Journal of Cleaner Production 45 (2013) 50e60

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

Innovation process of new ventures driven by sustainability

Duygu Keskin*, Jan Carel Diehl, Nelliene Molenaar
Delft University of Technology, Landbergstraat 15, 2628 CE Delft, The Netherlands

a r t i c l e i n f o a b s t r a c t

Article history: Since the Brundtland report appeared in 1987 various approaches to realising sustainable consumption
Received 29 November 2010 and production have come into practice. While more traditional approaches like Ecodesign and Design
Received in revised form for Sustainability often emphasize optimizing existing products, processes and businesses; more radical
26 March 2012
approaches like Product-Service Systems and System Innovation for Sustainability emphasize developing
Accepted 7 May 2012
new innovative products and services with higher environmental gains. Although these studies increased
Available online 29 May 2012
our understanding of sustainability in relation to product design, they are criticized for failing to draw on
existing theoretical frameworks in the organizational innovation literature (Berchicci, 2005).
Keywords:
Sustainability-driven entrepreneurship
This paper seeks to explore the innovation process within new ventures driven by sustainability since
Product innovation process 1) conventional wisdom suggests that young and new firms have advantages in innovation (Acs and
New ventures Audretsch, 1990) and as such they are the potential candidates of offering radical solutions to the
Creative techniques challenges of sustainability; and 2) there are few studies that address exploiting sustainable product
ideas through new organizations. The paper reports on the results of an explorative study involving the
use of generative techniques during 19 individual semi-structured interviews with eight entrepreneurs
and seven innovation support organizations. The results suggest that the relative impact of internal and
external factors on the innovation process change over time as the new organization forms. In addition,
creating new businesses from sustainability ideals is influenced by the firms’ ability in understanding
and managing the differences between intended and created value and in finding an overlap between
customer benefits and clearly defined (prioritized) sustainability goals.
Ó 2012 Elsevier Ltd. All rights reserved.

1. Introduction and implies changes to the social and structural environment.

Traditional approaches to sustainable consumption and
production are to make products and production processes cleaner
and more efficient (Charter et al., 2008). This view reflected in
design domain through approaches like Design for Environment
(DfE), Ecodesign and Design for Sustainability (DfS) with a focus on
product improvements and redesign (Brezet and Hemel, 1997;
Gertsaksis et al., 1997; Charter and Tischner, 2001; Lewis and
Gertsakis, 2001; Crul and Diehl, 2006). Moreover, some scholars
called for more radical approaches such as Product Service Systems
(PSS) and System Innovation for Sustainability e with an emphasis
on developing new products and services with higher environ-
mental gains (Brezet et al., 2001; Charter and Tischner, 2001;
Manzini and Vezzoli, 2002; Mont, 2004; Tukker and Tischner,
2006a,b). While PSS focus on functions rather than products, and
seek to combine tangible products and intangible services to fulfil
user needs, system innovation requires technology development,
* Corresponding author. Tel.: þ31 (0) 15 2783081.
E-mail address: d.keskin@tudelft.nl (D. Keskin).
However, these approaches often fail to offer studies of what radical
innovation entails for the organization (i.e., explaining to a project
team how to deal with the higher degree of uncertainty intrinsi-
cally linked to project radicalness) (Berchicci, 2005).
In addition, these approaches have focused rather on estab-
lished organizations and how to design and develop more
sustainable products within this context. While conventional
wisdom suggests that young and small firms have greater advan-
tages in innovation (Acs and Audretsch, 1990), as such they are the
potential candidates of offering radical solutions to the challenges
of sustainability, there are few studies examining how entrepre-
neurs exploit sustainable product ideas through new organizations.
Therefore this paper seeks to explore and characterize the product
innovation process in an entrepreneurial context driven by
sustainability ambition.
The data that builds up the empirical evidence for answering the
research questions raised were collected within the EcoMind
project. The EcoMind project, funded by the European Union’s
Interreg IVA “2Seas” programme, is an intervention program that
aims to address the specific support needs of SMEs who are seeking
to develop innovative products and services for sustainability.

