Tag Archives: startups

What Fuels Growth? A Comparative Analysis of the Scaling Intensity of AI Start-ups

Schulte-Althoff, Matthias, Gene Moo Lee, Hannes Rothe, Robert Kauffman, Daniel Fuerstenau. “What Fuels Growth? A Comparative Analysis of the Scaling Intensity of AI Start-ups”. Under Review. [ResearchGate]

  • Presented at HICSS 2021 (SITES mini-track), Copenhagen Business School 2021, FU Berlin 2021, University of Cologne 2021, University of Bremen 2021, Humboldt Institute for Internet and Society 2021, University of British Columbia 2022.

AI technologies automate ever more complex tasks and promise new efficiencies for firms to provide new market offerings and grow. Economists argue that complementarities from AI innovations have not diffused widely enough to yield higher productivity yet though. We examine how firm revenue scales with labor for revenue-per-employee (RPE) and is moderated by firm-level AI investment. We compare AI start-ups, in which AI provides a competitive advantage, with digital platform and service start-ups. We use propensity score matching (PSM) to explain the scaling of start-ups and find evidence for sublinear scaling intensity for revenue as a function of labor. Surprisingly, our study suggests similar scaling intensities between AI and service start-ups, while platform start-ups produce higher scaling intensities. We show that an increase in employee counts is associated with major increases in revenue for platform start-ups, while increases were modest for service and AI start-ups. We also consider AI-enabled service start-ups that incorporate both service and AI-based business models and AI-enabled platform start-ups that combine AI and platform business models. AI-enabled service start-ups have a scaling intensity between service and AI start-ups, so they may not yet have achieved scaling benefits because AI adoption requires manual work from human experts. AI-enabled platform start-ups, in contrast, have a higher scaling intensity. Our study provides new perspectives on the role of AI as an emerging technology resource that supports economies of scale and scope for start-ups. 

On the Heterogeneity of Startup Tech Stacks

Schulte-Althoff, Matthias, Kai Schewina, Gene Moo Lee, Daniel Fuerstenau. “On the Heterogeneity of Startup Tech Stacks”. Working Paper [HICSS version]

  • Presented in HICSS 2020 (Maui, HI)
  • Previous title: On the Heterogeneity of Digital Infrastructure in Entrepreneurial Ecosystems

Digital infrastructure is the backbone on which digital startups realize business opportunities, and the homogeneity or heterogeneity of the technological base can have significant downstream impacts on business risks, inflexibilities, and growth barriers. On the nexus of digital entrepreneurship and infrastructure studies, we suggest a conception of startup digital infrastructure as organized in tech stacks; tech stacks contain individual technological elements that are combined in a single startup, while the way this is done will be inspired by shared templates within the ecosystem. Given that there is limited understanding of the heterogeneity (or homogeneity) of startup tech stacks, we use public registry datasets from StackShare and Crunchbase to identify common tech stacks of startups. Through our analysis, we identify ten commonly used startup tech stacks, which we use to measure and analyze the heterogeneity of startup tech stacks and its antecedents. OLS regression analysis shows that a startup’s technologies’ interrelatedness, its age, and investor funding are associated with the heterogeneity of startup tech stacks. The overall analysis suggests that while startups may make individual choices regarding technology usage, there could be underlying commonalities and imprinting effects across startups, exposing them to common risks in terms of their digital infrastructures. This could pose important implications for startups, investors, and society at large

Toward a Better Measure of Business Proximity: Topic Modeling for Industry Intelligence (MISQ 2016)

Shi, Zhan, Gene Moo Lee, Andrew B. Whinston (2016) Toward a Better Measure of Business Proximity: Topic Modeling for Industry IntelligenceMIS Quarterly 40(4), pp. 1035-1056.

In this article, we propose a new data-analytic approach to measure firms’ dyadic business proximity. Specifically, our method analyzes the unstructured texts that describe firms’ businesses using the statistical learning technique of topic modeling, and constructs a novel business proximity measure based on the output. When compared with existent methods, our approach is scalable for large datasets and provides finer granularity on quantifying firms’ positions in the spaces of product, market, and technology. We then validate our business proximity measure in the context of industry intelligence and show the measure’s effectiveness in an empirical application of analyzing mergers and acquisitions in the U.S. high technology industry. Based on the research, we also build a cloud-based information system to facilitate competitive intelligence on the high technology industry.