Comparison of Applicability of Startup Life Cycle Theories Based on Natural Language Processing

ABSTRACT

In the economies of Eastern and Central Europe, startups are expected to become the engine of economic development. Based on interviews with the founders, we examine the extent to which startup life cycle theories (SLCT) can be synthesized and what different or identical narrative conceptual spaces can be drawn. Based on our natural language processing results, it can be concluded that SLCTs cannot be clearly synthesized in the case of semi-peripheral countries, as they draw different narrative spaces. SLCTs can adequately capture enterprises in the initial stages, but in the later stages, the practical applicability of the theories is reduced.

KEYWORDS:

• Startup
• life cycle
• natural language processing
• text mining

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. This is supported by the increase in the volume of venture capital investments from 2018 (Invest Europe 2019; Molnár and Jáki 2020).

2. This methodological direction can be found under several names in the literature: text mining, automated content analysis, automated text analysis and natural language processing.

3. We used OLS regression to examine the consistency of the different theories. In other words, the extent to which the same text is classified in the same or different life cycle states by the theories.

4. The lemmatization was performed with the Magyarlánc 3.0 java based program (Zsibrita, Vincze, and Farkas 2013).

5. The following software packages were used in our R analysis: Quanteda (Benoit et al. 2018), tidyverse (Wickham et al., 2019), igraph (Csardi and Nepusz 2006), xlsx (Dragulescu and Arendt 2020), readtext (Benoit and Obeng 2021), wordcloud (Fellows 2018), tm (Feinerer and Hornik 2020), forcats (Wickham 2021), performanceAnalytics (Peterson and Carl 2020), factoextra (Kassambara-Mundt, 2020), text2vec (Selivanov, Bickel, and Wang 2020).

The scripts created during the analysis are available in the GitHub repository of Márton Gosztonyi https://github.com/Goszmarton/StartupLC

6. For the analysis, the corpus was converted into a document term matrix, and then the stopwords were removed. The lemmaing of the corpus was carried out on the basis of the WordNet electronic lexical semantic database, in which the Hungarian language concepts are organized in a network. Concepts are represented by sets of synonyms (synsets), and the relationships between them are represented by semantic relations (hypernym, meronym, antonym, etc.); our lemmas are formed based on these. After that, we calculated the descriptive statistics, such as the average number of words, which was calculated based on the average absolute frequency of terms occurrences in each document.

7. As our results are based on Hungarian language. Thus, we decided to publish the figures in Hungarian, but in each case, we also provide the English equivalents of the words in the footnotes.

8. Figure 3: Lester: Létrejövetel (birth of a business), Siker (success), Túlélés (survival); Dufour et al.: Jövőalkotás (creating the future), JövőGond (reflection of the past), MúltRef (acting on the basis of the past), StartGond (thinking about the future).

9. Pre-Seed: tanul, ötlet, tesz, akar, látszik, hónap, kezd, szeret, pénz, kap, működik, idő, ember, rész, dolgozik, fontos, csinál, elkezd, próbál, év, lát, talál, megy, projekt, eleje, cég, koncert, zenei – learn, idea, do, want, seem, month, start, love, money, get, work, time, person, part, work, important, do, start, try, year, see, find, go, project, beginning, company, concert, musical

Seed: idő, hónap, segít, sikeres, biztos, munka, több, lát, ügyfél, alapító, szokja, dolgozik, cég, könyvelő, év, befektető, megy, csapat, csinál, ember, ad, jön, probléma érez, használ, szeret, üzlet, kap, kezd, nehéz, közös, cselekvés, pénz, akar, fejezet, következő, vállalkozás – time, month, help, successful, sure, work, more, see, customer, founder, used to, work, company, accountant, year, investor, go, team, do, man, give, come, feel problem, use, love, business, get, start, difficult, joint, action, money, want, chapter, next, venture

Series-A: kap, tart, ad, nap, nehéz, próbál, siker, jön, fontos, akar, cég, működik, megy, szint, cél, pénz, biztos, lét, csinál, dolgozik, tesz, idő, ember, év, csapat, segít, ötlet, startup, foglalkozik, kis, beszél, szeret, rész – get, hold, give, day, difficult, try, success, come, important, want, company, work, go, level, goal, money, sure, existence, do, work, do, time, person, year, team, helps, idea, startup, deals, small, talks, loves, part

Seires-B: terv, szám, pénzügy, reális, tanít, időszak, befektető, ad, nehéz, alap, kap, csomag, ember, partner, megy szint éves, cél, beszél, év, megy, csinál, dolgozik, siker, csapat, sikeres, következő, nehéz, vállalkozás, startup, cég, tét, működik, vesz, kezd, jön, szeret, fontos, épít. Szép, pozitív, kör – plan, number, finance, realistic, teach, period, investor, give, difficult, fund, get, package, man, partner, go level year, goal, talk, year, go, do, work, success, team, successful, next, difficult, business, startup, company, bet, works, buys, starts, comes, loves, important, builds. Nice, positive, round.

