1

I

Inhalt List of figures ............................................................................................................................ II

List of tables ............................................................................................................................. III

List of abbreviations ................................................................................................................ IV

1. Introduction ........................................................................................................................ 1

2. Business Model................................................................................................................... 2

3. Legitimacy .......................................................................................................................... 4

4. Methodology ....................................................................................................................... 6

5. The Freeletics BM .............................................................................................................. 7

6. Actions towards legitimacy ................................................................................................ 9

7. Achieved legitimacy ......................................................................................................... 10

8. Legitimation through the Business Model........................................................................ 12

8.1. Pragmatic Legitimacy ............................................................................................... 12

8.2. Moral Legitimacy ...................................................................................................... 12

8.3. Cognitive Legitimacy ................................................................................................ 12

9. Conclusion ........................................................................................................................ 13

References ................................................................................................................................ 14

II

List of figures

Figure 1: Ryanair BM Source: Casadesus-Masanell & Ricart, 2010 p. 199 ............................. 3

Figure 2: Freeletics BM Source: own illustration according to Osterwald &Pigneur, 2010 ..... 8

Figure 3: Training Group Source: Facebook. ............................................................................ 9

Figure 4: Trainng group 2 Source: Facebook. 11

Figure 5: Playstore Source: Google Play. ................................................................................ 11

III

List of tables

Table 1: Types of legitimacy Source: According to Suchman, 1995 p. 584 ............................. 5

Table 2: Legitimacy gains Source: own illustration ................................................................ 13

IV

List of abbreviations

Business Model (BM)

Customer Relations (CR)

Customer Value Proposition (CVP)

Facebook (FB)

1

1. Introduction

The term business model (BM) is around for a long time and has gained a lot of attention in

the last decade due to the emergence of the web 2.0 and the opportunity it presents.

Most of these web 2.0 businesses are new ventures. Therefore finding the right BM is crucial

for them (Amit and Zott, 2001).

But even when they find a good BM, they need to achieve legitimacy in order to become a

success (Lounsbury and Glynn, 2001). Since most new ventures fail within the first five years

and survival is one of the most important effects of legitimacy, trying to become legitimate

quickly is vital (Zimmerman and Zeitz, 2002).

Legitimacy refers to an understanding and acceptance by the public, in addition to the Believe

that the actions of the company are desirable and appropriate (Powell and DiMaggio, 1991).

Unfortunately this is one of the most difficult parts for a new venture and the process of

legitimation is a very complex one (Kennedy and Lounsbury, 2010). Especially, like in the case

of Freeletics, when an industry is still relatively new and there are few firms in the market

(Santos and Eisenhardt, 2009; Navis and Glynn, 2010; Schultz, AU - Marin et al., 2014).

According to Navis and Glynn (2010) a new market category exists when two or more products

or services are substitutes for each other to fulfill a specific demand of the customers. It is of

course important to gain legitimacy from many different stakeholders of the new venture like

employees, venture capitalists, investors, the public and the government. The most important

group though, are the customers in the beginning of a new venture. They are the ones that pay

the bills and help the startup to achieve legitimacy with the other stakeholders. That is why this

paper concentrates on the legitimacy from the customers. The problem with legitimacy is, that

it is created subjectively, jet it is possessed objectively. Therefore it is resilient to specific

events once it is obtained but achieving it is based on a history of events (Suchman, 1995).

Fortunately it is possible to actively seek legitimacy and to try to manipulate the environment

(Zimmermann and Zeitz, 2002; Suchman, 1995). The steps taken by Freeletics to obtain

legitimacy will be the focus of this paper.

One of the newest trends in web 2.0 is mobile fitness. It enables users to train effectively

without much equipment or gym memberships. Because this market is attractive and relatively

new this paper focuses only on this market for research.

As already outlined, legitimacy from customers and the right BM are both crucial for early

success of startups this paper will link the two and ask the following question:

2

How can a startup in the mobile fitness market gain legitimacy through its BM?

I will use a case study approach to analyze the BM of Freeletics. After the analysis I will

evaluate the steps taken by Freeletics to gain legitimacy and how well they worked. Then I will

check if Freeletics is legitimate in the eyes of the customers. For this purpose I will analyze

press mentions, the number of downloads, likes on Facebook, the amount of usage of online

forums and co-operations with outside companies.

2. Business Model

The term Business Model (BM) is present in scientific literature since Peter Drucker introduced

the term in 1954. He already argued that a BM should answer the following questions:

Who is the customer?

