Initial Business Models in New Technology-Based Firms: Dimensions and Founders' Prioritisations

Abstract: Business models have been emphasised in research as an important concept for studying and understanding firms’ value creation and performance. The business model in literature is understood as how firms configure their businesses, including how they create and deliver value for their customers, and how they capture economic value from its offering. Recently, research has highlighted the founder’s role in the firm’s business model, pointing to a cognitive perspective in business models. Emphasising this perspective makes founders’ perceptions and prioritisations essential in understanding the link between business models and firm performance. However, the relationship of these prioritisations to the business model dimensions in extant literature still requires clarification, and so far, such a connection has not been fully addressed.
The purpose of this thesis is to connect business model dimensions and founders’ prioritisations. This is addressed through a systematic literature review of business models and through a multiple-case study, including interactive and retrospective parts, of eight new technology-based firms (NTBFs).
The results recognise three measurable dimensions of the business model in literature: innovation, change, and efficiency. Measurements are identified for each of these dimensions to facilitate the connection of each dimension with firm performance. Further, the case study’s results demonstrate three distinct ways in which founders of NTBFs prioritise within their business model in the start-up phase. These prioritisations focus on customers, value chain partners, and finance. This thesis further recognises a connection between the customer-focused business model in NTBFs and innovation and change dimensions, and a connection between prioritising partners and the change and efficiency dimension. Additionally, the results indicate a connection between the financial focus and the business model’s dimension of efficiency.
The thesis contributes to business model literature, and to the field of entrepreneurship, by addressing the connection between business model dimensions in literature and founders’ prioritisations. Moreover, the thesis suggests future research with a focus on the interrelations among business model dimensions, and potential effect of these dimensions and founders’ prioritisations on firm performance.