What Fuels Growth? A Comparative Analysis of the Scaling Intensity of AI Start-ups

Mattias Schulte-Althoff; Daniel Fürstenau; Gene Moo Lee; Hannes Rothe; Robert J. Kauffman

What Fuels Growth? A Comparative Analysis of the Scaling Intensity of AI Start-ups

Mattias Schulte-Althoff
, Daniel Fürstenau
, Gene Moo Lee
, Hannes Rothe
, Robert J. Kauffman

Department of Digitalization

Freie Universität Berlin
Sauder School of Business

Research output: Contribution to conference › Paper › Research › peer-review

Abstract

We examine how firm revenue scales with labor for revenue-per-employee (RPE) and is moderated by firm-level AI investment. We compare AI start-ups, in which AI provides a competitive advantage, with digital platforms and service start-ups. We use propensity score matching to explain the scaling of start-ups and find evidence for sublinear scaling intensity for revenue as a function of labor. Our study suggests similar scaling intensities between AI and service start-ups, while platform start-ups produce higher scaling intensities. We show that an increase in employee counts is associated with major revenue increases for platform start-ups, while increases were modest for service and AI start-ups.

Original language	English
Publication date	2022
Number of pages	10
Publication status	Published - 2022
Event	The 32nd Workshop on Information Technologies and Systems - Copenhagen Business School, Copenhagen, Denmark Duration: 14 Dec 2022 → 16 Dec 2022 Conference number: 32 https://witsconf.org/wits2022-program-schedule/

Workshop

Workshop	The 32nd Workshop on Information Technologies and Systems
Number	32
Location	Copenhagen Business School
Country/Territory	Denmark
City	Copenhagen
Period	14/12/2022 → 16/12/2022
Internet address	https://witsconf.org/wits2022-program-schedule/

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Cite this

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title = "What Fuels Growth? A Comparative Analysis of the Scaling Intensity of AI Start-ups",

abstract = "We examine how firm revenue scales with labor for revenue-per-employee (RPE) and is moderated by firm-level AI investment. We compare AI start-ups, in which AI provides a competitive advantage, with digital platforms and service start-ups. We use propensity score matching to explain the scaling of start-ups and find evidence for sublinear scaling intensity for revenue as a function of labor. Our study suggests similar scaling intensities between AI and service start-ups, while platform start-ups produce higher scaling intensities. We show that an increase in employee counts is associated with major revenue increases for platform start-ups, while increases were modest for service and AI start-ups.",

author = "Mattias Schulte-Althoff and Daniel F{\"u}rstenau and \{Moo Lee\}, Gene and Hannes Rothe and Kauffman, \{Robert J.\}",

year = "2022",

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note = "The 32nd Workshop on Information Technologies and Systems, WITS 2022 ; Conference date: 14-12-2022 Through 16-12-2022",

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TY - CONF

T1 - What Fuels Growth? A Comparative Analysis of the Scaling Intensity of AI Start-ups

AU - Schulte-Althoff, Mattias

AU - Fürstenau, Daniel

AU - Moo Lee, Gene

AU - Rothe, Hannes

AU - Kauffman, Robert J.

N1 - Conference code: 32

PY - 2022

Y1 - 2022

N2 - We examine how firm revenue scales with labor for revenue-per-employee (RPE) and is moderated by firm-level AI investment. We compare AI start-ups, in which AI provides a competitive advantage, with digital platforms and service start-ups. We use propensity score matching to explain the scaling of start-ups and find evidence for sublinear scaling intensity for revenue as a function of labor. Our study suggests similar scaling intensities between AI and service start-ups, while platform start-ups produce higher scaling intensities. We show that an increase in employee counts is associated with major revenue increases for platform start-ups, while increases were modest for service and AI start-ups.

AB - We examine how firm revenue scales with labor for revenue-per-employee (RPE) and is moderated by firm-level AI investment. We compare AI start-ups, in which AI provides a competitive advantage, with digital platforms and service start-ups. We use propensity score matching to explain the scaling of start-ups and find evidence for sublinear scaling intensity for revenue as a function of labor. Our study suggests similar scaling intensities between AI and service start-ups, while platform start-ups produce higher scaling intensities. We show that an increase in employee counts is associated with major revenue increases for platform start-ups, while increases were modest for service and AI start-ups.

M3 - Paper

T2 - The 32nd Workshop on Information Technologies and Systems

Y2 - 14 December 2022 through 16 December 2022

ER -