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Article

Novelty and Sustainability: The Generation Process of Original Business Model Innovation

by
Guihuang Jiang
*,
Xuehong Ji
* and
Aonan Zhang
School of Economics and Management, North China University of Technology, Beijing 100144, China
*
Authors to whom correspondence should be addressed.
Sustainability 2023, 15(19), 14182; https://doi.org/10.3390/su151914182
Submission received: 14 July 2023 / Revised: 11 September 2023 / Accepted: 12 September 2023 / Published: 25 September 2023
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Abstract

:
Compared to incremental business model innovation, the impact of original business model innovation on both enterprises and societal development is more significant. The process of its emergence has attracted considerable attention. This article defines the concept of original business model and divides the process of its formation into two steps: achieving novelty and sustainability. Employing an exploratory multiple case study method, the research and analysis are conducted on six startup enterprises with characteristics of original business model innovation. The study reveals that achieving novelty involves three stages, i.e., heterogeneous knowledge accumulation, pain point perception, and opportunity identification, as well as cross-domain thinking application and creative formation. Achieving sustainability entails three stages: concept definition, business model development, and business model validation. Throughout this process, the effective integration of cross-domain knowledge is achieved through iterative experimentation, garnering support and recognition from stakeholders. The attainment of sustainability is pivotal to the success of original business models.

1. Introduction

In the 1990s, numerous companies achieved significant success by harnessing the power of the internet and embracing business model innovation. However, in today’s increasingly complex and digitally transformed competitive landscape, relying solely on technological innovation or strategic revisions is no longer sufficient for achieving profitability in the business arena. Companies now need to integrate technology and strategy into new business models to gain a competitive advantage in this new era [1]. Such a business model possesses distinct characteristics of originality. The process of its formation is considerably more intricate than that of incremental business model innovation. Start-up enterprises that fail to grasp crucial elements in this process are prone to encountering challenges that could lead to a state of failure. Consequently, delving into the formation process of original business model innovation holds significant importance in enhancing the likelihood of success in business innovation and entrepreneurship for enterprises.
After a period of “noisy theoretical debates” triggered by the wave of innovation brought about by the internet and information technology, researchers have gradually reached a consensus on the essence of business models. This consensus revolves around a set of business logics focused on value creation and value capture [2]. Extensive research has been conducted on various aspects of business model innovation, including its definition, characteristics, influencing factors, relationship with innovation strategies, and the innovation process [3,4]. However, there is a lack of in-depth research on the specific stages of the formation process of original business model innovation. To elucidate the concrete process of achieving original business model innovation, the study begins by establishing criteria for identifying original business model innovation. It then proceeds to define the concept of original business model innovation and employs a multiple case study approach to analyze six selected startup enterprises in the transportation industry that exhibit characteristics of original business model innovation. Through this analysis, the study synthesizes the formation process of original business model innovation.

2. Literature Review and Conceptual Definition

2.1. Original Business Model Innovation

Given the absence of a well-established conceptual definition for original business model innovation, the theories of original innovation and business model innovation serve as important foundations for this research. Previous studies have defined original innovation as the proposal of unprecedented discoveries, inventions, or innovative outcomes through research [5]. This concept is commonly applied in the fields of fundamental research and technological innovation, representing the highest level of transformative requirements within autonomous innovation models. It typically involves a qualitative leap based on original accumulation and entails complex evolutionary mechanisms [6,7]. Generally, original innovation exhibits four characteristics: first, it addresses problems for which there are no previous references or precedents; second, it introduces original breakthroughs in terms of content or methodology [8,9]; third, it establishes a new innovation cycle or triggers a new wave of innovation, rather than merely extending the existing innovation cycle [10]; and fourth, the innovation process exhibits strong dynamism and unpredictability [11].
Business model innovation can be understood from three perspectives: content, structure, and context. From a content perspective, business model innovation can be defined as changes in the core elements of a business model [12]. From a structure perspective, business model innovation is reflected in the optimized configuration of various elements, forming a new structural system [13]. From a context perspective, business model innovation is the process of exploring or developing potential customer needs, creating and implementing a completely new value proposition that is recognized by the market, within the environmental background [14,15]. Based on the degree of innovation, business model innovation can be categorized as incremental innovation and disruptive innovation [16]. While original business model innovation shares some similarities with disruptive business model innovation, it may not have the same level of impact as disruptive innovation.
To determine whether a business model innovation is an original business model innovation, researchers have identified the characteristics of original business model innovation. These characteristics include the following: Firstly, the business model addresses a completely new problem or satisfies a completely new pain point and demand, resulting in a unique value proposition. Secondly, the method of realizing the value proposition is applied for the first time in that field. Thirdly, it has the potential to trigger a wave of business model innovations, which can be manifested in the pursuit of capital or imitation by followers [17]. Fourthly, the process of original business model innovation is dynamic and unpredictable. The first two characteristics can be combined into one criterion: novelty, which is reflected in the breakthrough innovation in value proposition and its implementation. The third characteristic can be understood as sustainability, which signifies the success and widespread acceptance of original business model innovation, ultimately leading to achieving a breakthrough in original business model innovation. The fourth characteristic indicates that original business model innovation is influenced by multiple factors and requires exploration of key elements in the implementation process.
The study employs novelty and sustainability as criteria to judge whether a business model belongs to original business model innovation, as depicted in Figure 1. The four quadrants of Figure 1 represent different types of business models. Those that lack novelty or sustainability belong to outdated, eliminated, or no longer applicable business models. Those that exhibit novelty but lack sustainability are still in the conceptual stage of original innovation, not yet validated or proven to be feasible business model prototypes. Business models that demonstrate sustainability but lack novelty are continuations, imitations, or iterative improvements of existing business models. Only when both novelty and sustainability are present can a business model be considered an original business model that has undergone breakthrough innovation.

