Prototyping in business model innovation - An exploratory study of prototypes as tools for business model experimentation

Sammanfattning: In today's rapidly evolving markets companies must recurrently innovate their business models to achieve a sustainable competitive advantage. However, substantial risks and challenges are inherent in the process of business model innovation (BMI), causing many BMI attempts to fail in practice. In this regard, experimentation has been acknowledged to reduce risk and uncertainty. However, there exists a lack of knowledge regarding concrete methods to perform business model experimentation. The thesis at hand aims to close this gap by exploring prototyping as a method for experimentation in the business model context. With an explorative multiple case study this thesis contributes to a conceptual understanding of the use of prototypes in BMI. Empirical data of ten BMI cases was collected, amounting to a total of 19 interviews. The study's theoretical framework was synthesized from BMI research and literature on prototyping in related fields of innovation. Findings indicate that prototypes are extensively used in the BMI process, following distinct patterns depending on their position in the process. Prototypes are used for the purpose of exploration, generation, evaluation, persuasion, communication, motivation and syncing. In accommodating these functions, prototypes are designed with varying levels of scope, allowing practitioners to explore and ideate only selected aspects of the business model early in the process while syncing and evaluating the business model as a whole later in the process. Early-stage prototyping methods are mostly derived from product and service prototyping, whereas later-stage methods for prototyping are specific to the BMI context and still sparse. This thesis advances the research on business model experimentation by transferring and extending existing prototyping literature from related fields of innovation to the BMI context. In addition, the study provides much-needed guidance for practitioners with regards to the organizational challenges of using prototypes in practice.