenue: List your top three revenue streams. If you do things for free but they could be monetized in the future, add them here too.

4. Channels: How do you communicate with your customer? How do you deliver your product or service to them?

5. Customer relationships: How our relationships and interactions are created and how do you maintain the relationship?

6. Activities: What do you do every day to run your business model?

7. Resources: The people, knowledge, means, and money you need to run your business.

8. Partners: List the partners that you cannot do business without.

9. Cost : List your top costs by looking at activities and resources.

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Example Business Model Canvas: Home Sharing Platform

Photographers, insurance companies

Platform dev, customer support

Online platform, properties listed

Make money with unused rooms, and stay in unique places conveniently

Self-service, customer support

Website & App

Hosts & Guests

Employees, tech platform, marketing and customer support

Hosting fees & guest fees

(Slide Duration: 10 mins)

�Tell students:

Let’s use a home sharing platform as an example to fill in the business model canvas.

Ask Students:

1. Customer Segments: Who are their customers?

There are two customer segments that define the home sharing platform business model.

-Hosts: The people who have spaces available for rent and want to make money from that. In the app, they can include their properties under certain conditions, such as available period, check-in and out times, and other “rules”.

-Guests: The people who are looking for a place to stay. They can search by location, type of property, price, among other filters that the app offers. They book and pay through the sharing platform.

2. Value Proposition: What value does the company offer their customers?

Their value proposition is different for each segment:

-For Hosts: The biggest value proposition here is being able to make money through the platform. In addition, there are the benefits of doing so comfortably and safely, with total control over bookings and even insurance against damage and accidents. It also has the advantage of being able to check the profile of those who are requesting a reservation and the option to decline offers. All this with 24/7 support via phone, email and chat with company.

-For Guests: The biggest value proposition here is to save money on hotel rooms or holiday rentals. In addition, the convenience of being able to choose a place according to all your preferences through your phone or computer and without having to negotiate with anyone. Furthermore, the traveler can also check the owner’s profile and, in some cases, exchange experiences with them during the stay. And finally, you have payment security through the platform.

3. Channels: How does the sharing platform reach their customers?

Its primary channels are the website and the app itself. In addition, the company uses social media, digital marketing, an affiliate model, and, of course, it benefits substantially from word of mouth.

4. Customer Relationships: What kind of relationship does the company have with their customers?

The sharing platform’s customer relationships are based on a high level of trust in transactions carried out through the company’s website and app. For this reason, the company acts strongly in the communication between the segments, to avoid damaging its name and reputation. If the brand is tarnished by any inconsistency, it will be easy for a competitor to take the lead. In this way, the company works to avoid conflicts, manages bad behavior and risks, ensures the protection of data and private information, and offers support to answer questions and solve problems. Its greatest customer relationship tool is the platform itself, which provides personalized recommendations and 24/7 customer service support.

5. Revenue Streams: How do they make money?

Host’s fees

Travelers’ fees

6. Key Resources: What does the sharing platform need to run the business?

Among the company's key resources are the platform and mobile app itself, the content generated by the partners, both the properties available and the assessments and reviews, its human resources including coders, marketing professionals, and other key personnel, and its algorithm.

7. Key Activities: What does the company do to operate their business?

Their main activity is the development and maintenance of the platform itself, where customer experiences takes place. Aside from that, other key activities include sales and marketing for acquiring new hosts and guests, information security for all partners and users, and customer service (on both sides), including conflict intermediation.

8. Key Partners: Who does company need to help them operate?

The company’s biggest key partners are its hosts, which can be private owners or hotels and inns, for example. If there were not any people interested in listing their rooms and properties in the app, the platform has no reason to exist. Other partners include professional photographers, who provide their services for the platform, insurance companies that secure the rental properties, as well as investors, who have made it possible to build the entire sharing platform structure.

9. Cost Structure: What does it cost to run their business?

The cost structure includes investment in all of its key activities and resources, as well as its channels. To name a selection: software maintenance and development, marketing, salaries, customer acquisition, insurance, credit card fees, and legal and administrative costs.

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Circular Business Model Canvas

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Product As A Service: Clothing rental

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Circular Business Model Canvas

University Students

communities with Low-income

Mass market and segmented customers (male/female)

(Slide Duration: 3 mins)

Tell students:

The Customer Segments section identifies the groups of people or companies that you are trying to target and sell your product or service to. There are different customer segments a business model can target.

