Exploring the Factors Influencing the Transition from Startup to Scale-up

Soleimani, Moein; Rezaee, Bijan; Naderi, Nader; Mohamadifar, Yosef

doi:10.22034/jer.2024.715483

Exploring the Factors Influencing the Transition from Startup to Scale-up

Document Type : Research Article

Authors

Moein Soleimani

Bijan Rezaee

Nader Naderi

Yosef Mohamadifar

Department of Management and Entrepreneurship, Faculty of Economics and Accounting, Razi University, Kermanshah, Iran.

10.22034/jer.2024.715483

Abstract

Introduction: The transition from startup to scale-up represents a critical and decisive phase for establishing a solid foundation for exponential business growth. Success during this transition significantly impacts return on investment and revenue growth, while also contributing to the long-term sustainability of the enterprise. Therefore, understanding the factors that facilitate a successful transition is the essential first step in planning and implementing effective measures. This study aims to explore the key factors affecting the business transition from the startup phase to the scale-up stage.
Methodology: In terms of objective, this is an applied study. Given its nature, it employs a mixed-methods (qualitative-quantitative) research design based on a sequential exploratory approach. Data were collected through descriptive and field-documentary research. The methodology involved inductive content analysis and the Fuzzy Delphi method for screening and prioritization. The study population comprised key informants, including faculty members in entrepreneurship with relevant expertise, startup founders undergoing or having completed the transition, scale-up owners, mentors, and experts/planners from relevant organizations within the national startup ecosystem.
Findings: The analysis initially yielded 144 conceptual elements. Following a process of screening and prioritization, 131 of these were validated as conceptual codes, while 13 were excluded. The validated concepts were organized into 14 distinct categories: 1) Continuous environmental scanning and analysis, 2) Defining a clear vision and appropriate goals, 3) Addressing legal, regulatory, and ownership matters,4) Developing and consistently reviewing the marketing plan, 5) Capabilities of team members and the founder’s leadership and managerial skills, 6) Refining the business model and value proposition, 7) Establishing an effective structure and optimal allocation of tasks and activities, 8) Strengthening the social and cultural capital of the team, 9) Building adequate financial capabilities with a focus on cost efficiency, 10) Instituting processes for team learning and empowerment, 11) Providing suitable infrastructure, processes, and technologies, 12) Overcoming mental barriers to change within the team, 13) Selecting the optimal timing for scaling, and 14) Networking and engagement with supporting and sponsoring institutions.
Conclusion/ Implications: Theoretically, this research deepens the understanding of the factors driving the startup-to-scale-up transition, clarifying the distinctions between the startup and scalability stages. It provides a framework for successfully managing this critical process. The findings also establish a useful foundation and impetus for future research in this domain. Practically, the results can assist entrepreneurs in formulating effective strategies for scaling their ventures. From a policy perspective, the study offers valuable insights for officials and policymakers within the innovation and entrepreneurship ecosystem, supporting improved decision-making and planning to foster a more conducive environment for business growth and scaling.

Keywords

Start-up

Scale-up

Transition stage

Exponential Growth

Fuzzy Delphi

Subjects

Entrepreneurship

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