SECURE – a new business model framework for measuring start-up performance

Abstract

Purpose Existing business model frameworks show weak conceptual unification, a paucity of measurement focus and limitations when applied in emerging economies. The study proposes a new business model framework – “Start-up Evaluation Calculus Using Research Evidence” (SECURE). The purpose of this study is to allow the measurement of the impact of business model design on start-up performance in emerging economies. Design/methodology/approach Data collected from 713 entrepreneurs in select cities of India, Oman and the United Arab Emirates is analyzed through structural equation modeling. The study uses measurement and structural models to examine the validity of measures and additionally tests the five hypothesized relationships proposed in the study. Findings The SECURE’s components comprising desirability, marketability, feasibility, scalability and viability showed validity and reliability. They synergistically demonstrated a statistically significant effect on a mix of financial and non-financial start-up performance outcomes. An alternative structural relationship that examined the impact of SECURE on only financial performance outcomes showed a weaker model fit. The findings indicate that a business model framework is useful when its ex ante measures show a positive causal effect on the desired performance outcomes. Practical implications The scores obtained by the SECURE framework serve as an evaluative tool that informs entrepreneurs and start-ups on the readiness of their proposed, incubated or existing start-ups. Originality/value Replacing subjective judgments with objective assessment criteria, SECURE is one of the first quantitative and performance-driven business model frameworks that contain measures from all functional domains of a start-up business. Start-ups can evaluate their business models against the SECURE model’s research-driven quantitative criteria and assess their impact on start-up performance.

Opportunity abandonment: Why are entrepreneurs vulnerable to type I and II errors?

“…Bias, prejudice, stereotyping, and lack of motivation are common factors that create misjudgment. Errors in judging the real potential in the opportunity leading or Type I or Type II error Huges et al, [ 66 ]; Flamini et al [ 67 ]; Arshi et al [ 75 ]; Sarooghi et al [ 68 ]; De Brito & Leitão [ 54 ], Stakeholders' opportunity evaluation at various stages of development Stakeholders are vulnerable to reification fallacies as opportunity ideas evolve through various stages of incubation. Critical stages where opportunity miscalculations occur are initial concretization and later at the actualization stage.…”

The Effect of Internship and Entrepreneurship Training on Strat-Up Performance With Entrepreneurial Motivation as an Intervening Variabel

“…The results of their research state that venture capital and start-up performance have a negative relationship. Makarevich (2018) Other research reveals that SECURE components in the form of desire, confidence, marketability, scalability, and viability show statistically significant effects on financial and non-financial start-up performance (Arshi et al, 2020). To improve organizational performance, Agustina & Nelloh (2017) suggest that companies collaborate with universities to attract high-quality internship students to achieve optimal organizational performance.…”

Marketing Capabilities and Competitive Performance in the SMEs Context: A Bi-Theoretical Perspective

“…However, scholars have advocated that a multidimensional approach should be used to capture performance, as outcomes may be favorable in some dimensions but unfavorable in others (Arshi et al, 2020;Hooley et al, 2005;Tsai & Shih, 2004). Indeed, this appears to be the pioneer study to examine the marketing capabilities through an integrated performance model in the SME sector in emerging economies since Vorhies and Morgan's (2005) call to test the dimensions in different sectors in different economies.…”

“…This study builds upon two main theories: Resource-Based View (RBV) and Competence-Based View (CBV) of the firm. According to the RBV, resource endowment determines competitive advantage and, thus the performance of firms (Arshi et al, 2020;Barney, 1991). Accordingly, Barney (1991) stated that if these resources are inimitable, valuable, non-substitutable, and rare, a competitive advantage would be created and sustained over a period since companies "develop isolating mechanisms or resources-position barriers that secure economic rent" (Lavie, 2006, p. 640).…”