Knowledge that Transforms

Research Summary We develop a dynamic view of national entrepreneurial culture by examining the linguistic evolution of media‐produced cultural artifacts—entrepreneurship‐related newspaper articles. Applying machine learning to 690,088 articles from 103 newspapers across the United States between 1996 and 2016, we identify a growing positivity bias toward entrepreneurship at the national level evidenced by rising emotional tone and declining analytical thinking. This bias varies by topic, with “entrepreneurial aspirations and journeys” driving the trend. Our analyses also suggest this bias may encourage the creation of new ventures but limit venture growth potential. We highlight theoretical and methodological contributions to research on national entrepreneurial culture and identify promising avenues for future research. Managerial Summary We examine how a country's cultural attitudes toward entrepreneurship change over time by studying relevant newspaper articles. We also consider if any changes in such attitudes may have implications for the quantity and quality of a country's new ventures. After analyzing 690,088 articles from 103 newspapers across the United States between 1996 and 2016, we find a growing positivity bias toward entrepreneurship evidenced by increasing rates of positive tone and decreasing rates of analytical thinking. This bias is largest when media articles discuss entrepreneurial aspirations and journeys. Our analyses also suggest this bias may facilitate the creation of new ventures but limit their growth potential. These findings have implications for understanding and measuring national entrepreneurial culture, and create opportunities for future research.

Research Summary Using data from 1899 Kickstarter campaigns (2009–2019), we examine the impact of simultaneous emission of interdimensional signals of human capital and social causes on crowdfunding campaign success. We argue and demonstrate that backers respond positively to human capital signals, as reflected by prior work and entrepreneurial experiences, as they communicate the competencies of the entrepreneurs. Conversely, signaling a high level of commitment to social causes communicates competing demands, thereby reducing entrepreneurs' ability to secure funding. Moreover, when emitted jointly, interaction of these two signals negatively affects campaign success. Our theory and findings provide nuanced insights regarding simultaneously emitted interdimensional signals in crowdfunding context with a structured incentive system, thereby increasing our understanding about the ambiguous nature of bundling human capital with high social cause signals. Managerial Summary When evaluating new ventures in the public sphere, potential backers simultaneously process the complex information emitted by founders (i.e., signals). These signals communicate the unobservable qualities of the founders. In this article, we investigate the independent and joint effects of two signals on crowdfunding campaign outcomes: founder's human capital and their commitment to social causes. We show that while human capital increases campaign success, a high commitment to social cause decreases this likelihood. We further demonstrate that when these two signals are emitted simultaneously, balancing issues between the signals reduce the chances of attaining campaign success in crowdfunding. These findings emphasize the importance for crowdfunding founders and campaign designers to communicate coherent and well aligned signals to ensure campaign success.

Research summary Entrepreneurship research overlooks the dynamics of changing diversity in founding teams. Our simulations calibrated from existing studies suggest that founding teams that change diversity exhibit greater discounted performance for their ventures due to being less diverse and thus their ventures surviving longer, compared to teams that maintain their diversity. Moreover, discounted performance is higher for teams changing diversity due to other teams' performance than due to their own poor performance. Simulating without membership changes the interdependence between team diversity, venture performance, and team disruption, we find that while team diversity is overall performance‐enhancing, this association differs across contexts and its impact varies as ventures mature. Founding team diversity should thus be seen as a continuum where moderate diversity can best serve teams in turbulent environments. Managerial summary We simulated the behavior of founding teams over time to show that compared to teams that do not change their diversity, those who do experience greater discounted performance for their business ventures. This improvement stems from the increased longevity, and thus greater accumulated performance, for teams that switch since they are more rather than less homogeneous. Our investigation also indicates that ventures led by teams that change diversity because they aspire to outperform other teams, tend to exhibit greater discounted performance than those that change diversity to outperform themselves. When we investigate the interconnectedness of teams' diversity, ventures' performance, and disruption, albeit without allowing for any changes in team diversity, we find that while diversity usually helps, teams moderately diversified tend to perform best in turbulent times.

