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Driving or driven by others? A dynamic perspective on how data-driven start-ups strategize across different network roles in digitalized business networks
Abstract
Digitalization transforms how actors conduct activities and exchange resources in business networks. Data-driven start-ups are key actors in this transformation as they are often the first to commercialize novel digital technologies and influence business networks through their strategizing. Extant Industrial Marketing & Purchasing (IMP) literature has investigated roles and strategizing in business networks. However, understanding how data-driven start-ups' specificities impact their roles and strategizing is still at its infancy. Specifically, the authors conceptually show that assumptions on how data-driven start-ups strategize contradict strategizing tenets of prior IMP literature. Therefore, previous knowledge on strategizing needs further differentiation. Addressing this research need, theories-in-use and multiple case study research on 23 data-driven start-ups is conducted to examine (1) in what network roles they operate and (2) how they strategize within and across different network roles. The study extends IMP and data-driven business model research by identifying four network roles (enabler, extender, transformer, orchestrator) and developing a specific classification framework for data-driven start-ups. Furthermore, the study shows that IMP tenets apply in specific network roles only to some extent to data-driven start-ups. Finally, three strategizing trajectories are identified, which provide a dynamic perspective to IMP literature for guiding entrepreneurs on strategizing opportunities.
... While this stream of literature investigates start-ups from a general industrial network perspective, a contextual focus is required to understand industry specifics in relation to resource dynamics, particularly because cocreated value strongly depends on the specific context where resource integration takes place (Vargo and Lusch, 2008). Furthermore, how new entrants relate to, and influence networks is an area where more research is needed (Baraldi et al., 2019), especially within the scope of digitalization (Mosch et al., 2022). ...
... This combination relies on the common points of the approaches pinpointing value creation as a collaborative effort among actors and as being strongly connected to resources (Bocconcelli et al., 2020). Similarly, other studies have sought combinations of literature streams to capture the complexity of start-ups in context of digitalized networks (Mosch et al., 2022). ...
... Departing from the discussion on the pursuit of digitalization (Egloff et al., 2018), this study builds on the complex interaction patterns of MLNs Waluszewski, 2002a, 2002b), which are reshaped by the entrance of digital intermediaries (Baraldi et al., 2019;Mosch et al., 2022) taking different roles while integrating information-based resources (Aaboen et al., 2016) and facilitating the value cocreation along the network (Vargo and Lusch, 2008). This value cocreation environment is stimulated by resource-dependences (Pfeffer and Salancik, 1978), which further reveals the emergent power dynamics in MLN networks (Pfeffer, 1981). ...
Purpose
This study aims to explore how a start-up entering maritime logistics networks (MLNs) in the container shipping industry integrates resources underlying value cocreation patterns in these networks.
Design/methodology/approach
The paper is based on a single case study of a technological start-up, providing tracking, tracing and other information services to MLN members using internet-based software. An interorganizational theory perspective informs the case study to unveil the resource integration for value cocreation in the network.
Findings
The start-up holds multiple resource interaction roles and the start-up’s involvement enables the creation of new knowledge resources, which facilitate new revenue streams and manage resource dependencies. Hence, the findings indicate that the start-up changes value cocreation patterns in the network by reconfiguring and integrating existing resources so that the service is customized for various customers, including shippers and freight forwarders.
Practical implications
The results provide insights about how technological start-ups can unlock resources within MLNs.
Originality/value
The study extends previous studies on resource roles in business networks and shows how start-ups can perform multiple roles simultaneously within these networks. In addition, the study contributes to the literature by studying information and knowledge as resources configured in different ways in a unique network setting.
... To employ qualitative rigor when dealing with raw data we applied methodological remarks of Gioia, Corley, and Hamilton (2013), which has been used in similar studies on digital technology, e.g., by Mosch et al. (2022). Data analysis involved multiple iterations of the analytical process; it was a continual process of going back and forth among the data, theory, and the emerging relationships between the two (Eisenhardt, 1989;Maxwell, 2008). ...
This paper aims to provide in-depth insight into the value co-creation around conversational agents-a solution based on Artificial Intelligence (AI) that replaces customer service employees. Using the concepts of value-in-use from information technology and the ARA Model as a theoretical lens, we investigated which resources are combined to create an AI-based solution, how providers and clients cooperate, and what value is an outcome of co-creation in the case of advanced technologies in the B2B context. Based on multiple case studies on leading providers of conversational agents, this research demonstrates the complexities of the process. Our findings reveal significant differences in informational, strategic, transactional, and transformational dimensions of value-in-use of conversational agents (CA) from other technologies. It shows that AI-activated value is dynamic, context-dependent, and fuzzy. This paper also highlights the role of resource interaction and non-technological factors that enable conversational agents to reflect and replace human activities.
... It is well known that digital technologies provide new momentum and opportunities to start-ups [25]. A precise matching of supply and demand can be ahcieved by accelerating the information exchange between entrepreneurs and demanders, thereby improving the innovation efficiency of products and services [26]. ...