0959-6526/$ e see front matter Ó 2012 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jclepro.2012.05.012
 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60
EcoMind brings together a partnership of seven organizations from
the Netherlands, France and United Kingdom. By assisting more
SMEs to become increasingly innovative in their design the project
aims to stimulate innovation in regions, increase economic growth,
increase the capitalization of knowledge and therefore contribute
directly to the EU agenda for Innovation and Knowledge Economy
and the Gothenburg Agenda; i.e., to make the EU a world leader in
sustainable development.
In this study firms and innovation support organizations
involved within the Ecomind project were interviewed in order to
investigate the innovation processes of new ventures and how the
sustainability intention of the entrepreneurs influences this
process. Interviewing three additional organizations in the
Netherlands extended the sample of the innovation support
organizations.
It should be noted that the ambition of this paper is not to define
what “sustainable innovation” is in an entrepreneurial context or
what “sustainable entrepreneurship” is or should be. This study
rather adopts an analytic stance and aims to explore how entre-
preneurs driven by sustainability develop a new organization from
a product idea. Therefore, at first instance some key concepts and
figures related to innovation and entrepreneurship have been
reviewed in the following sections.
2. Literature review
2.1. Product innovation
While scholars in DfS literature define ‘radicalness’ of an inno-
vation based on the environmental performance of the outcome
(Brezet et al., 2001; Charter and Tischner, 2001; Manzini and
Vezzoli, 2002; Mont, 2004; Tukker and Tischner, 2006a,b), the
scholars of innovation literature link the degree of radicalness/
novelty of an innovation to the levels of risk and uncertainty and
implications of these on the innovation process (Ansoff, 1980;
Rogers, 1995; Lynn et al., 1996; Christensen, 1997; Tidd et al., 1997;
Veryzer, 1998; Leifer et al., 2000; Rice et al., 1998).
There are mainly two different perspectives of how the innova-
tion process may unfold: rational/linear and non-rational/cyclic
(Buijs, 2003; Löfqvist, 2010). Rational/linear models suggest that
the innovation process is a sequence of activities that starts with the
definition of a problem and ends with the commercialization of an
end product (Archer, 1974; Roozenburg and Eekels, 1995; Dorst,
1997; Buijs and Valkenburg, 2000; Cooper et al., 2002; Buijs,
2003). The New Product Development (NPD) process is often por-
trayed as a linear model where a product proceeds from one phase to
the other (Roozenburg and Eekels, 1995). It is goal-oriented, linear
and visualised in consequent steps. Despite this logical linear
representation and the analytic logic, in practice the innovation
process is more chaotic and unstructured and may require an
experimental logic, particularly in case of radical innovations
(Hellman, 2007). This non-rational view of the innovation process is
illustrated as a learning process with intermediate outcomes (Schon,
1967; Lynn et al., 1996) unlike a single product as illustrated in NPD
models. Considering the technological and market uncertainties
involved within radical innovations, the innovation process is
characterized as a highly uncertain journey of exploration and
learning and modelled as a dynamic process of parallel activities in
technology development, early applications and continuous
learning (Hellman, 2007).
Even though there are different perspectives on innovation
processes and each innovation process is unique, there are similar
process patterns and common elements of innovation processes
(Van De Ven et al., 1999). These include an initiation period,
development period and implementation/termination period. The
51
initiation period represents a gestation period lasting several years
in which seemingly coincidental events occurred and set the stage
for the initiation of innovation. The period is characterized by
a divergent exploration of alternatives. For technological innova-
tions the targeted outcome of this phase is a technology-market
mix and a business case, instead of a well-defined product
concept as in NPD models (Hellman, 2007). The development period
typically involves proliferation of numerous ideas and activities
that proceed in divergent and convergent paths of development
(Van De Ven et al., 1999). It involves development of plans
submitted to resource controllers to obtain the necessary resources
needed to launch the innovation development (Berchicci, 2005).
The implementation/termination period occurs when inputs have
been converted into outputs or when the uncertainties have been
translated into risks (Schon, 1967). It begins when activities are
undertaken to apply and adopt an innovation regardless of who is
developing, implementing or adopting the innovation. Innovations
stop when they are implemented and institutionalized or when the
resources run out (Van De Ven et al., 1999).
2.2. Entrepreneurship
The concern for the socio-ecological system and human well-
being has given rise to the concept of sustainability as a broad social
goal and entrepreneurship is increasingly seen to contribute to this
goal (Parrish, 2009). Sustainability driven entrepreneurs see envi-
ronmental and social issues as opportunities that need to be
exploited in the market (Berchicci, 2005). They usually pursue
multiple goals including a diverse set of personal objectives (Baker
et al., 2005). Yet, balancing the sustainability goals with the desire
to make profits and maintain economic efficiency is no simple
matter (Zahra et al., 2009). In addition, entrepreneurs face chal-
lenges when translating their sustainability goals into product
attributes that offer customer value. One reason to that is the
uncertainty around the existence and severity of problems related
to sustainability and uncertainty about the best methods to address
these problems and the consequences of various solutions (York
and Venkataraman, 2010). In other words, innovations for
sustainability often require action in the absence of concrete
performance data, particularly regarding the social and environ-
mental consequences of the innovation in development (Berchicci,
2005).
In addition to the challenge of pursuing multiple goals and the
uncertainty around sustainability, they face distinct challenges due
to their inability to internalize all elements of the innovation
process (Maillat, 1990). Hence, linkages are needed with external
actors to get the required resources and capabilities to exploit the
innovation. Through those linkages, entrepreneurs get access to the
necessary information, resources and legitimacy along the firm
creation process. The network of the firm gives access to the rele-
vant information about markets and how to serve them (Elfring and
Hulsink, 2003). Particularly, in the early phases entrepreneurs must
access and deploy resources in order to exploit the opportunities
(Berchicci, 2005). Moreover, in order to reduce the perceived risks
by actors and prove the value of the new innovation, entrepreneurs
need to gain legitimacy (Aldrich and Auster, 1986).
Besides the challenges of the entrepreneurial context, this study
focuses on the innovation process associated with new organiza-
tion formation in a sustainability driven context. A process view of
entrepreneurship can be defined as “intentional act of new value
creation in which opportunities are created and realised through
various modes of organising” (Parrish, 2007) (See Fig. 1). In this
definition, entrepreneurial intention (i.e., entrepreneurs’ value and
motivation) is presented as an important dimension that guides
their entrepreneurial actions.
52 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60
Fig. 1. A process view of entrepreneurship (Parrish, 2007).
This process of new organization formation is characterised by
three development stages: an embryonic stage, a start-up stage,
and growth stage (Churchill, 2000; Benebo, 2010). The embryonic
stage is the initial stage of the development of a venture, and is
characterized by the development and validation of the product
technology. In the start-up stage the capability of having and selling
a product, and creating the business and its operations are most
important. The growth stage generally focuses on marketing of the
company and products for market entry into other target market-
segments (Benebo, 2010).
3. Method and cases
3.1. Research design
Based on the insights from literature, a conceptual model of
entrepreneurial value creation (Fig. 2) is developed. This model
builds on the framework of Parrish (Fig. 1) and integrates the theo-
retical representation of the innovation process by Van De Ven et al.
(1999) including three phases of the strict product development
process: an idea phase, design phase and commercialization phase.
19 interviews were conducted within this research in order to
