Intense global competition and rapid technological advances have seen innovation become central towards enabling firms to adapt and rejuvenate themselves. While firms become increasingly focused on innovation, the challenge of managing innovation and developing innovation capabilities still remains. The purpose of this thesis is to analyse and evaluate the innovation capabilities of Ericsson’s Shared Services Organization (SSO). To do so, the existing literature and theories are synthesized and a multi-dimensional framework is utilized to conceptualize the determinants of organizational innovation capabilities. This framework is applied to analyse and evaluate the innovation capabilities of Ericsson’s SSO. Empirical data are collected through interviews in conjunction with qualitative content analysis of internal documents and participation in several meetings and discussions.Overall, the analysis of the case study revealed some common areas related to innovation capabilities, such as strategy intent for innovation, employees’ engagement with innovation initiatives, structured approach for innovation and management support. The conclusions and implications suggested reflect on the ways in which the case study could create a functional innovation program for fostering innovation in the organization and reaching its performance goals by exploiting untapped resources for innovation.

New developments such as 'Precision Medicine' and 'Digital Health' are emerging areas in healthcare technology, underpinned by 'convergent technology' or 'cross-industry' innovation. However, convergence results in greater uncertainty and influence from new knowledge and actors, including previously disparate technologies and capabilities, bringing specific challenges in the development of innovations. Although the literature addresses the context of technology convergence, there has been limited research reported on the how such innovation is effected in nascent ecosystems. This qualitative research addresses identified literature gaps, initially by using a combination of ecosystem actor interviews (n=39) to understand the context, followed by five longitudinal in-depth case studies at innovator organisations. Case evidence was obtained from a combination of interviews (n=62), supplemented by field observations, primary documents and evidence from publicly available sources. The data was subjected to multiple coding methods, with plausible causal mechanisms identified through case and cross-case analyses. The research findings identify a set of five interconnected micro-processes (early organisational routines) which together form a non-deterministic activity system that enables an innovator to navigate (the ecosystem), negotiate (a position within it) and nurture (the innovation and ecosystem). The research further identifies the importance of careful balancing between relationally focussed credibility-seeking and advantage-seeking actions as the main driver 'guiding' managers when developing the innovation, the associated business model(s) and value network in the evolving ecosystem. A conceptual model and framework are developed to show the interrelationships between organisational routines, the activity systems and the ecosystem. In developing organisational capabilities, it is argued that convergent innovation requires mostly incremental changes (low depth of change) across many organisational routines (high breadth of change), which reduce the uncertainty of organizational change and thus increase internal acceptance. These findings support the argument that innovators require a more 'systemic' view of innovation and governance approaches contributing to the innovation and capabilities literature. From a practice perspective, the research provides mechanisms for building relational capabilities critical to innovation delivery.

The point of departure for this thesis is how a traditional service sector shifts towards becoming more energy efficient and the processes that enable environmental action. Traditional services are generally considered to be poorly innovative and inclined towards routine activity; this leaves a gap in understanding how these adapt to the challenge of taking environmental action. The study argues that service firms adapt by deploying capabilities to multitask or to carry out innovative activity alongside routine activities related to service delivery. The research problem is addressed through three objectives: i) explicating how dynamic capabilities enable environmental action in traditional services with a focus on energy efficiency; ii) investigating the interface between the service firm and a type of intermediary, the knowledge intensive business service firm (KIBS), and how this acts as a locus for intermediation activity, or the exchange of knowledge about energy efficient technologies and measures; and iii) exploring how developments in the external context may influence the firm’s capabilities to adapt.The key contributions are two-fold. Firstly, the research links different combinations of capabilities with particular innovative behaviours in service firms; this underscores the presence of a differential multitasking potential across firms in the same sector. Secondly, it demonstrates a link between the service firm’s internal capabilities and the extent to which it mobilizes absorptive capacity to obtain knowledge about energy efficiency measures from its relation with KIBS.A qualitative study is designed with the hotel sector in Malta as the empirical setting. The fieldwork was undertaken through interviews with 26 hotel managers, 14 engineering consulting firms and 16 actors in the broader institutional environment. The data from the hotels were clustered to derive different adaptation modes characterized by particular capabilities and patterns of environmental action. Then, pairs of hotels and engineering consulting firms were identified in order to investigate the relational dynamics that may be influencing intermediation activity. The findings distinguish between hotels with a low multitasking potential that adopt a narrow range of energy efficient measures and those with a higher multitasking potential that modify activities and make deeper structural changes to shift towards improved energy efficiency. Accounting for the range of multitasking potential are different combinations of capabilities to sense signals in the external environment and interpret these in the firm and the capability for problem-solving for energy efficiency. The findings demonstrate a different pattern of KIBS use by hotels that is suggestive of a cluster differentiation. This is linked to different levels of absorptive capacity in hotels that determines whether intermediation activity and therefore the exchange of knowledge and learning about energy efficient measures is constrained or otherwise enhanced at the KIBS-client interface. The conclusion provides policy implications and areas for future research.

