Lately, Tech startups are considered an essential entity for a nation due to their ability to generate employment, innovative products, and contributions towards economic expansion. However, tech startups are new ventures with no prior existence and experience with deficient essential resources. To obtain extramural resources, tech startups depend on external networks in the form of incubators, accelerators, suppliers, customers, trade associations, or any other associated firm. Networks thus assist in resource accumulation and provide the much-needed competitive advantage to a startup. However, the resources needed vary across the startup stages. Stages play an essential role in deciding with whom the startups should interact (network partner types or network efficiency), with how many (network size), and patterns of interaction (network strength). Our regression analysis based on primary data from 98 tech startups reveals that stage significantly affects the network attributes of tech startups. Our results suggest that the stage negatively influences network size and network efficiency, i.e., network size and network efficiency reduce with startup progression, indicating the reduced structural embeddedness as the startup matures.
In contrast, the stage positively influences the network strength, i.e., the network strength increases with the startup progression, resulting in an increased relational dimension as the startup evolves. These results highlight the importance of network changes across the lifecycle stages of tech startups and thus contribute to the dynamic network literature. Accordingly, we draw the managerial and policy implications for creating and promoting networks for startup growth in the context of their lifecycle stages and identify the avenues for future research.
Keywords: Network size, network efficiency, network strength, tech startups, India.