Publications
Publications

Where Strategy Matters: Evidence from a Global Startup Field Study

By: Nataliya Langburd Wright
  • Format:Print
  • | Language:English
  • | Pages:53
ShareBar

Abstract

The role of strategy for innovative startups is theoretically ambiguous and much debated among practitioners. I interviewed executives of 253 scaling software ventures from 34 countries and scored the alignment of their market and organizational choices—validated with human and AI approaches—to detect whether they have a strategy, developing the first dataset of its kind. Having a strategy predicts performance more for non-US startups, for which a one standard deviation increase in the strategy score is associated with an increase in valuation by over a third. Yet, non-US startups are less likely to develop a strategy; they have a 0.3 standard deviation lower strategy score than do others. Additional analyses suggest that mistakes are more costly in non-US contexts because of financial, talent, and cultural differences, penalizing firms there without a strategy that helps anticipate sources of failure. Creating a strategy, however, is more difficult without the ability to learn from prior mistakes. Together, this research suggests that in institutional contexts where mistakes are more costly, strategy matters more, but is also harder to develop.

Keywords

Entrepreneurship And Strategy; Scaling Technology Ventures; Global Contextual Intelligence; Strategy; Entrepreneurship; Global Strategy; Growth and Development Strategy

Citation

Wright, Nataliya Langburd. "Where Strategy Matters: Evidence from a Global Startup Field Study." Harvard Business School Working Paper, No. 23-041, January 2023. (Revised May 2023.)

More from the Author