Business model development in startups: A study of causation, effectuation and bricolage

Objective: Our main goal is to investigate how causation, effectuation and bricolage interact with business model’s components across startup´s lifecycle, creating dynamics not foreseen in traditional linear approaches to business planning. Methodology: We applied Langley’s alternative templates approach to compare the incidence of these logics in a biotech venture from ideation to scale up. Main results: The more static, limited nature of bricolage at startup’s founding seems to have locked in the initial value proposition, which has not changed over time. By contrast the elements of effectuation that were used gave the startup considerable flexibility in areas such as production and distribution, which permitted rapid growth. Elements of causation were found throughout the trajectory to stabilize and bring efficiency to operation. Theoretical contribution: The use of the three logics impacted different components of the business model in different ways at different times but together generated synergies, enabling it to simultaneously address the contradictory and paradoxical forces of the regulatory environment, the difficulty of developing viable products and adapting to the dynamic requirements of scaling production, marketing and distribution, for geographically and socially diverse clients. Relevance: Our study responds to McKelvie’s call for more empirical studies exploring the use of these approaches in venture development while providing a rich description of the development of a progressive startup in the Brazilian biotech sector. Management contribution: The main managerial contribution is helping entrepreneurs to better understand how to use business modeling concepts and techniques in their startup development, considering these alternative rationalities.