The purpose of this paper is three-fold. First, it is intended to establish a new framework by combining literature streams on start-up success with research on cultural and institutional environments. Although a wide array of literature on start-ups, cultural and institutional literature exists, connecting research is underdeveloped. This paper hence sets out to bridge these differing streams of literature.
1 In fact, one has to bear in mind that although always termed a worldwide crisis, many developing countries and BRIC states have not been affected.
Second, drawing upon the impact of globalization and the Internet, new implications for the sourcing of business ideas will be generated. A lot of attention has been paid to the development of start-ups and the characteristics of entrepreneurs. However, the step in the development chain where the idea is generated has received comparably low attention. This paper thus tries to explore some sources and mechanisms evolved through globalization and use of the Internet.
Third, a case study designed to explore the above-mentioned new framework and implications is expected to support the development of a new model. It is therefore the overall purpose of this paper to produce a theoretically grounded and practically applicable model. A model that should cover the most important aspects when copying and implementing a business concept from a different country.
Table of Contents
1 Introduction
1.1 Aim of the paper
1.2 Structure of the paper
1.3 Methodology and sourcing of information
2 Tapping the global farm for business ideas
2.1 Influence of globalization
2.2 Influence of the Internet
2.3 Imitation and copycatting
3 Success factors of start-ups
3.1 The business model
3.2 Business planning
3.3 The team as key asset
3.4 The power of the network
3.5 Funding as growth driver
4 The cultural environment
4.1 Hofstede‘s cultural dimensions
4.2 Cultural differences and their effect on start-ups
5 The institutional environment
5.1 The effect of the institutional context on success factors
5.2 Legal issues as a stumbling block
6 Case study: the daily deal mania
6.1 The couponing market pre Groupon
6.2 The new business model
6.3 The hype starts
6.4 The European clone wars
6.5 Big money for fast scaling
6.6 Groupon‘s shopping spree and outlook
7 Case study part 2: adaption difficulties
7.1 Institutional context
7.2 The cultural context
8 Developing the model
9 Conclusion
9.1 Limitations
9.2 Case study key findings and discussion
10 Glossary
11 Bibliography
Objectives and Research Focus
The paper aims to bridge the research gap between start-up success factors and the influence of cultural and institutional environments. It seeks to establish a framework for successful intercultural transfer and adaptation of foreign business concepts, specifically focusing on the mechanism of copycatting, supported by an explorative case study.
- Examination of globalization and internet-driven sourcing of business ideas
- Analysis of critical start-up success factors (business model, planning, team, network, funding)
- Assessment of cultural and institutional barriers for new ventures
- Investigation of the daily deal market through a longitudinal case study
- Development of a model for successful intercultural business transfer
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3.3 The team as key asset
One important chapter in every business plan – and at the same time one of the key differentiators amongst hundreds of pitches given to business angels and venture capitalists – concerns the start-up team. It is a widespread belief that a mediocre idea executed by a great team will excel a great idea executed by a mediocre team. Founding the new venture in a team is a common phenomenon (Lechler 2001: 264) and increases the likelihood of its success to a large extent (Schutjens and Wever 2000: 151; Teal and Hofer 2003: 45; Lechler 2001: 265). From the resource-based view, it is often claimed that strong founding teams initially equip the start-up with higher legitimacy, which consequently facilitates gaining more initial resources (Packalen 2007: 886). Resources that can hence be used to attract talent, partnerships and develop a great product (Packalen 2007: 886). Furthermore, the heavy focus of venture capitalists on the team‘s quality and skills underlines the significance of a capable team (Kaplan and Strömberg 2004: 2185). Considering that outside capital contributes largely to a start-up‘s success, as documented in section 3.5, a confirming connection can be established between a great team and the success of the new venture.
Although there are examples of successful start-ups founded by a single person, such as the case of Jeffrey Bezos and Amazon.com, it seems especially for high-growth ventures that many are the result of at least two and sometimes more people partnering up to tackle the challenge together (Shrader and Siegel 2007: 894). Famous duos are Steve Wozniak and Steve Jobs (Apple), Paul Allen and Bill Gates (Microsoft), Sergey Brin and Larry Page (Google), Jerry Yang and David Filo (Yahoo!) or Peter Thiel and Max Levchin (PayPal). Additionally, we can suppose that also for start-ups founded by a single person the team will be one of the key factors in the successful execution of the initial idea.
Summary of Chapters
1 Introduction: Provides the foundation of the paper by outlining its purpose, structure, and the methodology, which combines literature review with a qualitative, longitudinal case study.
2 Tapping the global farm for business ideas: Explores how globalization and the internet have facilitated a global market for business ideas, specifically addressing the phenomenon of imitation.
3 Success factors of start-ups: Analyzes the theoretical and empirical literature on key drivers of start-up success, including business models, planning, teams, networks, and funding.
4 The cultural environment: Investigates the impact of national culture on start-up environments, utilizing Hofstede’s dimensions to compare different national contexts.
5 The institutional environment: Discusses how regulatory and administrative frameworks influence start-up activities and internationalization strategies.
6 Case study: the daily deal mania: Introduces the Groupon business model and provides an overview of the rise of the daily deal market in the US and the subsequent international imitation.
7 Case study part 2: adaption difficulties: Details the specific institutional and cultural challenges encountered when adapting the daily deal model to the German-speaking market.
8 Developing the model: Synthesizes the insights from literature and the case study to present a generic framework for intercultural business concept transfer.
9 Conclusion: Summarizes the key findings and addresses the limitations of the research, emphasizing the importance of aligning business models with local conditions.
Keywords
Start-up, success factors, entrepreneurship, globalization, internet, copycatting, business model, cultural environment, institutional environment, venture capital, business planning, networking, innovation, adaptation, daily deals.
Frequently Asked Questions
What is the core subject of this paper?
The paper examines how entrepreneurs can successfully transfer and adapt foreign business concepts to their home markets, focusing on the interplay between standard start-up success factors and specific cultural and institutional constraints.
What are the central topics addressed?
The main topics include the role of globalization and the internet in sourcing business ideas, the necessity of adapting business models, the impact of venture capital, and the challenges of cultural and regulatory environments for international start-up scaling.
What is the primary goal of the research?
The goal is to develop a theoretically grounded and practically applicable model that guides entrepreneurs in the intercultural copycatting process, helping them identify critical success factors and potential pitfalls.
Which methodology does the author use?
The author employs a qualitative approach, combining an extensive literature review of various research streams with an explorative, longitudinal case study of the daily deal sector.
What is the focus of the main body of the text?
The body text covers a theoretical investigation of start-up success drivers, an analysis of macro-environmental influences (culture and institutions), and a detailed real-world case study comparing the US and German-speaking deal markets.
Which keywords best characterize the research?
Key terms include start-up success, copycatting, business model adaptation, venture capital, globalization, and cross-cultural entrepreneurship.
Why is the "tipping point" considered a challenge in the German-speaking market?
In the US, the tipping point (minimum number of sales) incentivized social sharing and speed, whereas in the German-speaking market, due to higher uncertainty avoidance, it initially caused potential customers to hesitate and wait instead of participating.
How does institutional environment impact internationalization?
Institutional frameworks—ranging from regulatory complexity to the availability of venture capital—create different environments for growth; for example, the scarcity of venture capital in Germany compared to the US makes fast scaling significantly more difficult for local copycats.
- Arbeit zitieren
- Adrian Roessler (Autor:in), 2011, Sourcing start-up success, München, GRIN Verlag, https://www.grin.com/document/177782
