The Effect of External Environment Factors and Founders’ Characteristics on Digital Platform Start-up Performance. Dynamic Competition Perspective

Abstract

Digital platform start-ups rely on technological innovations to compete with other start-ups and incumbents. Competition by innovation, so-called dynamic competition, radically changes how start-ups leverage the external environment and founders’ characteristics to create superior performance. Although scholars unveiled the significant role of dynamic competition in entrepreneurial ecosystems, it is little known about how external environment factors and founders' characteristics interact under dynamic competition. This study focuses on the healthcare industry, which is a highly innovative sector where digital platform start-ups face unique challenges and opportunities. Using a sample of 235 digital platform start-ups, this study quantifies the impact of external environment factors and analyses the role of founders’ characteristics through managerial effectiveness. The findings reveal that economic freedom and governance quality may negatively affect performance, while founder characteristics enhance managerial effectiveness and significantly support start-up success. This study contributes to the literature by linking digital entrepreneurship with dynamic competition and offers insights into how start-ups can strategically navigate competitive environments to achieve superior performance.