Determinants for the success of software startups: Insights from a regional cluster

Abstract

In recent years, we have seen a growing interest in technology-based companies and intensive knowledge. Several regional clusters have appeared supported in dynamic entrepreneurial ecosystems which, alongside intrinsic aspects of the business, are important determinants of the success of new companies. However, most startups created in these innovation-oriented spaces do not survive the first years of life, due to the high competitiveness of the technological market, due to deficiencies in the business model, due to the support conditions provided by the surrounding ecosystem, and finally due to a weak adjustment between all these dimensions. Among several models available, the Early-Life Decision Model (ELDM) presents itself as an interesting framework for studying the development and success conditions of software companies. This article discusses the application of the ELDM based on a series of interviews conducted to 15 Portuguese software startups installed in a technological cluster located in the northeast of Portugal. Based on the results obtained, it was appropriate to add a new dimension to the ELDM model (learning) and complementing it with the perspectives of the business type and internal versus external determinants.