From digitalized start-up to scale-up: Opening the black box of scaling in digitalized firms towards a scaling process framework

Abstract

While there is some recent empirical research on scale-ups, how digitalized start-ups transition to scale-up remains largely unexplored. Our research furthers our understanding of digitalized scale-ups and their growth process by examining how digitalized start-ups transform during scaling. We focus on internal workings of digitalized scale-ups and the transformation therein distinct from the firms' start-up phase. Drawing on firm growth literature, we use a qualitative methodology consisting of in-depth, semi-structured interviews with digitalized scale-up founders, finding commonality in their scaling process. We find scaling in digitalized firms is a complex mix of related internal activities, priorities, and trade-offs in pursuit of scaling process goals. Four priorities, goals, and related tensions relevant to their scaling process emerge from our analysis. We also find balancing tensions to optimize trade-offs require dynamic capabilities during scaling in digitalized firms. We conclude that although their growth patterns may be heterogeneous, digitalized scale-ups have commonality in their scaling process. The study furthers our understanding of the firm growth process and nascent literature specific to scaling digitalized firms, contributing towards a scaling process framework for digitalized scale-ups. We uncover opportunities to further develop theory, sharpening it with greater operative insight based on today's digitalized scale-ups.

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