By-Product and Waste Valorization in the Sea Food Industry: A
Sustainable Business Model and Hybrid Organizations
Perspective
by Tristan Groh
M.Sc. Knowledge-based Entrepreneurship
Spring 2023
Supervisor: Hani H. Elzoumor
Acknowledgements
I would like to express my deepest gratitude to my supervisor, Hani, for his unwavering
guidance, support, and mentorship throughout the entire process of completing this master's
thesis. His expertise, insightful feedback, and encouragement were instrumental in shaping
the direction of this research and refining my academic abilities. I am truly grateful for their
invaluable contributions.
I would also like to extend my sincere appreciation to my friends who supported me with
their ideas and input. Their intellectual discussions, thought-provoking insights, and
constructive feedback played a significant role in enriching the content of this thesis. Their
friendship and support were crucial in overcoming the challenges faced during this journey,
and I am grateful for their unwavering belief in my abilities.
Furthermore, I would like to express my deepest gratitude to my family for their constant
love, encouragement, and understanding. Their unwavering support and belief in me were
vital in keeping me motivated and focused throughout this master's program. I am profoundly
grateful for their patience, understanding, and sacrifices made on my behalf.
Lastly, I would like to extend special thanks to Oliver, Tim, and Michael for their support on
this master journey. Their guidance, encouragement, and words of wisdom were invaluable in
helping me navigate through the various stages. I am immensely grateful for their willingness
to share their knowledge and experiences with me, and for being a constant source of
motivation and inspiration.
I am indebted to all the individuals mentioned above for their immeasurable contributions to
the successful completion of this master's thesis. Without their support and encouragement,
this accomplishment would not have been possible. Thank you from the bottom of my heart.
Tristan Groh
2
Abstract
There is a growing interest in sustainable entrepreneurship, fueled by the urgent need to
address environmental challenges and global societal issues. This study explores the
entrepreneurial opportunities presented by seafood waste valorization, as it offers potential
solutions to both environmental concerns and the need for resource-efficient production. By
examining the link between sustainable business models, sustainable entrepreneurship, and
hybrid organizations, this research aims to identify strategies that can create a sustainable
impact through seafood waste valorization.
To investigate this emerging field, a multiple case study approach is employed. The cases
selected represent various seafood waste valorization initiatives across different regions and
market contexts. Through a comprehensive analysis of these cases, this research uncovers the
opportunities and difficulties for multidimensional value creation in sustainable seafood
waste valorization.
The findings highlight that a sustainable value proposition must go beyond mere sustainable
consciousness. Successful ventures in seafood waste valorization actively engage in efforts to
build value-sharing relationships with stakeholders, such as suppliers, customers, and local
communities. Moreover, regional regulatory environments and market dynamics play a
crucial role in shaping strategies for sustainable development. Leveraging the biggest
sustainable impact often requires addressing the largest markets while considering the unique
regional context.
This study contributes to the literature on sustainable entrepreneurship by exploring the
specific entrepreneurial context of seafood waste valorization. The results provide insights
into the key factors and strategies that enable entrepreneurs to create sustainable impact in
this field. By offering a comprehensive understanding of the opportunities and challenges
associated with seafood waste valorization, this research can guide entrepreneurs,
policymakers, and other stakeholders in developing sustainable solutions and fostering
environmental sustainability in the seafood industry.
3
Abbreviations
Abbreviation Meaning
B2B business-to-business
LCA life-cycle assessment
R&D research and development
USP unique selling proposition
4
Table of Content
Introduction............................................................................................................................ 6
Background and Problem Discussion................................................................................ 6
Entrepreneurship as a Solution..........................................................................................7
Sustainable Business Models and Hybrid Tensions...........................................................8
The Gap in Literature and the Research Questions...........................................................9
Literature Review................................................................................................................. 11
Sustainable Entrepreneurship.......................................................................................... 11
Sustainable Business Models.......................................................................................... 12
Hybridity in Sustainable Entrepreneurship....................................................................... 14
The Seafood Waste Industry: Entrepreneurial Ecosystem...............................................16
Sustainable Business Models and Hybridity in Seafood-Waste Ventures: Synthesizing a
Framework....................................................................................................................... 17
Method.................................................................................................................................. 19
Research Strategy............................................................................................................19
Research Design..............................................................................................................20
Data Collection and Analysis............................................................................................22
Analysis................................................................................................................................ 25
Case Introduction............................................................................................................. 25
Seafood Waste Valorization with Sustainable Business Models: The Case Analysis......28
Tidal Vision: Sustainable Business Model and Hybrid Tensions................................ 28
TômTex: Sustainable Business Model and Hybrid Tensions......................................34
Upcyclr: Sustainable Business Model and Hybrid Tensions.......................................38
Aquafood: Sustainable Business Model and Hybrid Tensions................................... 42
Discussion............................................................................................................................ 46
Value Proposition............................................................................................................. 46
Value Creation and Delivery.............................................................................................47
Value Capture...................................................................................................................49
Sustainable Value Capture...............................................................................................50
Conclusion............................................................................................................................52
Implications for Sustainable Entrepreneurs with Seafood Waste Valorization................. 52
Implications for the research field.....................................................................................53
Future Research Opportunities........................................................................................ 53
Limitations of this study.................................................................................................... 54
References............................................................................................................................55
Appendix...............................................................................................................................62
Interview Guide................................................................................................................ 63
Thematic Analysis............................................................................................................ 65
5
Introduction
This section will introduce and elaborate on the origin and goal of this body of work.
It depicts the problematic state of sustainable development in the seafood sector.
Furthermore, a link to possible entrepreneurial approaches will be created and how this link
yields insights into the then following research questions. Also, it will be discussed how this
work can fill a gap in the literature.
Background and Problem Discussion
The human population has a one-sided relationship with the planet they live on: it is
dominated by extraction, abuse and discarding the “product’s” leftovers back into the
environment (Tan & Lamers, 2021). This may lead to issues of misused resources, damaged
ecosystems and other unsustainable behavioral consequences. A prime example of one
industry that is regularly known for profit-driven and nature-damaging behavior is the
seafood industry. This highly nutritious broad food category, containing species like salmon,
crabs, lobsters, tuna and carp, is a historically important foundation for the diet of many
populations, particularly in coastal and island communities where fish is a major part of the
local diet (Golden, 2016).
Furthermore, the seafood industry has the potential to address critical issues:
observing the global hunger crisis, the seafood industry is the object of multiple
investigations and examinations. This comes from the fact that seafood products are
extremely high in high-caliber protein, lipids with high levels of unsaturated fatty acids,
vitamins and minerals. Therefore seafood can globally help to address problems of food and
nutritional security in poor countries (World Bank, 2013). This is also supported by the fact
that global demand for seafood has increased significantly over the past few decades, driven
by population growth, rising incomes, and changing consumer preferences (FAO, 2022).
On the other hand, the production and processing of seafood leave 50-70% of the
initial product as by-products or waste (e.g. trimmings and offal) (Guerard 2007, Ghosh et al.
2016). As the demand of the market wants to be fulfilled, the fishing industry tends to apply
unsustainable fishing behaviors due to the inefficiency of their processing, which ultimately
may lead to the depletion of fish stocks and disrupt marine ecosystems (Cashion et al., 2017).
Overfishing may result in the discarding of bycatch and can have significant negative impacts
on marine ecosystems and biodiversity (FAO, 2019).
Generally, there are two possible approaches to identifying wasted seafood and
tackling the issue: the first is by-catch in the fishing process. Unwanted species like turtles,
juvenile fishes, or others may get caught in the nets as well. As they often do not survive the
process and will not be further used, they will often be disposed of back into the sea. This has
multiple issues as the disposal of seafood waste can have negative impacts on water quality
and ecosystems. When waste is dumped into waterways, it can lead to oxygen depletion and
the growth of harmful algae blooms, especially in sweet water regions, like rivers (Brown,
2020).
The other point of waste is the food production itself: as described, the majority of the
seafood's original weight (50-70%) is not properly used in the production process (Guerard
2007). The by-products at this stage usually derive from the process of filleting and
6
preparation for products that are meant for end-consumers. The offal may contain skin,
bones, shells, heads and other parts of a fish that are not processed or turned into low-value
products like fishmeal.
This work wants to go deeper into the opportunities and challenges in the seafood
waste industry. The nature of waste valorization aims at more efficient and sustainable
processes to commercialize food production. The often-cited “triple-bottom-line approach”
(Adams et al., 2013) is a foundational perspective to holistically examine the sustainable
nature of business, especially in the entrepreneurship sphere. Therefore the perspective of
sustainable entrepreneurship is a sound approach to holistically examine the characteristics of
new ventures addressing sustainability issues that successfully link social, environmental and
economic objectives (Rosario et al., 2022). As described, the disadvantages of the seafood
industry regarding their unused, or poorly processed by-products open up space for
innovative businesses and new technologies. Entrepreneurs are eager to find solutions to fill
this space and address social issues (e.g. high nutritional food for populations suffering from
underfeeding) or economic issues (e.g. more efficient use of the total value of seafood; less
energy consumption etc.) while they are able to create financial viability and achieve profits.
A more recent stream in this sphere is hybrid organizations (Davies & Chambers, 2018).
Using this lens gives a better understanding of value creation and stakeholder considerations,
examining how a company in the studied industry keeps being financially viable without
losing its impact-driven nature. As companies follow the trajectory of innovation and growth,
they might take business paths away from their initial statement to create sustainable value -
in the seafood byproduct industry, those values might be energy-efficient processes, waste
reduction, or solving underfeeding issues in poor populations. The act of changing the
sustainable impact to achieve a stronger financial status is called mission drift (Ebrahim et
al., 2014) and will be investigated further.
The literature provides different perspectives to investigate the solutions to mitigate,
or even benefit, from seafood waste material. One dimension comes from the technological
or processing perspective (e.g. Guerard, 2007; Suresh et al., 2018). Other scholars approach
the issue through economic models, for example, streams from the circular economy (e.g.
Ruiz-Salmón, Israel, et al., 2020; Cooney et al.; 2023) or Eco-Design (Topleva & Prokopov;
2020). Globally, there are multiple actions observable with the goal to use by-products from
the seafood processing industry and turn them into further upcycled products, e.g. collagen,
chitosan, or protein (Eramsus et al., 2021). The business perspective gives fruitful
information about corporate and entrepreneurial solutions which not only address the issue
of seafood waste on a sustainable level but also have the potential to create economic value.
Entrepreneurship as a Solution
To address this problem, different initiatives, organizations and businesses were built.
Those can be found either as NGOs, business practices of established seafood producers, or
as New Ventures founded by mission-driven entrepreneurs. Especially start-ups and
innovative ventures aim to find new solutions through valorizing food side streams. The
entrepreneurial perspective is a well-functioning lens to observe organizations that potentially
kick off transformation processes with the capability to overcome systematic issues. For
example, entrepreneurship can be an effective way to address the global problem of waste.
According to a report by the Ellen MacArthur Foundation (2019), there are many innovative
7
and creative entrepreneurs who are already developing new technologies, products, and
services to tackle waste-related issues. Exploring and exploiting innovative business ideas,
entrepreneurs are known to open up new pathways for future businesses and have the
capacity to shift the dominant market logic. This is especially interesting when observing
market inequalities that affect social or environmental issues. The entrepreneurial sphere was
observed to have capabilities to address the issues of waste and establish a “circular business
model” (Schaltegger et al., 2016; Donner et al., 2020). The authors Donner et al. (2020) put
upcycling entrepreneurial ventures into the context of other fundamental players of waste
valorization and evaluated them as an essential pillar of environmental development. This is
also supported by their nature of being risk-takers and not bound by territorial limits.
Despite the emerging interest in food-waste valorization from both, literature and
practice (e.g. Topleva & Prokopov, 2020; Helkar et al., 2016; Donner et al., 2021), there is a
considerable lack of research regarding innovative valorization of seafood processing
by-products. A result of that is a missing link between the body of literature from the
entrepreneurship sphere and the seafood waste industry. To address this gap, this work will
apply the emergent body of literature from the sustainable entrepreneurship sphere and
examines entrepreneurial practices.
Sustainable Business Models and Hybrid Tensions
The Sustainable Business Model literature is an emerging scope to identify the
dynamics of entrepreneurial ventures with a mission to holistically engage in societal and
environmental issues (Boons & Lüdeke-Freund, 2013). Being the foundational architecture of
a company, a business model, can give insights into competitive strategies and a venture's
actions (Teece, 2010). The detailed scope of sustainable business models provides even more
opportunities to gain a better understanding of underlying (or future) sustainable dynamics
within its core value systems (Bocken et al., 2014). This work has the approach to utilize the
idea of sustainable business models in the context of entrepreneurial ventures to understand
the main strategies in the dimensions of value proposition, value creation and delivery and
value capture (Osterwalder & Pigneur, 2010). This approach enables a research focus on
relevant assets and goals within a venture, observing multiple dimensions without
interchanging the key elements, or as Osterwalder et al. (2005) named them, “pillars”.
Special focus is therefore on the created value spheres and their representative strategies.
Having multiple value spheres within one organization, in the literature sometimes
called “logics” (e.g. Doherty et al. 2014) has a number of managerial consequences.
Especially in Sustainable Entrepreneurship and its nature of having multiple key
drivers/missions (environmental, social, financial), there are potential conflicts observable,
recently described as “mission drift” (Pache & Santos, 2010). For example, a common hybrid
tension in organizations with a sustainability agenda is the collision between financial
viability and the environmental/social goal (Battilana & Lee, 2014). With the nature of waste
valorization ventures and their potential goal of kicking off environmental transformations,
this body of work expects a multitude of hybrid tensions within their organizational
architecture. To examine this characteristic, the author links a connection between (1)
sustainable entrepreneurship literature to identify the relevant characteristics and attributes of
multidimensional value creation (Schaltegger & Wagner, 2011), (2) the sustainable business
model literature, as it is an appropriate lens to investigate the mentioned company archetype
8
(Bocken et al., 2014) and (3) hybrid organization literature, as this will yield insights about
the unique value conflicts within observed organizations (Doherty et al., 2014).
The Gap in Literature and the Research Questions
The main research question that will be addressed within this work is how
entrepreneurs build sustainable business models around the valorization of seafood
by-products and side streams incorporating the idea of hybrid organizations to create
financial and sustainable value. The formulation of the topic is rather broad, as it underlines
the intention of exploration and tries to keep it open against disadvantageous limitations. My
questioning of how the mentioned enterprises try to rise and succeed is similar to
Denscombe’s (2013) typification and resembles type 4: “Describing a phenomenon”.
The reason for that is the innovative character and the juvenile stage of the examined
industry. Seafood by-product valorization and the creation of sustainable enterprises/ventures
are so far dominated by new ideas, technologies, and rather untested market hypotheses. This
supports the approach of explorative research, trying to understand the dynamics in a more
holistic way. Potential market validity, sustainable impact, and institutional influences are not
entirely clear. The questioning of “how” should encompass the current state of the examined
artifacts, but should also evaluate future undertakings within this industry. The
socio-economical context of this research topic is of high relevance, as future research may
dig deeper and rely on bigger bases of data. Future research options will be discussed later.
The first step for this will be a review of relevant literature. Then the author will
create a framework to identify sustainable business model aspects, combined with questions
of hybridity that are in line with the literature and well suited to be applied to analyze
sidestream valorization. It will not function as a set theory that will be tested, but rather as a
core structure to analyze, understand and interpret the cases in their context. To say it simply,
it will be used to “ask the right questions”. This will ensure that the reviewed cases are
observed from the relevant angle. The literature and the framework will help to put future
data collection and analysis into the right context. It is aimed to create a common
understanding of what those concepts mean and how they can be applied to real-life practices
(companies), as there are multiple examples of examined sustainable entrepreneurship in
hybrid organizations in the literature already (e.g. Tabares, 2021). This knowledge is also
important for gaining industry insight, and what actors are the most relevant to fit into the
selection criteria.
To answer the research question, this body of work will revolve around a comparative
case study, examining multiple entrepreneurial ventures with a business model around the
valorization of seafood by-products. The overall goal is to understand how entrepreneurs are
able to manage the different spheres (financial, sustainable) while creating value and validity
for both. The special focus will be on the idea of sustainable business models with their
distinguished sectors of value creation, value capture and value delivery. Based on the
findings, a model will be built that gives researchers and entrepreneurs a better understanding
of the different approaches that may be taken when trying to construct mentioned
organizations and the potential hybrid tensions. It can also be used as a conceptualization
reflecting the concepts of sustainable business models as well as hybrid organizations within
a specific market niche. Based on the created theory, future entrepreneurs as well as scholars
9
should be able to make assumptions for further decisions or research, which will need more
investigation in the field through either testing or more extensive analysis.
The Research Questions:
R 1. What are the main strategies for sustainable enterprises when building a
sustainable business model around the valorization of by-products in the seafood
industry?
R 2. What are the main hybrid tensions/opportunities for sustainable enterprises when
building a sustainable business model around the valorization of by-products in the
seafood industry?
10
Literature Review
This section elaborates on the relevant theories. Multiple definitions and different approaches
in the literature will be stated. To get a better understanding of the relevant streams, the
spheres of sustainable entrepreneurship, sustainable business models and hybrid
organizations will be elaborated. Also, there will be a depiction of the state of current
developments in seafood by-product valorization. After that, a framework will be developed
that gives the foundation for further investigation and interviews. It will depict relevant
dimensions in the stated fields to properly reflect the sustainable business model aspects and
hybrid tensions.
