The objective of the present study is to examine the strategizing of start-ups in a network context. The paper depicts start-up strategizing as an intertwined activity of identification and boundary-drawing. The questions of network identity and network boundaries become salient in times of disengagement by a primary customer or when there is a need for significant redirection of the business during what is referred to as a network identity crisis. The study emphasizes the viewpoint of an entrepreneur as strategist and builds on the concept of network identity to stress the socially structured individual cognition of who the organization is in light of its network connections. We study strategizing in four start-ups with different identity crises. By applying a grounded theory approach and Gioia methodology, the paper models the dynamics of restart strategizing in terms of its internal and external triggers and the choices when managing three identity-related contradictions. Furthermore, we characterize four alternative restart strategies connected to the identities and boundaries perceived by the entrepreneurs. By embracing the way start-up’s identity and its strategy evolve interdependently in relation to the network dynamics, the model contributes to our understanding of those strategizing activities whereby restart can occur.

Introduction

The network concept plays a key role in a number of seminal articles that deal with start-up creation and development (Aldrich & Zimmer, 1986; Birley, 1985; Keeble & Wilkinson, 1999; Uzzi, 1997). Later research also constantly notes the significance of networks for small firms (see Araujo & Easton, 1996; Hoang & Antoncic, 2003). Networks have been suggested to be more important than an individual’s characteristics for the development of start-ups. Still, deeper analyses of the network activities of start-ups are scarce (La Rocca, Ford, & Snehota, 2013). There are only a small number of studies that have contributed to our knowledge of the actual existence of start-ups in networks and their strategic activity within networks (Aaboen, Laage-Hellman, Lind, Öberg, & Shih, 2016). In the present study, we focus on the strategizing of start-ups within networks and use network identity as a lens to study the crises that start-ups face after their establishment. By strategizing we mean an ongoing effort that follows the routinized ways of both proactively making moves to find future direction for the development of the firm as well as reacting to changes in the network. Strategizing of a firm is intimately related to its identity in networks (Anderson, Håkansson, & Johanson, 1994; Huemer, 2004; Johanson & Mattsson, 1992). Identity is here understood as a sense of “who we are” as an organization (Albert & Whetten, 1985) embedded in organization’s practices and manifested in, but also changed by, organizational activities (“what we do”) (Gioia, Schultz, & Corley, 2000). Identity in network context captures a company through its connections with other companies with respect to how a company is perceived by others, and how a company perceives itself, and its position, based on its network connections (Anderson et al., 1994).