How founders' values enable business model innovation in new ventures: The case of Magnum Photos

Anastasia Sergeeva and Christoph Zott

Strategic Management Journal, 2025, vol. 46, issue 10, 2492-2534

Abstract: Research Summary This study explores why and how founders' values lead them to design novel business models. To address these questions, we conducted a historical case study of Magnum Photos, a photo agency whose novel business model revolutionized magazine photography in the mid‐20th century. Our abductive analysis reveals that personal values can be a principal driving force for business model innovation (BMI). Actors who believe that their personal values are difficult to reconcile with existing business models engage in BMI to retain control over activities that are perceived to be central to their values. Our findings highlight values as an important and hitherto under‐studied antecedent of BMI and of entrepreneurial innovation and strategy more generally. Managerial Summary What drives business model innovation in startups? Our study finds that personal values can be a powerful force. Through an in‐depth historical analysis of Magnum Photos, a pioneering photo agency, we reveal how its founders' commitment to creative freedom and integrity led them to reject conventional business models and design an entirely new one. Unlike traditional agencies, Magnum's founders saw certain activities—such as taking, editing, and distributing photographs—as inseparable. This led them to create a cooperative model where photographers retained full control over their work. The new business model not only protected their values but also reshaped the photojournalism industry. This study highlights an overlooked driver of innovation: when personal values clash with existing models, entrepreneurs may be compelled to create new ones.

Date: 2025
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