Customer search strategies of entrepreneurial telehealth firms – how effective is effectuation?

Abstract

PurposeThe demand for healthcare innovation is increasing, and not much is known about how entrepreneurial firms search for and sell to customers in the highly regulated and complex healthcare market. Drawing on effectuation perspectives, we explore how entrepreneurial digital healthcare firms with disruptive innovations search for early customers in the healthcare sector.Design/methodology/approachThis study uses a qualitative, longitudinal multiple-case design of four entrepreneurial Nordic telehealth firms. In-depth interviews were conducted with founders and senior managers over a period of 27 months.FindingsWe find that when customer buying conditions are highly flexible, case firms use effectual logic to generate customer demand for disruptive innovations. However, under constrained buying conditions firms adopt a more causal approach to customer search.Practical implicationsManagers need to gain a deep understanding of target buying environments when searching for customers. In healthcare sector markets, the degree of flexibility customers have over buying can constrain them from engaging in demand co-creation. In particular, healthcare customer access to funding streams can be a key determinant of customer flexibility.Originality/valueWe contribute to effectuation literature by illustrating how customer buying conditions influence decision-making logics of entrepreneurial firms searching for customers in the healthcare sector. We contribute to entrepreneurial resource search literature by illustrating how entrepreneurial firms search for customers beyond their networks in the institutionally complex healthcare sector.