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Business Model Innovation in Edtech - An exploratory study of business

model innovation in a complex market environment

Thesis · May 2017

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Stockholm School of Economics (SSE)
Institute of Marketing & Strategy
15 May 2017

MASTER THESIS
BUSINESS MODEL INNOVATION in EDTECH
An exploratory study of business model innovation in a complex market environment

ABSTRACT:
Edtech companies are in a nascent, complex industry and face two broad challenges, (1) finding a
viable business model and (2) catering to a multitude of stakeholders. Addressing the empirical gap,
a practice-oriented case study was conducted. The authors apply a value network perspective and
the dynamic capability framework to understand their interplay and impact on a company’s
business model innovation. The purpose of the study, therefore, is to investigate how one edtech
company devised and developed its business model to continuously create, capture, and deliver
value for, and in collaboration with, its value network. The analysis confirms that both, the value
network and the dynamic capabilities of an edtech company play an essential role in driving
business model innovation. Paradoxically, the more the value network expands, the more the
changes driving business model innovation stem from within the company. The authors attribute
this finding to the fact that by continuously interacting with [sensing] the value network, companies
develop and hone dynamic capabilities.

Keywords: Education technology (edtech), business model innovation, value network, dynamic
capabilities

Authors:
Shreeti Badhani, MSc Business & Management, 40843
Julia Mut, MSc Business & Management, specialization Marketing & Media Management, 40877

Supervisor: Professor Per Andersson Examiner: Professor Micael Dahlén

 Badhani & Mut, 2017

Acknowledgements
First and foremost, we would like to thank our supervisor, Per Andersson, for his relentless
encouragement, exceptional guidance and eternal enthusiasm. Your constructive feedback was
invaluable to our progress.

Second, we are deeply grateful to Sensavis for participating in our study, and particularly to Fredrik
Olofsson, Helene Ruda, Peter Nordlander and Marvin Turkia for creating a thoroughly enjoyable
data collection process. Thank you for your trust in sharing your stories of failure, success and
constant iteration with us. Your passion for what you do leaves us with great optimism for the
company’s future.

Third, we are indebted to all our interviewees for the thoughtful conversations we were lucky to
have. Your passion to transform the education sector is contagious.

Last but not least, thank you to Felix Bender and Benjamin Lau for providing valuable feedback.
Special thanks to Professor Vaishali Mamgain for your honest, critical and constructive input,
including the following ingenious contribution, that kept us in good spirits days ahead of the thesis
deadline: “The word “learnings” gives me a furry tongue - It’s not grammatically correct and is entirely too ’new
Agey’ for me but if you tree huggers in Sweden like to use it, do it by all means ;-).” [note: you no longer will
find the word ‘learnings’ in this thesis.]

About the authors

The authors are M.Sc. students Shreeti Badhani (Shreeti.badhani@gmail.com) and Julia Mut
(Julia_mut@hotmail.com). This master thesis is the final assignment of the 2-year Master of
Science program at Stockholm School of Economics (SSE), Sweden. Shreeti Badhani has a
background in Economics, Sociology, Business & Management. Julia Mut has a background in
Business & Management, specialized in Marketing & Media Management.

Originally from India and Kazakhstan, both authors have experienced education as one of the most
transformative forces in people’s lives and on a broader scale for entire societies and economies.
Their passion for education, combined with a deep interest in digitisation led to the writing of this
master thesis, which ended up being as much work as a passion project.

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 Badhani & Mut, 2017

GLOSSARY

Edtech Short for educational technologies. Refers to digital technology products

and services used to facilitate learning and skills development.

Edtech companies Commercial businesses developing educational technologies for

education.

Edtech industry Economic activity concerning the demand and supply of educational
tools and services. In this thesis defined as emerging and complex.

K12 education K12 (spoken as ‘k through twelve’) comprises the sum of primary and
secondary education. The expression is a shortening of kindergarten (K)
for 4-to 6-year-olds through twelfth grade (12) for 17-to 19-year-olds.

Buyer Prime decision maker for purchasing decisions. In this thesis, this refers
to the prime decision maker of buying decisions for public or private
schools. This varies across markets and can include headmasters, IT
departments and governmental institutions.

Consumer A person who purchases goods and services for personal use. In this
thesis referring to all actors who use edtech tools.

Customer In this thesis, schools are regarded as customers, as they consume

‘education technology’ for instructional use.

User Teachers who use edtech in classrooms to engage students and improve
learning outcomes. In some cases, this can also refer to students who are
using edtech products.

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 Badhani & Mut, 2017

TABLE OF  CONTENTS  
1. Introduction ............................................................................................................. 8

1.1 Research Gap ............................................................................................... 9

1.2 Purpose & Research Questions ..................................................................... 10

1.3 Research Outline ......................................................................................... 11

1.4 Delimitations ................................................................................................ 12

1.5. Background & Pre-Study ............................................................................... 12

2. Literature Review ................................................................................................... 17

2.1 The Importance Of Business Model Innovation ................................................... 17

2.2 State Of Literature On Business Models & Business Model Innovation .................. 17

2.2.1 What Is A Business Model, And What Does It Do? ....................................... 17

2.3 Dynamic View Of Business Models .................................................................... 18

2.3.1 Process School ........................................................................................... 19

2.3.2 Technology Driven School .......................................................................... 19

2.4 Synthesis Of Literature Review ........................................................................... 20

3. Building The Theoretical Framework ......................................................................... 21

3.1 Value Driven Business Model Canvas ................................................................ 21

3.2 Network Perspective On Stakeholder Theory ..................................................... 23

3.2.1 Network Perspective On Value Creation & Value Flows ............................... 23

3.2.2 Network Value Analysis (Nva) ................................................................... 23

3.3 Dynamic Capabilities Framework....................................................................... 25

3.4 Synthesis & Visualisation Of Theoretical Framework ............................................ 27

4. Methodology.......................................................................................................... 29

4.1 Methodology & Fit ........................................................................................... 29

4.2 Research Design ............................................................................................... 29

4.2.1 Research Philosophy .................................................................................. 29

4.2.2 Research Approach ................................................................................... 30

4.2.3 Research Strategy ...................................................................................... 30

4.2.4 Research Choice & Triangulation ................................................................ 31

4.2.5 Data Collection & Data Analysis ................................................................. 31

4.3 Research Process .............................................................................................. 34

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 Badhani & Mut, 2017

4.4 Quality Of Study .............................................................................................. 35

4.4.1 Consistency ............................................................................................... 35

4.4.2 Credibility ................................................................................................. 35

4.4.3. Transferability ........................................................................................... 36

5. Empirics ................................................................................................................. 37

5.1 Sensavis, Stage 1 [2008 – 2012] ...................................................................... 37

5.2 Sensavis Stage 2 [2013] ................................................................................... 40

5.3 Sensavis Stage 3 [2014] ................................................................................... 42

5.4 Sensavis Stage 4 [2015] ................................................................................... 45

5.5 Sensavis Stage 5 [2016] ................................................................................... 47

6. Analysis ................................................................................................................. 51

6.1 Business Model Innovation & Value Networks .................................................... 51

6.1.1 Definition Of Value Flows ........................................................................... 51

6.1.2 Sensavis’ Value Network Evolution ............................................................. 52

6.1.3 Concluding Remarks .................................................................................. 56

6.2 Business Model Innovation & Dynamic Capabilities............................................. 58

6.2.1 Value Creation .......................................................................................... 58

6.2.2 Value Delivery ........................................................................................... 59

6.2.4 Value Capture ........................................................................................... 60

6.2.3 Value Proposition .......................................................................................... 62

6.3 Business Model Innovation In Edtech – Concluding Remarks ............................... 64

7 Discussion ............................................................................................................... 67

8. Conclusion.............................................................................................................. 68

8.1 Limitations ........................................................................................................ 68

8.2 Theoretical Contribution .................................................................................... 68

8.3 Managerial Implications ................................................................................... 69

8.4 Future Research ................................................................................................ 69

References ............................................................................................................. 70

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 Badhani & Mut, 2017

LIST OF APPENDICES

Appendix 1: Edtech Investments 2011-2016 ................................................................ 76

Appendix 2: Literature On Educational Technology ...................................................... 77

Appendix 3: Introduction To Sensavis .......................................................................... 78

Appendix 4: Pre-Study & Main Study Interviews .......................................................... 80

Appendix 5: Swedish Education System ...................................................................... 81

Appendix 6: Exploring Business Model Innovation ....................................................... 82

Appendix 7: Business Model Canvas (Osterwalder & Pigneur, 2010)............................ 83

Appendix 8: Research Onion (Saunders Et Al., 2007) .................................................. 84

Appendix 9: Sample Interview Guide .......................................................................... 85

Appendix 10: Sample Introduction Email ..................................................................... 86

Appendix 11: The 3d Classroom ................................................................................. 87

Appendix 12: Sensavis Content Portfolio ..................................................................... 88

Appendix 13: Sensavis’ Future In The Clouds ............................................................... 89

Appendix 13: Business Model Changes & Drivers Of Change ....................................... 90

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 Badhani & Mut, 2017

LIST OF FIGURES
Figure 1: Identifying the Research Gap

Figure 2: Value Based Business Model Canvas

Figure 3: Network Value Analysis & Map

Figure 4: Dynamic Capabilities Framework

Figure 5: Theoretical Framework

Figure 6: Circular Research Process

Figure 7: Teacher IT Savviness Graph

Figure 8: Sensavis Customer Growth, 2013 - 2016

Figure 9: Sensavis Value Network, Stage 1

Figure 10: Sensavis Value Network, Stage 2

Figure 11: Sensavis Value Network, Stage 3

Figure 12: Sensavis Value Network, Stage 4

Figure 13: Sensavis Value Network, Stage 5

Figure 14: Revised Theoretical Framework

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 Badhani & Mut, 2017

1.   INTRODUCTION
Digitisation is fundamentally transforming industries and challenging established industry logics
(Bughin, Dhingra & Stamenov, 2017). While banking, retail and healthcare, for example, have
undergone systemic changes over the past three years (Bughin, Dhingra & Stamenov, 2017), the
education industry is still at an early stage of technology adoption (WEF, New Vision for
Education, 2016). Particularly, the K121 education sector (K12) has barely changed in the past
century (Anant Agarwal, CEO of edX via Raths, 2014; Evans & Horn, 2013). While there have
been impressive improvements in access to education, traditional education systems, teaching
methodologies and examination practices are failing to prepare children and young people for their
working future (WEF, New Vision for Education, 2016).

Firms developing educational technologies, referred to as ‘edtech companies’, are challenging this
status quo by creating digital products and services that present educators around the globe with
an opportunity to revolutionise teaching and learning (Hsu et al., 2013). By doing so, edtech
companies are shaping the emerging ‘edtech industry’, which has attracted significant flows of
private investment over the past five years (WEF, New Vision for Education, 2016). Hailed as the
‘next fintech2’, some predict edtech to become the biggest and possibly most profitable digitalised
sector yet (Bainbridge, 2016). Others say that “edtech and medtech are the most important sectors to digitalise,
because they will have the most impact globally once digitised successfully” (Jeremias Andersson,3 2017).

In the past, many edtech companies have prioritized product design and user growth over revenues
(Kovalskys, 2016), forcing investors to question the path to monetization for the industry (Wan,
2016). Investor scepticism is expressed in the steep decrease of investments in edtech from 2015
to 2016 (CB Insights, 2016; see Appendix 1). While the monetization challenge is not unique to
edtech start-ups, it comes with a distinctive set of challenges within K12, where engagement-driven
revenue streams such as advertising are regarded as inappropriate (Kovalskys, 2016). It is further
magnified by the conceptualisation of education as a public good and the multiplicity of public and
private stakeholders in K12 (Draxler, 2008). This contributes to a high level of complexity within
an already heavily bureaucratic environment (Williams & Lewis, 2008).

The emerging edtech industry presents an ideal example of a complex and fast changing
environment, in which edtech companies struggle to develop a viable business model (Watters,

1
K12 (spoken as ‘k through twelve’) comprises the sum of primary and secondary education.
2
Technology used to support or enable banking and financial services.
3
Jeremias Andersson, Swedish edtech investor, interviewed 22.02.2017

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 Badhani & Mut, 2017

2016). Due to its nascency the industry lacks a clear trajectory, market needs are not yet defined
and many stakeholders have overlapping roles.

This real-world phenomenon is mirrored in a burgeoning theoretical debate, where literature

suggests that companies must continuously innovate their business models to remain successful in
the long-term, especially in increasingly complex business environments (Johnson et al., 2008). A
growing body of scholars have advanced the conceptualization of business model innovation
(BMI) as a dynamic process, requiring dynamic capabilities for joint value creation with relevant
stakeholders in a ‘value network’ (Leih et al., 2014). A value network is a web of relationships
between two or more organizations, groups or individuals that generates tangible (e.g. economic)
and intangible (e.g. credibility) value through complex dynamic exchanges (Allee, 2011). The
network perspective on business models puts emphasis on the network embeddedness of a firm
(Shafer et al., 2005; Sciarelli & Tani, 2013) and presents an increasingly important, yet under-
researched field in business model literature (Gassmann et al., 2016). Further, to understand the
internal dynamics of an edtech company, the dynamic capabilities framework explores the
capabilities a company needs to nurture to enable successive BMI (Teece, 2007; Leih et al., 2014).

1.1 Research Gap

Research on education technologies has increased substantially over the last decade, with focus on
three research domains: (1) Technology Integration; (2) Acceptance/Attitude of Emerging
Technologies; & (3) Learning Environments (Hsu et al., 2013). The main concern is the pedagogical
use of technology in achieving intended learning outcomes (Hsu et al., 2013; see Appendix 2 for a
summary of the study). Though impact assessment on learning outcomes is necessary to identify which
tools are effective, this research stream only shows one side of the coin, leaving the question of
how to design a viable business model in edtech unanswered. This confirms the empirical
knowledge gap and strengthens the need for more research on (1) how edtech companies conceive
and develop business models over time, and (2) how they ‘do business’ in a complex value network
that includes private and public stakeholders.

From a theoretical perspective, there is need for further research on how business model design
and innovation can lead to superior performance in different sectors and organizational contexts
(Zott et al., 2011; Schneider & Spieth, 2013). Furthermore, there remains a need to better
understand how business models evolve in the course of a firm’s actions and reactions in the
market, the factors initiating change (Ojala, 2006) and the enablers, capabilities and success factors

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 Badhani & Mut, 2017

that have an impact on BMI (Schneider & Spieth, 2013). Given the multiplicity of public and private
actors in the edtech context, it is also relevant to investigate how various stakeholders shape the
content, structure and governance of business models (Zott & Amit, 2010). Further, Laplume et
al. (2008) call for more research on stakeholder theory in small, private firms and suggests that
more fine-grained qualitative narratives are needed to build theory and to “create rich and rigorous cases
that could lead us to see the overall stakeholder relationship as a multifaceted, multi-objective, complex phenomenon”
(Harrison & Freeman, 1999). The nascency and complexity of the edtech industry, combined with
the theoretical gap in understanding BMI, presents an interesting opportunity for further
exploration. In addition, the decreasing flow of investments in edtech increases the urgency to
explore how a viable business model can be designed.

1.2 Purpose & Research Questions

Based on the presented research gap, the purpose of this study is to explore and analyse how one
edtech company, Sensavis4, devised and developed its business model to continuously create,
capture, and deliver value for, and in collaboration with, its value network. The intended result of
this study therefore is to integrate insights from value networks and stakeholder theory into
business model research to examine the interconnectedness of BMI and stakeholders. This will be
accomplished by examining the following main research question: “How do edtech companies
innovate their business models in a complex market environment?”

To answer this question, the authors separate the main research question into two sub-questions,
which relate to two distinct, yet closely interrelated concepts. The authors apply network value
analysis and the dynamic capabilities framework as the theoretical lenses through which to analyse
the processes, decisions, interactions and tension points of an edtech company with their
stakeholders and how this interplay affects BMI. The conclusions of this study aim to be
generalizable theoretically, not statistically. The sub-questions are articulated as:
Sub-Question 1: What is the relationship between business model innovation of edtech

companies and the value network they are embedded in?

Sub-question 2: Which internal capabilities do edtech companies need to build and nurture to

successively innovate their business model?

The following section outlines the authors’ approach to answering the above research questions,
and presents the overall structure of this thesis.

4
Sensavis is a Swedish company offering a high-quality visualization software for the education sector http://sensavis.com/en
Please see Appendix 3 for a brief presentation of the company, its products, and customer testaments.