Sustainable Entrepreneurship
Sustainable entrepreneurship is a rapidly growing field of research that focuses on the
sustainable development of innovative enterprises. It can be further described as a sub-field
of entrepreneurship and gained substantial traction in the business and sustainability literature
(Muñoz & Cohen, 2018). It involves the creation of new ventures or the transformation of
existing ones to achieve both economic and environmental sustainability. The core of this
academic field is the incorporation of sustainable development with the idea of innovative
venture creation. This is in line with the Schumpeterian idea of Entrepreneurship
(Schumpeter, 1934) as he described the field's nature as creative destruction, with its means
and goals of disrupting existing markets and technologies and introducing new and
innovative products and services to achieve a new market equilibrium.
Another important economic scholar was Kirzner (1973), who elaborated on the idea
of entrepreneurship in the context of using arbitrage opportunities. He discussed that
entrepreneurs identify those opportunity spaces through information advantages, and exploit
them with innovative products and services to gain financial rewards. This stream, in contrast
to the destruction in Schumpeter's vision, focuses on the creation of new markets and
economic opportunities, combined with the application of innovative business models while
taking entrepreneurial risks (Block et al., 2015).
One idea that is often mixed with Sustainable Entrepreneurship is Corporate Social
Sustainability (CSR). This concept is commonly defined as "the responsibility of enterprises
for their impacts on society" (European Commission, 2011) and "the responsibility of an
organization for the impacts of its decisions and activities on society and the environment,
through transparent and ethical behavior that contributes to sustainable development,
including health and the welfare of society" (ISO, 2010). CSR involves integrating social and
environmental concerns into business operations while pursuing economic profit. Examples
of CSR activities include philanthropy, environmental conservation, fair labor practices,
ethical governance, and community engagement, among others. As the name implies, CSR
acts on the level of corporate organizations and industry incumbents. This means, even
though companies with CSR initiatives follow sustainable missions, they will not be
classified as Sustainable Entrepreneurship. This derives from the lack of entrepreneurial
characteristics, such as the Schumpeterian creative destruction, or the approach to creating
11
innovative markets. Also, sustainable entrepreneurs go beyond CSR by creating businesses
that are explicitly designed to generate positive social and environmental outcomes.
In contrast, scholars tried to find sufficient definitions of Sustainable
Entrepreneurship to grasp a collective and cohesive understanding. This is especially
important as the different sub-fields of Entrepreneurship were described by similar or even
identical definitions as Sustainable Entrepreneurship, which can lead to confusion.
Furthermore an overview of the most prominent definitions of adjacent fields of sustainable
entrepreneurship will be provided. This is important, as a cohesive classification gives the
necessary understanding of what type of company will be observed within this thesis.
There are multiple definitions and approaches in the literature that try to explain the
concept of Sustainable Entrepreneurship. A definition of Sustainable Entrepreneurship has
been provided by Hockerts and Wüstenhagen (2010), who define it as "the process of
creating new ventures that meet the needs of the present without compromising the ability of
future generations to meet their own needs." This definition highlights the intergenerational
aspect of sustainability and emphasizes the need to consider the long-term consequences of
entrepreneurial activities.
Schaltegger & Wagner (2011) propose a definition of Sustainable Entrepreneurship as
a business approach that balances the impacts of environmental, social, and economic
activities to achieve efficiency and competitiveness. This involves discovering and exploiting
entrepreneurial opportunities that generate social and environmental benefits to promote
sustainability. Sustainable Entrepreneurship is characterized by the creation of long-term
value for all stakeholders, including shareholders, employees, customers, and the
environment. The ultimate goal is to contribute to the achievement of sustainable
development goals by meeting the needs of present and future generations.
In conclusion, sustainable entrepreneurship is a multifaceted and complex concept
that can be defined in various ways. However, all definitions share a common goal of creating
economic, social, and environmental value and emphasize the importance of considering the
long-term consequences of entrepreneurial activities.
Sustainable Business Models
The concept of sustainable business models has gained significant attention in recent
years as a response to the need for sustainable development. In this chapter, we will explore
the concept of sustainable business models, their characteristics, and how they contribute to
sustainable development. Furthermore, multiple approaches will be discussed and analyzed.
This will be of high importance, as the perspective of Sustainable Business Models delivers a
structure to examine the architecture and dynamics of the reviewed case companies.
A sustainable business model can be defined as a way of doing business that
integrates environmental, social, and economic sustainability principles into its core
operations, with the aim of creating long-term value for all stakeholders (Schaltegger &
Wagner, 2011). Sustainable business models seek to balance the three dimensions of
sustainability, while ensuring the profitability and competitiveness of the business (Bocken et
al., 2014).
Sustainable business models are characterized by several key features, including the
integration of sustainability principles into the business strategy, the creation of value for
12
multiple stakeholders, and the consideration of the entire lifecycle of products and services
(Boons & Lüdeke-Freund, 2013). They also involve the adoption of innovative practices,
such as the use of renewable energy sources, the reduction of waste and emissions, and the
adoption of circular economy principles (Stubbs & Cocklin, 2008).
Sustainable business models have the potential to contribute significantly to
sustainable development by promoting environmental and social sustainability while ensuring
economic viability (Bocken et al., 2014). They can help reduce environmental impacts,
enhance social welfare, and promote economic growth and competitiveness (Boons &
Lüdeke-Freund, 2013). By considering the entire lifecycle of products and services,
sustainable business models can also promote the efficient use of resources and the reduction
of waste, leading to cost savings and increased profitability (Stubbs & Cocklin, 2008).
Sustainable business models are essential for promoting sustainable development, as
they integrate environmental, social, and economic sustainability principles into business
operations. By considering the needs of multiple stakeholders and the entire lifecycle of
products and services, sustainable business models can lead to long-term value creation and
competitiveness.
An important categorization in the field of business models was made by Osterwalder
et al. (2005). They broke down their concept of business models into nine pillars, which were
later developed into the commonly accepted practice of a business model canvas. Other
scholars reviewed this model, such as Bocken et al. (2014), and Osterwalder & Pigneur
(2010). This resulted in a more reduced approach with three core dimensions, namely value
proposition, value creation and delivery, and value capture.
In this vein, a value proposition is a statement that explains the unique benefits that a
product or service offers to customers, and how it differentiates from competitors. It answers
the question: "Why should customers buy from us?" (Osterwalder & Pigneur, 2010). Value
creation and delivery refer to the process of designing and delivering a product or service that
satisfies customer needs and creates value for the company. It involves identifying the
customer's needs, developing a solution that meets those needs, and delivering it through
efficient and effective channels. Value capture refers to the ability of a company to capture a
portion of the value it has created and deliver it to shareholders. It is the process of turning
customer value into company profits. This can be achieved through various methods, such as
pricing strategies, cost-cutting measures, and partnerships (Chesbrough, 2007).
To specifically examine the different perspectives of a company’s architecture in the
context of sustainable entrepreneurship, Davies & Chambers (2018) advanced the concept of
sustainable business models by incorporating hybrid tensions. They used the mentioned 3
pillar model of Osterwalder & Pigneur (2010) and discussed specific features of hybrid
organizations. For example, in the Value Proposition, Sustainable Enterprises mainly
encounter problems in communication with stakeholders (Hahn & Ince, 2016; Austin et al.,
2006). Value Creation & Delivery uncovers various tensions within organizations, for
example, in the use of resources, employees, or the network (Battilana & Lee, 2014). These
tensions, caused by multidimensional value creation will be discussed later. In the context of
Value Capture, they discussed the problems created by the conflicting objectives and
limitations of the measurement tools of their success (Lüdeke-Freund et al., 2017).
Furthermore, another attempt to adapt the concept of Business Models to the idea of
sustainability was made by Sparviero (2019), who included the concept of Social
Entrepreneurship in the idea of the Business Model Canvas by Osterwalder & Pigneur
(2010). The result was the Social Enterprise Model Canvas (SEMC). For the sake of this
work, the concept of Social Enterprises is adaptable to Sustainable Entrepreneurship.
13
Therefore, the nice original pillars will be enhanced by two additional dimensions, as this will
be elaborated further.
Hybridity in Sustainable Entrepreneurship
The concept of hybridity has its origin in the field of biology, specifically botany
(Canan, 2015). Organizational research drew the comparison of the biological hybrid with
organizational transformation processes in various ways (Ménard, 2006; Minkoff, 2002).
Evers & Ewert (2010) specified this process as follows: "Elements, each originally associated
with a different sphere, combined with each other, within one organizational form". The
boundaries of conventional "spheres" are dissolved and combined in novel ways. Hybrid
organizations form blends of the characteristics of organizational archetypes (Greenwood &
Suddaby, 2006). These are found between market and state (Jay, 2013), between market and
third sector, and between state and third sector (Seibel, 2015; Davies & Doherty, 2019).
In the literature on hybrid organizations and social entrepreneurship, an increased
interest in the combination between traditional enterprises (for-profit) and non-profit
organizations can be observed (Haigh et al., 2015). Ventures of this type are also referred to
as "for-benefit" enterprises (Sabeti, 2011). Other names for organizations on this spectrum
(Lehner & Weber, 2016) appear in the literature, such as "social hybrid venture" or "hybrid
firm" (Tuunainen, 2005; Florin & Schmidt, 2011).
In the literature, the terminology of hybridity usually refers to multidimensional value
creation, which finds examples in sustainable entrepreneurship or social entrepreneurship
(Grassl, 2012; Lans et al., 2014), but is not conditional on them.
Doherty et al. (2014) define the concept of organizational hybridity as “structures and
practices that allow the coexistence of values and artifacts from two or more categories”.
Those categories are related to the “spheres” and “logics” that are inherent in every
organization. They draw the connection to the idea of Social Entrepreneurship, as the “social
sphere” is as existent as the “financial sphere” in companies that might fall under this
category.
Also, McMullen (2018) applied the aforementioned metaphor of the biological hybrid
in his conceptual examination of Social Entrepreneurship. Thus, he examined and described
the characteristics of two-dimensional value creation, positioning in the business landscape,
and organizational adaptations. Furthermore, scholars connect the special effectiveness of
hybrid structures to Social Entrepreneurship, which must find special solutions to their social
and economic problems and successfully overcome the boundaries of private and social value
creation (Pache & Santos, 2013; Doherty et al., 2014).
Furthermore, hybrid organizations combine the demand-based logic of the market
with a sustainable logic of social and environmental problems to minimize issues of this
nature through entrepreneurial action (Belz & Binder, 2017; McMullen & Warnick, 2016).
This hybridity is based on the idea that values and norms at the societal level, also referred to
as “logics”, are responsible for actions and beliefs at the organizational level (DiMaggio,
1988). Institutional logics, in the context of an organization, are the "patterns of related
behaviors, schemas, and goals" (Thornton & Ocasio, 2008). According to Roundy (2017),
these are directly linked to social institutions and are supra-organizational patterns of human
14
activity that evidence both ends and means of organizational behavior (Friedland & Alford,
1991; Thornton & Ocasio, 2008).
Hybrid organizations, especially Sustainable Enterprises, are able to establish a
dialogue between the business world and society through effective mechanisms. However,
this requires an appropriate sustainable business model (Jabłoński, 2016). Jabłoński described
the sustainable business model as a hybrid component of a subject-object system, consisting
of common relationships in the context of business, value-based management, stakeholders,
and shareholders, which are in a mutual relationship in terms of sustainability. In his paper
Scalability of Sustainable Business Models in Hybrid Organizations, which explores the
concept in a network environment, Jabłoński (2016) declared the following aspects necessary
to sufficiently understand a sustainable business model: (1) the role of the various
sustainability drivers, (2) the causal relationships of the actions undertaken, (3) the impact of
the actions on sustainability, and (4) the potential and real impact on financial outcomes
(Epstein & Buhovac, 2010).
The authors Haigh et al. (2015) further defined that the business models of hybrid
organizations are based on a certain social mission (non-profit), which is realized through
income-generating actions (for-profit). When considering this dichotomy, parallels to
definitions of sustainable entrepreneurship become apparent (Hockerts & Wüstenhagen,
2010; Shepherd & Patzelt, 2011; Schaltegger & Wagner, 2011). For example, an established
company can integrate or cooperate with hybrid organizational structures (Haigh et al., 2015).
In this way, synergy effects can arise that are beneficial for both organizations and result in
potential competitive advantages (Hockerts, 2015).
For Sustainable Enterprises, their mission (Austin et al., 2006) is the ultimate goal,
but is also accompanied by specific threats. In academia, looking at this problem using the
theory of hybrid organizations has proven effective (Battilana & Dorado, 2010; Doherty et
al., 2014). Most importantly, the risk of emerging tensions and the resulting "mission drift" is
highly significant, where the hybrid institutional components create conflict and as a result,
one side dominates the other (Davies & Chambers, 2018). This is especially visible when
sustainably motivated entrepreneurs redirect the focus of their business to the economic
dimension to ensure survival and income (Ebrahim et al., 2014). The cause is the
aforementioned multidimensional value creation, realized through novel products and
services - the distinguishing criterion of sustainable entrepreneurship (Schaltegger et al.,
2016). The different logics, in this case the logic of sustainable mission and profit
management, work against and weaken each other when the management is flawed (Pache &
Santos, 2010). Davies & Chambers (2018) showed that the less intersection these logics have
with each other, i.e., the greater the differentiation of the various institutional values, the
higher the likelihood of the occurrence of tensions and potential mission drift. In practice, this
can be illustrated, for example, by a company that conducts conventionally profit-generating
activities and uses those profits for separate sustainable development purposes (e.g. donations
to charity projects). The structure of profit generation is inhibited by the "extraneous" use of
funds, as these funds are lacking for reinvestment and growth. The three spheres of economy,
ecology, and society are more sharply separated and thus more prone to interfere with each
other (Battiliana et al., 2012; Austin et al., 2006). If the key business activities that generate
revenues are coupled with the activities that serve a sustainable mission, we speak of
"integrated hybrids"; if economic and sustainable value creation are separate, we speak of
"differentiated hybrids" (Battiliana et al., 2012; Ebrahim et al., 2014). The scope of this paper
will mainly refer to the integrated hybrids, i.e. Sustainable Enterprises, whose business
processes are both means and ends of achieving sustainability goals. This is because an
15
examination of the business model of integrated hybrids is easier to differentiate and more
clearly coupled with the non-economic goals of the enterprise. Also, observing the effects of
their applied strategies within the observed business model pillars (value proposition, value
creation and delivery, and value capture) is more clear with integrated hybrids.
Integrated Sustainable Enterprises (Battiliana et al., 2012; Ebrahim et al., 2014) also
experience different types of tension throughout their mission (Davies & Chambers, 2018). In
particular, the hybridity of the mission can lead to conflicts of competition: since the supreme
mission is to push sustainable development (Battilana & Dorado, 2010), there is an advantage
in making one's business model available to other companies and allowing copying to
increase the market size (Zahra et al., 2009). From an economic identity perspective, this
tends to be counterproductive, as competitive advantages can be given up. However, hybrid
organizations do not see this as a disadvantage, but as a concept of "competitive cooperation"
(Zeyen et al., 2013).
Davies & Chambers (2018) delivered an important foundation for this work. They
analyzed multiple Sustainable Enterprises with the scope of Sustainable Business Models and
examined potential and existing hybrid tensions. As they state, the synergy between the
managerial responses to hybrid tensions and the potential observations of how the business
model is affected by those seems like a promising space for exploration. Inspired by their
work, this thesis also applies the business model pillars of Osterwalder et al. (2005). To state
the major difference to their study, there will be no dedicated focus on the business model
innovation, as Davies & Chambers applied in their study. Moreover, this thesis will focus on
the general application of strategies and practices from the perspective of the dedicated
business model pillars. Still, if an innovative strategy is applied, this will be stated to
elaborate on the managerial activities. The author aims to holistically understand the general
dynamics and characteristics of the observed companies in the context of their hybridity.
The Seafood Waste Industry: Entrepreneurial Ecosystem
There is a considerable lack of research considering the link between seafood waste
valorization and entrepreneurship. Recently scholars examined the commercial exploration
and exploitation of seafood by-products in the context of a circular economy (Cooney et al.,
2021; de la Caba et al., 2019) or circular business model (Donner et al., 2020; Donner et al.,
2021). The authors Cooney et al. (2023) discussed a framework to categorize multiple types
of business in the context of circular economy regarding different characteristics. It is a
useful tool to identify the major value-added systems and the potential impact on
stakeholders along and outside the value chain of “circular” companies. They not only define
the business by the stage in the value chain of seafood production but also consider the
potential environmental and social impact the different activities may have. As implied in the
title, this thesis will focus on business approaches that are built around the valorization of
by-catch or production sidestreams, compared to other seafood waste reduction strategies like
disposal (e.g. Cadavid-Rodríguez et al., 2019) or prevention (e.g. Komoroske and Lewison,
2015). Furthermore, Cooney et al. (2023) observed circular business models in the context of
their stage in the value chain of seafood production were described as (1) Aquaculture, (2)
Fishing, (3) Processing, and (4) Consumption. Depending on the stage, a business can utilize
different opportunities to construct sustainable business models. For example, a company in
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the fishing stage of the value chain can valorize the fish bycatch and produces products like
fishmeal or fertilizer (Dineshbabu et al., 2013). This framework will help to identify and
categorize companies in the industry. The author is convinced that observing companies with
similar strategies, in this case, valorization, will help to generate comparable results with
deeper insight into how companies facilitate success through their sustainable mission.
Sustainable Business Models and Hybridity in Seafood-Waste
Ventures: Synthesizing a Framework
To investigate the underlying value dynamics and dedicated strategies of entrepreneurial
ventures, this work aims to synthesize a framework that has the capability to analyze the
organizational architecture, while considering the multidimensional value creation, often
cited as triple bottom line (Adams et al., 2013). This practice is not meant as an end in itself,
but should help to identify and elaborate the formerly explained hybrid tensions and possible
unique opportunities (Davies & Chambers, 2018; Hahn & Ince, 2016, Doherty et al., 2014).
