Early-Stage vs. Growth-Stage Startups: Examining the Differences in the Perception of Factors Instrumental to Success

Abstract

A stream of research available in the literature focuses on startup success factors, although there is a lack of consensus in determining what these factors are. In general, there are two critical groups of success factors, organizational and entrepreneurial, both considered to be integral parts of internal startup environment. Since the perception of early-stage (incubation stage) and growth stage (post incubation stage) startup entrepreneurs differ significantly they tend to perceive important success factors distinctively. As a result, attributes of success differ considerably. This paper aims at capturing internal startup environment as it is considered to be crucial in shaping startup’s success in contrast to external environment that is more remote and (usually) not manageable.
 Primary data were collected using an online survey questionnaire and quantitative approach was used; data were analysed using descriptive statistics and Mann-Whitney U test. The final research sample consisted of 70 startups and the findings indicate that the perception of internal environment and its contribution to overall success differs significantly from the perspective of early-stage and growth stage startup entrepreneurs. Out of analysed internal factors, statistically significant differences were identified for prior experience in starting the company and self-confidence (individual’s/entrepreneur’s category factors) and internal startup organization and team-level competencies (organizational category factors).
 The contribution of this research is evident in identifying important internal factors that determine startup’s success (that aspiring startup founders can benefit from) and providing an insight into the startup community in Croatia, thus contributing to a scarce empirical literature on the topic available. Limitations of the research include sample size and subjective assessment of the success factors, so recommendations for future research include repeating the research on a larger sample, covering the international level and widening a set of key-performance indicators that can be assessed at a higher level of rigour with objective metrics.