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 Badhani & Mut, 2017

1.3 Research Outline

To fill the underlying knowledge gap, the authors conducted an explorative qualitative study,
tracking Sensavis’ business model transformation over nine years. The research questions
warranted an in-depth investigation of Sensavis’ decisions, “why they were taken, how they were
implemented, and with what result”, deeming a case study as an appropriate research method (Schramm,
1971). ‘Systematic combining’, an abductive approach to case studies, shaped the research
direction. It allowed the authors to continuously move back and forth between theory and empirics,
shaping the scope of the study. The authors viewed the chance to go in-depth into Sensavis’ history
as a unique opportunity, allowing them to shed empirical light on the interconnectedness of various
theoretical concepts (BMI, value networks and dynamic capabilities). Therefore, the following
study is primarily empirically driven rather than theoretical.

The research study was divided into two parts, the pre-study and the main study (see Appendix 4 for
a list of interviews). Probing the empirical field, the pre-study served three purposes: (1) adding to the
authors knowledge of the problem at hand, (2) the context it is embedded in, (3) reconfirming and
scoping the empirical gap (Flick, 2014). The main study was thus initiated based on these findings.
The research study comprises of both primary and secondary data. Primary data was collected
through interviews with the case company and complemented by expert interviews. Secondary data
was obtained from journals, company websites, industry reports and online articles. The below
figure shows how the authors derived at the research gap and research questions.

The study was structured as follows: (i) Introduction, (ii) Literature Review, (iii) Theoretical
Framework, (iv) Methodology, (v) Empirics, (vi) Analysis, (vii) Discussion and (viii) Conclusion.

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 Badhani & Mut, 2017

1.4 Delimitations
The digital transformation of education lends itself to many interesting areas of investigation. Due
to a lack of experience in pedagogy, the authors limited their study to understanding how edtech
companies can enter and survive in the market rather than assessing the content, technology or
efficiency of their products. Further, the case company, Sensavis, creates products and services
specifically for the K12 sector, which limited the scope of the education sector for this thesis.
Due to the distinctive character of education systems in different national contexts, the authors
decided to primarily focus on the Swedish K12 sector for two main reasons. (1) While Sensavis’
serves a wide range of international clients, their initial and main area of operation remains in
Sweden; (2) the authors had better access to data from stakeholders within the Swedish education
sector. This decision allowed the authors to understand the complexities and challenges within the
Swedish market, including the interplay of public and private actors. The final delimitation was to
conduct a single case study, as the research gap warranted an in-depth investigation.

1.5 Background & Pre-study

To set the context for the study, this section presents a background to the education sector, the
state of the edtech industry and the challenges therein. The presented insights are based on a pre-
study, which involved data collection through expert interviews and secondary sources.

"Your education today is your economy tomorrow."

Andreas Schleicher5, Director of Education & Skills at OECD

A well-functioning education system is as a key driver for sustained economic growth, global
competitiveness as well as social cohesion (Daviet, 2016). For a nation, formal schooling is an
investment in human capital. Hence, the measure of educational output in economic terms can be
understood as its effect on an individual’s lifetime income (Jorgenson et al., 1992). Traditional
education systems with outdated teaching and examination practices are challenging this output by
failing to prepare children and young people for their working future (Scardamalia et al., 2012).

“20th Century education systems cannot teach 21st Century skills.”

Eilif Trondsen, Project Leader at Silicon Vikings6

Rapid disruption cycles, global connectivity, rising machine intelligence, acceleration of

automation, and the digitisation of routine work will make many skills and even entire professions

5
Director for the Directorate of Education & Skills at OECD; and one of the world's most influential figures in education
6
Silicon Vikings based in Silicon Valley, aims to build a borderless community supporting Nordic and Baltic innovation and
entrepreneurship. Eilif’s project, funded by Nordic Innovation, aims to build a ‘Nordic Edtech Network’: http://net.futurelearninglab.org

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 Badhani & Mut, 2017

obsolete (Camarda, 2015). It is estimated that 65% of students in school today will work in jobs
that do not currently exist (WEF, The Future of Jobs Report, 2016). This shift in skill demand
exposes problems in skill supply, leading to the 21st century skills gap (WEF, New Vision for
Education, 2016) exposing a misalignment between what is being taught in schools versus what is
required from the workforce of the future. Moreover, the widening gap between the level of
technology in schools and that in the student’s home, reduces interest and engagement in schools,
as well as the overall relevance of schools in the eyes of students (BellSouth Foundation, 2003).

“Educational technology holds the potential to unlock the transformative effects of

digitisation seen in other industries.”
Jeremias Andersson7, Swedish edtech investor

Edtech companies can help bridge the gaps mentioned above by combining technology with latest
insights in pedagogy (WEF, New Vision for Education, 2016). Given this opportunity, it is no
surprise that there has been a surge globally in the development of education technologies in the
last decade (Wan, 2016). Private investment in edtech reached a peak of $4.5 billion in 2015, with
a 32% compound growth rate for total private investment in edtech. Of that, the biggest share,
35% [US$ 1.608m] went to edtech companies operating in the K12 sector (WEF, New Vision for
Education, 2016). With investments in edtech set to reach $252 billion globally by 2020, there is
speculation about the education sector becoming the biggest and possibly most profitable digitised
sector yet (Bainbridge, 2016). In 2016, however, overall investments in edtech slumped below US$
2 billion (CB Insights, 2016 – see Appendix 1), reflecting “higher levels selectiveness on the part of investors”
(Shauntel Poulson, general partner at Reach Capital8 via Wan, 2016).

“There’s a broader shift in venture capital where there is less exuberance for
companies that haven’t really nailed the business model.”
Tory Patterson, Managing Partner at Owl Ventures9 (via Wan, 2016)

Many edtech entrepreneurs have focused on product design, and cost-effective user acquisition at
scale (Kovalskys, 2016). Growth alone however, only solves part of the problem. Turning users
into dollars has proven extremely difficult (Kovalskys, 2016; Wan, 2016). “We’ve noticed VCs becoming
more selective about their education investments, asking more questions about revenue growth and product adoption,
implementation timelines and ultimately usage. [...] More investors now realise that unlike other consumer internet

7
Founder & Deputy Chief Executive Officer, Academic Work Sweden; owner of two private schools in Stockholm, Sweden, multiple
edtech investor; and Sensavis shareholder.
8
Reach Capital is venture capital and private equity firm based in Palo Alto, CA, investing in early stage edtech firms.
9
Owl Ventures is a San Francisco Bay Area based venture capital fund that invests in the world's leading edtech companies.

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 Badhani & Mut, 2017

hits, it can take 10 or 15 years to build a sustainable education business.”- Jason Palmer (Partner, New
Markets Venture Partners10 via Wan, 2016).

Sweden has been hailed a ‘unicorn factory’, third in rank after Silicon Valley & Beijing in producing
the world’s most valued tech companies (valued at US$1 billion at IPO). While Swedish tech is
flourishing with a record number of investment rounds in 2016 raising over US$ 1.6 billion in
capital (Industrifonden, 2016), the Swedish edtech sector accounts for a meagre 1% of these
investments (Michael, 2017). While investments remain scarce, the Swedish edtech sector is slowly
gaining momentum. In 2016, Jannie Jeppesen launched ‘Edtech Sweden’, an initiative targeted at
decision makers in the edtech industry with the goal of speeding up the digital transformation of
education. EdTech Sweden has launched the ‘Innovating Learning Conferences’, the ‘Swedish
EdTech Start-up Awards’, and held breakfast seminars with the Swedish parliament on the need
for a national digital strategy in education. In 2017, Jannie launched Scandinavia's first edtech trade
organization ‘Swedish Edtech Industry’11, to build a strong edtech network and share knowledge.
In late April 2017, Sweden’s first edtech incubator and accelerator program was launched by
‘Edtech Southeast Sweden12’. Clearly, “the Swedish edtech scene is buzzing” (Jannie Jeppesen, 2017),
making the quest to develop viable business models and build strong value networks more
important than ever.

The multiplicity of stakeholders’ demands, needs and values in public-private networks contributes
to a high level of complexity within an already heavily bureaucratic organizational environment
(Williams & Lewis, 2008). To understand this environment, it is crucial to look at the wider political,
economic and socio-cultural context of Swedish education. In the early 1990s, Sweden introduced

10
New Markets Venture Partners is an early and growth stage venture capital firm that invests in disruptive education, information
technology, and business services companies.
11
Jannie Jeppeson, CEO at Swedish Edtech Industry, Scandinavia’s first trade organization for edtech which was launched in February
2017, interviewed on 14.02.2017, http://swedishedtechindustry.se
12
Edtech Southeast Sweden is a cluster of science parks, incubators, schools, companies and municipalities in the southeast of Sweden:
http://edtechsoutheast.se

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 Badhani & Mut, 2017

one of the world’s most ambitious choice-based educational reforms, which led to the increasing
involvement of non-state actors in the educational landscape (Hartman, 2007; OECD, Improving
schools in Sweden, 2015). The new school-voucher system allowed parents to choose freely
between any public or private school, which were competing for the same government funds. As
part of this decentralisation effort, local municipalities were given control of the school system,
previously controlled by the central government13 (Hartman, 2007). “It’s a very fragmented and slow-
moving market in Sweden. Municipalities own the schools, there are 290 municipalities, and the differences between
municipalities are very big” says Anders Huge14, Government and Education Executive at Intel
Corporation.

In theory, the inclusion of private actors in the market aimed to bring higher levels of
competitiveness and innovation into the traditional education system (Lundahl et al., 2013). In
reality, the state failed to provide sufficient guidance to municipalities on how to implement this
hybrid market system (Sanandaji, 2014; OECD, Improving schools in Sweden, 2015). Over the
years, instances of crony capitalism, corruption and failed private schools have arisen (Sanandaji,
2014). In addition, between 2000 and 2012, Sweden’s ranking in PISA15 fell from 7th to 23rd place
respectively. The OECD comments: “No other PISA-participating country saw a steeper decline in student
performance over the past decade than Sweden.” These occurrences have garnered criticism and ingrained
a sense of scepticism amongst the public regarding private involvement in education (Sanandaji,
2014). This contributes to the risk aversion of state actors towards letting private actors in. “Everyone
wants to play it safe. No public decision maker dares to radically innovate within the education sector for fear of
public scrutiny” says Jeremias Andersson.

However, many believe that this mistrust is misdirected as these problems do not stem from the
system itself, but rather from its ineffective implementation (Sanandaji, 2014). Scholars attribute
the main problems of education privatization to the agency problems presented by public-private
partnerships, which require considerable government design, implementation and monitoring
capacity (LaRocque, 2008).

13
See Appendix 5 for a visualisation of the Swedish education system.
14
Anders Huge was interviewed as part of the pre-study on 10.01.2017 and on 16.01.2017, and as part of the main study on 07.03.2017
15
The Program for International Student Assessment (PISA) is a triennial international survey which aims to evaluate education systems
worldwide by testing the skills and knowledge of 15-year-old students.

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 Badhani & Mut, 2017

Concluding the pre-study, the authors learnt that the edtech industry faces a unique challenge. The
public education sector, characterised by high levels of bureaucracy, risk-aversion and slow
technology adoption (OECD Conference, Innovating the Public Sector: from Ideas to Impact,
2014) stands in stark contrast to the innovation driven edtech industry, presenting multiple barriers
to entry for edtech companies. Navigating a network of multiple stakeholders while simultaneously
apprising the sector of the need for edtech in classrooms is difficult. Growing investor impatience
to show returns adds pressure on edtech companies. Though edtech companies have the
opportunity to transform learning, the potential impact of their services depends on their ability to
develop a viable business model. Thus, in the following chapter (ii) the authors conduct a thorough
review of BMI and edtech literature to align the empirical and theoretical research gap.

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 Badhani & Mut, 2017

2. LITERATURE REVIEW
The following chapter examines the current state of literature on business models and BMI (2.1)
and presents the authors’ perspective on the concept, which is applied throughout this thesis. In
(2.2), a brief analysis of the literature on education technology is presented.

2.1 The importance of business model innovation

Devising and developing a viable business model remains one of the major challenges of
technology-based firms, due to high levels of technological and market uncertainty and the
unpredictability of commercialization options (Reymen et al., 2016). As a result, business model
components are created and re-designed at different points in time as part of a dynamic process
(Sosna et al., 2010, Demil & Lecocq, 2010).

2.2 State of literature on business models & business model innovation

Over the past two decades, the vibrant field of business models and BMI has gained significant
interest and importance within scientific research (Gassmann, 2016; Massa et al., 2017) and
management practice (Lindgardt et al, 2009 for BCG; Long Range Planning Special Issue, 2013). The
number of articles on business models published in academic and non-academic management
journals has significantly increased since 1995 (Zott et al., 2011) and the trend continued through
2015 and beyond (Massa et al., 2017).

2.2.1 What is a business model, and what does it do?

Although a vast - albeit fragmented - body of business model literature exists, there is an apparent
lack of agreement in the interpretation of business models, their functions and unit of analyses
(Massa et al., 2017). Broadly defined, most scholars agree that a business model is “the rationale of
how an organization creates, delivers and captures value” (Osterwalder & Pigneur, 2010). It expresses “the
logic of the firm, what value the company offers to customers and, relating the concept to a business network perspective,
the architecture of the network of partners” (Andersson & Mattsson, 2015).

The prevailing inconsistencies in the conceptual framework of BMI and the lack of definitional
clarity on business models, “are a potential source of confusion, promoting dispersion rather than convergence of
perspectives” (Zott, 2011) and contribute to the notion that “BMI still is a difficult-to-grasp topic” (Spieth
et al., 2014). Thus, cumulative research progress on business models and BMI has been difficult to
achieve and an overall theory to explain the phenomenon is still missing. One potential reason is
that business models have not yet been anchored in social sciences or management theory (Teece,

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2010), and thus research on business models often lacks a solid theoretical basis. Concurrently, the
multifaceted and boundary-spanning nature of the phenomenon makes it a “burgeoning unit of
analysis”, while “different perspectives could enrich the debate and leverage the knowledge-creation process in
academia as well as know-how development in practice” (Gassmann et al., 2016).

More recently, scholars have attempted to establish the concept as its own discipline, building on
areas of technology and innovation management, as well as social entrepreneurship and strategic
management, (Gassmann et el, 2016, Massa & Tucci, 2014, Lüdeke-Freund et al., 2016).
Consequently, the business model concept adds value across multiple fields by “expanding the meaning
of “value creation” (to include entirely new markets for/with users and members of their ecosystems) and “value
capture” (to include monetization), and by relaxing assumptions that often went unchallenged when those theories
were developed” (Massa et al., 2017). In this thesis, business models are defined as a new unit of
analysis that offers a systemic perspective on boundary-spanning activities. Drawing a holistic
picture of a company, the business model takes into account different activities and components
that are configured in a way that allows the firm to create, deliver and capture value for itself and
its stakeholders within the ecosystem it is embedded in (Zott et al., 2010; Osterwalder et al., 2010,
Demil & Lecocq, 2010, Mason & Spring, 2011).

2.3 Dynamic View of Business Models

Adopting a dynamic view of business models, Mason and Spring (2011) attempt to link the
conceptualisation of what business models are with what they do, suggesting that “firms, business
networks and markets form embedded systems within which multiple overlapping business models can be considered
as constituent parts. In this way, the business model is understood as having agency to shape action; but in turn
actions (of others in the business network as well as within the firms themselves) also shape the business model.”
Thus, business models are conceived as continuously emerging systems with performative power,
as they iteratively influence, shape and are shaped by the market as it evolves (Doganova &
Eyquem- Renault, 2009; Mason & Spring, 2011).

Gassmann et al. (2016) provide a comprehensive guide to the state of the art of business model
research, describing seven schools of thought that are spearheading this field (see Appendix 6). Two
research directions stand out as most relevant for this thesis: (1) the process school, and (2) the
technology driven school.

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2.3.1 Process school

A business model is a dynamic process of balancing revenue, costs, organization, and value. Mainly
attributed to research by Demil and Lecocq, the process school combines the static and dynamic
views on business models. To overcome this paradox, they propose a framework to analyse the
consistency of a given firm (implying the notion of a BM as ‘static’) while also embodying the
dynamic view. In their study of Arsenal FC, Demil and Lecocq (2010) describe the football club’s
evolutionary business model change, focusing on the interactions between its core components,
over the last decade and identify ‘dynamic consistency’ as a crucial capability to build and sustain
performance while successively fine tuning its business model. They argue that business models
are inherently in a state of transitory disequilibrium, as they are subject to continuous internal and
external changes, open-ended interactions between core components, and managers’
entrepreneurial initiatives. Business model changes can be based on deliberate management
decisions, and as consequences of the dynamics between core components. In real life, business
models often evolve due to unintended results of externally induced changes in the value network.
The antecedents and consequences are often surprising and depend on the environment, or on
happenstance, rather than on deliberate management choices (Tsoukas & Chia, 2002).

