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Product Strategies And Startups’ Survival In Turbulent Industries: Evidence From The Security Software Industry

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Author Info
Andrea Fosfuri ()
Marco S. Giarratana ()

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Abstract

This paper seeks to explore the drivers of startups’ survival in turbulent industries, characterized by high rates of entry and exit, fragmented market shares, and a rapid pace of product innovation. Specifically, the paper aims to underscore the role played by post-entry product strategies, along with their interaction, beyond that of pre-entry conditions. Based on a sample of 270 startups that entered the Security Software Industry from 1989 till 1998, we find evidence that surviving entities are those that more aggressively adopt versioning and product portfolio strategies. Interesting enough, strategic learning seems to play a major role: Focusing on one of the two product strategies commands a higher survival probability than adopting a mixed strategy.

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Paper provided by Universidad Carlos III, Departamento de Economía de la Empresa in its series Business Economics Working Papers with number wb044816.

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Date of creation: Oct 2004
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Handle: RePEc:cte:wbrepe:wb044816

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  6. Audretsch, David B, 1991. "New-Firm Survival and the Technological Regime," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 441-50, August. [Downloadable!] (restricted)
  7. Neil Gandal, 2001. "The Dynamics of Competition in the Internet Search Engine Market," Department of Economics, Working Paper Series 1017, Department of Economics, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
  8. Kenney, Roy W & Klein, Benjamin, 1983. "The Economics of Block Booking," Journal of Law & Economics, University of Chicago Press, vol. 26(3), pages 497-540, October.
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