Strategic management: Which factors affect the growth journey of software startups?

Sammanfattning: Purpose: The purpose of this study is to research the environment in which the IT-artifact exist, rather than the IT-artifact itself. Researching how founders of software startups manage their growth strategies, by researching essential internal and external factors and how they are represented in the founder’s growth strategy. This thesis is interested in the growth journey of startups, therefore we will study both software startups and software SMEs (small medium size enterprise). Research question: How does strategic management choices in the internal and external environment affect growth for software startups? Method: In this research we use a deductive approach, furthermore a qualitative research method was applied in order to gain a deeper understanding about the companies researched to answer our research question. We applied a comparative case study design as we wanted to analyze different cases/ companies and compared them both to each other using more or less identical methods. Semi-structured interviews were used as our preliminary data collection method as it allowed for flexibility. Conclusion: There is no perfect management strategy for software startups to achieve growth. The software industry is complex and rapidly changing, therefore the need to adapt and change the strategy to internal and external environment is essential to achieve growth. This research shows that the three most important factors affecting management strategies for growth in software startups are; (1) customers, (2) competitive advantage and (3) culture. Talented employees influence all the internal and external factors though the entire growth journey, both startups and SMEs. As the startup grows into being an SME, the internal organization factors become more important as well as scalability to achieve growth.