How sector fluidity (knowledge-intensiveness and innovation) shapes startups’ resilience during crises

In the context of the crises, this study sheds light on the varying impact of crises on startups in different sectors and outlines the specific resilience practices utilized in response, recovery, and growth phases. The research team conducted qualitative analysis on 18 public discussion interviews featuring key stakeholders in the Indian startup ecosystem, which included 51 chief executive officers, founders, cofounders, and venture capitalists who reflected on COVID-19. The study found that high-fluidity sectors (highly knowledge-intensive and innovative) leverage their agility through resourcefulness and customer value creation. In contrast, low-fluidity sectors (low in knowledge intensiveness) primarily focus on operational adjustments. As the transition goes from response to recovery, high-fluidity sectors prioritize digital transformation and strategic shifts, while low-fluidity sectors continue to cope. In the growth phase, high-fluidity startups exhibit growth aspirations, while low-fluidity ones emphasize business model innovation. This research provides valuable sector-specific insights into resilience and highlights the evolution of these strategies throughout a crisis, thereby enhancing our understanding of startup resilience in the context of the crisis. • Sectors are treated as variables, not merely as controls. • We need to move beyond a static view of sectors and recognize their differences. • Sectors affect resilience practices, and resilience practices vary across sectors. A study of startups from multiple industries offers insights into how they responded to the challenges of the COVID-19 pandemic. By analyzing interviews with key leaders from the Indian startup ecosystem, the research reveals how businesses in tech-oriented sectors like gaming, social media apps, and e-health were able to adapt quickly by embracing innovation and digital transformation. These companies turned crisis into opportunity, accelerating their growth despite the challenges. Meanwhile, industries like tourism and hospitality were hit harder and focused on survival strategies such as cost-cutting and operational adjustments. Startups in knowledge-intensive sectors thrived by investing in new technologies and rethinking their customer engagement, while those in more traditional sectors concentrated on stabilizing their operations. This research underscores the diversity of resilience strategies, showing that it's not a one-size-fits-all concept. Resilience is about understanding the industry and aligning strategy with the opportunities and threats, a key insight for entrepreneurs. The key takeaway for entrepreneurs is that resilience strategies must be tailored to their industry's specific dynamics. This research underscores the proactive nature of resilience, showing that it's not just about surviving but about thriving. Innovation and agility are essential to turning challenges into growth in fast-evolving sectors. In more stable industries, resilience requires focusing on operational efficiency and adjusting business models to new realities. By recognizing these differences, entrepreneurs and managers can better prepare for future crises and make more informed decisions that support long-term success. This study provides a roadmap for startups to rethink their approach to crisis management, emphasizing the need to adapt to industry conditions.