The starting point of this framework is the often-cited business model canvas by
Osterwalder et al. (2005). The further consolidation by Bocken et al. (2014) and Osterwalder
& Pigneur (2010) is a useful advancement to the three core dimensions of value proposition,
value creation and delivery, and value capture. Further, those three dimensions were
dissected into nice pillars: under the main category value proposition the sub-categories
product/service, customer segments and relationships will be observed; value creation and
delivery will be divided into activities, resources, channels and partners; lastly, the value
capture dimension contains the pillars cost structure and revenue streams.
The value proposition is often discussed as a cornerstone in constructing hybrid
business models, especially in the context of stakeholder communication (Moss, 2011; Hahn
& Ince, 2016). Therefore, this dimension should yield insights into the company's strategy
and issues with establishing financial and sustainable relationships, how they manage
upcoming hybrid tensions and how they adapt to different stakeholders.
The value capture and delivery is aimed to identify the organization's management
decisions regarding internal and external activities, questions of capital acquisition (human
and financial) and market access strategies (channels and partners). It is expected that
sustainable enterprises struggle here in a multitude of ways: the literature points to hybrid
conflicts regarding scalability (Jabłoński, 2016), finding mission-oriented investors (Santos
et al., 2015), or partnering with mainstream distribution (Davies et al., 2019).
The value capture, often referred to as the financial viability of a company's business
model, has special implications for sustainable enterprises. This framework depicts this
dimension with issues derived from hybridity and its nature of multi-dimensional value
creation combined with the complex state of measurement methods (Lüdeke-Freund et al.,
2017).
Based on the integration of Bocken et al. (2014) and the integration of hybridity
(Davies & Chambers, 2018) this framework should be able to depict the most relevant
features of sustainable enterprises and their strategies. Furthermore, the specific observations
of hybrid tensions inside the business model pillars are sorted in a way that their origin and
impact on the company and the environment are sufficient to identify. Compared to an
unstructured approach by just finding hybrid tensions without application of the business
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model idea, this method classifies the dedicated issues, puts them into perspective and leaves
room for comparison to commercially focused companies.
Still, the business model canvas received criticism, especially from the perspective of
sustainable and social value creation (e.g. Bocken et al., 2015): it is argued that the static
perspective of the sectors is missing the capability of dynamic adaptation and change, and
rather depict a rigid snapshot of their structure while treating social and environmental factors
as externalities (Sparviero, 2019). Therefore, the author drew the conclusion that an
adaptation of the business model canvas to incorporate the aspects of environmental and
social values, as discussed by Osterwalder & Pigneur (2010) is needed. First, an advancement
of Sustainable Value Capture is added. This is in line with Osterwalder’s & Pigneur’s
elaboration of their model in the context of sustainable-focused organizations. Secondly, the
discussed hybrid tensions will be discussed in a dedicated column to give an overview of the
appearing issues within the pillar. Thirdly, the deducted opportunity will be added, as hybrid
tensions may be limiting a company's ability to achieve financial and social/environmental
goals (Doherty et al., 2014), but it is argued that especially those tensions create potential
unique opportunities (Davies & Chambers, 2018). The result is a synthesized framework that
gives a proper manual to investigate mission-driven sustainable enterprises, gaining insights
into their strategies for their value-added processes, their interaction with their environment,
the emerging hybrid tensions, and the potential to explore and exploit business and
sustainable opportunities (Maletič et al., 2014). An overview can be found in Table 1 in the
Appendix.
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Method
The following section elaborates on the applied research strategy, ontological considerations
and epistemological aspects. There will be a link to the initial research question and
reasoning for the decision regarding the state of the literature, industry and aimed result.
Further, the selection criteria for the cases will be elaborated.
Research Strategy
General Strategy
The general research strategy applied to my study is a qualitative approach. The idea is to
interview people within the industry to get a better understanding of the examined
organization's nature. It is necessary to get a holistic view to encompass the aspects of
sustainable business model and hybridity - concepts that may describe an organization’s
origin, state, and goal on a higher level. Qualitative research, according to Bell et al. (2011),
encompasses research that is rather based on images and words and is often used for theory
building. Therefore, it is assumed that the results of this qualitative research are sufficient to
properly conceptualize sustainable enterprises as hybrid organizations which commercialize
seafood side streams. It is an explorative approach, as those fields are not properly linked so
far in the literature. Also, qualitative research “emphasizes predominantly an inductive
approach to the relationship between theory and research” with the goal of the “generation of
theories” (Bell et al., 2011). The gathered data will link the examined organizational
dynamics (insights from entrepreneurs) to draw a bigger picture and categorize multiple
approaches and implications. The chosen type of medium will be interviews held with
relevant people, who are sharing their insights and knowledge based on their experience. The
qualitative nature helps further to understand mentioned dynamics in their context, rather
than being an isolated fact or metric. It puts the insights into a reference of past, present, and
future, to explore this topic further. This means that companies might have different
appearances depending on their entrepreneurial origin and context. The companies are aimed
to be observed and examined from the relevant aspects, namely sustainable business models
and hybridity, but there should also be a degree of openness to new influences and aspects
which the author did not think of before. The qualitative approach is sound to explore and
helps to create an openness to new concepts, ideas and possible explanations. All those
factors are rather unknown or unclear and are the goal of this study.
Furthermore, the inductive nature of this approach will focus on an attempt to
generate a “theory as an outcome of research” (Bell et al., 2022) with more applicational
potential over the cases’ borders. To be specific, the inducted theory/framework should
withstand external applications to other phenomena, e.g. on an organizational level. The
conceptualization will have limited generalizability due to being a case study and having only
a few researched artifacts. It still should bring a better overview of the challenges and
opportunities when applying the lens of sustainable entrepreneurship, sustainable business
models and hybrid organizations in practice, both, from an academic as well as an
entrepreneurial point of view. Despite being mainly inductive research, there will still be
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signs of deductive ideas. The original theory of sustainable business models, sustainable
entrepreneurship and hybrid organizations will have a deductive impact on the type and scope
of the observations. Also, after examining the multiple cases, there will be an iterative
interchange between deducted knowledge from the literature review, as well as inducted
theory from the cases. A fairly common iteration between collecting and interpreting data is
not only a side product of this strategy, but a goal, as this nonlinear process keeps the balance
between newly constructed theory and newly gathered data. Still, the main character of this
research will be of inductive nature, as the origin of this study is real-life phenomena
(organizations) being the foundation for inducted theory (framework).
To find a visualization of this research approach please see Figure 1 in the Appendix.
Ontological Considerations and Epistemological Considerations
The ontological aspects of this study are highly connected to the premises that are inherent in
its strategy and design. Being a qualitative case study, the author understands the examined
artifacts and phenomena in a constructivist manner. This means that the meanings of the
artifacts are social constructs and cannot be objectively stated. They are the results of
interactions and are “in a constant state of revision” (Bell et al., 2022). The ideas of
sustainable entrepreneurship and hybrid organizations are in their shape and form social
constructs and the result of understanding interactions in a specific context. The
organizational nature of those concepts is in no manner set, rigid and “objectively defined”,
as their appearance and academic understanding is changing over time since their advent in
the literature. This is of relevance for this project, as the observed companies provide
knowledge that should be understood and interpreted only in its context, not as objective
facts. Every state and observation is a result of the relevant circumstances. Still, there will be
premises made to ensure a degree of comparability between the cases and to create a
foundation for the built theory. The concepts of “sustainability”, “hybrid organizations” and
“entrepreneurship” will be assumed not in an axiomatic manner, but as a spectrum of
interactions and ideas, with the goal to create a common understanding of what those
organizations may have in common - and what differs them.
This study will also base the research on an interpretivist approach. The belief is that
the observed reality is a social construct, trying to understand rather than explain human
behavior (Bell et al., 2022). This reality is not an attempt to objectively grasp the “true” as a
fact, but to make meaning out of the observable logic of social interaction. Despite case
studies in business research often facing a positivistic approach (Goffin et al., 2019), this
work pursues a subjective understanding of the organization's identity based on the
philosophical idea of phenomenology.
Research Design
This section reflects the general design approach, the reasoning behind the choice, the link to
the research question, as well as different criteria that will be of high relevance.
To answer the research question, the author believes that a comparative case study
fulfills the demand. Case studies are an important tool when it comes to building new
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theories, especially in the business sphere (Goffin et al., 2019). The field of sustainable
entrepreneurship, especially in a niche like seafood waste valorization, is a rather untested
battlefield, either from a practical or a theoretical standpoint. New ventures being dynamic
business entities with unclear dynamics have multiple leverages to create value - especially
when pursuing a sustainable mission (Davies & Chambers, 2018).
The time dimension of this comparative case study will be cross-sectional. This
means that the data collection will only take place at one point in time. The case artifacts will
be observed as a snapshot of their current state. The main reason for that is the circumstance
of the study (Master Thesis) and the connected time limitations. Still, it is a proper method to
gain an in-depth look at a company and its core dynamics (in terms of relevant dimensions),
such as value creation, value delivery, value capture, sustainability efforts and others.
Cross-sectional research is also sufficient to create to understand the current state, and to
construct theory: a longitudinal study, despite being an important tool, would answer different
questions (e.g. what strategies are the most successful/long-lasting). To connect the aim of
this research in its inductive nature and to create the best link to the research question, a
cross-section analysis is well suited for the cases. Still, the interviewees will be encouraged to
inform about past transitions and pivots. Young and entrepreneurial startups are often objects
of change over time with special relevance for their business model. Even though the
measurement is meant to be a snapshot of their current state, knowing more about the
organization’s trajectory and transitions gives insights into market and value dynamics inside
and outside of the company. With special attention to the hybrid nature and the arising
tensions, management decisions regarding transitional processes are very insightful to
understand the driving forces of sustainable value creation for seafood waste startups. What
worked, what did not work, and why are very relevant questions and will be discussed
further. On the other hand, past decisions and developments are potential objects of bias, as
the interviewee may read the transformation differently now compared to back then. In some
cases, the interviewee may not be a day-one employee and therefore has to rely on
second-hand information and experience. The cross-sectional study has therefore implications
regarding the validity of the discussed pivots and tensions over time..
Another aspect of the thesis is that it will be of comparative nature. Multiple
artifacts/cases will be compared to each other. In this work, the chosen entities are
companies/organizations. With companies being social constructs and this being a qualitative
analysis, the defined criteria of (1) case selection and (2) case analysis are of utmost
importance. Furthermore, comparing different companies will bring reflectable data and give
more robust insights to ultimately create a more suited framework. Again, it is not aimed to
create a theory that is easily generalizable, but to explore the dynamics from the mentioned
dimensions. A comparison is also a good tool to examine multiple scenarios - this minimizes
the issue of having a “very special case”, even though every case is individual. The different
approaches of every company, even though having special and individual origins,
environments and influences, share similar values, which is also visible in the collective
selection of the addressed industry. Also, sustainable business models and hybrid
organizations are proper tools to observe cases, as they sharpen the lens to properly identify
the most relevant dynamics within the financial, but also the sustainable sphere, while
understanding the importance of the triple bottom line. The causal relations and compared
reflections will be interpreted with caution, as comparability is limited due to the unique
circumstances of every company and case. The approach is rather finding a good and deep
explanation of why, but especially how the entrepreneurs built their company around the
sustainable valorization of seafood by-products.
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Data Collection and Analysis
In this section it is discussed how the author will collect and analyze the relevant data. It will
be described what method will be used with a link to research questions, strategy and design.
Furthermore, the approach of analysis will be reflected.
Data Collection Method
The main approach is using interviews with entrepreneurs or decision-makers of the
dedicated case companies. Entrepreneurs are the origin and one of the most influencing
factors of the company. They are also a rich source of valuable data about the company, as
they usually know the most about the mission, structure, strengths, and weaknesses. The
practical second choice for the cases, if the initial entrepreneur is not available, are important
employees/managers, which are preferable in the company since the early days. The general
aim is to understand the reason why this company exists and how it is built around its core
missions: financial and sustainable validity.
The applied general data collection strategy looks like this: first, the cases will be
selected, then the individual who will answer the interview. The selection criteria for the case
selection are very important. The relevant criteria are based on the characteristics of
sustainable enterprises with a business model around seafood by-product valorization. They
should address a new market, have an innovative character, and mainly address an issue of
sustainability (mainly deducted from waste products in the seafood industry) - they should
conform to the definition of Sustainable Entrepreneurship by Schaltegger & Wagner (2011)
and Hockerts & Wüstenhagen (2010) (Davies & Chambers, 2018). This is also of high
relevance, as reinvestment into their sustainable mission made them relevant for the analysis
of their hybrid nature (Ebrahim et al. 2014).
The main criteria were the industry and the business model: the object and purpose of
the organization should be the usage of seafood waste and the valorization and upcycling into
different products. This was ensured by checking the main proposition and details of their
activities, often on the main website of the company or within interviews. Secondly, to filter
for relevant entrepreneurial emerging companies, the founding date should not be before
2015. Also, the company should have less than 200 employees, which was later a
non-essential criterion, as the employee base was usually smaller. Thirdly, the main purpose
of the business is to address environmental and social issues, as implied by the criteria for
Sustainable Entrepreneurship categorization (Schaltegger & Wagner, 2011). Fourthly, the
organization should be a for-profit business with an integrated hybrid business model
(Ebrahim et al., 2014). This was a relevant factor since the scope of this work is to examine
how profit and sustainable-driven value creation interact with each other. Lastly, they should
be integrated hybrids (Ebrahim et al., 2014), which means that profit activities and
mission-focused activities are the same. The purpose of the elaborated criteria was to gather
relevant and comparable data, reaching companies with different business models, but with
often a similar mission, issued by the focus on seafood waste startups. Therefore, a special
focus was on the internal and external dynamics and how the business model variations were
dealing with the observed problems and opportunities.
The research question and design demand an understanding of the cases and their
context. Therefore, primary data will be gathered in the form of interviews. The sample size
of selected cases was aimed to be around 4-5 companies. This is a manageable amount of
22
data, bringing enough room for multiple perspectives while still being able to go deep into the
companies. The chosen number is important for the meaning and interpretation of the study,
as the dimensions of observable depth and theoretical contribution are heavily influenced by
that (Voss et al., 2002; Goffin et al., 2019).
Furthermore, it is assumed to get the most valid qualitative data by conducting
semi-structured interviews. They have multiple advantages: first, they provide a structure to
ask the relevant questions regarding the research questions. Second, semi-structured
interviews, despite having set questions in between, leave room for further exploration of
unknown fields, which the author underestimated or did not think of before. Again, this is due
to the inductive and explorative nature of this research. Third, the semi-structured nature
gives categorizable data, which is especially important when comparing multiple cases with
each other, but still leaves room for surprising insights. Therefore, they are an important tool
for this research design and strategy.
The chosen medium was online video conferences, as they are a good tool to properly
engage with each other. The calls were recorded and transcribed. This made further analysis
and coding easier and more reliable. Also, the primary data gathered by the interviewees was
complemented with data from news databases, internal documents and company websites, as
suggested by Yin (2009).
The major barrier to overcome was finding companies with relevant employees who
would be willing to accept an interview. To find relevant organizations, the author used
online search engines and applied the keywords “seafood waste startup”, “circular seafood
waste”, “blue food waste”, “by-product valorization company” and “fish waste company”,
combined with multiple variations of the mentioned keywords. Also, multiple Venture
Capital portfolios of impact investing-oriented funds were screened, with a special focus on
the North American and European markets. Another method was the request for companies
and decision-makers in the author's network.
A total of 45 to 50 companies were being contacted with mostly negative responses.
In the end, 4 decision-makers from relevant companies were willing to accept an interview.
At this point, the question of accessibility bias arises, as those companies may have a casual
relationship that led them to be more open to student interaction. On the other hand, as the
results will not be presented as a model with expectations of generalizability, this problem
has a lower importance compared to quantitative or qualitative studies that aim to create a
representative picture.
Two of the companies were founded and located in the USA (Washington and New
York), while the other two are located in Sweden (Gothenburg). The different case
companies, their product and the target customer will be elaborated on in the “Analysis”
section under Case Introduction.
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Data Analysis Method
The gathered data will be analyzed by the use of thematic analysis. Undertaking
thematic analysis is an organized and thorough technique used to examine the gathered data.
It aids in the sorting of information, shaping ideas, and comprehension of the subject of
research. Discovering and analyzing themes can lend a meaningful perspective, adding to the
general investigation of this work.
The gathered data will be codified and categorized. The main categories and themes
will be inspired by the previously established framework from the literature review, but will
also be adapted as the author gets a better understanding of the market dynamics and the
specifics of the case. This will ensure that the later built theory depicts the initial research
question, but as well formulated a novel theory, providing new insights into a previously not
existing link between research and practice. The coding will be based on transcripts of the
interviews. With code, specific sentences, wordings and phrases will be identified and
summarized into multiple themes. For the case of the thesis, this can be for example “
approaches to mitigate mission drift”, “sustainable competitive advantages” or
“transformation/pivots” to just name a few. Those themes are not entirely pre-coded, as the
gathered data will be the foundation to iteratively exchange between analyzing data,
establishing coding systems and going back and forth. Still, they are heavily influenced and
shaped by the previously built model that combines the streams of sustainable
entrepreneurship, hybrid organizations and seafood waste product valorization. The result
should be an induction of the observed cases into a framework/theory. Again, the lack of
preexisting research regarding this topic will be the foundation for this explorative approach.
The related codes will be summarized, compared and will be put into context. The
goal is to find the reasoning behind the different appearances, dynamics and development
regarding the companies. The summary will reflect on an overview of multiple approaches,
their benefits and disadvantages, and especially considers the surrounding dynamics,
originating from the potentially conflicting spheres of their financial and sustainable focus.