This study investigates the impact of consumer sophistication on emerging market firms’ ability to innovate. Three constructs, namely, innovation capabilities, sources of information and strategies, were identified as critical factors in the innovation process. By leveraging off these factors emerging market firms may gain sustainable competitive advantages in a highly competitive environment. The context of the study was South African based software development firms competing in more developed markets (wealthier), less developed markets (poorer) and domestic markets only (middle income). Data collection took place via telephonic survey. It was found that the size of the firm as measured by the number of employees is related to the consumer sophistication. Firms in less developed markets tend to be significantly larger than firms in more developed markets and the domestic market. Suppliers and clients as sources of information that impact the firms’ innovation development were found to be statistically significant. Firms in the more developed markets made considerable use of international clients for innovation ideas whereas firms in the domestic market leveraged ideas off local suppliers. The firms’ resource strategy was found to be significantly different across the three groups. Domestic market firms considered themselves ahead of the industry compared to less developed markets who considered themselves average with regard to having the latest equipment. / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

The field of strategic management addresses challenges that firms encounter in an attempt to remain competitive. The ability to explain variation in firm success through examination of knowledge flows has become a prominent focus of research in the strategic management literature. Specifically, researchers have sought to further examine how firms convert knowledge, a phenomenon conceptualized as absorptive capacity. Absorptive capacity is the firm’s ability to acquire, assimilate, transform, and exploit knowledge. Few studies have captured the richness and multi-dimensionality of absorptive capacity, and it remains to be understood how the dimensions of the phenomenon convert knowledge. Furthermore, how absorptive capacity influences the firm remains to be understood. To address these research gaps, this dissertation seeks to (1) determine how absorptive capacity converts knowledge, and (2) determine how absorptive capacity influences firm capabilities. The research questions are investigated using structural modeling techniques to analyze data collected from software-industry firms. The findings offer contributions to the absorptive capacity and capability literatures. For example, absorptive capacity is hypothesized to consist of complex relationships among its internal dimensions. However, findings of this study suggest the relationships among the dimensions are linear in nature. This finding is in line with the theoretical foundations of and early literature on absorptive capacity but contrary to recent conceptualizations, which suggests relationships among the dimensions are more closely related to the theoretical origins of absorptive capacity. Additionally, to examine how absorptive capacity influences the firm, a capability-based perspective is used to hypothesize the influence of absorptive capacity on firm capabilities. Findings suggest absorptive capacity positively influences each dimension of firm capabilities (e.g., operational, customer, and innovation capabilities); thus, absorptive capacity influences the firm by altering firm capabilities. Given the richness of the findings, numerous fields are likely to benefit from this investigation. Through an examination of absorptive capacity and capabilities, this study contributes to the understanding of the absorptive capacity phenomenon and offers insight into how the phenomenon influences the firm. Furthermore, practical implications are offered for managers interested in enhancing firm competitiveness.

This thesis aims to explore how trust, communication and innovation is potentially interconnected in the context of e-entrepreneurial startups. Trust seems to be an important component to success, but the virtual environment makes the traditional formation of trust difficult. An inductive strategy using qualitative interviews was employed to explore this relatively under researched subject. The findings indicate the most important aspects of trust in this context. Further, the findings imply that some of the constructs for trust present in virtual and temporary teams are also present in this context. Furthermore, there seems to be connections between communication and trust in a startup, both ways. The same seems true for the aspects of the firm's innovation capabilities and trust. Finally, theoretical implications of this research are presented and several interesting topics for future research are suggested. / Denna uppsats ämnar utforska den potentiella relationen mellan tillit, kommunikation och innovation i kontexten av e-entreprenöriella start-ups. Tillit verkar vara en viktig del för att nå framgång, men den virtuella kontexten gör en traditionell tillitsutveckling svår. En induktiv strategi med kvalitativa intervjuer användes för att utforska detta, som är ett relativt underforskat ämne. Resultaten antyder på de viktigaste elementen av tillit i denna kontext. Vidare pekar även studien på att vissa av de konstruktioner för tillit som återfinns i virtuella och tillfälliga teams även återfinns i denna kontext. Det tycks även finnas en tvåvägs koppling mellan kommunikation och tillit samt för beståndsdelarna av innovation capabilities och tillit. Slutligen presenteras implikationer för det teoretiska fältet och flera intressanta ämnen för framtida forskning föreslås.

