Document Type

Dissertation

Degree

Doctor of Business Administration

Major

Business Administration

Date of Defense

8-22-2023

Graduate Advisor

Bindu Arya

Committee

Vivek Singh

Yiuman Tse

Abstract

Our study aims to understand the choices managers working for subscription-based digital ventures must make at arguably the most critical juncture of their firm’s lifecycle. With few slack resources to repair mistakes, managers at these scaling firms must make decisions that are larger in scope and scale than in the start-up phase. Tradeoffs are often required as decision-makers face choices such as investing more resources in sales and marketing to drive growth or in product development to improve quality and add new products or features. In many instances, the question is whether to forego some growth opportunities to maximize profitability or pursue growth even if the result is profit losses. Prioritization must be given to a few limited resources while consciously allowing others to remain underfunded. Further complicating matters, these initial investments are often inefficient. For example, a new sales team does not instantly create value. Managers making poor choices with minimal financial slack heighten a scaling firm's risk of setback or failure. Using resource orchestration as the theoretical framework, we conduct a panel analysis over a six-year period and discuss the empirical implications of the resource configuration strategies managers can implement to positively impact the firm valuation of scaling digital ventures. We find that managers who navigate the tradeoff between value creation and value capture in a way that meets the rule of 40, while also delivering future growth that includes a mix of foreign sales with a business-to-business revenue models will significantly impact firm value.

Download

Share

COinS