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Complementary Product Integration by High-Technology New Ventures: The Role of Initial Technology Strategy

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  • Satish Nambisan

    (Lally School of Management, Rensselaer Polytechnic Institute, 110 8th Street, Troy, New York 12180)

Abstract

In this paper, we investigate the relationship between complementary product integration and the initial technology strategy of a high-technology new venture. With customers placing considerable emphasis on cross-product integration, the success of a new venture is dependent as much on its ability to integrate its product with relevant complementary products as on the core product functionality itself. We identify three types of complementary product integration: value-added internal, add-on module, and data interface. We argue that the adoption of proactive initial technology strategy critically determines the ability of a high-technology new venture to rapidly and efficiently integrate its product with new and emerging complementary products. More specifically, we offer hypotheses that relate initial design and development strategies to the number and the type of complementary product integrations achieved by a new venture in the initial years. The hypotheses are tested using data from a set of U.S.-based software new ventures. The results support our arguments and imply the need for high-technology new ventures to adopt an explicit complementary product focus during initial product design.

Suggested Citation

  • Satish Nambisan, 2002. "Complementary Product Integration by High-Technology New Ventures: The Role of Initial Technology Strategy," Management Science, INFORMS, vol. 48(3), pages 382-398, March.
    • Handle: RePEc:inm:ormnsc:v:48:y:2002:i:3:p:382-398
    DOI: 10.1287/mnsc.48.3.382.7724
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    References listed on IDEAS

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    Cited by:

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