understand the innovation processes of sustainability driven small
firms. Because relatively little research has been conducted on the
subject, a qualitative approach has been chosen to identify themes
and patterns that are relevant. Two studies were conducted to do so
(Fig. 3).
In study 1, eight Dutch firms participating within the EcoMind
project were interviewed to get insights into their innovation
processes. These consisted of spinoff companies of Delft University
of Technology (DUT) as well as companies that are established
differently. In selecting the cases, the following criteria were
considered:
- Firms in the process of developing new products based on
a sustainable product idea.
- Firms involved in innovations with a relatively higher degree of
complexity (i.e., moderate to radical innovations, and not
incremental innovations).
- Firms that cover different sectors (i.e., transport, housing,
energy, entertainment, see Table 1).
The majority of the firms in the sample have between one to five
employees and were established after 2002. Only one firm, namely
Fig. 2. The conceptual model of entrepreneurial value creation.
“Lantern”, has 20 employees and was established in 1924. Because
this firm was involved in a new product and business development
since 2006, it was considered to be an example of entrepreneurship
and thereby included as a case in this study.
From the perspective of novelty in terms of market and tech-
nology, half the firms in the sample worked with an existing
technology in a new market, two of them worked with a new
technology in an existing market and two of them worked with
a new technology in a new market, i.e., all firms in the sample
worked on moderate to radical innovations.
In addition, support organizations were considered as an
important source of information regarding the innovation
process of small firms driven by sustainability. In study 2, seven
support organizations were interviewed (Table 2). Four of the
organizations were involved in the EcoMind program. The other
three were public and commercial organizations that are not
involved in EcoMind. While selecting non-EcoMind innovation
support organizations, it was not always possible to find orga-
nizations with focus on supporting sustainable innovation
projects in the context of SMEs or new businesses. The organi-
zation “incubator” in Table 2 was established particularly to
support start-up firms that focus on developing sustainable
products and businesses and therefore found to be an interesting
case that provided valuable data for this study. The other two
organizations (i.e., “public support” and “commercial support”)
were established in general to support SMEs, but interested in
learning and supporting sustainable innovation projects. Never-
theless they were involved in this study since they were
considered as an important source of information for innovation
process within the context of SMEs.
3.2. Generative techniques
Different research techniques provide access to different levels
of knowledge (Fig. 4). Interviews provide insights into the infor-
mation what interviewees can say, which is mainly explicit
knowledge. Observations give insights into how people do things in
a certain physical context. What people know, feel and dream (i.e.,
latent and tacit knowledge) can be elicited in generative sessions
through the use of creative methods (Sleeswijk Visser et al., 2005).
Generative techniques have recently emerged from the design
discipline in order to explore the experiences, feelings and moti-
vations of users in a creative session. Such creative tools and
self-documentation techniques help participants to express
 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60
Fig. 3. Studies carried out within this research project.
themselves in a visual form while talking about their experiences
(Stappers and Sanders, 2003, Sanders and Stappers, 2008).
In this research, a mix of different type of methods was used in
order to get access to the different levels of knowledge. In addition
to interviews, in generative sessions entrepreneurs were asked to
reflect on a recent innovation process they went through and to
visualize it. The research procedure is explained in detail in the next
section.
3.3. Research procedure
At the time of the research no specific generative tools were
available to explore the tacit and latent knowledge of entrepre-
neurs about their innovation process. As such the research team
developed a ‘tailor made’ generative tool for this purpose. Based on
the theoretical representation of the innovation process by Van De
Ven et al. (1999) three phases of the strict product development
process were incorporated into a visual framework: an idea phase,
design phase and market introduction phase (Fig. 5). Before and after
these phases room was left open to investigate the initial conditions
(i.e., intended value) and functional endpoint (i.e., value created) of
the process (Parrish, 2007) (based on the conceptual framework,
Fig. 2). Moreover, the network of the firm was visualised through
the circles around each phase in order to investigate the type, role
and importance of various stakeholders along the firm creation
process.
In study 1, this visual framework in combination with images
that might inspire certain events along the innovation process
printed on stickers (from now on called “generative tool”) has been
used while interviewing the entrepreneurs. The development and
use of this generative tool is described in more details in another
article of the authors of this paper (Keskin et al., 2011). Two
researchers conducted eight of the ten interviews with entrepre-
neurs. The interview questions can be found in the appendix of this
paper.
Simultaneously study 2 was carried out. Seven innovation
support organizations were interviewed about the innovation
process of SMEs, in particular small sustainability driven firms and
how they use their network. Seven out of nine interviews with
support organizations were conducted by one researcher, the other
two were conducted by the two researchers.
The interviews were conducted over the period of April till July
2010 and lasted between one and 2 h. In some cases follow-up
Fig. 4. Different research techniques access different levels of knowledge (Sleeswijk Visser et al., 2005).
53
interviews both with entrepreneurs and support organizations
were held to further clarify issues. All the interviews were tran-
scribed and analysed by the two researchers.
In addition to the generative sessions, company reports and
websites were analysed for additional relevant data.
4. Cross case analysis
The conceptual model presented in Fig. 2 will serve as a guide
for the cross case analysis in this section. The initial intention and
ambition of entrepreneurs regarding sustainability, most signifi-
cant factors along the innovation process and the value created at
the end of the process are considered in this analysis (Parrish,
2007), see Fig. 6.
Amongst the others, external factors found to be most relevant
within this study are the external validation of the opportunity,
network and market orientation. The most relevant internal factors
were found to be human resources and innovation management
skills. The external validation of the innovation is the most influ-
ential in the idea phase of the innovation process. Human
resources, networking and managing the innovation process are
relevant for all phases of the innovation process but particularly
affect the beginning of the design phase. In the commercialisation
phase the market and user orientation of the firms manifests the
process.
4.1. Starting conditions
In this study, the initial intention and ambition of entrepreneurs
regarding sustainability is concerned with whether sustainability
was a driver for innovation, how many aspects of sustainability
were addressed by the firm, whether this was integrated in all
phases of the innovation process (idea, design, commercialization)
(Table 3).
The internal drivers in contrast to the external drivers were
found to be more relevant for firms when considering sustain-
ability. The most mentioned internal drivers were creating envi-
ronmental awareness, the prospect of green marketing, the
opportunity to create new value and innovation. The support
organizations interviewed in this study confirmed that firms that
pursue sustainability goals are mainly driven by entrepreneurs’
personal values and ambition to prove why their sustainable ideas
will be successful.
All firms studied considered environmental aspects of
sustainability through energy saving. Linked to energy saving is
cost saving. This orientation towards environmental aspects of
sustainability and cost saving is in line with historic develop-
ments in the DfS research domain (Charter and Clark, 2007;
Cohen et al., 2008; Dewick and Pietikainen, 2008; Brink et al.,
2009). However, breaking with historic trends, about half the
54 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60

