Journal of Industrial and Systems Engineering

Journal of Industrial and Systems Engineering

Machine Learning Algorithms for Prediction of Startup Success

Document Type : Research Paper

Authors
1 Technology Management Department, West Tehran Branch, Islamic Azad University, Tehran, Iran
2 Assistant Professor, Technology Management Department, West Tehran Branch, Islamic Azad University, Tehran, Iran
Abstract
Today, startups are turning into the driving forces of the economic growth throughout the world. During the last decade, number of start-ups has grown dramatically all over the world. The very uncertain and unstable nature of startup environments in the initial stages of their activity has made it difficult to analyze and interpret information in order to evaluate their success. Therefore, investors and venture capital funds need a suitable tool to predict startups’ success rate. Considering the time complexity and computationally intensive nature of the problem, predicting startups’ success rate at the beginning of their activity with this approach requires the use of a quantitative model. In this study, the success of a start-up company is defined as their ability to reach the next stage of investment within a certain period of time. The ability to predict success is regarded as a valuable competitive advantage for venture capitalists who are looking to invest in startups. In fact, their first choices for investment are companies with faster growth potential than the competitors. Finally, the proposed model enables investors to move one step ahead of the competitors. To address this challenge, the present study provides a solution to predict the startups’ success rate in the future. Specifically, first, by collecting the data from three different sources, it examines and extracts factors affecting the startups’ success rate. Then, using machine learning methods, it presents a model for predicting the startups’ success rate, which has improved significantly compared to the previous models
Keywords
Subjects

