Factors of Russian high-tech startups market failures: analysis of barriers

Abstract

The article analyzes existing barriers for innovative entrepreneurship in Russian markets that raise obstacles to market efficiency. The purpose of the study is to rethink the role of the main barriers to creating competitive Russian startups, to identify the basic reasons for the failure of Russian new high-tech companies in the fields of information technology, biotechnology, medicine and pharmaceuticals, and to provide an insight in relative significance and sectoral characteristics of these factors. To identify the conditions and circumstances underlying unsuccessful start-up, the authors developed the methodology, conducted interviews with start-up participants, provided a comparative quantitative assessment and compiled the rating of existing barriers. All these made it possible to formulate the main reasons for Russian startups failures that relate primarily to product and market problems: difficulties in forming an adequate supply of in-demand goods and services, wrong choice of promotion strategy, limited marketing communications with a potential are associated with the lack of financial resources (inadequate financial planning, errors in investment design, underestimation of costs), alongside managerial and organizational issues (building cohesive professional teams and lack of leadership qualities among managers). The findings show that to minimize the risk of adverse outcomes, executives and employees of high-tech startups should pay special attention to target markets, marketing and strategic management. The unique approach of the research, together with the identification and classification of relevant barriers, contributes to understanding the specifics of high-tech startups in preventing their collapse.