Customer attractiveness: A comparative analysis of startups versus incumbents in supplier choice

Startups compete against incumbents for supplier resources. In this competition, startups suffer from the liability of newness and lack a track record and positive reputation. Startups that want to mobilize supplier resources need to become attractive to suppliers. This research analyzes the factors impacting startup attractiveness as buyers. Our findings from a discrete choice experiment with 129 salespeople show that startups are less attractive as customers than incumbents. We found eight factors that impact customer attractiveness. We compared the relative importance of customer attractiveness factors. We discovered that strategic compatibility, operative excellence, and innovation positively impact startups more than incumbents’ attractiveness. •Discrete Choice Experiment (DCE) as a method for studying customer attractiveness in startups.•Being a startup decreases the likelihood of a startup being chosen by suppliers over the alternative incumbent customer.•Company type is a moderator variable that affects the strength of factors influencing customer attractiveness.•Strategic compatibility, operative excellence, and innovation enhance startup attractiveness more than incumbents.