Supplying entrepreneurial ventures: lessons from information technology companies

Abstract

As market valuation shifts from earnings toward growth potential, entrepreneurial companies have become a more important part of a contract manufacturer’s customer portfolio. As a contract manufacturer emphasizes small, potentially fast‐growing companies, the risk of customer failure increases. However, the opportunity cost of missing a possible star customer justifies exposing the contract manufacturer to considerable risk that the entrepreneurial venture will fail. Explores characteristics of the ideal entrepreneurial supply chain from the viewpoint of contract manufacturers interested in doing business with startups. Emphasis is placed on a customer selection process and on nurturing the high‐risk startup customers. By choosing to do business with startups, but providing nurturing processes, the contract manufacturer simultaneously reduces the risks of missed opportunities and failed startup ventures.

Citation

Bullington, K.E. and Mullane, J.V. (2001), "Supplying entrepreneurial ventures: lessons from information technology companies", Management Decision, Vol. 39 No. 1, pp. 57-63. https://doi.org/10.1108/EUM0000000005407