Factors affecting growth in Company A

Entrepreneurial orientation and entrepreneurial characteristics

Entrepreneurial orientation of founders in Company A played an important role during the pre-incorporation phase as well as during the introductory phase of the company. In addition, proactive behavior of founders was a driving factor for market opportunity recognition. The Co-founder expressed that: “I noted that there were major problems in the industry, and these issues have become even more prominent and visible in our society during the recent years”

(Co-founder, Company A, 2020). The Co-founder interviewed explained that the founder team had a very clear vision on how their product could be used in order to solve issues prevalent in the industry they operated in: “We knew the two major problems in the industry, and we had a clear vision how we could solve them and create value” (Co-founder, Company A, 2020). It was further elaborated that this vision had emerged based on the experience gained from the earlier company. Certain characteristics of the founding team were considered important in the decision to enter the new market. The Co-founder mentioned that they were aware of the competitiveness of the market in Silicon Valley, but the challenge intrigued them: “If you succeed in this market, you can succeed anywhere” (Co-founder, Company A, 2020). New market entry had posed challenges to the company, and it became evident during the interview that hard work and persistence of the founding team had played an important role in the company’s survival particularly during the resource accumulation phase. Risk-taking of the founding team had been more prominent during the introductory phase of the company as expressed by the Co-founder: “Certain risks need to be taken in order to enter the market and start operations” (Co-founder, Company A, 2020). It was elaborated that the risk-taking of the team had decreased as the company had acquired resources in the market as elaborated by the Co-founder: “I think the amount of risk-taking has decreased. When you have acquired something, for example, pilot customers, you start being a little more cautious and do not want to take high risks as you already have something that works” (Co-founder, Company A, 2020).

It can be concluded from the interviews that entrepreneurial orientation had the highest dominance during the introductory phase of the company including higher risk-taking,

proactiveness, and founders’ ambitious behavior. During the resource accumulation phase of the company, team members’ persistence and ambition became more prominent as that phase in the company’s development was characterized by hard work, acquisition of first customers, and building networks.

Resources

Funding was considered as one of the key success factors in the company’s development. The company had received funding each year since inception. The most important funding round had been acquired during the resource accumulation phase of the company. It was noted that an important seed funding round was acquired partly due to the credibility acquired from getting accepted to a well-known accelerator program: “Acceptance to the accelerator program was very important for us as it enabled us to acquire seed funding round and in addition, it enabled us to expand our networks in the new market” (Co-founder, Company A, 2020). The previous experience of founders and skills were considered as an important resource in Company A.

During the interview, it became evident that previous experience of the founders and the global mindset had helped the company to proactively seek business opportunities in the new market as stated by the Co-founder: “Due to our prior experience of operating in multiple countries, we realized that if we want to build a firm that is truly global, we should do it from the US” (Co-founder, Company A, 2020).

Capabilities

Networking capabilities were considered important growth drivers in Company A’s development. The first pilot customer was gained through personal networks in Silicon Valley, and it was considered to have played an important role in the company’s growth as it had contributed to the company’s credibility in the new market: “Conducting the first pilot for free with a well-known company was a good strategy as we were then able to do more pilots with larger companies which were no longer conducted for free” (Co-founder, Company A, 2020). It was also elaborated that gaining the first pilots had started a positive loop in the company’s growth development and credibility building: “Acquiring a first reference customer has resulted in more references. It is like climbing a ladder to build a company’s credibility” (Co-founder, Company A, 2020).

Dynamic capabilities can be seen to have played an important role in the company’s growth.

The company was able to shift directions quickly having a flexible approach in product

development. The company conducted an extensive product pivot during the resource accumulation phase which included changing the market focus of the product in order to meet the prevailing market demand. The Co-founder elaborated that soon after introducing their product in the market, they had realized that while it did respond to the prevailing issues faced by the industry at that time, the industry structure did not support the concept. Hence, they executed a market pivot to respond to the market’s demand. According to the Co-founder, the product pivot was one of the most critical factors affecting their growth in the market. As mentioned earlier, in addition to networking and dynamic capabilities, entrepreneurial opportunity recognition was considered as an important capability during the introductory phase of the company.

Growth strategy and market activities

Company A’s strategy was to be a global company from inception and entry to the US market was considered as an obvious choice for the company ever since incorporation. The Co-founder emphasized on the importance of physical presence in the new market. During the first year of operation the founders visited the market on a regular basis, however, they had soon realized that market entry would not be successful until physical presence would be established in Silicon Valley. The biggest challenges faced by Company A was the lack of business networks as well as customer references. In order to overcome these challenges, the company’s strategy was to apply for an accelerator program in order to build important networks and gain credibility for their product. The entry into an accelerator was not self-evident and hence, the founder team worked extensively to gain access to the program. According to the interviewee, the teams’ persistent behavior played an important role in accessing the program.

Another important milestone in new market activities for Company A was the acquisition of their first pilot customer. As mentioned earlier, the company’s strategy was to conduct a free product pilot with a well-known company operating in the market anticipating that good results gained from the pilot would help build the company’s credibility in the market. The positive results gained from the pilot helped Company A in acquiring new business partners and build their credibility in the market. Another strategy which helped the company in further customer acquisition was the conduction of clinical studies which, according to the Co-founder, were an important element in building credibility in the industry: “We were aware that these studies would help build our product’s credibility” (Co-founder, Company A, 2020).

Product strategy

During the introductory phase, the company had conducted market research in order to gain information about the market environment and industry competitors. Based on their research, the founders were assured that their product was unique to the market. As mentioned earlier, the company conducted a large product pivot during the early existence of the company. Later, product validation was gained through product pilots with different companies. It was noted that the development of the product was an ongoing process that could be chaotic at times.

Challenges and liabilities

Understanding the market environment caused challenges for the company during the introductory phase resulting in difficulties defining the company’s value proposition. The challenges emerged mostly from industry regulations and governmental regulatory requirements. In addition, the high cost of the market had made the company remain their product and development operations in the home market. As mentioned earlier, the company also faced challenges due to lack of networks especially during the resource accumulation phase.

Figure 6. Factors affecting growth in Company A