Types of Startups
The development of a startup is determined by the entrepreneurial actions of its founders, and the associated entrepreneurial action theory accordingly describes the different goals, strategies, and measures of the founders for this development. The founders’ ambitions, which are a driving force behind entrepreneurial action, play a significant role in this context. Research shows that these ambitions determine the goals, strategies, and measures of the young company and, thus, the desired development from the founders’ perspective with the associated success. However, not every founder pursues the same ambitions in terms of content and form or always strives for the maximum. Based on three consecutive surveys (n = 1,985 startups), we use K-means cluster analysis to analyze three different dimensions of entrepreneurial ambition (growth, ownership, and cooperation) to examine their combined configuration. Based on this, we identified and double-checked four ambition groups with K-means cluster analysis and laid a foundation for a typology of startups based on the goals of their founders. Two types were identified that were already known in the literature and in practice: Unicorns and Zebras! But we were also able to discover two other types that have only been described rudimentarily in the literature and have not yet been proven empirically: Horses and Cows! The results have theoretical and practical implications for the founding and development of startups and a related focus on the founders’ ambitions, but also an associated broader consideration by potential investors.
Entrepreneurship
The Startup-Zoo
A Typology of Startups
Tobias Kollmann • Anna Pröpper
Full Titel
The Startup-Zoo: A Typology of Startups Based on the Ambitions of Their Founders
Journal
International Journal of Business and Economics Research
DOI
10.11648/j.ijber.20251402.11
Publication Date
2025-07-03
The article is available online here https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
or as a PDF here https://article.sciencepublishinggroup.com/pdf/j.ijber.20251402.11
Introduction
A central component of entrepreneurship is action, which occurs under uncertainty [1-4]. Entrepreneurial action is a goal-oriented and consistent initiative with which entrepreneurs create innovation [4-6]. Independent of background, circumstances, resources, and motives, entrepreneurs create something new in their own way [7, 1, 8, 4]. Therefore, they recognize and pursue opportunities [3]. The ability to make judgments and act rationally is fundamental for entrepreneurial action [9, 10]. Especially in the early phases, business success is a result of the founders’ “experience, judgments, and actions” [11], p. 1127. This theory is referred to as the “theory of entrepreneurial action” [4].
In the entrepreneurial process, entrepreneurs have wishes that transform into goals, actions, and performance [2]. For the unknown future, entrepreneurs develop visions [12, 4] of what they want their startup to look like in the future and what they want it to achieve [13, 14]. A vision in this context refers to a clear idea of what is to be achieved in the future based on the ambition(s) of the entrepreneur(s) and as a resulting development for the startup [15, 16]. Individuals with ambition aspire in all areas constantly for accomplishment and success [17]. This is especially true for individuals who are starting a business, and research indicates that ambition drives the corresponding entrepreneurship and sustains it simultaneously [18, 19].
Against this background, founders can pursue several ambitions simultaneously [39]. Combining multiple entrepreneurial ambitions e.g. [37, 38] with different strengths e.g. [35, 20] has the advantage of multi-dimensional rather than one-dimensional considerations. This allows founders to pursue multiple ambitions e.g. [23, 40] for the future of their startup at the same time, setting various goals that differ in content and strength [41]. Once multiple ambitions are set, founders can develop a detailed plan to achieve them [42]. If several ambitions are considered at the same time, a clustering of ambition types emerges. Specific startup types can then also be described on this basis.
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Background
Currently, there are individual classifications and type designations in the practice-oriented (and partly also theoretical) reporting on startups [47, 48], which also take into account the ambitions of the associated founders, but a theoretical basis for this or an overarching overall model cannot be found in the literature. This paper aims to fill this gap because, to the best of our knowledge, no reliable “startup type theory” exists, especially based on ambitions. The descriptions of so-called Unicorns and Zebras originate from the practice- orientated discussion. Although these terms appear more frequently in theoretical considerations, we have not found any empirical studies that would initially prove the existence of these startup types. Even if the descriptions from practice are initially comprehensibly explanatory, we believe that the theoretical and empirical basis for the proof is missing. Therefore, we first used a structure-discovering/explorative method for theoretical foundations, not a structure- testing method for an existing theory.
Therefore, we conducted a repeated cross-sectional study with a comprehensive survey of startup founders. In doing so, we designed and coordinated the surveys with our partner, the GSA, over three years. In particular, we developed the scientific scales independently based on our theoretical research and inserted them into the joint questionnaire. After that, we analyzed the data. We used a K-Means cluster analysis to classify startups by ambition types across several dimensions of entrepreneurial ambition. In this regard, various kinds of entrepreneurial ambitions could have been used, but three dimensions in particular are described in the literature as essential [35, 15, 40]: Growth, exit, and collaboration ambitions.
