Do Intangible Assets and Pre-Founding R&D Efforts Matter for Innovation Speed in Start-Ups?
Posted: 1 Dec 2009
Date Written: 2004
An important step for startups that takes their venture closer to growth, profitability, and independence is the launch of the first product. However, theory and data on new product development and innovation speedare lacking in the entrepreneurship literature. Aframework is constructed concerning the antecedents of innovation speed instartups.Ideas from new product development literature are combined with resource-based theory. It is argued that pre-founding research and development efforts, and intangible assets such as team tenure, founder experience and third-party collaborations, are important for innovation speed. Data were collected on 99 research-based startups in Belgium founded during1991-1997.An event-history approach was used to test themodel.Findings indicate that research-based startups vary in theirstarting conditions, and that these differences significantly affect the timeit takes to launch the first product.The impact of starting conditions on innovation speed differs among software, medical-related, telecommunications, and other technologies. It was also found that software firms startingwith a beta-version have a slower product launch.In addition, it is shownthat team tenure and founder experience lead to faster product launch. Alliances with other firms do not significantly affect innovation speed; collaborations with universities lengthen product development times.The results of the study increase the understanding of product development processes in startups and the differences between firms with slow and rapid growth. (TNM)
Keywords: Resource based economics, Innovation process, Time to market, Intangible assets, R&D, Startups, High technology industries, Product development
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