Business Model Generation for a Start Up Enterprise Within the Transport Infrastructure Industry

Abstract

Transports, and transport infrastructures enable and deliver vital societal functions in today’s society. At the same time, as sustainability becomes more and more important these sectors fail to enable the rate of change that international and national policies calls for. The electrification of the transport sector is a key driver of the future’s sustainable transport system, and the number of electric cars, buses, and trucks are increasing exponentially on our streets, but the rate of adaption is compromised by the lack of supporting charging infrastructure.

The free market, in combination with governmental policies, has succeeded in creating the market for the electric vehicles we have today, but the case is not the same for the transport infrastructure sector. Some of the key reasons for this is the same reasons for that the infrastructure has been historically exposed to substantial government involvement, like that they are natural monopolies, have high up-front costs, high level of standardization, and long pay-back horizons.

Innovation is needed within the transport infrastructure sector to enable sustainable transports at a faster rate than today but some of the most disruptive innovative firms, the start-up enterprises, fails to find viable business models to enter the market in larger scales.

This thesis explores business model generation, and innovation, through a start-up enterprise within the transport infrastructure market – Elonroad. Through thirteen iterative workshops with the senior advisor at Elonroad, and a workshop with their investor and potential customer, Bring, the study identifies two main limitations to the current tools: a lack of a systematic evolutionary perspective, and an ecosystem centered approach. It presents a new matrix framework with eight key evolutionary dimensions for Elonroad’s business model as an extension of the existing tools in literature. The findings contribute to identifying the common ground between Elonroad’s capabilities and the markets challenges in a long-term perspective through business model tools.

Popular Abstract

Supporting start-up enterprise business model generation for a sustainable future


Great innovation is needed within the transport infrastructure sector to enable sustainable transports at a faster rate than today to contribute to meeting the agreed climate goals. At the same time, some of the most disruptive innovative firms, the start-up enterprises, fails to find viable business cases to enter and help innovate that market. To effectively create a long-term business model for a dynamic and fast-changing start-up enterprise, the business model should reflect these characteristics. This article summarizes a proposed business model generation approach for a Swedish start-up enterprise within the transport infrastructure sector.

Today’s existing solutions in the transport sector, and in the supporting transport infrastructure, are not enough to meet to the challenge and the set goals of a sustainable society. While the government is historically involved in these sectors, start-up enterprises have emerged as contributors in developing socio-economic systems for regional economic growth and disruptive innovation. They play an important role in the linking of innovative solutions to consumers and companies but face a high threshold to enter such a capital intensive and standardized market.

Start-up enterprises are in constant need for adaptation and development while at the same time acting with low resources. The transport and infrastructure markets are on the other hand highly resource intensive, heavily standardized and regulated. Although there are many business model tools and theories out there, they are often static in their nature, making it hard for the start-up companies to apply and sustain their business model long-term.

Using a recognized business model generation tool as baseline, two main limitations in long term application for a start-up enterprise are identified. The two limitations are: (1) a lack of a systematic evolutionary perspective, and (2) a lack of ecosystem centered approach. To incorporate the dynamic environment and leverage the resources and ecosystem of the start-up enterprise, a new extension in the form of a matrix framework is introduced to contribute to identifying the common ground between start-up’s capabilities and the markets challenges in a long-term perspective. When the business model is treated as dynamic over time, it is possible to be proactive instead of reactively wait for development within and around the company. The evolutionary business model framework is designed to change due to the development inside the firm and on the surrounding market.

The main contribution in using this business model matrix framework is the dynamic and systematic approach to showcase a business model long-term, incorporating the theoretical knowledge of the firm and market as well as strategic ecosystem approaches to leverage the future opportunities of the company.

To depict the business model as true and as long-term as possible it is crucial for the innovative start-up enterprises to show their value and build their business together with the market rather than in isolation from it. Hopefully this in turn will enable the disruptive start-up companies to show their long-term goals and potential through their business models. This may enable the opportunity to enter the market and leverage the innovation needed therein for a sustainable future.

• author: Lundberg, Sara
• supervisor: Lars Bengtsson
• organization: Innovation Engineering
• course: INTM01 20211
• year: 2021
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Keywords: Transport infrastructure, Business model innovation, Start-up enterprise, Business model canvas, Business model generation
• language: English
• id: 9067558
• date added to LUP: 2021-11-08 10:48:34
• date last changed: 2021-11-08 10:48:34