Choosing Startups as Suppliers: A Supplier Selection Archetypes Typology

Abstract

Recent research demonstrates the value of examining collaborations between established organizations and startups via the lens of the buyer–supplier relationship. However, enterprises must first find, analyze, and select potential startups as suppliers before they can exploit startups' resources and talents in a buyer–supplier relationship. Due to the fact that earlier research has focused exclusively on how purchasing firms select established firms as suppliers, it is unknown which processes, tools, or organizational approaches purchasing organizations employ when selecting startup firms as suppliers. These suppliers are qualitatively distinct in that they lack organizational structure, financial resources, and operational competencies, offering a substantial risk to purchasing organizations. This inductive, qualitative case study research elicits data from twenty established purchasing firms and examines how they choose startup suppliers. We begin by identifying five design motifs that differentiate purchasing firms' selection procedures. We create a typology of three supplier selection paradigms based on these themes. The findings suggest that enterprises who are ready and able to adjust their selection technique to startups should exhibit a higher level of selection performance, implying a greater likelihood of selecting acceptable startups as suppliers. The findings contribute to the literature on supplier selection and shed light on the burgeoning sector of new venture suppliers.