Table 1
Case descriptions (the names used are pseudonyms).

Firm “Bike” “Solar” “Fun power” “Truck” “Plug” “Boat” “Party” “Lantern”
Industry Transport Energy, lighting Energy, Transport Energy Marine, housing Energy, Energy, lighting
entertainment entertainment
Product Cargo bicycle Lighting for Means for Elements to make Reduce energy A boat for living Energy generating Historic LED
developing interactive trucks more consumption of and working dance floor street lighting
countries domestic, energy aerodynamic appliances
reduction
Novelty of the Existing Existing New technology, New technology, Existing Existing technology, New technology, New
innovation technology, technology, new market. existing market technology, new market new market technology,
new market new market new market existing
market
Start-up year 2009 2009 2009. 2008 2002 2004 2006 1924
DUT spinoff Yes Yes Yes Yes No No No No
Development Embryonic Embryonic Embryonic Embryonic phase, Start-up firm, Start-up firm, Start-up firm, Established
phase phase, product phase, product phase, product market market phase market phase, market phase, firm, product
testing development development, testing, preparing design iterations product development
market testing commercial launch improvements
Sustainability Reduce emissions, Reduce emissions, Reduce energy Reduce fuel Reduce energy Reduce consumption Power clubs Reduce energy
goals make transport improve living consumption, consumption, consumption of resources (energy, through the floor, consumption
available to all conditions, create create awareness economic gains of household water) in an create awareness of historic
employment in a fun way appliances alternative space amongst young street lanterns
for living and people
working
Informant Founder Founder Founder Founder Founder Founder CEO Manager

firms either explicitly strived to create awareness about sustain-
ability (“Fun Power” and “Party”) or strived for social impact with
their products (“Bike” and “Solar”). In these firms innovation
covered all three pillars of sustainability (Elkington, 1998). Three
of these firms (“Fun Power”, “Bike” and “Solar”) were developing
a product-service system (PSS), which is a more radical approach
to sustainable innovation (Tukker and Tischner, 2006a,b). These
firms (“Fun Power”, “Bike” and “Solar”) were all DUT spinoffs,
which could signify that knowledge of PSS is an effect of the
education of the founders.
Half of the firms studied were taking sustainability beyond the
idea phase of their product by also taking into account materials
used in the product and other sustainability aspect along the
product life cycle. Integrating sustainability in all phases of the
innovation process seems to be difficult for many firms. This might
be linked to the disadvantages of small firms, i.e., lack of resources
in terms of time, knowledge and skills (Hemel and Cramer, 2002)
and a focus on daily activities that found to impede innovation in
small firms (Kaufmann and Todtling, 2002), particularly in start-
ups (Freimann et al., 2005).
4.2. The innovation process
There is a multitude of internal and external factors that may
influence the innovation process. This study will focus on a select
number of factors that emerged from the data. The relative
importance of these factors is linked to the different phases of the
innovation process and explained in the following sections.
4.3. Idea phase
Given the low level of firm legitimacy, resources and market/
technology competences, the external validation of the opportunity
becomes an important factor at this phase. Entrepreneurs seek

Table 2
Description of the support organizations.

