Providing a Framework to Explain the Failure of Technological Start-ups in the Field of Information Technology

Information technology startups are one of the requirements of the transition to the digital economy and economic growth of the country. These entities have a high failure rate due to uncertainties and risks in their development path. The lack of financial and operational records makes it difficult for supporters to make decisions and makes them reluctant. Considering the high rate of changes and the industry’s distinctive conditions and need for a model or framework to explain the causes of failure, this study’s purpose is to present a framework based on the factors affecting failure in order to help the founders and supporters to take appropriate decisions and actions. This study with a qualitative-quantitative mixed approach was done by gathering a relatively comprehensive set including 96 failure factors from the research literature, surveying 17 Delphi panel experts, classifying 81 failure factors approved by experts into twelve components and three dimensions and confirming 79 framework factors using Structural Equation Modeling method with Smart PLS Software. The results show the significance and impact of the business model, organizational factors, and IT startup ecosystem on failure. From the internal aspect, the personality characteristics and capabilities of the founders and from the business model aspect, it is recommended to pay attention to resources and income models. From an environmental point of view, it is emphasized on the importance of developing a single and coherent program for developing various dimensions and interactions of ecosystem components in order to coordinate various institutions and improve the business environment in the country.