Start-ups' Motives, Approaches, and Opportunities for Using Open Innovation

Abstract: Purpose – The existing literature of open innovation (OI) has focused mainly on large companies and few on SMEs, leaving start-ups with scarce analysis of the use of OI. This paper aims to close that gap and contribute to a better understanding of what drives start-ups to open for innovation, how they use it and comprehend what challenges and benefits OI brings to start-ups. Design/methodology/approach – This research uses a primarily qualitative methodology based on the analysis of 11 in-depth interviews with start-ups within WIN Water, a Swedish business network for the water sector. Also, an analysis of a self-completion questionnaire from 22 start-ups within the same network is used as an additional supportive data. Findings - The research suggests that OI literature for large companies and SMEs might not be fully transferable to start-ups. The thesis introduces the OI model in start-ups. On the one hand, the liability of newness influences the entrepreneur’s or manager’s decision making process to open for innovation as a survival strategy and address long-term business goals. On the other hand, it shapes the OI process turning it into opportunistic, informal and fully opened one. The research suggests that start-ups tend to use mainly non-pecuniary and outbound OI and analyses and discusses the reasons of this phenomenon. Originality/value – The study offers start-ups a deeper understanding of how to use OI in an effective way and guides the decision-making process to create OI strategies. It also helps OI networks to comprehend the fundamental role they play as intermediaries and meet the start-ups' needs when practicing OI.