What does the customer value?

How do we make money in this business?

What is the underlying logic of the business?

Can we deliver the value at appropriate cost?

(Drucker, 1954)

On this basis a lot of scholars have attempted to sum up a BM in a short but still explanative

way.

In recent years BMs have gained popularity among scholar and practitioners as well. BMs

serve the important purpose of showing the different parts of a business logic and how they are

interlinked. Because of the prominence of the concept there are several definitions and

explanations of BMs. Margretta (2002) defined BMs as a good story about how a company

works. According to her a BM should answer the questions posted by Drucker. Chesbrough

and Rosenbloom (2002) argue that a BM is a blueprint. This blueprint pictures the way a

company captures the value it creates from services or products. Teece (2010) has a very similar

definition. He states that a BM shows how a company converts payments by customers into

profits and delivers value to these customers.

Baden-Fuller and Morgan’s (2010) definition is more detailed. They see a BM as a generic

level of description of how a company creates and captures value in a profitable manner and

how a company organizes itself. Zott and Amit (2001) offer a different approach. They argue

that a BM is a system of interdependent activities that span the boundaries of the company and

transcend the company. They further argue that a BM consists of design elements and design

themes. These themes describe the source of value creation, for example through lock-in or

3

efficiency (Amit and Zott, 2001). The design elements are comprised of the content, structure

and governance of transactions. These transactions are designed to create value through

opportunity exploitation. New exchange mechanisms and transaction structures are what most

e-businesses use for their BM design.

Zott and Amit were the first to analyze e-businesses and therefore are laid the foundation for

this paper. They also argue that in e-business value can be created by novelty,

complementarities, lock-in or efficiency. Casadesus-Masanell and Ricart (2010) also go in a

more abstract direction. They believe that a BM consists of a set of choices and consequences

arising from these choices. Charging a low price for example is a choice which results in more

volume sold as a consequence. They also argue that a BM should reinforce itself. In the given

example above, more volume results in economies of scale and therefore in a lower price. This

way a virtuous circle is created and the BM reinforces itself. The choices of a BM can be split

into policies, assets and governance while the consequences can either be rigid or flexible.

All these definitions have a lot of commonalities and differ only in details. Some are broader

(Chesbrough and Rosenbloom, 2002), some are more detailed (Baden-Fuller and Morgan,

2010; Casadesus-Masanell and Ricart, 2010). To sum it up a BM focuses on the way to generate

value for customers and how it is possible to capture that value for a company at appropriate

costs (Amit and Zott, 2001; Magretta, 2002; Zott and Amit, 2007; Baden-Fuller and Morgan,

2010; Casadesus-Masanell and Ricart, 2010; Teece, 2010).

While the definition of what a BM is answered, the problem is that no one of these authors

offered a way to illustrate a BM in an easy to understand and graphical way. Casadesus-

Masanell and Ricart (2010) have tried to model their definition but the result is not satisfactory

because it is confusing and not very tidy as can be seen in figure 2.

Figure 1: Ryanair BM Source: Casadesus-Masanell & Ricart, 2010 p. 199

4

This is why for this paper, I will use the Business Model Canvas by Osterwald and Pigneur

(2010) to analyze and illustrate the BM of Freeletics. The canvas incorporates all parts of the

definitions discussed above and is even more detailed (Osterwald and Pigneur, 2010). In the

next part. I will give an overview over the concept of legitimacy.

3. Legitimacy

The term legitimacy stems from institutional theory. It builds on the works by Parsons (1960)

and Weber (1978). There are again many definitions what legitimacy is and what types of

legitimacy exist. Maurer (1971) for example defined legitimacy as road through witch a

company justifies its existence to the outside. This definition has a clear focus on evaluation.