2.3.2 Technology driven school

A business model is a way to commercialize novel technology. Attributed to Chesbrough and
Teece, this research stream explores the role of business models in commercializing technology
(the realisation of economic value), by embodying the technological core of an innovation in an
economically viable enterprise. They emphasize that realizing value involves third parties, both
within the vertical value chain, and from the value network (Christensen & Rosenbloom, 1995).
From a study of six technology companies, Chesbrough and Rosenbloom (2002) propose that
positive alignment with the value network can leverage the value of technology, because the value
network of a business shapes the role that suppliers, customers and third parties play in influencing
the value captured from the commercialization of an innovation. Thus, the commercialization of
technology derives from the economic and social structure of the situation, rather than from some
inherent characteristic of the technology itself, implying that the selection of a market, and
construction of a value proposition involve managing significant complexity and ambiguity
(Chesbrough & Rosenbloom, 2002). Devising and innovating viable business models is an iterative,
entrepreneurial act, requiring a high degree of risk, and insight into both the technology and the
market, to allow management to ‘make sense’ of complex environments (Chesbrough &
Rosenbloom, 2002; Teece, 2007).

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Learning about and from the market environment was especially challenging in those case studies,
where the novel technology was ahead of its time, and the value network had yet to emerge
(Chesbrough & Rosenbloom, 2002), a situation inherent to the edtech industry.

In a similar vein, Teece explores the role of dynamic capabilities (Teece, 2007), which allow firms
to adapt to and shape their environment (Teece et al., 1997), where organizational design and
architecture and, particularly, organizational learning play a central role in this process (Eisenhardt
& Martin, 2000; Leih et al., 2015). Seeking to answer the central question of how entrepreneurs
and managers evolve business models in fast changing environments, they emphasize that ‘the
successful intertemporal management of value creation, delivery, and capture is a key dynamic capability’ and crucial
for BMI (Leih et al., 2014).

2.4 Synthesis of Literature Review

The dynamic view on BMI focuses on the central question of how firms create, deliver and capture
value, while acknowledging that BMI processes are influenced by the focal firm’s embeddedness
in and transactions with its value network (Mason & Spring, 2010; Demil & Lecocq, 2008). This
warrants a value network perspective on BMI, which is further discussed in chapter, (iii).

Consistent with the value network perspective, Teece (2007) stresses that “Enterprises with strong
dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems, but also shape them
through innovation and through collaboration with other enterprises, entities, and institutions.” In this line of
thought, the dynamic capabilities framework can help identify the necessary internal capabilities of
a company to identify and turn business opportunities into financially viable business models
(technology-driven school), and explain how this unfolds into a dynamic implementation process
(process school).

As per Gassmann et al. (2016), “the merging and combination of different schools of thought is a viable avenue
for future research”, which the authors aim to explore in this thesis. This leads into the following
chapter, which aims to build a theoretical framework that connects the above-mentioned concepts.

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3. BUILDING THE THEORETICAL FRAMEWORK

The literature review reveals that the central question of how firms create, deliver and capture value
within a value network, permeates theoretical and empirical research related to the field. This logic
gives impetus to the emerging concept of BMI as a dynamic process, requiring dynamic capabilities
for joint value creation with relevant stakeholders within a value network. To understand the
theoretical and conceptual substantiations of this multi-dimensional phenomenon, the following
chapter describes the fundamental notions of three relevant, interlinked concepts. Combined, these
concepts present the theoretical framework that will be used to analyse the empirics of this study.

(3.1) The value driven view of business models

This first part presents an adapted framework of Osterwalder’s business model canvas (2010).
which is used to describe and structure the different business model stages of the case company in
the empirics (chapter v) and analysis (chapter vi).

(3.2) The network perspective on stakeholder theory & business model innovation
The second part develops a value network perspective on stakeholder theory and BMI as discussed
in Mason & Spring (2011) and Demil & Lecocq (2010), while also extending its conceptualisation
to networked value creation. It introduces the network value analysis (Peppard & Rylander, 2006),
which is used as an analytical tool in the analysis, chapter (vi).

(3.3) The dynamic capabilities framework

The third part of this chapter introduces the dynamic capabilities framework as an analytical tool
for the analysis chapter (vi) to understand the internal arrangements that enable business model
innovation within a value network as discussed by Teece (2007) & Leih et al. (2014).

3.1 Value Driven Business Model Canvas

Osterwalder and Pigneur (2010) devised the widely-used business model canvas outlining nine core
building blocks of business models (see Appendix 7): value proposition, customer segment, channel and
customer relationships, partner networks, revenue streams, cost structure, and key resources and activities.
This thesis adopts Osterwalder’s framework and terminology to present the key elements of the
business model and describe the business model transformation of the case company, Sensavis.
Due to the inherent use of the business model in conceptualizing the value creation, and money
earning logic of the organization (Doganova & Eyquem- Renault, 2009; Osterwalder and Pigneur,
2010), the authors further dissect Osterwalder’s nine building blocks into four specific value driven

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constructs, namely value proposition, value creation, value delivery and value capture (Kamoun,
2008; Johnson et al., 2008; Kaplan, 2012). While this categorization is not mutually exclusive, for
this thesis, it serves the purpose of investigating the relationship and dynamics between business
model components with regards to their functions within the company and across the value
network.

While the business model canvas is suitable to describe the business model of a focal firm at a
certain point in time (static view), it does not entail the analysis of value exchanges between
different stakeholders and thus fails to consider the interdependencies between actors in a value
network (Gordijn et al., 2005; Loss & Crave, 2011). A network perspective is applied to create a
more holistic picture of the value network and the embeddedness of the focal firm therein.

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3.2 Network Perspective on Stakeholder Theory

In strategic management literature, stakeholder theory ‘has been advanced and justified on the basis of its
descriptive accuracy, instrumental power and normative validity’ (Donaldson & Preston, 1995). A broad
definition of stakeholders refers to any group or individual who can affect or is affected by the firm
(Freeman et al., 2010). The theory focuses on the analysis of the wide range of parties involved in
value-creation processes, including customers, employees, investors, suppliers, and communities,
such as political groups or trade associations. The broadening and diversification of the stakeholder
network in education results in a shift from government to governance in policy making (Daviet,
2016). Lingard and Rawolle (2011) define this evolution as a “rescaling of educational policy and politics”,
transitioning from hierarchical decision-making, bound within state structures towards networked
decision-making among all stakeholders in the education sector. In this multi-stakeholder network,
it makes sense to analyse stakeholders through a network perspective, in which the interactions of
the entire value network influence a company’s business model and vice versa. In this regard,
Network Value Analysis (NVA) presents an effective analytical tool (Williams & Lewis, 2008).

3.2.1 Network Perspective on Value Creation & Value Flows

Value network theory questions the conventional notion of profit maximization as the preeminent
management concern and opens the debate towards joint value creation and ‘shared values’, seeking
to understand the often-overlooked sociological question of how organizations affect society
(Hinings & Greenwood, 2002). Thus, ‘value’ and ‘values’ are of importance when exploring BMI
in ecosystems involving public and private actors.

Conventionally, the term value has been used for use value (customer benefits) or transaction value
(economic value). A holistic view of value includes benefits and costs to all stakeholders in the
value network, including society (Donaldson & Preston, 1995). Allee (2011) proposes that the
consideration of value for these stakeholder groups “involves understanding tangible and intangible value
flows between stakeholders towards identifying relationships, exchanges and interactions, and opportunities for greater
collaborative mutually beneficial value creation.”

3.2.2 Network Value Analysis (NVA)

According to Sciarelli and Tani (2013), two main research streams can be identified in stakeholder
management literature. One focuses on identifying which stakeholders are relevant to a focal firm
and on defining the right strategies in dealing with them. The other stream takes a more dynamic
approach to stakeholder management, where the unit of analysis goes beyond mapping out

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stakeholder and managing the relationship with each one. Rather, the focus is on analysing the
whole web of relationships within the network the company is embedded in (Sciarelli & Tani,
2013), also referred to as a value network. From a network perspective, relationships are viewed as
part of a larger whole – a network of interdependent relationships (Andersson et al., 1994). The
value network concept suggests that value is co-created by a combination of players in the network
and through their relationships with each other (Peppard & Rylander, 2006; Andersson, 1995).

Because the edtech industry is in a nascent stage, the value network itself is constantly evolving,
which makes it a very interesting unit of analysis defined as an ‘opportunity network’, “where no one
knows what it will look like in the future” (Peppard & Rylander, 2006). NVA is the ideal analytical lens
to assess the forces that are shaping such networks by analysing perceived value as a key driver of
behaviour, and thus, a key force of network development. Thus, mapping out the value network
of the case company helps the authors create a clearer, more holistic picture of the dynamics
between stakeholders, their influence on each other, and the underlying tangible and intangible
value flows (Sciarelli & Tani, 2013).

Peppard and Rylander (2006) introduce NVA to investigate the nature of alliances, competitors,
complementors and other members in business networks. The dynamic nature of networks means
that actions by one network member can influence other network members, or require further
actions by other participants to be effective. Thus, all direct and indirect stakeholders, whose
presence in the network can influence value creation of the firm, must be included in the value
network analysis. In summary, NVA aims to generate a comprehensive description and subsequent
visualisation of where value lies in a network and how value is created. Consequently, NVA is an
effective tool in guiding manager’s decisions on how a business model should be improved or
developed (Peppard & Rylander, 2006). Network Value Analysis is conducted in 4 steps [adapted
from Allee, 2011; Peppard & Rylander, 2006]:

(1)   Define network participants & network objectives

The value network is defined as consisting of all actors or communities of people that exist in the
focal company’s (Sensavis) current network environment that have a direct influence on, or are affected
by, its value propositions towards customers (Peppard & Rylander, 2006). With NVA, the aim is to
generate a comprehensive description of where value lies in a network (Peppard & Rylander, 2006).

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(2)  Identify value dimensions of the network participants

Delivering value requires a clear understanding of what value is desired by network members. The
classification of value flows in terms of value creation, delivery and capture, and based on whether
they are tangible or intangible helps understand the divergent logics of network members.

(3)  Define value flows

This step involves identifying the value flows [exchanges] within the network. Network value flows
can be understood as direct or indirect and positive or negative influences that impact the perceived value
dimensions and/or behaviour of network participants. They determine the importance of the
participant in the development of the focal firm’s business model.

(4)  Analyse & shape

A network value map, although static by definition, provides an overview of the network and the
dynamics within by presenting the roles and value dimensions of all participants, and describing
the value flows and interconnections between them. Thus, a network value map allows some quick
conclusions to be drawn and network participant behaviour to be analysed. This analysis furthers
the understanding of network dynamics and their implications in future scenarios.

The analysis of the value network thus provides the key to understanding the complex nature of
the case company’s value network within the larger edtech industry, and helps uncover the sources
of value (Peppard & Rylander, 2006).

3.3 Dynamic Capabilities Framework

In young industries, such as the edtech sector, business models must be continuously reassessed
for relevance and potency. “Strong dynamic capabilities enable firms to orchestrate their resources effectively.
They enable a firm to identify and exploit opportunities, synchronize business processes and models with the business
environment, and/or shape the business environment in its favor” (Teece et al., 1997).

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Dynamic capabilities are defined as the “ability to integrate, build and reconfigure internal and external
competences to address rapidly changing environments and to achieve new and innovative forms of competitive
advantage” (Eisenhardt & Martin, 2000; Teece et al., 1997). Shaped by the firm’s unique history,
values, and routines (Teece, 2007), dynamic capabilities encompass entrepreneurial activities,
processes, and leadership skills, which can be categorized into three activity clusters:
‘Sensing’, and ‘seizing’ of market opportunities, as well as ‘reconfiguring / transforming’ the
organization as it evolves in an ever-changing market in the pursuit of new value creation (Teece,
2007; Leih et al., 2014), so that the [new] business model is better aligned with its environment
(Teece et al., 1997). Organizational design is a vital element, which can positively or negatively
affect dynamic capabilities (Leih et al., 2014).

(1)   Sensing
Sensing involves ongoing scanning of the environment, including listening to customers and
stakeholders to identify unmet needs and explore business, technological, and market
opportunities. Sensing capabilities must be embedded throughout the company, and management
is required to be entrepreneurial.

(2)  Seizing
Once opportunities are sensed and top management has decided which ones to pursue, firms must
mobilize resources internally and externally to create, deliver and capture value from these
discoveries or innovations. Seizing involves identifying and establishing influence over, and
coordinating complementary assets and resources, for example, by establishing new alliances.

(3)  Reconfiguring / Transformation

Transformation involves the reconfiguration of business model components, practices,
organizational structure and culture as the company evolves in an ever-changing market
environment. Transformational capabilities are essential when radical new threats and

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opportunities need to be addressed. But they are also needed periodically, to lessen internal
rigidities that can develop over time and to remain entrepreneurial. In contrast to mature firms,
transformation is generally easier for start-ups due to their lack of a definite trajectory, fewer fixed
assets to redeploy, and fewer established positions to reengineer.

3.4 Synthesis & Visualisation of Theoretical Framework

The preceding theoretical concepts were selected to help answer the main research question: “How
do edtech companies innovate their business models in a complex market environment?”

To present the interconnectedness of these concepts and their relevance for BMI, the authors
devised the following theoretical framework. The business model components (value proposition,
value creation, deliver and capture) are at the centre. Dynamic capabilities (sensing, seizing,
reconfiguring) are the mediating variables between the company and its value network. Arrows
represent interdependencies between, and continuous evolution of, the different elements.

By applying a dynamic view of the business model, the authors use a value network perspective as
the theoretical lens by which to analyse the value flows between the case company and its
stakeholders, and investigate how this interplay affects business model development. This
framework helps answer sub-question 1: What is the relationship between BMI of edtech
companies and the value network they are embedded in?

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 Badhani & Mut, 2017

To analyse how drivers of change stemming from the value network are sensed and seized, the
authors apply the dynamic capabilities framework (Teece, 2007, Leih et al. 2014) to examine which
internal dynamic capabilities are required for successive BMI in the context of a small edtech
company. This part helps answer sub-question 2: Which internal capabilities do edtech
companies need to build and nurture to successively innovate their business model?

Overall, the focus is placed on how the interrelations of external stakeholders within Sensavis’ value
network and the company’s internal dynamic capabilities impact the firm’s ability to create, deliver
and capture value.

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4. METHODOLOGY
In this chapter, the authors argue for the choice of conducting a qualitative single case study to
investigate the research questions. Further, the authors substantiate the research design, research
process, choice of data collection and data analysis methods. The aim of this chapter is to structure
the qualitative study and overcome the possible hurdles related to the quality of the results.

4.1 Methodology & fit

The uncertainty surrounding the edtech industry and the lack of data available made qualitative
research an obvious choice. The presence of multiple stakeholders in the value network reinforced
this choice by directing the study towards a context based method (Flick, 2013). To understand the
interaction between the phenomenon (edtech) and its context (the K12 education sector), an in-
depth case study was deemed suitable (Dubois & Gadde, 2002). To accommodate multiple
perspectives, an engaging method such as interviewing enabled the collection of “complex detailed
data with high explanatory potential” (Rubin & Rubin, 2012). Triangulation in the form of multiple
‘sources of data’, ‘investigators’ and ‘methods’ was applied to fulfil the potential of case research
and increase its quality (Yin, 2014). Addressing an important concern regarding single case studies,
this study’s findings are potentially applicable to a “variety of situations far beyond any strict definition of
the population represented by the original case”, implying generalisation on a theoretical rather than
statistical level (Yin, 2014).

4.2 Research Design

Research design is the “logical sequence that connects the empirical data to a study’s initial research questions
and ultimately to its conclusions” (Yin, 2014). The ‘Research Onion’ (see Appendix 8) provided an
effective progression to design the research methodology and maintain coherence throughout
(Saunders et al, 2007). Relevant layers for this study are detailed below.

4.2.1 Research Philosophy

Interpretivism was employed as the research philosophy, allowing the researchers to interpret the
elements of the study, integrating human interest (Flick, 2014). This approach helped build and
guide the authors’ assumptions and beliefs about the process and directed the authors towards their
research strategy. It was selected due to the following reasons: (1) The study was focused on
understanding different aspects of the same issues (business model challenge for edtech
companies) hence allowing for an interpretivist approach to be applied. (2) Through this approach,
an in-depth investigation was given priority over the ability to generalise data (Flick, 2014).

