Innovation Alone Does Not Guarantee Financial Success
Contrary to popular belief, innovation does not always guarantee financial success. This is the conclusion of a recent study published in the International Journal of Entrepreneurial Behavior & Research, led by Colin Donaldson, Sascha Kraus, Andreas Kallmuenzer, and Cheng-Feng Cheng. By analyzing 128 startups incubated in Spain, the researchers identified combinations of relational and human factors that enable young companies to perform better, depending on their level of innovation.
The study reveals that financial performance does not solely depend on innovation, but also on social skills, relational capital, and the ability to mobilize resources. However, these factors vary depending on whether the startup is highly innovative or not.
For Highly Innovative Startups:
- Communication, persuasion, and influence skills are often decisive.
- Some succeed thanks to a vast network of contacts (relational builders), others by relying on their entrepreneurial environment (relational borrowers), or by combining network, social skills, and intelligent access to resources (social mobilizers).
For Less Innovative but Profitable Startups:
- The key lies in good resource management.
- Some succeed alone, with little network but a strong ability to optimize what they have (unique mobilizers). Others rely on their network, available resources, and ecosystem support (pragmatic hunters or ecosystem mobilizers).
What This Means for Ecosystem Actors
This study sends a clear message: there is no one-size-fits-all model for success. It's better to understand your startup's profile and focus on the right levers.
- Entrepreneurs must adapt their strategy: the most innovative should develop their relational skills, while the less innovative must learn to better mobilize and exploit their resources.
- Incubators and accelerators would benefit from offering targeted support based on the degree of innovation.
- Public decision-makers should design more differentiated financing mechanisms, as even modest startups can succeed if well-supported and well-equipped.
"Innovation alone is not enough. It's the right combinations of relationships, skills, and resources that make the difference," conclude the authors.