One means to achieve legitimacy is to reduce to information asymmetry between the firm and

its stakeholders (Aldrich and Fiol, 1994; Wang, Song et al., 2014). Aldrich and Fiol (1994)

looked at new industry creation and how it was possible to gain legitimacy in those

circumstances. It is even more difficult to gain legitimacy as a new venture, when you start in

a new industry like Freeletics does when practices and strategies are still developing (Aldrich

and Fiol, 1994; Navis and Glynn, 2010; Schultz et al., 2014). Schultz et al. (2014) argue that

mass media can act as an important tool to create awareness in these circumstances. Aldrich

and Fiol (1994) argue that every new companies is vulnerable due to the liability of newness

and that there are two types of legitimacy: cognitive and socio-political legitimacy (Aldrich

and Fiol, 1994). For them gaining legitimacy is a key issue of new ventures. Founders of new

activities lack credibility and therefore it is vital to build legitimacy in order to attract

stakeholders to the company. Aldrich and Fiol (1994) define cognitive legitimacy as knowledge

about the new company and its products. Socio-political legitimacy on the other hand is defined

as the cultural acceptance of the new venture, its operation, the way it does business and how

it acts according to laws and norms. They also state that it is attempted often, to copy

legitimated organizational forms and that the success rate for these attempts is high. Aldrich

and Fiol (1994) argue that it is important for a new venture to use symbolic language and

behavior to gain cognitive legitimacy. One possibility is the use of narratives. Another is to

focus on the most immediate audiences in order to gain pragmatic or exchange legitimacy

(Aldrich and Fiol, 1994; Suchman, 1995; Tornikoski and Newbert, 2007). To gain socio-

political legitimacy new ventures must be consistent in their stories.

5

Exchange Interest* Pragmatic

Legitimacy Influence Character*

Consequential Personal* Moral

Legitimacy Procedural Structural

Comprehensibility

Cognitive

Legitimacy

Predictability Plausibility

Taken-for-Grantedness

Inevitability Permanence

Table 1: Types of legitimacy Source: According to Suchman, 1995 p. 584

Suchman (1995) incorporated parts of Aldrich and Fiol’s work into his own contribution to the

field. He defines legitimacy as “a generalized perception or assumption that the actions of an

entity are desirable, proper, or appropriate within some socially constructed system of norms,

values, beliefs and definitions” (Suchman, 1995: p.574). He argues, that it is an objective

attribute of a company but it is attributed subjectively. It is also independent of a single

observer. It depends on the shared beliefs of a social group (Suchman, 1995). The goal of

legitimacy is to get social groups to give resources to the company because they feel that the

company is desirable and appropriate (Parsons, 1960). The second goal is that the public

develops a better understanding of the focal company. This leads to a more trusting relationship

and the public views the focal firm as more worthy and predictable (Suchman, 1995).

According to Suchman (1995) there are three main types of legitimacy: pragmatic, moral and

cognitive. Pragmatic legitimacy can be summed up as the immediate interest of a social group

in the benefits a company delivers or that it is responding to their larger interests (Suchman,

1995). A positive normative evaluation of a company and company activities is called moral

legitimacy (Aldrich and Fiol, 1994). It is, unlike pragmatic legitimacy, not about whether an

activity benefits a social group but more about what is the right thing to do based on norms and

morals and therefore differs from simple self-interest (Suchman, 1995). It can be divided in

four subtypes: consequences, procedural, personal and structural legitimacy. Suchman (1995)

describes procedural legitimacy as the use of socially accepted techniques and procedures in a

company. The use of a certain, socially accepted, way of delivering the product can be an

example. Consequential legitimacy refers to achieving legitimacy through what the company

6

accomplishes. Two important aspects in this assessment by customers are quality and value.

The last discussed form of moral legitimacy is structural legitimacy. Companies can send the

signal that they are well equipped to get a certain job done by having the right structure

according to Suchman (1995). Schools for example do this, by showing off their modern

classrooms.

The last of the three types of legitimacy is cognitive legitimacy. This type is based mainly on

the comprehensibility and the “taken-for-grantedness” of a company (Suchman, 1995; Aldrich

and Fiol, 1994). Taken for grantedness is a key description cognitive legitimacy according to

Aldrich (1999). He noted that at its highest level, “a new product, process or service is accepted

as part of the sociocultural and organizational landscape.” (Aldrich, 1999: p.230) To achieve

this type of legitimacy it is crucial for the company to offer as much information possible to

the public. “Taken-for-grantedness” is the most difficult to achieve, since only some mature

companies like Microsoft or Coca-Cola have achieved it.

In the real-world, these types of legitimacy are always present. They are also always interlinked

in some way. Pragmatic legitimacy rest on self-interest whereas the other two do not.

Pragmatic and moral legitimacy are based on evaluation and are therefore easier to achieve

than cognitive legitimacy according to Suchman (1995). There are several ways for companies

to try to gain legitimacy. And a study by Tornikoski and Newbert (2007) showed, that

companies that pursue legitimacy actively are more successful than companies who do not.

