Digital new ventures: Assessing the benefits of digitalization in entrepreneurship
New ventures must rigorously manage their resources because they suffer from the liabilities of newness and smallness. Digitalization, traditionally associated with resource savings, higher operational efficiency and more flexibility, implies great benefits for new ventures; however, this effect has not been empirically proven. Implementing the resource-based view, this article uses a survey with 102 new ventures to investigate how new ventures benefit from digitalization. We clustered the new ventures in three groups according to their degree of digitalization (low, medium or high) and conducted an analysis of variance to compare the benefits of digitalization among these groups. Our results show that a higher degree of digitalization in new ventures does not result in direct resource savings such as decreased human capital or office space needed; rather, it results in indirect savings through increased operational efficiency. It also leads to considerably greater market flexibility. Our findings assist founder and founder support initiatives in evaluating the necessity of investing in digitalization given the benefits realized.
Copyright (c) 2020 Anna Frieda Rosin, Dorian Proksch, Stephan Stubner, Andreas Pinkwart
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