Business Model Innovation and Young Firm Performance: The Role of Founder Personality

This article seeks to analyze the relationship between business model innovation (BMI) and young firm performance, and the impact of the founder's personal characteristics on this relationship. Drawing on the resource-based view and strategic leadership theory, we examine the moderating role of founder workaholism on the relationship between BMI and young firm performance and the moderating effect of founder narcissism on the moderating role of founder workaholism on the BMI–young firm performance relationship. Using a sample of 205 young firms from Russia, we demonstrate that BMI positively relates to young firm performance, whereas founder narcissism and workaholism have a reinforcing effect on this relationship. We discuss the implications of our study for both theory and practice.

I. Introduction

Every year, a massive number of businesses are launched all over the globe with the ambition of becoming successful entities that would remain sustainable in the long run. Most start-ups fail within the first years of existence [1], [2], but the rest of them grow rapidly and contribute to job creation, innovation, and economic growth [3], [4]. Young firms, which are between two and ten years of age [3], [5], [6], face specific challenges related to gaining legitimacy, stability in resource acquisition, and operational efficiency [7]. A critical factor in the success of young firms is the ability of their founders to meet new challenges as the company evolves through the various stages of the business development process [8], [9]. To survive and become more profitable, young entities need to change or improve the initial business model [10]. In addition, today's dynamic and turbulent business environment exerts a direct effect on business models and their innovation [11], [12].