Business model scaling and growth hacking in digital entrepreneurship

Abstract

Creating an innovative product and validating an innovative business model may not be enough for digital startups to be competitive. To grow fast and expand globally, digital startups need to innovate their business model during the scaling phase. A pragmatic approach has recently been proposed to support digital entrepreneurs engaging in business-model innovation during the scaling phase (i.e., business-model scaling), a strategy known as growth hacking. However, we know little about its theoretical grounding and how effective growth hacking is, as businesses lack methodologies to assess its effectiveness before committing resources and investments. To fill this gap, we developed a method for supporting business- model scaling through simulation modeling and provided an illustrative application to the PayPal case. By doing so, we contribute to the ongoing debate on scalability in digital entrepreneurship.