Business Model Evolution and the Growth of Innovative New Ventures. Evidence from the Italian System

It is well acknowledged that a non-negligible number of new business ventures, of any industry and country, are short-lived and don’t generate satisfactory economic performances and neither significant growth. In this chapter we claim that the adoption of an integrated perspective could shed new light on the deep causes of this phenomenon. In particular, the central idea of this study is that the performance gap of innovative new ventures mostly refers to the inappropriateness of their business models. To support our claim we analyze the business model evolution of three innovative new ventures. Our analysis reveals that in all the three cases the initial business models have been significantly changed over time to adapt to new contingent factors and to assure a better match with the market demand and the entrepreneurial objectives. Contrary to the well rooted idea that the market potential of innovative start-ups is reflected in its initial business model, as described in the business plan, our findings emphasize the role of the founding entrepreneur (or entrepreneurial team) in assuring – through the business model configuration - a continuous adaptation and fine-tuning of the new venture within uncertain competitive landscapes.