In the context of digitalization, start-ups cultivate the dynamic capabilities enabled by digital technology and promote disruptive innovation, which has become the key for enterprises to achieve catch-up in the digital age. However, the path to achieving disruptive innovation with dynamic capabilities has not been revealed to date. This paper summarizes the dynamic capability dimension in the digital context by applying the grounded theory method and divides the evolution of disruptive innovation into the sprout stage, growth stage, and expansion stage. Based on the logic of “motivation–action–result”, this paper reveals the path of realization path for the disruptive innovation of start-ups under the influence of dynamic capabilities in the digital context. The results show that the disruptive innovation of start-ups can be attributed to the different dimensions of dynamic capabilities. Digital technology allows for enterprises to achieve disruptive innovation by enabling dynamic capabilities. This paper broadens the research on dynamic capability theory and disruptive innovation theory in the digital context. Furthermore, it provides a reference and inspiration for start-ups in the same situation, aiming to realize disruptive innovation by cultivating dynamic capabilities with digital technology.
... To properly organize such a control link, there are various options, including the state, a digital platform or a company [135,136], which constitute a "central entity around which the innovation ecosystem is built" [13]. In this context, we should employ the term "orchestrator" to denote the central subject of the ecosystem [137]. In addition, it is proposed to consider a "pacemaker" as a "center of intellectual attraction of actors", which ensures a consistency of the interaction of all the actors, (a separate actor, technology, project or platform, with each other [138]. ...
The intensification of innovation processes in Russia is a challenging task that requires a continuous search for solutions to make possible the many required changes in economics. We consider the major factors needed to advance an innovative activity at all levels in the national economy to have a freely exchanged flow of innovative ideas between all actors involved. As practice shows, the currently existing models in the country to deal with open innovations are mostly based on a cluster development approach, which is still limited. The authors propose synergizing the cluster approach with an ecosystem innovation model, which should ensure an effective collaboration and an accelerated rate for the diffusion of innovations between various actors while involving various regions. The purpose of the study was to develop a conceptual model for implementing open proposals from participants in the innovation economy. The research methodology is based on numerous works in the field of open innovation theory, cluster and ecosystem approaches. The study utilizes empirical and dialectical methods of scientific knowledge. The methodological toolkit covers information processing with historical analysis, a literature review using the Russian Citation Index and Scopus databases, analysis and diagnostics of innovative activity in domestic regions, the comparison method, modeling and correlation analysis. We concluded that the interaction of participants in the Russian regions through implementing the cluster model is not sufficiently effective and requires the development of new methodological approaches. Therefore, we propose combining the cluster approach with the ecosystem innovation model, which should ensure an effective cooperation and accelerate the rate of innovation dissemination among various subjects involving several regions. To determine the approach’s efficiency, the proposed concept should be tested in one or more regions.
... Such an approach has been criticized for paying too much attention to complexity and uniqueness, which has had narrowing consequences for research [50]. However, the ARA model has been profitably applied to focus on business interactions, i.e., in solution networks [51], innovations in co-creation, and network ties [52], digitalization of business networks [53], and the role of Artificial Intelligence in business networks [54]. ...
The objective of this study is to identify the environment for business interactions in virtual reality in the value co-production and co-creation process and to understand how such an environment enables the sustainable development of co-creational activities. This paper takes the concepts of value co-production and co-creation and presence and the Actors, Resources, and Activities Model as conceptual references for the exploration of interactions in virtual reality. Using ten in-depth interviews with senior managers, this paper takes an exploratory case analysis perspective. Results show how the sense of presence—level of immersion to which a medium that produces seemingly accurate representations of objects, events, and people, can submerge the perceptual system of a user—is the primary technical resource enabling the performance of value co-production and co-creational activities inside VR simulations. Additionally, the VR consultants and the hiring firms become the actors, organizing the value-co-production and co-creation practices; those customers and employees are the actors performing five co-creational activities that can result in valuable outcomes for the VR consultants and the hiring firms. Virtual reality is one of the newest vehicles used for the co-production and co-creation of value, for innovating existing products, for sustainable creation of new marketing offerings, or for managing network relations. This study contributes to existent literature by showing the process and practice of value co-production and value co-creation taking place in virtual reality simulations in B2B settings.
Purpose
This paper aims to investigate two seminal market-scanning frameworks – the five-forces analysis and PESTEL environmental scanning tool – to assess their readiness for anticipating market-shaping acts.
Design/methodology/approach
Drawing on the market-shaping literature that conceptualizes markets as complex adaptive systems, this conceptual paper interrogates the underlying assumptions and “blind spots” in two seminal market-scanning frameworks. The paper showcases three illustrative vignettes in which non-industry actors catalyzed market change in ways that these market-scanning frameworks would not be able to anticipate.
Findings
Marketing strategists can be “blindsided” as seminal market-scanning frameworks have either too narrow an interpretation of market change or are too broad to anticipate specific types of market-shaping acts. The assumptions about markets that underpin these market-scanning frameworks contribute to incumbents being slow to realize market-shaping acts are taking place.
Research limitations/implications
The authors extend market-scanning to include a type of managerial myopia that fails to register the socially embedded, systemic nature of complex contemporary markets. Furthermore, the paper provides an “actors-agendas-outcomes” scanning framework that offers awareness of market-shaping acts.
Originality/value
This paper is the first to consider market-scanning frameworks from a market-shaping perspective.
Purpose: Combining institutional work and actor engagement (AE) literature, this paper aims to elucidate how the collective action of market shaping occurs through the interplay between market shapers' institutional work and engagement of other market actors. While markets are shaped by actors' purposive actions, and recent literature notes the need to also mobilize AE, the underlying process remains nebulous.
Design/methodology/approach: This paper is conceptual but supported by an illustrative case study: Winding Tree. This blockchain-based, decentralized travel marketplace shapes a market by decoupling existing resource linkages, creating new ones, and stabilizing others through a dynamic, iterative process between the market shaper's institutional work and others' AE.
