Research studies of 114 technology-based firms within the Greater Boston area indicate evolution over the first several years after founding toward: (a) more product-oriented businesses, away from consulting and R&D contracting; and (b) increased orientation of the founders to sales and marketing, with lessened emphasis on engineering. Evolution toward market-orientation is manifested in many ways. The use of direct sales forces as well as sales representatives both grow over time, as does the adoption of more formal mechanisms such as marketing departments, sales forecasting and analyses of potential markets. Greater orientation toward marketing in all its dimensions is especially true for multi-founder firms, the single founder company being slower to evolve in the characteristics cited.
EVOLVING TOWARD PRODUCT AND MARKET-ORIENTATION: THE EARLY YEARS OF TECHNOLOGY-BASED FIRMSPeople, technology and/or an idea for a product or service, and money enable a technical enterprise to get formally initiated. But what do the founders do in getting underway? And how do their companies change during the first several years of existence? While research on technology-based enterprises has increased significantly, especially in recent years, most studies (not cited here) have focused upon characteristics of the entrepreneurs, the venture capital financing of these firms, some elements of their strategies, or their overall success and failure. Few research projects have focused upon aspects of change during the early life of these new technology-based firms. Yet it is safe to assume that evolution of both the founders and their firms may be necessary for companies to benefit from experiential learning and to adapt to environmental changes in technologies and markets. This article seeks to add empirically to the evidences of change during the early years of technology-based companies. How much occurs and in what ways? Can prospective entrepreneurs learn from their predecessors any clues for more effective launch and development of their companies?
THE RELEVANT LITERATUREResearchers have long been interested in how and why organizations change over their life cycles of birth, growth, maturation and death. And yet, in their synopsis volume, The Organizational Life Cycle, Kimberly & Miles [9] decry the absence of "the dynamic quality of organizational life ... from most research and writing in the area." (p. 3) Quinn & Cameron [11] hypothesize four distinct phases, beginning with "an entrepreneurial stage characterized by innovation, creativity, and the marshalling of resources sufficient to survive." In an excellent identification of eighteen alternative "stage models" to depict the evolution of complex phenomena, especially in organization and management theory, Kazanjian [7] provides further specifications that should facilitate concrete empirical research. Two studies that postulate organizational life cycle theories of the firm have attempted to relate psychological characteristics of entrepreneurs to the adapta...