The different start-up types were then identified based on these three dimensions of ambition: Two types were identified that were already known in the literature and in practice: Unicorns and Zebras! But we were also able to discover two other types that have only been described rudimentarily in the literature and have not yet been proven empirically: Horses and Cows!
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Ambitions
In the field of entrepreneurship, founders pursue various ambitions such as growth- [35], exit- [40], cooperation- [15], innovation- [70, 34], social- [71], and sustainability-ambitions [72]. This study focuses on the three ambitions that we consider most relevant for a startup and its founders from its inception and that every startup should think about. Three of the most discussed manifestations in literature [73, 15, 23], which are of central importance for startups e.g. [74, 75], will be explained in further detail below and in Figure 1.
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Long- vs. Short-Term Growth
The ambition to grow is an essential and widespread desire of founders [39]. In the context of ambitious entrepreneurship, a founder with this ambition might be “someone who starts a new firm and expands it” [56], p. 139. Verheul and Van Mil [23] view business growth as a goal that is pursued individually by the entrepreneur. Overall, nearly every entrepreneur strives for growth; however, there are differences in terms of the length of the growth period [76].
On the one hand, entrepreneurs could prioritize building their startup rather slowly and sustainably over a long period of time [76, 77]. Moreover, extremely high growth is not always associated with a company’s profitability if, for example, the high investments in customer acquisition have not yet been matched by the related sales and profits [78]. The associated pressure on financial liquidity and stress is not wanted by every founder. Hence, entrepreneurs avoid too fast growth since they fear the potential loss of control and an increased workload as a result of growth [77]. However, the ambition of long-term growth has received little attention so far despite its importance [76].
Otherwise, other founders are not afraid of this possible lack of control and have the ambition to grow exponentially over a short period of time [79-86]. For example, high- growth-orientated ambitions are relevant in terms of market expansion, new technologies, and a strong commitment to the company’s success [38]. So-called “productive” entrepreneurs strive for rapid growth and global expansion of their businesses [80, 87, 88].
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Keep vs. Exit the Company
Ownership that entrepreneurs can regard as a goal can create a strong sense of connection to the company and it increases the likelihood of acting for its highest good [89, 90]. Most companies worldwide are so-called “family firms” as they are owned by one shareholder, who is usually the founder, and/or his family [91, 92]. Because of this psychological attachment to the company and the company-specific human capital, many owners seek to maintain their company [93, 94].
Another established ambition of founders is the pursuit of an exit [93, 97, 40]. DeTienne [98], p. 203 defines an exit as “the process by which the founders of privately held firms leave the firm they helped to create; thereby removing themselves, in varying degree, from the primary ownership and decision-making structure of the firm” and explains it as an essential part of the entrepreneurial process. Hence, entrepreneurial success is connected to exit aspirations [99]. Therefore, founders may seek an indication of success, as it may be the liquidation of financial investment and/or career decisions [40]. There are several ways to exit a company, which founders may strive for: First, one important stage in the development of a public company is the initial public offering (IPO), through which the company seeks to obtain additional capital [100]. Second, a management buy-out (MBO) implies the sale of the company to members of the existing management team. Third, a management buy-in (MBI) refers to the sale of the company to an external management team [101]. Fourth, mergers and acquisitions (M&A) involve the full or partial fusion of at least two companies [102].
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Cooperation vs. Competition
Both cooperation and competition are meaningful for economic development and the innovation process [103, 104]. Companies in this process can have either a more competitive or cooperative view of the market. Cooperation is defined as “firms jointly pursuing mutual interests and common benefits” [15], p. 3164. Companies may aim to collaborate and thereby gain innovation [105, 106], to add value [15], to expand profit [107], to save costs [108], or to spread possible risks [109].
In many sectors, companies are even forced to cooperate, for example, to gain access to resources for innovation [110, 15, 111]. However, if companies cooperate excessively, not enough value may be created for survival [15]. Traditionally, the market aims for competition [65]. Therefore, some founders pursue more competitive measures, being defined as “the pursuit of a market position by firms that offer comparable products to a targeted set of customers” [114], p. 3033 and thus “pursuing their own interests at the expense of others” [15], p. 3164. In doing so, companies with this ambition try to create value and outplay other companies [15, 115] or realize a relative cost advantage [107]. Also, because a successful company receives more attention [116], companies strive for competition. They may be aiming for a so-called “winner- takes-all market”, where the best-performing companies claim a very large proportion of the available profit for themselves. This leaves little for other competitors [117]. Also, since competitive behavior has been proven to bring success [15], there is the ambition for competition.