Findings: The paper develops a dynamic, iterative framework of market shaping through increased resource density, revealing the interplay between seven types of market shapers' institutional work distilled from the literature and changes in other market actors' engagement dispositions, behaviors and the diffusion of AE through the market.
Originality/value: This research contributes to the emergent market shaping and market innovation literature by illustrating how the engagement of market actors is a fundamental means of market shaping. Specifically, it advances understanding of how market shapers' institutional work leads to new resource linkages and higher resource density in emergent market systems through AE. The resultant framework offers an original, critical foundation for future market shaping research.
Context: Startups aim at scaling their business, often by developing innovative products with limited human and financial resources. The development of software products in the startup context is known as opportunistic, agility-driven, and with high tolerance for technical debt. The special context of hardware startups calls for a better understanding of state-of-the-practice of hardware startups’ activities. Objective: This study aimed to identify whether and how startups can achieve product quality while maintaining focus on agility. Method: We conducted an exploratory study with 13 hardware startups, collecting data through semi-structured interviews and analysis of documentation. We proposed an integrative model of agility and quality in hardware startups. Results: Agility in hardware startups is complex and not achieved through adoption of fast-paced development practices alone. Hardware startups follow a quality-driven approach for development of core components, where frequent user testing is a measure for early debt management. Hardware startups often lack mindset and strategies for achieving long-term quality in early stages. Conclusions: Hardware startups need attention to hardware quality to allow for evolutionary prototyping and speed. Future research should focus on defining quality-driven practices that contribute to agility, and strategies and mindsets to support long-term quality in the hardware startup context.
Despite the increased interest in using digital technologies for servitization purposes, little is known about what drives firms towards a digital servitization strategy. Using a dynamic capabilities lens, we look into the relationships between two organizational mechanisms – exploitation and exploration – and firms' orientation towards digitization, servitization and digital servitization. On top, we examine the influence of two environmental contingencies – technological turbulence and competitive intensity – as potential influencers of these relationships. We collected and analyzed data of 139 Belgian firms through hierarchical regressions. Exploitation and exploration are positively associated with digital servitization, but exploration trumps the effect of exploitation when firms do both. Technological turbulence is positively associated with digitization regardless of the firm's level of exploration or exploitation, and competitive intensity only relates positively with servitization when firms emphasize exploration. Theoretically, we contribute to the literature by unravelling the relationship between firms' dynamic capabilities and their environment. In order to fully understand firms' strategic transition towards digital servitization, both should be considered. As managerial implications, we suggest that firms pay close attention to adapting their strategy to fit an increasingly changing environment.
While the use of data in business-to-business marketing is not a new phenomenon, the digitization and digitalization of business-to-business firms' business models have recently attracted a great deal of attention. With the aim of creating an overview and consolidating this stream of research, the present paper offers a brief historical overview of research on digitization and digitalization in business-to-business markets – concluding that this discussion has a long tradition and, thus, is not a new phenomenon. We develop a definition of digitization capability as a basis for discussing how a firm's digitization capability interacts with its business model to allow for data-enabled growth, i.e. its digitalization, and we highlight promising avenues for future research.
This article’s objective is to inspire and provide guidance on the development of marketing knowledge based on the theories-in-use (TIU) approach. The authors begin with a description of the TIU approach and compare it with other inductive and deductive research approaches. The benefits of engaging in TIU-based research are discussed, including the development of novel organic marketing theories and the opportunity to cocreate relevant marketing knowledge with practitioners. Next, they review criteria for selecting research questions that are particularly well-suited for examination with TIU-based research. This is followed by detailed suggestions for TIU research: focusing on developing new constructs, theoretical propositions (involving antecedents, moderators, and consequences), and arguments for justifying theoretical propositions. A discussion of TIU tradecraft skills, validity checks, and limitations follows. The authors close with a discussion of future theory-building opportunities using the TIU approach.
Data based on qualitative judgments are prevalent in both academic research in marketing and applied marketing research. Reliability measurement of qualitative data is important to determine the stability and quality of the data obtained. The authors assume a decision theoretic loss function, formally model the loss to the researcher of using wrong judgments, and show how this produces a new, proportional reduction in loss (PRL) reliability measure that generalizes many existing quantitative and qualitative measures. Because the PRL measure is often cumbersome to compute directly, they provide reference tables that enable the researcher to apply their approach easily. They then use this new approach to explore several important practical issues in conducting marketing research with qualitative judgments. In particular, they address the issues of (1) how reliable qualitative data should be (extending directly from Nunnally's rule of thumb for Cronbach's alpha in quantitative measurement), (2) how many judges are necessary given a known proportion of agreement between judges, and (3) given a fixed number of judges, what proportion of agreement must be obtained to ensure adequate reliability.
The objective of the present study is to examine the strategizing of start-ups in a network context. The paper depicts start-up strategizing as an intertwined activity of identification and boundary-drawing. The questions of network identity and network boundaries become salient in times of disengagement by a primary customer or when there is a need for significant redirection of the business during what is referred to as a network identity crisis. The study emphasizes the viewpoint of an entrepreneur as strategist and builds on the concept of network identity to stress the socially structured individual cognition of who the organization is in light of its network connections. We study strategizing in four start-ups with different identity crises. By applying a grounded theory approach and Gioia methodology, the paper models the dynamics of restart strategizing in terms of its internal and external triggers and the choices when managing three identity-related contradictions. Furthermore, we characterize four alternative restart strategies connected to the identities and boundaries perceived by the entrepreneurs. By embracing the way start-up's identity and its strategy evolve interdependently in relation to the network dynamics, the model contributes to our understanding of those strategizing activities whereby restart can occur.
