Startups’ Roads to Failure

Why do startups fail? A core competency deficit model

A growing body of work aims to explore the reasons behind startup failures. However, there is a need for integrative approaches organized around conceptual frameworks to avoid fragmented and perplexing knowledge about these reasons. To our knowledge, no previous research has systematically investigated the role of competency deficits in startup failures, a crucial element of these failures. In our study, we adapted Spencer's behavioral competence model specifically for startups to identify the competencies within startup teams that, according to their Chief Executive Officers, contributed to their downfall. Three coders meticulously analyzed 50 online accounts of startup failures using a modified Critical Incident Technique. This analysis revealed two prominent competency deficits as pivotal determinants of these startups' outcomes: information-seeking and customer service orientation. Additionally, deficits in technical expertise, analytical thinking, and flexibility emerged as significant factors contributing to these failures. The competency deficits identified in this study offer focal points for evaluating and enhancing startup teams, thereby helping to prevent failure.

Enablers and inhibitors of digital startup evolution: a multi-case study of Swedish business incubators

Global advances in digital technology are facilitating corresponding rises in digital entrepreneurship and its startup manifestation. There are many uncertainties on the road to digital startup evolution, some of which may be successfully navigated with the assistance of business incubators. While these organisations provide valuable guidance and support to the startup community, their efforts are at least partly constrained by the lack of a consistent, coherent roadmap to guide both them and their incubatees. T0 help efforts to develop such a map, this paper seeks to identify factors that influence digital startup evolution within an incubator setting through a multiple-case study focusing on digital startups under the umbrella of three business incubators in the Swedish city Umeå. Sets of enabling and inhibitory factors are identified through literature searches and the case studies. The latter may include inertia and possibly attitudes towards failure. In addition, present the Ideation Dynamics Model as a guide for both incubators and digital startups is proposed.

Founder personality and entrepreneurial outcomes: A large-scale field study of technology startups

Technology startups play an essential role in the economy-with seven of the ten largest companies rooted in technology, and venture capital investments totaling approximately $300B annually. Yet, important startup outcomes (e.g., whether a startup raises venture capital or gets acquired) remain difficult to forecast-particularly during the early stages of venture formation. Here, we examine the impact of an essential, yet underexplored, factor that can be observed from the moment of startup creation: founder personality. We predict psychological traits from digital footprints to explore how founder personality is associated with critical startup milestones. Observing 10,541 founder-startup dyads, we provide large-scale, ecologically valid evidence that founder personality is associated with outcomes across all phases of a venture's life (i.e., from raising the earliest funding round to exiting via acquisition or initial public offering). We find that openness and agreeableness are positively related to the likelihood of raising an initial round of funding (but unrelated to all subsequent conditional outcomes). Neuroticism is negatively related to all outcomes, highlighting the importance of founders' resilience. Finally, conscientiousness is positively related to early-stage investment, but negatively related to exit conditional on funding. While prior work has painted conscientiousness as a major benefactor of performance, our findings highlight a potential boundary condition: The fast-moving world of technology startups affords founders with lower or moderate levels of conscientiousness a competitive advantage when it comes to monetizing their business via acquisition or IPO.

Nanotechnology from lab to industry - a look at current trends

Nanotechnology holds great promise and is hyped by many as the next industrial evolution. Medicine, food and cosmetics, agriculture and environmental health, and technology industries already profit from nanotechnology innovations and their influence is expected to increase drastically in the near future. However, there are also many challenges that need to be overcome to bring a nanotechnological product or business to the market. In this article we discuss current examples of nanotechnology that have been successfully introduced in the market and their relevance and geographical spread. We then discuss different partners for scientists and their role in the commercialization process. Finally, we review the different steps it takes to bring a nanotechnology to the market, highlight the many difficulties related to these steps, and provide a roadmap for the journey from lab to industry which can be beneficial to researchers.