The constructed thematic analysis, consisting of the 1st order codes, sub themes and themes
can be found in the Appendix.
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Analysis
This section introduces the observed cases. Furthermore, the data conducted from the
interviewees will be brought into context by connecting them to the sectors of the introduced
framework (see: Literature Review). The themes will be sorted and stated through the
framework by connecting strategies, potential hybrid tensions and opportunities for each
category. The approach is categorized by the pillar of the framework (Value Proposition,
Value Creation and Delivery, Value Capture) to gather the data and put them into context and
comparison. The results can also be found in the Appendix.
Case Introduction
Tidal Vision
The Bellington, Washington, based company Tidal Vision was founded in 2015 by
Craig Kasberg and Zach Wilkinson. At the moment of the interview, the team consisted of
around 60 employees. It is backed by multiple venture capital funds with a focus on impact
investing, agriculture and material science. With almost 8 years of market experience, it is the
oldest of the case companies. Initially, they started their business by using waste crustacean
shells to extract chitosan and manufacture wallets out of the material. Chitosan is a family of
biodegradable, biocompatible, and hemocompatible biopolymers (Roy et al., 2022). This
means that the derivative of chitin, the second most abundant biopolymer on earth, has the
properties of being safe for humans, is non-toxic for the environment, causes no, or few,
allergic reactions and has the ability to break down and return to nature after it is discarded or
composted. After the successful start of their initial business model, they pivoted their
mission and their approach.
At the time of the study, their core business model is providing technologies for the
valorization of seafood waste (mostly waste crab shells) into chitosan. They are a technology
company with the mission to use the abundant resource of chitosan and upstream, midstream
and downstream for the purpose of different applications (Tidal Vision, 2023). They focus on
three different technologies and markets. The first addressed market is the agricultural
industry. Their products, working under the name TidalGrow, should be used for natural plant
nutrition and crop protection by farmers and crop producers. The second section of products
addresses the water treatment industry, by providing more sustainable and non-toxic
alternatives for water filtration and recycling. This line of products is named Tidal Clear.
Their third section is addressing the material science market, as they aim to provide textile
and material alternatives for customers in different industries. This trench is called Tidal-Tex.
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Having their main business and customers in the US, they also prepare for an
expansion into the European market. Recently, they investigated the regulatory barriers and
market potentials with a special interest in the industrial use of crab shell waste.
The interview partner was a day-one employee at Tidal Vision, who started in the
company as a working student. After 8 years in the company, he is now in the position of
Creative Director. He is responsible for the interaction with third parties, translates the
mission and science of Tidal Vision for potential collaboration and is responsible for the
website and investor relations. His deep knowledge of the company and the opportunity of
chitosan helped to understand the decisions of Tidal Vision and their future aspirations -
financially and environmentally.
TomTex
TomTex, a young company from Brooklyn, New York, aims to change the fashion industry
with its chitosan-based textiles and materials. Initially founded in 2020, the team of 9 around
CEO Uyen Tran works to utilize side streams of the fishing industry, mainly discarded shrimp
shells, to produce biodegradable and sustainable fashion textiles. With her experience in the
fashion market with leading US Designer brands, the founder built a team of designers and
scientists to establish the necessary technology to achieve her goal. The business-to-business
sales strategy aims to collaborate with textile manufacturers in the US. After impact-driven
investors joined the first fundraising round, the company is still in its Seed Phase.
Coming from a small Vietnamese fishing village, founder and CEO Uyen Tran wants
to combine social, environmental and financial value creation in multiple ways. First, as
described before, the crab and shrimp fishers will be released from financial pressure, as they
are able to gain more efficiency by selling their otherwise discarded waste streams. This is
especially important for poor fishing villages, and also beneficial for nature, as the companies
can utilize more of their catch.
Their intersection of biology, chemistry and design aims to reduce the waste of
textiles by establishing a circular framework: due to the biodegradability of TomTex’s
material products, it can be easily recycled, decomposed, or, as the interviewee stated, even
eaten. This means that the business model revolves around valorizing unused waste on one
end and reducing discarded waste streams from thrown-away clothes on the other end by
replacing unsustainable leather alternatives.
My interview partner was the Communications and Marketing Manager at TomTex.
She advanced the research across HR, Marketing, Communications, and Community, is
responsible for marketing activities and is a main copywriter for the TomTex website. Similar
to the case of Tidal Vision, her daily task of translating the mission and story of TomTex to
collaborators was helpful to yield knowledge about the company.
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Aquafood
The Gothenburg, Sweden, based startup Aquafood was founded by Mehdi Abdollahi, Oliver
Östensen and Ingrid Undeland in 2021. The initial spark of the business venture came from
researchers at the Chalmers University of Technology in Gothenburg, who developed a new
technology for valorizing fish side streams into further products. The initial product portfolio
at the moment of the study consisted of a novel protein mass, marine collagen and fish oil
with multiple potential applications in the food industry, pharma and cosmetics. Their core
mission is to reduce waste and increase the efficiency of the fish contingents caught by
seafood producers. For that, they collaborate with local companies who (1) fish and produce,
(2) process fish into different valuable components, or (3) have a need for sustainably
produced fish derivatives.
At the moment of the study, the company is in its initial stage of delivering a
proof-of-market by purchasing seafood waste streams like offals, trims, and guts and
valorizing them into the mentioned product categories. They are backed by early-stage funds
and are currently growing their employee base.
The interview partner was the Chief Operating Officer and Co-Founder of Aquafood.
He is responsible for the intersection of Aquafood’s technology with the commercialization
and operation of the day-to-day business.
Upcyclr
The Swedish company Upcyclr is the youngest organization that was observed. Founded in
2022, the team of 5 employees aims to address the seafood waste issue by applying two novel
technologies. The first is a solar drying procedure that dries biological material through an
energy-efficient process and leaves more nutritional value in the finished product. The second
key technology is a commercial milling technology that utilizes high-frequency physics
simultaneously to liberate and micronize materials from protein and other desired ingredients.
Upcyclr wants to cooperate with seafood producers, which are conscious of their issue of
wasting a high portion of the original weight. For now, it aims to be a service provider for the
mentioned seafood producers.
Being in a pre-seed stage, Upcyclr’s business model is rather unclear but is more in a
testing phase. Incorporating a company this early is interesting, as it depicts the often
uncertain paths a company faces, especially with multi-dimensional value creation. The team
of 6 aims to launch their first product/service within the next 1-2 years.
The interview partner was the co-founder and current CEO of Upcyclr. He has almost
20 years of experience in the seafood industry and is involved in multiple major seafood
companies in the Nordics, in some of them as CEO or board member.
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Seafood Waste Valorization with Sustainable Business Models: The
Case Analysis
This section will report the findings of the interviews. The goal is to depict the multiple
hybrid tensions, opportunities and business model variations/strategies around the dedicated
pillars of the established framework (See: Table 1). If helpful, the different strategies or
arising issues will be underlined by quotes from the interviewee, as it is expected that the
interviewees’ experience and stories yield a deeper insight and give the reader a proper
impression of the case. The foundation is the thematic analysis visualized in Table 1 to Table
4.
Tidal Vision: Sustainable Business Model and Hybrid Tensions
Creating and communicating a seafood waste-based Value Proposition
The first company, Tidal Vision, has a multi-dimensional and multi-industry approach to its
products. This means that the idea of valorizing seafood was the origin, and the initial
technology, called “Chitofining”, opened up the opportunity for multiple markets. The
starting point was the awareness of seafood waste pollution and unused resources. The
company went through an existential pivot, as they initially built “sustainable wallets” with
the idea to sell to sustainable-conscious customers. After initial success, the team decided to
aim at a bigger market to leverage a greater impact of chitosan. This interviewee underlined
the initial success and how easy it was to grow and scale. The decision to prioritize the
impact of the organization's activities indicates that they may have chosen to forego
financially viable opportunities in favor of pursuing riskier ideas that have the potential for
greater impact.
After pivoting to a new business approach, they split their technology into upstream,
midstream, and downstream services. The core idea and message they want to convey is that
chitosan and its derived products are not only made from a sustainable source (waste crab
shells), compared to petro-chemical based competitive products, but it is also biocompatible,
biodegradable, and hypoallergenic, which yields multiple benefits for potential customers.
Still, the interviewee underlined that building a sustainable product with sustainable
communication is not sufficient alone. Focusing the communicated value proposition only on
the sustainable nature leaves the image vulnerable to greenwashing (de Freitas Netto et al.,
2020) accusations or hits resistance with “conservative” customers. The products have to
fulfill the requirements of improved price, performance and convenience compared to the
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competition: Tidal Vision aims to offer a “better solution, no matter what”. This is also
visible in the company’s strategy to engage in customer dialogues. They try to understand the
currently used market-standard applications and position their product in a way the customer
is already used to. With this strategy, they aim to overcome potential barriers of skepticism
towards sustainable products and existing resistance to change. Furthermore, it is stated that
product properties and communication are adapted to the target market. As an example,
customers in the agricultural industry are offered a chitosan-based fertilizer that is also
compatible with market-leading pesticides and other chemicals. The mission to replace
existing potentially harmful chemicals has to be in symbiosis with the knowledge that it is
more likely to hit a market fit by offering a product that is also applicable in combination
with non-sustainable products.
This links to the point of engaging like-minded customers. In many cases, the
customers, especially in the agricultural industry, were suspicious of the non-toxic properties
of Tidal Vision’s chitosan-based fertilizer: even though the product was less toxic and
harmful to other market-standard chemicals, Tidal Vision put the fertilizer products on the
EPA list for hazardous chemicals (EPA, 2023). The reason for that was that farmers used that
list to “see that it works”. For now, they do not focus their marketing around the benefits of
using a more sustainable or waste-based product, but rather stating the performance and
convenience benefits - similar to commercial startups and companies.
“As far as customers go, we work in very conservative industries with a lot of
God-fearing decision-makers. They don't really care about climate change. To effectively
change the world, you need to persuade these decision-makers. They don't care about
sustainability.”
- Tidal Vision
In this vein, even though they address three very different main markets (water treatment,
agriculture, material science), the core messages of the environmental benefits of chitosan
stay similar and related across the different industries.
Another aspect worth mentioning is the broad customer segment: Tidal Vision is open
to a variety of customers and tries to find solutions for as many businesses as possible. This is
in line with the mission to increase the volume of chitosan across the industry landscape. On
the other hand, they try to avoid cooperating with companies that do not share their mission
or simply represent too small leverage for potential impact. For example, the company
decided to not collaborate with the pharma industry, as the companies in question do not
represent their values and transport the value-added of sustainable chitosan. An issue of this
is potentially missed revenue and awareness in bigger industries.
Furthermore, the interviewee stated that focussing on too many customer segments
was an issue, as the scarce resources and the attention have to be distributed. Still, he
believed that with this strategy the company can learn the most about potential product
applications and creates the widest awareness. Fast and dynamic pivots are an integral part of
this approach.
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“Our company has struggled with focus for sure and we have a bit of a natural
cleavage that happens after a project starts to seem like a bad idea. It just sort of gets deep
prioritized until it is gone, because we are focusing on what matters.”
- Tidal Vision
Building Value Creation and Value Delivery around seafood waste valorization
The pillar of value creation and delivery is strongly connected to the company’s vision and
value proposition. Tidal Vision revolves around its core practices as a business-to-business
technology partner. The foundational innovation was Chitofining, a procedure to efficiently
upstream crab shell waste from seafood manufacturers into chitosan and further developed
products.
An important first step was made when the major seafood producer Trident was
facing legal issues with their practice of discarding the waste crab shells of their fishing
activities back into the Bering Sea. They were looking for a solution, and the team around
Craig Kasberg and Zach Wilkinson proposed their idea of Tidal Vision. This was an
important stepping stone, which issued multidimensional value creation: the valorization of
the waste products reduced the environmental impact on the oceanic ecosystem, as well as
created a financial opportunity for Tidal Vision, because the base resource, crab shells, was
purchasable for a low price. The interest of Trident resulted in the first investments and
network opportunities.
In this vein, the company was able to attract major impact investors and VC funds.
The interviewee stated that this decision was essential to keep Tidal Vision's mission focused:
“And we're really excited about that because you get approached by a lot of investors
in this space and we're really interested in quality more than money. You know, we need
people that have a stake in us, succeeding with their current, like world, and that's what we're
seeking. So, I know that particular impact fund has been critical to us.”
- Tidal Vision
Having impact driven investors who align with the company’s goals may have multiple
benefits. First, they have more patience and reduced financial expectations than conventional
funds. They seem to “speak the same language” and are able to combine financial with
sustainable impact-oriented models. Secondly, they provide a good network of portfolio
companies, suppliers, and potential partners who can help a company like Tidal Vision to
access critical knowledge or resources. Thirdly, they have elaborated reports and
life-cycle-assessment systems, which can help to evaluate the company’s degree of fulfilling
its sustainable goals.
Tidal Vision constructs its goals and activities around a mission-driven team. It is
extraordinarily important that the employees align with the values of going the extra mile for
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the case. The interviewee demonstrates the willingness to participate, and reports increased
motivation:
“All that we've done so far has been accomplished by an amazingly driven
mission-driven team. We attracted that team with our story.”
So I'd absolutely rank our internal stakeholders as primary stakeholders because
everyone comes to work with that little bit of [..] want to get stuff done and no matter what it
is. It's like “Oh I need to make an adjustment to a label that's gonna take me 45 minutes and
it's gonna be seen by nobody ever. I'm still motivated to get it done because it's going to sell
more chitosan.”
- Tidal Vision
The collective mission to “put more chitosan into the market” may have positive implications
on the company’s culture and therefore is a critical aspect of hiring new employees. This
ensures internal consistency of the business practices aligning with the core idea of waste
reduction and replacement of toxic/harmful chemicals.
In line with the selection criteria for customer markets, it is essential for Tidal Vision
to build relationships with partners who understand and share the mission of waste reduction
and environmental pollution. They engage in knowledge-sharing activities and incorporate
service and product providers with a sustainable mission. Tidal Vision is conscious of the fact
that this can have the implication that potentially beneficial partners may get rejected through
a lack of shared values.
Noteworthy is also the split between Tidal Vision and Tidal Grow, the agricultural
sector: both have their own CEO and respective employees. The organization's architecture
utilizes this dissection to focus on the department's strengths while being conscious of the
role of technology for both.
“We have a CEO of Tidal Vision and we have a CEO of Tidal Grow. And it's a good
thing. I really like it because they're both very good at what they do. But it does mean that
there is a subtle difference. In that question, the approaches are slightly different.”
- Tidal Vision
Also, the company aims to structurally change the landscape of seafood waste
valorization: while opening up new technologies and being a pioneer for potential second
movers, they actively participate in political activities and lobbyism. This sign of
transformational entrepreneurship (Ratten & Jones, 2018) supports their vision of a wider use
of chitosan across industries. While working towards regulatory acceptance for their
self-developed products, they open up ways for new entrepreneurs.
The industry is also heavily dependent on geographical access to chitosan yielding
seafood waste, mostly seashells and crab shells. This means that access to a port is critical,
which also limits the possible expansion possibilities. Longer transportation and supply chain
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distances decrease resource efficiency and increase the carbon footprint. Therefore Tidal
Vision stated that future market entries, for example in the EU, are ultimately bound to the
market of (crustacean) fishing.
Furthermore, Tidal Vision is managed to be dynamic, flexible, and with the potential
to adapt to market shifts or appearing demands. This is incorporated by an openness to a wide
array of potential customer markets, but also from a technological standpoint. The
capabilities and properties of their product will be adapted to the customer’s needs, reducing
the hurdle to getting accepted by new and skeptical customers.
Financial Value Capture
Tidal Vision has a clear, but broad idea of how to commercialize their technologies and
products. As a business-to-business manufacturer of chitosan and derived products, they
work directly with water treatment companies, material manufacturers and agricultural
producers. They provide the demanded quantities of a product combined with a service
approach to help the customer introduce the new solution. For example, Tidal Clear, Tidal
Vision’s water treatment solutions, will be modified and customized to fit the customer’s
needs. This can mean that they offer a solution with varying concentration rates. They also
offer to help with regulatory permitting processes to lower the customer’s barrier to adoption.
This is in line with their approach to structurally change the use and acceptance of chitosan,
as they engage the customer to substitute environmentally harming products with their
biodegradable polymer-based products.
A major cost driver is energy, which means that cheaper energy access translates into
more capital left to reinvest in R&D and growth. In this vein, the company usually uses more
expensive green energy to minimize its carbon footprint. This may be a disadvantage to
companies that either use conventional energy resources or have access to cheaper green
energy.
Seafood waste shells, Tidal Vision’s core resource, is a relatively easily accessible and
cheap raw material. The downside of that is the necessary close proximity to ports and areas
with fishing activities to gain access to the manufacturer's waste streams. This is due to the
mentioned relatively low time for seafood to expire. The production facilities of Tidal Vision
must be in the geographical range to purchase the waste shells within 1-2 days after being
caught.
Furthermore, Tidal Vision incorporates its environmental and social mission within its
Sustainable Business Model. They have only a small separation between their financial and
sustainable growth aspirations, as increasing the volume of chitosan products sold means a
bigger impact in terms of sustainability, as well as financial viability. This is also visible by
observing the addressed markets: the biggest attention of research, development and sales is
on agricultural products, which also depicts a major market with a global market size of
$12,541.15 billion (Research and Markets, 2023). The team believes that concentrating on
one of the biggest monetary markets is congruent with leveraging the biggest sustainable
impact.
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While developing its product portfolio, Tidal Vision aims to increase the efficiency
and usability of its chitosan-based products to create sustainable and innovative solutions.
