New businesses often start from the recognition of an opportunity or from a technological capability (Chesbrough & Rosenbloom, 2002). In both cases, the initial idea must be exploited through the development of a business model (Hamel, 2000). But it remains doubtful whether entrepreneurs are able to properly conceive their business model in their first attempt (Pitt & Kannemeyer, 2000), and, further, whether the first version would remain valid over time. With a few exceptions (Andries et al., 2006; MacInnes, 2005; Vaccaro & Cohn, 2004), most literature has taken a static perspective on business models, implicitly assuming them to remain stable over time. While reasons for changes in business models are examined widely, the process and structure of how entrepreneurial firms transition from opportunity realization to market entry and market exploitation itself remains under-investigated. To understand and support this process, an analysis of business model evolution on start-ups is needed (George & Bock, 2010).

This paper aims to fill this gap by exploring how start-ups evolve. In addition, we identify structural patterns that are specific to high-expectation ventures, and describe their underlying growth mechanism.