Title: Business models in emerging industries: some lessons from the 'Better Place' electric-car debacle
Authors: F. Xavier Olleros
Addresses: Department of Management and Technology, ESG-UQAM, Pavillon J.A.-DeSeve, 320, rue Sainte-Catherine est, local DS-3933, Montreal (Quebec) H3C 3P8, Canada
Abstract: In this article, I explore the role of optimal target markets in developing sustainable business models for promising new technologies. On the basis of a counterfactual analysis of what a failed electric-car pioneer could have done differently in order to survive and thrive, I argue that a high-technology start-up in an emerging industry needs to find the market where its value proposition stands the best chance of being perfectly scalable, fertile and lasting, and I show how these three qualities of a value proposition reinforce each other and can bring an initially reluctant market into being. I conclude that in emerging high-technology industries, the choice of the most adequate target market should be pre-eminent, since it is so pivotal to the selection and calibration of all other elements of a suitable business model. I close with a cautious plea for a more frequent use of theory-based counterfactuals in business research.
Keywords: business models; value propositions; target markets; emerging industries; emerging technologies; high technology; start-ups; complementors; electric cars; counterfactual analysis.
International Journal of Technology Management, 2017 Vol.75 No.1/2/3/4, pp.193 - 207
Accepted: 11 Apr 2016
Published online: 08 Aug 2017 *