Resource and Competence (Internal) View vs. Environment and Market (External) View when defining a Business

TL;DR

This study empirically compares internal resource and competence perspectives with external environment and market views in startup definitions, revealing a tendency to favor internal factors, especially in stable economies.

Contribution

It provides new empirical insights into how entrepreneurs prioritize internal versus external factors when defining their startups, highlighting economic context influences.

Findings

Preference for internal view is stronger in stable economies.

Focusing on resources correlates with favoring internal view.

Order-based analysis better explains view differences.

Abstract

Startups is a popular phenomenon that has a significant impact on global economy growth, innovation and society development. However, there is still insufficient understanding about startups, particularly, how to start a new business in the relation to consequent performance. Toward this knowledge, we have performed an empirical study regarding the differences between a Resource and Competence View (Internal) vs Environment and Market View (External) when defining a Business. 701 entrepreneurs have reflected on their startups on nine classes of Resources (values, vision, personal objectives, employees and partners, buildings and rental contracts, cash and credit, patents, IPR's and brands, products and services and finally revenues and grants) and three elements of the Business Mission ("KeyContribution", "KeyMarket" and "Distinction"). It seems to be a tendency to favour the Internal View over the External View. This tendency is clearer in Stable Economies (Europe) than in Emerging Economies (South Africa). There seems to be a co-variation between the tendency to favour the Internal View and the tendency to focus on adding Resources. Finally, we found that an order-based analysis seems to explain the differences between the two views better than a number-based method.