Attention is not forever: how startups engage with the market

Many startups fail not because their entrepreneurial idea is wrong, but because they cannot attract the attention of the market they hope to reach. They do not yet know who their audience truly is, nor how to engage it. A paper by Paola Cillo and Gaia Rubera, published in the Academy of Management Journal, shows that winning market attention is a process that requires different strategies at different moments.

The research identifies three strategies—three ways a startup can stand out—but with a key caveat: they do not work the same way in every stage of a firm’s life. During the first three years, a startup must learn to shift from “leading the conversation” to “engaging through products” and “following the conversation.” Otherwise, it will struggle to secure a meaningful position.

The market speaks, changes its mind, and expects a startup to do the same.

Why startups fail

A large body of managerial literature argues that startups often stall because they cannot properly identify their market. Founders may start from a promising technology or a brilliant insight, but fail to turn it into a valuable proposition for someone.

The problem is particularly acute in the early stage, when no real customers exist to observe and when even investors find it difficult to distinguish startups with potential from those that will never break through.

The paper, therefore, addresses three questions:

• How does a startup identify its market when it has just been founded and has no users?
• Which strategies help attract attention in different phases of development?
• How does the relationship evolve over time between what founders say, what the market discusses, and what the firm produces?

The theoretical contribution is rooted in the idea that entrepreneurship is a reciprocal dialogue between founders and the market. It is not enough to influence; one must also be influenced. And this exchange happens through entrepreneurial artifacts: words (conceptual artifacts) and products (material artifacts).

How to identify a market

The research analyzes 1,529 U.S. startups founded in 2014–2015, using a combination of Twitter/X data (on founder and market conversations) and Semrush data on organic web traffic to the startups’ sites, used as a proxy for market attention.

One of the most innovative methodological elements is the construction of the startup’s potential market through social media observation. The potential market is defined as the set of followers of a selection of exemplar accounts, i.e., accounts that are relevant for the sector the firm aims to enter (for example, fitness magazines for a sports-sensor startup). This allows researchers to estimate who might be interested, even when the firm has no customers yet.

Three strategies for gaining attention

The combined data reveal three ways founders can influence the market, or be influenced by it.

• Founders who lead the conversation. The founder introduces new themes, shapes online discourse, and proposes new interpretive frames. A prominent example is Glossier, a beauty-sector player that helped start the conversation on “clean beauty.” This strategy can have a strong effect early on, but its impact gradually declines and disappears after about 14 quarters. Around the 10th and 11th quarters, however, two other strategies begin to prove effective.
• Introducing new products. The product is the material artifact through which the firm shows tangible progress to the market and “learns” from it by listening to feedback. The effect of introducing products that align with the value proposition defined in the earlier phase is essentially irrelevant at the beginning but grows over time and becomes significant after the 10th quarter.
• Founders who follow the conversation. The founder listens to the market, identifies emerging themes in user discussions, and realigns communication. At first, the effect of this strategy is even negative (the startup has no way to stand out), but it becomes neutral between the 5th and 11th quarters and positive from the 12th onward. Impossible Foods, a producer of plant-based foods, initially emphasized sustainability and the environment, then adapted to prevailing themes by shifting its focus to taste and texture.

Three years to find a voice

In the beginning, the startup leads. The founder must stand out in a crowded arena by bringing new, distinctive ideas. Then, the startup must listen and build a relevant presence through new products. The full cycle takes about three years. If, during this period, the startup fails to generate stable attention, it is unlikely to succeed later on.

The study shows that the ability to capture market attention results from the intelligent management of three forms of entrepreneurial action. And above all, that this ability is time-sensitive: what works in year one does not work in year three, and vice versa. Startups need to keep this in mind.

The research also offers a practical method, based on exemplar accounts, that can help founders identify their potential market from the very beginning, even in the absence of actual customers.

Paola Cillo, Gaia Rubera, “Grow old with me: The temporal dynamics of founder–market interactions in capturing market attention.” Academy of Management Journal, 2025, Vol. 00, No. 00, 1–23. DOI: https://doi.org/10.5465/amj.2023.0974.