Empirical Taxonomy of Start-Up Firm Growth Trajectories

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Empirical Taxonomy of Start-Up Firm
Growth Trajectories
Université catholique de Louvain

• Mahamadou Biga D., D. François,
• B. Gailly, M. Verleysen, V. Wertz

Centre for Research in Change, Innovation and
Strategy Louvain School of Management www.crecis.
be Machine Learning Group

Engineering Faculty www.ucl.ac.be/mlg
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• Motivation

Promising firms generate significant wealth and
jobs OECD Audretsch Turik, Storey Birsch
Knowledge about new small firm growth remains
scattered Wiklund Shepherd Delmar et al
Davidsson Wiklund
Longitudinal approaches generate methodological
challenges Garnsey Heffernan, Garnsey et al.
Davidsson Wiklund
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Proposed approach
Growth is a multidimensional process Wiklund,
2004 Delmar et al., 2003 Dess Lumpkin,
2001 Weinzimmer et al., 1998 Lumpkin Dess,
1996 Birley Westhed, 1990 Cameron, 1978.
Growth is a longitudinal process Garnsey et
al., 2006 Busenitz et al., 2003 Chandler
Lyon, 2001 Pettigrew et al., 2001 Davidsson
Wiklund, 2000
Growth is an ubiquitous phenomenon Delmar
Davidsson, 1998 Delmar et al.,2003
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Methodology 1/2  Promising firms 
Sales Employment Assets
10 years
Excluded firms
Promising firms
Threshold of micro-firm size
Firm age

• Sample of 741 promising firms with complete
  trajectory, out of 17,168 firms created between
  1992 and 2002 in Belgium.

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Importance of using multidimensional approach

• Share of firms growing beyond
  micro-firm level based upon criteria selected to
  measure growth. (n741)

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Ubiquity of promising firms
Sector distribution
High-tech vs. low-tech distribution
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Methodology 2/2 Discretization
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Multidimensional representation of growth
trajectories
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7 Typical growth trajectories identified

1. Grow as a question mark
2. Grow as a start-up
3. Grow as a star
4. Grow as a boutique
5. Grow from start-up to question mark
6. Grow from start-up to boutique
7. Grow from start-up to star

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ii
iv
v
vi
i
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Share of firms adopting one of 7 58 50 42
n 602 521 431
Span (years) 4 5 6
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Conclusions Further Work

• Original empirical approach based on
  systematic clustering
• and classification
• Relevance of longitudinal and multidimensional
  approach
• based on economic data
• Identification of several possible growth
  trajectories beyond
• classical start-ups profiles

Further interpretation could rely upon
international sample, in-depth case studies or
use of more complete data (business model,
entrepreneurs motivation, competitive
environment.)