Abstract
The coronavirus disease 2019 (COVID-19) pandemic led to a turbulent business environment, resulting in market uncertainties, frustrations, and rumors. Wrongly held beliefs—or myths—can hinder startups from turning new market opportunities into their favor (e.g., by failing at diversification decisions) or undertaking wrong business decisions (e.g., diversifying in industries that have products of no real market value). The objective of the chapter is to identify the beliefs that drive the business decisions of startups in a pandemic and to isolate those beliefs that are merely myths. Further, this chapter proposes strategic guidelines in the form of a framework to help startups make sound decisions that can lead to market success. The two-step research method involved multiple case studies with five startups based in India, France, Italy, and Switzerland, to identify perceptual beliefs that drove strategic business decisions, followed by a case study of 36 COVID-19 solution-focused startups, funded by the European Union (EU). The findings were validated through a survey that involved 102 entrepreneurs. The comparative analysis of two multiple case studies helped identify beliefs that were merely “myths,” myths that drove irrational strategic decisions, resulting in business failures. The results indicate that startups make decisions in pandemic situations that are driven by seven myths, pertaining to human, intellectual, and financial resources. The decision on whether to diversify or continue in the same business operation can be divided into four strategic options of the Competency-Industry Relatedness (C-IR) framework: ignore, delay, phase-in, and diversify. Diversification in the same (or different industry) is less risky for startups if they have the skills, as needed, to diversify in related industries. Diversification in related industries helps startups leverage their experiences and learning curves (those associated with existing product lines) to adapt their existing products in new markets or utilize their technologies to solve new problems via new products. The desired outcome for these startups should be sustainable business growth—to meet sustainability goals by contributing to the society and the economy. The Competency-Industry Relatedness (C-IR) framework is a strategic guide for startups to make business decisions based on internal factors, rather than myths. Accurately assessing skill diversity and the nature of new industries will help startups leverage their existing resources optimally, without the need for (pricey) external funding. This will foster sustained business growth resulting in a real contribution to the nation economy.
This chapter was published in Sustainability, MDPI, 13(9), Varun Gupta and Luis Rubalcaba, Competency-Industry Relatedness (C-IR) Framework for Sustained Business Growth in Startups during and Beyond Pandemic: Myths and Lessons from Publicly Funded Innovative Startups, pp. 1–23, © Authors (2021).
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The data supporting reported results are hosted at Harvard Dataverse and could be accessed at https://doi.org/10.7910/DVN/L88OOB.
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Acknowledgments
The authors thank the five startups based in Europe and Asia that agreed to participate in the case study. The authors express their gratitude and appreciation to the startup team for participation in the case study.
Informed Consent Statement
Informed consent was obtained from participants of the multiple case study conducted with five startups and those who took part in the survey.
Funding
This chapter has received funding from the European Union’s Horizon 2020 Research and Innovation Programme under grant agreement No 770356: Co-VAL. This publication solely reflects the views of the authors, and the agency cannot be held responsible for any use made of the information contained herein.
The chapter was also co-funded by the Spanish National Research Programme RTI2018-101473-B-100.
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Gupta, V. (2023). Sustained Business Growth in Startups During the Pandemic: Competency-Industry Relatedness (C-IR) Framework. In: Innovation Mechanisms in Start-ups. Innovation, Technology, and Knowledge Management. Springer, Cham. https://doi.org/10.1007/978-3-031-19741-3_9
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