Insight into start-up, its action and surroundings

Economic Annals-ХХI: Volume 170, Issue 3-4, Pages: 32-37

Citation information:
Slávik Š. (2018). Insight into start-up, its action and surroundings. Economic Annals-XXI, 170(3-4), 32-37. doi: https://doi.org/10.21003/ea.V170-06

Štefan Slávik
PhD (Management),
Professor,
University of Economics in Bratislava
1/b Dolnozemska cesta Str., Bratislava 5, 851 02, Slovak Republic
stefan.slavik@euba.sk
ORCID ID: https://orcid.org/0000-0002-2890-8091

Insight into start-up, its action and surroundings

Abstract. Start-ups are an appealing business form that gives space for self-realisation to enthusiastic, brave and creative people. The start-up progress is conditioned by the development of the business model. Other conditions for start-up viability include monetisation of business effort, effective leadership and teamwork, business strategy and external business support. A survey conducted on a sample of 76, 72 and 53 start-ups in three stages in 2015, 2016 and 2017 examined the development of those beginning and imperfect micro-enterprises in Slovakia. The research results are as follows. Start-ups are relatively closed, and their business model is inadequately connected to the environment. Start-ups know their customers well, but they do not know how to get them. They do not create partnerships in a sufficient range and quality. The monetisation of the examined start-ups is a little sophisticated, too traditional and without experimentation. Just less than a third of start-ups sell their basic product or service for free and generate money by selling premium services only. The most developed blocks are still customer value proposition and customer relationships; the least developed blocks are distribution channels and revenue streams. Start-uppers rely on the simple assumption that a working business model will provide a lucrative earning directly. The founders of the studied start-ups are capable visionaries, but less competent managers. Start-up teams have demonstrated a high degree of internal cohesiveness and support in unpleasant and unpredictable situations, but they lack a greater formalisation of work in a routine operation. Business strategies of start-ups are ambitious and international, but little verified in a competitive battle. The competitive advantage of start-ups is based on differentiation rather than on low cost. Start-ups do not trust the state support for business; they cooperate with large companies just a little, but prefer to work with the start-up scene and private investors. Start-ups must mature entrepreneurially, enthusiasts must become entrepreneurs and managers, and they have to learn how to monetise their business effort. Start-ups will be most aided by the cultural and civilisation development of a society that recognises entrepreneurship as a natural, useful and honourable resource for the development of the national economy.

Keywords: Start-up; Business Model; Monetisation; Leadership; Teamwork; Business Strategy; Public Support of Business Making

JEL Classification: M13; M21

Acknowledgements: This paper is the output of research project of VEGA MŠ SR a SAV No. VEGA 1/0019/15 Business models and business strategies of start-ups (2015-2017).

