Effective business model adaptation strategies for new technology-based ventures

New technology-based ventures (NTBVs) in emerging markets are confronted with high levels of technical and market uncertainty. This complicates the ex ante identification of viable business models. While previous research has pointed out the relevancy of adaptability for NTBVs, i.e. the ability to redefine the initial business concept, insights on how to engage in such adaptation efforts remain underdeveloped. This paper explores how NTBVs in emerging markets address business model development. Based on seven case-studies, two approaches are identified. A first tactic implies a committed choice for one specific business model, despite the acknowledged uncertainty. A second tactic translates uncertainty into the entrepreneurial activities and decision making process of the venture through experimentation with a range of different business models. Although this second tactic goes against the common investment model used by the VC community, we find investors willing to support such modes of experimentation. When ventures adhering to the focused development model discover later on that assumptions have been too optimistic or wrong, changes of a radical nature are required to avoid failure. Development of a new business model then only makes sense if the transfer of assets and expertise compensate for the significant resources implications of crisis management. However, if such synergies need to exist between consecutive business models, one should ask whether it would not have been preferable to develop these activities from the start.