Exploring how innovative entrepreneurs develop and adapt their business models to gain or maintain legitimacy. The case of the bicycle delivery service industry in the Netherlands.

Abstract

The goal of this study was to explore how innovative entrepreneurs develop and adapt their business models to gain or maintain legitimacy. For this, an explorative case study research design was implemented. The unit of analysis was the growing phenomenon of the bicycle delivery service industry and the units of observation were innovative entrepreneurs that operate in this industry in the Netherlands. This exemplary case was chosen because research shows that bicycles can play an important role in the transition to a more sustainable transport system. Consequently, the following research question was formulated: “How do innovative entrepreneurs in the bicycle delivery service industry develop and adapt their business models to gain or maintain legitimacy for their organizations?”. Subsequently, a framework was constructed that captures the effect of the institutional environment in the forming of an innovative entrepreneur’s business model and, in turn, its development focused on affecting the institutional environment through institutional work. Data was collected through desk research and semi-structured interviews. In the case of innovative entrepreneurs operating in the bicycle delivery service industry, two totally different institutional playing fields were identified, due to the focus on the non-food or food delivery market. Nevertheless, it was found that regulative and normative elements of institutions mostly affect innovative entrepreneurs’ business model developments. However, how the innovative entrepreneurs in turn focus on affecting the institutional environment through their business model differs due to their individual characteristics. Subsequently, three different types of innovative entrepreneurs were identified. Yet, all innovative entrepreneurs predominantly conduct institutional work focused on creating new industries to gain or maintain legitimacy. The results indicate that institutional environments directly affect organizational behavior, and the initiation of institutional work by these organizations can be empirically observed by investigating organizations’ business models. This can increase the overall understanding of the transition towards a more sustainable future transport system.