Abstract. Living Labs offer an open-innovation infrastructure for co-creation and product testing and gained increasing attention with regard to their potential to support sustainable innovation. However, many Living Labs face the challenge of financing their services, especially, when the business models focus on solving wicked problems such as urban transition and the future of health. Based on a desktop research and four qualitative interviews with active Living Labs, this paper explored experiences of Living Labs and their business model challenges as well as main future success factors. The findings demonstrate the need and opportunities to transition from public towards private funding, e.g., to clarify the Living Lab-as-a-service beyond technology show- room and innovation workshops; to be distinct from traditional R&D tools and consul- tancies and to place services within established innovation funding schemes, e.g., start-up vouchers. Furthermore, the results indicate challenges according to balancing the innovation process of flexibility and standardisation. Although iterative and agile processes are core values of the Living Lab, the innovation process needs some stand- ardisation to allow efficiency gains and to comply with public regulations, e.g., by struc- turing the process and to include descriptions where and how to use Living Lab meth- odology as well as to clarify linkages to other established design approaches. The paper concludes that future research needs to better understand the linkages between entrepreneurship and design research, e.g., towards design-driven innovation and user experience design.