Business Model Development and Validation in Digital Entrepreneurship

Every venture is developed under high uncertainty and causal ambiguity. A large majority of digital startups leverage the lean startup approach to validate the attractiveness of their venture, to reduce avoidable investments of scarce resources, and to structure the venturing process. Digital entrepreneurs highlight that prioritization and the definition of MVPs are two challenges that entrepreneurs face when applying the lean startup approach. We provide support on these particular challenges through a structured approach—the venture pyramid—to (in)validate digital business models in the face of high uncertainty. Furthermore, we map different types of digital business models with patterns of minimum viable products to inspire digital entrepreneurs and scientists alike. To illustrate our thoughts, we have developed two case studies of German startups that applied a process of rigorous iteration and learning to their venturing processes.

Pursuing International Opportunities in a Digitally Enabled World

Digitalization has tremendously challenged how international opportunities are created and captured. Inspired by researches in the field of both entrepreneurship and international business, this study provides a comprehensive framework toward the impact of digital technologies (DTs) on opportunity pursuit in foreign markets. We identify two perspectives of DTs, i.e., DTs as ‘driving force’ and DTs as ‘disrupting force,’ which characterize DTs as a catalyst of experiential knowledge acquisition, and as a factor altering the relative significance of experiential knowledge to opportunity pursuit, respectively. By bridging these two perspectives with the notion of market-specific knowledge and general knowledge within internationalization process theory, some arguments with regard to what specific influences DTs play on international opportunity pursuit are further introduced. We hope this study can potentially offer some nuances to both practitioners as well as the research in the interaction of digitalization and international opportunity.

Challenges and Opportunities for Digital Entrepreneurship in Developing Countries

This chapter explores the obstacles and opportunities that digital entrepreneurs encounter when they operate in developing countries. Drawing on the varieties of institutional systems framework and on three interviews (two digital entrepreneurs and one consultant), this chapter chalks out the idiosyncratic challenges and opportunities for digital entrepreneurs operating in a developing context. Our findings indicate that digital entrepreneurs face a weak institutional infrastructure and an environment characterized by corruption that obstructs their operations. These weak infrastructures result in the inaccessibility to necessary start-up funds, the lack of policies and regulations that protect and support e-commerce, a weak digital infrastructure, and to a deficiency in digitally competent and experienced labor capital. At the same time, our findings indicate some opportunities stemming from the unique institutional setting in which digital entrepreneurs operate. The opportunities translate into the use of family wealth as a source of start-up financial capital, the use of personal connections as a source of social and human capital, and the rising education on digital entrepreneurship and its benefits. We conclude with some suggestions to improve the current institutional infrastructure for digital entrepreneurs in developing countries.

Developing a Digital Entrepreneurial Mindset for Data-Driven, Cloud-Enabled, and Platform-Centric Business Activities: Practical Implications and the Impact on Society

The term ‘digital’ concerns not only technology but also people. This chapter emphasises the necessity of adopting a digital entrepreneurial mindset when operating in a digitised world. The chapter proposes a definition of a digital entrepreneurial mindset that is rooted in cognitive psychology, organisation theory and entrepreneurship literature. We also focus on the five trends that are shaping the digital future: mobile computing, cloud computing, social media, the Internet of Things and Big Data. The chapter discusses the challenges and opportunities that pervasive digitalisation offers for designing new digital business models and changing interactions with customers. Discussing the success stories of Domino’s Tesco and Tate Art Galleries helps to examine data-driven, cloud-enabled, platform-centric business activities, for which developing a digital entrepreneurial mindset is the first step towards success in the digital age. Collectively, the aforementioned cases suggest that businesses that rely on a digital entrepreneurial mindset enjoy better financial performance. Both managers and employees in these companies have shown the inclination and ability to discover, evaluate and exploit opportunities emerging from digital technologies. This chapter also provides a practical guide for entrepreneurs on the steps they can take to encourage a digital entrepreneurial mindset throughout their entire organisations. Finally, we elaborate on the practical implications of adopting a digital entrepreneurial mindset and its impact on society.

Development and Validation of Platform Businesses in Digital Entrepreneurship

Platform business models grow in relevance in nearly every industry by an optimization of transaction costs or a significant increase in innovativeness. Many entrepreneurs choose platform business models to create and capture value. Although the benefits of platform business models demonstrably have immense growth potential, these business models are also accompanied by unique challenges for startups in their early stages of development. In this chapter, we aim to discuss the specific challenges that digital entrepreneurs face when validating their platform business model concept. We also develop a processual model, based on the venture pyramid (discussed in Chap. 10.1007/978-3-030-53914-6_4 of this book) to validate the critical assumptions of platform business models. Based on three case studies of early-stage startups, we shed light on the dynamics of testing platform business models and discuss different approaches to develop a minimum viable platform.

