Business model innovation: How iconic business model emerges

Abstract

Research on business model studies the cognitive processes that lead entrepreneurs to develop innovative business models. However, we still know little about how these innovative business model become known to the public to the extent that they are taken for granted as iconic representations of particular types of firms. This study advances business model innovation research by answering the following question: How do iconic business models emerge? In other words: How do innovative business models become prototypical exemplars for new categories of firms? To answer this question, we focus on the case of Airbnb – an online platform allowing home owners to rent out rooms or flats directly to travellers. We analysed how six mainstream business media publications have talked about Airbnb between 2008 (year of creation of Airbnb) and 2013. Our results show that Airbnb business model became iconic in three stages. At first, media attempted to assimilate Airbnb within its category system by drawing analogies with existing iconic business models or established market categories. During the second stage media shifted their attention away from analogies with existing firms and built a more complex understanding of Airbnb and its business model. In the third stage, Airbnb’s business model representation detached from the actions of the instigator company as media routinely referred to Airbnb as the ‘typical’ sharing economy (or peer-to-peer) firm. As media increasingly used Airbnb’s business model to define other firms’ business model, Airbnb’s business model became iconic. We contribute to business model research by theorizing the cognitive process, which underpins the emergence of iconic business models.