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4.2.2 Research Approach

The selected research approach was Dubois and Gadde’s (2002) systematic combining, grounded
in an abductive logic. It is a process where theoretical framework, empirical field and case analysis
evolve simultaneously (Dubois & Gadde, 2002). Unlike deductive and inductive logic of reasoning
it pushes the researcher to constantly reflect on the research process and challenge the assumptions
underlying the research model (Flick, 2014). It allowed the authors to constantly go back and forth
between the empirics and theory, enabling the identification of unanticipated yet related issues,
expanding the authors knowledge of both and eventually shaping the scope of the theoretical
framework (Dubois & Gadde, 2002). It also exploited the potential uses and advantages of case
research by avoiding the standardized conceptualisation of the research process as a series of
planned sequential phases (Dubois & Gadde, 2002).

4.2.3 Research Strategy

The research strategy outlines how to answer the research question in a systematic way (Saunders
et al., 2007). Aligned with the research approach, the authors pursued a case study (Dubois &
Gadde, 2002). Case study research has grown in reputation as an effective methodology to
investigate and understand complex issues and decisions in real world settings (Harrison et al.,
2017; Schramm, 1971). Sensavis was an ideal company to investigate because it is a particularly
instructive example of the problem of finding a viable business model faced by edtech companies
(Flick, 2014; Wan, 2016). Access to Sensavis and careful investigation of the case during the pre-
study pushed the authors to pursue a single case study (Yin, 2014). The choice for a single case
study was supported by various scholars who have expressed the need for fine-grained narratives
in the form of rich and rigorous cases to understand business models and their relationship with
stakeholders better (Hedman & Kalling, 2003; Harrison & Freeman, 1999). Therefore, the findings
are generalizable analytically aiming to establish knowledge through the evidence of the case
company and contribute to existing business model literature (Yin, 1989).

Designing the research strategy, the authors took two steps: (1) By defining the case, they identified
‘multiple units of analysis’ shaping this study as an ‘embedded case study’. While the main unit of
analysis was Sensavis’ BMI, the sub-units, reflected in research sub-questions, consisted of internal
drivers and external drivers of their transformation (Yin, 2014). This flexibility added “significant
opportunities for extensive analysis, enhancing insights into the single case” (Yin, 2014). (2) By delimiting the
case, also called bounding, the authors determined the scope and extent of data collection. This

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enabled them to distinguish the subject of the case [BMI for edtech companies] from empirics
external to the case [the education sector and the edtech industry] (Yin, 2014).

4.2.4 Research Choice & Triangulation

The following paragraph describes the chosen qualitative method. ‘Multimethod research’ was
selected to accommodate multiple data collection techniques. The research study comprises of both
primary and secondary data. Primary data was collected through in-depth interviews with the case
company and complemented by expert interviews. Secondary data was obtained from journals,
company websites, industry reports and online articles. The combination of data collection
methods cross-validated and built on the knowledge the authors acquired from each source.
Methodological triangulation16 was achieved by fulfilling the need for multiple sources of evidence
in case studies (Yin, 2014).

4.2.5 Data Collection & Data Analysis

Qualitative research involves a precise understanding of the relationship between issue and method
(Flick, 2014). The process that is used at this stage of a study contributes significantly to the study’s
consistency and credibility (Saunders et al., 2007). For this purpose, semi-structured interviews
were conducted with the case company and experts, and additional secondary sources were used
to validate and strengthen the authors’ arguments.

4.2.5.1 Pre-study
The pre-study, served as a first step in entering the edtech field and carrying out careful
investigations of the potential ‘case’. It helped the authors expand their understanding of the
problems in the sector and identify their potential contribution (Flick, 2014). The authors aimed to
solve two concerns before the research design was established: (1) Secondary sources available on
the digitisation of education were limited, restricting the background research. Addressing this, the
authors conducted interviews with industry experts to identify research needs and opportunities
within the field. The investment and commitment displayed by these experts encouraged and
inspired the authors. (2) To conduct an in-depth case study, access to a suitable company and its
employees was crucial. Addressing this, the authors met with the CEO of Sensavis, Fredrik
Olofsson, who presented Sensavis as a potential case (see Appendix 4 for a list of pre-study interviews).

16
Methodological triangulation refers to employing more than one method to gather data.

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 Badhani & Mut, 2017

4.2.5.2 Interview Sample

The interview sample consisted of 17 main and 3 follow up interviews, either held face-to-face or
via skype and lasted between 30 to 120 minutes. The selection of the population was purposive,
driven by the concept of ‘theoretical sampling’. Theoretical sampling, along with being an
appropriate strategy for qualitative research (Flick, 2014), gives room fine-tune and limit the
sampling based on theoretical and not statistical reasons (Eisenhardt, 1989), which was an
important consideration for this study. Therefore, the sampling was based on two factors: (1) To
add depth and information to the case study of Sensavis through in-depth interviews with
employees, and (2) to understand the multiple perspectives of actors in the education sector
through expert interviews.

With the first purpose in mind, 6 interviews lasting 70-120 minutes were conducted with key
employees17 of Sensavis to draw a clear narrative of the journey Sensavis had been through since
2008. For the second purpose, experts including relevant researchers, policy advisors, investors,
teachers and employees from global tech corporations (Microsoft & Intel) were interviewed. The
sampling of experts evolved during the process of data collection, both in terms of the leads that
were provided by each interview, and by the desired knowledge to be obtained from the interviews
(Flick, 2014). Due to their capacities as specialists in a certain field of activity (Flick, 2014), experts
constituted an important part of the research and helped narrow down the respective challenges
they foresee in the digitisation of education. Upon reflection, the initial aim of the expert interviews
was the exploration (Flick, 2014) of a new field, and moved into ‘systematizing’, with the aim of
collecting contextual information to complement insights derived from the case study (Flick, 2014).

4.2.5.3 Interview Design

The interview design refers to the type of interview that was selected to gather data, the style of
interviewing and the tools used to facilitate this process. Predominantly, semi-structured interviews
were used. A narrative style of interviewing was used for interviews with Fredrik Olofsson (CEO
of Sensavis) to create a detailed account of the business model changes that Sensavis had gone
through (Flick, 2014). Semi-structured interviews are a common method in qualitative research to
allow interviewees to open and share more knowledge through a conversation rather than through
a structured information gathering technique, such as a questionnaire. Flick (2014) calls this
knowledge a part of “subjective theory”, referring to the “complex stock of knowledge” that the interviewees
possess about the topic under study. This, layered with a “responsive style” (Rubin & Rubin, 2012) of

17
See Appendix 4 for a list of pre-study and main study interviews.

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interviewing, lends itself perfectly to guide conversations between the interviewee and the
interviewer and allow for the implicit knowledge and experiences of the interviewees to surface by
creating a comfortable environment. Driving a collaborative conversation helped build trust and
rapport with the interviewees and helped the authors in retrieving accurate and honest answers.
Participants in the industry are highly motivated by the impact that they could have on the future
of learning, hence it was important to reciprocate the same level of enthusiasm. The authors
realised the importance of nurturing a rapport with interviewees before and during the interviews
(Ryan & Dundon, 2009). They used ice breakers, unrelated to the study topic to express their
interest and to create a comfortable space to express opinions.

An interview guide18 was prepared for each interview. This was driven by ‘open questions’ and
‘theory driven questions’, for three reasons: (1) To guide and structure thoughts, (2) to focus on
delimiting conversations during conversation, and (3) to lead interviewees to a more in-depth
position (Flick, 2014). The interview guide helped maximise the value derived from each
interaction. Rooted in systematic combining, the interview guide was adapted throughout the
process to accommodate new information and to personalise the questions according to the
interviewee. To tailor this information as much as possible, the authors gathered background
information regarding the interviewee from company websites and Linkedin.

Another important part of the data collection process was communication with the interviewee
and ‘informed consent’ (Flick, 2014). All coordination happened through emails and phone calls.
Each interviewee was sent a brief introduction19 in advance, with a description of the study and the
intended goals from the interview. Before the interview began, the interview process and
confidentiality measures were presented and a permission to record the conversation was sought.

4.2.5.4 Data Processing

The interpretation of data is at the core of qualitative research (Flick, 2014). In addition, unlike
statistical studies, the analysis and reporting of case study evidence does not have a fixed formula
and depends on the researcher's own style of empirical thinking, along with sufficient presentation
of evidence and careful consideration of alternative interpretations (Yin, 2014). The interviews
were recorded and transcribed, turning realities of the field into text (Flick, 2014). Only parts of
interviews that were directly related to the research were selected for transcribing. Secondary

18
See Appendix 9 for a sample interview guide.
19
See Appendix 10 for a sample introduction email.

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 Badhani & Mut, 2017

sources were read and texts pertaining to the background or analysis of the research were
summarized in a ‘notes document’ to facilitate easy referencing at a later stage.

While the authors remained the main analysts, a computer assisted tool, NVivo20, was used to
categorize and code unstructured data (Yin, 2014). Interview transcripts and the information from
the ‘notes document’ were read and re-read to generate themes. The themes were re-evaluated
during the process, to continuously connect them to the research design (Yin, 2014). Investigator
triangulation was achieved by two measures: (1) Both researchers made individual interpretations
of the data before developing shared interpretations, and (2) both researchers were involved in the
process of transcription (Yin, 2014).

4.3 Research Process

Driven by systematic combining, the research process was agile and constantly evolving. Hence,
contrary to the linear model of the research process, the study was circular and allowed the authors
to go back and forth between empirical research and theory (Dubois & Gadde, 2002). The circular
process allows new opportunities to be considered by forcing the researcher to permanently reflect
on the whole research process and on particular steps in the light of other steps (Flick, 2014). The
circular process was maintained throughout the data collection and analysis stage to ensure
consistency of the process (Flick, 2014), and is visualised below:

20
NVivo is qualitative data analysis software for researchers, developed by QSR International.

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 Badhani & Mut, 2017

4.4 Quality of Study

“Grounding qualitative research” is subject to several discussions (Flick, 2014). Systematic combining
allowed for an intimate connection with empirical reality, enabling the study to achieve quality
criteria suitable for qualitative research, which are detailed below.

4.4.1 Consistency
Lincoln and Guba (1985) were the first to theorize reliability in qualitative research as ‘consistency’.
Scholars argue that consistency reflects the trustworthiness by which the methods have been
undertaken (Holloway & Wheeler, 1996). The concern with consistency is not if the findings can
be replicated but whether they are consistent with the data collected (Merriam, 2009). Consistency
was achieved in two ways:

(1)   Triangulation of data sources, methods and investigators helped ensure consistent and
dependable data (Merriam, 2009). By developing convergent evidence, where findings are
supported by more than a single source of evidence, data triangulation helped strengthen the
confidence that the case study has rendered the events truthfully (Yin, 2014).
(2)   In line with the principle of data collection, the authors maintained an audit trail or a ‘chain of
evidence’ (Yin, 2014). This was an attempt to allow the reader to follow the “derivation of evidence
from initial research questions to the ultimate conclusions” (Yin, 2014). This was done through:
(a) Adequate citations and clear cross-referencing to be explicit enough to differentiate
between what the statement of the subject is and where the researcher’s interpretations
begin (Flick, 2014). (b) The methodological procedures were made clear so that there was
a possibility to compare different interviewer’s conduct (Flick, 2014).

4.4.2 Credibility
“Credibility deals with the question of how research findings match reality” (Merriam, 2009). Also, understood
as internal validity, credibility is a goal rather than a product (Maxwell, 2005). Owing to the
multidimensional, ever changing nature of reality, scholars argue that credibility is inherently
relative (Maxwell, 2005). Credibility was achieved in three ways.
(1)   Triangulation of data sources (comparing and cross-checking data), methods and investigators
aimed to improve the internal validity of the data (Merriam, 2009).
(2)   Respondent validation ensured descriptive and interpretative accuracy on the part of the
researchers (Merriam, 2009). This was done by sharing transcripts with interviewees, which was

35
 Badhani & Mut, 2017

particularly important for the empirical chapter (iv), to leave no room for error on a factual and
interpretive level. The transcripts as well as the empirics presented in the thesis were confirmed
and edited by Sensavis.
(3)   Adequate engagement in data collection was achieved to get as close as possible to the
respondents’ understanding of a phenomenon (Merriam, 2009). This was achieved by
saturating the data collection process when the data collected was converging and the
researchers began hearing the same thing over and over again.

4.4.3. Transferability
Transferability refers to whether the empirical findings of the study can be applied to another
context (Merriam, 2009). Transferability can be understood as extrapolations which are problem
oriented rather than statistical and probabilistic (Merriam, 2009). Transferability in the following
study was achieved in two ways.
(1)   The researchers aimed to create a “thick description of the sending context so that someone in a potential
receiving context may assess the similarity between them and the study.” According to Lincoln and Guba
(1985), providing a rich description of the context, that the case study is embedded in, is the
best way to ensure the possibility of transferability.
(2)   Through employing purposive sampling, the authors attempted to draw a holistic picture of all
stakeholders in the education sector. The study additionally interviewed members of the
Swedish education sector working abroad to allow for the possibility of a greater range of
application by readers (Merriam, 2009).

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 Badhani & Mut, 2017

5. EMPIRICS

The edtech industry in Sweden is nascent and slow moving, attributed partly to the institutional
context it is embedded in (Alexander Alvsilver, 2017) and partly to the lack of a strong eco-system
to support its growth (Jannie Jeppeson, 2017). In this context, the following chapter presents the
empirical findings from the investigation of the business model transformation of Sensavis.

Sensavis is a Swedish company offering high quality, 3D visualisation software for the K12
education sector. Sensavis’ vision is to improve learning outcomes by making complex and abstract
phenomena, particularly within STEM (science, technology, engineering, and mathematics)
subjects, easier to understand. Their mission is to give educators all over the world tools that enable
them to include all students in the learning process and help them to reach their full potential. With
headquarters in Sweden, the company operates in 36 countries serving over 550 schools, and
reaching more than 220000 students.

The empirical study reflects five distinct stages, identified by the authors, to illustrate the journey
Sensavis has been through since 2008. The stages are structured according to the business model
transformation that occurred at that time, mainly based on changes in the value proposition.
Narrated as they unfolded in reality, the stages describe the processes, decisions and logic that
moved the company onto the next stage, aiming to tell the story of Sensavis rather than draw
conclusions from their actions. While this chapter remains descriptive, the next chapter (vi) aims
to analyse the presented empirics through the theoretical framework.

5.1 Sensavis Stage 1 [2008 – 2012]

Launched in 2008, Sensavis operated as a B2B21 company producing 3D visualisations for Swedish
corporations, primarily within mining and heavy machinery. The value proposition was to provide

21
B2B is short for ‘business-to-business’, and refers to commerce transactions between companies.

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 Badhani & Mut, 2017

interactive and engaging 3D visualisations of products that, due to their size and cost, were
inherently difficult to move and showcase within a sales setting. The final product was delivered as
software and clients were required to purchase the necessary hardware (3D screens and glasses) to
display these visualisations.

Sensavis’ clients used these visualisations primarily as a marketing and sales tool. For instance, a
visualisation of mining equipment operating inside a mine enabled Sandvik22 to present their
product at trade shows in a highly interactive way, providing a ‘real feel’ of the product, beyond
what a product brochure would allow.

Sensavis operated as a project based company, each ‘product’ in the form of a tailor-made
visualisation specific to client needs. The customized nature of products required personal
assistance throughout all stages of project management to allow for continuous feedback and
iteration loops with clients to ensure that visualisations met their needs. Thus, the production
process could take up to 12 months, partly because Sensavis’ developers had to produce each
visualisation from scratch. This demanded large resource requirements from the team and the
client, in terms of time and money. Project teams were devoted to one project at a time, limiting
the number of projects the company could take on.

The customer acquisition process was driven by Sensavis’ strong network. Many of Sensavis’
directors and senior management leveraged their personal contacts to get introductions with
executives at Sweden’s leading firms. This was complemented by identifying and targeting
companies that could benefit from 3D visualisations to showcase their products. Sales and
marketing activities were carried out through email and face-to-face interaction.

In addition to private clients, Vinnova23 engaged Sensavis to produce a visualisation of the ‘Nobel
Prize in Physiology or Medicine 2010’ awarded to Sir Robert Geoffrey Edwards in collaboration
with Karolinska Institute24 (KI), displaying ‘in-vitro fertilization’ in 3D. The partnership with KI
continued through the following years on multiple projects, including visualisations of the heart
and lungs, for use in patient education and doctor training. This collaboration made Sensavis realise
that 3D visualisations could be used to generate a greater understanding of highly complex

22
Sandvik is a is a 155-year-old Swedish high-technology engineering group in tools and tooling systems for metal cutting, equipment, tools
and services for the mining and construction industries.
23
Vinnova is a Swedish governmental agency that administers state funding for research and development.
24
Karolinska Institute is one of the world’s largest and most prestigious medical universities located in Sweden.

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 Badhani & Mut, 2017

phenomena in science. Seeing potential in entering the healthcare sector, Sensavis branded these
visualisations under ‘The 3D Healthline’.

