When the window of opportunity opens: how does open search impact the business model design of digital startups?

ABSTRACT

Open search is crucial to business model design. In recent years, the digital revolution has significantly reshaped the open search environment and the business model landscape. The traditional ‘either/or’ paradigm that separately tests the effects of open search breadth and depth on business model design is no longer applicable. By introducing the ‘both/and’ paradigm, this study explores how open search breadth and depth, both jointly and in an orderly manner, impact hybrid business model design. Using a sample of digital startups during the opportunity window of China’s digital entrepreneurship, we find that open search breadth positively relates to the balance between technology- and consumer-oriented business models. Furthermore, under the premise of high breadth, open search depth shows a U-shaped relationship with this balance. This study not only enriches our knowledge of the antecedents of business model design but also provides a comprehensive understanding of the role of open search.

KEYWORDS:

• Open search
• business model design
• technology orientation
• consumer orientation
• digital startup

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. According to the ‘Digital China: Driving Global Competitiveness’ released by the McKinsey Global Institute in December 2017; see https://www.mckinsey.com/~/media/McKinsey/Industries/Technology%20Media%20and%20Telecommunications/High%20Tech/Our%20Insights/Digital%20China%20Powering%20the%20economy%20to%20global%20competitiveness/MGI_Digital-China_Executive-summary_Dec-2017.pdf

2. According to the ‘China Mobile Internet Development Report (2016)’ released by People’s Daily Institute in July 2016.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China under Grant 72072175 and 71872178.

Notes on contributors

Hai Guo

Hai Guo is currently a professor at the School of Business, Renmin University of China. His research interests include entrepreneurship, technology and innovation management, and strategy in the digital economy. He has previously published his research in Journal of Product Innovation Management, IEEE Transactions on Engineering Management, R&D Management, Journal of World Business, British Journal of Management, Journal of Business Research, Industrial Marketing Management, Management and Organization Review, and Asia Pacific Journal of Management, among others.

Xiaoyu Li

Xiaoyu Li is currently a PhD candidate at the School of Business, Renmin University of China. Her research interests are entrepreneurship, innovation, and strategy in the digital economy.

Chao Wang

Chao Wang is currently a lecturer at the College of Business Administration, Capital University of Business and Economics. Her research interests are entrepreneurship, innovation, and strategy in the digital economy.