Purpose Startups play a significant role in improving societies. This paper concentrates on the concept of “startups” and attempts to present a more comprehensive view of this phenomenon. Also, the focus of this paper is on investigating enterprising communities and the startup ecosystem in Iran. Design/methodology/approach The existing literature is carefully reviewed, definition and views are explored and the story of this phenomenon is told from the formation to the exit stage. The author elaborates the existing stages and challenges of startups in Iran. To do so, 65 tech startup founders are interviewed. Semi-structured interviews (SI) were based on previous studies mentioning the lifecycle of the startups, and were fully recorded. Moreover, secondary sources of data (SS) were used to support the findings. Findings The paper classifies the extant theories of startups in two levels, i.e. macro level, and micro and meso levels. Also, it defines some steps for the formation of startups and studies the Iranian startup ecosystem. Last but not the least the paper contributes to the startup ecosystem of Iran which is changing disruptively, especially in the last couple of years. Research limitations/implications Findings of this research shed light on the existing ecosystem of startups in Iran, which is rarely studied in previous research. Lack of enough evidence in the existing literature of startup ecosystem in Iran was the most significant limitation of the research which increased the need for more investigation and elaboration. Originality/value The paper contributes to understanding the startup ecosystem in Iran, and the challenges.

1. The enterprising communities
and startup ecosystem in Iran
Reference: Salamzadeh, A., & Kawamorita Kesim, H. (2017). The enterprising
communities and startup ecosystem in Iran. Journal of Enterprising
Communities, 11(4), 456-479. https://doi.org/10.1108/JEC-07-2015-0036

2. Structure of the presentation
Startups: definitions and views
Theoretical background
Stages of startup evolution
Research methodology
Startup ecosystem in Iran
Findings

3. Startups: definitions and views
A startup company is considered as an early stage in creating a new
venture or organization.
 A journey from conception to birth (Evers, 2003)
 startup (Vesper, 1990; Van de Ven and Poole, 1995)
 preorganization (Katz and Gartner, 1988; Hansen, 1991)
 organization in-vitro (Hansen and Wortman, 1989)
 prelaunch (McMullan and Long, 1990)
 gestation (Reynolds and Miller, 1992)
 entry (Lumpkin and Dess, 1996)

4. Startups: definitions and views
Avnimelech and Teubal (2006) define startups as young, high-tech companies
whose main activity is to deal with a new venture idea up to the initial sales
stage, which usually takes between 1 and 5 years.
To some scholars, startups are ventures that pursue opportunities from the
moment the business idea is first discovered (Oviatt et al., 1995; Dominguinhos,
2002; Wakkee, 2004; Englis et al., 2007).
Moogk (2012) considers them as organizations that develop new products under
conditions of extreme uncertainty (Sommer et al., 2009).
Bastié et al. (2013) argue that startups are the setting up of “new means of
production”.
Blank, S. (2017) mentions that a startup is a temporary organization in search of a
scalable, repeatable, profitable business model.

5. Theoretical background
 Macro level
e.g. Schumpeter’s theory (1934), population ecology (Hannan and
Freeman, 1977).
 Meso and micro levels
e.g. organizational views (Gartner, 1985; Katz and Gartner, 1988),
dimensional views (Van De Ven et al., 1984; Vesper, 1990; Lim et al.,
2008), process views (Bhaves, 1994; Veciana, 1988; Deakins and
Whittam, 2000; Núñez, 2007; Serarols, 2008), other views (Samuelsson
and Davidsson, 2009).

6. Stages of startup evolution
The formation stage
The challenges
The exit stage

7. Stages of startup evolution
i. The formation stage
At this stage, startup founders should:
gain a preliminary understanding of the critical legal, tax and interpersonal issues
unique to startup companies
 optimize the flexibility of the startup with entity selection and special organizing
documents
tailor the operating agreement provisions
 consult with experts/mentors regarding complicated founding and funding
matters
determine the target market segment(s)
write detailed business and marketing plans
handle the human resources management
think about the exit strategies, etc.

8. Stages of startup evolution
ii. The challenges
Financial challenges
Human resource
management
challenges
Support measures
and mechanisms
Other challenges

9. Stages of startup evolution
iii. The exit stage
Survival <=> Bankruptcy
Merger
Acquisition
Strategic alliances/partnerships
Venture capital funds
IPO

10. Research methodology
Research design: qualitative
Literature review+ Semi-structured interviews (SI)+ Secondary sources of data (SS)
Research population and sampling technique:
A sample of 65 tech startups, which were founded in last three years, used support measures and pursued a successful exit strategy (purposive
snowball sampling, until saturation or redundancy was reached). The startups were located in Tehran, Isfahan, Mashhad and Tabriz.
Validity and reliability:
 Credibility (internal validity) - refers to the believability and trustworthiness of the findings. Triangulation.
 Transferability (external validity)- refers to the degree that the findings of the research can be transferred to other contexts by the readers.
Thoroughly described the context of the research to assist the reader in being able to generalize the findings and apply them appropriately.
 Dependability (reliability)- refers to the consistency with which the results could be repeated and result in similar findings. Research
protocol+ database
 Confirmability - A measure of the objectivity used in evaluating the results, describes how well the research findings are supported by the
actual data collected when examined by other researchers. Findings are corroborated or confirmed by other experts who examined the
data, and then no inappropriate biases impacted the data analysis.
Data analysis technique: Coding (Strauss and Corbin, 1990)
Data analysis software: Atlas.ti

11. Startup ecosystem in Iran
The country is facing higher rates of opportunity-based instead of
necessity-based entrepreneurial activities (GEM report, 2014). This
shows a high potential for change through startup activities, which
triggered higher participation of women especially, and sheer
volumes of teams in startup weekends.
 Before 2000: limited evidence of the emergence of new ventures in
Iran
 In 2000s: the Iranian government played a paramount role in
improving the entrepreneurship and startup ecosystem.
After 2010: the society itself made significant efforts to improve
startup ecosystem.