2.2. The Process of Business Model Innovation

To proactively engage in business model innovation, companies must understand the process of business model innovation [18]. This process is often categorized into externally driven and internally driven approaches [19]. The externally driven perspective suggests that continuous changes in the external environment compel companies to improve their existing business models [20]. Through a reactive process of “trial-error-adjustment”, new business models are formed. On the other hand, the internally driven perspective argues that business model innovation is driven by the cognitive recognition of decision-makers within a company who take proactive measures based on perceived opportunities in the external environment [21]. In reality, the success of business model innovation relies on the synergy between external and internal factors during the innovation process [22].
Numerous scholars have explored the formation process of business models from a staged perspective and proposed various stage models. Morris (2005) identified five main stages of business model formation: clarification, refinement, adaptation, revision, and reinvention [23]. Casadesus-Masanell and Ricart (2010) identified two stages: business model establishment and business model strategy selection [20]. Cavalcante et al. (2011) divided the dynamic formation process of business models into three stages: idea generation, pattern creation, and ongoing adjustment or termination of the pattern [13]. Eyring and Johnson (2014) highlighted the stages of hypothesis, testing, and adjusting the blueprint for opportunity realization in business model development [24]. Wang Bingcheng et al. (2020) divided the business model innovation process into three stages: the period of business model ideation, application period, and lean period [25]. Blank and Dorf (2012) emphasized that startup companies need to reduce uncertainty by continuously narrowing down alternative options for their business model, gradually approaching a viable business model that meets both internal and external consistency requirements [26]. Recent research on the construction of business ecosystems has also emphasized the importance of enhancing the fit between elements, particularly the fit with the external environment, to make the business ecosystem more robust or build new types of business ecosystems [27,28,29].
From the above, it is evident that existing research has analyzed the dynamic formation process of business models from a procedural perspective [30]. However, these process divisions have primarily focused on generality and have difficulty reflecting the differences between original business model innovation and incremental business model innovation in the implementation process. Especially when original business model innovation faces challenges such as unclear constituent elements, undefined market rules and boundaries, and difficulties in capturing influencing factors, addressing and resolving these issues to achieve ultimate success requires answers to these detailed aspects. Based on the conceptual definition of original business models outlined in Section 2.1, this study divides the formation process of original business models into two steps: novelty formation and sustainability formation. By employing an exploratory multiple case study method, the study seeks to uncover the specific generation process of original business model innovation.

3. Research Design

3.1. Research Methodology

According to Yin (2017), case studies are suitable for exploring process-related questions of “what” and “how”. When practice and theory are in their initial stages and research subjects are relatively scarce, exploratory multiple-case studies can provide more refined process analysis to meet the precise requirements of theoretical construction [31,32]. As the generation process and underlying logic of original business models are still unclear and theoretical hypotheses among variables have not been formed and well-defined yet, case study is the most suitable research method [33]. It allows for the extraction of core concepts from rich contextual data and the presentation of a holistic view to reveal the underlying reasons behind phenomena. In this regard, the research choose exploratory multiple case study method to explore dynamic and ambiguous processes of original business model innovation [34].
The study organizes research cases into two groups: The first group serves as the foundation for experimentation and analysis, enabling the construction of theoretical hypotheses and the formulation of initial propositions. The second group of cases is then organized and supplemented based on the findings from the first group. These second group cases are used for comparative validation analysis, employing analytical replication and tabular display methods to assess whether the propositions hold true in the remaining samples. This process leads to the identification of final propositions, thereby forming a universally applicable research model and conclusions regarding the generation process and key components of original business model innovation based on insights derived from real-world enterprise practices.

3.2. Object and Case Selection

In accordance with Eisenhardt’s perspective on case studies [35], the primary purpose is theory construction rather than validation. Therefore, the focus of case selection is not on representativeness but on the suitability of cases for analyzing relevant factors and constructing theory. Building on the viewpoint proposed by Liu Zhiying et al. (2018) [36] regarding controlling environmental variables and excluding interference from other factors, this study emphasizes the selection of new venture companies to eliminate the influence of existing business models on new business models.
The chosen companies were selected from similar industries to eliminate the impact of differences in industry life cycles and other uncontrollable factors. The study commenced in 2018 and spanned two years for data collection and tracking. Following Kazanjian’s definition (1990) [37], new venture companies were considered that were established within eight years. The selected case companies were all established in the transportation industry after 2012, a time when mature business models were unavailable domestically and replicating foreign business models was challenging.
Companies whose business model innovations did not meet the criteria of novelty and sustainability were excluded from the study. Ultimately, six distinct startups were chosen as research subjects out of 18 companies, which falls within the recommended range for multiple case studies (4–10 cases) [35]. Among the selected companies, three were automotive distribution companies, two were car-sharing companies, and one was a bike-sharing company. All of them exhibited characteristics of original business model innovation, as there were no similar business models domestically or internationally prior to their establishment. These companies not only attracted investment capital but also influenced a certain number of business model follower companies.
The research team conducted long-term observations and investigations of the six selected companies, from their early stages of establishment to the validation of their business models, ensuring comprehensive information gathering. The companies are referred to as A1, A2, A3, A4, A5, and A6, and their basic information is presented in Table 1.