Country Type of support Supporting sustainability Informant

organization driven small firms?
Ecomind support 1 Netherlands Commercial Yes, also larger firms Project manager
foundation
Ecomind support 2 UK University Yes, also larger firms Project manager
Ecomind support 3 UK Public Yes, also larger and Project manager
non-sustainable firms
Ecomind support 4 UK Public Yes, also larger and Project manager
non-sustainable firms
Public support 1 Netherlands Public Not necessarily. Main Regional innovation
focus is to support SMEs manager
in general but is interested
in learning and supporting
sustainable innovation
projects in the context
of SMEs
Incubator Netherlands Incubator Yes, sustainable start-ups Incubation manager
Commercial support Netherlands Commercial Not necessarily. Main focus Intern, workshop visit
is to stimulate innovation
in the manufacturing and
creative industry by
making new connections
between different
stakeholders
 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60
Fig. 5. Generative tool visualising the innovation process and stakeholders necessary for innovation.
legitimacy to prove the value of the new innovation and get access
to the necessary information and resources in order to exploit the
opportunity.
4.3.1. External validation
Creating early interest for their products was important and
relevant to all firms, especially in order to come into contact with
investors or sponsors. The young firms/entrepreneurs have created
this interest through competitions (see Tables 1 and 4). Without
exception, ‘business plan’ and ‘new venture’ like competitions have
created a platform for ideas to be presented and tested by
a professional audience for feedback. Entrepreneurs stated that
competing in competitions and ‘tasting’ the enthusiasm and
potential was the motivation to really start a business. A network of
advisers and potential clients were built through these competi-
tions. As the firms developed and gained credibility through the
competitions, they started generating financial resources from, for
instance, paid public presentations and eventually from subsidies
and bank loans.
Next to competitions, acquiring sponsorships to develop the
product was very important to firms. “Bike” was able to boost the
development of the product and the venture through sponsorships
to build a prototype. Firms managed to acquire sponsors for
development achieved this through the enthusiasm their product
created in competitions.
In contrast to young entrepreneurs, experienced entrepreneurs
mainly relied on investors or bank loans as they are more advanced
in their network building process. A requirement for investors was
a proven external interest for the product, for example through
statements of intent. Entrepreneurs, furthermore, created interest
for their products through visiting fairs. In some cases, they were
being approached by larger organizations.
Fig. 6. Internal and external factors that influence the innovation process.
55
4.4. Design phase
Human resources and innovation management skills as internal
factors, and networking as an external factor are relevant for all
phases of the innovation process but especially affect the beginning
of the design phase (Table 4).
4.4.1. Human resource development and innovation management
skills
Although human resources are relevant when starting up the
firm, the need for capacity and expertise for innovation becomes
more apparent during the development phase since more and
diverse tasks need to be fulfilled by the team. Considering the
expertise available in firms a distinction can be made between
mono-disciplinary teams and multi-disciplinary teams. Mono-
disciplinary teams are considered to consist either of one person
or of partners that have worked together in the same industry for
a long time (“Solar” and “Bike” among embryonic firms and “Boat”
and “Plug” among start-up firms). In firms with mono-disciplinary
teams various relations need to be managed by one or two
firm owners. This leads to an overload of work, particularly for
embryonic firms, as they are immature in their network building
process.
In embryonic firms, multi-disciplinary teams consisted of an
engineer or designer and an entrepreneur since early stages of the
company. In established firms, multi-disciplinary teams have
generally grown with the firm (e.g., “Party” and “Lantern”). In firms
with multi-disciplinary teams it appears that fewer tasks need to be
outsourced, and the need to expand the team with different
expertise is better identified. These teams seem to become relevant
during the design and development phase since diverse tasks need
to be fulfilled.
56 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60

Table 3
Initial conditions.

Firm “Bike” “Solar” “Fun power” “Truck” “Plug” “Boat” “Party” “Lantern”
Opportunity User and User and User and Economic goals, Sustainability Personal product Sustainability Sustainability
identification sustainability sustainability sustainability technology problem, based use, based on own problem, own problem,
problem, based problem, based problem, based orientation, on own frame frame of reference frame of customer
on own frame on own frame on market and based on of reference reference, demand,
of reference of reference user research research also researched somewhat
researched
Sustainability. . driver to Yes Yes Yes No Yes No Yes Yes
start
project?
. aspects Social and Social and Environmental Environmental Environmental Environmental Environmental Environmental
(issues) environmental environmental issues and issues issues issues issues and issues
addressed issues issues creating creating
awareness awareness
. in idaea? Yes Yes Yes Yes Yes No Yes Yes
. in design? Yes No No Yes No Yes Yes Yes
. in sales? Intended Intended Yes Yes Yes No Yes Yes