Concepturealize™: a new contribution to generate real-needs-focussed, user-centred, lean business models

It is widely accepted that somewhere in the region of 90-95% of startups fail. It is often suggested that the majority of unsuccessful startups either failed to identify a viable idea, or they failed to execute the idea effectively enough to get to market before running out of cash. Two approaches stand out as being particularly well-suited to addressing these problems: Design Thinking and Lean Startup, respectively. This paper presents the Concepturealize™ methodology that cross-applies Design Thinking and Lean Startup as a single iterative process and that enables the entrepreneur to generate real-needs-focussed, user-centred, lean business models. Existing literature reveals a need for further exploration of cross-application of Design Thinking and Lean Startup (and other related methodologies) in the areas of business model development and innovation. This work answers the research question by review of prior attempts to combine Design Thinking and Lean Startup and presenting the Concepturealize™ model that cross-applies Design Thinking and Lean Startup in a single iterative methodology and that enables the practitioner to generate real-needs-focussed, user-centred, lean business models. By following this new process model correctly, a practitioner will be guided to uncover a viable way to create value, develop a deep understanding of the value proposition, the target customers and how to reach and serve them, together with the expected revenue and costs, all needed to properly formulate the business model. Finally, the practitioner may use the Concepturealize™ model to retest the problem-solution fit and understand how the customers perception of value has altered, each time a new product or new features are launched, looking to continually add value at each cycle. Whilst prior research has explored how organisations may make use of both DT and LS, it has failed to demonstrate how they may be used in parallel, throughout the entire business model development process, instead it demonstrates examples of insight into where to transition from one model to the other. This work progresses the state of the art by following Design Science guidelines to present how the true, in-parallel, cross-application of DT and LS, in the context of business model development, is possible.

Strategic Background of the Start-Up—Qualitative Analysis

A start-up is a relatively new and attractive entrepreneurial form that is being explored in a broader national economy and industry context. However, there is little knowledge about its strategy, which is mainly represented by the business development strategy. The main goal of the research is to deepen and expand knowledge about the strategic background of start-ups, which is preparation and condition for a development strategy and later a business strategy, too. The partial goals of the research are in-depth and detailed knowledge of the content and novelty of the business idea, the quality of the internal environment of the start-up, the nature of the external environment of the start-up, and the content of the goals. The research sample contains 147 start-ups operating in Slovakia. Each start-up was researched by a member of the research team, who personally recorded the statements of the founder. The research results are based on qualitative analysis and synthesis of statements of the founders of start-ups. The main result of the research is a summary view of the strategic background of the examined start-ups, which expresses the peculiarities of the start-up business making and documents the possibilities and motives of the start-up’s strategizing. The summary of knowledge about the strategic background of the start-up is synthesized into a strategic balance sheet, which expresses the strategic perspective of the start-up, the possibilities of survival, explains the potential failure, and provides a solution to the identified imbalance. The practical use of the results consists of providing a model of the strategic balance, which is the result of field research of real and functioning start-ups. The originality and value of the research lie in the direct collection of qualitative data, immediate knowledge of business reality, and the synthesis of results into a comprehensive and at the same time detailed picture of the strategic background of the start-up.

Product hacking as a systematic intervention: towards new strategies and platforms in design education

This paper is mainly about how product hacking can be categorized and implemented in a systematic way in design education. The theoretical or analytical part of the project is based on a study in which a great number of hacking projects are reviewed and categorized found in popular DIY platforms. The implementation or synthesis part of the research is a design project held in an industrial design department with freshman design students based on the categorization of function proposed, which are namely; enhance, change and add function. In this project students are required to make three kinds of interventions on functions of existing products, also share their projects in the selected platform (www.instructables.com), so that other people can find, criticize, develop, or apply it by using the instructions given. Sharing in platforms like these creates a connection between the analytical and synthetic phases of the paper, and also makes it different from other classical projects confined to a closed studio atmosphere.This paper also seeks for the possibility of fresh perspectives on issues like sustainability, ready-made and open source design by engaging students in an intervention-based design process where they look for formulating their designs in a methodological way.One other aspect of the project was the idea that it has the potential to create an advantage or value for the time and context it was given, that is when the COVID-19 has started to influence our lives deeply.

The Circular Business Framework for Building, Developing and Steering Businesses in the Circular Economy

The need for a transition towards a circular economy (CE) is evident, as the current economic model is based on the exploitation of far more resources than the planet can replenish sustainably. A significant part of this economic transition is the inception of new, CE-oriented startups and business activities. While business model frameworks (BMF), such as the Business Model Canvas (BMC), were at the center of discussions about structuring business ideas in the beginning of the millennium, the conversation must now shift towards circular BMFs (CBMF). This paper follows the Design Research Methodology (DRM) for an empirical approach to devising a novel CBMF, including expert interviews as well as a first application of the framework with a startup. Throughout this process, a new and innovative tool called Circular Business Framework (CBF) was created and tested based on CE principles.