Thesis (MBA (Business Management))--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: Through the process of innovation, organisations create technological growth. Successful innovation creates customer value through new products and services, and it could give rise to new markets. Successful innovations contribute to better quality, higher productivity, lower costs and increased profits. One of the ultimate goals for implementing innovation is to achieve a competitive advantage that leads to outperforming competitors. Through the understanding of the innovation processes, organisations can bring predictability into their innovation efforts. This comes from understanding and managing the forces that influence the decisions made by managers. Because of globalisation and fierce competition Spescom DataVoice, a South African technology company, is finding it increasingly difficult to compete in an international market. It is against the background of Spescom DataVoice's need to increase its innovation productivity that this research was spawn. The ambitious goal of this study was to investigate what Spescom DataVoice can do to become sustainable, innovative and competitive in its market space. This research firstly captured the important themes and theories around the subject of innovation and how it relates to strategy. The literature study will try to look into all the important work, especially well-known research and its significance. Lastly, the research will apply the knowledge gained by discussing the research questions relating to Spescom DataVoice's particular situation. The research will discuss the innovation capabilities and perspectives that Spescom DataVoice should focus on; the environment that is needed for sustainable continuous innovation; and innovation strategies that Spescom DataVoice could employ to improve its innovation productivity. AFRIKAANSE OPSOMMING: Organisasies skep tegnologiese groei deur die proses van innovasie. Suksesvolle innovasie skep waarde vir kliënte deur nuwe produkte en dienste, wat weer kan aanleiding gee tot nuwe markte. Suksesvolle innovasie dra by tot beter kwaliteit, hoër produktiwiteit, laer koste en die verhoging van winste. Een van die uiteindelike doelwitte met die implementering van innovasie is om 'n kompeterende voordeel te bewerkstellig wat kan lei tot die oortreffing van kompeteerders. Deur die proses van innovasie beter te verstaan, bring organisasies meer stelligheid in hul pogings om te innoveer. Dit word meegebring deur die verstaan en bestuur van die kragte wat bestuurders se besluite beinvloed. As gevolg van globalisering en fel kompetisie vind Spescom DataVoice, 'n Suid-Afrikaanse tegnologie-maatskappy, dit al hoe moeiliker om in 'n internasionale mark mee te ding. Dit is teen hierdie agtergrond van Spescom DataVoice se behoefte, om hul produktiwiteit ten opsigte van innovasie te verhoog, dat hierdie navorsingstuk die lig gesien het. Die ambisieuse doelwit van hierdie studie was om te ondersoek wat Spescom DataVoice kan doen om volhoubaar, innoverend en kompeterend in sy mark mee te ding. Eerstens bekyk hierdie studie na die belangrike temas en teorieë rondom die onderwerp van innovasie en hoe dit verband hou met strategie. Die literatuurstudie poog om na al die belangrike werke in die vakgebied te kyk, veral die navorsingsresultate en bydrae wat dit opgelewer het. Verder sal die kennis wat opgedoen is toegepas word deur navorsingsvrae te bespreek wat gerig is op Spescom DataVoice se spesifieke situasie. Die navorsingstudie sal dan bespreek op watter innovasie vermoëns en perspektiewe Spescom DataVoice behoort te fokus; die omgewing wat nodig is vir volhoubare kontinue innovasie; en watter innovasie strategieë Spescom DataVoice kan aanwend om sy innovasie produktiwiteit te verhoog.