Research Summary This work explores the intersection of strategic entrepreneurship and craft‐based ventures, focusing on the integration of materiality, authenticity, and tradition in the creation of competitive advantage. Craft, historically rooted in artisanal, small‐scale production, has evolved into “advanced craft,” requiring high expertise while also engaging with modern economic goals such as scaling, technological adoption, and global value chains. Craft‐based strategic entrepreneurship embraces creativity and innovation, alongside traditional values and high‐quality production, to engage with the modern economy without the alienating effects of industrialization. We highlight how craft entrepreneurs balance the pursuit of innovation with the preservation of authenticity and heritage. By examining the materiality, authenticity, and tradition embedded in craft, our work contributes to the understanding of how these elements influence competitive advantage and the broader relationship between economy and society in entrepreneurial ventures. Managerial Summary We offer practical insights for owners and managers in craft‐based ventures seeking to balance tradition with modern business strategies. As the craft sector evolves into “advanced craft,” entrepreneurs must integrate artisanal expertise with scalable operations, technology adoption, and global market engagement. We highlight how successful craft ventures maintain high quality, authenticity, and cultural heritage while embracing strategic entrepreneurship practices like innovation, planning, and partnerships with larger organizations. For owners and managers, the key takeaway is the importance of preserving the unique values of craftsmanship—such as materiality, authenticity, and tradition—while also adopting modern tools like advanced technology and marketing strategies to scale and compete. By understanding these dynamics, craft‐based businesses can enhance their competitive advantage, foster meaningful customer engagement, and navigate challenges like technological disruption and market expansion without losing their core identity.

Research Summary Venture capital firms (VCs) sometimes continue to hold significant equity stakes in entrepreneurial ventures after venture IPO. The information economics view suggests that retaining equity signals VC commitment and venture quality. This study conceptualizes retaining equity as holding an exchange option, the option to exchange VCs' own valuation of IPO ventures for the market's valuation. Holding this option allows VCs to benefit from the ventures' upside potential. Since exit amounts to giving up the option, the option value represents an opportunity cost of exit. VCs may delay exit if this option is sufficiently valuable. The study examines two key conditions that interact to increase the value of this option: uncertainty and positive private information. This study contributes to research on VC exit and real options. Managerial Summary When do VCs retain equity rather than exit after venture IPO? Researchers have addressed the impact of signaling, cash constraints, human capital constraints, blockholding, VC fund performance, portfolio diversification and institutional features. We identify a previously unrecognized driver: to retain the opportunity to benefit from an IPO venture's upside potential that is yet to be fully recognized or realized. We submit that VCs' incentive to retain equity increases with uncertainty in the venture's industry, and VCs' positive private information as indicated by venture patent applications and positive market surprises in the venture's industry. We find largely supportive evidence for the positive joint effect of uncertainty and private information on the decision to retain equity within the first year or even two years after IPO lockup expiration.

Research Summary What drives platform complementors to adopt boundary resources? We address this question by drawing on optimal distinctiveness. We suggest that competitors' adoption of a platform boundary resource on the one hand increases the legitimacy of the resource, but on the other hand decreases a focal complementor's ability to differentiate by adopting it. We therefore hypothesize an inverted U‐shaped relationship between prior and future adoption of a platform boundary resource. In a dataset of health and fitness apps on the Apple iOS platform and through three online experiments, we find support for this relationship and for the existence of two important complementor‐specific contingencies that moderate this relationship. This paper expands our understanding of how optimal distinctiveness drives the dynamics of platform‐mediated markets. Managerial Summary In platform markets, complementors face a dilemma: which of the available platform boundary resources should they adopt? We show that a focal complementor's decision to adopt a boundary resource is the result of a strategic trade‐off between the desire to be both legitimate and to be differentiated from competitors. The result is that initially many complementors adopt the boundary resource and it becomes viewed as increasingly attractive by other platform complementors. However, over time as many complementors have adopted the boundary resource, the remaining complementors begin to shy away from adopting it because they worry that doing so might hurt their ability to be differentiated on the platform. These results are shaped by the complementors' performance and how dedicated they are to the platform.