Start-up firms are notoriously resource and time poor. One way of addressing these deficits is to develop strategic capability to access, activate and co-shape resources with other firms in the start-up's network. The capability literature assumes such a development is inevitable, provided a start-up survives. But developing network capability depends on the managers of other firms, the deepening managerial understanding of business relationships , and the ability of the start-up managers to adjust to and understand interdependence in networks. We present a processual model of how managerial understanding of network capability develops, comprising of three parts each building on the earlier: (i) in relationships, (ii) through relationships and (iii) in the network. The model was inductively developed from a longitudinal study of a start-up firm. Also, two sensemaking processes were found to predominate-problem solving and social-cognitive processes. Our model highlights the role of the start-up manager in sensemaking with managers across a number of firms to resolve commercial problems. Thus, the independence many start-up managers seek must turn towards interdependence. Second, managers' temporal horizons and the specific temporal profile of events and activities inside the involved business relationships are important in understanding and developing, with other firms, network capability.
Rapid and pervasive digitization of innovation processes and outcomes has upended extant theories on innovation management by calling into question fundamental assumptions about the definitional boundaries for innovation, agency for innovation, and the relationship between innovation processes and outcomes. There is a critical need for novel theorizing on digital innovation management that does not rely on such assumptions and draws on the rich and rapidly emerging research on digital technologies. We offer suggestions for such theorizing in the form of four new theorizing logics, or elements, that are likely to be valuable in constructing more accurate explanations of innovation processes and outcomes in an increasingly digital world. These logics can open new avenues for researchers to contribute to this important area. Our suggestions in this paper, coupled with the six research notes included in the special issue on digital innovation management, seek to offer a broader foundation for reinventing innovation management research in a digital world.
The purpose of this paper is to provide a state-of-the-art comparison of the conceptualization of resources in ‘Resource Interaction’ (IMP) and ‘Resource Integration’ (SDL). Both are engaged with understanding how value is (co)-created, but with different emphases. Existing comparisons are limited and out of date. We trace how each has evolved over time by analyzing key developments. The focus of SDL has shifted from operant resources towards resource integration, and from a dyadic view towards ecosystem contexts. Within IMP, research takes a network perspective in investigating the nature of resource interaction in a variety of empirical contexts. An analysis of similarities and differences highlights key assumptions, the classification of resources, and the role for the actor. The comparison offers a thorough understanding of Resource Interaction and Resource Integration. The paper concludes by proposing suggestions for further research for Resource Interaction.
This positioning paper is informed by our judgment that the mainstream research on business marketing and marketing in general is losing its relevance and vigor because it views business environments as narrow “markets” and focuses primarily on dyadic business relationships and their management. Sticking to this limited, economics-driven market view has detached the discipline from major real-world phenomena, leaving it with scant understanding of the contemporary environmental context of marketing and business strategy. Based on a focused reading of literature on business fields, business networks, business ecosystems, and market systems, we venture our own comprehensive theoretical framing of complex business environments summarized in two frameworks. In the pursuit of relevance our integration is avowedly simplifying as we strive for parsimony. Key points explicate the nested, multi-layered, multimodal, transitional and conditioned character of the business environment, and the dynamics, phases and processes of the evolution of that nested environment. We use the frameworks constructed, which form an initial theory of complex business environments, to supply a research agenda for business marketing and offer brief managerial conclusions.
Purpose-This paper aims to investigate two seminal market-scanning frameworks-the five-forces analysis and PESTEL environmental scanning tool-to assess their readiness for anticipating market-shaping acts.
Design-Drawing on the market-shaping literature that conceptualizes markets as complex adaptive systems, this conceptual paper interrogates the underlying assumptions and "blind spots" in two seminal market-scanning frameworks. The paper showcases three illustrative vignettes in which non-industry actors catalyzed market change in ways that these market-scanning frameworks would not be able to anticipate.
Findings-Marketing strategists can be "blindsided" as seminal market-scanning frameworks have either too narrow an interpretation of market change or are too broad to anticipate specific types of market-shaping acts. The assumptions about markets that underpin these market-scanning frameworks contribute to incumbents being slow to realize market-shaping acts are taking place.
Research implications-The authors extend market-scanning to include a type of managerial myopia that fails to register the socially embedded, systemic nature of complex contemporary markets. Furthermore, the paper provides an "actors-agendas-outcomes" scanning framework that offers awareness of market-shaping acts.
Originality/value-This paper is the first to consider market-scanning frameworks from a market-shaping perspective.
As a research field, entrepreneurship emerged from an increasing interest in fostering new business ventures. Over the past decade, interest in entrepreneurial phenomena also triggered several studies in the IMP research stream. We examine connections between these two research streams in terms of the phenomena in focus, key concepts, and approaches to identify research areas fruitful for advancing our understanding of entrepreneurial phenomena. In pursuit of this aim, we analyzed 48 IMP-based entrepreneurship studies and the abstracts of the 227 most cited papers in eight main entrepreneurship journals; among the latter, we conducted an in-depth analysis of 30 articles, in which we found connections with IMP studies. Based on our analysis, we identify four directions for future research, where confronting and bridging the key concepts has the potential to contribute to conceptualizing entrepreneurial phenomena and related theory development. The four areas are: variety in the context of new ventures; multiplicity of networks embedding new ventures; connecting the new venture to its context; and the new venture's learning and management.