DOI: https://doi.org/10.21003/ea.V170-06

References

1. Baum, J. R., Locke, E. A., & Kirkpatrick, S. A. (1998). A longitudinal study of the relation of vision and vision communication to venture growth in entrepreneurial firms. Journal of Applied Psychology, 83(1), 43-54.
   doi: https://doi.org/10.1037/0021-9010.83.1.43
2. Bednár, R., & Tarišková, N. (2017). Revenue streams as key determinant of scalability of start-ups business models. In Slávik, Š. et al. Business models and business strategies of start-ups III. Reviewed Proceedings of Scientific Works (pp. 71-94). Bratislava: Ekonóm (in Slovak).
3. Blank, S., & Dorf, B. (2012). The start-up owner’s manual. The step-by-step guide for building a great company. K&S Ranch Publishing Division.
4. Gartner, W. B. (1985). A conceptual framework for describing the phenomenon of new venture creation. Academy management review, 10(4), 696-706.
   doi: https://doi.org/10.2307/258039
5. Gassmann, O., Frankenberger, K., & Csik, M. (2014). The business model navigator. Pearson.
6. Robehmed, N. (2013, December 16). What Is A Startup? Forbes.
   Retrieved from: https://www.forbes.com/sites/natalierobehmed/2013/12/16/what-is-a-startup/#2cbdd77b4044
7. Isenberg, D. J. (2010). How to start an entrepreneurial revolution. Harvard business review, 88(6), 40-50.
   Retrieved from https://www.researchgate.net/publication/265536827_How_to_Start_an_Entrepreneurial_Revolution
8. Johnson, M., W., Christensen, C. M., & Kagermann, H. (2008, December). Reinventing Your Business Model. Harvard Business Review, 86(12), 50-59.
   Retrieved from https://hbr.org/2008/12/reinventing-your-business-model
9. Kets de Vries, M. F. R., & Miller, D. (1986). Personality, culture, and organization. Academy of Management Review, 11(2), 266-279.
   doi: https://doi.org/10.2307/258459
10. Kiska, A. Jr. (2014, March 10). Venture capital in the practice on the example of Credo Ventures.
    Retrieved from http://www.tyinternety.cz/startupy/kiska-venture-kapital-v-praxi-na-prikladu-credo-ventures (in Slovak)
11. Klotz, A. C., Hmieleski, K. M., Bradley, B. H., & Busenitz, L. W. (2014). New Venture Teams: A Review of the Literature and Roadmap for Future Research. Journal of Management, 40(1), 226-255.
    doi: https://doi.org/10.1177/0149206313493325
12. Kollmann, T., Stockman, Ch., Linstaed, J., & Kensbock, J. (2015). European Start-up Monitor 2015. German Start-ups Associations.
    Retrieved from https://europeanstartupmonitor.com/esm/esm-2015
13. Kollmann, T., Stockman, Ch., Linstaed, J., & Kensbock, J. (2016). European Start-up Monitor 2016. German Start-ups Association.
    Retrieved from https://europeanstartupmonitor.com/esm/esm-2016
14. The Government of the Slovak Republic (2016). The Concept for the support of start-ups in Slovak Republic.
    Retrieved from http://www.rokovania.sk/Rokovanie.aspx/BodRokovaniaDetail?idMaterial=24603 (in Slovak)
15. Leyden, D. P., & Link, A. N. (2013). Knowledge spill-overs, collective entrepreneurship and economic growth: the role of universities. Small business economics, 41(4), 797-817.
    doi: https://doi.org/10.1007%2Fs11187-013-9507-7
16. Lööf, K., & Nabavi, P. (2014). Survival, productivity and growth of new venture across locations. Small business economics, 43(2), 477-491.
    doi: https://doi.org/10.1007%2Fs11187-014-9553-9
17. Mata, J., & Portugal, P. (2002). The survival domestic and foreign-owned firms. Strategic management journal, 23(4), 323-343. doi:
    https://doi.org/10.1002/smj.217
18. McClure, D. (2017). Bringing Silicon Valley to Latin America.
    Retrieved from https://www.slideshare.net/dmc500hats
19. Moore, J. F. (2006). Business ecosystems and the view from the firm. Antitrust bulletin, 51(1), 31-75.
    Retrieved from https://www.ecosystemsinnovation.com/wp-content/uploads/2017/09/Business-ecosystems-and-the-view-from-the-firm-antitrust-bu_081320081450.pdf
20. Motoyama, Y., & Watkins, K. (2014). Examining the Connections within the Startup Ecosystem. A Case Study of St. Louis. Ewing Marion Kauffman Foundation.
    Retrieved from http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20
    covers/2014/09/examining_the_connections_within_the_startup_ecosystem.pdf
21. Okamuro, H., Kato, M., & Honjo, Y. (2011). Determinants of R&D cooperation in Japanese start-up. Research policy, 40(5), 728-738.
    doi: https://doi.org/10.1016/j.respol.2011.01.012
22. Osterwalder, A., & Pigneur, Y. (2009). Business Model Generation. A Handbook for Visionaries, Game Changers, and Challengers (1^st ed.). John Wiley and Sons.
23. Pearce, C. L., & Sims, H. P. (2002). Vertical versus shared leadership as predictors of the effectiveness of change management teams: An examination of aversive, directive, transactional, transformational and empowering leader behaviours. Group Dynamics: Theory, Research, and Practice, 6(2), 172-197.
    doi: https://doi.org/10.1037/1089-2699.6.2.172
24. Porter, M. (1980). Competitive Strategy. Techniques for Analyzing Industries and Competitors. The Free Press, New York.
25. KPMG in Slovakia (2015). Survey of the Slovak start-up ecosystem 2014.
    Retrieved from https://assets.kpmg.com/content/dam/kpmg/sk/pdf/Startup-survey-2014-SK.pdf (in Slovak)
26. Ries, E. (2011). The lean start-up. New York: Crown Business.
27. Sipola, S. (2015). Understanding growth and non-growth in entrepreneurial economies. Analysis of startup industries and experimental winner generation in Finland, Israel and Silicon Valley. Acta Universitatis Oulensis G Oeconomica, 73.
    Retrieved from http://jultika.oulu.fi/files/isbn9789526208138.pdf
28. CB Insights (2018, February 2).The top 20 reasons start-ups fail.
    Retrieved from https://www.cbinsights.com/research/startup-failure-reasons-top
29. Thiel, P. (2014). Zero to One. New York: Crown Publishing Group.
30. Timmons, J. A., & Spinelli, S. (2008). New Venture Creation: Entrepreneurship for the 21^st Century (8 ed.). London: McGraw-Hill.
31. Truban, M. (2016). Facebook post.
    Retrieved from https://www.facebook.com/michal.truban/posts/10209058253989372
32. Vendetti, D. (2010). Company Evolution – The Organizational Life Cycle: working paper. Seattle: Product Arts.
33. Benešovská, M. (2017, November 23). The current start-up scene in the Czech Republic versus abroad. Retrieved from
    http://www.helloworld.cz/soucasna-start-upova-scena-cr-versus-zahranici (in Czech)
34. Startitup (2018). Official web-site.
    Retrieved from https://www.startitup.sk/startupy
35. Cassala, C. (n.d.). Innovative start-ups.
    Retrieved from https://www.tatsachen-ueber-deutschland.de/en/chapter/business-innovation/innovative-start-ups

Received 1.06.2018