The composition of teams and managing the innovation (e.g.,
compensating lacking knowledge, outsourcing and detail devel-
opment) are closely linked to each other. Except the start-up firms
with multi-disciplinary teams (“Party” and “Lantern”) and teams
consisting of detail developers (“Bike”) all firms lacked the
knowledge and capacity for the detail development and needed to
outsource that part of the process. A lack of knowledge in the area of
detail development and a dependency on external parties made the
innovation process more complicated. The founder of “Truck”
stated: “We should have contacted a design firm at an earlier stage in
our process. First we thought we could do the detailing and design
ourselves. We also should have contacted our producer at an earlier
stage. Here we also thought we could do the final detailing of molds
ourselves. In the end about 30% of the detailing of the designers had to
be redone because it did not fit the production process at our
producer”.
Among the different types of firms, the embryonic firms with
multi-disciplinary teams worked more closely with their detail
developers. The start-up mono-disciplinary firms preferred not to
be involved in detail development.
4.4.2. Network
Although network is an important factor for all phases of the
process, network needs becomes more apparent as the amount and
diversity of tasks increase during the development phase. This was
more obvious in the case of firms with multidisciplinary teams (i.e.,
“Fun Power”, “Truck”, “Party” and “Lantern”). They actively sought
for new contacts in order to expand their network and insource
external knowledge for the technology/product co-development. In
addition, they were better at identifying their network needs. In
cases where the opportunities originated from the owner’s own
frame of reference (i.e., where the dominant character of entrepre-
neur might dictate the innovation process), network building
process was rather ad-hoc and coincidental. In cases where the
firms started off on the premises of research, entrepreneurs could
use research as a means to build a platform of industry contacts in
order to in-source the necessary knowledge and develop contacts
with clients. The research and resulting network compensated the
lack of knowledge within the firm. In these cases, network building
process was done more orderly and consciously.
In the case of firms with mono-disciplinary teams, network
building process was more ad-hoc and coincidental. They did not
actively seek for new contacts or knowledge and rather relied on
their existing network. Moreover, they had troubles in identifying
their network needs managing external relations. They outsourced
design, detailing and production and were involved as little as
possible in detail development, with the exception of “Bike” as
founders were also the detail developers.
4.5. Commercialisation phase
In the commercialisation phase an important factor that was
recognised in the sample was the degree to which markets and
users are consulted (Table 4).
4.5.1. Market and user orientation
The analysis of the sample showed that some firms that
participated in competitions could successfully use them during
the commercialisation phase as well. Parties that became interested
in new product ideas during competitions, often became first
customers or test partners. In the case of “Truck”, for instance, once
products were improved and evaluated positively, test partners
were contractually obliged to purchase the products. In a similar
way, “Lantern” provided test set-ups on location for clients to be
able to judge the product before deciding to purchase. In these
testing processes these firms succeeded in being responsive to their
customers’ needs and requirements. Other channels firms used to
gain first customers were internet, word of mouth and active
promotion to distributers.
Some firms in the sample could maintain relations with
potential clients/users throughout their entire innovation process.
This gives them both a channel for first sales as described above,
and insights in market requirements. This can be described as
a more pro-active approach in which market insights are gained and
used right from the idea phase (and possibly even before). This
seems to be different for other firms where relations with the
market and users are more limited and concentrated around the
commercialisation of a product. In this case firms operate in a more
reactive way, guided by learnings from the market once the product
is being sold or fails to sell.
4.6. The functional endpoint
Previous sections gave an analysis of the factors influencing the
initiation period and the innovation process. To conclude, this
section examines the functional endpoint of the innovation process
and whether this matches to the original idea and initial intentions.
4.6.1. Value created
In majority of the cases, the initial conditions (i.e., intended goals
of sustainability and customer benefits) and the value created differ
significantly. In the case of firms in their embryonic phase, the
Table 4
Internal and external factors influencing the innovation process.

Firm “Bike” “Solar” “Fun power” “Truck” “Plug” “Boat” “Party” “Lantern”
Participation in Yes Yes Yes Yes No Yes No No
competitions

D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60

Funding Competition prize Competition prize Competition Competition prize Investors Bank/investor Sponsorship, subsidies, Firm capital, investor
money, sponsorship money prize money, money, subsidy, bank loan
paid public bank loan
presentations
Human resources 2 designers 1 idaea generator 1 engineer, 2 engineers 1 engineer, 1 1 idaea generator 1 entrepreneur, Mainly craftsmen,
at start of 1 entrepreneur entrepreneur, graduate students small sales force
development 2 idaea generators
Human resource None None None 1 entrepreneur, None None 1 business developer, Expand to 20 people:
expansion 1 engineer 1 engineer, 1 finance, 1 sales manager, sales, marketing
during
development
Network needs New network, New network, business New network, New network, build Existing network Mainly existing New and existing network, New and existing
business development, development, strategy, business industry platform, (i.e., known designer, network and some new engineers, designers network, new engineers
strategy, production product development, development, designers, producers producer and distributor) new contacts, new and producers
production strategy designers and
production producer
Market and user Close cooperation Close cooperation Close cooperation Close cooperation No No Limited Limited
orientation with potential users with potential users with potential with potential users
users and clients and clients
Value created Easy to understand Easy to understand, but Easy to understand First product tests Product sales are Product sales Easy to understand, but too Easy to understand but
product, complicated slightly complex service but more service- are successful. Easy to below expectation. are slow. Easy to expensive to sell in intended perceived as expensive.
service system to system. Social and oriented system. understand product. Simple product but understand market, rented instead.
replace less sustainable financial model more No insight into the Energy saving, cost difficult to understand the product.
forms of commuter and important than product. use of appliances reduction, increased by consumers. Limited Perceived value by
passenger transport. yet safety. energy saving. consumers is low.