We contribute to the business network literature by presenting and introducing a radical constructivist research approach, in which we foreground sharing the context of an actor's understanding of interaction. We elaborate the approach by illuminating the problematic issue of boundaries in business network research. We conceptualize boundaries as inter-action spaces and times where differences are created, maintained and changed in a physical-social setting. We make a distinction between boundaries and borders, with the latter being simply representations. We undertake a review of select realist and social constructivist business network literature to distinguish and elaborate the potential of a radical constructivist perspective, as an alternative approach. The approach appears most useful when the researcher and interview participant do not have a convergent understanding of the research phenomenon. Further, a radical constructivist approach is eminently suitable for settings where inter-action conditions and content are changing, for example in times of crisis or network change. We present the metaphors of castles and frontiers, as illustrative research tools suitable for a radical constructivist study of boundaries in business networks.
Business-to-business marketing academics study complex phenomena, aiming to describe these phenomena through theoretical frameworks, explaining the relationships among the framework's constructs, and provide guidance and insight to decision-makers. Not surprisingly, often business-to-business researchers undertake qualitative case studies. In this editorial, we discuss what we believe could be reported in the write-up of a case-study methodology section. In particular, we consider the issues of selecting cases; crafting instruments and protocols, entering the field; and analyzing the data. How to assess the validity and reliability of qualitative case studies is also discussed. We finish the editorial by examining three exemplar case studies that have been published in Industrial Marketing Management.
We extend the discourse on actor engagement by arguing that the ‘actor’ should be viewed both as a single-actor (humans or machines) and a group of actors (collectives or organizations), and that engagement implies both exchange-based and non-exchange-based resource contributions, which are facilitated by dispositions, formed partly by actor specific characteristics and partly by the institutional and organizational arrangements prevalent in the context in which the resource contributions occur. We further show how the resource contributions, combined with other resources, improve resource density and, thus, drive value creation. This mechanism can be the foundation for ‘economies of actor engagement’; focal actors can achieve increasing returns by mobilizing actor engagement. Building on this, we argue that actor engagement is central for market-shaping strategies that aim for market innovations, which we define as the emergence and institutionalization of resource linkages that improve resource density and, hence, value creation in a market. Finally, we suggest that the dramatic shifts that we see in the operating environment are elevating the role of actor engagement, making the management of actor engagement a strategic priority.
Applying grounded theory, we comprehensively categorize capabilities needed for market-shaping and synthesize them into a conceptual framework that describes the process and its outcomes. We establish that in order to improve value creation in a market, market-shapers must consider a larger system of relevant stakeholders, recognize the institutional arrangements governing their behaviors, and foster new resource linkages within and across stakeholders. Based on our analysis, we identify eight triggering capabilities, which generate new intra- and inter-stakeholder resource linkages by directly influencing various characteristics of the market, and four facilitating capabilities, which enable market-shaping by discovering the value potential of new resource linkages and augment the impact of the triggering capabilities by mobilizing relevant resources. We show that triggering capabilities are context-specific, whereas facilitating capabilities are generic. We conclude that there are performance outcomes of market-shaping not only for the shaping firm, but also for other stakeholders, and at overall market level.
In business-to-business settings, dyadic relationships between firms are of paramount interest. Recent developments in business practice strongly suggest that to understand these business relationships, greater attention must be directed to the embedded context within which dyadic business relationships take place. The authors provide a means for understanding the connectedness of these relationships. They then conduct a substantive validity assessment to furnish some empirical support that the constructs they propose are sufficiently well delineated and to generate some suggested measures for them. They conclude with a prospectus for research on business relationships within business networks.
The value-capture problem for innovators in the digital economy involves some different challenges from those in the industrial economy. It inevitably requires understanding the dynamics of platforms and ecosystems. These challenges are amplified for enabling technologies, which are the central focus of this article. The innovator of an enabling technology has a special business model challenge because the applicability to many downstream verticals forecloses, as a practical matter, ownership of all the relevant complements. Complementary assets (vertical and lateral) in the digital context are no longer just potential value-capture mechanisms (through asset price appreciation or through preventing exposure to monopolistic bottleneck pricing by others); they may well be needed simply for the technology to function. Technological and innovational complementors present both coordination and market design challenges to the innovator that generally lead to market failure in the form of an excess of social over private returns. The low private return leads to socially sub-optimal underinvestment in future R&D that can be addressed to some extent by better strategic decision-making by the innovator and/or by far-sighted policies from government and the judiciary.
The default value-capture mechanism for many enabling technologies is the licensing of trade secrets and/or patents. Licensing is shown to be a difficult business model to implement from a value-capture perspective. When injunctions for intellectual property infringement are hard to win, or even to be considered, the incentives for free riding by potential licensees are considerable. Licensing is further complicated if it involves standard essential patents, as both courts and policy makers may fail to understand that development of a standard involves components of both interoperability and technology development. If a technology standard is not treated as the embodiment of significant R&D efforts enabling substantial new downstream economic activity, then rewards are likely to be calibrated too low to support appropriate levels of future innovation.
