eThesis - School of Business electronic theses

Disruptive business model innovations have not only reshaped entire industries but also created new ones during the past ten years. The changing business environment has increased the need to consider not only how to address customer needs more astutely, but also how to capture value from innovations. Nowadays great products or services are not enough; they must be wrapped into great business models.

The objective of this study was to investigate the effectiveness of the Business Model Canvas as a tool for business modelling for early-stage start-ups. Principally, the study derived from the real needs of an early-stage start-up Cosmics, which focuses on developing their business model. Additionally, in the literature, the effectiveness of the Business Model Canvas framework has not been evaluated in the start-up scene in terms of business modelling and business model innovation. However, in today's dynamic markets, start-ups must develop and adopt innovative business models to survive.

The research method consisted of a qualitative single-case study. The study focused on examining the business modelling process in an early-stage start-up Cosmics, which took part at an eight-week master's level course Introduction to IT Business and Venturing at Aalto University. During the course, students used the Business Model Canvas to describe, improve and transform start-up business models. The study was conducted by using multiple sources of evidence; interviews with process owners and start-up co-founders, direct observations, participant-observations, and document retrievals. To analyze the data, pattern recognition and pattern matching were utilized.

The findings indicated that the Business Model Canvas is fairly an efficient tool for business modelling for an early-stage start-up. The BMC proved to provide a common language for a multidisciplinary start-up team and it was identified to cater all phases of the business modelling process. Moreover, the BMC enables working on a conceptual and visual level that can promote innovation and foster the efficiency of the framework. However, the biggest issue with the BMC concerned the importance of human capital; the framework does not fully support a start-up team as an essential part of a business model. Additionally, the building blocks have limitations in terms of providing relevant content to a start-up. Consequently, a new business model canvas for early- stage start-ups, The Early Startup Canvas, was developed to confront these limitations.