Success Factors of Startups in the EU—A Comparative Study

The paper focuses on key success factors of startups in the European Union. Startup companies have a massive potential to boost the level of innovation and competitiveness of national economies. They are also uniquely equipped to provide extremely effective and flexible ways of meeting both existing and emerging market needs. However, the development of these microventures differs from country to country. Hence, we put forth a hypothesis that strategic success factors in the development of startups vary in highly developed and catching-up countries. Our main goal was to determine the key success factors of startups in the EU, and to classify the gap between developed and lagging Member States. For this purpose, we applied the method of component analysis on startup data available for selected the EU states. We managed to isolate 5 components explaining 72% of data variability, all of which can be linked to human capital as well as to formal and informal economic institutions. The results confirmed the validity of our hypothesis. We established that more developed countries offer an institutional competitive advantage to startups, while the gap in success factors between highly developed and catching-up countries can be attributed to human capital and to institutions. Based on our findings, we offer suggestions how to reduce this gap by improving formal and informal institutions via innovative public policy and by supporting education.

Freelancers in the Software Development Process: A Systematic Mapping Study

[Context] Freelancers could catalyze the software development process by providing their niche skills to generate high quality outputs. They could help companies (including startups) to foster innovations by suggesting creative ideas and providing their expertise in implementing them (for instance, designing solutions, coding solutions etc.). Freelancers could effectively and efficiently work as a virtual member of the software development team. The company must make informed decisions about which task to allot to the freelancer, which freelancer to select, pricing the task, and evaluating the submitted work. On the other hand, the freelancer should make an informed decision about evaluating the monetary value of the task to be charged, trusting the requester, analyzing the skills requirement of the task (finding matches between skill requirement and skills processed), selecting the best task, and maintaining the highest level of reputation. However, the literature does not provide freelancers and the companies the guidelines that support their decision making. However, if freelancers are selected carefully for the most suitable task, the companies will benefit a lot in terms of improved software development metrics. [Objectives] The objective of this paper is to provide the research community the research trends in freelancer-supported software development. This helps to understand that which software development areas have higher concentrations of research efforts, which area has the support of empirical evidence to support management decision makings, and which area requires the research attention. [Method] The systematic study is conducted by planning the mapping protocol, executing the protocol, and reporting the findings using various visualization tools like bar charts and pie charts. The search process was planned to be executed using set of inclusion and exclusion conditions on four bibliographic databases (IEEExplore, Springerlink, Sciencedirect, and ACM digital library). The relevant papers are selected by applying inclusion and exclusion conditions. The google citations of the relevant papers are subject to the inclusion and exclusion conditions again to include the more relevant papers. Finally, the systematic schema was created and populated after analyzing the studies abstracts. [Results] The results indicate the following (a) The research focus is on generic software development (78%) rather on individual life cycle activities. (b) The number of empirical studies is limited (25%). (c) A number of studies proposing solutions and evaluating on live cases in industrial settings are missing from the literature. This is in comparison to the validation approaches (72%) i.e., solutions tested in laboratory settings. (d) At present, the literature has limited ability to provide the software companies (including startups) with the guidelines (in the form of opinions and experience reports) for involving freelancers in the software development process. (e) The reported challenges include Collaboration and Coordination (33%), Developer Recommendation (or selection) (19%), Team Formulation (14%), Task Recommendation (allocation) (14%), Task Decomposition (11%), Privacy and Security (Confidentiality) (11%), Budget Estimation (8%), Recognition (8%), Trust Issues (8%), Market Dynamism (6%), Intellectual Property Issues (6%), Participation of Crowd Worker (6%), and Capacity Utilization (3%). These challenges are highly interactive, and each challenge impacts all other challenges. (e) Recent focus of the researchers (total 7 studies in 2019) is on generic software development handling the collaboration and coordination (3 studies out of 7), Developer recommendation (2 studies out of 7), and task recommendation (2 studies out of 7). [Conclusion] The freelancer-driven software engineering research area has got the attraction of the researchers, but it will take a long time to gain maturity. This puts an urgent call for more empirical studies and evaluation-based solution research that could help companies (including startups) to foster innovations. Further, the research focus should be well distributed among the various development phases to address the unique challenges associated with individual activities. The accurate management of the freelancer in the software development could help companies and startups to foster innovations and remain competitive in the marketplace.