To gain legitimacy as a new venture through conformance, a company can either confirm to

set standards or mimetic isomorphism. Mimetic isomorphism refers to copying the most

prolific and well-known company in their field (Suchman, 1995). Through this even

comprehensibility and “taken-for-grantedness” can be achieved by a new venture to a certain

degree. Another way is to build the company out of legitimated practices (Suchman, 1995).

For the rest of the paper, I will use the model by Suchman will since it incorporates the model

by Fiol and Aldrich and it builds the foundation for the research that followed. In the following

part, I will explain the methodology for this paper and after that Freeletics will be analyzed.

4. Methodology

The methodology of this paper is first of all based on case study research. I chose Freeletics as

the focal company because the company is still relatively young but has already built a big

customer base. In addition the company is a great example of how to grow a customer base

quickly without a lot of financial resources. To answer the research question at hand, I analyzed

7

the company’s BM. After that, I dissected the degree of legitimacy achieved by the company

and the link between the parts of the BM and legitimacy that resulted was examined. Aldrich

and Fiol (1994) stated that it is possible to measure the level of legitimacy by assessing the

knowledge of the public about an activity or company. For this purpose internet research on

Freeletics as well as press mentions, Facebook likes and television appearances of the company

were evaluated.

Case study research is the appropriate method for the research question of this paper since it

focuses on contemporary events and it does not require control of behavioral events (Yin,

2009).

5. The Freeletics BM

The Freeletics BM is also based on a freemium logic. The offer a free version of their app, a

paid version and a 15 week fitness plan. The CVP is based on convenience, a cheap price,

gamification and social networking. Freeletics also states its main principles as “tough, together

and free” (Freeletics, online). With the paid plans it is also possible to get mass-customized

training and diet schedules.

Customer relationships are an important part of the Freeletics BM. They make extensive use

of social and viral marketing to attract customers and convince them of the effectiveness of the

program. Especially Facebook (FB) and Youtube are used. The “success stories” of people who

tried the plan and show their results in a video are key here. One success story has already more

than 4.5 million hits (Success story 1, online). They directly try to market their most expensive

product through these videos. The communities can be separated in on- and offline. The online

communities are first, in-app where people can share and compare their results for one and

second, also a Freeletics forum and the FB groups. They are used to share experiences and

advice. Through the FB groups the offline community gets organized. In many cities there are

several spots where Freeletics user meet and train together. The most prominent example is

Munich, the city Freeletics was founded.

The channels are as already mentioned above the website, the app, FB, Youtube, the

communities, print media, blogs, TV and word-of-mouth of customers. The most important

channels are still the website and app, but the communities are important for customer retention

and customer experience. And word-of-mouth by customers is important for customer

acquisition. They recently started to add TV to their channels to reach new customers.

8

The customer segment is generally a mass market since everybody who is able to do sports is

able to do Freeletics. Especially the plan targets people who need extra motivation or people

who want fast results.

The revenue stream can be broken down into two main sources of income: the pro version and

the training and diet plans. Freeletics charges 4.99€ for the pro version of the app and 34.99€

for the diet as well as the training plan (Freeletics coach, online; Freeletics app, online).

The cost structure includes two main cost items: website and app maintenance/development

and the employees. These are both fixed costs but through economies of scale they can be split

over more customers. They have already more than 1 million users (Freeletics, online).

Freeletics uses only social marketing to this point so they have no marketing cost.

The key partners, activities and resources are heavily interlinked in the Freeletics BM.

Customers for example are one of the key resources and key partners at the same time. They

fill an important function in the Freeletics BM because to offer a good community you need

many people that participate actively. Through their contribution to the communities they

improve the product experience for all other users. They also help acquire new customers

through word-of-mouth.

Figure 2: Freeletics BM Source: own illustration according to Osterwald &Pigneur, 2010

A key resource is of course the website and the app. They are the base for all other operations

of the company. They are also the foundation for the other key resources. The key activities

are first of all the website and app maintenance and further improvement. The next key activity

are the customer relationships. One important part of the Freeletics BM is based on their

customers and therefore it is important to have good CR and address them how the customers

want to be reached. One of the main parts of the CR is viral and social marketing to attract new

customers and show the value that is offered. The last key activity is the maintenance and the

9

active participation in the communities. The newest key partner is ProSiebenSat1Media, who

gave Freeletics an own segment in one of their TV shows to spread the knowledge of the firm

(Freeletics on Taff, online).

