Emerging networking capabilities through business model development: The case of Danish start-ups in the peer-to-peer platform economy

The purpose of the study is to investigate the start-up process of new ventures in the so-called sharing economy. Recently, manifold new platform-based business models emerged. By defining sharing-economy entrepreneurs as start-ups that work with peer-to-peer platforms in the sharing economy, this investigation aims to contribute to a better understanding of the start-up process in general (Baraldi et al., 2020) and particularly within this industry. The peer-to-peer platform economy can be described as a highly complex industry (Schiavone et al., 2020; Leick et al., 2021). Start-ups face various challenges, e.g., finding new business partners for the co-creation of their platform-based business model or conquering a market share that enables scalability and revenue creation. The development of a new business network represents a critical issue for start-up entrepreneurs in order to overcome their liabilities of smallness and newness (La Rocca et al., 2019). Start-up entrepreneurs need to connect with many actors, including suppliers, co-creators, users and customers (Baraldi, et al., 2020; Apte and Davis, 2019). Commonly, they lack resources and depend upon relationship building (McGrath et al., 2019: Baraldi et al., 2020, Baraldi et al., 2019; Aaboen et al., 2013). For example, start-up entrepreneurs need to access complementary resources to create new, innovative solutions to the market and translate them into effective business models (McGrath et al., 2019; Baraldi, et al., 2020). Hence, the development of network capabilities is considered as a vital task for platform-based entrepreneurs (Baraldi et al., 2020). To date, the question of how these network-building processes unfold in platform-driven contexts is still under-explored (Schiavone et al., 2020; Sussan and Acs, 2017; Baraldi et al., 2020). Schiavone et al. (2020) highlight that the interactions and roles of actors in the peer-to-peer platform economy are somewhat blurred and ambiguous, and even technology users may provide innovation and turn into entrepreneurial co-creators themselves (Schiavone et al., 2020; Sussan and Acs, 2017). Concludingly, the gap in the research on start-up entrepreneurs in the sharing economy relates to a lack of understanding about how actors, resources and activities sequence themselves during the development of an initial business model (Bizzi and Langley; 2012; McDonald and Eisenhard, 2019). During this process, networking capabilities emerge and drive the further business model development (Baraldi et al., 2020). The start-up entrepreneur has a crucial impact on these processes, for instance, by adopting particular roles (Heikkinen et al, 2007). By using roles in a targeted way, start-ups could gain positions and mould relationships for developing and establishing their first business models. The better a start-up entrepreneur will develop the relevant networking capabilities that drive business model development, the more likely the start-up will gain acceptance in terms of the establishment of the business. In the light of this research gap, the following research questions will be answered: How will the adoption and exploitation of roles influence the start-up processes within the peer-to-peer sharing economy with regard to a) the emergence of networking capabilities? and b) the establishment of business models?
Theoretical background: By assuming that the development of capabilities for start-up entrepreneurs often happens through interaction with their initial business partners which help them to bridge shortcomings of resources and/or relationships (McDonald and Eisenhardt, 2020), the ARA (actors, resources, activities) interaction approach will be adapted to the context of start-up entrepreneurs in the peer-to-peer platform economy (cf., Håkansson et al., 2009; Bizzi and Langley, 2012). The concepts of roles and capabilities will be integrated into the ARA model, and there will be a particular focus on start-up business models and their mediating effect on development processes of start-ups (Håkansson et al., 2009; Bizzi and Langley, 2012; McDonald and Eisenhardt, 2020).
Design/methodology: The paper will present a regional case study of peer-to-peer platform-economy entrepreneurs in Denmark. Denmark hosts manifold new and emerging businesses in this sector with different business models and markets in which they operate, ranging from for-profit entrepreneurs with national and international networks to social entrepreneurship initiatives at the local and municipal level. Therefore, Denmark represents a relevant and appropriate country context for this study. We have selected 15 recent start-ups (established since the year 2021) and more established start-ups (operating in the market for a period of 1-4 years). For each start-up, we will include one co-creator and one key person from the networks that are relevant for the platform-based business model. Data collection will be conducted through in-depth interviews, based on structured interview guides (with specific guides regarding the various kinds of included actors). A multiple-step coding concept in line with Saldaña (2016) will be adopted. As a first-cycle coding, an open macro-level coding technique will be used for the code mapping and landscaping that identifies the basic themes and general dimensions associated with the phenomena of interest (e.g., roles during the various phases). This first cycle of coding will be informed by the key building blocks of the industrial network approach (Håkansson et al., 2009; Bizzi and Langley, 2012). The second cycle coding (Saldana, 2016) will be used to (re-)analyse the data coded in the first cycle and conduct an axial coding that re-organises and links the concepts identified in the first cycle (Saldana, 2016). Based on this two-tier process, we will firstly describe the various roles at play with platform-economy entrepreneurs as a time-dependent pattern and secondly identify drivers that impact the emergence of roles and the transformation of resources and capabilities in the entrepreneurial process (Saldana, 2016).
Expected main findings: This is work in progress, and the results of the case study will be presented on the conference. Preliminary findings show that, due to the logic of how actors, resources and activities interact, entrepreneurs use various roles that impact the process of capability emergence, particularly those capabilities that connect the start-up with its key partners. For instance, the delivery of so called “quasi inhouse capabilities” to vital business partners has a huge impact on the entrepreneur’s own business model but can either limit or broaden the opportunities for shaping a competitive edge that enables rent creation.
Key contributions: This paper will contribute to a better understanding in how start-ups emerge and build capabilities against the background of the complex peer-to-peer platform economy through business model development. A better understanding of the emerging capabilities through business model development will provide new insights into the interactions of actors, resources and applied roles. Furthermore, this paper will deliver insights in how emerging capabilities bridge between start-up entrepreneurs, their partners, customers and users. Finally, this paper presents whether applied roles function as driver, enabler and/or hindrance for shaping networking capabilities that boost business models of start-ups.