Purpose: The objective of this study is to investigate the uses of performance measures in startup firms including perceived importance and performance of those measures. Design/methodology/approach: The survey method is used in this study. Data were collected from founders/CEOs/managers of 110 startups in Thailand. The correlation analysis and ANOVA techniques are used as the analysis tool in this study. Findings: The results show that there is a positive relationship between the perceived importance and the performance of each metric. However, no significant differences are found in the importance and performance of each metric among the various stages of startups. Research limitations/implications: Because there are so few startups compared to large corporations, the sample size of this study is relatively small, which is a limitation for some statistical tests. Practical implications: Startup should measure and monitor the correct metrics in a particular stage, instead of trying to perform well in all areas, which will lead them to lose focus, and possibly even fail. Results obtained from this study will aid startups in properly monitoring and managing their performance. Originality/value: Unlike large corporations, the performance measures used by startups vary, and depend on a startup’s stage and type. Due to the fact that there are much fewer startups than large corporations, there are limited number of studies in this area. This research is among the first studies that try to investigate the uses of performance measure for this new type of organizations.

Introduction

A startup is the pursuit of an opportunity without currently controlled resources (Stevenson et al., 1994), and includes several definitions. Blank and Dorf (2012) define a startup as a temporary organization in search of a scalable, repeatable, and profitable business model. Alternatively, Ripsas and Troger (2014) define a startup as a young company, less than 10 years old, with an innovative business model and/or innovative technologies, and that demonstrates significant growth in the number of employees and/or in turnover. Startups are the result of entrepreneurial activity (Ripsas et al., 2015). Modern startups do more than just seize opportunities, because they also create opportunities themselves (Stevenson et al., 1994). Entrepreneurship can be defined as the process of developing an innovative and value-creating business model, starting and leading a company to serve customers and users with new products or services, and changing the way companies and people work and live (Faltin and Ripsas, 2011). Startups also needs innovation in order to survive. Business model innovation that requires effective management of the intellectual capital of a startup can also be a key to success since it can unleash value creation from the company (Elia et al., 2017). Startups differ from large corporations. Each possesses what the other lacks. For example, corporations have resources, scale, power, and the processes needed to efficiently operate a proven business model. Conversely, a startup has none of these, but typically has promising ideas, organizational agility, the willingness to take risks, and aspirations of rapid growth (Weiblen and Chesbrough, 2015). The other difference between startups and large corporations is that for startups, there will be unused capacity in the earlier stages of the firm when the funding is usually tight. Although unused capacities are generally not desirable, firms build it to accommodate uncertainty and plan for potential growth (Balanchandran et al., 2007).