A Taxonomic Analysis of Smart City Projects in North America and Europe

In recent years, the concept of a “Smart City” became central in the agenda of researchers, practitioners, and stakeholders. Although the application of information and communication technologies on city management has advanced exponentially, also other components would be needed for building a truly sustainable urban environment. Researchers from different domains debated the definition of a smart city and the conceptual variants. However, a broad view of the smart city field is still missing. This paper attempts to fill this gap by proposing a taxonomic classification of the most 105 outstanding smart city projects in Europe and North America. Collected data are then processed by statistical tools for clearly highlighting the success factors, trends and future paths in which all these projects are moving, along with different aspects (e.g., business model, purpose, industry). We then investigate the European and the North American Smart City concepts, illustrating the key role of mixed public and private partnerships in creating successful projects and the focus on the urban transportation, and freight and last-mile delivery in particular. Moreover, it emerges how the business modeling and the exploitation aspects have still low integration in the projects.

Entrepreneurial Risk-Taking in Sustainable Energy: University Spin-Off Firms and Market Introduction in Northwest Europe

Universities are cradles of innovation, with many start-ups involved in sustainable energy solutions. The extent in which such solutions reach the market and the kind of risk-related factors young firms encounter, are hardly known and understood. We aim to clarify market introduction and focus on the empirics of firms’ risk-taking behavior related to strategic choices, competences, and interactions with (national) ecosystem conditions. We use a unique dataset of almost 110 university spin-off firms and a small selected sample from this set. A total of 60% of spin-offs are able to reach the market, most of them in the first five years of spin-offs’ lives. Wind energy provides the best chances, as compared to such things as solar photovoltaics (PV) and advanced biomass. In-depth results suggest the high probability of quick market introduction in ‘Innovation Leader’ countries, like Sweden and Denmark, if combined with employing rich collaborative networks. A second set of favorable influences includes a practical mindset and accessing substantial investment capital. In contrast, strong risks tend to be connected to activity in fundamental inventions, highly specialized technology, weakly developed (sub) markets, poorly built networks, and short refunding time of substantial investment. This study provides a unique contribution to understanding the market introduction of sustainable energy solutions and risk-taking in this effort by young high-tech firms, among others, connected to differences between countries.

Sustainable Growth Approaches: Quadruple Helix Approach for Turning Brașov into a Startup City

The aims of this study are to identify large companies’ role in stimulating local entrepreneurship, and higher education institutions’ contribution of fostering entrepreneurial activity in order to achieve an innovative ecosystem and turning Brasov into a startup city. To address the research questions, exploratory research was conducted among 18 representatives of companies and public institutions active in Brasov city, Romania. The findings confirm that large companies engage startups by collaborative models being also available to outsource a series of activities to entrust the startups with. These collaborations bring many opportunities to startups to scale up faster by using large companies’ resources and the routes to the markets on which they operate. Furthermore, this research reveals the need for a better synergy between education, research, and practice and, consequently, an improvement of the academic curriculum. It also exemplifies the need for joined theory and practice to influence policymakers in developing policies to create a sustainable entrepreneurial ecosystem. The empirical results have implications for both the entrepreneurship literature and entrepreneurship policies.

Sustainable and De-Stressed International Supply-Chains Through the SYNCHRO-NET Approach

Synchro-modal supply chain eco-NET (SYNCHRO-NET) is a Horizon 2020 European research project aimed at overcoming the stress due to the increasing transportation distances, the higher complexity, and the vulnerability of international supply chains. In order to foster sustainability, quality, and reliability of such supply chains, SYNCHRO-NET mainly exploits the impact and the possible benefits coming from slow/smart-steaming and synchro-modality transportation strategies, and the related business models. The aim of this paper is to summarize and disseminate the main developments and scientific contributions coming from the project. In particular, the working core of the SYNCHRO-NET solution is an integrated and cloud-based eco-system of optimization and simulation software modules that supports stakeholders’ decisions in freight transportation and logistics management at strategic, operational, and real-time levels. The platform has achieved a high grade of automation in several processes to overcome all the issues related to human-based operations. The efficiency and effectiveness of the overall platform have been tested on three case studies considering pan-European and regional trade lanes, as well as commercial activities between the Far East and European ports. The project results and outputs also allow us to analyze barriers and opportunities of the approach, industrial and academic developments, and relations with emerging technologies.