Research Summary Strategic entrepreneurship research has long focused on high growth and wealth maximization in the creation of primarily economic value. As such, it has largely overlooked craft entrepreneurs, who prioritize skill, materiality, and immersive action in creating broader forms of value. Deep engagement with materials, alongside daily aesthetic (sensory, tacit, embodied) practices are key to how craft entrepreneurs create unique value and strengthen competitive distinction. Drawing on ethnographic data from two craft‐based settings, we abductively generated three dimensions and associated tensions by which craft entrepreneurs leverage aesthetics for strategic entrepreneuring: materializing , enchanting , empathizing . Our key contribution is to unpack the embodied—and very human—processes by which craft entrepreneurs imagine and give life to unique offerings while creating distinctive value for both themselves and their stakeholders. Managerial Summary The focus of strategic entrepreneurship research is often on economic value creation, along with high growth and wealth maximization. By exploring the everyday practices of craft entrepreneurs, we unpack how creating broader forms of value (e.g., symbolic, artistic, social, cultural) through immersive and embodied actions contributes to stylistic and competitive distinction. For the craft entrepreneurs in our study, remaining competitive is about engaging in sensuous practices that result in meaningful and authentic offerings, for both themselves and their stakeholders. By capturing and exploring these daily practices, along with the tensions that undergird real‐time exchanges with stakeholders, we provide fresh insights into how craft entrepreneurs create unique value while delicately balancing tradition with innovation to strengthen competitive distinction.

Research Summary Commercial success in craft‐based industries requires projecting authentic identities but direct claims of authenticity can backfire and raise suspicions of pecuniary motivation, an antithesis to authenticity. Managing authentic identities is thus central to the success of craft‐based ventures. We argue that organizations can shape their audience's perceptions of authenticity and appeal by tacitly and indirectly conveying a resonant identity meaning with visibility and credibility . Our empirical analysis, set in the US craft beer industry, reveals strong support for the idea that craft ventures can raise authenticity and appeal through managing the content/meaning, visibility, and credibility of their identity claims. We discuss the implications of our theory and findings for the role of organizations in the social construction of authenticity and appeal. Managerial Summary Managers of craft ventures in identity‐driven markets face a strategic challenge in managing growth—how to maintain the authentic identity of their firm as its scale of operations expands. In modern‐day craft industries, consumers covet offerings from firms that they deem authentic but overt claims of authenticity by producers are ineffective. Our study of the craft beer market suggests that managers can leverage strategic assets like organizational resources (ownership structure), capabilities (investment in technology and product variety) and position (third‐party endorsements) to effectively communicate their firm's identity meaning with credibility and visibility. This holds significant practical implications for how managers can successfully navigate the growth process and their firms can continue to be viewed as authentic craft producers even as they increasingly benefit from scale.

Research Summary We investigate why a corporate investor makes more corporate venture capital (CVC) investments in certain areas than in others. Focusing on firms' different technological capabilities across distinct technology domains, we argue that a corporate investor's technological capabilities in a given domain affect its likelihood of investing in (1) ventures within the domain in an inverted U‐shaped manner and (2) ventures operating in other technologically complementary domains in a positive manner. We further claim that these two suggested relationships between technological capabilities and the likelihood of CVC investments are shaped by the technology growth rate of the focal domain. We test these arguments in the US medical sector, where incumbent firms are active in CVC investments as a means to acquire external knowledge. Managerial Summary We argue that firms exhibit different patterns in their choice of CVC investment areas based on their technological capabilities within a given technology domain. Our findings in the US medical sector indicate that firms are most likely to invest in ventures within domains where their technological capabilities are moderate—neither too weak nor too strong. This suggests that CVC investments serve gap‐filling purposes for technology intermediates. Moreover, corporate investors tend to invest in ventures within domains that are technologically complementary to their areas of strength. However, when a given domain experiences rapid growth, technology leaders in that domain shift their CVC investment focus from complementary areas to that domain to maintain their leading position.

Research Summary Building on business model research and the social entrepreneurship literature, we conceptually develop a set of business model choices for social ventures. These choices specify the scope of venture beneficiaries, the extent that customers and beneficiaries overlap, and how social meaning is attached to the venture's value proposition. Concurrent configurations of these choices give rise to four types of social business models: (1) Social Stimulators, (2) Social Providers, (3) Social Producers, and (4) Social Intermediaries. We illustrate this typology using data from seven social ventures and formulate propositions about the implications these business model choices have for a venture's value creation and value capture potential. We then discuss contributions to the literature on social ventures and social entrepreneurship, and the literature on business models. Managerial Summary In this article, we propose a framework outlining key business model choices for social ventures. These choices include the scope of target beneficiaries of the venture, the degree of overlap between customers and beneficiaries, and how the venture communicates its social mission through its value proposition. By combining these choices in different ways, we identify four distinct types of social business models which we call Social Stimulators, Social Providers, Social Producers, and Social Intermediaries. To bring this framework to life, we have examined data from seven real‐world social ventures, offering concrete examples to illustrate each type. For each of these four types of social business models, we have also formulated propositions about how the business model choices impact a venture's value creation and value capture potential.