This paper outlines findings from a large-scale interview based study of start-ups who obtained equity crowdfunding in the UK. It takes a novel integrative approach towards the analysis of entrepreneurial networks by examining both personal and business networks involved in the equity crowdfunding process. Adopting a processual perspective, the empirical findings show that networks and social capital play a critical role in the crowdfunding process. Start-ups leverage, build and draw upon a complex array of network actors and "ties" as they move through the different stages of their crowdfunding journey. The paper shows that this form of funding confers important relational benefits to recipients which amount to "more than money". It concludes that equity crowdfunding is a highly "relational" form of entrepreneurial finance, requiring holistic forms of empirical investigation. Implications for theoretical development, managerial practice and further research are outlined.
This article introduces Industrial Marketing Management's special issue on start-ups and networks. To begin with, we stress the relevance of understanding the context wherein entrepreneurship unfolds - a context filled with social, technical and economic connections to which the start-up needs to relate. We also present and confront three network perspectives which bring different insights to the interplay between start-ups and networks: Social Network (SN) theory, the Industrial Marketing & Purchasing (IMP) view, and Actor-Network Theory (ANT). Next, we introduce the 12 papers of this special issue and place them on a continuum covering a start-up's process of network embedding and including the three periods of establishment, consolidation and stabilization. We conclude with a research agenda suggesting five avenues for further research: (1) tracing start-ups' process of network embedding, (2) mapping the connections between the different networks affecting a start-up, (3) grasping the negative effects of networks on start-ups, (4) making longitudinal case studies on start-ups and networks more comparable via common analytical tools, and (5) investigating how policy influences the complex interplay between start-ups and networks.
New business ventures have rather limited resources, generally suffer from liabilities of smallness and newness and rely on external business relationships, typically with suppliers, for developing and acquiring necessary resources. Yet, to date, research on how new ventures develop initial relationships with suppliers and how these affect the nascent business has been limited. Taking the business network perspective and relating it to studies of supply chain and supplier involvement in product development, our study contributes to the rather limited body of knowledge on new ventures' supplier relationships. Empirically, we draw on a longitudinal, in-depth single-case study of the first two years of operation of a start-up. Our study shows that the development of the key initial supplier relationships starts from open-ended expectations of mutual future relational benefits and involves a stepwise 'inter-definition' of solutions in interaction between the parties. We observe that interdependences arise between the new venture and its key suppliers and these enable but also limit, the development paths of both partners. We argue that the key initial supplier relationships extend a new venture's resource and capability base and are an integral part of a new venture's business model.
Few researchers have examined empirically the dynamics of human-non-human networking and its importance for strategic outcomes, particularly in the field of entrepreneurship. In this paper, we use Actor-Network Theory to observe and investigate the role of materially heterogeneous entities in the entrepreneurial network. Building on the results of a four-year, multi-case study, this paper describes how an entrepreneurial network, beyond its social nature, is also a socio-material constellation. The symmetric treatment of human and non-human actors enables us to move away from the figure of the heroic entrepreneur. Our findings reveal various roles that the heterogeneity of actor-networks can play in the entrepreneurial process. We see on the one hand their power to attract and recruit new allies when they are aligned with the entrepreneur's vision, and on the other their ability to repel and block the new venture creation process when they fail to effectively translate what the entrepreneur has in mind.
Power plays a key role in the relationships between startups and established organisations. Yet researchers have devoted little attention to the startup's perspective on power in such relationships. To study startups' view on power, a useful starting point is their structural power, but this also requires an investigation of their power behaviour. We explore how structural and behavioural power interrelate in a startup's relationships with its established partners in the medical device business. Our longitudinal, embedded case study reveals nine interaction episodes in which power plays a decisive role. The power episodes show that the case startup often uses hostile power use tactics because it overestimates its structural power. Since its established partners recognise its lack of power, they usually do not accept such behaviour. Thus, the case startup could not extract the intended benefits. Nonetheless, we find that the case startup could benefit from its relationships if it employs conciliatory power use tactics or power change tactics. With these insights, we contribute to the startup business relationship literature by providing a better understanding of startups' experience with power. We also extend the power literature by showing that it is the perception of power that determines power behaviour rather than the de facto structural potential.
This paper focuses on how newly established technology-based start-up companies become part of the business landscape. In more detail, the aim of the paper is to analyse how a start-up becomes embedded through its networking behaviours in a business network. To approach this phenomenon, the theoretical frame of reference is based on the industrial network approach to industrial markets separating developing, producing and using settings. The business network settings are combined with networking behaviours consisting of both strong and weak ties. Importantly, for a start-up to become embedded through networking, resources of the start-up need to be combined with resources in the three business network settings. The paper relies on a case study methodology focusing on a start-up, founded at a technical university in Sweden, and its networking behaviours. The paper concludes that networking behaviours relying on strong ties are crucial to resource combining. However, the analysis also shows the importance of networking behaviours of weak ties, acquiring information and interaction to sensing new opportunities. The paper ends with managerial implications for start-up managers, pinpointing the need to work with both strong and weak ties as a platform to eventually become embedded in business networks.
The paper's main purpose is to analyse newness and heritage, and what form it may take, in the context of university spin-offs (USOs). The empirical research is based on two cases of USOs generated from an Italian university. The case analysis provides an in-depth investigation of the conditions under which newness can be considered an asset rather than a liability, and sheds light on the role of heritage and how it is related to newness in spin-offs originating in an academic setting. The paper contributes to the literature on whether newness is to be considered a liability or an asset and enhances our understanding of heritage in the context of USOs. The study is also relevant to industrial marketing literature, as it addresses newness and heritage in business networks and affords the potential to better understand the two concepts and how they are linked. The paper demonstrates the existence of an interplay between heritage and newness that is manifest in the mitigating effects of the dimensions of heritage on those of newness: when the degree of heritage (in its various dimensions) is significant, the effects of newness are limited in terms of changes to the existing network, and vice versa.
