Business models of data-driven start-ups and their positioning along the value chain

Project description

Data-driven start-ups constitute key actors in the digitalisation of business networks, as they are often the first to commercialise new digital technologies and capabilities; yet their failure rate is very high. One main reason for this is often a lack of strategy on how and where these start-ups can position themselves in complex and rapidly changing digitalised business networks. Also, in the literature on strategising in business networks, the specifics of data-driven start-ups have hardly been considered so far. We, therefore, formulate the following research questions in our project:

(1) What roles do data-driven start-ups take in digitalized business networks?

(2) How do data-driven start-ups strategise differently, based on their roles in digitalised business networks?

(3) Which dynamic strategising trajectories do data-driven start-ups follow in digitalised business networks?

To answer our research questions, we conducted interviews with the founders of 23 data-driven start-ups and created case studies detailing the different strategising approaches taken by their start-ups. Based on the analysis, we identify, classify, and describe four different network roles (Extender, Enabler, Transformer, and Orchestrator). In addition, we show that data-driven start-ups strategise differently depending on the network role and therefore need to be considered under different assumptions than start-ups whose value creation is based on physical products. Furthermore, we identify three dynamic strategising paths between network roles that data-driven start-ups often follow in digitalised business networks.

In addition to relevant insights for the academic literature, our results provide important implications for founders, managers of incumbent companies, and public institutions. Firstly, we support founders of data-driven start-ups in becoming aware of their own network role and the associated strategising characteristics, enabling them to operate more successfully in digitalised business networks. Secondly, we provide managers of incumbent companies with a qualitative analysis tool to assess cooperation with data-driven start-ups or to identify the disruption potential of these start-ups. Thirdly, we enable public start-up programmes to focus on strategising consistent with the network role from the outset and thus ultimately increase the share of successful data-driven start-ups.

The project was completed by 30 April, 2021.