Knowledge that Transforms

Research Summary Our qualitative study of five corporate venture capital (CVC) units reveals that CVC is organized along one of two distinct pathways—order‐taker or free‐bird. Our two‐pathway model deconstructs the heterogeneity within CVC designs and provides detailed insights into the processual nature of CVC search mechanisms. We find evidence that the locus of problem formulation influences the chosen search behavior. While order‐takers respond to predefined corporate‐led problem formulation, free‐birds allow the venture market to guide search behavior. Differences in search processes can thus be attributed to the pursuit of distinct problem‐solution pairs. Implications for CVC and organizational search literature are discussed. Managerial Summary Organizations search for new knowledge and technologies using corporate venture capital (CVC) units. Despite growing evidence of heterogeneity in CVC designs, managers continue to have limited insights for designing and running such CVC units. In contrast to previous recommendations to use structural attributes and/or institutional logics to design and manage CVCs, we provide managers an organizational search lens which reveals significant variations in how corporations search for new ventures. We identified two extreme CVC designs driven by the locus of problem formulation (internal vs. external): order‐takers—who respond to a predefined and corporate‐led problem formulation approach, and free‐birds—who shape the problem formulation guided by venture market dynamics. We point to design differences across popular CVC subprocesses which can be handy for managers.

Research Summary The question of how a new venture designs and innovates on its business model (BM) to leverage digital technology to address multiple grand challenges has received little attention in the literature. We address this through a longitudinal case study of a new social enterprise in China. We develop an accessing‐embedding‐strengthening‐expanding process model of BM design and innovation by which a venture may increase both the scale and scope of its impact as a complementor in ecosystems addressing grand challenges. We identify the specific actions and contingencies underlying this process. Our findings contribute to the understanding of BM design and innovation based on digital technologies and propose that assessment of a BM's impact on grand challenges may be in terms of scope as well as scale. Managerial Summary How may founders build a BM that exploits a technology's potential to address diverse sustainability challenges? Our study derives insights from one for‐profit Chinese venture whose founders had the explicit objective of leveraging remote sensing data and analytics to address important and diverse social and environmental challenges. We identify the steps in its ecosystem‐based strategy (accessing, embedding, strengthening, and expanding) by which the founders targeted and entered successive application ecosystems as a complementor. This strategy has enabled them to achieve financial goals and also increase their contribution to sustainability objectives in terms of both scale (vis‐à‐vis one grand challenge) and scope (across multiple grand challenges). We also identify the specific questions that the founders had to answer in the process of executing this strategy.

Research Summary Optimal distinctiveness can enhance firm performance, but we know little about how startups can achieve optimal distinctiveness when faced with multiple referents. This study investigates the strategic positioning of startups relative to two interdependent referents—incumbents and peer startups. Analyzing data for 3266 business plans from an angel investment platform in China, we find that a startup's distinctiveness from incumbents positively influences angel investors' evaluations. However, the positive effect is weakened by the startup's distinctiveness from peer startups within the same platform category. Economic signals emitted by the startup can mitigate the negative interaction between distinctiveness from both referents. Our findings suggest that startups can use a nuanced approach to attain optimal distinctiveness by aligning with peers while differentiating themselves from incumbent firms. Managerial Summary How can startups use their business plans to differentiate themselves from competitors and attract angel investors? Using data from business plans submitted to an angel investment platform in China, we find that a startup's distinctiveness from incumbent competitors helps attract angel investors, but this advantage diminishes when its distinctiveness from peer startups is also high. Nevertheless, startups can alleviate the negative interaction by presenting economic signals, such as financial records. Overall, our study suggests that startups can achieve optimal distinctiveness by aligning with peers while distinguishing themselves from incumbents, with economic signals acting as a legitimacy buffer to enhance their acceptance by investors.