Digital Entrepreneurship for the “Decade of Action”

In 2020, the UN launched the “Decade of Action” to achieve the Sustainable Development Goals (SDGs) by the year 2030. As the SDGs are interdependent, intersectional and interdisciplinary, so must be their solutions. This chapter argues that the best way to identify, develop, and scale solutions of such quality is (digital) entrepreneurship, building on the principles of open innovation, cutting-edge technologies, and social business. The COVID-19 pandemic in early 2020 in particular serves as a stark reminder of the interconnected nature of the SDGs and the challenges we face in achieving them. In this article, we explore the third SDG (SDG-3), “Good health and well-being”. We show the potential for digital entrepreneurship to foster the rise of new forms of digital health care and to accelerate the digitalization of the healthcare sector. Due to both perceived and real issues of regulatory compliance, user experience, and long investment/equipment use cycles, SDG-3 has been one of the slowest to adopt innovative solutions by far. We discuss specific areas, such as blended reality or quantum computing, for emerging and future digital health applications. In this chapter, we provide: the “memoreBox” of social start-up RetroBrain R&D, a special edition of gamelab.berlin’s app “Singleton”, and D-Wave’s free access to its cloud quantum computing services. All these examples of digital entrepreneurship utilize in whole or in part a combination of open innovation, future and emerging technologies, and social business, thus supporting our rationale. The article closes with recommendations for different stakeholders of entrepreneurial ecosystems, demonstrating both the necessity and the potential of digital entrepreneurship for the SDGs and the “Decade of Action”.

Digital Creativity: Upgrading Creativity in Digital Business

Creativity has become one of the most important driving factors of today’s digital business environments. Businesses are increasingly looking for creative employees who can offer new and out-of-the-box solutions to existing problems. Companies go through the process of digital transformation by increasingly changing the ways in which they employ digital technologies and develop new digital business models that help to create and to capture value. Combined with a creative approach, companies have experienced a surge in creative digital solutions. However, the creative process is not a self-perpetuating mechanism. It must be initiated and supported by organizations. This is done by understanding the creative process itself and by making small but fruitful adjustments to the work environment and the overall management of the workforce. As three chosen real-life examples will illustrate, such approach results in unleashing powerful creative energy that offers new services to the market, new approaches to solving existing problems, or as seen in the case of Uber—bringing in a completely new business model based on creative solutions and innovative approaches to different aspects of business operations.

AI-Enhanced Business Models for Digital Entrepreneurship

The world of AI offers new opportunities for companies and is therefore of particular interest to entrepreneurs at potentially every level impacting their business. The following article therefore tries to classify the roles of artificial intelligence (AI) applications on the strategic level and their influence on business models. By means of case studies, current business practice will be examined to give entrepreneurs and researchers an understanding of this technology, by providing practical examples so that they can pursue their own AI path. The analysis is based on case studies that examine the role of AI in a company’s business model, both for new market participants in the form of start-ups and incumbents such as the tech giants. By means of case studies, both sides of the extremes are covered in order to provide a picture of the scope of the applications. Insights from these case studies are processed to develop a classification scheme of the influence of AI on business models. Furthermore, the interaction of the different innovation possibilities of AI is compared and with that the importance for the innovative power of companies. Additionally, strategy types are developed on the basis of the presented classification scheme, but give entrepreneurs a suggestion for their own AI path in terms of AI applications to consider. Further, research could consider the influence of the presented AI roles in business models, especially the AI-driven business model is of interest here.

Blockchain as an Approach for Secure Data Storage on Digital Consulting Platforms

This chapter examines the concept of data security in a society increasingly shaped by digital technologies. We show how secure data storage can be optimised regarding digital documentation in the implementation of health-related service offers based on established procedures. Security and privacy of data are therefore particularly important in this subject area since highly sensitive data is stored and processed during health-related online consultations. The advent of blockchain technology provides a valuable opportunity to create trust in digital platforms. After relevant concepts and terms have been clarified, the functionality of the blockchain in general, as well as the different types, will be discussed. From this, options for the use of online consulting are developed and illustrated on the basis of three use cases.

Unleashing the Creativity of Entrepreneurs with Digital Technologies

For decades, creativity has been used to generate ideas among entrepreneurs and their teams. Although extensive research has been conducted on creativity, the majority of studies have focused on traditional ways of stimulating creativity, such as focus groups, the collective notebook method, brainstorming, brainwriting, reverse brainstorming and problem inventory analysis. However, the digital age appears to challenge much of this existing work on the nature of creativity. It is clear that online creativity and audiences are affecting the meaning, expression and impact of creativity. The traditional techniques of stimulating creativity have been replaced and aided by technology-driven innovations, such as artificial intelligence (AI), virtual reality (VR) and the Internet of things (IoT). This chapter explores ways to activate the creativity of entrepreneurs and their teams through the use of digital technologies. We believe that this chapter provides a rich source of examples on how technology is currently being used to support creativity by encouraging entrepreneurs and their teams to make connections, develop ideas, create meaning, collaborate and communicate. We present, in detail, three case studies and discuss practical implications for the future.