Startups surgem com o intuito de explorar comercialmente uma ideia de potencial inovador. Para isso, necessitam de um conjunto de capacidades técnicas e de negócios, alocando recursos de modo eficiente para obter um produto com valor de mercado. Elas necessitam, portanto, tornar-se firmas e executar um modelo de negócios. Nesse processo, muitas startups fracassam, enquanto outras atingem um bom desempenho e conseguem realizar a oferta pública de ações (IPO), ou mesmo vender o negócio. Torna-se crucial, então, identificar quais são os conjuntos de capacidades necessários para o sucesso e a sobrevivência das startups. Enquanto firmas possuem diferentes arranjos de quatro capacidades de inovação, nomeadamente as capacidades de desenvolvimento, de operação, de gestão e de transação, o assunto ainda é pouco investigado em startups. Isso posto, este estudo tem por objetivo identificar como se configuram as capacidades de inovação em startups. Para alcançar esse objetivo foi realizado um estudo exploratório de abordagem qualitativa no Vale do Silício, no qual foram entrevistadas 11 startups de base tecnológica e 7 profissionais com conhecimentos na área. O estudo evidenciou que startups não possuem as quatro capacidades de inovação, mas necessitam desenvolvê-las a fim de comercializar um bem/serviço no mercado, tornandose firmas. Enquanto as capacidades de desenvolvimento e a de transação são as primeiras a serem desenvolvidas (sendo as mais desenvolvidas), as capacidades de operação e de gestão necessitam ser desenvolvidas à medida que o negócio se expande. O aprendizado por startups também foi identificado como relevante para a construção das capacidades de inovação, processo no qual o rico ecossistema do Vale do Silício desempenha um papel fundamental. Embora esse ecossistema seja importante, a seleção e aplicação dos conhecimentos externos na construção de tais capacidades é uma tarefa que cabe apenas à startup. Evidenciaram-se também os diferentes arranjos de capacidades que podem levar à venda, transformação em firma e fracasso das startups. A principal contribuição teórica do presente estudo foi avaliar, em um único estudo, não apenas capacidades de cunho tecnológico, mas também operacionais, gerenciais e transacionais em startups, destacando sua importância para o sucesso do negócio. Uma segunda contribuição está em evidenciar, por meio da perspectiva da firma, que conhecimentos amplamente disponíveis no ecossistema podem ser irrelevantes para a startup se não forem aplicados adequadamente no desenvolvimento das capacidades. Como contribuição gerencial evidencia-se a necessidade de avaliar o desempenho da startup por meio de métricas, não negligenciando a importância da gestão. Às instituições governamentais sugere-se uma maior ênfase na cobrança de resultados das startups. / Startups are created to commercially explore an ideia with innovative potential. To do so, they need a set of technical and business capabilities, efficiently allocating resources to obtain a product with market value. They need, in such an understanding, to become firms and execute a business model. While searching for such a business model, a high percentage of startups fail, while others perform well and reach the initial public offering (IPO), or even sell the business. It seems crucial, then, to identify which capability arrangements are required for the success and the survival of startups. While firms have different arrangements of four innovation capabilities, namely development capability, operation capabillity, management capability and transaction capability, the issue is still under-researched for startups. That being said, this study aims to identify how innovation capabilities are arranged in startups. To accomplish that, an exploratory study with a qualitative approach was performed in Silicon Valley, in which 11 startups and 7 knowledgeable professionals related to the field were interviewed. It was found that startups do not have the four innovation capabilities, but need to develop them in order to transact goods/services in the market, allowing them to become firms. While the development capability and the transaction capability are the first developed by the startup (and also the most developed ones), the operation and management capabilities need to be developed once the business starts to grow. Learning by startups was also identified as relevant to the construction of their innovation capabilities, in which the rich ecosystem in Silicon Valley plays a key role. Although the importance of such an ecosystem, the selection and application of such external information into the construction of such capabilities is a task that can only be performed by the startup. Different arrangements of innovation capabilities were also identified, that might lead a startup to be sold, to turn into a firm or to follow a failure path. The main theoretical contribution was to evaluate, in a single study, not only technological capabilities, but also operational, management and transactional capabilities in startups, highlighting their importance to the startups’ sucess. A second contribution relies in identifying, through the lenses of the theory of the firm, that knowledge widely available in the ecosystem might be irrelevant to the startup if not properly applied in the development of capabilities. As a managerial contribution, the study highlights the need to evaluate the startup performance through metrics, without neglecting the importance of management. It is also suggested that governmental institutions should put a higher emphasis in demanding results from startups.