3.3. Data Collection

The process of collecting case data followed the principle of “triangulation validation” and utilized multiple channels and data sources, including interviews, archival documents, and direct observations. The interviewees consisted primarily of the entrepreneurs themselves, company executives, and a few industry experts. The interviews covered various aspects, from the generation of company ideas to the formation and application of the business model. A detailed research outline was designed for the semi-structured interviews, resulting in a total of 17 interviews conducted with the six companies, with each interview lasting approximately 2 h and a total interview time of about 35 h. Recordings and transcripts were made for each interview, and any questions or missing information were clarified and supplemented with the interviewees.
Archival documents were obtained from two sources, i.e., the official websites and online materials of the six companies, as well as company-related materials obtained during the interviews. Direct observations involved attending management meetings, promotional events, and seminars organized by the companies. The growth process of the companies, product planning, service offerings, external perceptions, and social evaluations were observed and recorded as written materials. Furthermore, the researchers downloaded the companies’ relevant apps, registered, and used their products to gain firsthand experience and a deeper understanding of their business models.
The research integrated the data obtained from these channels, following the case study method advocated by Eisenhardt (1989) [38]. Triangulation and logical deduction were emphasized in analyzing the data, presenting a comprehensive narrative description and theoretical deduction process. A qualitative research method based on grounded theory was used as a supplementary approach [39]. The collected case data was organized, analyzed, and coded to extract key features as the basis for analyzing commonalities among the cases. The coding process begins by selecting the first group of cases for coding. Interviews and collected data from each company are organized and summarized in chronological order according to the company’s growth. Each sentence is interpreted, irrelevant content is removed, and relevant content is labeled and numbered. The numbering system consists of five digits, such as A10102, where “A1” refers to Company A, “01” represents process category 01, and “02” signifies evidence data 02. Then, repeating concepts are categorized based on the labels, leading to the identification of important categories related to the process of original business model innovation.
Building upon the results of the first group, targeted data collection and analysis are conducted for the second group of cases. The conclusions drawn from the analysis of the first group are validated. If it is discovered that different companies yield different open codes, new concepts might be induced. Ultimately, after revisiting and tracking the six companies in the case study and analyzing the remaining two potential case subjects, no new categories or attributes related to the process of original business model innovation were found. This confirms that the core category model of the study has reached theoretical saturation.

4. Case Analysis

The study divided the six companies into two groups. The first group consisted of A1 and A2 companies, which provided the most comprehensive data for analysis. Through detailed analysis of the case texts, patterns were identified, key words were extracted, and the phenomena represented by the data were conceptually formulated using open coding. This process led to the development of initial propositions or hypotheses.
The second group included four companies, A3 to A6, and the logic of literal replication was applied. Using tabular displays, the initial propositions were validated against these additional cases. Based on the propositions that were confirmed through the analysis of the second group of cases, the final theoretical model was constructed.
By systematically analyzing the data from both groups and triangulating the findings, the study was able to refine and validate the initial propositions, leading to the development of a comprehensive theoretical model that explains the mechanisms and key influencing factors of original business model innovation.

4.1. Analysis of the Formation Process of Novelty in Original Business Model Innovation

4.1.1. Encoding and Conceptualization Process

Regarding the formation process of novelty in original business model innovation, the study initially examines the A1 and A2 cases. It is discovered that the entrepreneurs’ past experiences or chance encounters enabled them to identify user pain points and recognize entrepreneurial opportunities. However, at the outset, it remained somewhat unclear what specific approach or model they should adopt to engage in these opportunities.
For A1, the founder combined their internet industry experience, big data mining technology, and deep understanding of the car rental industry, including GPS and automotive technology. They gradually explored the potential of using car electronic technology to collect various data from vehicles as the primary approach to enter the car-sharing industry and achieve commercial success.
In the case of A2, the founder transitioned from the car rental industry to the used car industry, and the team members possessed diverse knowledge backgrounds. After an unsuccessful attempt with the consignment model for used cars, they shifted their focus to providing information services to used car dealers and leveraging the data from used cars to create business value. Through interactions with professionals in the finance and automotive manufacturing industries, they gradually developed the idea of integrating services for used car dealers, information systems, the internet, and financing leasing. This led to the formation of an internet-based new car financing leasing model.
The specific case data, coding process, and conceptualization are presented in Table 2, providing a detailed overview of the findings from the analysis of these two cases. These cases illustrate how entrepreneurs leverage their knowledge, experiences, and interactions to shape and refine their business models, resulting in the emergence of novel and innovative approache.
The coding results in Table 2 divide the formation process of novelty into three stages: knowledge accumulation, opportunity identification, and creative formation. Analyzing the A1 case, it is observed that pain point perception is the starting point of opportunity identification. However, anyone with similar experiential background can perceive this pain point. What sets the A1 entrepreneur apart from others is their heterogeneous knowledge accumulation and reservoir, which drives them to identify the feasibility of addressing the pain point and obtaining value. This indicates that heterogeneous knowledge accumulation that forms heterogeneous knowledge reservoir needs to occur prior to recognizing an opportunity. Here, “heterogeneous knowledge reservoir” refers to a knowledge repository with different types, sources, and forms. These knowledge resources may come from different fields, disciplines, personnel, organizations, etc., and have different characteristics and forms, such as professional knowledge, experiential knowledge, documents, databases, network resources, etc. This diversity and heterogeneity make the knowledge resource library have a wider and deeper knowledge reserve, which can support more complex and diverse knowledge processing and application needs. Correspondingly, “heterogeneous knowledge accumulation” emphasizes the process of acquiring different types of knowledge that contribute to the formation of a “heterogeneous knowledge reservoir”.
For the founder of A2, the process of pain point perception is progressive. Initially, the experience is similar to others, thinking that the second-hand car market is poor and service experiences are subpar. However, their heterogeneous knowledge reservoir progressively leads them to connect second-hand car dealers, consumers, and new car dealers, identifying the feasibility of addressing the pain point and gaining value. This illustrates that without the combination of heterogeneous knowledge reservoir and pain point perception, it is challenging to identify genuinely original business model opportunities.
In the creative formation stage, the founders of both A1 and A2 apply cutting-edge internet and big data thinking to the fields of car sharing and the second-hand car market, employing cross-domain thinking to create a preliminary novel business model prototype. Similar to the heterogeneity of knowledge accumulation, the application of cross-domain thinking is also a differentiating factor between original business model innovation and incremental business model innovation.
Based on the above analysis, the following proposition is proposed:
Proposition 1. 
The formation process of novelty in original business models can be divided into three stages: heterogeneous knowledge accumulation, pain point perception and opportunity identification, and application of cross-domain thinking and creative formation.

