Early Stage Venture Strategy and the Survival of Nascent Entrepreneurial Firms: A Sand Cone Model Approach

Abstract

Early stage firms often face conflicting pressures on where and how to prioritize their efforts. In this paper, we aim to shed light on the benefits of different competitive priorities, using a sand cone model of operations strategy specifically applied to the context of early stage new ventures. In particular, we examine the relationship between strategy and the survival of these nascent entrepreneurial firms using data from the Panel Study of Entrepreneurial Dynamics II. We find that a competitive priority of serving customer needs is associated with a greater probability of survival in nascent ventures. Innovation and traditional marketing activities were not significantly related to survival. The paper concludes with implications for practitioners and future research.