Startups surgem com o intuito de explorar comercialmente uma ideia de potencial inovador. Para isso, necessitam de um conjunto de capacidades técnicas e de negócios, alocando recursos de modo eficiente para obter um produto com valor de mercado. Elas necessitam, portanto, tornar-se firmas e executar um modelo de negócios. Nesse processo, muitas startups fracassam, enquanto outras atingem um bom desempenho e conseguem realizar a oferta pública de ações (IPO), ou mesmo vender o negócio. Torna-se crucial, então, identificar quais são os conjuntos de capacidades necessários para o sucesso e a sobrevivência das startups. Enquanto firmas possuem diferentes arranjos de quatro capacidades de inovação, nomeadamente as capacidades de desenvolvimento, de operação, de gestão e de transação, o assunto ainda é pouco investigado em startups. Isso posto, este estudo tem por objetivo identificar como se configuram as capacidades de inovação em startups. Para alcançar esse objetivo foi realizado um estudo exploratório de abordagem qualitativa no Vale do Silício, no qual foram entrevistadas 11 startups de base tecnológica e 7 profissionais com conhecimentos na área. O estudo evidenciou que startups não possuem as quatro capacidades de inovação, mas necessitam desenvolvê-las a fim de comercializar um bem/serviço no mercado, tornandose firmas. Enquanto as capacidades de desenvolvimento e a de transação são as primeiras a serem desenvolvidas (sendo as mais desenvolvidas), as capacidades de operação e de gestão necessitam ser desenvolvidas à medida que o negócio se expande. O aprendizado por startups também foi identificado como relevante para a construção das capacidades de inovação, processo no qual o rico ecossistema do Vale do Silício desempenha um papel fundamental. Embora esse ecossistema seja importante, a seleção e aplicação dos conhecimentos externos na construção de tais capacidades é uma tarefa que cabe apenas à startup. Evidenciaram-se também os diferentes arranjos de capacidades que podem levar à venda, transformação em firma e fracasso das startups. A principal contribuição teórica do presente estudo foi avaliar, em um único estudo, não apenas capacidades de cunho tecnológico, mas também operacionais, gerenciais e transacionais em startups, destacando sua importância para o sucesso do negócio. Uma segunda contribuição está em evidenciar, por meio da perspectiva da firma, que conhecimentos amplamente disponíveis no ecossistema podem ser irrelevantes para a startup se não forem aplicados adequadamente no desenvolvimento das capacidades. Como contribuição gerencial evidencia-se a necessidade de avaliar o desempenho da startup por meio de métricas, não negligenciando a importância da gestão. Às instituições governamentais sugere-se uma maior ênfase na cobrança de resultados das startups. / Startups are created to commercially explore an ideia with innovative potential. To do so, they need a set of technical and business capabilities, efficiently allocating resources to obtain a product with market value. They need, in such an understanding, to become firms and execute a business model. While searching for such a business model, a high percentage of startups fail, while others perform well and reach the initial public offering (IPO), or even sell the business. It seems crucial, then, to identify which capability arrangements are required for the success and the survival of startups. While firms have different arrangements of four innovation capabilities, namely development capability, operation capabillity, management capability and transaction capability, the issue is still under-researched for startups. That being said, this study aims to identify how innovation capabilities are arranged in startups. To accomplish that, an exploratory study with a qualitative approach was performed in Silicon Valley, in which 11 startups and 7 knowledgeable professionals related to the field were interviewed. It was found that startups do not have the four innovation capabilities, but need to develop them in order to transact goods/services in the market, allowing them to become firms. While the development capability and the transaction capability are the first developed by the startup (and also the most developed ones), the operation and management capabilities need to be developed once the business starts to grow. Learning by startups was also identified as relevant to the construction of their innovation capabilities, in which the rich ecosystem in Silicon Valley plays a key role. Although the importance of such an ecosystem, the selection and application of such external information into the construction of such capabilities is a task that can only be performed by the startup. Different arrangements of innovation capabilities were also identified, that might lead a startup to be sold, to turn into a firm or to follow a failure path. The main theoretical contribution was to evaluate, in a single study, not only technological capabilities, but also operational, management and transactional capabilities in startups, highlighting their importance to the startups’ sucess. A second contribution relies in identifying, through the lenses of the theory of the firm, that knowledge widely available in the ecosystem might be irrelevant to the startup if not properly applied in the development of capabilities. As a managerial contribution, the study highlights the need to evaluate the startup performance through metrics, without neglecting the importance of management. It is also suggested that governmental institutions should put a higher emphasis in demanding results from startups.