Though Sensavis had some big clients, the company had yet to make a profit and was close to
bankruptcy. To ‘save the sinking ship’, the current CEO, Fredrik Olofsson was brought in as a
consultant to coach Sensavis’ senior management team and restructure the company. With 15 years’
experience in selling software, Fredrik was a suitable candidate. He saw great potential in the
product and was determined to make the company profitable.

Given Fredrik’s experience, his first order of businesses was to understand the challenges Sensavis
was facing with its current value proposition. He understood that along with the lack of scalability,
a major problem stemmed from inadequate project management and inaccurate costing. The team
lacked experience in selling software which was evident in the cost based pricing25 they employed
rather than value based pricing26 which was more suitable to leverage the innovative nature of the
product. By projecting production costs and marking them up with a desired profit margin, the
company priced their initial projects based on resources required, mainly hours spent working on
the project. Accurate budgeting, precise costing and concrete timelines were necessary. With
production cycles of up to 12 months and the need for continuous input from clients, it was
impossible for the company to stick to deadlines, leaving them with high overheads and dwindling
margins. One of the largest projects incurred a loss of over SEK 500,000.

Fredrik explored various market opportunities, identifying the education sector as a potential
market. In conversation with the school principal at Högalidskolan27, who later became Sensavis’
product manager, Fredrik agreed to test an existing visualisation at the school for a two-month
period, granting free access to all teachers in exchange for feedback. Within two weeks, the
principal returned with news that the teachers had responded positively to the software. They had
used it as a tool to engage students in class and immediately noticed an increase in focus and
attention. They signed up as Sensavis’ first client in education. Instead of paying for licenses, they
agreed to serve as a reference. This development came as a positive surprise to Fredrik and
motivated Sensavis to focus on the education sector. It also encouraged the company’s decision to
abandon the healthcare industry, because health care institutions requested visualisations too

25
Cost based pricing uses manufacturing or production costs as its basis to determine the floor and ceiling prices, which serve as a price range
of minimum and maximum prices for a specific product or service.
26
Value based pricing is applied when prices are based on the value of a product as perceived from the customer's perspective. The perceived
value determines the customer's willingness to pay and thus the maximum price a company can charge for its product.
27
School in Stockholm, for F-9 education [6-16-year-olds], with just under 1000 students: http://hogalidsskolan.stockholm.se

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 Badhani & Mut, 2017

narrow in scope and unfit for scaling, which would force Sensavis to remain a project based
company, a direction they wanted to move away from.

5.2 Sensavis Stage 2 [2013]

To fully utilize Sensavis’ technology, improve scalability and drive growth, the board decided to
restructure the company with the goal of building high-quality software for the education sector.
‘The 3D Classroom’28 was born. Hired as official CEO in May 2013, Fredrik began steering the
company towards entering the education market. Sensavis embarked on an important shift towards
becoming a product company and focused on product development (content and platform).
Sensavis decided to sell a bundled product, combining their software with hardware (3D screen,
3D glasses and a computer). Two important features of the ‘The 3D Classroom’ are it does not
contain text or sound, and that it is interactive. This allows teachers to be in control of what and
how to teach, enabling them to adapt visualisations to suit diverse student and class needs. The
value proposition changed from creating a marketing tool, to providing a 3D visualisation tool that
enabled teachers to explain complex and abstract phenomena in a simple, understandable manner.

By employing a school principal as the new product manager, Sensavis placed the direction of the
product content into the hands of an expert with academic and practical experience in pedagogy.
The content portfolio was now being specifically curated for K12 education, including the heart,
kidneys, and lungs as the first education-based products. The production time for these
visualisations was a fraction of what the developers were used to, freeing up much of the team’s
time to focus on platform optimization. Sensavis began working closely with teachers and subject
experts29 to co-develop a content portfolio based on teachers’ experience of what concepts were
difficult to teach. New internal processes were implemented to establish proximity to the user,
enable co-creation, and facilitate effective implementation of their feedback. This laid the
foundation for Sensavis’ future as a highly user-centric organisation. Upon reflection, Sensavis
realised that platform and content changes based on user feedback were quick to be adopted within

28
See Appendix 11 for an old brochure of ‘The 3D Classroom’: http://the3dclassroom.com/se/hem/oversikt/
29
A subject-matter expert or domain expert is a person who is an authority in a particular area or topic.

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 Badhani & Mut, 2017

the organisation, which they attribute to their agility as a small company and on the “nothing is
impossible” attitude from CTO, Peter Nordlander, who has been with the company since day one.
Sensavis’ main partners were hardware providers such as LG30, HP31 and Techdata32, implying
transactional relationships rather than collaborative ones. After initial cooperation with resellers
and distributors, Sensavis decided to abandon intermediaries, due to disappointingly low sales,
which they attributed to, (1) a lack of understanding of the product and its impact on learning and
the classroom environment, and (2) the extensive product portfolios of intermediaries, where
Sensavis would provide a ‘wow’ effect, but slide to the bottom of priorities when it came to selling.

There was a clear shift from ‘B2B’ to ‘B2G’ (business to government) or ‘B2PS’ (business to private
schools) and trade shows became the main marketing and sales channel. During their first trade
show in September 2013, Sensavis acquired five Swedish schools as their first clients based on
verbal pitches and limited marketing material, reflecting the sheer power of the product. The pitch
was centred around the “wow” effect of the visualisations could create in class. Since the product
was bundled and ready to be used as soon as it was plugged in, Sensavis could circumvent school’s
often limiting IT infrastructures and included headmasters and teachers in the sales funnel. The
initial sales goal for 2013 was enthusiastically put at 200 units. Disappointingly, only 25 units were
sold, indicating a more complex market situation than they had envisioned.

The revenue model was devised through experimentation rather than strategy. The bundled
product was pre-packaged and sold as a three-year lease agreement for a fixed price, including
continuous software updates, maintenance and initial teacher training. To drive sales, Sensavis
designed ‘early bird’ discounts. The main cost drivers derived from the hardware and human
resources needed for product development, leaving the company with low profit margins of 10%
for each lease agreement. This, combined with cash constraints from previous losses, put breaks
on the company’s expansion, in terms of increasing content and entering international markets.
Still, to support the company’s new direction, Sensavis doubled in size by the end of 2013,
employing 20 people, partly on consultant contracts to control overheads.

By the end of 2013 Sensavis learned three main lessons. Firstly, the education sector was a very
complex market to navigate for various reasons. There was a difference between the user (teachers),

30
LG is a South Korean multinational electronics company.
31
HP (Hewlett-Packard Company) is an American multinational information technology company providing hardware & software.
32
Techdata is an American multinational distribution company specializing in IT products, logistical capabilities, and value-added services
for technology manufacturers such as Apple, IBM, Lenovo.

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 Badhani & Mut, 2017

the buyer (headmaster) and the resource divisor (municipalities) whose needs and demands had to
be addressed differently. Further, there was no established need in the market for Sensavis’ product,
nor any direct competition, making it harder to benchmark costs, prices, processes, or
performance. Secondly, exposure to the classroom helped Sensavis realise the crucial role of
teachers and why it was imperative to develop the product based on their needs. Thirdly, to increase
margins while keeping the product affordable, Sensavis needed to find ways to gain and sustain
economies of scale, potentially by standardizing the product further.

5.3 Sensavis Stage 3 [2014]

The disappointing sales of the previous year, having only achieved 12% of the initial sales goal, and
the experience gained in the process helped Sensavis direct their next steps. They realised that the
bundled product was an investment that schools were not prepared to commit to. However, to
introduce and establish the ‘need’ for the product in K12, they needed to ensure the ‘3D
Classrooms’ presence in schools. As a result, they dropped the hardware and focused on optimizing
its software and the core engine it runs on to allow smooth installation on the existing IT
infrastructure managed by the schools’ IT departments. This marked the company’s return to being
a pure software provider. IT departments entered the sales funnel, becoming an important decision
maker that Sensavis had to consider and cater to. To increase accessibility and reach, the operating
system moved from Linux to the widely-used Windows platform.

This direction brought a host of new challenges for Sensavis. IT departments at some schools were
reluctant to incorporate new software on the school’s existing IT infrastructure, partly because the
current software required an external graphics card to optimize the visualisations.
Further, only schools using the Windows operating system could buy ‘The 3D Classroom’. The
unbundling meant that Sensavis had to adjust their pricing model with the goal of increasing profit
margins. Motivating the same price levels as when the product was sold in combination with
hardware was next to impossible, forcing Sensavis to consider lower, subscription type payments.
As a result, instead of three-year leasing agreements, Sensavis started selling annual software
licenses, which could range from selling a license per classroom, per student or per school district
and could be paid on a monthly or annual basis. Sensavis expected to succeed with the new pricing
model because it would lower the initial investment costs for schools and districts, which were

42
 Badhani & Mut, 2017

restricted by low budgets. Through selling software licenses, the product was becoming highly
scalable and production costs were not affected by increasing user numbers. However, the new
subscription type revenue model also meant that schools could opt out more easily. Thus, the
product had to be ‘sticky’, and to be sticky, it had to be well understood by teachers so that they
could implement it into their teaching.

The content portfolio was steadily increasing with relevant visualisations within STEM (science,
technology, engineering, mathematics) subjects for K12 and since the visualisations were age
agnostic they could be used across classrooms, making the product increasingly more attractive for
schools33.

Teachers were integral in bringing ‘The 3D Classroom’ into classrooms. Close interaction with
teachers helped Sensavis realise two factors about the teacher community. First, that there is great
disparity within the teacher community with regards to ‘IT savviness’ and ‘technology adoption’.
Second, ‘word of mouth’ is strong in the community, reflecting the value teachers place on each
other’s experience and feedback. Sensavis learned that they could tackle the former with the latter.
As depicted in the graph below, teachers are spread across three groups, (1) the innovators, (2) the
adopters and the (3) the ‘laggards’. While ‘innovators’ are constantly in search for new digital tools
to enhance their teaching, and are motivated to provide detailed feedback, laggards are somewhat
apprehensive about technology and hesitant to experiment with new teaching tools and methods.
Sensavis realised that this resistance to change mostly stemmed from the fear of not knowing ‘how’
technology works and how it can fit into their ‘lessons’.

33
See Appendix 12 for Sensavis content portfolio and roadmap going forward.

43
 Badhani & Mut, 2017

Despite these developments and lessons learned, sales remained slow. Investment activities were
concentrated around private individuals and angel investors. The pressure to convert leads into
sales remained strong, to show proof of concept and regain shareholder confidence in the
company’s new direction. At this point in time, the company was yet to make a profit. Thus,
customer acquisition was still at the centre of Sensavis’ activities. Domestically, the focus remained
on introducing Sensavis to more schools by targeting and convincing teachers and headmasters of
the product need. While the value proposition stayed the same, the pitch was now moving towards
the ‘why’ rather than the ‘what’, focusing less on the cutting-edge technology of the 3D
visualisations but more on the impact on learning and motivation among students.

Fuelled by the board’s inclination to enter the US market, which promised huge potential due to
its sheer size, Fredrik departed to attend a sales trip in the US, which was organized by an
intermediary sales agent. While the sales trip did not go as well as hoped, Sensavis signed its first
international deal with the ‘Nevada State College’, who purchased four classroom licenses after a
15-minute pitch, which are being renewed on an annual basis to this day. These deals and the
market potential motivated Sensavis to launch Sensavis Inc., in Las Vegas, with one fulltime
employee. The second market on Sensavis’ radar was the United Kingdom (UK). They were
approached by two consultants to sell their products on a commission only basis. However,
Sensavis quickly realised that the market was difficult to penetrate with half-hearted attempts and
decided to terminate the relationship with the intermediary for the time being.

Acting on a rather serendipitous opportunity, Sensavis began pursuing the South East Asian (SEA)
market at the end of 2014. The neighbour of Sensavis’ CFO offered to make an introduction to
his contacts within the Ministry of Education (MOE) in Singapore. Excited about the unexpected
turn of events, Sensavis started a dialogue with the MOE and arranged a last-minute sales trip to
Singapore. These conversations continued for a few months. Sales and marketing continued
through trade shows, email conversations and leveraging personal contacts. Additional marketing
tools like catalogues, newspaper advertisements and social media campaigns were tested but did
not translate into sales. This can be attributed to the non-traditional nature of the product which
required a detailed sales pitch to create awareness, establish the need, and convince potential buyers
of the value proposition. Sensavis felt a much deeper understanding of the situation in the
classroom. They realised the transformational impact they could have on the industry and therefore
were motivated to extend the value proposition of ‘The 3D Classroom’ beyond a ‘nice to have’
tool with a wow-effect towards a ‘must have’ product.

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 Badhani & Mut, 2017

5.4 Sensavis Stage 4 [2015]

By the end of the year, financial constraints for Sensavis had increased, forcing them to reduce the
value of their shares with the aim to attract more investments. A private investor, thereafter
provided a much-needed capital injection into the company, diluting a large proportion of the early
investors’ shares. This was the result of an on-going conversation with the investor, who was
passionate about education, a serial entrepreneur, and the owner of several schools in Stockholm,
for which he had previously purchased ‘The 3D Classroom’. Sensavis concluded that it was the
dual value of the product that helped attract the investment, not only are the visualisations
innovative and high-tech but they also have a real impact on students’ learning. The new investor
added credibility, attracting further investments, which in turn added stability and more shareholder
[and employee] confidence, while reconfirming the importance of personal relationships in finding
and seizing opportunities.

Sensavis also built a partnership with Microsoft. First it was selected by Microsoft APAC as one of
six preferred educational partners34 and later became a global Microsoft partner for Office Mix.
Through this partnership, Sensavis granted free access to its product for teachers enrolled in
Microsoft’s Innovative Educators (MIE) program, in exchange for their feedback. Concluding, this
partnership greatly increased awareness in the SEA market, added much needed credibility to the
Sensavis’ product, and provided Sensavis with access to some of the most innovative teachers all
over the globe.35

After rounds of negotiating, two deals were finalised in Singapore, one with a private school and
the second with the ‘Ministry of Education Singapore’ (MOES) who acted as a customer and
development partner. As such, Sensavis and MOES together tackled the pedagogic challenge facing
public school teachers. A project, co-funded by both, was initiated, and experts from MOES
worked with Sensavis to produce visualisations specifically requested by teachers in the market,
such as DNA and cells. To leverage these opportunity, Sensavis established Sensavis Singapore

34
Microsoft APAC stands for Microsoft’s operations in the Asia – Pacific region.
35
MIE Experts help Microsoft to lead innovation in education. They advocate and share their thoughts on effective use of technology in
education with peers and policy makers.

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 Badhani & Mut, 2017

Ltd., formed a strategic partnership with Apex Business Advisory36 and in the summer of 2016,
relocated Andreas Kirsebom, previously VP of Business Development, to Singapore as Sensavis’
VP for the APAC and Middle East region. This phase also marked the first customer in the United
Arab Emirates (UAE), with a private school operator that encompassed licences for six schools.
This contract was the first school-district level license (multi-school licence) for which Sensavis
had to create a distinct revenue model. The negotiations were tough and though the licences were
sold below value, the goal of expanding the client portfolio was achieved.

A dedicated marketing director, Helene Ruda was added to the Sensavis team to revamp the
marketing department, build brand equity and specifically to devise an easy to understand value
proposition that would help the market understand why Sensavis does what it does and what
impact their products can have on students and teachers worldwide. Fredrik, in a continuous effort
to build his team, communicated clearly that this was not an organisation for people looking at
building structured, high-flying careers. It was the belief in the product and its impact which tied
these individuals together. Many of them entered the company either by foregoing salaries for a
certain period or by investing their own funds into the company. Thus, the team consisted of like-
minded people, with high levels of commitment and the ability to take risks. They were passionate
about changing the current education system for the better and confident about the company’s
potential to do so.

Product development elevated with the introduction of ‘Video Capture’, an add-on suggested by a
teacher who lacked the ability to record his Sensavis lessons for re-use. Video capture essentially
enabled teachers to add a voice-over to the visualisations to create completely customized ‘video-
lessons’. These could then be shared with other teachers and students before or after class, with
the option of adding a questionnaire and short test to immediately understand students’ learning
progress. The lessons also served as a great marketing tool to show the versatility of Sensavis’
product. Sensavis viewed video capture as a tool to enhance engagement, access and availability.
By increasing the replicability of the content that the teacher produced, video capture eliminated
the spatial and temporal restrictions and made the product more tangible.

Expanding into new territories also forced Sensavis to work with resellers and distributors. With
an increasing client portfolio, Sensavis credibility was reinforced, leading to a bargaining power

36
Apex Business Advisory Services Pet Ltd supports corporate clients in meeting their statutory and regulatory obligations in Singapore,
and offers niche business advisory services.