This means that they aim to achieve technology leadership and product advantages which are
both sustainable and competitively successful. They understand their technology and the
stack of developed applications as their most important asset to achieve a market-leading
position.
“I would say that technology was our biggest asset. Our biggest asset now is the
serial technology stack because that was the start of it all. And that enables the base,
chitosan, to get to market in an environmentally attractive way, which was never possible
before. That is huge, that's really a big deal because it changes the entire industry”;
- Tidal Vision
The Role of Sustainable Value Capture
Defining and measuring social and environmental impact is a rather complex process
according to Tidal Vision. They have, as described, the goal to replace as many
“unsustainable” products as possible with chitosan-based solutions. Using seafood waste as a
resource has multiple environmental benefits. The first is that seafood fishing companies
don’t have to discard their waste into the ocean. This harmful procedure influences the
vulnerable maritime ecosystem. The second benefit is that Tidal Vision increases the
efficiency of caught fish and crustaceans, which lifts pressure from the seafood industry as
well and especially from potentially overfished fish populations. The third benefit is the
biodegradable and non-toxic nature of their products which are aimed to replace
market-standard chemicals with negative environmental impacts.
Also, their overall impact will be measured through an extensive
life-cycle-assessment (LCA), on which they are currently working. Assessing the
sustainability impact of the business activity has multiple purposes for Tidal Vision. Firstly, it
is often used as a proof of validity for potential investors and other stakeholders with an
interest in metrics like carbon emission, waste reduction and others. Secondly, LCAs are an
important tool to define and measure the goals and reevaluate the activities if they align with
the core values of the sustainable enterprise. Thirdly, LCAs can help with product and
process optimization. While undergoing an extensive assessment, opportunities for
improvement in terms of resource efficiency, energy consumption, waste reduction, and
emissions mitigation can be identified. By evaluating alternative materials, technologies, or
production methods, potential environmentally or financially preferable options can be
identified.
Still, Tidal Vision has to manage the products’ properties against certain barriers and
challenges, like the described suspicion of conventional farmers, or the regulatory hurdles in
local areas. On the other side, the activities of Tidal Vision lead to other issues: one is that
their demand for chitosan may incentivize fishing companies to increase their yield and their
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revenue. The interviewee gave this potential development a low probability because the high
volume of already available chitosan is sufficient to produce market-satisfying amounts of
their products.
The other potential downside is the high energy demand for their processes. This is
one of the major drivers, as the demand for green energy may increase in the future. In terms
of being locally dependent on shell seafood fishers, they may expand into regions with
non-sufficient, or too expensive, green energy supply.
TômTex: Sustainable Business Model and Hybrid Tensions
Creating and communicating a seafood waste-based Value Proposition
TomTex has the purpose of clearly communicating the structural urge to drive sustainability
forwards and decrease environmental pollution. Their product utilizes seafood waste and
transforms them into upcycled products/textiles. Engaging in the idea of a circular business
model (Cooney et al., 2023), their products are designed to be recycled or composted after
use, as they are chitosan-based and therefore biodegradable. The core mission and message is
translated to partners and customers through the sustainable character of the used resources
and the final product. Still, they realized that new opportunities open up more easily if the
product delivers additional benefits. TomTex products are unique through their flexibility and
dynamic properties - the material can be chemically shaped and formed into a multitude of
different applications. This gives the customer the power to wish for certain patterns or visual
adaptations. Optically it is similar to other leather alternatives but with more creative freedom
through its unique manufacturing process. The interviewee stated that their customers need
more incentives to buy novel products than being offered a sustainable alternative.
On the other hand, there are arising issues: while looking for certain properties of
material e.g. waterproof textiles, more resources have to be invested in Research &
Development compared to companies who use petroleum-based materials. Therefore, it is
harder to gain market traction and satisfy the customer’s and the industry’s standards.
The interviewee stated, that the sustainable selling point is often not only a benefit but
sometimes may lead the customer confused and insecure, especially in the context of
greenwashing:
“Frankly the idea of circularity and being environmentally conscious has been really poorly
marketed across all activities, all sectors, that's why we have so many issues with
greenwashing now.”
“That's why most marketing is based on your lowest base instincts. Make you feel pretty or
hot or you're cool. Climate catastrophe is a little bit more of a kind of shaky vibe because
people are like “Wait, what do you mean climate change? I don't want to talk about that.”
- TomTex
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The company reported high interest in the sustainable nature and the possible positive
impact on the industry. Still, the mentioned insecurities may lead to problems regarding
marketing strategies and customer communication. They have to carefully communicate the
sustainable impact of their product and actively underline the difference to “greenwashing”
companies.
Still, one source of tension is depicted by the addressed fashion industry. Facing a
landscape of industry-leading manufactures with streamlined procedures and cost-efficient
supply chains, the interviewee reported that it will be hard to build a product with a
competitive price against the biggest competitors. Also, the issue of human labor will be
addressed with TomTex:
“There is a built-in tension between us and other fashion manufacturers of course. It is hard
to deny the way that the textile and fashion industry has been so wrapped up in really
significant issues with human labor.”
- TomTex
The main partners at the time of the interview were high-fashion departments and companies.
This originated from the fashion background of founder and CEO Uyen Tran. On the other
hand, it is believed that the trend-setting nature of high fashion stages will have the biggest
impact on the industry through increased awareness. The core mission of TomTex is therefore
to increase awareness about issues in the fashion industry while providing possible solutions
to change. Still, TomTex believes that it is functional to its mission, going the route of a
conventional fabric manufacturer partnering with existing producers of apparel.
Also, one reported hybrid tension that arises lies in the strategy of creating products
that are better than competitors vs. the intrinsic mission to give access to technology and
insights to increase the scale of their sustainable achievements:
“We want to be offering thought leadership and thought partnership to people who are
interested because we also, as much as the economy has a really built-in competition, we also
really want to be in a community with other people who are doing this work [...]. So we might
as well, show some collaboration or at least some communication with them.”
- TomTex
This means that the company engages in dialogues, events and discussions with potential
market entrants to share the knowledge and their story. The goal of TomTex is to increase the
market size of sustainable fashion rather than keeping the technological advancements in the
company sphere.
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Building Value Creation and Value Delivery around seafood waste valorization
TomTex Value Creation and Delivery is also structured around developing technologies and
researching possible chitosan variations. By finding new solutions to transform chitosan into
useful, aesthetic and sustainable textiles, they aim to shift the industry away from
unsustainable practices like high amounts of wasted clothes and petro-chemical based
materials like synthetic leather. They aim to deeply root their innovative approaches in the
value chain of fashion by collaborating with manufacturers and fashion brands. This
business-to-business channel approach supports the mission to achieve the biggest mission
impact leverage. Still, they don’t have a “traditional selling model” as they still develop and
improve their technologies, while creating awareness in the market.
One tension the interviewee mentioned is, that, similar to Tidal Vision, the way of
changing the industry goes through being part of the industry. This means that the present and
future partners have been the main drivers of fast-fashion behaviors, backed by issues of
human labor and throw-away culture. The key players, e.g. large-scale textile manufacturers,
show interest in TomTex’s technologies.
“People are very interested in this product. Thousands of businesses have reached out to us
by now, a lot of them, very famous and big brands. There's always that tension there because
these brands are also some of the ones driving these (sustainability) issues. But it's really
important to bring these fabrics to people's attention because people don't even know this is a
problem, to be honest.”
- TomTex
To attract capital, the founder Uyen Trand utilized her network in the fashion industry. Also,
she tried to gain attention with multiple media outlets and innovation awards given by known
institutions (e.g. Forbes 30 under 30; LVMH Innovation Award 2021; CFDA k11 Innovation
Award, and others). With this strategy, she was able to attract impact-driven investors and
raised $1.7 Mio (Forbes, 2023) for initial investments. The sustainable mission was helpful to
convince stakeholders and potential shareholders. It is aimed to collaborate with funds that
can align with their environmental and social values, as they are expected to improve the
organization’s network and support the mission with knowledge and capital in a superior way
compared to conventional funds.
“We have always been working with investors that come from the climate sector. So they
understand our climate needs, they understand, there's a bigger picture here and
revolutionizing the entire market, that goes beyond just the necessary returns that we
obviously have like a fiduciary duty to make”
- TomTex
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Still, the virtue of remaining environmentally friendly is, in the opinion of the interviewee,
a hard way. R&D processes slow down the development and growth of the company, as more
aspects have to be considered compared to conventional textiles (e.g. environmental impact).
It takes resources that would otherwise go into production capacities. This is why they
engage in the luxury industry first, as production capacities are usually lower and
willingness-to-pay is higher per customer. This opens up more space for future development
but is in contrast with the mission to have the biggest impact.
With the main production facilities located in New York, the company struggles to increase
production output. Therefore they plan to move the major production facilities to Vietnam,
where the fishing partners are based. An efficient supply chain and small distances between
the facilities are essential to increase efficiency and decrease energy consumption, mainly in
the form of fuel needed for transportation.
TomTex also experienced that the demand for vegan fashion is increasing. Utilizing mainly
animal-based seafood shells is not in line with this development. Therefore, they tried to
locate different sources of chitosan. With the purpose of potentially labeling their material as
vegan, they established processes to valorize mushroom production side streams into
chitosan-based materials. Therefore, the option to pivot away from the “non-vegan” seafood
waste into other sources due to market reasons can be discussed as a potential mission drift.
Financial Value Capture
TomTex has an unclear commercialization strategy for now, as they are not in the
“traditional selling stage” for now. They cooperate with manufacturers of clothes, focused on
the luxury industry. They believe that this enables more attention and “trend-setting”
consequences. The potential revenue will come from the raw TomTex material they sell to
their customer - their own apparel is, so far, not planned. They also pursue an integrated
hybrid approach that incorporates sustainable and financial goals with the same business
activities.
Despite using the cheap and abundant chitosan as their core resource, they struggle to
gain greater market traction, as the price distance to cotton will most likely not be achievable:
“I don't think we're expecting this to take over cotton [..] in the next 10 years, that
would be a big hurdle.”
- TomTex
To reduce costs and act in the interest of their customers, TomTex utilizes many
processes and technologies that are already common in the textile manufacturing market.
They can potentially buy old machines from other manufacturers to even decrease their
production costs. They try to be as close to the market standard as possible to provide a
competitive pricing range with their products. Still, because of the research and technological
efforts, their materials are usually higher than synthetic leather products.
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The Role of Sustainable Value Capture
TomTex’s core mission is to increase awareness of environmental issues in the fashion
industry while providing a potential solution. Therefore increasing the volume of chitosan in
the textile market aims to replace petroleum-based chemicals. The company was founded
with the idea of a chitosan-based product in mind. The founder Uyen Tran saw the potential
and the abundance of this resource, being originated in a Vietnamese region of indigenous
fishing villages. She wanted to help the people whose families lived and fished for centuries
in those villages and connected their issue of crab shell waste with the emerging chitosan
extraction and environmental issues in the fashion industry - this is in line with the
multi-dimensional value creation of Sustainable Entrepreneurship (Rosario, 2022).
TomTex tries to solve issues in the fashion industry in a holistic way through the
application of a circular business model. Through their activities they try to increase the
standards for human labor in the fashion industry, reducing seafood waste and the reduction
of wasted and discarded clothes. The biodegradable nature of their textiles leaves
opportunities for recycling or downstream into other uses. This conflicts with the
material-based constraints regarding their property. Especially compared to plastic-based or
synthetic materials, attributes like being waterproof are more complicated and research
intense than the industry standard.
Also, providing little innovation in terms of human labor, there is still an existing drift
to utilize cheap production in countries with lower labor standards. Especially in the context
of achieving competitive prices, the company may also rely on cheaper human labor
practices.
Another factor is, similar to Tidal Vision, the high energy consumption to transform
chitosan into usable textiles with the desired attributes. Therefore, the drift toward cheaper
sources of energy to achieve competitive prices is existent.
Upcyclr: Sustainable Business Model and Hybrid Tensions
Creating and communicating a seafood waste-based Value Proposition
Upcyclr has a different approach to the valorization of seafood waste streams. The idea of
closely working on-site with seafood producers and functioning as a technology partner to
improve the valorization of their existing waste streams has unique implications. The strategy
is to closely collaborate with potential customers, engaging in pilot programs and starting
processes to effectively valorize the waste into high nutritional products. Afterward, the
products can be sold by the seafood producers to third parties.
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The interviewee reports multiple benefits, but also potential barriers regarding this
strategy.
First, the idea of improved waste valorization is widely received as a positive
development from the customer’s perspective. This points towards a potential market
opportunity and an existing customer demand. The issue of an abundance of seafood waste is
a known factor within the industry and meets the desirable idea of turning costs into potential
income. The idea appears easy to communicate, which enhances potential adoption by the
customer.
“I think it's an idea that is easy to grasp and it appears to many. I definitely find it easy to
explain what we do [..]”
- Upcyclr
Second, the ideas of reducing waste pollution and increasing the efficiency of caught fish
have to meet further product improvements for the customer. This can potentially be
problematic for the step of selling the valorized fish by-products, as future applications of the
manufactured products are unclear. The end product, being a protein and omega-3-rich meal,
needs to find acceptance and adaptations of potential customers in this instance.
“To the end customer we need to offer something. Something better in nutrition values,
technical values, meaning the motion or other technical properties and/or cost saving.”
- Upcyclr
Utilizing fish side streams also has downsides regarding the limitations of time to expire, the
need for cooling in the supply chain and even issues deriving from the smell of fish waste.
This results in the mentioned necessary close proximity to seafood producers. Other sources
of food waste streams appear to be more attractive and provide a potential pivot:
“Yet, it's probably the hardest field of them all to develop value-added products outside the
seafood business market, because of the smell and the challenges with shelf life”;
- Upcyclr
Building Value Creation and Value Delivery around seafood waste valorization
Upcyclr’s approach of creating and delivering value is dominated by the explained value
proposition of turning waste into a source of income. This easy-to-explain concept, combined
with a moderately simple technical solution of solar drying and milling the seafood side
streams is also attractive to impact-driven investors. The first fundraising goal was quickly
achieved, and more investors were already interested, as the interviewee reported.
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“And as I do rounds with other companies, right now I’m also telling them about the
businesses that I run and I also tell them about Upcyclr and actually it steals the focus from
the round or the pitch that I am making because Upcyclr is so interesting.”
- Upcyclr
The interest of the capital side meets difficulties on the practical side of the value creation: as
the valorization of the seafood products is a safe and highly practical process, the potential
application, as explained in the Value Proposition, have to be found and connected. The goal
of working towards a value-added for the end-consumer is the main issue.
“I think the big challenge is to “productify” the end products. The difficulty is not to do a
part of any raw material cleaning [...]. Of course, there are challenges along the way as well,
but I think that's pretty easy. But building value-added products from those powders or
fractions that's the big challenge and it will take time and knowing the lead time within the
food industry from idea to launch, it will take us two to three years from now to have our first
products in the market.”;
- Upcyclr
Another important aspect of Upcyclr is to build a mission-driven team. This is in line
with the impact focus of the company, as employees who share the core sustainability values
of Upcyclr are, as the entrepreneur believes, more likely to work towards those goals. This is
also supported by the drive to attract “young and talented people '' with a certain degree of
openness to finding innovative solutions to novel problems.
Financial Value Capture
The Value Capture strategy of Upcyclr revolves around a close link to seafood producers. The
interviewee stated that the company will act as a service provider, offering the technology
and expertise on-demand and on-site. The entrepreneur believes that this is beneficial for the
customer, as potential issues with establishing and operating the drying and milling facilities
are reduced and the barrier to invest is lowered. Still, the development and commercialization
of the business model are still in process, as the young company has no revenue streams and
established business at the point of the study.
“Now we haven't set the business model yet, but I think the barriers are actually quite low
and in the ideal setup, we would actually sell a service.”;
- Upcyclr
With an expected time frame of 3 years to engage in the first sales, the company
conceptualized a second model. This approach aims to sell pilots to other companies, which
can then engage in valorization processes with the licensed technology stack of Upcyclr. The
goal is to increase the knowledge scale by incorporating more companies and cases but
demands closer knowledge-sharing activities with the customer. The other benefit of this
40
model is that an earlier cash flow is accessible. By licensing the technology, improved market
penetration is to be expected by the CEO.
Another factor that will influence the cash flows of Upcyclr is, again, seasonality.
Knowing that the seafood producers are not in need of the service for a certain time of the
year, the dynamic approach of acting as a service provider with modular processes is
beneficial. The customer does not have to invest in the full process but has the opportunity to
purchase the valorization depending on the seasonal activities.
“But the seasonality is important as well. So I believe that the benefit is the highest for
producers, who have short seasons like kelp producers who have a need for this technology
for only four to six weeks a year”;
- Upcyclr
Furthermore, the entrepreneur is positive that working towards the goals of waste reduction is
rather a market opportunity and less an obligation or hurdle to overcome. It is believed that
the valorization depicts a proper space for financial value creation.
The Role of Sustainable Value Capture
With the concept of being a value-based company, the main goal of the organization is to
create sustainable and financial value by “turning costs into income”. The otherwise
discarded waste streams will be processed into highly nutritious food products. Therefore the
company aims to not only increase resource efficiency and reduce potential overfishing but
also to address issues of hunger and undernutrition. The sustainable entrepreneur believes
that the technology has the capacity to support populations who suffer from those issues by
increasing the efficiency of their seafood production. The interviewee mentions the potential
in poor regions of Africa as a future opportunity.
“And I think that the technique which is based on a solar hybrid growing system would
actually work very well in the African countries and they don't have a sustainable food
system and they don't definitely don't get the best value out of the product because the
durability or the shelf life of the product is so low. So I would very much like to do something
good there.”