Startups surgem com o intuito de explorar comercialmente uma ideia de potencial inovador. Para isso, necessitam de um conjunto de capacidades técnicas e de negócios, alocando recursos de modo eficiente para obter um produto com valor de mercado. Elas necessitam, portanto, tornar-se firmas e executar um modelo de negócios. Nesse processo, muitas startups fracassam, enquanto outras atingem um bom desempenho e conseguem realizar a oferta pública de ações (IPO), ou mesmo vender o negócio. Torna-se crucial, então, identificar quais são os conjuntos de capacidades necessários para o sucesso e a sobrevivência das startups. Enquanto firmas possuem diferentes arranjos de quatro capacidades de inovação, nomeadamente as capacidades de desenvolvimento, de operação, de gestão e de transação, o assunto ainda é pouco investigado em startups. Isso posto, este estudo tem por objetivo identificar como se configuram as capacidades de inovação em startups. Para alcançar esse objetivo foi realizado um estudo exploratório de abordagem qualitativa no Vale do Silício, no qual foram entrevistadas 11 startups de base tecnológica e 7 profissionais com conhecimentos na área. O estudo evidenciou que startups não possuem as quatro capacidades de inovação, mas necessitam desenvolvê-las a fim de comercializar um bem/serviço no mercado, tornandose firmas. Enquanto as capacidades de desenvolvimento e a de transação são as primeiras a serem desenvolvidas (sendo as mais desenvolvidas), as capacidades de operação e de gestão necessitam ser desenvolvidas à medida que o negócio se expande. O aprendizado por startups também foi identificado como relevante para a construção das capacidades de inovação, processo no qual o rico ecossistema do Vale do Silício desempenha um papel fundamental. Embora esse ecossistema seja importante, a seleção e aplicação dos conhecimentos externos na construção de tais capacidades é uma tarefa que cabe apenas à startup. Evidenciaram-se também os diferentes arranjos de capacidades que podem levar à venda, transformação em firma e fracasso das startups. A principal contribuição teórica do presente estudo foi avaliar, em um único estudo, não apenas capacidades de cunho tecnológico, mas também operacionais, gerenciais e transacionais em startups, destacando sua importância para o sucesso do negócio. Uma segunda contribuição está em evidenciar, por meio da perspectiva da firma, que conhecimentos amplamente disponíveis no ecossistema podem ser irrelevantes para a startup se não forem aplicados adequadamente no desenvolvimento das capacidades. Como contribuição gerencial evidencia-se a necessidade de avaliar o desempenho da startup por meio de métricas, não negligenciando a importância da gestão. Às instituições governamentais sugere-se uma maior ênfase na cobrança de resultados das startups. / Startups are created to commercially explore an ideia with innovative potential. To do so, they need a set of technical and business capabilities, efficiently allocating resources to obtain a product with market value. They need, in such an understanding, to become firms and execute a business model. While searching for such a business model, a high percentage of startups fail, while others perform well and reach the initial public offering (IPO), or even sell the business. It seems crucial, then, to identify which capability arrangements are required for the success and the survival of startups. While firms have different arrangements of four innovation capabilities, namely development capability, operation capabillity, management capability and transaction capability, the issue is still under-researched for startups. That being said, this study aims to identify how innovation capabilities are arranged in startups. To accomplish that, an exploratory study with a qualitative approach was performed in Silicon Valley, in which 11 startups and 7 knowledgeable professionals related to the field were interviewed. It was found that startups do not have the four innovation capabilities, but need to develop them in order to transact goods/services in the market, allowing them to become firms. While the development capability and the transaction capability are the first developed by the startup (and also the most developed ones), the operation and management capabilities need to be developed once the business starts to grow. Learning by startups was also identified as relevant to the construction of their innovation capabilities, in which the rich ecosystem in Silicon Valley plays a key role. Although the importance of such an ecosystem, the selection and application of such external information into the construction of such capabilities is a task that can only be performed by the startup. Different arrangements of innovation capabilities were also identified, that might lead a startup to be sold, to turn into a firm or to follow a failure path. The main theoretical contribution was to evaluate, in a single study, not only technological capabilities, but also operational, management and transactional capabilities in startups, highlighting their importance to the startups’ sucess. A second contribution relies in identifying, through the lenses of the theory of the firm, that knowledge widely available in the ecosystem might be irrelevant to the startup if not properly applied in the development of capabilities. As a managerial contribution, the study highlights the need to evaluate the startup performance through metrics, without neglecting the importance of management. It is also suggested that governmental institutions should put a higher emphasis in demanding results from startups.