Entrepreneurial Start-up and Growth: A Classification of Problems

The purpose of this study was to develop a classification scheme for the types of problems encountered by emerging organizations using an open-ended approach to generating the Initial response data. The CEOs of 121 Inc. 500 firms were asked to state the most significant problem during their firms’ first year and during a later growth stage. The open-ended responses were systematically sorted Into classes of problems, and the resulting classification schemes appeared to be more comprehensive and exhaustive than some previously developed schemes that relied on closed-ended response categories to develop their problem classes. Once developed, the classification schemes were used to examine the relative frequencies of types of problems at both the start-up and later growth stage. The findings indicated mixed support for previous research linking types of dominant problems to different stages of organizational development.