- Upcyclr
Another factor in the vein of holistic sustainable value capture is the energy efficiency of the
process: by incorporating solar drying as a core of the technology, the potential energy
consumption is low. This has environmental benefits combined with cost advantages but
takes more time compared to an energy-powered drying technique.
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Aquafood: Sustainable Business Model and Hybrid Tensions
Creating and Communicating a seafood waste-based Value Proposition
The last case that is going to be discussed is Aquafood. The startup from Gothenburg
originated from the Chalmers University of Technology and was created around an
innovative technology that was developed by local researchers. The main idea is, similar to
Upcyclr, to directly link with seafood producers and engage in a novel way to valorize their
waste streams. Still, the seafood producers are not functioning as the main customer group,
but as the suppliers of the by-products. After purchasing the waste of e.g. fileted fish, the
company plans to apply its technology stack to produce a novel protein mass. This highly
nutritional product will then be sold to customers who use it for further food production.
One theme that was observable through the investigation was that the seafood
producers are often already engaged in existing contracts with other manufacturers who
valorize the seafood side streams into fish meal or fish oil. Therefore, the interviewee stated,
a lack of motivation by the major producers is observable to switch their processes and
supply chain towards Aquafood. To solve this issue, the company communicates the
sustainable benefits of its services. It is explained that the producers are less interested in the
use of their by-products, but rather in the price they can achieve by selling them.
In this vein, the company reports issues of communicating the mentioned sustainable
benefits: with seafood and fishing being “conservative industries”, the decision makers are
often hesitating towards pivoting existing processes into untested and new value-chains that
are unknown to them. Therefore, the interviewee underlined the importance of
communication and the need for improvement at this stage:
“We need to work on our communication, how we present it to showcase how we are different
and make it easier to understand.”;
- Aquafood
This is achieved by presenting the benefit to suppliers and customers outside of the
sustainability sphere underlining the technical and price advantages, if existent. Still, when
presenting the manufactured protein mass as a product, the end customers are often confused
and falsely relate the innovation to product categories they already know and understand:
“It's sometimes hard to communicate what it actually is. And if I say that we can make a
really unique protein mass. [...] Then some people think “Well so you just grind it up”. And
some people think we make surimi. They try to relate to what they already know and what is
already out there.”
- Aquafood
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Being a company at an early stage, the decision makers of Aquafood understand their
position as dynamic and open to change. They engage in close dialogue with potential
suppliers and customers to understand their needs. They are planning potential pivots in terms
of business approach and value proposition to properly satisfy the demands. Still, the
organization’s core mission is to reduce waste and increase efficiency.
In this vein, the interviewee underlined that it is desired to collaborate with
like-minded customers who share the sustainable vision. He stated that this can result in
issues facing the financial responsibility of the firm to achieve profits, as the major
companies with the biggest business leverage were often the driver of past unsustainable
activities, like overfishing and waste pollution.
Value Creation and Value Delivery around seafood waste valorization
The main value that Aquafood wants to create and deliver is to offer sustainably produced
food products with a positive environmental impact. For that, they aim to build, in line with
the other cases, a mission-driven team. This means that the employees, given a proper level
of skill and knowledge for the dedicated position, are desired to have intrinsic motivation for
the holistic cause of Aquafood. This circumstance is of high relevance for the company at the
time of the interview, as they were in a stage of a growing employee base. The interviewee,
being responsible for talent acquisition, reports a conflict between the importance of
competence, experience, or knowledge versus finding a person who appears to align with the
company's values the most. Still, the applied strategy is to find people with a major drive for
the mission and the cause of the organization, given a certain minimum skill set, and further
develop the needed know-how.
“And so I would then rather say that they are aligned with the mission and really feel that
they are passionate for this and will work hard for it and be slightly less confident. That's a
much better fix than someone who is highly confident, but only does it for the paycheck, who
doesn’t align with the values and the mission.”;
- Aquafood
Also, the company engages in building mutual relationships with organizations and
individuals who share similar values and appear to be helpful to achieve the holistic mission
of waste reduction. They aim to actively exclude companies with “unsustainable” activities to
further push the desired development, even if that means missing on potential revenues.
Regarding the funding, the company reports no conscious efforts connecting with
impact-driven investors but rather desires investments of more than “just cash”, like
knowledge and network. On the other hand, the investors who appear to help the company
the most are often sustainable-focused funds.
Regarding the regulatory and legal barriers, it is necessary to fulfill the corresponding
food-grade standard. Every facility and machine needs to align with the requirements to
deliver a safe product. The benefit of that is that the company does not have to engage in
43
extensive legal efforts regarding the potential launch of new products. Still, this circumstance
has to be considered when establishing new facilities and has to be communicated to
suppliers, as this has the implication of necessary cooling and close proximity to the waste
stream chains.
Financial Value Capture
The main cost drivers of Aquafood are expected to be salaries and the purchased seafood side
streams. It is observable that the price of the waste is dependent on the producer's current
existing alternative to sell. For example, if a company has no established use for their offal,
the price is significantly lower than the price of the waste of a company that is selling to fish
meal producers. Therefore, Aquafood has to investigate the existing and future relationships
with its suppliers.
With their technology to produce a novel type of fish mass, the company aims to
collaborate with other companies, who then can utilize the product in the context of
gastronomy or food production. Therefore, the business-to-business approach revolves
around the communication of their core benefits, closely linked to Aquafood’s Value
Proposition. The idea is to engage in contracts with major partners like IKEA, who can offer
the sustainably marketed product.
Another potential business model is, similar to Upcyclr, offering the technology as a
license model. It is believed that this can improve early cash flows, as well as growth and
impact leverages in more distant markets.
“But we're also looking at licensing out our technology but that's only for more markets that
you don't intend on entering within like 10 years.[...] And at the same time, we gain a cash
flow that helps us to finance our needed investments in the future to scale up.”;
- Aquafood
Sustainable Value Capture
With the focus on addressing environmental issues and working towards a more sustainable
future, the enterprise aims to structurally change the industry. To achieve that, the mentioned
engagement in relationship building and the creation of a network is of high importance.
Convincing the key decision-makers in the existing seafood industry is expected to drive this
development. Also, by providing a solution that is in line with those values, the company can
incorporate more organizations outside the seafood industry, e.g. IKEA and gastronomy
services.
In contrast to the other cases, LCAs are not playing a crucial role in the initial
development or to attract capital. So far, the company noticed that there was a wide interest in
carbon footprint-based LCAs in the impact investor sphere. At this point, it is necessary to
mention that the company was still in its infancy and the position toward LCAs may change
over time.
44
It is also believed that the financial scaling of the business is closely related to the
sustainable impact: the bigger the address market is, the more the company can leverage its
mission. Still, many adjustments are made to keep the organization focused on fulfilling the
mission, for example finding a mission-sharing employee base.
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Discussion
This section compares different business model variations and managerial strategies
for sustainable enterprises valorizing seafood waste. The internal and external dynamics will
be elaborated and put into the context of relevant literature. Also, a theory will be conducted
on how entrepreneurs mitigate hybrid tensions in this industry while achieving financial
viability. It will be dissected into the different pillars of the established framework for
Sustainable Business Models.
Value Proposition
The different case companies have one important similarity: they have been founded
and constructed around their sustainable mission. Tidal Vision seeks to replace harmful and
toxic chemicals with sustainable chitosan products, TomTex aims to transform the linear
fashion value chain into a circular model, Upcyclr wants to help seafood producers valorize
their seafood side streams and Aquafood works towards new food products to increase the
efficient use of caught fish. The mission orientation and “purpose beyond profits” approach
qualify all four companies as Sustainable Entrepreneurship and hybrid organizations (Haigh
& Hoffman, 2014).
Aquafood and Upcyclr share a similar opportunity: as the current market of
processing by-products is dominated by low-value commercial products (Bruno et al. 2019;
Donner et al., 2021), both companies utilize innovative solutions to process products with
higher nutritional value compared to the widely produced fish meal, which is often used as
animal feed. Still, the most noticeable difference is the target customer market: Upcyclr wants
to sell valorization technologies and services to the primary producers, while Aquafood
purchases the side streams and plans to sell the valorized products to food producers and
gastronomy customers.
Furthermore, dynamic communication strategies were observable regarding marketing
toward certain customers. Tidal Vision for example puts the selling proposition of having a
sustainable product made from chitosan in the focus of their water treatment activities. But
the marketing towards agricultural customers puts the performance and convenience benefits
in focus, often not mentioning the chitosan origin.
This is in line with the strategy of Upcyclr: the potential customer focuses on reducing
waste due to practical and legal issues. They are often not intrinsically motivated to increase
sustainable activities, but rather to exchange opportunity costs with income or avoid
regulatory fines. Therefore Upcyclr plans to directly work with seafood manufacturers on-site
to provide a service that helps them with their issues and underlines the convenience of their
technologies. The customer seldom has an intrinsic drive to push the environmental and
social impact of their activities over the regulatory, or market-demanded, boundaries. Davies
46
& Chambers (2018) also support the notion that Sustainable Enterprises often struggle to
manage the tension between working with sustainable, but often niche, customers, or working
with “mainstream” customers.
Tidal Vision solves this question by targeting markets with the biggest leverage of
their product: the example of agricultural products and the effect of their fertilizer on a large
scale shows that they strategically think about the consequences of the use of chitosan and the
implication to the customer. Seafood Waste Entrepreneurs therefore may be encouraged to
address the biggest markets, since this means that their sustainable activities have the biggest
impact, even if the customer is financially focused.
In contrast, the marketing of TomTex completely revolves around the idea of
circularity: they attract their investors and potential partners with their mission to reduce
waste. They collaborate with like-minded organizations to gain industry insights and
knowledge. This is in line with the behavior of commercial entrepreneurs, who create
networks to acquire new ideas and tangible resources (Johannisson et al.; 1994). Still, it is
believed that the interest switches when they switch to “selling mode”. The intrinsic
motivation to drive sustainability then faces the existential notion to reduce costs and create
revenue. This is especially notable in the industry of fashion, which is often dominated by
“clout and hype” (TomTex). It can be argued that the sustainable entrepreneur has to
understand the addressed market and the dynamics of the key player: not only in terms of
needs and preferences but also in terms of culture and value, to properly market the product
and communicate the value propositions (Matzembacher et al., 2020).
To sum up, the examined companies aim to offer a product that has more inherent
value than just being a more sustainable variation of already existing products. They actively
collaborate with customers who share their mission, believing that the transported message of
waste reduction creates a closer connection to them (Davies & Chambers, 2018; Davies &
Doherty, 2019).
On the other side, major downsides were observable: the awareness and initial
suspicion of greenwashing (TomTex) combined with reported resistance against change are
barriers that the companies have to overcome. Therefore, the conducted analysis points
towards potential hybrid tensions between the intrinsically sustainable mission and the
external financial interest of (business) customers (Davies & Chambers, 2018).
Value Creation and Delivery
A major benefit for the examined seafood waste entrepreneurs is the availability and
cost of their most important resource: fish waste. The companies reported that the relevant
dynamic in this ecosystem is that seafood producers not only sell their waste as a by-product
but often desperately are in need to find possibilities to dump their waste, as discarding
side-streams back into the ocean became limited in many seas and therefore highly regulated
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(e.g. see TMDL law; Massachusetts Department of Environmental Protection, 2023). For
multiple companies, this desperation was the stepping stone for their business (Upcyclr, Tidal
Vision, Aquafood) as relevant players invested capital and created networks. Seafood waste is
therefore one of the biggest opportunities for sustainable entrepreneurs. Still, there are a few
downsides and potential tensions that have to be managed regarding value creation.
First, the expiration time for the fish side streams is relatively low. An efficient supply
chain has to be built to minimize the time between the catch and valorization process (Donner
et al., 2021). This is mostly done by moving facilities close to the origin of the catch, e.g. the
seafood producers. Furthermore, this dynamic limits opportunities for geographical growth.
For most of the businesses, close proximity to local fishers is essential and the location of the
production facility is therefore a critical factor. For business models that utilize a
service-oriented business-to-business approach, such as Upcyclr, this means that the market is
strictly geographically limited.
Second, for some customers, the connection to fish-related properties is not desirable.
For example, Tidal Vision reports experience with farmers who did not like the
chitosan-based product, since it was “smelling bad”. In another case, TomTex reports about
the demand for vegan products, and the image of seafood waste, even though it is technically
discharged, creates a different picture in the mind of the customer. The sustainable customer
should carefully consider the “objective” and the “subjective” value, such as image, feeling,
or smell when creating the business model and product.
Third, the valorization of seafood waste is often connected to high amounts of R&D,
new solutions have to be found to upcycle the waste into usable products. This means also
that highly skilled and highly educated employees are needed, often in the field of advanced
chemistry. Therefore, a longer time-to-market is seen in this industry, with high initial R&D
investments. This points towards desirable technology collaborations to engage in joint R&D
efforts (e.g. Donner et al., 2021)
This connects to the importance of investors: most case companies started their
research activities backed by impact-driven investors, or in collaboration with incumbent
seafood producers (Upcyclr, Tidal Vision). These investors bring multiple hybrid advantages
to the table (Doherty et al., 2014): first, impact-driven investors measure the success of the
venture not only by financial gain but also by reaching the environmental or social goal. With
waste being a prevalent problem in the global food market, this depicted opportunities for the
case organizations to quickly create awareness and connections to respective financial
partners. The second advantage is the network of potential partners and customers derived
from the portfolio companies and network ties of competitive impact investors.
Also, all four case companies stated the importance of a mission-driven team. They
reported that the internalized commitment to work towards the collective goal is necessary to
keep sustainable values in line, which results in an observable increase in general motivation
(Battilana and Lee, 2014)). Still, in some cases this makes the process of proper hiring more
complex, resulting in a potential balance between skill, knowledge, and values that have to be
managed and identified (Davies & Crane, 2010). The most dominant strategy within the cases
was to hire a person with the necessary set of skills, but who definitely aligns with values,
48
rather than to identify the most qualified. This is in contrast to the findings of Battilana & Lee
(2014) who support the idea of employing people with superior commercial skills and
utilizing the company’s culture to influence the individual's socialization (Davies &
Chambers, 2018).
To sum up, all four case organizations incorporated their waste reduction mission into
their Value Creation and Delivery strategies. With a focus on trust among stakeholders,
building an environmental image, ensuring shared values, building relationships and
networks, and creating value for customers beyond sustainability, they actively manage their
hybrid nature to create growth, market penetration and an increased sustainable impact with
potential for scalability (Jabłoński, 2016). Still, there are noticeable difficulties that arise
from the conflicting logics of their financial, social and environmental sphere (Hestad et al.,
2021), like acquiring impact-driven investors, conflicting interest in the aspect of talent
acquisition and efforts of network-building relationships with change-resistant external
decision makers.
Value Capture
All of the case companies have a business-to-business approach, as they aim to
provide solutions to businesses that generate large amounts of fish waste. Once the
technology is set up, these enterprises can benefit from lower resource costs by using cheap
fish waste as raw material. However, the success of the startups heavily depends on their
ability to create a superior value-added product, such as chitosan, which can be used as a
sustainable polymer. One reported difficulty in this vein is aiming for long-term contracts
with seafood producers to access high volumes of seafood waste with a certain degree of
planning reliability. The barrier at this point is to convince the manufacturers of the
sustainable impact and the environmental and social benefits of the business. This is
important, because, depending on the location, seafood producers often already sell their
waste streams to e.g. producers of fishmeal. They also tend to stick to their existing processes
and partners (Aquafood). This can make it more difficult to find a cheap and reliable source
of waste.
One of the major challenges for seafood waste startups is the conflicting selection of
customers. On the one hand, these startups may want to work with businesses that are known
drivers of existing issues related to fish waste. However, such businesses may not necessarily
share the same vision as the startups. The example of Tidal Vision leaving the pharma
industry untouched, because it provides smaller leverage for their impact, may lead to missed
revenues (Laasch, 2018).
Another challenge that seafood waste startups face is seasonality. As the availability
of fish waste varies depending on the fishing season, these startups need to have a constant
supply of fish waste. The decision has to plan aspects of storage, transport and processing
(Donner et al., 2021) to avoid resource shortages.
49
This problem is solved by either having modular production facilities (e.g. Upcyclr)
being a service provider on demand, or by buying-in frozen seafood from external partners
(Aquafood). The entrepreneur has to find solutions that overcome this challenge which
aligns with the mission.
Despite these challenges, the potential for revenues from the production of chitosan,
fish protein and other value-added products makes seafood waste startups an attractive option
for sustainable enterprises looking to make a positive impact on the environment while
achieving financial viability.
In general, the sustainable companies defend the opinion that penetrating the biggest
markets and working towards profit maximization is perfectly in line with the mission to
achieve the biggest sustainable leverage and create the biggest impact. They believe that their
core business activity, combined with conscious efforts regarding the mission validity among
the stakeholders, captures value in a holistic and multi-dimensional way. This is supported by
the notion that potential profits can be reinvested into developing more business activities to
increase the impact. They understand the role of their profit as a means-to-an-end revelation
(Davies & Chambers, 2018; Stubbs, 2017).
Sustainable Value Capture
Evaluating the holistic sustainable impact of a company’s activities is a difficult but
important endeavor, especially in the realm of Sustainable Entrepreneurship. They can
measure their carbon footprint, water usage, waste production, and other relevant metrics to
determine the extent of their environmental impact. The life-cycle-assessment is an essential
tool to create transparency and evaluate the achieved and potential impact (Ruiz-Salmón et
al., 2021). All four case companies the importance of this tool. In many cases, the LCA
functions as a proof of validity to external stakeholders like impact investors. It also gives the
organization the opportunity to evaluate the sustainable goals and if they were able to reach
them. Furthermore, assessing its own dynamics and structures helps the organization to
optimize processes to increase efficiency and effectiveness.