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Types
In the following, we analyze the profile of each cluster. In practice, we can already observe examples that seem to have achieved the ambitions of two clusters. The first cluster, with the ambitions of long-term linear increase in value, ownership, and cooperation, corresponds to the specifications of a Zebra [49, 50]. Simultaneously, the fourth cluster, with the ambitions of short-term exponential increase in value, exit, and competition, matches the specifications of a Unicorn, which Brandel et al. [49] and Shaw [50] have already outlined. Unicorns, which in practice have a valuation of at least $1 billion [44, 142], have such ambitions [49, 50].
In addition to these two types, Kollmann/Kleine-Stegemann [143] have found initial indications of two further clusters that can be located between Unicorns and Zebras: The Cows and Horses!
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Zebras
Zebras can be characterized by the variables long-term linear increase in value, ownership, and cooperation. Founders’ ambitions of Zebras are centered around long-term and sustainable growth. They have a long-term linear value enhancement perspective, a strong willingness to cooperate with competitors, and thus a strong market tolerance towards competitors. Zebras operate in “all-takes-it-all markets”, which implies that there are numerous shares in the market for many market participants. They focus very strongly on founder-related ownership and aim for an investor exit via management buy-in/management buy-out (MBO/MBI) or buyback (see Figure 2).
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Cows
Cows are located between Zebras and Unicorns. Founders of this startup type aim for medium-term and moderate growth and have a medium-term linear value growth perspective. Cows want to grow fast but may not be focused on such fast growth as Unicorns. Founders with Cow ambitions are cooperative thinkers. Thus, they have an open willingness to cooperate with competitors and have an open market tolerance towards competitors. They operate in “many-takes-it- all markets,” which means that there are many shares in the market for many market participants but fewer shares than in “all-takes-it-all markets.” Furthermore, they have a strong founder-related ownership orientation. A conceivable exit option for investors could be a secondary purchase or MBO/ MBI (see Figure 2).
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Horses
Horses can also be found between Zebras and Unicorns and are thus characteristically a mixture of both animals. Founders with Horse ambitions seek short-term and strong growth. Additionally, they strive for short-term exponential value growth. They are characterized by a certain willingness to cooperate with competitors and a certain market tolerance towards competitors. “Some-takes-it-all markets” are very interesting for them. In this type of market, only a few market participants survive and divide the market among themselves. Moreover, founders with Horse ambitions have a strong investor-related exit orientation. Investors can possibly strive for an exit via mergers and acquisitions (M&A) or a secondary purchase (see Figure 2).
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Unicorns
Founders with Unicorn ambitions are focused on short- term and very strong growth and, thus, short-term exponential value growth. At the same time, they have a competitive nature. Founders with Unicorn ambitions take high risks for market dominance and use the capital for fast growth. Hence, they have no willingness to cooperate with competitors and no market tolerance towards competitors. They operate in “winner-takes-it-all markets,” which means that high-performing companies claim a large share of the profit. They strive very strongly for an investor-related exit. Possible exit scenarios for investors are an initial public offering (IPO) and an M&A (see Figure 2).
https://www.sciencepublishinggroup.com/article/10.11648/j.ijber.20251402.11
Authors
Prof. Dr. Tobias Kollmann
Member of the Faculty of Computer Science, esp. Digital Business and Digital Entrepreneurship, University of Duisburg-Essen, Universitaetsstr. 9, 45141 Essen, Germany tobias.kollmann [[at]] uni-due.de
Prof. Kollmann has been working on scientific issues related to the Internet, Digital Business and E-Commerce since 1996. His research results have been published in international A-Journals such as Entrepreneurship Theory and Practice (ETP), Journal of Business Venturing (JBV), Strategic Entrepreneurship Journal (SEJ) and Journal of Management Information Systems (JMIS). According to FAZ, he was among the 100 most influential Economists in Germany in 2018, 2019 and 2021 with "weight in media, research and politics."
Anna Pröpper
Member of the Faculty of Computer Science, esp. Digital Business and Digital Entrepreneurship, University of Duisburg-Essen, Universitaetsstr. 9, 45141 Essen, Germany
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Cite the article (APA)
Kollmann, T., Pröpper, A. (2025). The Startup-Zoo: A Typology of Startups Based on the Ambitions of Their Founders. International Journal of Business and Economics Research, 14(2), 38-55. https://doi.org/10.11648/j.ijber.20251402.11