Mass market: A business model that focuses on mass markets does not group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.

Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.

Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.

Diversified: A diversified market segment includes customers with very different needs.

Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Ask students:

Who are the customers of our clothing rental company?

Answers:

We will appeal to the mass market but will segment customers based on income, lifestyle, and shopping behavior. A specific example of one customer segment may be university students who are socially active and fashion-conscious, ecologically aware, and living on a budget.

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Circular Business Model Canvas

Trendy clothes on a budget without having to own clothes you will hardly wear.

University Students

communities with Low-income

Mass market and segmented customers (male/female)

(Slide Duration: 3 mins)

Tell students:

The Value Proposition (VP) segment is the building block that is at the heart of the business model canvas. It represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment. A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. If you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

A value proposition should also be crucial, compelling, concrete, and credible. This means that it should solve a customer pain point, it should have an ‘emotional pull’ for a customer, it should be tangible, and your business should be able to deliver it.

�Ask students:

What is our clothing rental company’s value proposition?

Answers:

We offer stylish and trendy fashion on a budget without having to own clothes you will hardly wear.

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Circular Business Model Canvas

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Clothes for people with low income, reduces textile waste

Trendy clothes on a budget without having to own clothes you will hardly wear.

(Slide Duration: 3 mins)

Tell students:

The Circular Value Proposition (VP) is the value added as a result of the circularity of your business model. It represents your unique solution (product or service) for a problem faced by a customer segment or added benefits for the customer segment. A circular value proposition should be innovative or should be different from that of your competitors and it should have social and environmental benefits.

Circular Value Propositions can be either social (services to people with low-income and/or society) and/or environmental (regenerates ecosystems, diverts waste from the environment, etc.). Ideally, they should incorporate both!

Ask Students:

What is the Circular (VP) of our clothing rental business?

Answers:

We offer clothing options to communities with low-income and consumers, shipped to their door. Keeping clothes in circulation diverts textile waste from landfills and reduces the production of new textiles and ultimately future waste.

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Circular Business Model Canvas

Personalized, online support

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

(Slide Duration: 3 mins)

Tell students:

The Customer Relationships segment is where you need to establish the type of relationship you will have with each of your customer segments and how you will interact with them throughout their journey with your company. There are several types of customer relationships:

Personal assistance: You interact with the customer in person or by email, through phone call, or other means.

Dedicated personal assistance: You assign a dedicated customer representative to an individual customer.

Self-service: Here you maintain no relationship with the customer but provide what the customer needs to help themselves.

Automated services: This includes automated processes or machinery that helps customers perform services themselves.

Communities: These include online communities where customers can help each other solve their own problems with regards to the product or service.

Co-creation: Here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

Ask students:

What are the customer relationships that exist with our clothing rental company?

Answers:

We will have personalized relationships with customers communicating with them directly via email/phone/online chat to assist them.

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Circular Business Model Canvas

Personalized, online support

Online platform, social media, influencers

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

(Slide Duration: 3 mins)

Tell students:

The Channels section is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company. Channels play a role in raising awareness of your product or service among customers and enable you to deliver your value propositions and products to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels:

Owned channels: company website, social media sites, in-house sales, etc.

Partner channels: partner-owned websites, wholesale distribution, retail, etc.

�Ask students:

What are the channels that we will use with our clothing rental company?

Answers:

We will rent our clothes to customers through our website and linked social media platforms, as well as through our partner influencers.

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Circular Business Model Canvas

Rent clothes to customers, Customer support

Personalized, online support

Online platform, social media, influencers

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

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Circular Business Model Canvas

Rent clothes to customers, Customer support

People who donate or sell their old clothes. Thrift shops

Personalized, online support

Online platform, social media, influencers

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

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Circular Business Model Canvas

Rent clothes to customers, Customer support

People who donate or sell their old clothes. Thrift shops

Inventory, website shopping platform

Personalized, online support

Online platform, social media, influencers

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

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Circular Business Model Canvas

Rent clothes to customers, Customer support

People who donate or sell their old clothes. Thrift shops

Inventory, website shopping platform

Web platform development and maintenance

Personalized, online support

Online platform, social media, influencers

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

(Slide Duration: 3 mins)

Tell students:

In the Costs segment you identify all the things you need to spend money on associated with operating your business model. You will need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer). You should always try to do both.

