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Managing New Ventures and Knowing Whether You Need to Pivot Your Business Model: Evidence from the Finnish IT Sector

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dc.contributor Aalto University en
dc.contributor Aalto-yliopisto fi
dc.contributor.advisor Vuori, Timo
dc.contributor.author Saarenko, Saska
dc.date.accessioned 2017-11-13T14:49:13Z
dc.date.available 2017-11-13T14:49:13Z
dc.date.issued 2017
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/28727
dc.description.abstract Research Objectives Corporate agility is considered to be a key competitive advantage of startup companies developing new products when compared to larger corporations. With the now popular Lean Startup -methodology suggesting companies should make swift decisions to change their strategy and business model in uncertain new ventures, companies are supposed to know very quickly whether a business model is going to be successful or not. The purpose of this study is to understand why companies make radical changes to their business model and how they try to ensure at a relatively early stage that a business model is likely to fail, and that the most prudent action to take is to change trajectory and focus on another business model. Subsequently, the study seeks to clarify how agile companies develop their products under high levels of uncertainty. Methodology The empirical data for this study was gathered from eight semi-structured interviews with founders or early investors from growing Finnish IT startup companies. The respondents were selected as they have been involved with their respective companies from conception or from a very early stage and due to their top management position, the interviewees are very knowledgeable about all the reasoning behind the strategic decisions their companies made throughout the lifecycle of their core product offering. The interviews were analyzed using a systematic coding process. Findings The findings of the study indicate that companies either pivot due to a prolonged period of disappointing sales performance, or due to the new opportunities presented by experiments with new business models that lead to an immediate impact in customer satisfaction and revenue growth. The study indicates that disappointing performance is a sound basis for pivot only after multiple iterations on a business model, as it then becomes clearer that progress is too slow to reach desired performance levels and financial trouble is already visible in the horizon. Another finding of the study was the temporal differences between pivots that arose from negative performance and positive surprises from experiments. en
dc.format.extent 116
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Managing New Ventures and Knowing Whether You Need to Pivot Your Business Model: Evidence from the Finnish IT Sector en
dc.type G2 Pro gradu, diplomityö fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Johtamisen laitos fi
dc.subject.keyword new product development en
dc.subject.keyword pivots en
dc.subject.keyword trial-and-error learning en
dc.subject.keyword experiments en
dc.subject.keyword lean startup en
dc.identifier.urn URN:NBN:fi:aalto-201711137561
dc.type.ontasot Master's thesis en
dc.type.ontasot Maisterin opinnäyte fi
dc.programme Strategy en
dc.subject.helecon strategia fi
dc.subject.helecon johtaminen fi
dc.subject.helecon tuotekehitys fi
dc.subject.helecon uudet tuotteet fi
dc.subject.helecon oppiva organisaatio fi
dc.subject.helecon myynti fi
dc.subject.helecon toimialat fi
dc.subject.helecon tietotekniikka fi
dc.ethesisid 16070
dc.location P1 I fi

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