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The Startup as a Result of Innovative Entrepreneurship

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Digital Startups in Transition Economies

Abstract

This chapter presents the characteristics of startups as a manifestation of innovative entrepreneurship in the era of digital revolution. The chapter concludes with a developed universal definition of a startup. First, the new market reality is presented, shaped as a result of the digital, social, and economic revolution, which resulted in the emergence of new, specific forms of organisation—startups. Next, the existing definitions of a startup are discussed and a model of startup development process is developed. These analyses are illustrated with examples of Polish and foreign startups. Finally, the concept of the so-called spiral definition of a startup is proposed.

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Notes

  1. 1.

    These conclusions were also undermined later—jobs are created mainly by young companies, not small ones (Haltiwanger et al. 2013), and the quality of these jobs remains problematic (Coad et al. 2013).

  2. 2.

    Hackaton is a multi-hour (e.g. two to three days without a break) event during which developers design IT solutions for a given problem or for a given industry (e.g. educational websites, applications for government agencies); a type of competition.

  3. 3.

    Incubation is a free advisory and training service for enterprises at an early stage of development, often associated with the physical placing of the company in the so-called incubator, that is, in the place indicated by the organiser of the incubation programmes ; for example, Academic Business Incubators and their co-working network: Business Link.

  4. 4.

    Excubation describes incubation programmes, usually run by corporations, that do not contain an element of placing a startup in an incubator.

  5. 5.

    Acceleration describes very intensive, 8–12 week-long educational programmes for startups that are to help them to quickly verify a business model; often a startup “pays” for the acceleration programme with its shares (about 5% of shares). Accelerators are in this case funds that invest at a very early stage of development; the most famous and the most prestigious accelerator in the world is YCombinator.

  6. 6.

    Marc Andreessen (born 1971) is an American entrepreneur and investor, as well as a programmer. He is a co-creator and a managing partner of one of the most prestigious venture capital funds Andreessen-Horowitz, and is or was an investor and member of supervisory boards of leading e-business companies, such as Facebook, eBay, Skype, Zynga, Twitter, LinkedIn, and many others. He is considered to be a visionary in the field of the directions of development of the digital economy.

  7. 7.

    Noga describes the successive waves of competition as follows: the first wave (Harvard school) was competition that relied on multiple market players and fighting monopoly; the second (Chicago school) focused on minimising (though not eliminating) state intervention in the economy. The discussion between the supporters of both classic schools continues to this day. Since the late 1960s and for the following two decades of the twentieth century, powerful geopolitical, social, and economic changes (e.g. oil crises) disturbed the established market status quo. The third wave of competition, focusing on the choice of the optimal operating strategy, emerged. The strength of competition was no longer decided by the state or the number of entities on the market—but by the ability to compete as a derivative of the adopted strategy. The fourth wave arose with the intensification of deregulation and privatisation of many sectors of the economy, which took place in the 1980s. The fourth wave competition allowed the optimal (rather than maximum) number of the best enterprises to operate on the market. The fifth wave comes with the breakdown of optimal market structures and their virtualisation.

  8. 8.

    In the original: “the business of investing in the startups in the electronic data processing field”; Forbes, 15/08/1976, pp. 6/2.

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  1. Faculty of Management, Warsaw University of Technology, Warsaw, Poland

    Agnieszka Skala

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Skala, A. (2019). The Startup as a Result of Innovative Entrepreneurship. In: Digital Startups in Transition Economies. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-030-01500-8_1

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