Implementing a circular economy isn’t about trying to re-design entire systems on your own, it’s about taking the ideas and principles behind the circular economy and applying them to your own personal and/or professional background. If your background happens to be in tools and/or construction, a great opportunity could be right at your fingertips. So what is it about tools that make them a good circular product and a good opportunity in general? Before I answer that, let me clarify that the tools I’m referring to are those you would typically associate with construction, remodeling and home-improvements; things like saws, hammers, paint brushes and drills. Furthermore, the opportunity discussed in this article is catered towards home-owners and do-it-yourselfers; not contractors or tradesmen that use tools on a professional level. I believe there is an opportunity for a circular tool business catered to pro's, but their needs are entirely different than DIY'ers, so I'll save that for another article.
The first reason tools make a great circular product has to do with the demand for the service they provide. When people need tools, it's typically for just a limited amount of time; they are extraordinarily useful, but only for a relatively limited set of objectives. For example, a tile saw is an essential component of installing a back splash over your kitchen counter, but doesn’t otherwise serve the average person in any other part of their daily lives. Same goes for pretty much all of the other tools you would need to install a back splash (like a trowel, tile nippers, rubbing stone, grout float carpenter square and so on). When a DIY’er buys a tool like a tile saw, only a fraction of its true capacity ever gets utilized. This may sound like a drawback but it’s actually the opportunity. If people are paying full price to buy things they’ll hardly ever use, they are A) paying more than they should, and B) letting valuable resources (tools) waste away in their basement. Renting tools as opposed to buying them is better for the consumer and creates less waste. Yet there are still a lot of people who buy them… There are over 2,200 Home Depots, 1,800 Lowe's, 4,000 True Values, 4,800 Ace Hardware's and another 1,000 Harbor Freight Tools throughout the US & Canada; all of which sell tools to do-it-yourselfers and homeowners. But renting tools has become an emerging trend in the industry. Home Depot in fact has over 1,100 tool rental shops within their stores nationwide. While this could be thought of cannibalizing their own market (seeing as their primary business is selling tools), CEO Craig Menear has a different perspective. In a recent call with investors, he pointed out the soaring growth of their rental business over the last couple years and identified it as an opportunity for growth.
Another advantage of tools in a circular context is their inherent durability. So many products are designed with built-in obsolescence; but tools are not one of them. The tools you can buy at any one of the stores listed above are in most cases, the exact same tools that professional contractors are using on job sites all over the place. That means they're designed and built to take a beating and to last. As a contractor myself, I've used tools day in and day out for the better part of 10 years before they needed to be replaced. When they're taken care of and maintained properly, tools can survive some pretty harsh conditions. They also won’t go obsolete. Sure better models might come out, but I can do pretty much the same thing with a 15 year old drill that I can with one I bought yesterday; as long as it was taken care of.
This combination of intermittent demand for the service they provide, long-term durability and continued relevance - make tools the perfect product to establish a managed cycle of technical nutrients. Technical nutrients are man made products and materials that cannot be easily returned to a naturally occurring resource cycles. In an effective circular economy, technical nutrients are closely managed in cycles of sharing, maintaining, reusing, refurbishing, and recycling. (read more about technical & biological nutrient cycles in the Circular Economy article). Tools provide the opportunity to do all of these; and generate several opportunities to do even more...
Tool Accessories: Almost every power tool requires some kind of “accessory” to operate. For example... every saw needs a blade, every drill needs a bit and every sander needs a pad. Detachable accessories increase the versatility of a tool, but they all eventually wear down and need to be replaced. Most blades & bits can be sharpened (refurbished) numerous times before they become unusable. And when they do finally become obsolete, their high quality metal composition makes them valuable because they're easy to recycle into new high quality metals. Offering a variety of detachable accessories will increase the versatility of the tools they accompany, add a revenue stream to the business model and provide the opportunity to manage a longer portion of the accessory’s life cycle.
Work Supplies: When I refer to supplies I mean the things you need to complete a project that are thrown away after a single use. Things like roller covers, rags, grout sponges, tray liners, sandpaper and so on. Offering a kit of tools customized to a specific project provides the opportunity to add these supplies to every transaction, increasing revenue. Furthermore, with some thought and effort put into how project supplies are designed, I believe they can be made in a way that allows them to be reused; or at the very least allow the material to be recycled. This business model would position a company to take advantage of this opportunity.
Building Materials: There are a number of ancillary building materials like caulk, adhesives, spackle, tape, nails and screws that are used in several different kinds of projects The packaging used to distribute these products restricts the quantities in which they can be sold. This means you often end up buying way more than you need. The one size fits all approach doesn’t actually fit all, it just wastes whatever you don’t use. But what if a durable package was developed, where you can return what you didn’t use with the tools you rented. It would allow you to purchase the exact amount of the supply you need; reducing waste and saving money.
As a contractor, I get a lot of questions like "how do I paint a ceiling" or "how can I replace this floor?" The first part of my answer is always the same - you need the right tools or you're not gonna get very far. Tools are a primordial human concept that first separated us from other species, they are part of our evolution and DNA; we wouldn’t be where we are without them. Our human instinct to create tools lives on today at companies like Bosch, DeWalt, Milwaukee and Makita that have been around for a long time and have gotten very good at what they do. So the circular opportunity with tools lies not in competing against these companies to make better tools, but in working with them to distribute tools in a way that takes advantage of the mismatch between a tool's inherent usability and the amount they actually get used.