10. Creation: app, elkezd, csapat, akar, tesz, szeret, lát, jön, év, pénz, dolgozik, megy, hónap, tanul, ember, cég, csinál, kezd, működik, próbál, ötlet, idő, nehéz, rész, ad, talál, eleje, feladat – app, start, team, want, do, love, see, come, year, money, work, go, month, learn, person, company, do, start, work, try, idea, time, difficult, part, gives, finds, beginning, task

Success: rész, év, áll, hónap, kap, konkrét, vesz, cél, pénz, megy, működik, befektető, szeret, lát, idő, ad, befektetés, munka, siker, dolgozik, cég, startup, csinál, nap, tesz, akar, probléma, csapat, ember, bizalom, valós, méret, hoz, foglalkozik, fontos, próbál, jön, kezd, érez, szint, ügyfél, több, döntés, egyszerű, tart – part, year, stand, month, get, concrete, buy, goal, money, go, work, investor, love, see, time, give, investment, work, success, work, company, startup, do, day, do, want, problem, team, person, trust, real, size, bring, deal with, important, try, come, start, feel, level, customer, more, decision, simple, hold

Survival: nehéz, siker, elér, idő, befektető, ügyfél, idő, fontos, sikeres, cél, cég, megy, működik, rendszer, nehéz, startup, beszél, év, dolgozik, piac, csomag, akar, csinál, szint, jön, kezd, ember, szeret, partner, csapat, következő, vállalkozás, ad, vesz, rész, kap – difficult, success, achieve, time, investor, customer, time, important, successful, goal, company, go, work, system, difficult, startup, talk, year, work, market, package, want, do, level, comes, starts, person, loves, partner, team, next, business, gives, buys, part, gets.

11. Creating the future: app, csapat, segít, akar, elkezd, tesz, zenekar, szeret, lát, pénz, jön, év, ember, cég, csinál, dolgozik, megy, hónap, használ, működik, próbál, ötlet, kap, idő, nehéz, kezd, rész, ad, kis, talál, eleje, feladat – app, team, help, want, start, do, band, love, see, money, come, year, person, company, do, work, go, month, use, work, try, idea, get, time, difficult, start, part, give, small, find, beginning, task

Referring tot he past: csinál, siker, megy, dolgozik, csapat, idő, cég, jön, startup, lát, ügyfél, fontos, év, működik, szeret, belekezdés, pénz, cél, ad, akar, szint, probléma – do, success, go, work, team, time, company, come, startup, see, client, important, year, work, love, start, money, goal, give, want, level, problem

Strategic Thinking: vízió, közös, kollektív, cél, egyén, döntés, kultúra, különböző, jövőkép, fajta, egyén, pont, törzs, szempont, nehéz, szint, operatív, jelent, szeret, ember, lépés foglalkozik, kezd, rész, halad, következő, hisz, cég, megy, beszél, kap, képes, pénz, nap, áll, nincsen, forint, év, más, fontos – vision, joint, collective, goal, individual, decision, culture, different, vision, kind, individual, point, tribe, aspect, difficult, level, operative, mean, like, man, step deal, start, part, progress, next, believes, company, goes, speaks, gets, can, money, day, costs, no, forint, year, other, important

Strategic Thinking about the future: rész, partner, ötlet, tanul, tesz, szolgáltatás, csapat, piac, magyar, ember, dolgozik, jön időszak, ad, szeret, kezd, csinál, globális, lát, projekt, startup, cég, nehéz, megy, csomag, befektetés, szállít, hét, kap, alap, kis, szint, elmegy, hoz, megcsinál, elér, cél, befektető, nehéz, sikeres, vállalkozás – part, partner, idea, learn, do, service, team, market, Hungarian, man, work, coming period, give, love, start, do, global, see, project, startup, company, difficult, go, package, investment, deliver, week, get, base, small, level, go, bring, do, reach, goal, investor, difficult, successful, business.

Additional information

Funding

This work was supported by the Project no. TKP2021-NKTA-44 has been implemented with the support provided by the Ministry of Innovation and Technology of Hungary from the National Research, Development and Innovation Fund, financed under the TKP2021-NKTA funding scheme.

Notes on contributors

Márton Gosztonyi

Márton Gosztonyi, PhD, is a researcher at the Budapest Business School University of Applied Sciences. Throughout his career, he has conducted extensive applied empirical research to better understand the growth and transformation of different types of businesses within different industries, and to better understand the livelihoods and opportunity expansion practices of low-income households. Her methodological background is mixed research methodology, which includes participatory action research, social network analysis, PLS-SEM methodology, and artificial intelligence-based methods. In addition to his scientific work, he has been implementing social and economic development programs together with low-income families in disadvantaged settlements in Hungary for more than 10 years.

Judit Csákné Filep

Judit Csákné Filep is Director of Research at Budapest LAB Office for Entrepreneurship Development at Budapest Business School University of Applied Sciences. She earned the Ph.D. in Management and Organization Sciences from Corvinus University of Budapest. She has more than 10 years of experience in social research. She is an enthusiastic researcher of Hungarian family businesses and entrepreneurial ecosystem. She leads the Hungarian National Team of Global Entrepreneurship Monitor research project which carries out survey-based research on entrepreneurship and entrepreneurship ecosystems around the world. Her research interest includes: family businesses, family business governance, succession, start-ups, freelancers, entrepreneurial ecosystems and entrepreneurship education.

Száva Zsigmond-Heinczinger

Száva Zsigmond-Heinczinger is Associate Professor at Management Department of Budapest Business School University of Applied Sciences, whose educational activity focuses on Marketing, Entrepreneurship, Entrepreneurial Development and Service management and marketing. She earned the Ph.D. in Management and Organization Sciences from University of Miskolc. Her research areas included business development, business developmental mentoring, as well as entrepreneurial coping strategies. Since 2012 she is a certified Team Coach at Team Academy Budapest and member of Team Academy Learning Network.