�Ask students:

What are the costs we will face with our clothing rental company?

Answers:

We will spend money on developing and maintaining our website. We will also spend money on marketing and staff salaries. An additional example is logistics and delivery costs for shipping out the clothes and ensuring they are returned.

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Circular Business Model Canvas

Rent clothes to customers, Customer support

People who donate or sell their old clothes. Thrift shops

Inventory, website shopping platform

Web platform development and maintenance

Subscriptions

Revenue generated from renting clothes

Personalized, online support

Online platform, social media, influencers

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

(Slide Duration: 3 mins)

Tell students:

The Revenue segment is the source from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions. A revenue stream can belong to one of the following revenue models:

Transaction-based revenue: made from customers who make a one-time payment

Recurring revenue: made from ongoing payments for continuing services or post-sale services

�Ask students:

What are the sources of revenue for our clothing rental company?

Answers:

We will generate revenue from renting clothes as well as through a subscription model, where customers can have a set number of rentals per month or unlimited access to clothes for rent based on a monthly subscription payment.

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Circular Business Model Canvas

Rent clothes to customers, Customer support

People who donate or sell their old clothes. Thrift shops

Inventory, website shopping platform

Web platform development and maintenance

Subscriptions

Revenue generated from renting clothes

Product as a service

Personalized, online support

Online platform, social media, influencers

Clothes for people with low income, reduces textile waste

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

(Slide Duration: 3 mins)

Tell students:

The Circular Innovation segment is the type of circular economy strategy your business has created that sets you apart from the competition. There are 5 core circular models that can be implemented into a product or service:

Circular Supplies: Products made from fully renewable, recyclable, or biodegradable resource inputs.

Resource Recovery: Services that work to eliminate resources, materials, or waste from leaking into the environment and maximizing the value of it to reenter the loop.

Product Life Extension: Services that offer to extend the life of an otherwise discarded product through repairing, upgrading, or reselling back into the loop.

Sharing Platform: Service platforms that allow people to collaborate and share a product amongst themselves without singular ownership by the customer.

Product as a Service: Products that are used by one or more customers through a pay-as-you-use arrangement.

Ask Students:

What is the Circular Innovation of our clothing rental business?

Answers:

In the textile industry most businesses follow the linear model of ”make, take, and dispose”. By implementing a rental and repair model, clothes transition from being a product to a service, a sharing platform is created between fashion consumers, and the life of clothes are extended through repairs.

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Circular Business Model Canvas

Rent clothes to customers, Customer support

People who donate or sell their old clothes. Thrift shops

Inventory, website shopping platform

Personalized, online support

Online platform, social media, influencers

Web platform development and maintenance

Subscriptions

Revenue generated from renting clothes

Clothes for people with low income, reduces textile waste

Product as a service

Renters return clothes, repair if needed, then rented again to other customers

University Students

communities with Low-income

Mass market and segmented customers (male/female)

Trendy clothes on a budget without having to own clothes you will hardly wear.

(Slide Duration: 3 mins)

Tell students:

The End-of-Life segment outlines ”how” we are going to keep resources in the circular loop model. You can think of this as a reverse logistics segment where you define how those products or services keep items in the loop.

Ask Students:

What is the End-of-Life scenario of our clothing rental business model?

Answers:

In the textiles industry most businesses follow the linear model of ”make, take, and dispose”. By renting clothes instead of selling them we need a way to ensure the renters give us the clothes back. We will incentivize renters to return clothes through a subscription service or a deposit scheme without a subscription, and with each item returned, customers can earn store credit on their next rental. The shop will repair the clothes as needed to maintain their rental inventory.

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The Activity

Activity duration: 30 minutes

Split into groups of 3-5 and prepare a poster board or use the “Circular Business Model Canvas” handout for the exercise. Using sticky notes on a large poster board is recommended.

Pick one of the scenarios from the “Redesign for Circularity” handout to use for the canvas.

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4

When finished with the canvas, sketch your circular product and business model and share your circular innovations with the class.

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Fill out the “Circular Business Model Canvas” in your group and apply one or more circular design models to your business model.

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Circular Business Model Canvas