Customer development-product development dilemmas in startup firms: a qualitative investigation into founder's involvement

Entrepreneurship literature recognizes the founder’s involvement as a salient factor in determining the success of startups. Nevertheless, its role in conjunction with the marketing roles of founders has been relatively unexplored. Very little is known about how founder’s involvement in marketing tasks (i.e. developing products, sales and customers) helps attain success in early startups. To fill this knowledge gap, this study aims to qualitatively investigate the founder’s involvement under three vital functional areas (i.e. sales, customer development and product development) and also explain their entwined nature of the relationship as the early-stage startups grow to become a scalable businesses.

This study used purposive sampling for conducting in-depth interviews with 11 startup founders in the midwestern city of the USA. A constant comparative method was used to code the interview transcripts, while juxtaposing them with extant literature.

Using three levels of axial coding, this study identified 32 descriptive codes, 11 aggregate codes and 2 interpretive codes. Following this, the authors present five propositions that illustrate the relationship between founders’ involvement, customer development, product development and sales.

This study offers guidelines to founders on how they could generate initial sales, identify early customers and build and sustain mutually beneficial relationships with them.

This study contributes to the extant literature on entrepreneurship and innovation literature. It presents motivation and potential processes, including systematic activities performed by founders in generating sales in conjunction with customer development and product development, thereby making a novel contribution.