Start-ups Scale-up in Upstate New York

Clarkson University Professor Christian Felzensztein, who holds the Reh Chair in Entrepreneurial Leadership at the Reh School of Business, is studying the strategies that lead to the success of start-ups in their scaling-up in upstate New York. He is doing so by conducting in-depth interviews with engineering and science start-up founders.

The study focuses on science and engineering-based start-ups, as these firms have the potential for growth and strategic importance in upstate NY, a region that is spawning sizable new tech and science companies and injecting new life into an area that has long been considered as part of the rust belt.

Professor Felzensztein’s study revealed that start-ups employ a combination of strategies to successfully scale-up. While previous international academic studies mostly identified the organizational factors such as leadership and team culture that foster scaling of small businesses, this study explores both the internal and external strategies that start-ups with high resource constraints employ to rapidly grow.

The study found that the start-ups build the scaling capacity in their human capital, organizational structure, decision making, operational processes, finance, business model, and business ownership. To foster the scaling process, the start-ups also develop strategies that target the business environment including competitors, recognizing scaling opportunities, and expanding the business in the local and international markets.

This is one of the first academic studies that explores the scaling-up strategies of start-ups with high resource constraints and uncertainties in upstate New York. The findings extend existing global knowledge on start-ups’ scaling and ask for the consideration of these externally focused factors of scaling small firms.

What are the practical implications?

Professor Felzensztein explains that start-up founders and entrepreneurs who are in the process or intend to start scaling their business can use the strategies that emerge from his study to make informed scaling-up decisions and develop effective strategies that guide their scaling process. By employing the scaling-up strategies, small business owners can improve the probability of their success in scaling-up their business.

Second, investors and venture capitalists who intend to invest in upstate New York can benefit from this study on the strategies that contribute to successful scaling start-ups in evaluating investment opportunities, identifying start-ups with growth and development potential, and providing strategic advice and support to the ventures they invest in.

Third, policy makers can use this study to enhance start-up founders’ knowledge and understanding of the scaling-up strategies, provide targeted advice and assist start-ups in overcoming the challenges and obstacles associated with the scaling process. Additionally, the study can inform the development of specific programs that create a conducive environment for the scaling-up and growth of start-ups.  

“Successful business scaling is a complex and multifaceted process that requires developing specific strategies that construct internal scaling capabilities and enable external opportunity exploitation,” Felzensztein concludes. “Upstate New York can offer both opportunities for new science and engineering start-ups in the scale-up process.”