This paper has been designed to analyse the impact of the structure of social networks on academic spin-offs' entrepreneurial orientation. We have specifically focus on both size and frequency of three different types of social networks: informal networks (composed of family and friends); market networks (composed of agents belonging to the business context); and university support networks (composed of university institutions and agents). With the premises of Resource Dependence Theory as theoretical background and drawing on a sample of 167 Spanish academic spinoffs, results of regression analysis have highlighted the positive influence of market networks and university support networks on the enhancement of academic spin-offs' entrepreneurial orientation, as well as the null impact exerted by informal networks. Our paper expands the research developed in the fields of academic entrepreneurship, social networks and Resource Dependence Theory and offers some suggestions to academic spin-offs' managers and university support institutions.
Purpose
This paper aims to examine the experience of hub:raum, the accelerator program of Deutsche Telekom, to deduce potential success factors. In today’s fast-paced world, large companies strive to keep up with the disruptive changes in their markets brought by innovative startups. In face of these challenges, the paradigm of open innovation encourages firms to use internal ideas and external sources of knowledge to advance their innovation output (Chesbrough, 2003). Yet, in practice, this is much easier said than done, particularly when large firms engage in partnerships with startups.
Design/methodology/approach
This paper is based on interviews and academic collaboration with hub:raum.
Findings
From the five years of experience since the foundation of hub:raum, one of the first German corporate accelerators, the authors have seen five key success factors: transparent and aligned goals, an independent team of startup advocates, a large and committed external network, top-management backing, long-term objectives and performance indicators.
Research limitations/implications
This paper is based on the case study of hub:raum. There are several limitations to this approach. Hub:raum has a clear industry focus in the information and communications technology industry and also acting international has a strong German and European focus.
Practical implications
Based on the identified five success factors, executives working with or designing accelerator programs can significantly increase the chances of success of these kind of programs. Constantly working on the right alignment of these factors with the overall objective of the incubator program is the key task of the management.
Social implications
Designing and running corporate accelerator programs more successfully will also help to enable more startups to join forces with corporates, creating more jobs and developing successful product innovation.
Originality/value
The paper is based on working for five years closely with the hub:raum management, a series of interviews and longitudinal study of this specific accelerator program.
Digital ventures, start-ups growing by drawing on and adding to digital infrastructures, can scale their business at an unprecedented pace. We view such rapid scaling as a generative process by which a venture’s user base increases significantly between two points in time through digital innovation. We studied WeCash, a Chinese digital venture, nearly doubling its user base monthly, to learn more about this generative process. We trace three contingent mechanisms underpinning rapid scaling: data-driven operation, instant release, and swift transformation. We explain these mechanisms and how they interact in the rapid scaling of digital ventures. The research offers an agency perspective on scaling of digital ventures that speaks to the digital innovation literature.
This paper examines the impact of digitalization - the adoption of Internet-connected digital technologies and applications by companies - on B2B exchanges. While B2C exchanges are the subject of numerous studies on the transformations brought by the digital technologies, B2B exchanges are far less analyzed. Building on a conceptualization of exchanges between companies as made of activity links, resource ties, and actor bonds, this paper offers to identify three types of "digitalization” according to the nature of the most deeply impacted link. Five cases of digitization in different industrial sectors and five companies providing digital solutions for businesses illustrate these three types. This typology provides an alternative to analyses based on the nature of digital systems used by B2B companies.
We propose a conceptual framework for examining the value-creation potential embedded into novel, digitally powered resource configurations. We suggest that business digitization calls for firms to adopt a system-based, value-creation-centric perspective for designing and organizing their resource configuration. Our conceptualization of a firm's resource-configuration decisions centers on organizing access to resources controlled by value co-creators. We discuss resource-configuration prototypes, value-creation sources, and the underlying resource-configuration processes enabled by digitization. Our study contributes to the literature on strategic entrepreneurship by incorporating the ramifications of digitization into the theory on firms' resource configuration and its underlying processes to enable strategic entrepreneurship. Digitization has profoundly reshaped the way business opportunities are discovered and exploited. In this article, we suggest that digitization expands the scope of resources firm could utilize while requiring firms to take a holistic approach in considering the resources and addressing the needs of all customers and partners (e.g., resource providers). We highlight the importance of such a holistic approach to enhancing the value creation potential in the digital age for entrepreneurs and managers. In addition, we propose novel ways to connect resources with needs of customers and partners (e.g., enabling transactions and providing bridges) as well as the actionable micro processes that undergird and enable these novel connections in a digitally enabled world.
The role of digital technologies in service business transformation is under-investigated. This paper contributes to filling this gap by addressing how the Internet of things (IoT), cloud computing (CC) and predictive analytics (PA) facilitate service transformation in industrial companies. Through the Data–Information–Knowledge–Wisdom (DIKW) model, we discuss how the abovementioned technologies transform low-level entities such as data into information and knowledge to support the service transformation of manufacturers. We propose a set of digital capabilities, based on the extant literature and the findings from four case studies. Then, we discuss how these capabilities support the service transformation trajectories of manufacturers. We find that IoT is foundational to any service transformation, although it is mostly needed to become an availability provider. PA is essential for moving to the performance provider profile. Besides providing scalability in all profiles, CC is specifically used to implement an industrialiser strategy, therefore leading to standardised, repeatable and productised offerings.
