Mind the Gap Exploiter: Circular Business Models for Product Lifetime Extension

Very often, a circular economy is equated with a recycling economy. Implementing a full-scale recycling economy may seem challenging enough, but in this paper we argue that the real challenge of the circular economy lies in the exploitation of the so-called ‘inner loops’, where a product’s lifetime is extended through for instance repair, refurbishment or remanufacture. The inner loops enable the capture of a product’s embedded value over time, in a systemic way, over and over again. This paper addresses the question which business model archetypes best enable product lifetime extension, in a circular economy. Five business model archetypes are presented. Four of these are relatively well-known and have to some extent been described in the literature. These include
the ‘access’ and ‘performance’ business models. The fifth, Gap Exploiter, however has a special status: it concerns businesses that are built around extending the lifetime of products from other firms. They are called Gap Exploiters because they exploit product lifetime value gaps. Familiar examples are companies that refurbish used phones and computers. They generally procure their resources at no or very low exchange value, in order to add substantial perceived use value. The paper explores the meaning and value of Gap Exploiters in a Circular Economy.