4.1.2. Replication Logic Validation and Theoretical Construction

The case data of the second group of companies was organized using the logic of identical replication, and the results are shown in Table 3.
Table 3 reflects that Proposition 1 has been confirmed through direct replication of cases A3–A6. Moreover, the case data indicates that heterogeneous knowledge can stem not only from founders like those in A3 and A4, with diverse knowledge backgrounds and work experiences, but also from team compositions with members from different backgrounds, as seen in A5 and A6 companies. However, all possess multidisciplinary knowledge beyond traditional industries.
Under the influence of heterogeneous knowledge, the transformation of pain point perception into opportunity identification manifests in two types. First, as demonstrated by A5 and A6, founders perceive pain points from their experiences and then identify opportunities based on heterogeneous knowledge. Second, A3 and A4 companies showcase a departure from their founding team’s diverse knowledge to analyze the industry anew and identify pain points that can be addressed. Regardless of the type, the absence of heterogeneous knowledge in the first stage prevents the completion of opportunity identification in the second stage. The application of cross-domain thinking requires enterprises to leverage broader social resources and adopt problem-solving approaches from various domains. In cases A3–A6, cross-domain thinking still revolves around cutting-edge internet and big data thinking outside of traditional business domains. Its application serves as a breakthrough to find unique solutions and is pivotal in the realization of novelty. The study summarizes the formation process of novelty in original business models as shown in Figure 2.
In conventional business model innovation, there could also be the presence of heterogeneous knowledge and the application of cross-domain thinking, but their role is typically to improve the existing business model. In original business model innovation, however, heterogeneous knowledge accumulation and cross-domain thinking are often ambiguous and involve more unknown factors. Entrepreneurial teams need to explore further to confirm their sustainability due to the higher level of uncertainty associated with them.

4.2. Analysis of the Formation Process of Sustainability in Original Business Model

4.2.1. Coding and Conceptualization Process

The case analyses of A1 and A2 revealed that the process of forming a new business model involves addressing numerous detailed issues that carry uncertainty and risk. Entrepreneurs may rely on their intuition to generate initial ideas and determine the direction, but the lack of prior experience and limited access to relevant information and knowledge can create challenges [40].
In the case of A1 and A2, a continuous process of trial, learning, and iteration was observed. As the entrepreneurs worked through the uncertain details, the conceptual definition of the business model gradually became clearer. They transformed their solutions to user pain points into products that effectively met their needs. Moreover, they developed a clear path and method for acquiring value.
This iterative process reflects the entrepreneurial journey of refining and adapting the business model to navigate uncertainties and mitigate risks. By actively addressing the challenges and learning from their experiences, entrepreneurs are able to shape their ideas into viable and value-generating business models.
The specific case information, coding, and conceptualization process are provided in Table 4, which further illustrates the iterative nature of the business model formation process and the evolution of the conceptual definition.
Table 4 divides the formation process of sustainability into three stages: concept definition, business model development, and business model validation. In the concept definition stage, guided by the value proposition, research, design, experimentation, and continuous refinement of the business model’s architecture and content take place until a clear conceptual definition of the overall business model and its details are achieved. The business model development stage involves effectively integrating the business model content with business scenarios, considering and resolving detailed issues and practical challenges, and developing a comprehensive business model implementation plan for execution. The business model validation stage entails testing the feasibility of the original business model innovation in the market environment and providing feedback to the earlier stages. This leads to refining the concept definition and adjusting actions until sustainability is achieved.
In contrast to incremental innovation, the iterative process of experimentation and the integration of cross-domain knowledge play an exceptionally pivotal role during the stages of concept definition and business model development in original business model innovation. This significance stems from the fact that original business model innovation involves collaboration across diverse domains, allowing products and services to actualize their intended utility within a novel business framework. Throughout this journey, enterprises should not confine their focus solely to internal or external factors; instead, they should consistently engage in practical experimentation, seek feedback, and dynamically assimilate fresh insights through the interplay of internal and external influences [41]. This proactive approach facilitates the seamless amalgamation of cross-domain knowledge and orchestrates harmonious coordination among varied fields, ultimately forging a resilient and innovative business model.
The iterative progression of experimentation, learning, and validation presents a formidable challenge, necessitating entrepreneurs to be emotionally prepared. Without adequate readiness, there is a risk of the nascent business model faltering midway. This intricate dynamism fundamentally sets apart original business model innovation from its conventional counterpart.
During the business model validation stage, analysis of A1 and A2 reveals that the criteria for validating a business model encompass rapid customer growth, genuinely engaged and sticky customers, substantial growth potential, and promising future returns. The study, in refining these three criteria, simultaneously examined interview data from founders and investors. It was found that the pursuit of capital and imitation by competitors are also based on thorough assessments of these attributes. Perry-Smith and Mannucci (2017) [42] previously outlined a four-stage process from ideation to innovation: idea generation, idea elaboration, idea support, and idea implementation. They underscored the critical nature of the third stage, involving seeking legitimacy and support from relevant stakeholders.
Similarly, for original business model breakthroughs, meeting regulatory requirements demanded by industry authorities is just as crucial as addressing the value-seeking needs of consumers, investors, and other partners. The study groups these conditions as garnering support and recognition from stakeholders. This also distinguishes original business model innovation from incremental innovation, as the latter has typically already obtained acceptance from the majority of stakeholders. A1 and A2 gradually secured stakeholder support and recognition through adaptive adjustments in external interactions, ultimately constructing a viable new business ecosystem and achieving sustainability.
Based on the aforementioned analysis, the study presents the following proposition:
Proposition 2. 
The formation process of sustainability in original business model innovation can be divided into three stages: concept definition, business model development, and business model validation. The concept definition and business model development stages necessitate enterprises to effectively fuse cross-domain knowledge through iterative experimentation. The business model validation stage requires gaining support and recognition from stakeholders.

