Parallel play: startups, nascent markets, and effective business model design
- Administrative Science Quarterly
- 65(2), Jun, 2020: p.483-523
Prior research has advanced several explanations for entrepreneurial success in nascent markets but leaves a key imperative unexplored: the business model. By studying five ventures in a nascent financial-technology market, we develop a novel theoretical framework for understanding how entrepreneurs effectively design business models: parallel play. Similar to parallel play by preschoolers, entrepreneurs engaged in parallel play interweave action, cognition, and timing to accelerate learning about a novel world. Specifically, they (1) borrow from peers and focus on established substitutes for their services or products, (2) test assumptions, then commit to a broad business-model template, and (3) pause before elaborating the activity system. The insights from our framework contribute to research on optimal distinctiveness and to the learning and evolutionary-adjustment literatures. More broadly, we blend organization theory with a fresh theoretical lens—business-model processes—to highlight how organizations actually work and create value. - Reproduced
Entrepreneurship, , Adaptation, Competition, Legitimacy, Strategy, Organizational innovation, Organizational learning, Mechanisms and processes, Institutional entrepreneurship, Qualitative methods, Business model design