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How Conflicts Cause Technology Startups to Fail in India? An Empirical Analysis

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  • Kalyanasundaram Ganesaraman

    (Ramaiah University of Applied Sciences)

  • M. H. Bala Subrahmanya

    (Indian Institute of Science)

Abstract

Technology startups are exposed to multiple challenges. One of the key challenges is conflict, as it has a decisive role in the technology startup evolution. This study examines the effect of conflict on the following two counts: How do conflicts differentiate the success or failure of technology startups? How do conflicts impact the startup lifecycle comprising multiple stages of formation? The studies on conflict are few in the context of an emerging economy like India. This study explores the role of conflict by gathering primary data from 151 cofounders (101 who have experienced failure and 50 who are successful and continuing their operations) from India's six leading technology startup hubs. The presence of cofounder conflicts or Investor conflicts increases the odds of failure of technology startups. 1. The cofounder(s) should navigate and resolve the potential conflict issues related to relationships, roles, and rewards. Besides ensuring the cofounder's agreement, having an effective issue resolution mechanism is required. 2. The strategic intervention of investors coupled with the proper governance structure can lend a helping hand in minimizing conflicts. The epiphanies from cofounder(s) perspectives offered practical suggestions for conflict resolution between cofounders and investors.

Suggested Citation

  • Kalyanasundaram Ganesaraman & M. H. Bala Subrahmanya, 2022. "How Conflicts Cause Technology Startups to Fail in India? An Empirical Analysis," International Journal of Global Business and Competitiveness, Springer, vol. 17(1), pages 40-52, June.
    • Handle: RePEc:spr:ijogbc:v:17:y:2022:i:1:d:10.1007_s42943-022-00047-x
    DOI: 10.1007/s42943-022-00047-x
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    More about this item

    Keywords

    Conflicts; Technology startups; Startup failure; Startup success; Investors; Cofounders; Entrepreneurial ecosystem; India;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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