IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i9p4632-d540607.html
   My bibliography  Save this article

Competency-Industry Relatedness (C-IR) Framework for Sustained Business Growth in Startups during and Beyond Pandemic: Myths and Lessons from Publicly Funded Innovative Startups

Author

Listed:
  • Varun Gupta

    (Department of Economics and Business Administration, University of Alcala, Plaza de la Victoria 2, Alcalá de Henares (Madrid), 28802 Madrid, Spain
    School of Business, University of Applied Sciences and Arts Northwestern Switzerland, 4600 Olten, Switzerland
    Instytut Zarządzania, Uniwersytet Szczeciński, ul. 71-004 Szczecin, Poland)

  • Luis Rubalcaba

    (Department of Economics and Business Administration, University of Alcala, Plaza de la Victoria 2, Alcalá de Henares (Madrid), 28802 Madrid, Spain)

Abstract

Context: The coronavirus disease 2019 (COVID-19) pandemic led to a turbulent business environment, resulting in market uncertainties, frustrations, and rumors. Wrongly held beliefs—or myths—can hinder startups from turning new market opportunities into their favor (for example, by failing at diversification decisions) or undertaking wrong business decisions, e.g., diversifying in industries that have products of no real market value). Objectives: The objective of the paper is to identify the beliefs that drive the business decisions of startups in a pandemic and to isolate those beliefs that are merely myths. Further, this paper proposes strategic guidelines in the form of a framework to help startups make sound decisions that can lead to market success. Method: The two-step research method involved multiple case studies with five startups based in India, France, Italy, and Switzerland, to identify perceptual beliefs that drove strategic business decisions, followed by a case study of 36 COVID-19-solution focused startups, funded by the European Union (EU). The findings were validated through a survey that involved 102 entrepreneurs. The comparative analysis of two multiple case studies helped identify beliefs that were merely “myths”; myths that drove irrational strategic decisions, resulting in business failures. Results: The results indicate that startups make decisions in pandemic situations that are driven by seven myths, pertaining to human, intellectual, and financial resources. The decision on whether to diversify or continue in the same business operation can be divided into four strategic options of the Competency-Industry Relatedness (C-IR) framework: ignore, delay, phase-in, and diversify. Diversification in the same (or different industry) is less risky for startups if they have the skills, as needed, to diversify in related industries. Diversification in related industries helps startups leverage their experiences and learning curves (those associated with existing product lines) to adapt their existing products in new markets, or utilize their technologies to solve new problems via new products. The desired outcome for these startups should be sustainable business growth—to meet sustainability goals by contributing to the society and the economy. Conclusion: The C-IR framework is a strategic guide for startups to make business decisions based on internal factors, rather than myths. Accurately assessing skill diversity and the nature of new industries (or markets) will help startups leverage their existing resources optimally, without the need for (pricey) external funding. This will foster sustained business growth resulting in a nation economic development. Knowledge transfer from the Innovation ecosystem will further strengthen the C-IR framework effectiveness.

