The effects of the COVID-19 crisis on startups' performance: the role of resilience

Abstract

PurposeThis paper aims to evaluate the impacts of the COVID-19 crisis on startups performance and the moderating effects played by several resilience-related startup characteristics during times of crisis.Design/methodology/approachTo achieve this, 94 Brazil-based startups were surveyed, and multivariate data techniques (PLS-SEM) were applied.FindingsThe results show that despite the startups performance having been affected by the pandemic crisis, the response measures, when influenced by the resilience characteristics of these companies, moderated this effect. Furthermore, our findings suggest the future challenges to be faced by these organisations in the post-pandemic period.Research limitations/implicationsProposing a framework, our survey research contributes to the dynamic capabilities theory by showing that startups resilience is linked to the micro-foundations of sensing (e.g. innovation systems, resilience culture, pivoting practices, innovativeness products), seizing (e.g. leadership/focused skills, people development and selection, agility, clear vision of business process) and reconfiguring capabilities.Practical implicationsNot only for theory, but this paper also contributes insights and guidelines for business practice in the face of challenges arising from times of crisis. By demonstrating the positive effect of early response measures based on resilience, our findings provide genuine managerial input that can help managers, funders and decision-makers in these companies operations against turbulent crises early on, thereby supporting the traction phase and sustaining their performance.Originality/valuePrevious research has examined the effects of the COVID-19 crisis in several sectors and perspectives. However, this study is the first to empirically test and clarify how the resilience and singularities of these new business models based on innovation could react to the changes caused by the pandemic.