Abstract:
The COVID-19 crisis had a significant and immediate impact on business activities in every
industry across the world. The pandemic severely affected startups in particular, which are
typically resource-constrained. However, during these tough times, some businesses not only
sustained themselves but also managed to grow significantly. This occurred because these startups
were able to adapt and manage change effectively. Thus, businesses strive to survive and, in the
best scenarios, profit during a crisis. This study explores how startups can use business model
innovation (BMI) to survive crises and earn profit. The study also aims to explore the different
types of BMI adopted by startups in response to crises.
The theoretical lens of this study was centered on a dynamic capabilities lens, focusing on sensing,
seizing, and reconfiguring strategies to cope with the crisis. The methodology of this study was
qualitative and fifteen semi-structured interviews with founders and co-founders of Pakistani
startups were conducted. The findings suggest that startups faced various challenges during the
crisis, including shifts in consumer behavior, disruptions in business operations, and financial
constraints. The study also highlights the value capture, value creation, and value proposition of
BMI in response to these challenges. The results emphasize the importance of digital
transformation as a crucial factor in customer engagement and enhancing business operations.
Additionally, the study underlines the importance of strategic adaptability and market
responsiveness for crisis resilience. Overall, this study contributes to exploring the role of BMI in
empowering startups to transform crises into opportunities and underscores the significance of
dynamic capabilities.
