Product Innovation in Sustainability-Oriented New Ventures: A Process Perspective

Despite the recognition that new ventures are potential candidates of creating innovations necessary for sustainability, little is know on how they actually engage in this journey. Sustainability-oriented new ventures are confronted with high levels of uncertainty that stem from the liabilities of being new and small, as well as demonstrating and justifying sustainability benefits of new products to customers and stakeholders. Consequently, they are often not able to identify a promising product-market combination at the outset of the product innovation process, and instead progressively define their business idea. The objective of this exploratory study is to gain a profound understanding of this process: (1) How can the product innovation process in new ventures be described? (2) What explains the similarities and differences among the product innovation processes of new ventures? (3) How does the sustainability motivation of the entrepreneurs influence the product innovation process? To fully understand how new ventures translate sustainable product ideas into new businesses, a process-oriented case study research approach is adopted with a focus on the relationships between key concepts identified in innovation and entrepreneurship literature. The main contributions of this study include: (1) a descriptive model to describe the product innovation process in new ventures, (2) a conceptual model to explain the similarities and differences among the product innovation process in new ventures, and (3) insights into how sustainability motivation of entrepreneurs influences the product innovation process. This study provides entrepreneurs, particularly novices, design practitioners and students who are considering starting a new venture based on a sustainable product idea with relevant new insights. In particular, they concern understanding the different type of decision-making logics and their implications for the product development process. Insights into this process can support firms in using different approaches simultaneously and interchangeably, both during the innovation process over time and under different conditions of uncertainty. This enables them to engage in different actions, such as design experiments and stakeholder interactions, with different purposes more effectively. Finally, this study recommends new ventures to combine their strong vision for sustainability with affordable small steps in order to create room for experimentation and increase learning effects in relation to sustainability