Research summary I examine how the organizational antecedents of spinouts shape the new firms' industry and technological trajectory choices compared to those of the parent firms. Building on prior research on employee entrepreneurship and integrating insights from the literature on opportunity and necessity entrepreneurship, I hypothesize that spinouts launched to exploit a new business opportunity shunned by the parent firm (i.e., opportunity spinouts) are more likely to enter a different but related industry and technological field to those of the parent firm. I hypothesize also that spinouts triggered by adverse developments in the parent firm (i.e., necessity spinouts) are more likely to target the same industry and technological field as the parent. Analysis of data from the European biotech industry supports these predictions. Managerial summary The prevailing view of employee entrepreneurship is that the established firm's unwillingness to commercialize an employee's ideas leads to the employee leaving to start a new firm. However, evidence suggests that spinout activity (new firm formation by former employees) can be also triggered by adverse developments in the established firm that disrupt an employee's job. This study examines how the organizational antecedents of spinouts shape the new firms' early‐stage strategic choices. Using data from the biotech industry, I show that opportunity driven spinouts are more likely to enter a different but related industry and technological field to those of their founders' prior employer and that necessity driven spinouts are more likely to target the same industry and technological field as the prior employer.

Research Summary This study explores how traditional craft produces novelty, which appears to be at odds with its emphasis on continuation. While prior research has explored how tradition is rediscovered and revived from the past, traditional craft can produce intrinsic novelty potentially through its own repetitive acts. This study examines a Japanese cuisine Kaiseki , which is traditional but simultaneously innovative. The analysis of a well‐known chef's design processes reveals that the chef designs novel dishes by responding to what has been done before, making something better and differently and thereby going beyond the limit of the tradition; Kaiseki tradition is re‐enacted through such practices. A process philosophy of Gills Deleuze is engaged to explain our concept of “tradition as capacity” as well as “tradition as object.” Managerial Summary Tradition is now seen as important source of value. This study explains how craft can be both traditional and innovative. Typically, innovation has been explained by recombination with new technologies and restoration and reinterpretation to reinvigorate identity rooted in the past, this study sheds light on the intrinsic novelty within the practices of craft. This novelty is evident in traditional Japanese cuisine, called Kaiseki , which is traditional but also innovative because customers seek novel exquisite experience as they do in any Michelin Guide starred restaurants. Through the analysis of a chef's practices, we propose a new conceptualization of tradition as capacity. The creative force of this tradition as capacity is important for creating new opportunities and novel values.

Research Summary Following a growing body of research indicating that most high‐growth entrepreneurial firms are “one hit wonders,” this article leverages Canadian survey and administrative data to investigate the relationship between recent entrepreneurial income and growth barriers, on the one hand, and the growth intentions of established firms, on the other. We draw on the theory of planned behavior to develop hypotheses on how salient information resulting from entrepreneurial experience may shape growth intentions. As anticipated, we find that higher incomes negatively associate with intentions. The picture for barriers is more mixed, such that recently experienced human resources and financial barriers positively associate with growth intentions and barriers related to competition and regulations negatively associate with intentions. The implications for policy and for further research are discussed. Managerial Summary Our study investigates factors associated with growth expectations among small firms, utilizing descriptive and multivariate analyses. In doing this, we extend the theory of planned behavior into a study of established firms, recognizing that intentions are dynamic and will be shaped by experience of entrepreneurship. Key findings indicate that past performance significantly affects future growth expectations, while higher personal income correlates with lower growth intentions, suggesting entrepreneurs become “satisficers” as income increases. In addition, perceptions of external barriers are negatively associated with future expectations, while internal barriers do not significantly hinder them. This result implies that entrepreneurs perceive external challenges as beyond their control, affecting their confidence in future growth.

Research Summary By following the historical case of the world‐renowned potter Luce Rie, we study the relationships between the accrual of material expertise, entrepreneurial actions, and successful craft venture outcomes. Drawing from Sennett's material consciousness framework and Fisher's resource‐based propositions of effective entrepreneurial actions, we enhance understanding of the material drivers of such actions, how material expertise can contribute to self‐imposed constraints, and how these constraints may contribute to positive craft venture outcomes. Our findings thereby contribute to a nuanced understanding of the intimacy between human and material agency in entrepreneurship and reveal a craft approach to managing the tension of novelty and control at the heart of strategic entrepreneurship. Furthermore, our analysis contributes to broader reflection on the definitions of venture success, value generation, and growth. Managerial Summary Craft‐based ventures are increasingly recognized as vital to thriving and sustainable economies. However, our understanding of the drivers of entrepreneurial actions that contribute to successful craft venture outcomes remains limited. In this article, drawing from our analysis of the historical case of the world‐renowned potter Lucie Rie using theoretical insights from the craft literature, we focus on the role of material expertise. We thereby identify how a craft entrepreneur's intimate understanding of their materials may help them identify and act upon opportunities, overcome problems, engage a community, and innovate to support the viability of their venture as well as achieve outcomes that motivate the venture in the first place, namely to continually refine their craft and shape audiences' understanding of the value of skilled making.