12. Startup ecosystem in Iran
In 2014, TechCrunch published a report titled “The Next Tech Startup
Ecosystem to Emerge-Iran”.
In 2015, Bloomberg writes an article titled “Startups Surge as Iranian
Tech Finds Silver Lining to Sanctions”
 Iranian startups held a large startup event in Berlin in 2015.
 brain gain statistics, foreign direct investments, emergence of
accelerators, inviting successful startup founders and such reports
show the thriving trends in Iranian startup ecosystem.

13. Findings
i. Startup stages
Ideation, opportunity (venture idea) recognition
Shaping the entrepreneurial intention
Preparation
Networking
Entry
Value creation
Exit

14. Findings
i. Startup stages- Ideation, opportunity (venture idea) recognition
Two different views:
 entrepreneurial opportunity recognition (Shane and Venkataraman, 2000)
 new venture idea (Davidsson and Tonelli, 2013).
There were three main approaches in this stage.
 First, a number of interviewees mentioned that they started their business based on a
specific idea, need or opportunity (21.5 per cent)
 Some mentioned that they started a business and their new venture idea shaped after
they initiated the startup activities. It means that the main idea was changed and a new
idea came into existence (40 per cent)
 The rest of interviewees mentioned that there was a simultaneous coexistence of new
venture idea and their startup activities (38.5 per cent).

15. Findings
i. Startup stages- Shaping the entrepreneurial intention
As Krueger (1993) argues, “Entrepreneurial intention (EI) is defined as the
commitment to starting a new business”.
Interviewees mentioned that they intended to:
 make a substantial change in their lives (91 per cent), societies (69 per cent)
 handling their financial needs (66 per cent)
 making a wish come true (37 per cent)
 gaining respect in society (32 per cent) and
 other intentions (17 per cent).

16. Findings
i. Startup stages- Preparation
Indeed, starting a new venture/business/startup needs resource mobilization, creating
competency and activity organization (Ruef, 2005; Degeorge and Fayolle, 2013). We call these
three as “preparation”.
Resource mobilization:
applying for funding and financial assistance (89 per cent), listing the requirements and planning to
buy the required things (83 per cent), finding service/product providers (65 per cent), planning to
mobilize those resources (45 per cent), hiring new staff as team members (mostly as co-founders)
(32 per cent), etc. (11 per cent).
Creating competency:
startup founders dealt with registering their products and services (82 per cent), obtaining required
licenses, patents and permits to secure the intellectual property rights (39 per cent), finding
informal sources to support their innovations (32 per cent), etc. (6 per cent).
Organizing activities:
most of startups followed their founders’ knowledge and experience (95 per cent) along with
supports form the support mechanisms they were using (66 per cent), such as accelerators and
incubators. One could criticize lack of enough managerial insights in this stage.

17. Findings
i. Startup stages- Networking
To some scholars, networking is so critical in creating any startups (Vesper, 1990;
Larson and Starr, 1993; Forbes, 1999; Ramachandran and Ray, 2006). Networking
could be either formal or informal (Neck et al., 2004).
Interviewees mostly highlighted the importance of informal networking in new
venture creation process (91 per cent), while considering formal networking in a
lower level (42 per cent).
Also, they considered networking an important factor for financing (94 per cent),
supporting the idea (65 per cent), creating competency (45 per cent) and even
choosing a better exit strategy (39 per cent).

18. Findings
i. Startup stages- Entry
When it comes to entry, startups try to offer their products or services in a real
market.
Findings show that in this stage, the startups dealt with testing the products (97
per cent), registering a company and getting permits (100 per cent) and designing
innovative marketing campaigns and promotions (95 per cent).

19. Findings
i. Startup stages- Value creation
 To create value means to realize the intentions. It should be mentioned that
value could be either social or economic (Maase and Bossink, 2010; Salamzadeh
et al., 2015).
Many scholars highlighted the importance of this stage (Katz and Gartner, 1988;
Vesper, 1990; Bhaves, 1994; Deakins and Whittam, 2000).
Interviewees mentioned some different issues such as realization of their first
income (97 per cent), hiring first employees (80 per cent), serving society (42 per
cent) and reaching the break-even point (35 per cent).

20. Findings
i. Startup stages- Exit
 After creating value, startups consider different exit strategies. These strategies
are such as initial public offerings (IPOs), merger and acquisition (M&A),
partnerships or family business succession (DeTienne, 2010; Becker et al., 2015).
 Interviewees mentioned merger and acquisition (M&A) (63 per cent),
partnerships (22 per cent) and family business succession (15 per cent) as their
exit strategies. Surprisingly, none of the startups considered IPO due to legal
issues.

21. Findings
ii. Challenges of startups in Iran
lack of IPO possibilities
intense competition with other firms
lack of legal supports
securing intellectual property rights
lack of organizing skills
gap between technical and marketing teams
lack of enough capacity to respond to market demand

22. Findings
ii. Challenges of
startups in Iran

23. Thank you for your kind attention!
Reference: Salamzadeh, A., & Kawamorita Kesim, H. (2017). The enterprising communities and startup ecosystem
in Iran. Journal of Enterprising Communities, 11(4), 456-479. https://doi.org/10.1108/JEC-07-2015-0036