Abstract for: 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, and create fulfilling employment opportunities. However, the failure rate of startups in the US, a prominent country in encouraging startups, has been eight out of ten, a very high proportion. In this paper, 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 paper provides a holistic, system-driven conceptualization of a startup and its internal dynamics from human resources, product development, customers, and financials perspectives. I develop a System Dynamics model to represent these internal dynamics and simulate it over a period of five years. In addition, I bring in the impact of exogenous factors from the entrepreneurial ecosystem as a “second layer” of variables in the entrepreneurial model. I then compare and contrast the US and Egyptian cases. A significant difference in final Firm Valuation and Job Attractiveness was observed. I conclude with a discussion of the high leverage points in the Egyptian ecosystem based on this analysis.