René Unteregger

This dissertation unpacks the entrepreneurial venturing process that entrepreneurs engage in when commercializing health-tech inventions. The entrepreneurial process is particularly challenging in emerging tech industries due to the unique complexities and uncertainties presented by novel technologies (Kapoor & Klueter, 2021). These uncertainties and accompanying development paths result in a long and deep so-called valley of death (Ellwood et al., 2022). Besides the need to survive this long valley of death, the commercialization of health-tech inventions comes with even more challenges. For example, Randhawa et al. (2021) underscore the complex process of collaborative co-creation and technology-enabled customization of medical implants, while Lehoux et al. (2014), examining hurdles in the context of academic spin-offs, emphasize the complications of aligning business models with rapidly evolving health technologies. Additionally, Beaulieu & Lehoux (2018) highlight the increasing regulation and institutionalization of health technologies and the importance of managing conflicting institutional agendas and overcoming obstacles in technology adoption. Altogether, these challenges make the quest for a viable business model to exploit novel health technologies even more challenging. Therefore, the main research question of this doctoral dissertation is: How do health-tech entrepreneurs effectively navigate through uncertainty to arrive at a viable business model?

Navigating through this uncertainty requires methods that emphasize rapid learning, resource parsimony, and an intense focus on validating assumptions to reduce the cost and risk of failure (McGrath, 2023). The Lean Startup method, introduced by Ries (2011), embraces these notions and provides the overall framework for this dissertation. According to the Lean Startup Methodology, the entrepreneurial journey can be structured into four stages: customer discovery, customer validation, customer creation, and customer building. This dissertation is situated in the first three stages by delving into three key challenges that emerge during those stages: the discovery of problem-solutions, validating value propositions, and strategically creating a sufficiently large customer base to ensure commercial viability. To explore these challenges, three studies are conducted with a focus on problem-solving search patterns, value proposition in shifting customer markets, and legitimacy-building for wider technology acceptance. The research studies examine the healthcare technology sector, which provides the empirical context for this dissertation.

The first empirical study examines the search patterns of participants in an innovation contest on biosensors. Previous research has addressed various factors that drive valuable innovation contest outcomes. However, the exact process of ‘how’ innovation contest participants successfully manage problem-solving has received little attention, especially for targeting commercially viable solutions. Hence, this study addresses this by asking: How do innovation contest participants shape their problem-solving processes to achieve commercially viable outcomes? Through qualitative exploratory methods, the study elucidates major differences in the search patterns of how the contest participants (teams) explored the problem landscape. The main findings show that adopting search patterns involving a ‘broader’ (i.e., considering a wider range of problems and stakeholders) and a more ‘interconnected’ problem-exploration was more successful in creating contest outcomes (biosensing solutions) with greater commercial viability. Our findings emphasize the importance of extensive problem-exploration and confirm that the search for commercially viable innovations entails more than just developing technologically sophisticated solutions.

The second study proposes a new customer value propositions framework that addresses the limitations of existing frameworks, particularly in complex customer markets with shifting dynamics (e.g., changed customer roles and relationships). The conceptual study argues that existing frameworks proposed by scholarly research (Anderson, Kumar, & Narus, 2007) and business management practice (Kim, 2005) primarily focus on one main customer group and assume that customers can easily compare new value propositions (VPs) with established or competitive solutions. Typically, however, the qualitative assessment of new VPs is vague or inaccurate for various reasons. The study finds that in the context of healthcare innovation, the shifting customer landscape and changing trends, such as growing customer empowerment and personalized healthcare, require a tailored CVP framework that considers different customer knowledge bases and addresses these unique challenges. It also elucidates the benefits of adopting a “multi-perspective, customer-centered” and “innovation-focused” approach to CVP design. Building on best-practice elements of existing frameworks and integrating ideas borrowed from stakeholder mapping and the use of utility values applied by healthcare economists, this conceptual study proposes a tailor-made CVP framework, which enables applicability for the health sector and similar technology-intensive markets.

The third empirical study investigates the strategies adopted by technology firms to overcome legitimation obstacles for non-conventional health tech applications. From the perspective of technology-acceptance theory, both ‘proposing’ medically relevant and economically viable values and ‘legitimizing’ such value claims are essential for convincing users to adopt a technology (Mehrizi et al., 2023). For non-conventional technologies, this quest for legitimacy is even more problematic as these firms not only lack cognitive legitimacy but encounter obstacles on all four dimensions of legitimacy, including cognitive, moral, pragmatic, and regulative aspects. Previous empirical work has not thoroughly examined the intricacies of this difficult quest for legitimacy in such contested sub-sectors. This study addresses this gap by exploring how entrepreneurial firms strategically address legitimation obstacles and build legitimacy for their non-conventional technology applications. The study finds that in order to overcome the legitimation obstacles, firms adopt strategies relating to three central themes: credibility, customer empowerment, and better understanding of the innovative technologies. Each strategic theme primarily addresses one (or two) types of legitimacy yet demonstrates legitimacy-building across the other dimensions as well, resulting in positive ‘spillover’ effects. The study guides start-ups and SMEs in nascent markets to build legitimacy on all dimensions, particularly for technology applications that lack widespread public support and acceptance.

This dissertation researched how health-tech entrepreneurs effectively navigate through uncertainty to arrive at a viable business model. Based on three studies, it provided answers by exploring three key challenges that emerge during the stages of customer discovery, customer validation, and customer creation.

First, it highlights that when addressing the challenge of problem discovery, tech entrepreneurs realize outcomes with greater commercial viability if they emphasize exploring problems before prematurely jumping to solutions by interacting with stakeholders. Second, when evaluating market opportunities, the research findings suggest that entrepreneurs who seek to enhance their product attractiveness should develop value propositions that prioritize customer-centricity over competitiveness, and technological novelties over mere product improvements for all customer actors involved in the technology adoption decision. In this endeavor, thoroughly understanding unmet market needs across various target audiences is crucial. Third, in the quest for developing a viable business model in non-conventional health tech markets, the research highlights that an effective approach to gaining wider market acceptance and recognition involves first improving cognitive legitimacy through co-creation with target customers.

Together, these insights highlight the importance of interacting and aligning with different stakeholder groups as a key strategic activity to navigate the uncertain entrepreneurial journey. Moreover, the studies provide a set of concrete actions entrepreneurs can undertake to convince, engage with, and mobilize key stakeholders such as customers and healthcare professionals.