The double knot of technology and business-model innovation in the era of ferment of digital exchanges: The case of OM, a pioneer in electronic options exchanges

The discontinuous shift to an electronic exchange system has been a catalyst for extensive transformation of financial markets during the last decades. Previous research has proposed that there are prohibitive regulatory barriers for de novo entrants with limited resources to introduce discontinuous technological innovations and novel business models in finance. We challenge this notion by studying the techno-social transformative process of the first decade of OM, a Swedish de novo entrant that introduced the world's first commercially successful electronic options exchange and the first for-profit exchange. Our analysis reveals that this entrant had a key role in both the technological and regulatory construction of the new market through a bricolage technological development process and behaved as a proactive corporate political entrepreneur (CPE). The first phase of the era of ferment in electronic exchange technology was characterized by an adaptive techno-social development context that was open for bricolage technological and business-model experimentation. In the second phase, these experimental lessons were connected to a deliberative regulatory process that enabled the entrant to influence the regulatory process. We conclude by suggesting that an entrant's dual roles as a bricolage technological entrepreneur and as a CPE provide an alternative path for resource-constrained entrants to transform capital markets.