"Think Small First": Growth Strategies for Scaleups to Overcome Challenges in their Growing up Phase

Illugi Torfason Hjaltalín

Student thesis: Master thesis


Firm growth has been receiving increased attention from researchers, practitioners and policy makers. Empirical studies repeatedly show that a relatively small proportion of firms generate most new jobs. These firms, belonging to all demographics, are most often referred to as high-growth firms (HGFs) or gazelles. How these firms are defined vary in the literature and have resulted in fragmented studies and incompatible results. However, extensive knowledge has been produced in the field of HGFs. Most firm growth research relies on supply-side arguments, consequently demand-side arguments are absent. In this master thesis the author uses an integrated approach to examine fast growing new technology ventures, so-called scaleups, and their different growth paths. To this end, a case study was conducted on two Copenhagen-based scaleups in the cloud-based software industry. The objective of this study is to apply an integrated conceptual framework to scaleups to explain their growth. The originality of the framework lies in the fact that it is contextual, where it considers the market and local characteristics and how those influence a firm’s growth. The value of the study is considerable. First, the findings build on and add to the knowledge base of HGF research and new technology venture growth, aggregating prior findings into a comprehensive and unified study. Second, the study has several implications for practice and policy. This study findings include but are not limited to, external factors, such as investors and alliance formation, and internal factors, including human capital of founders and choice of growth strategies, can contribute to the growth of scaleups. Additionally, contextual factors can be barriers to growth, such as limited access to skilled labor and financial capital as well as cross-border trade restrictions. Conversely, internationalization or penetrating new markets are seen as opportunities for growth. Lastly, to understand this complex topic the author viewed firm growth from multiple theoretical angles (Andersson, 2003). Thus, a variety of appropriate theories were used as underpinning for the thesis, such as resource-based contingency theory, dynamic capabilities and diffusion of innovation.

EducationsMSc in Business Administration and E-business, (Graduate Programme) Final Thesis
Publication date2018
Number of pages89
SupervisorsIoanna Constantiou