The Role of Timing in the Business Model Evolution of Spinoffs

Abstract

The view of time that dominates conventional management thinking, including the Lean Startup movement’s “fail fast and pivot” approach, often leads to failure in the business model evolution of new ventures spinning off from established firms. Timing is critical for spinoffs because it is a key element of the balance between minimizing risk and maximizing opportunity. In the literature on business model evolution and lean startups, however, the issue of timing is given limited consideration. To address this issue, we present and analyze the role of timing in the business model evolution of C3 Technologies, a spinoff from Saab. The results offer insight regarding the use of managed timing to allow evolutionary processes to let the right moment present itself—and enable the organization to move quickly to seize the moment. This approach allows managers to control the evolutionary process despite the high uncertainty associated with exploring new business models.