Identifying Factors Affecting the Success of Startups: A Phenomenological Study

A startup is any company that works to grow, commercialize, and create entirely new goods, services, or mechanisms, driven by intellectual property or new technology. Startups have a significant impact on economic development. In addition, by creating jobs and wealth through innovation and technological activities, they have made important changes in the social, economic and even political context of countries. In the current era, startups or start-up companies play a significant role in entrepreneurship. These companies have played a prominent role in the development of the knowledge-based economy and are the source of many social developments. Innovation by start-up companies is one of the ways to increase competitive advantages and is considered one of the most important strategic approaches of companies to achieve long-term success. Startups have become the driving engine of the economies of developing countries, but many of them cannot continue their activities in the long term. Twenty percent of startups are out of competition in the first year and more than half of them in the first five years. In this regard, the aim of this research is to discover the factors affecting the success of startups. This research has been done with a qualitative approach using the phenomenological method. Fourteen managers of successful startups in the two provinces of Qazvin and Zanjan were selected by using criterion-based purposive sampling (being active and profitable) and data were collected using semi-structured interviews. Data analysis was done with the Colaizzi’s seven-step method. First, the text of the interviews was carefully read several times. Then the meaningful statements were identified. In the next stage, the meaning of these statements was formulated and organized in the form of organizing themes (thematic clusters). Then these clusters were described and then, the description of the underlying structure of the phenomenon under study was formulated. Finally, the analysis process was completed by validating the findings by receiving the feedback from the participants. : After the data analysis, factors affecting the success of successful startups were extracted in the form of 8 organizing themes and 26 basic sub-themes. The main themes are: "systems thinking", "active foresight", "creativity and innovation", "organizational learning", "team building", "financing", "business skills", and "market-orientation".The category of system thinking includes the three basic themes of adaptability, planned growth, and inter-functional coordination. The category of active foresight consists of the four basic themes of goal-setting, self-efficacy and hard work, experience and interest in work, and risk-taking. The category of creativity and innovation includes the three basic themes of creative ideation, the use of new technologies, and the design and production of applied products. The category of organizational learning consists of the three basic themes: acceptance of change, continuous learning and knowledge sharing. The category of team building includes the three basic themes of specialization, teamwork, and responsibility and accountability. The category of financing consists of two the basic themes of attracting capital and generating income. The category of business skills includes the three basic themes of problem solving, decision making, and advertising and information. And finally, the category of market-orientation consists of the five basic themes of choosing the target market and creating differentiation, customer orientation, publicity, product development and diversification, and providing service and support. Although having a creative idea is necessary to launch a startup and it is the main challenge of many founders to start a new investment, but it alone cannot guarantee its success. On the other hand, identifying and exploiting the opportunity also plays a prominent role in the success of startups, but the use of new technologies has improved the ability to generate ideas. Formulating a suitable growth strategy, foresight, having an expert team, financial strength, marketing and learning capabilities are other key success factors of startups. It should be noted that the systemic thinking is a necessary condition and a turning point in designing the structure and patterns of startup activities to adapt to technological changes and customer needs, and to connect them with each other. With this thinking, startups can intelligently make find the necessary preparations to face the upcoming opportunities and threats wisely.