The startups of 14 educational-software companies are investigated from three different perspectives: entrepreneurial, organizational, and ecological. The performance and stages of development of the new firms are viewed from each perspective. The entrepreneurial perspective concentrates on the characteristics and background of the founding individual. The organizational perspective looks at the planning and initial development processes of the firms. The ecological perspective uses the population of firms as a level of analysis and is concerned with the success of the industry as a whole. These three perspectives each contribute significantly to the designing of startups of new organizations.

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Entrepreneurial and established firms need different contracting strategies because they operate in different environments. Established firms operate in an environment of economic equilibrium, whereas entrepreneurial firms operate in an environment of economic disequilibrium. A general contracting model is developed that takes into account risk, environmental context, governance structure, safeguards, transaction costs, and transaction justice. The model is used to develop hypotheses about how entrepreneurial and established firms’ contracting strategies differ and how contracting strategies lead to firm success or failure.