From strong ties to no ties: Configurations for first-customer acquisition in tech startups

Attracting customers is one of the most important milestones for technology ventures. Ties are generally considered as beneficial when attracting start-up resources, such as first customers, because they can mitigate information asymmetry to overcome liabilities of newness and smallness. Despite this, when and how entrepreneurs use different network approaches to attract their ventures' first paying customers remains understudied. We rely on the concept of tie strength to distinguish between ventures acquiring customers via pre-existing strong ties, weak ties, or no ties (i.e., through market-based mechanisms). Using fuzzy-set Qualitative Comparative Analysis on 72 entrepreneurs from 72 Flemish technology ventures, complemented by extensive qualitative data, we identify distinct, equifinal configurations of founder, firm, and environmental attributes that are associated with acquiring customers through strong, weak, or no ties. Our post-hoc performance analyses further reveal performance differences: while attracting customers through no ties is associated with higher revenues, only using strong ties to attract first paying customers is associated with higher survival at scale. Our findings have important practical implications for entrepreneurs and technology commercialization policies. Overall, our study contributes a network-based perspective to customer acquisition to the literatures on entrepreneurial resource acquisition, entrepreneurial marketing and technology entrepreneurship. • First paying customers are important for young technology ventures • Entrepreneurs can attract first customers through strong ties, weak ties, or no ties • Each of these approaches has different firm, founder and environmental antecedents • Customer-acquisition approach affects firm revenues and survival