Page - 71 - in Digital Entrepreneurship - Impact on Business and Society

explored.Decisionmakingunderuncertaintyandcausalambiguity isconstrainedby various types of cognitive biases—e.g., confirmation bias, overconfidence bias, or escalation of commitment (Zhang andCueto 2015). This includes the development ofaproductwithoutavalidatedcustomerproblemorthescalingofactivitieswithout anattractivebusinessmodel.Under the influenceofcognitivebiases inanuncertain context, entrepreneurs are ignorant to disconfirm information (confirmation bias), too optimistic about their success chances (overconfidence), and susceptible to continue investing in an unpromising business idea (escalation of commitment). These cognitive biases can lead to premature scalingof activities,whichmeans the inappropriate scalingofactivities.Premature scaling is thusoneof themajordrivers of startup failure (StartupGenomeReport 2011; CBInsights 2018). To improve decisionmakingunder highuncertainty, effective entrepreneurs run experiments to validate/invalidate critical business assumptions (Ries 2011;Blank andDorf 2012; Gambardellaetal.2018).Theprocessofexperimentingtovalidate/invalidatecritical assumptions canbeunderstood asdeliberate anddynamic searchprocess tofindan attractive, replicable, and scalable business model and is core to the lean startup approach (Blank2010;Maurya2012;Ries2011;FrederiksenandBrem2017).Ries (2011) suggests a build–measure–learn loop, where an entrepreneur identifies the most critical business assumptions, builds an experiment to test these assumptions, measures the user behavior, and creates learnings from the gathered data (Fig. 1). Table 2 Businessmodel typologies (reference toWirtz 2019) Businessmodel category Businessmodel types Examples Content compilation of content, depiction and provision of content on domestic platform e-information wsj.com, handelsblatt.com, Wikipedia e-entertainment partypoker.com, Spotify, WoW e-education udacity, udemy, coursera e-infotainment nba.com, sport1.de Commerce Initiation and/or settlement of business transactions e-attraction AdSense, Shopping.com e-bargaining/negotiation eBay, Groupon e-transaction Paypal, Klarna, Bitcoin e-tailing Amazon, Expedia, book a tiger, zappos.com Context Classification and systematization of information available on the Internet Search engines Google, Yahoo, Bing, DuckDuckGo, Indeed.com Web directories Yahoo.com, Book-marking Citeulike.org Connection Creation of the possibility to exchange information in networks Intraconnection (Community) Facebook, Snapchat, Skype, Flickr, Yelp, Gmail, Dropbox Interconnection earthlink.net, sonic.net, att.com, t-mobile.com 74 L. Göcke and R.Weninger