Modeling and comparing a startup dynamics in the US and Egypt

In today's world startups are playing a key role to stimulate the economy, solve pressing problems and create fulfilling employment opportunities. However, the failure rate of startups in the US, one of the most prominent countries for encouraging startups, has been eight out of ten, a very high proportion. In this thesis, I explore this topic further with a hypothesis that company's sustained success depends not only on its financial growth, but also its dynamic ability to continuously fulfill its key stakeholders' needs and aspirations, and its ability to adapt to the specific conditions of its evolving ecosystem. This thesis provides a new holistic, system-driven conceptualization of a startup and its internal dynamics from human resources, product development, customers, and financials. I develop a System Dynamics model to represent these internal dynamics and simulate it over a period of five years to gain more insight about a startup behavior. In addition, I bring in the impact of exogenous factors from the entrepreneurial ecosystem as a "second layer" of variables in the entrepreneurial model. Through a process of validating and comparing the model to the literature, I identify five key internal leverage points for the sustained success of the modeled startup. Moreover, after performing a sensitivity analysis to the model, I identify the key exogenous leverage points in studied entrepreneurship ecosystems. I then compare and contrast the US and Egyptian case by embedding the modeled startup in the Egyptian ecosystem. A significant change of the behavior of the modeled startup with a much lower final Firm Valuation and Job Attractiveness is observed. I conclude with a discussion of the high leverage points in the Egyptian ecosystem based on this analysis, and recommendations for entrepreneurs and policy makers.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2013

Author dc:creator

• Saad, Fady M. (Fady Malak)

Advisor dc:contributor.advisor

• Donald Lessard and Oliver L. de Weck.

• Engineering Systems Division.
• System Design and Management Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/90701

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/90701