Page - 73 - in Digital Entrepreneurship - Impact on Business and Society

3 ConceptualModel/Empirical Insights 3.1 Venture Pyramid to IterativelyDevelopDigital Business Models Following the ideas of Ellis (2013), Osterwalder et al. (2014) andGöcke (2017b), we introduce the venture pyramid as a concept to structure the deliberate and dynamic search process to identify business model fit. The venture pyramid structures the most critical business assumptions. The most critical assumptions reside at the bottomof the pyramid as the foundation of the business and have the highest magnitude of impact in case they prove wrong. This includes required changes over a certain period of time. It is important to highlight that there is no “one-size-fits-all” approach to the venture pyramid and that, depending on the scenario, different foundations are possible to start from (e.g., founders’ compe- tence, a technology, or a market need). For the following, we are taking market attractiveness as the foundation of the venture pyramid to make the process tan- gible. However, starting with a different foundation (e.g., the problem-solution fit before dealingwith themarket)might sometimes be a betterway to get started.As with everything, every step in an entrepreneurial venture needs careful decision makingwithout falling into analysis-paralysis (Fig. 2). At the bottomof thepyramid as the foundationof thebusiness lays anattractive group of potential customers (market attractiveness: seize/growth of group). Building on top of an attractive group of potential customers,we see the existence of a pressing customer pain of this group of potential customers as the next fun- damental layer of critical assumptions (customer-problem fit). At the level of problem-solutionfit, we aimnot only to clarify if the customer favors our solution but also if customers are willing to pay for the solution. We suggest to test the critical assumptions at problem-solution fit only by the communication of value proposition and price but without enabling customers to experience the value proposition (e.g., with a landing page smoke test). Without the customers’will- ingness topay, thedevelopmentof aproductor the supply-sideof abusinesswould Fig. 2 Venture pyramid to structure the search process of a businessmodel (reference toGöcke 2017a) 76 L. Göcke and R.Weninger