This paper focuses on how newly established technology-based start-up companies become part of the business landscape. In more detail, the aim of the paper is to analyse how a start-up becomes embedded through its networking behaviours in a business network. To approach this phenomenon, the theoretical frame of reference is based on the industrial network approach to industrial markets separating developing, producing and using settings. The business network settings are combined with networking behaviours consisting of both strong and weak ties. Importantly, for a start-up to become embedded through networking, resources of the start-up need to be combined with resources in the three business network settings. The paper relies on a case study methodology focusing on a start-up, founded at a technical university in Sweden, and its networking behaviours. The paper concludes that networking behaviours relying on strong ties are crucial to resource combining. However, the analysis also shows the importance of networking behaviours of weak ties, acquiring information and interaction to sensing new opportunities. The paper ends with managerial implications for start-up managers, pinpointing the need to work with both strong and weak ties as a platform to eventually become embedded in business networks.

Introduction

In the past decades, incubation of research ideas with the purpose of commercializing research and establishing university start-ups have become increasingly important (Aaboen, 2009; Baraldi & Havenvid, 2016; Lundqvist, 2014; Mian, 1997; Mian, Lamine, & Fayolle, 2016). University start-ups are created when students or employees at the university attain or develop new technology or intellectual property and turn it into a product or business concept to be commercialized (Borges & Jacques Filion, 2013; Shane, 2004). In this paper, our research interest lies in how technology based start-ups originating from the university become part of and thus embedded in business networks. Previous studies of the establishment and development of start-ups show that interaction with different actors and networks have a huge impact (Elfring & Hulsink, 2007; Hallen, 2008). For example, university incubators, being organizations that provide new firms with resources or services (Aaboen, 2009; Mian, 1997). Other aspects include the personal networks of the entrepreneurs (Bhidé, ۱۹۹۹; Hite & Hesterly, 2001), where the entrepreneurs’ network are seen as a starting point for the emerging companies’ initial network. Studies also show that it is not only personal relationships that are important when establishing a new firm. Developing relationships with customers and learning in interaction with customers, as part of product development, has been recognized as an important part of becoming an established firm (Aaboen, Dubois, & Lind, 2011; Blank, 2013). In a study of 101 failed start-ups, 42% of the start-ups highlighted a lack of customers as a reason for failure while 29% cited a lack of money.