Suggested Citation

  • Varun Gupta & Luis Rubalcaba, 2021. "Competency-Industry Relatedness (C-IR) Framework for Sustained Business Growth in Startups during and Beyond Pandemic: Myths and Lessons from Publicly Funded Innovative Startups," Sustainability, MDPI, vol. 13(9), pages 1-23, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4632-:d:540607
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/9/4632/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/9/4632/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brown, Ross & Rocha, Augusto, 2020. "Entrepreneurial uncertainty during the Covid-19 crisis: Mapping the temporal dynamics of entrepreneurial finance," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    2. Varun Gupta & Jose Maria Fernandez-Crehuet & Chetna Gupta & Thomas Hanne, 2020. "Freelancing Models for Fostering Innovation and Problem Solving in Software Startups: An Empirical Comparative Study," Sustainability, MDPI, vol. 12(23), pages 1-29, December.
    3. Kuckertz, Andreas & Brändle, Leif & Gaudig, Anja & Hinderer, Sebastian & Morales Reyes, Carlos Arturo & Prochotta, Alicia & Steinbrink, Kathrin M. & Berger, Elisabeth S.C., 2020. "Startups in times of crisis – A rapid response to the COVID-19 pandemic," Journal of Business Venturing Insights, Elsevier, vol. 13(C).
    4. Varun Gupta & Jose Maria Fernandez-Crehuet & Thomas Hanne, 2020. "Fostering Continuous Value Proposition Innovation through Freelancer Involvement in Software Startups: Insights from Multiple Case Studies," Sustainability, MDPI, vol. 12(21), pages 1-35, October.
    5. Alex Maritz & Aron Perenyi & Gerrit de Waal & Christoph Buck, 2020. "Entrepreneurship as the Unsung Hero during the Current COVID-19 Economic Crisis: Australian Perspectives," Sustainability, MDPI, vol. 12(11), pages 1-9, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Iva Gregurec & Martina Tomičić Furjan & Katarina Tomičić-Pupek, 2021. "The Impact of COVID-19 on Sustainable Business Models in SMEs," Sustainability, MDPI, vol. 13(3), pages 1-24, January.
    2. Staples, Aaron J. & Deming, Kristopher & Malone, Trey & Carpenter, Craig W. & Weiler, Stephan, 2024. "Pouring the Paycheck Protection Program into craft beer: PPP employment effects in service-intensive industries," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    3. Martina Pilloni & József Kádár & Tareq Abu Hamed, 2022. "The Impact of COVID-19 on Energy Start-Up Companies: The Use of Global Financial Crisis (GFC) as a Lesson for Future Recovery," Energies, MDPI, vol. 15(10), pages 1-15, May.
    4. Wellalage, Nirosha Hewa & Kumar, Vijay & Hunjra, Ahmed Imran & Al-Faryan, Mamdouh Abdulaziz Saleh, 2022. "Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs," Finance Research Letters, Elsevier, vol. 47(PA).
    5. Tiberiu Foris & Alina Simona Tecău & Camelia-Cristina Dragomir & Diana Foris, 2022. "The Start-Up Manager in Times of Crisis: Challenges and Solutions for Increasing the Resilience of Companies and Sustainable Reconstruction," Sustainability, MDPI, vol. 14(15), pages 1-20, July.
    6. Simplice A. Asongu & Mushfiqur Rahman, 2022. "A Review of Covid-19 and Employment Implications: Evidence from Human Resource Management," Working Papers of the African Governance and Development Institute. 22/058, African Governance and Development Institute..
    7. Cristiano Bellavitis & Christian Fisch & Rod B. McNaughton, 2022. "COVID-19 and the global venture capital landscape," Small Business Economics, Springer, vol. 59(3), pages 781-805, October.
    8. Ljudevit Pranić, 2023. "What Happens to the Entrepreneurial Intentions of Gen Z in a Crony Capitalist Economy Amidst the COVID-19 Pandemic?," Sustainability, MDPI, vol. 15(7), pages 1-22, March.
    9. Otrachshenko, Vladimir & Popova, Olga & Nikolova, Milena & Tyurina, Elena, 2022. "COVID-19 and entrepreneurship entry and exit: Opportunity amidst adversity," Technology in Society, Elsevier, vol. 71(C).
    10. Grashuis, Jasper, 2021. "Self-employment duration during the COVID-19 pandemic: A competing risk analysis," Journal of Business Venturing Insights, Elsevier, vol. 15(C).
    11. Mikaela Backman & Johannes Hagen & Orsa Kekezi & Lucia Naldi & Tina Wallin, 2023. "In the Eye of the Storm: Entrepreneurs and Well-Being During the COVID-19 Crisis," Entrepreneurship Theory and Practice, , vol. 47(3), pages 751-787, May.
    12. Bressan, Alessandro & Duarte Alonso, Abel & Thi Kim Vu, Oanh, 2023. "Business-community relations under COVID-19: A study of micro and small firms," Journal of Business Research, Elsevier, vol. 155(PA).
    13. Björklund, Tua A. & Mikkonen, Maria & Mattila, Pauliina & van der Marel, Floris, 2020. "Expanding entrepreneurial solution spaces in times of crisis: Business model experimentation amongst packaged food and beverage ventures," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    14. Raluca Ignat & Marius Constantin, 2020. "Multidimensional Facets of Entrepreneurial Resilience during the COVID-19 Crisis through the Lens of the Wealthiest Romanian Counties," Sustainability, MDPI, vol. 12(23), pages 1-29, December.
    15. Mohammad Rashed Hasan Polas & Valliappan Raju, 2021. "Technology and Entrepreneurial Marketing Decisions During COVID-19," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 22(2), pages 95-112, June.
    16. Bahadur Ali Soomro & Ghulam Rasool Lakhan & Naimatullah Shah, 2021. "COVID‐19 impediments and business start‐ups in Pakistan: Evidence from the second wave of the pandemic," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(7), pages 1909-1918, October.
    17. Ali Anwar & Nicole Coviello & Maria Rouziou, 2023. "Weathering a Crisis: A Multi-Level Analysis of Resilience in Young Ventures," Entrepreneurship Theory and Practice, , vol. 47(3), pages 864-892, May.
    18. Ali Zackery & Joseph Amankwah-Amoah & Zahra Heidari Darani & Shiva Ghasemi, 2022. "COVID-19 Research in Business and Management: A Review and Future Research Agenda," Sustainability, MDPI, vol. 14(16), pages 1-32, August.
    19. Aldona Malgorzata Deren & Jan Skonieczny, 2021. "Proactive and Reactive Actions of the Organization during Covid-19 Pandemic Crisis," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 358-368.
    20. Michal Hrivnák & Peter Moritz & Marcela Chreneková, 2021. "What Kept the Boat Afloat? Sustainability of Employment in Knowledge-Intensive Sectors Due to Government Measures during COVID-19 Pandemic," Sustainability, MDPI, vol. 13(15), pages 1-21, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4632-:d:540607. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.