Birth of a New Industry: Entry by Start-ups and the Drivers of Firm Growth. The Case of Encryption Software

The paper analyses the birth of the Encryption Software Industry (ESI), a new niche in the software industry. Using a Chandlerian perspective, the author reports the main facts about firm entry and growth with a particular focus on start-up strategies and actions. Since scale economies do not play a major role in ESI, the paper investigates the different sources of firm competitive advantages.