57
58 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60
differences are relatively small. Although the products are not yet in
the market, it is still possible to make some conclusions based on the
feedback firms received from customers and competitions. The
products (i.e., prototypes, demonstrations) of embryonic firms
deliver a functionality closely matched to the original idea, i.e.,
intended customers perceive the products as intended. The products
are all easy to understand, but insights in market and user require-
ments might have led to more complicated service systems.
Whether this complexity impedes the development of successful
products cannot be said since the products are not in the market yet.
Amongst the start-up firms with less of an orientation towards
customers, there is a bit of a difference. “Plug” and “Boat” do not
necessarily have complex products but the intended customers did
not perceive the products as intended. Although “Plug” could achieve
the intended goals regarding sustainability (i.e., developing a ‘charge-
stop’ which switches off charging devices after 8 h being plugged), it
could not achieve the intended market success. One of the arguments
used by the firm was the current economic crisis, which slowed down
the sales. Moreover, “Boat” was not successful in selling the product to
the intended customers (i.e., individuals who want to live on water);
on the other hand financially the product was more attractive to
companies who want to use the boat for other purposes, e.g., orga-
nizing events. Yet, the intended market success could not be achieved.
The entrepreneur stated: “People will buy our product as a yacht, office
space and second home, but not as their primary living space as I initially
anticipated. I lived like that and loved it, but people do not necessarily
want it. Designing for myself is a problem and maybe the reason why we
haven’t sold so much yet”. This lack of matching the product to user/
customer needs could be attributed to a lack of market-oriented
management (i.e., reactive approach, guided by learnings from the
market once the product is being sold or fails to sell).
“Lantern” and “Party” products are both simple to understand,
but difficult to sell, as they are expensive and the efficiency of the
technology is still not optimized. In the case of “Party”, considering
sustainability goals, the difference between the intended value (i.e.,
power an entire club) and the created value (i.e., only power the
dance floor itself) is considerable. “Party” has been able to get
intended customers (i.e., clubs) to buy into the intended value (i.e.,
power an entire club), hence building a strong international
network, but clubs deemed the perceived value of the floor too low
to purchase it. “Party” has actively adapted to this reality by shifting
to a different market and customer group for whom the perceived
value is high enough, i.e., companies that like to lease the floor.
Hence, in the case of “Party” the floor is a reasonably successful
product for them, but not as originally intended. In the case of
“Lantern”, intended customers (i.e., municipalities) perceived the
product too expensive to purchase it. “Lantern” has adapted to this
reality by involving inhabitants of old city centres, which greatly
value the appearance of historic lanterns. By involving the inhabi-
tants into the process, “Lantern” could create pressure on munici-
palities to opt for products of “Lantern”.
5. Conclusions
Conventional wisdom suggests that young and new firms have
advantages in innovation and as such they are the potential
candidates of offering radical solutions to the challenges of
sustainability. However, only few studies address how the inno-
vation process takes place within new organizations. Although
there is a multitude of factors that influence the innovation process,
this paper discusses a select number of factors that emerged from
the data based on eight new ventures. In addition, how sustain-
ability is incorporated in this process is explored.
First of all, design and business related decisions at the idea
phase appear to be driven mainly by the external validation of the
opportunity. In cases of young firms (that do not have an estab-
lished network yet), the decisions were primarily driven by the
feedback firms received from ‘new venture’ like competitions.
Competitions were a test ground for these firms in order to develop
their innovation idea in terms of product, market, business model
as well as sustainability. Furthermore, competitions were a way of
building their network and credibility and getting access to first
clients. On the other hand, experienced entrepreneurs have rather
mature networks and they mainly relied on investors and banks for
the validation and funding of their innovation idea.
Considering the design phase, human resources and innova-
tion management appears to drive the innovation process.
Human resources or team composition becomes important in
this phase since more and diverse tasks need to be fulfilled. In
more balanced (i.e., multi-disciplinary) teams it appears that
fewer tasks need to be outsourced and the need to expand the
team with different expertise is better identified. On the other
hand, in mono-disciplinary teams more relations need to be
managed by one or two firm owners, which might lead to an
overload of work. In relation to the team composition and
innovation management is the network needs of the firms. More
balanced multi-disciplinary teams were better at identifying
their network needs and actively expanded their network. On
the other hand, firms with mono-disciplinary teams had troubles
in identifying their network needs and managing external
relations.
Finally, the degree of market orientation appears to be an
important factor that drives the commercialization phase. Firms
with a more pro-active approach to marketing gain and use market
insights more effectively from idea phase on. In contrast, firms with
a reactive approach to marketing are guided by learnings once the
product is in the market; either being sold or failed to sell.
Moreover, considering the sustainability aspect, some firms in
the sample attempted to take sustainable innovation beyond the
traditional environmental focus, in order to incorporate social
aspects, as well as create awareness for sustainable behaviour
through their products. A majority of these firms developed
services in combination with products in order to decrease envi-
ronmental impact of products and create awareness among users.
Although half of the firms attempted to take sustainability beyond