The startups in the seafood waste industry revolve around the increase in efficiency in
regard to valorized waste streams. They aim to find solutions that help the seafood producers
utilize their discarded trimmings, heads, bones, or shells to yield valuable products. This
already depicts a desirable goal in the context of environmentally friendly business. Still, the
observed businesses try to solve deeper issues, like the linearity of the fashion industry
(TomTex) or replacing toxic fertilizers with non-toxic and sustainable alternatives (Tidal
Vision). The case companies constructed their business models to access financial revenues,
which are ultimately used to address the predefined goals in a holistic and multidimensional
way (Haigh and Hoffman, 2014; Morioka et al., 2017). With the goal of value creation in the
50
financial, environmental and social spheres, they aim to connect multiple stakeholders needs
to create value for them. For that, they often chose the biggest financial market which appears
to be congruent with the biggest achievable impact. In the context of Tidal Vision, this means
the market with the highest amount of chitosan products. This strategy supports both the idea
of an entrepreneurial venture and a hybrid organization (Davies & Chambers, 2018) and
underlines the idea of financial gains as a means to an end for sustainable development
(Morioka et al., 2017).
Seafood Waste Valorization as Sustainable Entrepreneurship: A Holistic Model
The yielded insights were put into an attempt to picture the dynamics of sustainable
enterprises valorizing seafood waste in the context of a sustainable business model and
hybrid tensions. The Model Figure 2 dissects the entrepreneurial ecosystem into three
dimensions: the (1) resource sphere, being the origin of the core resource as seafood side
streams and by-products, as well as the supplier. The (2) internal sphere is reflected by
organizational aspects of production, employee base and funding. The aspect of production
incorporates the main activities, production-related tensions and the relevant dynamics to
achieve the creation of the product, e.g. R&D. The employees element reflects circumstances
of team building, leading and organizational dynamics. The aspect of funding shows potential
opportunities and issues regarding finding investors. The last dimension is the (3) external
sphere, depicted by customers, being the core stakeholders of the ventures, and regulatory
institutions, which shape the legal environment and potentially support or inhibit
transformation in the addressed market by setting processing standards, legalizing chemicals
or regulating waste discards.
The different entities are reflected by potential inherent hybrid tension. The nature of
being financially and sustainably driven companies has implications for arising issues that are
mentioned in the model.
Again, this framework does not have the acclaim to fully explain the dynamics of
seafood waste valorization with sustainable business models, but should rather give the
reader an idea of potential dynamics and tensions.
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Conclusion
Implications for Sustainable Entrepreneurs with Seafood Waste
Valorization
Future sustainable entrepreneurs should consider various implications to ensure
success in their ventures. Constructing the sustainable business model as an integrated hybrid
(Ebrahim et al., 2014) which benefits the targeted stakeholders should be a priority, with core
activities being aligned to this goal. Startups should focus on addressing specific problems,
such as seafood waste, and integrate sustainable practices into their operations from the
outset. Close proximity to sources of fish waste is critical to ensure access to the raw
material.
Impact investors can be important in providing initial funding for startups, providing a
potential network of like-minded partners and can support the venture with knowledge
through board members. Tensions can arise if those sources are not available and
commercially focused investors get involved.
Special thoughts have to go into building a mission-driven team, as this appears to be
a crucial factor to incorporate the sustainable mission into the company's culture and to
increase individual commitment. There were noticeable difficulties regarding the balance
between commercial skills and shared values and mission drive.
Partnerships with organizations that share the mission can also be beneficial.
Engaging in network building to create knowledge-spillover effects appear attractive
regarding the innovativeness and risk of the field. This can also result in losing aspects of
competitiveness, as unique advantages will be shared across other players.
Regulatory aspects and the legal environment should be evaluated, as certain laws can
either push or mitigate potential activities like the processing of seafood waste with a special
focus on food-grade standards in the local region.
Targeting the market that utilizes the highest volume of the product or service is
important, and the product should align with the company's values.
Entrepreneurs should communicate the sustainability unique selling proposition
(USP) in a way that resonates with their customers. The sustainable nature of their activities
should be underlined but can lead to confusion in the eye of the customers if not
communicated properly.
Lifecycle assessments (LCAs) are an essential tool to evaluate the goals and practices
of sustainable enterprises. As there is a trend towards regular waste with similar properties to
seafood waste, entrepreneurs must communicate the unique benefits of their product or
service to distinguish themselves from competitors. By considering these implications, future
sustainable entrepreneurs can build successful ventures that align with their values and make
a positive impact on the environment and society.
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Implications for the research field
The findings of this research have potential future opportunities for scientific advancements
and practice in the areas of sustainable entrepreneurship, hybrid organizations, sustainable
business models and seafood waste valorization. Specifically, there is a need for further
research to develop a more comprehensive understanding of the hybrid nature of sustainable
enterprises. This should include an exploration of the best practices and challenges of
sustainable enterprises across different industries and a deeper analysis of their business
models and organizational structures.
The synthesized framework can help to dissect the architecture of sustainable
enterprises and the inherent sustainable and financial value gains/restrictions in either. This
framework can help to identify the key drivers of sustainable and financial value gains and
restrictions and how they can be optimized for maximum impact and monetary profits. It
should also take into account the interconnections between different components of
sustainable enterprises, such as their mission, goals, values, and practices. Therefore, the
literature on sustainable entrepreneurship and hybridity was improved, combined with the
extensions of seafood waste valorization. This was especially interesting, as former research
was focused on the idea of circularity, often missing a critical reflection of conflicting value
goals.
In addition, this study highlights the importance of organizational-level research, such
as examining the driving forces both internally and externally that influence the
decision-making processes and operations of sustainable enterprises. Future research should
explore these factors in greater depth to develop a more comprehensive understanding of how
they impact the success of sustainable enterprises.
Future Research Opportunities
There are several future research opportunities that can build on the findings of this study.
Firstly, the perspective of how sustainable enterprises innovate can be further evaluated. This
can involve exploring the different strategies and practices that sustainable enterprises adopt
to innovate and the factors that influence their innovation processes. This can be inspired by
previous research, such as that conducted by Davies & Chambers (2018).
Secondly, further research can be conducted to understand how customers perceive
hybridity and what factors influence their perceptions. This can involve examining the image
and communication strategies used by sustainable enterprises to promote their hybrid nature
and how these strategies are perceived by customers.
Thirdly, the framework used in this study can be expanded to include Life Cycle
Assessment (LCA) models to gain a deeper understanding of the environmental impact of
53
sustainable enterprises. This can involve assessing the full lifecycle of the products or
services provided by sustainable enterprises and identifying the areas where improvements
can be made to reduce their environmental impact.
Fourthly, future scholars can improve this field by applying quantitative analysis to
e.g. measure the financial performance of seafood waste startups to identify critical success
factors. Financial figures such as success rates and profit margins can provide insights into
what works better under different circumstances.
Finally, there is room to investigate the hybrid dynamics and individual influences
over time considering developments based on managerial decisions like talent acquisition,
finding, or business model innovations. This can help to inform the development of more
effective business models and strategies for sustainable entrepreneurship
Limitations of this study
This study has several limitations that need to be acknowledged. Firstly, the use of only four
case studies may not be sufficient to provide a comprehensive picture of the sustainable
entrepreneurship ecosystem. The findings of the study may not be generalizable to other
sustainable enterprises and may not capture the full range of strategies and challenges faced
by these enterprises.
Secondly, the subjective nature of the data collected through interviews and surveys
may leave room for interpretation and potential biases. This can affect the accuracy and
validity of the findings, particularly if the respondents' views are not representative of the
wider community of stakeholders.
Thirdly, in two of the cases, there was no triangulation with other employees, which
may have resulted in a limited understanding of the company's operations and challenges.
This could have affected the overall comprehensiveness and accuracy of the data.
Fourthly, the cross-sectional nature of the study meant that it only provided a snapshot
of the companies' performance at a single point in time. This lack of observation of
development over time may have limited the ability to analyze the trajectory of the
companies and their impact on sustainability.
Finally, the possibility of over-positive statements by the respondents cannot be ruled
out. Respondents may have been inclined to present their enterprises in a positive light,
leading to potential biases in the data collected.
54
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64
Appendix
BM Pillar Company Hybrid Tensions Opportunity
Strategy
Value Proposition
Product/Service
Customer Segment
Relationships
Value Creation and Delivery
Key Activities
Key Resources
Key Channels
Key Partners
Financial Value Capture
Cost Structure
Revenue Streams
Sustainable Value Capture
Environmental and
Social Costs
Environmental and
Social Benefits
Table 1: Sustainable Business Model Framework: (Adapted from Osterwalder and Pigneur (2010), Davies &
Chambers (2018))
65
Figure 1: Visualization of Research Design
Interview Guide
● Why was the company founded?
● What is the target customer segment? Why should they buy the product?
○ Is there a potential conflict when “unsustainable” customers make
inquiries?
● Who are the key stakeholders? Who benefits?
● What are the main resources? What are the critical attributes?
● How is, or will be, the product sold? (Channel)
● How easy/hard was it to raise capital?
● Who are the key partners?
● What are the main investments (previous and future)?
● How can the business ensure sustainable growth?
● What are the key financial challenges to overcome?
● What are the key sustainability challenges to overcome?
66
67
Thematic Analysis
Tidal Vision
1st Order Concept Sub Theme Theme
“What that means is if we're going to sell products to Product’s
people, the products need to be better on price value-added needs
performance and convenience.”; more benefits than
“We want our customers to buy a better product. sustainability;
they're more sustainable, but that's like secondary.”;
“We are going to walk like a duck, quack, like a duck
and sell chemicals like a duck. It's just that our
chemicals are way better for the planet.”;
“We aim to have a better solution no matter what.
And I think it's because of the high value being
hidden in fish waste. Like we use a lot of salmon
guts in our fertilizer. And so we know that the
omega-3 to omega-6 ratio is good.”; Creating and
communicating
“We have that segmented broadly, except for material Targeting a broad
sciences, uber broad; there's no limit to who we will a seafoodcustomer base;
partner with.”; waste-based
“People think they want to use it for an array of
cases. I sit on the other side of this inbox all day long Value
and see inquiries and it's wild.” Proposition
“The only way to affect change is to provide farmers Overcoming the
with things they're used to.”; customer’s
“As far as customers go, we work in very resistance to
conservative industries with a lot of god-fearing change;
decision-makers. They don't really care about climate
change. To effectively effect change in the world,
you need to persuade these decision-makers. They
don't care about sustainability and don't care about
climate change”;
68
“I first have to figure out what their background is. I Adapting the
need to know how much they know about biology, communication to
because anyone with a biology degree knows what the customer;
chitosan is. Then I can explain how this fits into
nature and how it fits into the products we use.”;
“We have a really unique challenge in some of our
customer-facing products because there's one
approach where you explain what chitosan is and
why it's valuable and there's another approach, which
is you say, “Here's my product. Would you like
some? It has all these benefits.”.”;
“..because you get approached by a lot of investors in Finding
this space and we're really interested in quality more impact-driven/
than money.”; waste
“We need people that have a stake in us, succeeding reduction-oriented
with their current, like world, and that's what we're
seeking.”; investors;
“I know that particular impact fund has been critical
to us.”;
“So for our first two years, we had some pretty good
bits of an easy ramp because they were so interested
in a solution. And so, our first investment right out,
the gate was from Trident Seafoods. As well as a
supply of frozen crab shells, so we didn't have to
worry about crab shells.”;
“So we are absolutely willing to put resources, Engaging in legal
lobbyists, whatever it takes to make this molecule transformation;
available, for more people to use.”; Building Value
Creation and
“All that we've done so far has been accomplished by Building a Value Delivery
an amazingly driven mission-driven team. We mission-driven around seafood
attracted that team with our story.”; team; waste
“Everybody on our team is very aware of that. And
they put in 110% for us. So I'd absolutely rank our valorization
internal stakeholders as primary stakeholders,
because everyone comes to work with that little bit of
extra [...] “I'm still motivated to get it done because
it's going to sell more chitosan and that's gonna
improve the world!”.”;
“We choose where we work. Almost exclusively Partnering with
based on the impact we can have in that industry.”; like-minded
“We're really confident about what we can do for organizations;
agriculture. We want to also offer that technology to
the big ag(ricultural) players, in joint development.”;
“I can count on two hands, the biggest water
treatment chemical companies on earth and we're not
really interested in all of them. We're interested in the
right ones.”;
69
“We have a CEO of Tidal vision and we have a CEO Organizational split
of Tidal Grow. And it's a good thing. I really like it between markets;
because they're both very good at what they do. But
it does mean that there is a subtle difference. In that
question, the approaches are slightly different.”;
“Well, technically, we're a technology company. First Technology focus
and foremost. We are willing to do anything it takes and willingness to
to get these fish products valorized, commercialized, adapt;
whatever. Technology can reduce the hurdle to
adoption. We'll do it.”;
“The edge of this research is happening in Pharma. Impact>Profit
And we've made a distinct decision to stay away attitude results in
from Pharma and Medical because of that divide we turning away from
were talking about earlier between profit and impact. potential markets;
It is obvious that medical and pharma may contain
more profit in chitosan. But it does not contain more
impact, and we're very sure of that.”;
“It comes back to our belief that the more chitosan Aiming for the Financial Value
that is in industry the better off the world is. [...] That biggest impact can Capture
could also be the volume of acres applied on.”; also mean aiming
“So it's almost always that by choosing the way to for the biggest
have the most impact with this polymer chitosan we
also have financial opportunities.”; markets;
“I would say that technology was our biggest asset. Technology
Our biggest asset now is the serial technology stack advantage and
because that was the start of it all. And that enables sustainable,
the base, chitosan, to get to market in an innovative solutions
environmentally attractive way, which was never
possible before. That is huge, that's really a big deal result in
because it changes the entire industry.”; competitive
“The technology we're using is very breaking edge. advantage;
And very difficult. It's not easy. I think our
competitive edge is so strong that I'm not even
worried about other people copying us.”;
“The reason we are focusing on agriculture is Choosing the
because we believe we can have a larger systemic market with the
impact. For humanity. By improving nitrogen use biggest impact
effectiveness.”; leverage;
“We choose where we work. Almost exclusively
based on the impact we can have in that industry.“; The Role of
Sustainable
Value Capture
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“I do believe that LCA (life-cycle assessment) is the Defining a concrete
key. I think that if we had our LCA done I could take sustainable goal
it all the way to the farm and I could get a meeting and engaging in
with that sustainability director and we could talk extensive
about data.”;
“So what we are doing right now is we're committed assessments
to building models on our cradle-to-gate LCA, for ensures being
chitosan using our sources and we'll be able to commited to the
tighten that based on our source of shell and mission;
duplicate that as we do duplicate plants.”;
“The most important thing that we do is like, it's just
the easiest one to measure, so that will be on the
radar.”;
“Sustainability is a trip with our company just The mission of
because of how mission-focused everything is in our waste reduction is
company. Like everything we do is to displace clear and
chemicals in the bigger world.”; omnipresent within
“It comes back to our belief that the more chitosan is
in the industry the better off the world is. So, any the company;
opportunity to increase the volume is the priority
effectively and that can include the volume of
chitosan,. That could also be the volume of acres
applied on.”;
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TomTex
1st Order Concept Sub Theme Theme
“It is regenerative material, we call it bio fabric, It's a Adding more
hundred percent biodegradable and non-toxic”; value-added
“It's very versatile so we can change different aspects additionally to
of the actual material itself because we are casting the sustainability by
material.;
Tômtex can replicate any textural surface, so there are engaging in unique
endless possibilities for pattern design," said the product properties; Creating and
designer.
"It also can be customized to be either leather-like, communicating
rubber-like or plastic-like by adjusting the formula a seafood
and the way of production. So the possible
applications go beyond fashion to packaging, interior waste-based
or industrial design.; Value
“That's a huge selling point because, the biggest issue
that people always raise with these types of biological Proposition
engineered living materials is what some people call
it they're worried about, it's fidelity and how long it
will last basically.”;
“Despite the fact that I think we do have a really Communicating the
strong marketing and a really strong message, I still mission to potential
think that communicating the significance and customers is
importance of a material like this will be our greatest crucial;
challenge um and bringing that to as many people as
possible will be a secondary challenge.”;
“So , this market is still really new. People are still Marketing towards
really afraid of climate change and that's why most sustainability can
marketing is based on your lowest base instincts. be received
Make you feel pretty or hot or you're cool, making negatively by the
you feel like you're rooting. Climate catastrophe is a
little bit more of a kind of shaky vibe. They're like customer;
“Wait , what do you mean climate change? I don't
want to talk about that.”.”;
“Frankly the idea of circularity and being
environmentally conscious has been really poorly
marketed across all activities, all sectors, that's why
we have so many issues with greenwashing now.”;
“Green washing has created really significant
problems for everybody in our business because it
really confuses people.”;
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“The biggest issue that people always raise with these Competing with
types of biological engineered living materials is what conventional
some people call it they're worried about, it's fidelity materials on the
and how long it will last basically.”; market has
"So we need to deal with it being waterproofed. And
that's a huge question because the main way other limitations and
synthetic leathers do that is with plastic."; barriers;
“She originally started working with coffee and then The resource
moved slowly to shrimp shells as they engaged with properties opened
the R&D process. Because our scientific philosophy up new space for
is to let the materials lead us, not the other way opportunities;
around.”;
“We started by saying, "What can chitosan do?” And
so that's why, I think these processes are really
interesting”;
“When we started this, everybody was talking about Seafood waste is
vegan leather and people are wanting vegan options. perceived as
So technically the shrimp shells are not vegan. People non-vegan and can
have eaten the shrimp that they came from and it is potentially miss
food waste. So, I don't think we can really call it that.