4.2.2. Replication Logic Validation and Theoretical Construction

In response to propositions 2 the case data of companies A3–A6 were analyzed using a copy–paste logic, and the results are presented in Table 5.
In Table 5, A3–A6 demonstrate a process of iterative experimentation during the stages of concept definition and business model development. Through repeated deduction, validation, feedback, learning, and adjustments, cross-domain knowledge is effectively integrated, gradually constructing a viable new business ecosystem. This involves clarifying the definition of ecosystem elements and their interrelationships, introducing products and services that externalize the business model, and combining practical attempts to formulate concrete and implementable strategies.
During the business model validation stage, A3–A6 all garnered support and recognition from stakeholders, validating their business models. Although some of these enterprises faced setbacks in the later stages due to intense market competition, it does not necessarily indicate the failure of original business model innovation. This is because the business format has already taken root in the market and achieved sustainability. Therefore, Proposition 2 is validated through the replication logic of A3–A6. The study summarizes the sustainability generation process of original business models as depicted in Figure 3.
In Figure 3, when the business model fails to meet the expected outcomes during the validation stage, it might regress to a previous stage, undergo modifications, adjustments, and then be revalidated through attempts. This iterative process continues until sustainability is achieved, resulting in the successful implementation of original business model innovation.

5. Research Summary

5.1. Conclusions

Based on the analysis of six early-stage startups in the transportation sector with characteristics of original business model innovation, this study draws the following three research conclusions.
(1) The process of generating an original business model can be seen as the formation of novelty and sustainability. This article theoretically explains the essence of original business models and categorizes them into four types based on novelty and sustainability: embryonic business models, outdated business models, imitative improvement business models, and original business models. The process of generating original business model innovation is divided into two steps: achieving novelty and achieving sustainability. Novelty refers to addressing a completely new problem or having entirely new value propositions and methods of realization. Sustainability means that original business model innovation gains the support of relevant stakeholders, establishes a new business ecosystem, triggers subsequent waves of business model innovation, and attracts significant capital investment or imitation from others.
(2) The process of novelty formation in original business model innovation can be divided into three stages: heterogeneous knowledge accumulation, perception of pain points and identification of opportunities, and cross-domain thinking application and creative formation. In the process of original business model innovation, entrepreneurs’ personal characteristics, including the accumulation of knowledge and experience, educational background, personal history, risk-taking personality traits, analytical abilities, and more, are all important. However, these characteristics are generally applicable to both general business model innovation and entrepreneurial activities [43]. On the other hand, the emergence of completely new value propositions and unique solutions requires the foundation of heterogeneous knowledge reservoir. It involves combining perceived pain points with diverse knowledge to identify opportunities and applying cross-domain thinking to generate original ideas. Even if innovative inspiration can arise from chance encounters with information or purposeful searches for hidden market insights, lacking a heterogeneous knowledge reservoir and cross-domain thinking still makes it difficult to ultimately form original inspirations. This research finding highlights the context of the emergence of this new type of thinking, and the Internet is a major driver for the proliferation of original business model innovations. It also underscores a distinction between the process of original business model innovation and that of general business model innovation.
(3) The process of achieving sustainability in original business model innovation can be divided into three stages: concept definition, business model development, and business model validation. Throughout these stages, enterprises need to engage in iterative experimentation to effectively integrate cross-domain knowledge and gain support and recognition from stakeholders. The concept definition stage involves gradually refining the business model concept, clarifying the relationships among various elements within the business ecosystem, and creating a specific description of the business model. The business model development stage combines real-world business scenarios to construct and enhance a feasible new business ecosystem. The business model validation stage determines whether sustainability has been achieved and provides feedback. In the research of the formation process of business model innovation, three schools of thought have emerged: the positioning school, the evolutionary learning school, and the managerial cognitive school. The findings of this study confirm the viewpoints of the evolutionary learning school and the managerial cognitive school. On one hand, the formation of a business model is not an instantaneous process; it involves a cycle of trial and error, iterative innovation. On the other hand, the cognition, background, and learning process of entrepreneurs and management teams play a vital role. In original business model innovation, both novelty and sustainability need to be achieved to verify the feasibility of the business model. This highlights the second significant distinction between original and general business model innovation. Novelty in original innovation requires heterogeneous knowledge and the application of cross-domain thinking, which involves more unknown factors. This process requires continuous iteration, experiential accumulation of cognition, and collaborative learning from both internal and external influences. Ultimately, gaining support and recognition from stakeholders is essential for achieving sustainable novelty. The dynamic complexity of effectively integrating cross-domain knowledge is a feature that distinguishes original business model innovation from general business model innovation.

