Exploring Sustainability in Business Models of Early Phase Start-ups

Abstract

Purpose: The purpose of this paper is two-fold: First, we provide an analysis of sustainability topics that occurred in business models deployed in early-phase start-up projects. Second, we investigated potential drivers that led to the inclusion of sustainability aspects in different business model elements. Design/Methodology/Approach: We investigated our sample of six early-phase start-up projects using a multiple case study approach, whereby the business model of each start-up project represents one case. The nascent entrepreneurs took part in a four-month academic start-up accelerator, called the Gruendungsgarage, and we collected qualitative data at three sequential points in time. These data were then analysed using a qualitative content approach and interpreted from a business model and imprinting theory perspective. Findings: The business models deployed in these six early-phase start-up projects are centred around sustainable value propositions. However, the type and degree of sustainability differs. In fact, an intention to comply with sustainability principles was initially expressed in only two of the six start-up projects. Most of the investigated start-up projects did not holistically integrate sustainability-related values. Instead, sustainability was considered as an ancillary benefit to providing products or services. Practical and social implications: The findings offer practical knowledge that entrepreneurs can use to develop business models centred around a sustainable value proposition and benefit from the interactions among the three sustainability dimensions to address the unmet demand of a larger stakeholder group (i.e. solving social and ecological problems). Originality/Value: These study findings expand our knowledge about sustainable business model development in early-phase start-up projects. We use multiple data from six start-up projects to provide examples of different sustainability aspects that are being imprinted in business models. In addition, we provide empirical evidence of drivers that are considered to be supportive in the context of sustainable business model development, such as entrepreneurial motivation, careful resource use and waste reduction. Viewed through an imprinting theory lens, several of the identified drivers can be associated with the individual entrepreneur (imprinter), highlighting the importance of the entrepreneurs’ characteristics for the further development of sustainable business models. In addition, just as many drivers could be assigned to strategic considerations (imprinting processes) to imprint sustainability in the business model. These considerations can be used to develop specific strategies to improve the competitive advantage of start-up projects that place a focus on sustainability.