Abdi, H., & Nozari, H. (2025). AIoE-enhanced multi-objective optimization for sustainable bioprocesses in smart bioreactors. In Artificial Intelligence of Everything and Sustainable Development (pp. 19-38). Singapore: Springer Nature Singapore.
Abdi, H., Jahanian, A., & Nozari, H. (2025). Digital twin-enabled bioreactors: transforming industrial biotechnology in smart economies. In Dynamic and Safe Economy in the Age of Smart Technologies (pp. 105-120). IGI Global Scientific Publishing.
Aghajani, Ali Akbar; Akbari, Payman; Saidipour, Amir. (2022). “Analysis of the role of entrepreneurship education on entrepreneurial mentality with an emphasis on the mediation of entrepreneurial attitude and entrepreneurial self-efficacy (case study: technical and vocational education of Kermanshah province)”. Journal of Skill Training 4(3): 145-166.
Albashir, M. J., & Williamz, M. L. (2017). Reflections on the 2013-decade award— “Exploitation, exploration, and process management: The productivity dilemma revisited” ten years later. The Academy of Management Review, 40(4), 497–514.
Ansed, A. Berichan, E. (2018). “How SMEs engage in open innovation: a survey,” Journal of the Knowledge Economy, 9(2). 561–574.
Arshad, A., Noordin, M. and Othman, R. (2016), “A comprehensive knowledge management process framework for healthcare information systems in healthcare industry of Pakistan”, The 6th International Conference on Information and Communication Technology for The Muslim World, Jakarta10(5): 30-35.
Bozorgi, Sabaalsadat; Lazar, Farinoosh. (2020). “Investigation of the machine learning approach and its applications in digital marketing”. Quarterly Journal of Management and Accounting Studies 6(2): 179-186.
Canelas, D.A. (2017), “Understanding the massive open online course (MOOC) student experience: an examination of attitudes, motivations, and barriers”, Computers & Education. 110:35-50.
Caseiroa, Nuno. Coelho, Arnaldo. (2019). The influence of Business Intelligence capacity, network learning and innovativeness on startups performance. Journal of Innovation & Knowledge 4 (2) 139–145.
Cenonz, A., & Gambardella, A. Barney, J. (2005). The changing technology of technological change: General and abstract knowledge and the division of innovative labour. Research Policy, 23(5), 523–532.
Elhami, Asma and Sadeghi, Touraj. (2020). “Investigation of the effect of entrepreneurial orientation on the export performance of SMEs (case study: trading companies in North Khorasan Province)”. Quarterly Journal of New Researches in Management and Accounting 7(7): 177-194.
Ghaffari, Maral. (2019). “Identification of the impact of business intelligence with organizational entrepreneurship approach on improving the performance of Tejarat Bank.” Master's Thesis. Business Management. University of Tehran.
Ghasemieh, Rahim; Neissi, Abdul Hossein; Hardani, Yunes. (2020). “Evaluating the mediating effect of innovation and organizational entrepreneurship on the relationship between FAVA and improving organizational performance (case study: Ahvaz Industrial Town No. 1).” Journal of Entrepreneurial Development. 13(3): 419-401.
 Golmohammadi, Zahra; Hemmati, Mohammad. (2018). “Assessing the impact of strategic capabilities on the entrepreneurial performance of women in entrepreneurial centers of the 5th region of Tehran Municipality.” Conference on Civil Engineering, Architecture and Urban Planning of the Islamic World, Tabriz, Tabriz University - Shahid Madani University of Azerbaijan - Tabriz Municipal Applied Science University.
Haile, E.A. and Tüzüner, V.L. (2022), "Organizational learning capability and its impact on organizational innovation", Asia Pacific Journal of Innovation and Entrepreneurship, 16(1): 69-85.
Husain, Z., Dayan, M., & Di Benedetto, C. A. (2020). The impact of networking oncompetitiveness via organizational learning, employee innovativeness, and innovation process: A mediation model. Journal of Engineering and Technology. 5(9): 32-56.
Kamfort, G. (2005), “Information systems and organizational Learning: a literature review”, Journal of Information Systems and Technology Management. 12(1): 45-64.
Kochak Alipour Ranjbar, Afshin. (2022). “Factors affecting the entrepreneurial intention of graduates in the field of business management and theory of planned behavior.” International entrepreneurship conference with the slogan of developing entrepreneurial talent: a path to transformation.
Kongrode,J.  S Aujirapongpan, J Ru-Zhue.(2023). Exploring the impact of dynamic talent management capability on competitive performance: The mediating roles of dynamic marketing capability of startups. Journal of Competitiveness. panelAugustina Asih Rumanti. 8(7): 65-76.
Lee, L., Wong, P., Der Foo, M., & Leung, A. (2011). Entrepreneurial intentions: The influence of organizational and individual factors. Journal of business venturing, 26, 124-136.
Liu, Fajian. Xiaoyu, Wu.  Jinyan Xu.  Dongdong Chen. (2021). Examining cultural intelligence, heritage responsibility, and entrepreneurship performance of migrant homestay inn entrepreneurs: A case study of Hongcun village in China. Journal of Hospitality and Tourism Management. 4(8): 538-550.
Lu, S., Li, G., & Xu, M. (2020). The linguistic landscape in rural destinations: A case study of hongcun village in China. Tourism Management, 77, 1-3.
