Scalability of startups: the impact of entrepreneurial teams

Abstract

Scalability serves as a crucial tool in facilitating the growth and ensuring the survival of startups. The scalability of a startup is influenced by various factors such as leadership, business structure, access to technology, culture, and entrepreneurial teams, in which entrepreneurial teams play an important role. The impact of the entrepreneurial team on the scale of startups is important because they provide the leadership, expertise, and strategic direction needed to navigate the challenges of scale and take the startup to the next level. The impact of entrepreneurial teams can be categorized into two functional factors: team diversity, encompassing age, gender, and functional background, and team processes, including team-level cognitive comprehensiveness, team commitment, team size, and team integrity. A research instrument was administered to owners and managers of 90 Iranian technological startups between April and July 2021. Sampling was conducted using a simple random sampling method based on the accessible statistical population. The data collected was analyzed using path analysis and SmartPLS3 software. The findings indicate that both diversity and team processes play vital roles in the scalability of a startup. Moreover, team demographic characteristics and cognitive comprehensiveness were found to have the most significant influence on startup scalability and team integrity, respectively. In light of this, policymakers are encouraged to foster a collaborative and innovative environment for upcoming entrepreneurial teams to sustain the growth of startups. Furthermore, managers should focus on creating a culture of trust and loyalty within entrepreneurial teams to strengthen team commitment.