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 Badhani & Mut, 2017

shift, through which they could request that distributors put more ‘skin in the game’, in form of
upfront payments for licenses. Sensavis observed a difference between resellers and distributors,
noticing that for resellers, the product was one of many in their portfolio, whereas distributors tried
to understand the ‘why’ of the product, which made them vastly more effective.

5.5 Sensavis Stage 5 [2016]

A combination of being agile, opportunity driven and listening closely to the needs of the market
has helped Sensavis transform their value proposition. While the core product remains intact, its
application and impact has been expanding continuously. From being a tool provider, Sensavis has
taken on the role of a digitisation partner for schools, municipalities and ministries of education,
highlighting the impact of using not only Sensavis’ products but rather the potential of unlocking
technology driven, scientifically proven ways of teaching and learning. Years of engagement with
schools helped Sensavis learn two important aspects that have helped shape their value offering.

First, Sensavis relies on academic research that questions the single dimensional nature of pedagogy
and suggests that there are three cornerstones of education, interactivity, auditivity and
visualisation. All three aspects are required to create an equal platform for students to learn within
the classroom. However, current teaching methods are heavily focused on auditive means, thereby
challenging many children who learn differently, and in more than one way. Second, Sensavis took
these disparity among teachers regarding IT savviness seriously and devised their value proposition
to ensure that irrespective of IT savviness, Sensavis’ product could be used by all teachers to
enhance their teaching. They realised the importance of keeping the product and value proposition
simple and easy to understand, highlighting that technology is just a tool which can potentially
facilitate and enhance pedagogy. The learning was still happening in the classroom and it was crucial
not to overwhelm teachers with a high-tech tool, and to make it unambiguously clear that the tool’s
only aim is to support, not replace teachers.

The ‘why’ of the product increasingly gained importance over the ‘what’, allowing Sensavis to align
their business model with their vision. This inspired Sensavis to create a new value proposition,
captured by the slogan “Teach - Create - Activate”. “Teach” stands for enabling the inclusion of

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all students in the learning process. “Create” stands for creating personalized educational videos,
and “Activate” stands for letting students learn by exploration and discovery. Reflected in their
offering, communication and branding, ‘teach, create, activate’ allows Sensavis to play the role of
a digitisation partner for its wide variety of customers, not only encouraging the use of Sensavis’
products but also providing guidance to its customers on the path to digitisation.

Core engine optimization and expansion of the content portfolio continued throughout 2016. To
increase accessibility, Sensavis launched Sensavis as a ‘Windows 10 App’ giving access to students
via their mobile devices for the first time. The content portfolio diversified into many subjects, that
teachers identified to be difficult learning points for students. Because the visualisations represent
the ‘universal truth’ of these concepts, they become universally applicable. Decades can pass, but
students will continue to learn the same concepts, whether it is understanding gravity, how the
lungs work or the periodic table. This realisation impacts the future of Sensavis in two ways. First,
the product is age and curriculum agnostic, making it highly scalable and adaptable by teachers in
different markets. Second, the product remains future proof.

Sensavis witnessed exponential customer growth, today serving over 550 schools in 38 countries.

Two particular highlights include an Indian publisher, MBD37 who acquired the rights to produce
videos using Sensavis’ visualisations to add to their digital offering, which reaches over 1 million
students in India. This development is a good example of the changing role of actors. Traditionally,
publishers and Sensavis would see each other as competitors. Through this deal, their relationship

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MBD Group is one of India’s leading publishing houses, producing over 50 million books a year.

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moved from competition to co-opetition, a model in which stakeholders cooperate to create

mutually beneficial results. This opened a new customer segment and revenue stream for Sensavis
and significantly increased their reach. Closer to home, the Swedish National Agency for Education
became a partner, acquiring the right to use the heart visualisation throughout all their digital
platforms. Sensavis’ visualisation will also be used for online teacher training on how to integrate
visual learning tools in the classroom.

As the customer base grew, customer relationships evolved, alongside an even more customer-
centric culture within the company. The customer acquisition process continues to be driven largely
by trade shows and is complemented by cold calls, webinars, network of personal contacts and its
increasing number of influential partners, such as Microsoft and Intel. Access to these networks
has allowed Sensavis to be opportunity driven over strategy driven, packing bags and presenting
their products in any part of the world where an opportunity arises. This agility is attributed to an
informal structure within Sensavis, driven by Fredrik, who not only encourages all team members
to actively seek out new opportunities and growth directions, but also provides them with the
flexibility and trust to make the relevant decisions to seize these opportunities.

Multiple revenue streams have contributed to higher levels of stability, which has allowed Sensavis
to create even stronger feedback loops with users. Sensavis believes that having one foot in the
classroom helps them understand the real needs of teachers and students, which enables them to
quickly customize content, test and iterate it, to create a product that is innovative and practical.
The Sensavis website has been completely redesigned, which is now much more simple, clear and
user friendly. The company’s YouTube channel showcases many different applications of the
Sensavis product to inspire teachers, and to convince decision makers to invest in Sensavis licenses.
In 2016, Sensavis was featured in Discovery Channel’s ‘Innovation with Ed Begley Jr’ show38,
reaching hundreds of thousands of viewers worldwide. As a finalist of the BETT Asia EdTech
Award in 2015 and 2016, Sensavis garnered attention from the industry and media, helping it grow
its audience and strengthen its brand.

Monthly newsletters are sent to all customers, including exemplary customer cases, aiming to
increase product knowledge and inspire teachers to experiment with the product. At trade shows,
Sensavis applies the same logic and invites teachers to talk about their true experiences of working
with Sensavis and the impact they have experienced in their classrooms. Thus, some teachers have

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An informative series geared toward educating the public on the latest breakthroughs in all areas of society.

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become Sensavis ambassadors within and beyond their schools, helping the company through
word of mouth, building credibility.

Upon reflection, Fredrik believes that ties with existing customers need to be strengthened further,
to increase collaboration and co-creation and eventually help increase retention, referrals and
recapture of clients and value. This is especially relevant in the case of international customers,
where distance to the user and the small size of the team makes it more challenging to build these
types of relationships.

“Currently, we have only scratched the surface of what technology

in education can achieve39.”
Fredrik Olofsson, CEO (Sensavis)

39
Sensavis has a lot of potential and big plans for the future. These plans are further elaborated in Appendix 13. Due to the scope of this
thesis, the authors decided not to include this data into their analysis, however, it serves as a good read and inspiration for anyone who is
interested.

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6. ANALYSIS
This thesis aims to explore, describe and analyse how one edtech company, Sensavis, devised and
developed its business model to continuously create, capture, and deliver value for, and in
collaboration with, its value network. To fulfil this purpose, this chapter will analyse the empirical
findings through the theoretical framework presented in chapter (iii). Structured in accordance to
the research questions, this chapter is divided into three parts:
(6.1) Business Model Innovation & Value Networks
(6.2) Business Model Innovation & Dynamic Capabilities
(6.3) Business Model Innovation in Edtech

6.1 Business Model Innovation & Value Networks

Through Sensavis’ case, the authors of this study aim to understand the interplay of BMI and the
value networks that companies are embedded in. Sensavis’ value network consists of all the actors
that have a direct influence on, or are affected by, its value propositions towards customers (Peppard &
Rylander, 2006). To answer the first sub-question “What is the relationship between BMI of
edtech companies and their value network?” the authors conduct a network value analysis for
each relevant stage presented in the empirics. To investigate this relationship, the analysis presents
(1) the evolution of the value network, (2) the direction of value flows (unidirectional and
bidirectional) and (3) the nature of value flows (tangible and intangible).

6.1.1 Definition of Value Flows

The authors categorized value flows according to their main functions, similar to how the business
model components are structured. Since the goal is to establish the relationship between the
company’s BMI and its value network, this division is deemed suitable. These are explained below
and colour coded according to their function in the value maps illustrated below.
(1) Value Creation - where is value created and by whom; includes the exchange of information
(market insights) and ideas (cognitive) as part of collaboration or co-creation
(2) Value Delivery - exchange of goods and services
(3) Value Capture - exchange of economic value
(4) Intangible Value - exchange of intangible value[s], such as trust, credibility, legitimacy
(5) Influence (prescriptive) - showing which actors have noticeable influence on others

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6.1.2 Sensavis’ Value Network Evolution

The Network Value Analysis (NVA) resulted in the following five network value maps, the nature
and direction of value flows displaying the evolution and dynamics of the value network, and their
interconnected relationships. This analysis serves as a building block to draw conclusions and
answers for sub-question 1.

Stage 1 [2008-2012]:
As a resource intensive B2B company, Sensavis’ network was limited to the projects they acquired.
As illustrated their value flows were one directional and mainly tangible (monetary). Therefore, the
value network predominantly impacted the value capture and delivery components.

Figure 9: Sensavis Value Network, Stage 1

Stage 2 [2013]:
Entering the education sector with a bundled product (hardware & software), Sensavis unlocked
new sources of value. Value capture and delivery with buyers and suppliers expanded but remained
tangible and one-directional. In value creation, bidirectional value flows started shaping the value
offering, laying the foundation for Sensavis’ user centric nature. Additionally, intangible value flows
were created through the transfer of knowledge and market insights (e.g. user needs) as a by-
product of the interaction with users.

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Figure 10: Sensavis Value Network, Stage 2

Stage 3 [2014]:
‘Influence’ played an important role in acquiring new clients in Sweden (through their contact
network) and to enter their first international market: The United States (due to investor pressure).
Value delivery was attempted through re-sellers and distributors in new markets (UK). Publishers
and other edtech companies presented a weak, but existing ‘threat’. Value creation flows were
increasingly bidirectional and both tangible (co-creating value offering) and intangible (knowledge,
user needs, barriers to adoption). With an increasing client portfolio, the value web continuously
expanded, leading to increased credibility (intangible value). By securing investment, the intangible
value of credibility grew further, attracting a second source of investment.

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Figure 11: Sensavis Value Network, Stage 3

Stage 4 [2015]:
Sensavis seized new opportunities by entering new markets and through continuous product
development. Product development uncovered tangible value delivery and value capture flows due
to an enhanced value offering, and higher perceived value on the client side, as well as intangible
value creation flows in terms of feedback, and co-creation. Association with Microsoft contributed
to various intangible value creation flows by connecting MIE teachers to Sensavis product. This
partnership also added credibility and legitimacy to the Sensavis brand (intangible), expanded their
reach and opened the APAC region as a new market (tangible). Evident from the changes in value
flows, Sensavis became more selective with their distributor partners, relying on their knowledge
(intangible), and network (tangible).

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Figure 12: Sensavis Value Network, Stage 4

Stage 5 [2016]:
A growing portfolio of customers and partners expanded Sensavis’ value network. Evident in the
distributor network, a shift in bargaining power allowed Sensavis to demand commitment
(intangible) and upfront payments (tangible). The competitive nature with publishers transformed
into co-opetition, creating new value delivery and value capture flows (new customer segment and
revenue stream). As a development partner, MOES participated in value creation. An interesting
observation at this stage are the increasing value flows with actors who do not play the traditional
role of customers or suppliers. For instance, the launch of Scandinavia’s first edtech trade
association added pressure on public institutions in Sweden to build a digital strategy for education,
and to work more closely with edtech companies, contributing to value creation, delivery and
capture opportunities for Sensavis. For example, through the partnership with the Swedish
National Agency of Education to co-create teacher training modules (tangible). Further, association
with research institutions allowed Sensavis to base their value proposition in scientific insights,
increasing the brand’s legitimacy further (intangible).

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Figure 13: Sensavis Value Network, Stage 5

6.1.3 Concluding Remarks

Sensavis’ value network is fluid, dynamic and constantly evolving. The value network analysis
shows a progression from linear, transactional value flows, where value was based on the
production of goods and exchange of economic value, towards a connected value web of
relationships. Here, the value is based on knowledge exchange with key actors in the value network.
In the initial stages, most value flows represent value delivery and value capture flows
(transactional) whereas the final stages of the value network evolution show a steep increase in
value flows related to value creation and to the exchange of intangible value, such as knowledge
and trust. The process school in the dynamic view of business models (Demil and Lecocq, 2010)
argues that often business models evolve due to unintended happenstance. The authors of this
thesis challenge and build on that idea. They propose that as these happenstance decisions open
opportunities to interact with the value network, decisions get deliberate and effective. This is
attributed to the organisation’s ability to analyse and assess perceived value as a key driver of actor
behaviour.

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Sub-question 1: What is the relationship between BMI of edtech companies and the value

network they are embedded in?

The relationship between BMI and the value network has the potential to be intricate, interdependent
and mutually advantageous. This is contingent to the direction and the nature of value flows within the
value network, which in an ‘ideal state’ are bidirectional, and both tangible and intangible. The ideal
state thus can be defined as a value network wherein the participants can leverage their
interdependencies for mutual benefit. Identification and mapping of value flows creates a
comprehensive picture of the value network. This helps the focal firm identify potential value flow
opportunities, expand the value network, and change the nature of existing value flows. For the
edtech industry, this knowledge and approach is suitable due to its nascency, the ambiguous roles
of actors and the highly localized institutional contexts.

Four conclusions can be drawn about the relationship from the analysis presented above:
(1)   Product development rooted in user centricity establishes the ‘ideal state’ in value creation.
(2)   Value creation flows present an opportunity to extend the ‘ideal state’ through the remaining
components of the business model, value delivery and value capture by, (a) infusing a sense of
purpose within the network participants, and (b) by adapting delivery channels and capture
flows according to the needs of the network participants.
(3)   To leverage value flows, a combination of tangible and intangible value is important as it serves
as a means of acquiring knowledge and credibility.
(4)   Cooperation, coopetition, and co-creation with actors in the value network holds the potential
to reach the ‘ideal state’.

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6.2 Business Model Innovation & Dynamic Capabilities

Based on Sensavis’ case the authors explore the dynamic capabilities that edtech companies can
use to innovate their business models. For analytical purposes, dynamic capabilities can be
disaggregated into sensing and seizing of opportunities and reconfiguring the company’s tangible and
intangible resources. The authors analyse Sensavis’ business model components, and how they ‘do
business’ to understand which capabilities played what role in Sensavis’ BMI. This framework built
the foundation for answering sub-question 2: “Which internal capabilities does an edtech
company need to build and nurture to successively innovate their business model?”.
Sensing, seizing, reconfiguring are tracked through the business model components in the section
below and synthesized at the end. Based on these conclusions, the research question is answered
thereafter.

6.2.1 Value creation

Scholars argue that the core purpose or ‘common thread’ of the business model concept is value
creation (Zott et al., 2011). Continuous interactions with their expanding value network, Sensavis
understood the needs of the market and continuously aligned their partners, activities and resources
to address them. Illustrating the dynamic capabilities employed, the three most significant changes
in the value creation pillar are explained below.

6.2.1.1 Seek and you shall find

Till date, one of Sensavis’ strongest resources is their contact network. From finding investors to
building a team, Sensavis’ strong contact network played an important role in identifying and
acquiring clients. Particularly to enter new markets, Sensavis relied heavily on their contact network
[sensing & seizing] to set up meetings with buyers holding decision making powers. This enabled
Sensavis to follow ‘strong leads’ and reduced customer acquisition costs. Sensavis leveraged these
contacts and seized new market opportunities by “jumping on a plane and flying anywhere in the world to
pitch the product”.

6.2.1.2 It takes a village to tango

Value creation for Sensavis represents a shift in the supply and demand side phenomenon where
value was created not only by Sensavis, but increasingly in collaboration with customers, users and
other value network participants. Initially, close contact with customers was necessary due to the
complexity of the visualizations and constituted a demanding task in the project management
process. Whereas now, user centricity is a mind-set within Sensavis [sensing & seizing]. For

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instance, Sensavis based product development on the feedback and experience of teachers through
established co-creation processes.

6.2.1.3 Purpose-driven Teamwork

Hiring Fredrik as the CEO, the board relied on his software sales experience to turn the company
around [reconfiguring]. Based on their entry into the education sector and the limited resources
available, Fredrik identified a narrow set of values that a team tackling Sensavis’ challenge would
need [sensing]. He actively sought people who were “committed, hands on, risk taking individuals who
could function in an entrepreneurial environment” and most importantly, “felt attached towards the purpose of
Sensavis” [seizing]. Based on these values, Fredrik started building a company culture that was agile,
entrepreneurial and opportunity driven. A flat organizational structure and lean processes enabled
quick cooperation and knowledge-sharing and allowed the company to capitalise on multiple
opportunities [reconfiguring], while running the day-to-day operations effectively.

