Growth Strategies for Start-Ups
Read this chapter on the various growth strategies companies use. One particular area of interest for strategic managers is the best practices to build growth for new start-ups in the evolving marketplace. This video will teach how Hubspot CEO Brian Halligan addresses growth. He offers an analogy to showcase how much we as consumers invest in start-ups in our daily lives, such as using Spotify and Uber, which are all start-ups.
Definition and models
Growth through innovation
Times of technological change are an opportunity for start-ups to grow. New firms that use technological changes to introduce new products or services as market leaders can gain competitive advantages quickly. However, technological innovations like these must be able to be protected, or they will not last. The new firms must also possess or acquire the necessary complementary resources for the products and the marketing of them.
Certain types of innovation are especially advantageous for start-ups. In his book, The Innovator's Dilemma, Christensen differentiates between "sustaining technologies" and "disruptive technologies". Sustaining technologies improve existing product-market structures and are generally introduced most effectively by established firms. Disruptive technologies, on the other hand, which enable new applications for new customer segments, tend to be developed and marketed by start-ups. Christensen takes the example of the computer hard drive industry to show how start-ups have very often seen successful growth over a twenty-year period as spin-offs of established firms. Similar developments can be seen in other sectors.
In the next part of this chapter, we analyze the most frequent growth mistakes in start-ups.