Changing and pivoting the business model in software startups

Abstract

In a company, its business strategy and business model undergo changes throughout its life. These changes can be induced or forced externally or they can result from a deliberate strategy to improve the business performance and to achieve success. Certain changes can lead to a major change in the business model of the company (i.e., a pivot). Such change or innovation in the business model can occur in various of its dimensions. According to Osterwalder and Pigneur, there are four epicenters of change and innovation to be taken into consideration. In this manuscript, fifteen Portuguese software startups were studied using essentially semi-structured interviews to gather the information. The data was processed with a software application for qualitative data analysis. The main results are related to a dynamic process of evolution and change of the business model in software startups. In particular, we have identified that the changes in the business elements that support the production of the value proposition (left-hand side of the Business Model Canvas) affect the elements that explain the strategy of delivering the value proposition to customers (right-hand side of the Business Model Canvas).