Research Summary How should decision‐making be organized in entrepreneurial teams pursuing competing economic and noneconomic goals? Using a computational model, we examine how four archetypical decision‐making structures—unanimous approval, individual autonomy, majority voting, and lead entrepreneur—shape the performance of entrepreneurial firms when team members hold varied preferences for how to tradeoff economic and noneconomic goals. In stable environments, we find that majority voting generates highest economic performance, while unanimous approval generates highest noneconomic performance. Conversely, unanimous approval outperforms in fast‐changing contexts. Although goal diversity generally reduces economic performance, it enhances it in fast‐changing settings when teams operate under unanimous approval. This study thus underscores the critical role of decision‐making structures for the success of entrepreneurial teams. Managerial Summary How should entrepreneurial teams make decisions when balancing economic and noneconomic goals? We examine four decision‐making approaches—unanimous approval, individual autonomy, majority voting, and lead entrepreneur—and their impact on economic and noneconomic performance. In stable environments, majority voting leads to highest economic performance, while unanimous approval excels in achieving noneconomic goals. In fast‐paced environments, unanimous approval consistently delivers superior outcomes, enhancing both economic and noneconomic performance. Notably, teams with diverse goals can improve their economic performance in high‐velocity settings when using unanimous approval. These findings highlight the importance of choosing the right decision‐making structure to optimize performance in varying conditions. For entrepreneurial teams, adapting decision‐making processes to the pace of the environment is essential for success.

Research Summary We examine a critical yet underexplored aspect of human resource management in nascent technology ventures: employee recruitment. Applying theories of gender stereotyping, we contend that female‐led technology startups face greater obstacles in attracting job applicants than their male counterparts. Evidence from a randomized online experiment conducted in 2020/2021 with 777 US job seekers substantiates this barrier, indicating that the disparities are partly rooted in gender‐stereotypical perceptions of female technology entrepreneurs as less competent, agentic, and warm, which contribute to less favorable assessments of their ventures' economic potential and employee empowerment potential. Startups with gender‐diverse leadership teams appear to overcome these biases. Confirmatory evidence comes from a 2024 replication study with 455 US job seekers, underscoring the need to address gender biases in the technological ecosystem. Managerial Summary In the competitive landscape of technology startups, attracting talent is key. Our study reveals that startups with female leaders face gender biases during recruitment, with job candidates perceiving female technology entrepreneurs as less competent, agentic, and warm—and their startup ventures as less likely to have what it takes to grow and to empower employees. Analysis from a randomized online experiment involving 777 US job seekers in 2020/2021 and a follow‐up study with 455 US job seekers in 2024 confirm such biases. Crucially, a gender‐balanced leadership team significantly counters such biases, enhancing the venture's appeal to potential hires. These insights highlight the need for technology startups to promote gender diversity within their leadership to dismantle stereotypes and attract a broader talent pool.

Research Summary Distinctiveness is an essential element of crafts. Building on optimal distinctiveness theory, we examine the relationship between craft‐based ventures, distinctiveness, and crowdfunding performance. Using a sample of 10,915 craft campaigns and 429,290 non‐craft campaigns, we find that craft‐based campaigns have higher distinctiveness but realize lower success through distinctiveness. Additionally, craft‐based campaigns with a higher risk index have lower distinctiveness, those with higher strategy breadth have higher distinctiveness, and those with lower cognitive complexity have higher distinctiveness. The findings have implications for crafts‐based entrepreneurs in leveraging distinctiveness and the value of lowering perceptions of distinctiveness through elements of strategic entrepreneurship—strategy breadth and cognitive complexity. Managerial Summary Our study aids craft‐based entrepreneurs in presenting their ventures in crowdfunding contexts. We find that increasing the distinctiveness of craft‐based ventures results in lower crowdfunding campaign performance. Additionally, our results indicate that craft‐based campaigns that have higher risk have lower levels of distinctiveness. Conversely, we find that craft‐based campaigns with higher levels of strategic breadth and lower levels of cognitive complexity exhibit higher levels of distinctiveness. These findings have important implications regarding best practices related to how craft‐based entrepreneurs can best present their ventures within crowdfunding contexts. Specifically, our results indicate that craft‐based ventures can realize better crowdfunding performance via lower levels of distinctiveness within their campaigns.