Business Models Dynamics for Dutch Technology-Based Startups

Abstract

Technology-based startups entail creating and developing sustainable value by capitalizing and commercializing new technologies, which accelerates the growth of the startups and promotes economic sustainability. Unlike new technology developed in commercial firms, technology-based startups go through a process of transformation from a non-commercial to a commercial environment. In this process, they may lack knowledge, network, or resources and face different critical junctures. In recent years, emerging startups have been confronted with difficult changes in their business environments. The life spans of the business models are drastically shortened by technological advancements and shifting patterns of client demand. Companies must continuously examine their established routines and procedures if they want to survive and grow in such unsettling environments. Therefore, in order to succeed, the technology-based startup may require market testing and business model adaptation.
By combining insights from the literature, this paper presents a comprehensive framework that conceptualizes business model dynamics. The framework includes different origins of business model change and different types of business model change as well as the growth stages and junctures. Following the conceptual framework's construction, the effectiveness of the framework is evaluated using explorative case studies of six Dutch technology-based startups.
The results indicate that all startups changed their business model often in the credibility juncture. In the early stages of development, the changes are often forced and caused by external factors, and when the startup matures, it has more freedom to make strategic decisions, particularly in credibility and sustainability junctures. Startups with lower market, managerial and entrepreneurial knowledge changed their business model frequently in a response to challenges, like resource constraints, while startups that were able to acquire knowledge were able to grow faster, access resources, and seize opportunities effectively. Finally, first movers to a specific market confronted technological challenges and changed their business model more often than other startups.