Opportunity identification and business performance of design startups in the first year of entrepreneurship

Abstract

In this study, we interviewed two founders of design startups and investigated the features of and motivations for their entrepreneurship. We explored their entrepreneurial opportunities, environments, and resources, and examined their business performance in the first year of entrepreneurship. The findings are summarized as follows: (1) Both founders earned a master's degree, received many design awards, and demonstrated excellent industrial design skills. In addition, they had many freelancing experiences, established their own regular clients, and created a network of partnerships with other organizations before establishing their companies. Therefore, they clearly identified entrepreneurial opportunities, the entrepreneurial risk was relatively low, and limited resources were invested. (2) It is likely that the design business environment has changed since 2011–2012 in Taiwan. Governmental promotion of cultural and creative industries (e.g., venture grants, counseling grants) accelerated the interviewees' decisions to design entrepreneurships. The proliferation of opportunities to sell and exhibit works through physical channels (e.g., offline design stores, cultural and creative industry parks around Taiwan) and virtual channels (e.g., online stores, crowdfunding sites) have substantially decreased the difficulties of selling self-brand designer products. (3) Both design startups developed self-brand products during the first year. Developing self-brand products contribute to the value of offered design services, not only improve the manufacturing capability of design startups but also increase the visibility of design startups to potential clients through physical and virtual exhibitions. (4) The government is a crucial supporter of design startups. Regarding the business performance of the two startups in the first year, 75% of the revenue was from design service fees, and over half of this income was from quasi-governmental corporations or government-related projects (e.g., development of websites and applications or curatorial planning), which provide higher, more stable profits.