6. Actions towards legitimacy

As already mentioned above, it is in general more successful to strive for legitimacy more

actively than passively (Tornikoski and Newbert, 2007). That is why Freeletics employed what

Tornikoski and Newbert (2007) call strategic legitimacy. They use a social media heavy

approach to actively achieve legitimacy and attract customers. But in the beginning of the

company they used their immediate audience to test and develop their BM by inviting friends

and family to try their workouts. This was not only a good move to test and adjust their product,

it also gave them pragmatic legitimacy and a small group of customers right from the start

(Aldrich and Fiol, 1994; Suchman, 1995). Early customers are very valuable as literature tells

us because they can become repeat customers and they also attract others (Wang, Song et al.,

2014). This is exactly what happened at Freeletics through word-of-mouth advertising by the

early users. They were able to already create some buzz in their home market of Munich and

they were able to spread knowledge of their company even before their app and website went

online. It is of course important that the early customers are visible for potential new customers

(Wang et al., 2014). That is why they installed forums on FB and training groups in Munich

after they had attracted their first customers. Over time the training group concept grew and as

of today there are training groups all over Germany and Europe as well. For Munich there is

even a session calendar online in the FB group (Session schedule, online).

Figure 3: Training Group Source: Facebook. Retrieved June 15, 2014, from

https://www.facebook.com/groups/Freeletics.Muenchen/?fref=nf

10

The use of success story videos on Youtube were also key to make the early customers visible

for a mass market. One of the success stories has already more than five million views and

another one almost five million (Success Story1, online; Success story 2, online). This, first off

all led to pragmatic legitimacy due to the fact that people could see that they can benefit from

the service. It also led to cognitive legitimacy because through the videos the customers got to

know the company a little better (Aldrich and Fiol, 1994; Suchman, 1995; Johnson, Dowd et

al., 2006; Tornikoski and Newbert, 2007). It was of Course also important that Freeletics used

the standardized, and already socially accepted, channels of app and website as its main

channels to gain procedural legitimacy (Suchman, 1995; Navis and Glynn, 2011; Überbacher,

2014). Through the use of a freemium BM they can attract interested customers through the

free version. For the pro version they charge a relatively high price and use this price as a signal

to indicate high value to the customer (Tellis, 1986). The last strategic element of the Freeletics

BM is the CVP. Through the use of gamification and competition between users they are able

to attach users to their software and it also strengthens the community aspect of the BM. It of

course also helps to attract new customers through word of mouth. Gamification is the use of

game design elements in non-game contexts (Deterding, Dixon et al., 2011). In the case of

Freeletics this refers to the recorded times for each routine. Afterwards they can be compared

with friends.

7. Achieved legitimacy

Even though Freeletics is a relatively young company, it was already able to achieve a lot of

legitimacy. They achieved rapid growth since its founding. In September 2013 they had

100.000 users, in February 2014 they had 500.000 users and in May 2014 they had 1.000.000

users (Freeletics users, online). They also have more than 300.000 fans on FB (Freeletics FB,

online). This already shows that the public’s understanding of the company is rising fast and

that they established themselves and their market (Suchman, 1995; Navis and Glynn, 2010).

There are also users all over the world as the picture below from Paris shows. Other examples

are groups in Brazil, Austria and Malaysia for example.

11

Figure 4: Trainng group 2 Source: Facebook. Retrieved June 15, 2014, from

https://www.facebook.com/photo.php?fbid=10152239948560913&set=oa.357317654417349&type=1&thea

ter

There is even an own Freeletics segment on the show “Taff” on ProSieben (Freeletics on Taff,

online). The show has about 1 million viewers per day (Taff Quote, online). There are also a

lot of articles on Freeletics and press mentions in major newspapers and news websites (ZDF,

online; FAZ, online; Lifeline, online; Abendzeitung, online; SZ Jugendseite, online; AZ,

online). In addition Freeletics also shows a lot of magazines on its website which have reported

on them already, the most famous examples are BILD, GQ and GLAMOUR (Freeletics,

online). But also other major TV networks report on Freeletics (RTL, online). In both major

App Stores Freeletics is one of the most downloaded apps in the fitness and health section

(cision, online). In addition, there is also a lot of traffic in the FB groups and new members

join them every day. The Freeletics München Group for example, has 6605 members, with

1054 being new members (Freeletics München, online). And as already laid out before, the

success stories are a major hit on Youtube.