Though the mushrooms, it's still a waste product. It's demand;
still a byproduct, it's not food waste necessarily
because the byproduct that we're using is what they
grow the mushrooms on.”
“We'll get chitosan from those mushrooms and make
a different material that essentially looks exactly the
same. It's just a vegan option.
“We understand that luxury is a difficult space to start The target market
in because there is so much reason to not care, of high fashion is
because so much of the industry is built around clout ambiguous -
and hype.”; attracted by the
“They're coming to us right now. But it might be
different when we go commercial, I have a feeling sustainable
not, because we have established these (brand) mission, but led by
connections.”; market logics;
“That type of niche market is definitely an idea we
are using by engaging with luxury first. Those are
people who have more money. But bridge out by
engaging with luxury to a much larger market,
Luxury is also really important in fashion world
because it's what sets the standard, starting at the
top.”;
“People are very interested in this product. Thousands
of businesses have reached out to us by now, a lot of
them, very famous and big brands. There's always
that tension there because these brands are also some
of the ones driving these (sustainability) issues.”;
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“In terms of issues of energy and production, Using technologies
manufacturing one, we're trying to work a lot with and processes that
manufacturing machines and processes that are are proven;
already common in the textile market. So we might
even be buying things that you might use to make
synthetic leather, for example, but we're using it to
make our stuff.”;
“People are gonna shift to respond to this need for Engaging in
more ecological materials and brands are gonna come network building to
to us because we've now established ourselves, we've improve problem Building Value
met with them. We've shown them that we are willing awareness and Creation and
to engage and teach them as well, without essentially
being very aggressive about it. We want them to use building a bigger Value Delivery
the material”; community to around seafood
“We want to be offering thought leadership and increase the
thought partnership to people who are interested... impact; waste
and that's something that can help us build long valorization
term."”;
"We also really want to be in a community with other
people who are doing this work because as I've said,
it's not like anybody else is doing exactly what we're
doing.";
“But it's really important to bring these fabrics to
people's attention because people don't even know
this is a problem, to be honest. Like, this is a niche
part of the climate world right now, in the biotech
world.”;
“We want to set up relationships with farmers as well, Finding partners
so we can start engaging in really creating a circular who align with the
system in Vietnam.”; mission;
“We intentionally pick partners that follow our same
ethos of ecological care and fair employment
practices.”;
“Of course, large-scale luxury houses but we also Conflict between
work with smaller scale or, differently, because we do building
want this to be affordable eventually. Though, of relationships with
course, as you understand, there are constraints of the smaller, more
market and of our investment and we need to make
some returns.” dynamic brandsand large fashion
houses;
“We have always been working with investors that Finding impact
come from the climate sector. So they understand our investors is
climate needs, they understand, there's a bigger beneficial for
picture here and revolutionizing the entire market that network and
goes beyond just the necessary returns that we
obviously have like a fiduciary duty to make”; knowledgeacquisition;
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“I think the investor landscape that we've talked about
is really significant. I don't think people would have
invested in this 30 years ago.”;
“Obviously there's a lot of struggle that has gone into New technologies
making this product fantastic in terms of the deeply demand high R&D
iterative nature of our R&D scientific process that efforts - increased
Ross is engaged with. It's something that's made the risk and market
product really strong, but obviously, something that
takes a lot of time.”; entry costs;
“R&D obviously slows you down, but it slows us
down because we're trying to make a great product,
right? We're not expecting this to take over cotton or
anything like that in the next 10 years. That would be
a big hurdle.”;
“So one there is, there are also financial reasons why Seashell waste as a
I see seashells and chitosan is cheaper right now cheap resource;
obviously, like as, , , like the business has to be
dynamic as it scales because the scaling kind of
makes it a new business almost in terms of our
investors”; Financial Value
Capture
“I mean right now, you know, we're not in a Engaging in
traditional selling model. We're making a lot more partnership and
collaborations, right? Because our product isn't fully creating awareness
ready.” prior to selling;
“There is tension and a built-in tension between us Being part of the
and other fashion manufacturers of course. It is hard problematic
to deny the way that the textile and fashion industry industry to change
has been so wrapped up in really significant issues it;
with human labor.”;
“We track these standards across our supply chain, Sustainability
going all the way back before the chitosan across the value
manufacturers, before waste collection, even before chain;
the shrimp and seafood are eaten, to the shrimp farms
where we confirm that shrimp are grown sustainably
and by farmers who have fair treatment.”; The Role of
“We know that all of our supply chain is up to the Sustainable
highest of standards in a way that most other
businesses could not claim.” Value Capture
“After mixing all the ingredients, the bio-material can Energy-saving
be poured into the mold where it is air-dried at room procedures to
temperature for two days. The process doesn't require reduce the carbon
heat, therefore it saves more energy and reduces footprint;
carbon footprint.”
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“Developed in collaboration with nature, we create Engaging in
materials through our bio-based design process that building a circular
emphasizes circular manufacturing and diligence to approach;
uphold safety throughout our manufacturing process.”
“We've certainly done an LCA [...]; accumulating Applying life cycle
these different certificates and credentials that prove assessments creates
that we are sustainable will be important. Things like credibility;
B, Corps, stuff like that. That'll just be important to
other buyers and just generally; like new customers
respond really well to that.”;
Upcyclr
1st Order Concepts Sub Themes Themes
“Yet, it's probably the hardest field of them all to Seafood waste has
develop value-added products outside the seafood limitations
business market, because of the smell and the compared to other
challenges with shelf life and everything.”; sources of
“I believe that the low-hanging fruits are in the fruit
segment and vegetables because the waste volumes biological waste
are extremely high there”; material;
“We define two groups of customers first, the raw Providing value for
material owners and from them, the easy take is seafood producers
turning the waste streams and costs to incomes. Or the by turning their
alternative costs to turn upcycled value.”; waste into income;
“So most of the producers, and we're starting in the
seafood field, are actually carrying costs due to those
waste streams. So turning them into incomes, of
course, is an easy sale.”;
“In general speaking we would always start from the
raw material itself and the customer needed and try to Creating and
match them. So it depends on the properties that we're communicating
working with.” a seafood
“To the end customer we need to offer something. The end-product waste-based
Something better in nutrition values, technical values, has to have Value
meaning the motion or other technical properties beneficial
and/or cost saving. And we believe we can do all of properties to the Proposition
them”; end-customer
besides being
sustainable;
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“I think it's an idea that is easy to grasp and it appears The problem and
to many. I definitely find it easy to explain what we do the solution are
[..]”; easy to understand;
“What's the advantage against incumbents? Let's say The startup
like that: I can't see that happening due to the dynamic provides a
investment bias and the setup. It's built on bad benefit against
products and chemical processes. And hot air drying large producers
in high volumes. And we go totally the opposite way.”
“The industry, in general, is biased towards the who suffer under
significant investments already made in the “investment bias”;
production system. As a result, it is often easier to
invest a couple of million more in refurbishing
existing machines rather than building a completely
new factory and making significant changes.”;
“I found it reasonably easy to capitalize this company. The clear vision
We raised a small seed amount here in winter and our and mission lead to
company capitalized now for the need. And as I do easy access of
rounds with other companies, right now I’m also potential investors;
telling them about the businesses that I run and I also
tell them about Upcyclr and actually it steals the focus
from the round or the pitch that I am making because
Upcyclr is so interesting.”;
“I think the big challenge is to “productify” the end Transforming the
products. The difficulty is not to do a part of any raw waste streams into
material cleaning good and bacteria feasible. Of in-demand products
course there are challenges along the way as well, but is a challenge;
I think that's pretty easy. But building value-added
products from those powders or fractions that's the big
challenge and it will take time and knowing the lead
time within the food industry from idea to launch, it
will take us two to three years from now to have our Building Value
first products in the market.”; Creation and
“I think it's more of a value-based company, we like to Building a Value Delivery
attract young talented people, and start your career. mission-driven around seafood
We want to be with students in a startup that has some team;
value and take part in that.”; waste
valorization
“Well, key is access to raw material and the primary Critical access to
producers have their setups and they have their sort of major seafood
their sell off of these disposed material and they get producers vs.
rid of it in an easy way. And somebody monetizes structural
from that, mainly from primary production goes to
feed production. And upcycling that it might be hard resistance;
to change their waste stream systems. So it's very
much about access and network and getting the big
companies to actually change their setup.“;
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“That's what we start with the local businesses that we
personally know. They are a bit skeptical but
interesting. So it's a milestone that we actually get
them to pay for the project that they're interested in
seeing what is possible. Even if they say “I'm not sure
if it actually will solve them anything, but I'd like to
see it anyway”.”;
“So I'm used to working from the customer Founder’s industry
perspective and that's where we found the idea of experience and
working with the waste streams and, and bringing network is
value to primary producers.”; beneficial for
understanding the
customer’s needs;
“So, building up our business based on selling pilots is Acquiring first cash
a necessity. Also to get the financing because nobody flows by selling
wants to wait for three or four years to possibly get early pilots;
some cash streams.”;
“So it's a learning journey and I believe that we will
start going broad and selling the pilots, getting our
cash streams from the customers and then finding our Financial
sort of business line through that work in sort of
research of business.” Value Capture
“From a business perspective from where we start, as Increase scaling
I mentioned, I believe that going one way will take us potential and
several years to launch end-products. That's why I knowledge
believe in selling the idea of utilizing the waste acquisition by
streams to several customers and learning about those
materials and at the same time, understanding where engaging in
the potential is the highest and then finding out that licensing activities;
field and going in that direction.”
“Now we haven't set the business model yet, but I Service-oriented
think the barriers are actually quite low and in the Business Model;
ideal set up, we would actually sell a service.”;
“The barrier to invest in an equipment for 10% of the
year is very high and if we can then set a service for
quite high prices, it's more efficient for them and a
good business for us so we can use that equipment
over the year with different cases.”;
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“But the seasonality is important as well. So I believe Seasonality of
that the benefit is the highest for producers, who have fishing different
short seasons like kelp producers who have a need for species has an
this technology for only four to six weeks a year”; impact on cash
flows;
“And we believe we can do all of them actually Energy-efficient
because the process is so energy efficient.” procedure;
“On the other hand, we utilize the actual catch and Increasing the The role of
lower the pressure on wild stocks and also the farmed efficiency of caught
fish in that manner.”; fish - waste Sustainable
“So this is definitely an impact company or a mission. reduction is a Value Capture
We want to change something here.”; major theme;
“We haven’t decided that yet, but I think Ola has good Potential
connections in Africa and the social entrepreneur in application of the
me, and let's say in the company, the attitude is to technology to solve
build value in those countries. And I think that the hunger issues in
technique which is based on a solar hybrid growing
system would actually work very well in the African regions with
countries and they don't have a sustainable food underproduction of
system and they don't definitely don't get the best food;
value out of the product because the durability or the
shelf life of the product is so low. So I would very
much like to do something good there.”
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Aquafood
1st Order Concepts Sub Themes Themes
“And, of course we can, if the resources are already Increasing the
created then, they can use it for their value purposes efficiency of
and get more revenue.”; seafood producers;
“They love the idea of using the whole fish, the whole
resource.”;
“It's a lot about just finding the customers in the Existing waste
different segments and then targeting them, asking stream solutions
them how they see different uses of their side streams provide a market
and how they view our technology as part of their entry barrier Creating and
solution and sometimes it comes down to, “Well, this
sounds really interesting. But we are in a five-year through long communicating
contract with this other practitioner of fishmeal”; contracts and a seafood
“In most cases, they are still quite conservative. And hesitating
there are a lot of older men that are quite conservative producers; waste-based
and think, “Well, we're already using that, isn’t that Value
good enough?”; Proposition
“In most cases, they are still quite conservative.[..] Communicating
Kind of like viewing it as well: “Sustainability is a the sustainable
Leftist thing” but it's not.”; mission to
“We need to work on our communication, how we potential
present it to showcase how we are different and make
it easier to understand.”; customers leads to
“In some cases, if I pitched to someone that they potential confusion
should buy the protein mass, it's better, it's more and rejection;
sustainable. And then they ask what the price will be,
and I say it. And then they say “I think that is quite
high.” And all of a sudden, the sustainability leaves
and it ends up being just a number. Which is quite sad,
but it's the reality we have to live in for now at least.”;
“It's sometimes hard to communicate what it actually Marketing the
is. And if I say that we can make a really unique product’s
protein mass. [...] Then some people think “Well so properties in a way
you just grind it up”. And some people think we make that the customer
surimi. They try to relate to what they already know
and what is already out there. understands iscritical;
“I think you have to be quite open-minded at this stage Pivoting the
to see how and where you can fit into the market.”; product towards
“Our technology is very diverse or very versatile, so the customers
we can basically change anything that contains protein, needs;
we can work with chicken waste or beef waste or
whatever.”;
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“It depends on how much better (they pay), but Working with
probably not. I mean, of course, if it's the only way we mission-driven
can get our business to continue and expand then of suppliers/
course, it's still good because we can still be in there, customers vs.
creating a more sustainable impact even if that's not
part of their mission.” financially bestpartners
“And then we buy their side streams. Valorize it into Three different
the components that we can: fish oil, protein mass, product types to
almost minced-meat consistency and marine collagen” valorize multiple
by-product
streams;
“We will set up a sort of a blue bio refinery, where we Production with
set up a first production site, close to our first potential close proximity to
materials supplier. And then we buy their side the primary
streams.” producers;
“So fish, and other marine materials are very sensitive
to temperature. So, once you take your fish out of the
ocean, you need to basically make it into a product
within three or four hours to make sure that it doesn't
oxidize etc.”;
Value Creation
“And so I would then rather say that they are aligned Building a team
with the mission and really feel that they are passionate that is and Value
for this and will work hard for it and be slightly less mission-driven vs. Delivery
confident. That's a much better fix than someone who high levels of
is highly confident, but only does it for the paycheck, around seafood
who doesn’t align with the values and the mission.”; competence/experience trade-off; waste
valorization
“It hasn't been a conscious effort in that sense, we more Acquiring
looked into how potential investors be able to supply impact-driven
with more than just cash and most of the time that investors yields the
those investors are the ones that are also sustainable best cooperation in
focused and they are focused in finding solutions that
will help tackle the large global issues that we have terms of knowledge
with the increasing food production sustainably.”; and network;
“And it's also one of our criteria that they are working Building an
or are interested in working towards greater things, ecosystem with
having sustainable impacts. If they are consistently not like-minded and
working to have this sustainable impact, we will not mission-driven
collaborate. I think that's one part where we can also
impact the industry by leaving the bad players, like organizations;
fishy players, outside of the scope.”;
“We valorize it into the components that we can: fish Potential B2B
oil, protein mass, almost minced-meat consistency and market approach
marine collagen. And then we sell these three by offering the
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components to different markets in both. And so, we valorization as a
would need a b2b Company and network.“ service;
“And instead of us holding our own production line
and buying side streams from different parties
upcycling and selling, we would then sell, we would
buy all the equipment needed, sell that as a package,
with a license to our customer and then help them or
supply them with the aftermarket services.”; Financial Value
“But we're also looking at licensing out our technology Licensing as a tool Capture
but that's only for more markets that you don't intend to increase growth
on entering within like 10 years.[...] And at the same and cash flows to
time, we gain a cash flow that helps us to finance our finance
needed investments in the future to scale up.”; investments;
“And then of course it's very seasonal and it can vary a Seasonality
lot in how much they actually catch. [...] And we're impacts available
also looking at buying frozen side streams. If we have resources and
our own production lines up next to a supplier of raw costs;
material, that works during the fall and late summer,
for example.Then during the time when they are not
producing any fish, we would buy frozen side streams
from other actors that are producing.”;
“But if you compare it to fish meal prices, it's probably Price of seafood
around three crowns per kilo. And then some actors are waste depends on
also selling parts of the fish to other markets like alternative sale
Africa and Asia, where they would be directly made opportunities of
into fish heads for soup etc. And then of course the
value is a bit higher.”; the supplier;
“The main one will be salary. That's the main fixed The main cost
cost here.” driver is salary;
“Because they can use the full part of the resource that Reduction of
they already created and it brings a lot of sustainability wasted food;
to their whole value chain, which is a big marketing
branding point, especially in the same industry, where
there has been a lot of stormy weather on different
things.”;
“Since we can use the whole fish and create more food The role of
from the same amount of fish, fishers don't need to go
out and catch as much fish. And so we can help to Sustainable
reduce overfishing and collapsing our marine Value Capture
ecosystems indirectly.”
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“I know at least three investment companies that LCA reports help
require that you have an LCA and you can showcase to find impact
how you reduce the carbon footprint. And then of investors, but are
course an LCA is a very easy way of showing that. But not necessary;
then again we haven't found a brand that fits us well
enough, that's also required such an analysis. So we
have the analysis but it hasn't been used.”;
“But we're also looking at licensing out our technology Scaling the
but that's only for more markets that you don't intend Business with
on entering within like 10 years. Then you can increase licensing to
the reach of our technology and create more positive increase the
environmental impact around the world without having
to wait for us to reach there.”; overall impact;
“We've focused on this because fish production is the Keeping the focus
most inefficient food production in the street today and on seafood waste is
we can create a higher value and bigger impact in this based on the
industry” internal goal;
“And since we produce extra food and this can be used Potential to solve
in lower to income countries, where in them if you can food issues in
get all the food that you can out of the fish that is regions with
produced, you can also help work towards the no undernutrition;
poverty and hunger goals.”
“One of the unique things we have is that we have a Low energy
completely cold process. So the whole process takes consumption;
below 15 degrees which needs no heating steps at a lot
lower electricity and energy consumption. So that
makes it a more sustainable process..”;
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