5.2. Theoretical Contributions

(1) This study introduces the concept and criteria for defining original business model innovation for the first time. Although there have been studies that define original innovation and business model innovation, the essence and criteria of original business model innovation have not been explored. This paper introduces the fundamental characteristics of original innovation into the realm of business models, proposing that original business model innovation requires the simultaneous fulfillment of novelty and sustainability. Utilizing novelty and sustainability as coordinates, a quadrant diagram is constructed to elucidate the essence of four typical business model categories.
(2) Clarifying the process of generating original business models. In recent years, researchers have developed the concept of cross-disciplinary integration in the study of cross-boundary innovation. They believe that cross-disciplinary integration is a value creation process that links unrelated and incompatible elements to generate value [44]. It has a connection with business model innovation, but its underlying mechanisms are not yet fully clear [45]. This study, based on case analysis, distills six key stages in the process of generating original business models: heterogeneous knowledge accumulation, perception of pain points and identification of opportunities, application of cross-disciplinary thinking and formation of creativity, concept definition, business model development, and business model validation. Notably, the stages of concept definition and business model development require enterprises to achieve effective fusion of cross-disciplinary knowledge through iterative experimentation, while the business model validation stage necessitates obtaining support and recognition from relevant stakeholders.
(3) Clarifying the Distinction between Original Business Model Innovation and Conventional Business Model Innovation. The study first differentiates original business model innovation from conventional business model innovation through the concepts of novelty and sustainability. Secondly, it explains how heterogeneous knowledge reservoirs and the application of cross-domain thinking can generate more novel entirely new business models, setting them apart from typical business model design approaches. Thirdly, sustainability necessitates iterative trials by companies to effectively integrate existing and cross-domain knowledge, gaining the support and recognition of stakeholders. Similar to the intricate fusion process in organizational transformation, this constitutes a pivotal distinction between original business model innovation and conventional business model innovation.

5.3. Implications

The research findings in this article offer three key insights for teams involved in exploring and pioneering original business models, as well as for companies considering, establishing, and initially operating original business model innovations.
(1) In order to foster novelty, innovative companies or teams should prioritize the accumulation of heterogeneous knowledge and the application of cross-disciplinary thinking. While creative inspiration can involve elements of unpredictability and serendipity, it is often unleashed through the interplay of multidimensional experiences, knowledge, and diverse backgrounds. Therefore, companies should actively seek out and accumulate a wide range of knowledge, continuously challenging fixed thinking patterns associated with existing business models, and remain attentive to external opportunities. Enhancing external communication, monitoring, early warning systems, and experiential learning is essential for expanding rapid perception of the external environment from both vertical and horizontal perspectives. This approach is crucial for identifying and seizing opportunities for business model innovation. With the maturation of the internet and the emergence of artificial intelligence, companies that embrace heterogeneous knowledge reservoir and apply cross-disciplinary thinking find new avenues to pursue originality in business model innovation. These technologies offer a fresh perspective and open new doors for companies seeking to differentiate themselves.
(2) Original business models lacking sustainability have not undergone feasibility validation. Enterprises must focus on achieving cross-domain knowledge integration and gaining stakeholder support within the context of sustainable realization. Many individuals believe that any innovative business model qualifies as original business model innovation. However, this perspective often emphasizes the identification of critical pain points and the introduction of novel value propositions without necessarily considering the need for practical implementation and validation, which are essential for the formation of original business model innovation. This aspect is frequently overlooked by startups that adopt unique business models. In reality, numerous novel business models fail due to the absence of essential preconditions or supporting elements required for sustainability. Therefore, it is crucial to ensure that cross-domain knowledge integration is not only conceptual but also effectively implemented and supported by relevant stakeholders. This approach enables the establishment of a new business ecosystem that meets sustainability criteria, ultimately leading to the achievement of original business model innovation. In this context, startups can enhance their chances of survival and investment prospects.
(3) During the process of original business model innovation, there is a progression from concept definition to business model development and validation. However, it is important to acknowledge that iterative attempts, learning, and validation are inevitable. The application of heterogeneous knowledge and cross-domain thinking, which are essential for achieving novelty, introduces numerous unknown factors into the equation. Additionally, the external environment is constantly evolving, further adding to the complexity. Even a well-designed business model may face uncertainties and hidden issues when implemented in the real market. Therefore, at each stage of original business model innovation, iterative processes are likely to occur. It is crucial to approach challenges with an open mindset, leveraging both internal and external knowledge, and addressing uncertainties proactively. Effective integration of existing business practices with diverse knowledge is necessary to construct a new business ecosystem that supports the original business model. By embracing iterative processes, utilizing various sources of knowledge, and adapting to changing circumstances, organizations can enhance their chances of successful original business model innovation. This approach allows for continuous improvement, learning, and adaptation to create sustainable and impactful business models.

Author Contributions

Conceptualization and investigation, X.J.; Data curation, A.Z.; Writing original draft, G.J. All authors have read and agreed to the published version of the manuscript.

Funding

This research and APC was funded by [The National Natural Science Foundation of China] grant number [71603005], [Humanities and Social Science Fund of Ministry of Education] grant number [20YJCZH066], And [Beijing Municipal Natural Science Foundation] grant number [9222010].

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Original interview materials and data could not be unveil due to privacy or ethical restrictions.

Conflicts of Interest

The authors declare no conflict of interest.