Mehrizizadeh, Soraya; Sarbi, Mohammad Hossein; Motaghi Dastanai, Shokoufeh. (2022). “Developing a structural model of entrepreneurial attitude based on the perception of family support and competitiveness.” Journal of Innovation and Creativity in Humanities. 11(4): 111-136.
Mokari, Hashem; Mirarab Baygi, Seyyed Alireza; Azarion, Arash. (2021). “Examining the role of asset, entrepreneur and information characteristics in analyzing the financial structure of startups.” Journal of Investment Knowledge. 10(37): 88-99.
Mousavi Rad, Seyedah Tahereh; Honary, Habib; Farahani, Abolfazl; Ahmadpour Dariani, Mahmoud. (2019). “Designing and explaining the model of driving factors of organizational entrepreneurship with the dimensions of organizational entrepreneurial tendencies in the physical education organization of the Islamic Republic of Iran.” Dissertation for obtaining a PhD degree at Payameh Noor University of Tehran. Faculty of Human Sciences and Physical Education.
Mowlaie, S., Shakeri, R., & Yaghoubi, N. M.(2019). Personal Knowledge Management Influence on Innovative Culture and Performance in Knowledge Based Companies. IQBQ, 22 (4), 130-150.
Nabi, M. Linan, K (2019). Resolving the conflict-creativity tension in functionally diverse innovation teams, A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy to the Tepper School of Business at Carnegie Mellon University
Nazari, Farzad. Seyedeh Safiyeh Taghavi. Esmaeil Valizadeh. Mehrdad Soleymani. Danial Shahrabi Farahani. and Raana Bagheri. (2022). An Investigation on the Impact of Business Intelligence over the Performance of Startup Companies according to Innovation and Knowledge Management as Mediators. Mathematical Problems in Engineering. 12(7): 38-50.
Noor Mohammad Nasrabadi, Gholamreza. (2020). “Identifying and prioritizing the key success factors of startups (case study: health startups).” Journal of Management, Financial and Economic Studies, 02(02), 20-46.
Piraish, Reza; Mahmoudi, Hossein; and Behrevar, Helen. (2018). “Creating a competitive advantage through linking the views of organizational learning, innovative behavior and intellectual capital among the employees of Iran Transfo Corporation in Zanjan”. The 5th National Conference on Applied research in Management and Accounting, Tehran, Iran Management Association.
Rouhani Rad, Shayan; Tayyabi Abolhasani, Seyed Amir Hossein. (2021). “Investigation of the requirements for successful entry into the market for new knowledge-based companies (case study of Tehran information and communication technology companies).” Quarterly Journal of Technology Development Management, 8(1), 185-220.
Seyed Abbasi, Seyed Dara; Fatehipour, Morteza. (2021). “Investigating the impact of organizational communication styles on innovative work behaviors in the organization with the mediating role of entrepreneurial awareness (case study: Kurdistan Broadcasting).” The 2nd International Conference on Management, Humanities and Behavioral Sciences in Iran and the Islamic world, Tehran.
Sun, X., Zhao, D., Zhang, D., Tian, F., (2022). Entrepreneurship and sustainable innovation capabilities in platform enterprises: the mediating role of knowledge integration. Chin. Manag. Stud. 16 (3), 627–652
Tulit, Seyyed Ali; Mohaghegh, Nader; and Alizadeh Majd, Amirreza. (2021). “Investigating the effects of business intelligence, network learning and innovation in improving the efficiency of mobile startups in the field of electronic payment.” The 1st National Conference on Management and E-Commerce, Tehran.
Wang, Jianwen. Abdullah, Hisam Omar., Fahad M. Alotaibi. Yousef, Ibrahim Daradkeh. (2022). Business intelligence ability to enhance organizational performance and performance evaluation capabilities by improving data mining systems for competitive advantage. Information Processing and Management. 59(6): 77-89.
Wise, Sean. Andre, Laplume .Sepideh, Yeganegi.(2023). Accelerator cohort social network structure and startup performance. Journal of Small Business & Entrepreneurship. 8(5): 45-65.
Yari, Fatemeh; Shayan Nia, Seyyed Ahmed. (2021). “Examining the role of organizational entrepreneurship in organizational performance with regard to strategic entrepreneurship (case study: Ilam Steel Corporation).” Journal of New Research Approaches in Management and Accounting. 8(6): 1-18.
Yavari Gohar, Fatemeh; Karroubi, Mehdi; Aminifar, Aida. (2020). “Identifying and prioritizing the success and failure factors of Iranian tourism startups”. The 3rd Humanities Conference (New Advances on Science and Metascience), Mashhad, https://civilica.com/doc/1115045.
Yousefzadeh, Iman; Nilfroshan, Parisa; Abedi, Mohammad Reza. (2022). “Psychological and functional orientations of entrepreneurial people.” Journal of Career and Organizational Counseling. 2(5): 37-56.
Zandi, Marjan; Rajabi Farjad, Hajieh. (20189. “Evaluation of the mediation of organizational entrepreneurship in the effect of organizational innovation on organizational performance (case study: employees of the Agricultural Bank).” Journal of Human Resource Studies, 3(4): 103-122.
Volume 17, Issue 4
Autumn 2025
Pages 33-48

  • Receive Date 20 February 2024
  • Revise Date 01 May 2024
  • Accept Date 21 June 2024