Parallel Play: Startups, Nascent Markets, and Effective Business-model Design
By Rory M. McDonald, Kathleen M. Eisenhardt. Administrative Science Quarterly, 2019
314 citations recorded by the source corpus.
Prior research has advanced several explanations for entrepreneurial success in nascent markets but leaves a key imperative unexplored: the business model. By studying five ventures in a nascent financial-technology market, we develop a novel theoretical framework for understanding how entrepreneurs effectively design business models: parallel play. Similar to parallel play by preschoolers, entrepreneurs engaged in parallel play interweave action, cognition, and timing to accelerate learning about a novel world. Specifically, they (1) borrow from peers and focus on established substitutes for their services or products, (2) test assumptions, then commit to a broad business-model template, and (3) pause before elaborating the activity system. The insights from our framework contribute to research on optimal distinctiveness and to the learning and evolutionary-adjustment literatures. More broadly, we blend organization theory with a fresh theoretical lens—business-model processes—to highlight how organizations actually work and create value.
Subfields: Accounting, Business and International Management, Management of Technology and Innovation
View Paper: https://www.semanticscholar.org/paper/6a98fe4de6b739d4ba22b1a53317241b5bd75878
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Citations in the corpus
- Small business awareness and adoption of state-of-the-art technologies in emerging and developing markets, and lessons from the COVID-19 pandemic (2020, background): “…new entrants that often penetrate the market with new zeal and advanced technologies that can dislodge the traditional market leaders, and the churning out of superior substitute products, of which examples abound as discussed elsewhere (McDonald and Eisenhardt 2020; Laudon and Laudon 2019).”