the idea phase, all firms confirmed that integrating sustainability in
all phases of the innovation process is a challenge considering the
lack of knowledge, as well as the uncertainty around the existence
and severity of problems related to sustainability and the best ways
to address them.
The cases demonstrate that creating new businesses from
sustainability ideals is influenced by the firms’ ability in under-
standing and managing the differences between intended and
created value and in finding an overlap between customer benefits
and clearly defined (prioritized) sustainability goals, i.e., translating
sustainability goals into product features that contribute to
customer value. In addition, creating economically viable busi-
nesses depends on firms’ ability in dealing with shifts in sustain-
ability goals and customer requirements. In cases sustainability
requirements are not met with the early versions of the product,
firms might prefer to search for different marketeproduct combi-
nations. Firms’ ability in shifting sustainability goals, crafting new
value propositions accordingly and adapting product design influ-
ences their market performance.
The outcome of this study provides insights in how sustain-
ability driven entrepreneurs manage their innovation process,
specifically in embryonic and start-up phase of the business
development. These insights can be used to support these ventures
(by for example innovation support organizations) in a more proper
way by offering tailor made support tools.
 D. Keskin et al. / Journal of Cleaner Production 45 (2013) 50e60
The selected number of cases enabled an analysis of innovation
process of sustainability driven entrepreneurs. Nevertheless, this
approach also poses several limitations. First of all, the research is
based on a limited sample of eight firms making it difficult to
generalize the findings. A case study would yield an in-depth
analysis, which would increase the accuracy of the results. A
second factor that complicated the analysis further is that all
embryonic firms were spin-offs of DUT, and all start up firms were
not. This bias should be addressed in further studies, including
other firms in the embryonic phase of business development.
Furthermore, since these firms are in the embryonic stage of
development the value created for clients is difficult to judge. Any
judgements about value created are primarily based on prototypes
that are tested with a limited number of clients and users.
Acknowledgements
The authors would like to thank Prof. Kristina Lauche for her
contribution in the earlier version of this paper.
Appendix. A Interview questions
Study 1 e Small sustainability driven firms
1) Innovation process
 Taking in mind a recent innovation project, could you
describe, draw and fill in the events that occurred in it? You
can draw and make this process and talk us through it at the
same time.
 What were the most significant events?
 How would you describe the products you are working on:
complex or relatively simple?
 Where do sustainable issues play a role in the process?
 Why is sustainability important to you? Did you have diffi-
culties with this?
 Were there moments in this process when you needed to
learn more about something? Where or with who did find
new information?
 What are the problems you encountered in the process?
(skills, knowledge, attitude experience, with other partners,
people around you, communication, financing). Why did you
have these problems?
 Looking back on the process, what are things you would do
differently? (in terms of process, contacts, search for
knowledge)
 What aspects of this recent process are general to all your
innovations? What aspects are specific for this project?
2) Business network
 For the stages in the innovation process, could you make
a map of the contacts/stakeholders that are relevant for your
business-network? You can make the model and talk us
through it at the same time (suppliers, clients, consultants,
commercial firms, research institutes, law firms, financial
firms)
 Which stakeholders are involved in this process? Could you
indicate the formal (advisers, suppliers, researchers, part-
ners) and informal contacts (family, friends) using the circles
on the sticker-sheet? Could you place the most important
contacts closest to the centre and the least important
contacts on the outer circle? Could you write their names on
the labels? What kind of knowledge do these partners
provide you with? Could you write this on the labels too?
(business, design, sustainability, technology, user, market,
legal, commercialization)
 How do you interact with these contacts? (you can use the
stickers: meet in person, via e-mail, phone calls, at
59
workshops) How would you describe your interactions
(open, closed, trust, inspiring etc)
 How do these contacts contribute to your innovation
process? Do you especially use your relations for the
knowledge you know they have, or to find new ideas for
your business?
 How did you first meet these contacts?
 Which contacts (that you currently do not have) do you
think would be an asset to your business network?
Study 2 e Support intermediaries
1) Approach to support
 Could you describe your regular approach and methods to
supporting small (sustainable) businesses that you work
with?
 Do you have specific methods or tools that you regularly use
to provide support? Why do you use these?
2) Innovation support
 What are your client’s (particularly SMEs) aspirations when
they turn to you for support?
 What are the things you typically help them with? (what
kind of knowledge or skills?) What are the main challenges?
How do you help them?
 Is there a specific part of the innovation process (idea-
design/development-commercialization) that a lot of
companies struggle with?
 Is it possible to characterize companies or entrepreneurs in
some way?
3) Network
 How do you value connecting companies to other parties?
 How do you experience that companies use their external
contacts?
 Which contacts to your opinion are often lacking within
a company’s network?
4) Sustainability
 Are there differences when providing innovation support to
small companies involved in sustainable innovation?
 How often to SMEs approach you with sustainability related
issues/challenges?
5) Dialogue
 Considering the entrepreneur-consultant dialogue, what
main (communication) issues do you see?
 Are entrepreneurs open about their needs and capable and
open to explaining them?
 What e to your opinion e are the most difficult items for
entrepreneurs to talk about in the Ecomind Action Plans (if
you use these)?
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