6.2.2 Value delivery

Value delivery ensures that the value proposition of a company is ingrained in all stages of
production and distribution allowing the idea to reach implementation. The education sector is
complex, roles are undefined, leaving a high level of uncertainty and ambiguity for companies. This
made it imperative for Sensavis to first understand which value was desired by each customer
segment [sensing] and thereafter align customer relationships and channels to deliver that value
[seizing]. Illustrating the dynamic capabilities employed, the three most significant changes in the
value delivery pillar are explained below.

6.2.1.1 Context trumps content

Experience with private companies did not prepare Sensavis for the barriers in the education sector.
Within the first few months, they sensed that understanding the institutional context and locating
themselves in relation to it would be the first step towards delivering value to their customers.
Having one foot in the classroom helped Sensavis understand differences in needs within and
across their customer segments (user - buyer). These differences varied across markets, depending
on the local institutional context, further complicating the sales funnel. Sensing these differences,
Sensavis changed their sales pitch [seizing], adjusting the value proposition according to which
actor they spoke to and aligned appropriate channels and relationships to match it [reconfiguring].
For instance, after-sales for Sensavis’ customers include “tech support, inspirational support &
educational support” catering to all of their customer segments.

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6.2.1.2 More ‘ed’ less ‘tech’

Sensavis sensed the crucial role teachers played in bridging the gap between moving the product
from a “good to have” to a “need to have” in the classroom. By placing the needs of the teacher
community at the centre of product design [seizing], Sensavis could continuously deliver more
value to teachers. For instance, Sensavis addressed the challenge of varying IT savviness across the
teacher community by reconfiguring the value proposition to “teach - create - activate” to include
all teachers irrespective of how tech-savvy they are. Sensavis supports teachers through online
(webinars) and offline training as well as personalised pre-and after-sales, and by connecting the
teacher community with each other to share experiences and advice.

6.2.1.3 You don’t get a second chance to make a first impression

Sensavis attempted entering markets through resellers and distributors. However, they soon
realised that half-hearted attempts to enter new markets diluted the power of the Sensavis product.
Resellers would use the product to create a ‘wow’ effect during a sales pitch, but fail to explain the
product’s value in improving learning outcomes (the ‘why’). Sensavis realised that many potential
clients still remember them as a ‘high tech 3D company’, an image they wanted to move away from.
This led Sensavis to apply a strict filter when selecting partners [sensing & seizing]. Distributors,
who used to be seen as distribution and sales channels, became partners [seizing]. With an
increasing client portfolio, Sensavis credibility was reinforced, leading to a bargaining power shift,
through which they could request that distributors put more ‘skin in the game’, in form of upfront
payments [reconfiguring].

6.2.4 Value capture

The ‘value capture’ pillar of the business model reflects the company’s economic logic. Often
referred to as the monetization model of a company, value capture is one of the most complex
pillars to get right, particularly in complex and fast changing environments. The major shift in the
value capture logic of Sensavis was the transition from cost based pricing to value based pricing.
The move towards identifying where value is created within the network and how value is perceived
by different customer segments was a crucial step towards realising that a ‘one size fits all’ approach
to pricing did not work. The development of economies of scale and tight cost control, combined
with a flexible and agile attitude towards pricing enabled the company to seize opportunities quickly
and to reconfigure business model components accordingly. Illustrating the dynamic capabilities
employed, the three most significant changes in the value capture pillar are explained below.

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6.2.4.1 From cost based pricing to value based pricing

Sensavis, since inception, designed a novel product for which there was no distinct market need
nor competition to benchmark against. This, in combination with the intangible nature of the
product, made it particularly difficult to find the right pricing strategy, and Sensavis decided to
adopt cost based pricing for its simplicity. With over a decade of experience in selling software,
Fredrik, in his role as CEO turned the company’s focus away from the ‘tech’ and towards the
‘value’ that was embedded in the software. This allowed Sensavis to reconfigure their business
model to unbundle the software from the hardware by acknowledging that the value of the product
was not determined by the cost of its individual components [seizing]. The revenue model was
reconfigured to value based pricing, allowing Sensavis to capture the majority of what their
customers were willing to pay. While all customer segments perceived value differently, they shared
common values in terms of wanting to improve learning outcomes for all students. Focusing
conversations on shared values enabled the company to position ‘The 3D Classroom’ as a ‘need to
have’, rather than a ‘nice to have’ feature in the classroom, further justifying the value based pricing
approach [seizing].

6.2.4.2. One size does not fit all

Value based pricing enabled Sensavis to apply different revenue models for different customer
segments, adapting to their specific needs, problems and capacities [seizing]. While this forced the
company to sell their product at steep discounts, for example in developing markets, it helped them
continuously expand their customer portfolio and capture intangible value from each new deal
[seizing]. For instance, being associated with MOEs, allowed Sensavis to gain credibility and
legitimacy. The flexibility of revenue streams also allows Sensavis to be opportunity driven and to
reconfigure their customer segments and revenue models as and when an opportunity presented
itself, for example when they started working with international publishers in 2016.

6.2.4.3 Developing economies of scale

Implementing value based pricing and flexible revenue models required Sensavis to have a highly
scalable product while keeping tight reigns on costs [seizing]. Sensavis’ product was inherently
scalable as it was age, location and curricula agnostic. In addition, Sensavis continuously interacted
with customers to understand market needs and further improve scalability [sensing & seizing]. For
example, they addressed the needs of IT departments by optimising the core engine and removing
the graphic card requirement to make it easier for the visualisations to run on school computers.
Content production costs were reduced through the close cooperation with subject experts and

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teachers [seizing] and through well structured, efficient processes [reconfiguring]. To reduce fixed
overheads freelancers were contracted when extra support was needed [seizing].

6.2.3 Value Proposition

A value proposition seeks to solve customer needs through the value that is embedded in its
product or service. While the core of Sensavis’ product - 3D visualisations - remained the same,
their value proposition transformed significantly over the years. Illustrating the dynamic capabilities
employed, the three most significant changes in the value proposition pillar are explained below.

6.2.3.1 From tool provider to product company

Sensavis’ journey began as a pure B2B company serving sales and marketing teams, mainly in
mining and machinery corporations. The value proposition focused on the ‘high tech’ and the
‘wow’ effect of these visualisations. Entering the education sector, Sensavis attempted to
standardize their product by bundling hardware and software into ‘The 3D Classroom’
[reconfiguring] and selling their visualizations as ‘interactive, visual learning tool’, that enabled
instructors to explain complex and abstract components of a subject in a simple, understandable
manner.

6.2.3.2 From product company to software provider

Sensing the wide range of different needs and characteristics among their customer segments,
Sensavis got rid of the hardware and moved from a ‘product company’ towards becoming a
‘software provider’ [seizing]. To position ‘The 3D Classroom’ as a ‘need to have’, feature in the
classroom, Sensavis changed the focus of their value proposition from the ‘what’ to the ‘why’ and
emphasized the software’s beneficial impact on student motivation, educational growth and
learning outcomes [seizing & reconfiguring]. Co-creation with users had the biggest impact on the
subsequent changes in the value proposition of the firm [sensing, seizing and reconfiguring].

6.2.3.3 From software provider to service company

Collaboration with their expanding value network increased Sensavis’ knowledge of the
institutional context and the resulting entry barriers [sensing]. Sensavis sensed stark differences in
institutional settings, between users and buyers, as well as among the user community and
addressed them through a revised value proposition [sensing & seizing]. ‘Teach - Create – Activate’
(TCA) was born [reconfiguring]. It [new value proposition] targets all customer segments by
alluding to their shared vision (values) of wanting to revolutionize the education sector and improve

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learning outcomes. “There are schools that barely use email and there are schools that teach via skype - we want
to provide for all.” Due to the complex market situation and the lack of a digitisation roadmap for
K12, Sensavis sensed that the real value for most of their customer segments lay in the provision
of guidance, support and inspiration. Seizing this insight, Sensavis embarked on their journey
towards becoming a fully-fledged service company [seizing & reconfiguring], not only selling
software for K12, but rather acting as a trusted digitalisation partner to schools, municipalities and
ministries of education.

6.2.3.5 Concluding Remarks

Applying the dynamic capability framework to the empirics provides an interesting addition to
Teece’ (2007) argument for using dynamic capabilities. In addition to finding sustained competitive
advantage, the authors found sensing and seizing integral for a company establishing a need in a
market where none exists. In this regard, the empirics mirror Mason & Spring’s (2011) idea of
‘sites’ and ‘practices’ of a business model. Thus, business models emerge, take on multiple sites and
evolve over time, while spreading out across the value network through interactions with network
participants. Eventually, business models have the performative power to shape a market by
introducing themselves as the norm and creating a need.

For Sensavis, dynamic capabilities became the primary driver of business model changes. The most
important dynamic capability, within the context of this thesis was sensing, which is understandable
given the nascency of the industry and Sensavis’ initial lack of market knowledge. Teece (2007)
discusses that reliance on a few individuals to enable the scanning of the environment is short
sighted and limited in impact. This was mirrored by the empirics as the scanning and cognitive
processes to conduct sensing were embedded throughout the organisation. This can be linked to
Mason & Spring’s (2011) conceptualisation of business models as ‘frames of actions’, where all
employees translate, adapt and act in contextually appropriate ways, resulting in lean but
opportunity driven processes. Zooming out, these frames are created and transformed by
interacting with participants in the value network, shaping the markets within which they are
embedded.

Sub-question 2: Which internal capabilities does an edtech company need to build and

nurture to successively innovate their business model?

To drive business model innovation consistently, an edtech company needs to drive seizing and
reconfiguring through continuous sensing of the market and user needs. Empirics directed the

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authors to break sensing, seizing and reconfiguring according to their purpose in the company.
They found that while reconfiguring involves organisational and strategic changes, seizing
constitutes many operational, day-to-day tasks and sensing contributes to the organisational
learning of all individuals inside the company. “Thus, business models can be understood as a framing device
for influencing and shaping collective and individual action” (Mason & Spring, 2011) on a strategic,
operational and individual level through dynamic capabilities. “The connectivity between actors (with
bodies that perform activities and minds that shape performances), agency (the power they have to shape action),
knowledge and understanding (what actors think they should do) can be understood as the practices that form
structures of action (Mason & Spring, 2011).”

Presented as a top management skill to have, Teece (2007) and Mason & Spring (2011) however
leave the important aspect of leadership unexplored. The empirical findings present ‘leadership’ as
the glue that enables a robust yet flexible organisational structure bound by a common purpose,
shaping the frames of action within the company and across the value network. In relation to
dynamic capabilities, leadership’s role is to specifically encourage and enable sensing as a resource
for search and discovery of opportunities, empower the assessment and seizing of opportunities,
and reconfigure business model components accordingly to innovate the organisation’s business
model. Therefore, strong dynamic capabilities require both transformational leadership and a
flexible organization (Leih et al. 2015), as well as coherence between leadership, company culture
and employee commitment (Achtenhagen et al. 2013). This strengthens Leih et al. (2015) argument
that implementation failures in business model innovation can stem from ‘lapses of leadership’. In
this vein, Leih et al. (2015) remark that the role of organizational design in dynamic capabilities is
an important topic that so far has been offered little attention. Concluding, leadership plays a crucial
role in BMI and can be regarded a dynamic capability itself. The following table illustrates the
interplay between leadership, dynamic capabilities and their impact on the business model
components.

6.3 Business Model Innovation in Edtech – Concluding Remarks

To fulfil the purpose of this thesis, the authors first investigated the individual impact of the value
network and the dynamic capabilities on the BMI of edtech companies. This built the foundation
for them to answer the main research question.

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“How do edtech companies innovate their business models in a complex market

environment?”
The authors confirm that BMI is essential to navigating a complex market. They propose that
driving BMI requires the company to understand and balance the interplay between their value
network and their dynamic capabilities. Specifically, they propose that finding the sweet spot in the
value network is contingent to the company’s sensing capabilities. Teece (2007) has called for the
application of an analytical framework to facilitate sensing that allows the business eco-system to
be taken into account rather than the industry, justifying the application of the network value
framework.

To integrate the empirical and theoretical findings, the authors saw the need to adapt their
theoretical framework, which is presented and described below.

While the value network presents challenges and opportunities, it is the dynamic capabilities of a
company that determine whether the company will be able to sense and mitigate risks, seize
opportunities, and reconfigure the business model to capture value. The authors conclude that for
edtech companies, a big challenge and opportunity lies in their ability to acquire and build market
knowledge. Sensing is the ability to build awareness and discovery (Teece, 2007), and it needs to
be embedded throughout the organisation through routines and processes to become an integral
part of organisational learning. The ability of sensing to instil user centricity throughout processes
and routines is strengthened with the high correlation between successful innovations and the

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developers’ understanding of customer needs (Freeman, 1974). The authors of this thesis extend
and validate the application of sensing beyond the dynamic capabilities framework, highlighting its
importance in driving (1) seizing and reconfiguring and (2) in reaching the “ideal state” of the value
network. In this adapted framework, the authors propose that the tangible and intangible value
flows flowing into the company are absorbed through sensing, creating an understanding of needs
and perceived value in the value network. Sensing and seizing are inherently outward focused
(towards the value network), where sensing is related to making sense of incoming value flows.
Seizing and reconfiguring are essential in assessing and implementing this knowledge to drive BMI.
Reconfiguring takes place on an internal, strategic level, whereas seizing connects the reconfigured
outputs to the value network on an operational basis through value creation, delivery and capture
flows.

The authors combined Demil & Lecocq’s idea of dynamic consistency within Teece’s dynamic
capability framework and Peppard & Rylander’s idea of opportunity network to further this
framework. The authors propose that the process presented in the framework above is continuous
and not linear requiring progressive refinements to create internal consistency of capabilities with
and for the value network. Sustainable performance in the case of BMI therefore lies in the ability
of leadership to enable, empower and initiate dynamic capabilities within the organisational
architecture and in relation to the environment it is embedded in. By crafting an opportunity
network within the value eco-system, managers can therefore anticipate change sequences and
implement incremental or radical changes to adapt the BM and maintain, restore and boost
performance.

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7. DISCUSSION
In this thesis, the authors have tried to reconcile two theories related to the BMI concept, that are
identified as being complementary, rather than opposed. Taking a dynamic view of business
models, the authors of this thesis conclude that value network analysis is a highly beneficial tool
for successive business modelling, because it helps a firm understand where value lies in a network
and how value is created. This is particularly important in emerging industries such as edtech.
Mason & Spring’s (2011) conceptualization of business models is unique in that it links what
business models are with what they do, giving the concept agency to shape action; while
acknowledging that inter-organizational and intra-firm actions also shape the business model. They
try to understand the transformation of a technology into a market offering through the creation
of a network architecture, and stress a company’s embeddedness in its value network. One of the
aspects of the network architecture relates to ‘capabilities’, understood as the ‘know-how’ that is
retained, maintained and developed by an organisation over time. The authors of this thesis expand
this notion and imply that dynamic capabilities, particularly sensing and seizing, are at the periphery
of a focal company and its value network, and its these capabilities that enable business models
(and their elements) to shape and be shaped by markets and value network participants, allowing
business models to have multiple and multiplying sites over time (Mason & Spring, 2011). Business
models are thus regarded as ‘frames of action’ shaping the dynamic capabilities that in turn shape
boundary-spanning practices that interconnect a company with its value network. This, in turn,
strengthens the notion of business models as generative systems that continuously evolve within
the context in which they are practiced, but that in turn influence and shape the context. As seen
in the edtech industry, contextual adaptability to different markets forced the case company to
reconfigure their business model components to local institutional settings, taking into account
tangible and intangible value flows to be captured. In the pursuit of new value creation, in an ever-
changing market, dynamic capabilities were essential in this adaptation process allowing the
business model to take on different sites in different markets, to ensure a better alignment with its
environment (Teece et al., 1997).

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8. CONCLUSION
Chesbrough & Rosenbloom (2002) argue that companies producing novel technologies find it
particularly difficult to learn about and from the market, especially where the value network has yet
to emerge. Empirical findings in this thesis reflect this thought and build upon the theoretical gap
surrounding dynamic business models in complex market environments. The theoretical
framework presented in chapter (iii) guided the authors’ analysis. However, the empirical findings
directed them to adapt this framework and build upon existing theories of BMI, value networks
and dynamic capabilities.

The analysis confirms that both, the value network and the dynamic capabilities of an edtech
company play an essential role in driving BMI. External drivers (originating from the value
network) are particularly strong in driving changes in the initial stages, where the company’s
position within the value network is not yet clear. In these times, established network participants
contribute to the company’s understanding of the market, which can significantly shape the
company’s value creation, delivery and capture logic, and its value proposition. Interestingly, and
somewhat paradoxically, the more the value network expands, the more the changes driving
business model innovation seem to stem from within the company. The authors attribute this
finding to the fact that by continuously interacting (sensing) with the value network, companies
develop and hone dynamic capabilities.