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Figure 1. Business model matrix based on novelty and sustainability. Image source: original based on literature analysis.
Figure 1. Business model matrix based on novelty and sustainability. Image source: original based on literature analysis.
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Figure 2. Formation process of business model novelty. Image source: original based on case analysis.
Figure 2. Formation process of business model novelty. Image source: original based on case analysis.
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Figure 3. Process of business model sustainability formation. Image source: Original based on case analysis.
Figure 3. Process of business model sustainability formation. Image source: Original based on case analysis.
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Table 1. Basic information of case companies.
Table 1. Basic information of case companies.
Company NameCity Project InitiationYearCore BusinessCharacteristics of Original
Business Model
A1Beijing2014Time-sharing Rental Technology Service ProviderThe first time-sharing rental technology service provider that generates its primary revenue from data
A2Beijing2012Second-hand car trading service providerFinancing leasing model based on SaaS services
A3Beijing2014Car-sharing serviceUnique light-asset + heavy-operation car-sharing model
A4Beijing2013O2O e-commerce platform for new carsThe first online-to-offline integrated new car e-commerce platform
A5Beijing2014C2C platform for used car transactionsThe first C2C used car trading platform
A6Beijing2014Shared bicyclesThe first shared bicycle operation comp
Source of information: compiled by the research team.
Table 2. Coding results of representative case data and the formation process of novelty.
Table 2. Coding results of representative case data and the formation process of novelty.
ProblemEnterpriseCase DataPhenomenon DefinitionConceptualizationCategorization
Formation Process of NoveltyA1The short-term rental car service available by the hour on the roadside in the United States is very convenient, while in China, renting a car is difficult and the rental process is cumbersome and lengthy.Renting a car in China is inconvenient compared to his experiences.Perception of pain points.Opportunity identification.
With 16 years of data mining experience, he has gained insights into the travel data behind the car rental industry.Data mining experience with his expertise in the car rental industry.Heterogeneous knowledge reservoir.Knowledge accumulation.
As a technology service provider in the car-sharing industry, he provides technical services to car-sharing companies and positions value acquisition as the data behind the travel domain.Applies data thinking to the car rental domain.Application of cross-border thinking.Formation of creativity.
A2He has served as the Executive Vice President of a car rental company and has experience in automotive finance, used cars, and other businesses. The team members come from different fields such as the Internet and software development.Experience in car rental, finance, used cars, Internet, and software development.Heterogeneous knowledge reservoir.Knowledge accumulation.
Based on his experience, he felt that the used car market was in a very poor state, extremely fragmented, with a lack of information systems and chaotic internal management among used car dealers. Young people have a strong demand for cars but lack the financial ability to purchase them in full. Information asymmetry creates a value gap in vehicle sales.Based on his personal experience in purchasing used cars, he has identified several areas of dissatisfaction.Perception of pain points.Opportunity identification.
He provides comprehensive business services to car dealers based on a SaaS system, ensuring precise data matching. Additionally, he introduces the concept of automotive finance and launches new car Internet financing and leasing services based on the analysis of backend data from used car dealers.Applies internet, software services, and financial thinking to the used car domain.Application of cross-border thinking.Formation of creativity.
Data source: the research team compiled the information based on interview data.
Table 3. Validation of the Replication Logic of Novelty Formation Process.
Table 3. Validation of the Replication Logic of Novelty Formation Process.
Formation
Process		Case DataEnterprise
Heterogeneous Knowledge Accumulation.Having struggled in the automotive industry for 13 years, the interviewee has worked in various departments including management services, sales, and financial management. They have also created an automotive finance platform and possess experience in internet development. Additionally, they have received an MBA education from Peking University Guanghua School of Management.A3
A graduate in engineering, with nearly 20 years of experience in the automotive industry, well-versed in the realm of the internet, and having studied management and economics.A4
The founder has accumulated rich experience in internet product development and operations. The three co-founders each possess over 10 years of experience in automotive industry operations and management, aftersales service system management, and application development.A5
Passionate about cycling, the founder has been involved in various ventures including mountain bike online rentals, high-end bicycle financing, second-hand bicycle trading platforms, distribution of smart wearable devices, and cycling tourism. The entrepreneurial team also possesses experience in mobile app development.A6
Perception of Pain Points and Identification of Opportunities.The field of mobility services is still in its infancy in China, and users’ flexible demands are not being met. The “light asset + heavy operation” B2P model is worth exploring.A3
Automobile manufacturers face both inventory backlog and challenges in purchasing cars in third-tier and below cities.A4
Painful experiences in selling cars have led to the awareness of issues in the second-hand car market, such as lack of regulations, lack of transparency, lack of integrity, and price manipulation.A5
Over the course of four years in university, they lost five bicycles. Not having a bicycle was very inconvenient for them.A6
Application of Cross-Domain Thinking and Formation of Creativity.We draw inspiration from “Ctrip” to create a platform that gathers small- and medium-sized car rental companies. We will independently develop car connectivity devices and build a unified app platform for numerous small-scale car rental companies online, while providing standardized and specialized services offline.A3
Our goal is to become a car Internet company that brings together various aspects of car life. In third- to sixth-tier cities, we will connect with car manufacturers and primary dealerships on the upper end and channel partners on the lower end. By integrating the upstream and downstream of the new car industry through automotive e-commerce, we will establish a complete ecosystem and create a closed-loop new car e-commerce platform.A4
Using an internet-based approach, we will construct a C2C platform for second-hand car transactions, reducing costs associated with intermediaries and eliminating expenses related to physical spaces. This platform will meet the expectations of buyers and sellers in terms of price and quality.A5
To address the issue of transportation difficulties, we can implement a bicycle-sharing system combined with password locks. Users can access the unlocking password through a mobile app, enabling them to use the bicycles at any time and return them by locking them again.A6
Data source: the research team compiled the information based on interview data.
Table 4. Coding results of representative case data and the formation process of sustainability.
Table 4. Coding results of representative case data and the formation process of sustainability.
ProblemEnterpriseCase DataPhenomenon DefinitionConceptualizationCategorization
Sustainability Generation ProcessA1The difficulties in software, hardware, and data management and data analysis were overcome through repeated attempts, resulting in the provision of a free solution for time-sharing leasing. This helped partners achieve an operational model of “time-sharing leasing, pay-as-you-go, self-service throughout, and on-demand return”, and later generated profits through data acquisition from traffic.The company attempted various approaches to determine the final operating model.Iterative attempts at cross-domain knowledge integrationConcept definition