- This paper describes the process of inducting theory using case studies from specifying the research questions to reaching closure. Some features of the process, such as problem definition and construct validation, are similar to hypothesis-testing research. Others, such as within-case analysis and replication logic, are unique to the inductive, case-oriented process. Overall, the process described here is highly iterative and tightly linked to data. This research approach is especially appropriate in new topic areas. The resultant theory is often novel, testable, and empirically valid. Finally, framebreaking insights, the tests of good theory (e.g., parsimony, logical coherence), and convincing grounding in the evidence are the key criteria for evaluating this type of research.
During the last few years, several authors have recognised the need for more research into how start-ups or new business ventures initiate new relationships. Aaboen, Dubois and Lind (2011) studied how start-up firms develop their initial customer relationships and resource base in close interaction with customers. Furthermore, La Rocca, Ford and Snehota (2013) argued that even though developing new business relationships is demanding for all types of firms, it is particularly critical for start-ups because their offerings are likely to be less developed than the offerings of established firms. Thus, it is a newly developed interest to study, understand and manage the process of initiating business relationships for start-ups.
2016, © Emerald Group Publishing Limited. $\textbf{Purpose:}$ The purpose of this paper is to derive a taxonomy of business models used by start-up firms that rely on data as a key resource for business, namely data-driven business models (DDBMs). By providing a framework to systematically analyse DDBMs, the study provides an introduction to DDBM as a field of study. $\textbf{Design/methodology/approach:}$ To develop the taxonomy of DDBMs, business model descriptions of 100 randomly chosen start-up firms were coded using a DDBM framework derived from literature, comprising six dimensions with 35 features. Subsequent application of clustering algorithms produced six different types of DDBM, validated by case studies from the study’s sample. $\textbf{Findings:}$ The taxonomy derived from the research consists of six different types of DDBM among start-ups. These types are characterised by a subset of six of nine clustering variables from the DDBM framework. $\textbf{Practical implications:}$ A major contribution of the paper is the designed framework, which stimulates thinking about the nature and future of DDBMs. The proposed taxonomy will help organisations to position their activities in the current DDBM landscape. Moreover, framework and taxonomy may lead to a DDBM design toolbox. $\textbf{Originality/value:}$ This paper develops a basis for understanding how start-ups build business models capture value from data as a key resource, adding a business perspective to the discussion of big data. By offering the scientific community a specific framework of business model features and a subsequent taxonomy, the paper provides reference points and serves as a foundation for future studies of DDBMs.
Digital ventures, start-ups growing by drawing on and adding to digital infrastructures, can scale their business at an unprecedented pace. We view such rapid scaling as a generative process by which a venture’s user base increases significantly between two points in time through digital innovation. We studied WeCash, a Chinese digital venture, nearly doubling its user base monthly, to learn more about this generative process. We trace three contingent mechanisms underpinning rapid scaling: data-driven operation, instant release, and swift transformation. We explain these mechanisms and how they interact in the rapid scaling of digital ventures. The research offers an agency perspective on scaling of digital ventures that speaks to the digital innovation literature.
While the vast majority of the supplier selection and development literature has focused on relationships between mature, established firms, significantly less attention has been paid to relationships between established firms and new, entrepreneurial ventures. This study addresses this important topic and, using an interdisciplinary lens, investigates the question of how established buying firms can work with new ventures to achieve desired relationship outcomes. Drawing on the literature from the disciplines of entrepreneurship and supply chain management, we propose a theoretical model that links buying firms' strategic orientation in supplier selection (innovation and cost in strategic supplier selection) and operational approach in supplier development (direct and indirect development of new venture suppliers) with new venture-specific relationship outcomes (purchasing volume and realized innovations). The model's predictions are tested on cross-sectional survey data from 136 buying firms. Our results contribute to the emerging research stream at the supply chain management-entrepreneurship interface and enhance the understanding of relationships between established firms and new ventures.
The vocabulary used in economic and business analyses of information and communication technology (ICT) developments comprises terms such as business models, ecosystems and platforms. Such terms require clarification and translation to concepts used in general economic and business analyses. The process that interests us in this chapter is the intermediating role of platforms for service innovation. Examples include mobile phone-based platforms that enable innovation in payment processes and related service transactions; hotel booking sites that enable innovation in several related tourist services; and technical platforms for development of services related to ‘smart homes.’ As illustration we use platforms developed to connect vehicles with a variety of actors and resources.
Existing research often considers coopetition as something occurring between organizations on a meso level, that is, a relational or company level. This study explores coopetition strategy in the form of activities from a multilevel perspective. The focus is on coopetition praxis and practices and how these are interrelated on the micro, meso and macro levels. In order to improve our understanding of coopetition activities, we use the strategy-as-practice approach and integrate it with coopetition research. The empirical part of this study is based on a single qualitative case study of a coopetitive relationship between a large multinational company and its supplier. The findings show how praxis on the micro level influences, and is influenced by, practices on the meso and macro levels. Coopetition strategy is shaped over time through the relationship between praxis and practices on different levels. Our study contributes to coopetition research by focusing on coopetition strategy as something that is implemented on multiple levels, including the individual (micro) and network (macro) levels alongside the meso level.