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Startups’ Roads to Failure

Marco Cantamessa (), Valentina Gatteschi (), Guido Perboli () and Mariangela Rosano ()
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Marco Cantamessa: Politecnico di Torino, 10129 Turin, Italy
Valentina Gatteschi: Politecnico di Torino, 10129 Turin, Italy
Guido Perboli: Politecnico di Torino, 10129 Turin, Italy
Mariangela Rosano: Politecnico di Torino, 10129 Turin, Italy

Sustainability, 2018, vol. 10, issue 7, 1-19

Abstract: The role of a relatively small cadre of high-tech startup firms in driving innovation and economic growth has been well known and amply celebrated in recent history. At the same time, it is well recognized that, while the overall contribution of startups is crucial, the high-risk and high-reward strategy followed by these startups leads to significant failure rates and a low ratio of successful startups. So, it is curious to notice that literature tends to focus on successful startups and on quantitative studies looking for determinants of success while neglecting the numerous lessons that can be drawn by examining the stories of startups that failed. This paper aims to fill this gap and to contribute to the literature by providing a repeatable and scalable methodology that can be applied to databases of unstructured post-mortem documents deriving startup failure patterns. A further and related contribution is the analysis carried out with this methodology to a large database of 214 startup post-mortem reports. Descriptive statistics show how the lack of a structured Business Development strategy emerges as a key determinant of startup failure in the majority of cases.

Keywords: startup failure; SHELL; lean business; business development (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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