Business model renewal and firms' performance: the role of preventive vs. promotion mindsets

This study explores the role of an entrepreneurial mindset in buffering the relationship between the recurrent business model renewal and firms’ performances over time. Using the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE), a 3-year longitudinal study, this paper examines the role of preventive and promotion mindsets in business model renewals and firm performance. A sample of 599 young firms (in the first wave) was used in exploring the role of entrepreneurial mindsets in business model renewals and firm performance. Factor and Regression analysis were the main methods used to understand the relationship between promotion mindset versus prevention mindsets in the business model renewals. The results showed that the impact of business model renewal was greater for promotive mindset than preventive mindset entrepreneurs in the beginning. Over time, subjective performance (as a consequence of business model renewal) appears to improve slower among promotive mindset than the preventive mindset entrepreneurs. However, for objective performance, the improvement seemed to be slower among promotive mindset but non-significant effect among the preventive entrepreneurial mindsets.