To successfully operate time-sharing leasing, the participation of multiple parties is required, including vehicle dealers, original equipment manufacturers, platforms, electrical equipment companies, operating enterprises, and local resource providers. The operation is challenging, and the hardware system relies on components from various regions worldwide, with assembly and testing conducted in Beijing.Multiple parties participated, and procurement and integration were carried out in multiple locations.Iterative attempts at cross-domain knowledge integrationBusiness model development
The “sharing economy” has experienced explosive growth without encountering significant difficulties, with customers actively participating. The data generated between partners and consumers ensures their loyalty to the platform. With the increasing number of customers, the company has attracted investment from multiple investors and has a promising future in terms of profitability. However, the growing prospects also bring competitive pressure from new and potential competitors.The customer base grew rapidly, and the customers showed genuine loyalty to the company, indicating promising future profits. This attracted the attention and support of investors.Support and recognition from stakeholdersBusiness model validation
A2While providing SaaS services to the used car industry, the company discovered different needs among small and large used car dealers. After repeated exploration, they decided to launch different products for these dealers.After repeated attempts, the company successfully identified two types of products that catered to the diverse needs of their target market.Iterative attempts at cross-domain knowledge integrationConcept definition
Collaborating with financial institutions, the company created an Internet-based automotive finance service model primarily focused on “1-year long-term rental + final payment to purchase.” In 2019 and 2020, the company delved into the digital transformation of the automotive industry and acquired comprehensive service providers in automotive supply chain warehousing and logistics, automotive trading platforms, ERP system providers for automotive dealers, and automotive freight information and channel service platforms. This gradually formed a digital ecosystem for the automotive circulation field.The company also explored integration with various industries and formats, ultimately establishing a unique digital ecosystem service model.Iterative attempts at cross-domain knowledge integrationBusiness model development
In 2016 alone, the number of car dealers using their SaaS system increased from over 200 to more than 4000. In 2017, 70–80% of used car dealers nationwide used their system, with large-scale dealers accounting for as high as 95%. The stickiness of the platform is strong, and with the improvement of service models, there is vast room for future growth. The company was listed on the “Global Rising Unicorn” list by PitchBook, a global data research institution in Silicon Valley, in 2017 as an automotive new retail and new finance platform.With the rapid growth of the customer base, high adoption rates, and strong customer loyalty, the company has significant room for expansion and has gained recognition in the industry.Support and recognition from stakeholdersBusiness model validation
Data source: the research team compiled the information based on interview data.
Table 5. Replication logic validation of the sustainability generation process.
Table 5. Replication logic validation of the sustainability generation process.
Formation StageFormation
Elements		Case DataEnterprise
Concept definitionIterative attempts at cross-domain knowledge integrationThey conducted extensive research and iteratively designed a SaaS software service system for both B2B and B2C.A3
They went through different stages, from an information model to a transaction model, and then focused on selling cars, forming an “Internet + automotive industry” that caters to car buyers, with an all-in-one O2O model combining information, shopping, a marketplace, and city stores.A4
Since the establishment of their company, they have been on an adventurous journey, overcoming various challenges. Eventually, they developed a virtual consignment model that allows car owners to sell directly to buyers, eliminating intermediaries and ensuring fair transactions. Their platform provides services such as on-site inspections, valuation, and after-sales support.A5
Based on previous business attempts and campus surveys, they quickly identified a shared bicycle solution. Starting from campuses, they collected unused bicycles, refurbished and registered them, and equipped them with QR codes that integrate with their mobile app for unlocking and retrieval using a password lock.A6
Business model developmentIterative attempts at cross-domain knowledge integrationAfter multiple explorations, the following points have become clear:
1. The cars are sourced from small- and medium-sized rental companies.
2. The focus is on creating a seamless car rental experience anytime and anywhere, with car delivery within 10 min.
3. Cars can be returned at any location, and the platform handles the cumbersome post-rental tasks.
4. The initial focus is on establishing locations in Beijing before expanding nationwide.		A3
Online, they distribute information tailored to the needs of individual consumers (C-end), while for businesses (B-end), they provide comprehensive dissemination from precision to breadth. They gradually integrate the internet with traditional industry by combining online information dissemination, offline guidance, in-person car delivery, and maintenance services into a closed-loop system.A4
They have made detailed preparations for the three core aspects: car sourcing, transaction transfer, and after-sales service. All car sources come from real individuals and undergo 249 professional inspections. They also provide full guarantees throughout the transaction process.A5
Implementing the idea of shared bicycles has faced many challenges. These include addressing issues such as bike theft, key-lock correspondence, the disparity between bike placement on campuses and the lack of user growth in orders, and finding solutions to the problem of bikes going missing without being returned. Each problem requires deep analysis, continuous exploration, and attempts to find practical solutions.A6
Business model validationSupport and recognition from stakeholdersThey secured two angel investments and established over 50 locations in Beijing. User growth has been rapid, and although the company has not yet reached profitability, monthly revenue has doubled, validating their business model and customer experience.A3
They have formed an O2O closed-loop system through a large online comprehensive automotive marketplace and city stores spread across the country. The first batch of eight city stores have been operating successfully for a year with favorable conditions. The plan is to expand to 1000 city stores nationwide in the future.A4
The business model has proven to be attractive, quickly accumulating a large number of car sources after the launch. Within five months, they became the market leader in Beijing, with monthly sales of 300 cars.A5
They successfully launched and operated in Beijing’s universities, gaining recognition from investors. In 2016, their business rapidly expanded to over 20 universities in Beijing and other cities such as Wuhan and Shanghai. In September 2016, with the start of the academic year, they achieved a daily order volume of 400,000 orders.A6
Data source: the research team compiled the information based on interview data.
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Jiang, G.; Ji, X.; Zhang, A. Novelty and Sustainability: The Generation Process of Original Business Model Innovation. Sustainability 2023, 15, 14182. https://doi.org/10.3390/su151914182

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Jiang G, Ji X, Zhang A. Novelty and Sustainability: The Generation Process of Original Business Model Innovation. Sustainability. 2023; 15(19):14182. https://doi.org/10.3390/su151914182

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Jiang, Guihuang, Xuehong Ji, and Aonan Zhang. 2023. "Novelty and Sustainability: The Generation Process of Original Business Model Innovation" Sustainability 15, no. 19: 14182. https://doi.org/10.3390/su151914182

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