8.1 Limitations
Owing to the contextual, institutional nature of the education sector, findings are limited in their
applicability. Though quality criteria to increase generalisability were attempted, this study’s
findings can be enriched and validated by conducting multiple in-depth investigations to explore
business model innovation in different contexts (regions and organisations). Additionally, the data
analysis process uncovered several interesting areas for exploration, but given the scope of this
study, only aspects pertaining to the research questions were explored further.

8.2 Theoretical contribution

Firstly, this thesis improves the understanding of BMI in an under researched sector (edtech
industry) by presenting an in-depth case study of a real-life phenomenon and the environment it is
embedded in. Second, the thesis fills the theoretical gap of practice in BMI literature by presenting
a process driven, practical study of a company’s actions and reactions to a market and its impact
on their BMI. This answers the urgent need presented by both Schneider & Spieth (2013) as well

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as Mason & Spring (2011) to bring theory up to speed with the empirical world regarding the
process of conducting BMI. Further, this thesis is unique in the way that it explores the process of
BMI by combining the value network perspective and the dynamic capabilities framework to
investigate the drivers of a company’s decision making. This combination sheds light on their
interplay, thereby highlighting the managerial tools that can be used to leverage both in an uncertain
market environment.

8.3 Managerial Implications

The findings of the study are applicable for a wide range of actors in the sector; edtech
entrepreneurs, policy makers, investors, teachers, headmasters and incumbents trying to enter the
field of edtech. Specifically, four main conclusions impacting managers and edtech entrepreneurs
are discussed: (1) NVA can help managers understand the local context of the sector, different
needs, perceived value of the products and help them take quick decisions based on their influence
and value flows within the network. Since this study has already mapped out NVA for an edtech
company, other edtech entrepreneurs can base their analysis on it. (2) The aim should be to align
activities, resources and partners to create greater value that serves present and future market needs,
and to capture intangible value from within the value network. (3) Integrating marketing, sales and
distribution channels and building strong customer relationships is vital for value delivery to
different customer segments. (4) Building a team based on a common purpose and a strong sense
of commitment to the impact they can have should be an important consideration for managers
and investors.

8.4 Future Research

The current study presents several unexplored questions that are mirrored by gaps in academia.
Four of these are discussed in this section. (1) While this study explored the external and internal
drivers of a company’s business model transformation, the same analysis would be equally
interesting and insightful for an incumbent (for instance, a traditional publisher) with established
value flows. (2) Conversely, a NVA and dynamic capability framework applied in a completely
different context (for instance, in the FMCG industry) would unveil the role value plays in
connecting the different actors in the value network. (3) Further exploration must be conducted
on the concept of values as a mediating variable between value networks and business model
innovation. (4) Internally, the role of management’s entrepreneurial nature in driving dynamic
capabilities also presents itself as an interesting area to explore.

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APPENDIX 1: EDTECH INVESTMENTS 2011-2016

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APPENDIX 2: LITERATURE ON EDUCATIONAL TECHNOLOGY

The need to understand how educational technologies can effectively support teaching and learning
has resulted in the exponential growth of research published in peer-reviewed journals in the field
of educational and instructional technology. A recent study by Hsu et al (2013) examined almost
3000 international research articles published between 2000 and 2010 in six journals included in
the Social Science Citation Index in the field of Educational Technology.

Their findings show that there has been a steady increase in published research articles on edtech
with focus on three major research domains: (1) Technology Integration; (2) Acceptance/Attitude
of Emerging Technologies; & (3) Learning Environments.
The main concern of researchers is the pedagogical use of technology in achieving intended
learning outcomes and there is a lack of research on how edtech companies fit into the education
sector from an industry and a business perspective.

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APPENDIX 3: INTRODUCTION TO SENSAVIS

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“What is happening is a principal’s dream; teachers do what they should do and achieve world
class education using modern pedagogy so students understand. Students prefer this new way of
learning!”
- Jukka Miettunen, Head Teacher, Yli-Ii school in Oulu, Microsoft mentor

“Using Sensavis will empower our teachers to help every student reach their full potential
by
personalizing learning. It encourages our teachers to collaborate and share projects that engage
students in the learning process.”
- Kim Clemmons Supervisor of Instructional Technology, Wilson County Schools

“What’s great is that I choose the content, I direct the lesson or leave control to the students. A
book or movie is not as engaging. With Sensavis they want to see more, and they use me to
explore for them. We create context together!”
- Sofia Kruth, Teacher , Sandhult School

“I have a student with a attention issues. When I started using Sensavis, he immediately moved to
the middle of the classroom and started talking. With Sensavis, I learned more about the
student’s knowledge in one hour than I had in two years.”
- Rebecka Nilsson, teacher, Skurup

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APPENDIX 4: PRE-STUDY & MAIN STUDY INTERVIEWS

PRE-STUDY INTERVIEWS
INTERVIEWEE ROLE & COMPANY DATE DURATION CHANNEL
1 Fredrik Olofsson CEO, Sensavis 10.01.2017 60 minutes Face-to-face
Marvin Turkia VP Nordics, Sensavis
Anders Huge Government & Education
Executive, Intel Co

2 Anders Huge Government & Education 16.01.2017 30 minutes Skype

Executive, Intel Co
3 Jannie Jeppeson Founder & CEO, Swedish 14.02.2017 120 minutes Face-to-face
Edtech Industry
4 Ellen Hagstrand Education Program Manager, 23.02.2017 60 minutes Skype
Microsoft
5 Eilif Trondsen Project Leader, Silicon 24.02.2017 60 minutes Skype
Vikings
6 Jeremias Founder, Academic Work 22.02.2017 60 minutes Face-to-face
Andersson Edtech investor (incl.
Sensavis), owner of two
schools

MAIN STUDY INTERVIEWS

CASE COMPANY
INTERVIEWEE ROLE & COMPANY DATE DURATION CHANNEL
1 Fredrik Olofsson CEO, Sensavis 16.01.2017 120 minutes Face-to-face
2 Fredrik Olofsson CEO, Sensavis 01.03.2017 120 minutes Face-to-face
3 Fredrik Olofsson CEO, Sensavis 09.03.2017 120 minutes Face-to-face
4 Helene Ruda Director of Marketing & 07.02.2017 90 minutes Face-to-face
Communications, Sensavis
5 Marvin Turkia VP Nordics, Sensavis 09.02.2017 60 minutes Face-to-face
6 Peter Nordlander CTO, Sensavis 13.02.2017 60 minutes Face-to-face
EXPERT INTERVIEWS
7 Blair Stevenson Founding Manager, Oulu 02.03.2017 30 minutes Skype
EduLAB
8 Anders Huge Government & Education 07.03.2017 60 minutes Face-to-face
Executive, Intel Co
9 Lena Gode Office Manager, Digilar 08.03.2017 90 minutes Face-to-face
10 Jonas Backelin Microsoft Innovative 09.03.2017 120 minutes Face-to-face
Educator (MIE)
11 Emma Naas Microsoft Innovative 15.03.2017 60 minutes Phone
Educator (MIE)
12 Alexander Senior Program Manager, 21.03.2017 13:00-13:30 Face-to-face
Alvsilver Vinnova
13 Eilif Trondsen Project Leader, Silicon 20.04.2017 60 minutes Webinar
& Vikings
Blair Stevenson Founding Manager, Oulu
EduLAB

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APPENDIX 5: SWEDISH EDUCATION SYSTEM

Source: The Swedish National Agency for Special Needs, Education & Schools
[Specialpedagogiska Skolmyndigheten], retrieved 01.05.2017, from
https://www.spsm.se/om-oss/english/the-swedish-education-system/ministry-of-education-
and-research/

SWEDEN GOVERNMENT

& PARLIAMENT
Guidelines, e.g. Education Act
& Curricula
Public funding
THE NATIONAL AGENCY
SCHOOL INSPECTORATE
FOR EDUCATION

Central administrative authority Assessment of schools

for public education

21 COUNTIES

Public funding

290 MUNICIPALITIES

Equal provision of public funds

to private & public schools
Buying decisions for all schools

PUBLIC SCHOOLS PRIVATE SCHOOLS

Management & cost control

Buying decision for individual
school / group of schools
SCHOOL OWNERS &
HEADMASTERS
HEADMASTERS

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APPENDIX 6: EXPLORING BUSINESS MODEL INNOVATION

Comparison of schools of thought on business models (Gassmann et al., 2016)

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APPENDIX 7: BUSINESS MODEL CANVAS (OSTERWALDER & PIGNEUR, 2010)

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APPENDIX 8: RESEARCH ONION (SAUNDERS ET AL., 2007)

The following is a visualization of the study’s research design, adapted from Saunders et al., 2007.

RESEARCH PHILOSOPHY:
INTERPRETIVIST

RESEARCH APPROACH:
ABDUCTIVE

RESEARCH CHOICE:
MULTI METHOD QUALITATIVE

RESEARCH STRATEGY:
SINGLE CASE STUDY

TIME HORIZON:
CROSS SECTIONAL

DATA
COLLECTION
& DATA
ANALYSIS

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APPENDIX 9: SAMPLE INTERVIEW GUIDE

1.   Personal Introductions
2.   Introduction to our thesis: where we are now and our goal

We are both interested in education, and edtech specifically got our interest for two reasons:
-   Insights from secondary sources on how the industry is growing, and the potential impact
of edtech [proof of concept]
-   The huge flows of investment (edtech is the next fintech) and recent slow-down [proof
something is happening / there is a problem]
-   Encouragement from our supervisor [proof of relevance / interesting field to research]
-   Contact with Sensavis and their willingness to share their story [access to data]

Preliminary research confirms that monetization is a big issue in edtech, particularly in K12. This
empirical issue relates to business model innovation, a topic we are very interested in, and which
presents a similar theoretical problem (how to balance and innovate the different components of
a business model).

Our research is an iterative process, currently trying to get a good idea of what the industry is
about and the challenges edtech companies face, so that we can identify the empirical and
theoretical research gap.

We hope to get insights and answers to the following:

-   What does success mean in an edtech company – best case examples
-   How is it defined and what are the drivers?
-   Potential lines of thoughts / where the research gaps are
o   Business model innovation modelling
o   Go to market strategies
o   Internal organizational capabilities / ambidexterity - striking the right balance
between agility and efficiency
-   general overview of the edtech sector, edtech in the Nordics, edtech in Sweden
-   examples of trade associations in the Nordics
-   How is an edtech company defined by you? Is there an overarching definition for the
Nordics that we can use?
-   Strengths of these associations, how are they funded and what is their main function?
-   What has caused the difference among the Nordics
-   Who do you think are the main players in this scene and what stake does each
stakeholder have?
o   Edtech Investor perspective
o   Publisher perspective
o   Edtech entrepreneur perspective
o   Public perspective (Government, municipalities, etc.)
o   Teacher perspective
-   Too much ed, to little tech – what does that mean to you? [from SEI report]
-   What are the main challenges in Sweden / the Nordics
o   Fragmented ecosystem
o   Lack of control
o   Different levels of digitization
o   No innovation procurement
-   Do you have any other contacts you think we should meet to further our understanding
of the edtech sector?

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APPENDIX 10: SAMPLE INTRODUCTION EMAIL

Hi Jannie,

We hope this finds you well. Helene has spoken very highly of you and we’re delighted to reach
out.

Shreeti & I are passionate about the education sector, which is why we decided to write our
master thesis investigating business model evolution within EdTech, with Sensavis as our main
case study. In brief, the purpose of our research is to map business modelling processes within
EdTech and to understand the complex interrelations with stakeholders and their ability to drive
business model changes (internally & externally). Our desired outcome is to generate insights and
develop a model for more effective business modelling practices and go to market strategies
within EdTech.

As part of our empirical research, we are also conducting expert interviews and would be grateful
if you could meet with us for a conversation about the education sector and the transformation it
is going through. Our goals for the meeting with you are:
1.   To get a holistic picture of the education sector in Sweden & beyond (current state,
progress and future potential for edtech)
2.   To understand the complexities and stakeholder networks within the industry (and how
these differ across private vs public institutions)
3.   Any other insights you are happy to share with us.

Would any time on Friday, 17th February, work for you? Do let us know if you prefer another
date. Many thanks and all the best,

Shreeti & Julia

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APPENDIX 11: THE 3D CLASSROOM

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APPENDIX 12: SENSAVIS CONTENT PORTFOLIO

The entire content portfolio: http://sensavis.com/app/uploads/2016/12/ToC_5.1_eng.pdf

Roadmap going forward: Overview of the content in Sensavis Visual Learning Tool that is
currently being developed. Everything below the line is prioritized content under production that
will be released in upcoming versions of the product.

BIOLOGY CHEMISTRY PHYSICS

PHOTOSYNTHESIS WATER NEWTON’S LAWS

THE HUMAN BODY
Digestive & lymphatic system
Urinary system
Cardiovascular system
Nervous system & senses
Reproduction & anatomy

Acid and base reaction
Skeleton & muscles
The cells & DNA
Digestion

Cell respiration
Photoreceptors
Myocardial infarction
Asthma
Molecule Forces & parallel forces
Water & ice REFRACTION
THE PERIODIC TABLE Refraction & human eye
Periodic table & NaCl Nuclear power
Covalent bond Volt/Ampere
Projectile motion
Water Gas +4° C Magnetic fields
Planetary motion
Ionizing radiation
Nuclear fusion

MATHEMATICS GEOGRAPGY ENGINEERING

GEOMETRY CLIMATE ELECTRICITY

Points,lines & rays Temperature Precipitation Basic DC
Line segment & angles Vegetation AC/DC
Area & volume THE EARTH & SOLAR SYSTEM LEVERS
Pythagorean theorem The earth, sun, earth & moon The golden rule
Circle, pyramid & cone the solar system Human arm
LINEAR EQUATIONS EARTH’S INTERIOR Hydraulics
Connection & change Tectonic plates The Screw
MATHEMATICS Strato volcano The Wedge
Negative numbers Glaciers Inclined plane
Unit conversions Earthquakes
Algebra/equations The moon phases
The moons orbit

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 Badhani & Mut, 2017

APPENDIX 13: SENSAVIS’ FUTURE IN THE CLOUDS

For Sensavis, the potential impact of its product is yet to be unlocked. They foresee their complete
transformation into a service provider to take place in the next one to two years. They visualise this
transformation taking place on the back of two new technological innovations to their product,
which will allow them to significantly increase access, availability and engagement.
Cloud computing allows Sensavis software to run on a cloud based server, eliminating
operating system and hardware dependencies, and making the visualisations accessible anywhere,
at anytime, as long as a high-speed internet connection is available. This significantly increases
market opportunities for Sensavis, as they can target all K12 schools, independent of which
operating system they use, and for the first time allowing the product to be used on Apple (mainly
Mac PCs and Ipads) and Google devices (mainly Chromebooks) as well as on Android and Linux
platforms. The need for high-speed connectivity, however, poses a challenge for Sensavis market
entry in developing countries with sub optimal internet connections.
A global cloud sharing platform allows Sensavis to develop a universally accessible video
storing platform similar to YouTube, but for education, where teachers (and potentially students)
can upload their instructional video lessons using Sensavis visualisations with plug-ins to record,
add slides, questionnaires, notes and more. The content will then be categorized according to
subject and grade, peer-reviewed, and ranked according to relevance and popularity. Users can
share their feedback and promote ‘best’ content. This development builds on the popularity of
peer to peer sharing platforms and aims at reducing the inequality that exists between schools
within and across markets, increasing knowledge sharing, engagement and participation. The cloud
sharing platform could become a lock-in. The first challenge for Sensavis is creating habits and
changing mindsets. Though the intention might be present, the education sector has established
ways of working that are tough to change. Once a habit of creating this type of content and sharing
it is established, the rest is ‘just’ logistics according to Sensavis. The sharing they visualise will
happen in steps. First within a school, across the teacher and student groups. Next facilitating
sharing between schools in the same district, city and country. Finally, the ultimate goal is to
broaden the sharing cloud between regions and across the globe, and especially making the lessons
available at low-cost to schools in developing countries, which is where Sensavis sees huge potential
for creating invaluable social impact in the long run.
These developments are in an ideation stage, wherein Sensavis is looking for partners,
funding and suppliers to execute both. Business model consequences of both cloud services have
not yet been fully assessed.

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APPENDIX 13: BUSINESS MODEL CHANGES & DRIVERS OF CHANGE

The following graphs display whether the main business model changes of Sensavis, throughout
the 5 stages were driven by external forces (initiating from the value network) or by internal forces
(through dynamic capabilities). In line with the authors’ adapted value based business model
canvas, the changes are broken down into value creation, value delivery and value capture.

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