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Early-stage business model experimentation and pivoting

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  • Burnell, Devin
  • Stevenson, Regan
  • Fisher, Greg

Abstract

Recent literature suggests entrepreneurs struggle to pivot—or fundamentally change aspects of their venture—due to identity-based resistance to change. Yet, when entrepreneurs receive negative feedback, overcoming this resistance may be important to pivoting their business model. We adopt a convergent, mixed methods research design to explore when and why some entrepreneurs overcome resistance to change in response to negative feedback during early-stage business model experimentation. Building upon qualitative data that we gathered and analyzed, we theorize entrepreneurs may resist pivoting their value proposition relative to other business model components despite receiving negative feedback on this aspect of their business model. However, we find three factors – entrepreneurial experience, startup mentoring, and team size – may enable entrepreneurs to pivot in response to negative feedback. We theorize that these factors broaden a startup team's perspective, enabling value proposition pivoting during early-stage business model experimentation. We test these relationships with quantitative data from 80 startups engaged in business model experimentation and find support across hypotheses. We contribute to understanding when and why entrepreneurs pivot aspects of their business models in response to negative feedback during early-stage business model experimentation.

Suggested Citation

  • Burnell, Devin & Stevenson, Regan & Fisher, Greg, 2023. "Early-stage business model experimentation and pivoting," Journal of Business Venturing, Elsevier, vol. 38(4).
    • Handle: RePEc:eee:jbvent:v:38:y:2023:i:4:s0883902623000289
    DOI: 10.1016/j.jbusvent.2023.106314
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