Figure 5: Playstore Source: Google Play. Retrieved June 15, 2014, from

https://play.google.com/store/apps/category/HEALTH_AND_FITNESS?hl=de

This shows that Freeletics was able to reach quite a lot of legitimacy within three years of its

founding. But the road to legitimacy is not at an end. In the next chapter, I will analyze the

Freeletics BM decisions and give an overview what types of legitimacy they help to achieve.

12

8. Legitimation through the Business Model

To gain legitimacy for a new venture different forms of legitimacy can be targeted with

different elements of the BM. In the following all types of legitimacy gained through the BM

by Freeletics will be detailed and explained.

8.1. Pragmatic Legitimacy

Their activities and marketing play a big role in gaining pragmatic legitimacy. Pragmatic

legitimacy does come from their CVP, CR and channels. The biggest gain comes from their

use of social media, especially from the Youtube use, and of course from the CR with the real

world training groups. Another key is that the fitness industry as a whole already offers

pragmatic legitimacy because the general public acknowledges the fact that working out is

good for your health. Therefore Freeletics is able to gain exchange legitimacy by addressing

individuals as well as influence legitimacy by addressing the social value of health (Suchman,

1995).

8.2. Moral Legitimacy

Freeletics is able to use the Freemium model to get new customers to try the product for free

and through that, legitimate their product through the use and performance of the product. They

also use signaling to gain legitimacy by demanding a high price (4.99€ for the pro version and

34.99€ for 15 weeks) in comparison with other apps. This sends the signal that the product is

valuable and useful to the customer. This in turn leads to legitimacy for the company. They are

also able to gain moral legitimacy through the use of already accepted channels and CR

practices like FB, Youtube, and mass customized email.

8.3. Cognitive Legitimacy

To gain cognitive legitimacy, a company needs to be comprehended and understood by the

public (Suchman, 1995). They achieve this goal by being present in all types of media. As

already laid out they are active in social media, print media and even television. The next part

of their BM which helps them gain cognitive legitimacy is again their revenue model as it is

already widely accepted when it comes to apps. The last part again is their CVP as parts of it

are similar to other popular apps like Runtastic, which you can see in Figure 5. The last part

they use to achieve cognitive legitimacy are their CR. By being present for the users at all time

they achieve high satisfaction from the users and in turn a lot of positive word-of-mouth.

13

Pragmatic Legitimacy Moral Legitimacy Cognitive Legitimacy

CVP+ Customers CVP CVP

Channels Channels Channels

CR CR CR

Revenue Streams Revenue Streams Revenue Streams

Table 2: Legitimacy gains Source: own illustration

9. Conclusion

The easiest way to gain legitimacy is do rely on mimetic isomorphism and copy the most well-

known company in its respective market (Suchman, 1995; Tornikoski and Newbert, 2007). The

problem for Freeletics is, that there are currently almost no other companies in their market

and therefore they had to build legitimacy in a different way. They relied heavily on social

media and word-of-mouth from their customers as well as their success story videos on

Youtube (Lounsbury and Glynn, 2001; Zimmerman and Zeitz, 2002; Cheung and Thadani,

2012). This was the foundation for everything that followed. They were able to create a big

and active community on FB and also within their app. The next step was, and still is, to get

the general public’s attention. They do this by cooperating with ProsiebenSat1Media and also

rely on blogs and newspaper articles to promote their business (Schultz et al., 2014). Working

in in the fitness industry is also a big plus for them in terms of legitimacy since the whole

market already offers pragmatic legitimacy to the companies involved. Overall it can be stated

that Freeletics is a very positive example for startups in general on how to grow fast and gain

legitimacy for the business along the way. They made strategic decisions with their BM from

the beginning and they paid off. All parts of the BM that are visible to the customer can be used

to attain legitimacy. This means the right CVP, channels, CR and revenue model can help to

achieve legitimacy for the new venture. There are of course other ways like mimectic

isomorphism but in this case, when no apparent market dominating company is there, this is

no easy task (Suchman, 1995). The limitation of this paper is, that it solely relies on case study

research to answer the given research question. Therefore the results might not be generalizable

and directly applicable to other startups from different sectors. For future research on the topic

an interview with the company, interviews with customers and data on the users from the

company would be the next step. It would also be interesting to compare the decisions by

Freeletics with other successful startups.

14

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