Adam J. Bock

The Business Model in Practice and its Implications for Entrepreneurship Research

While the term “business model” has gained widespread use in the practice community, the academic literature on this topic is fragmented and confounded by inconsistent definitions and construct boundaries. In this study, we review prior research and reframe the business model with an entrepreneurial lens. We report on a discourse analysis of 151 surveys of practicing managers to better understand their conceptualization of a business model. We find that the underlying dimensions of the business model are resource structure, transactive structure, and value structure, and discuss the nature and implications of dimensional dominance for firm characteristics and behavior. These findings provide new directions for theory development and empirical studies in entrepreneurship by linking the business model to entrepreneurial cognition, opportunity co–creation, and organizational outcomes.

A review and simulation of business angel investment returns

Abstract Business angels are widely recognized as a significant source of entrepreneurial finance, particularly for early-stage businesses. However, rigorous investigation on angel investment performance has been limited. This paper examines investment returns of business angels in addressing the question of whether angel investing generates attractive returns. We review the few published studies which report on more than 100 investment exits to establish baseline returns expectations and clarify returns measurement limitations. We then use data from one of the largest studies of angel returns to populate a Monte Carlo simulation of returns profiles to explore the link between portfolio size and the probability of the desired level of returns. The study reveals that angel deal returns are highly skewed; smaller portfolios have higher average returns but dramatically lower median returns. In contrast with prior studies, our study shows that portfolios with more than 50 investments are required to significantly minimize risk of poor returns and that similar scale is required to maximize returns potential, as smaller portfolios have a lower average internal rate of return (IRR). We show that reinvestment rate is a critical element in measuring angel returns, and we demonstrate the limitations of IRR as a returns metric through the simulation.

Creating Project Legitimacy – The Role of Entrepreneurial Narrative in Reward-Based Crowdfunding

Purpose This study examines how narratives and legitimacy formation affect crowdfunding capital assembly from distributed, heterogeneous investors. Methodology/approach The study explores a dataset of 80,181 projects from Kickstarter, a rewards-based crowdfunding platform, between 2009 and 2013. We explore the link between project-related variables, legitimacy formation and outcomes. Findings Entrepreneurs design narratives and create project legitimacy by exploiting crowdfunding platform-specific features. First, lower funding targets and shorter campaign durations confer positive project legitimacy. Second, entrepreneurs exploit reward-levels as narrative tools that encourage funders to engage with the project. Third, visual pitches transmit a broader sociocultural narrative, leveraging emotional rather than financial reasoning. We also note certain gender effects. Research implications Crowdfunding platforms allow entrepreneurs to pitch business ideas to a broad online audience. We show that project legitimacy, including both structural and narrative elements, is linked to crowdfunding outcomes. In particular, legitimacy is co-created through the generation of a persuasive narrative linking the entrepreneur and investor cohort. Practical implications Entrepreneurs use crowdfunding platforms to generate a coherent narrative around unfamiliar business models. Generic platform tools may be set and manipulated in online crowdfunding pitches to support project legitimacy. Ultimately, these are less important than establishing an affinity-based narrative that engages and exploits investor participation. Successful crowdfunding pitches co-author the project story with investors. Originality/value Crowdfunding has been traditionally understood as simply an online-mediated venture resource assembly tool. A narrative framework highlights the critical role of legitimacy formation in a disintermediated investment system.

Innovation and Leadership: When Does CMO Leadership Improve Performance From Innovation?

Ensuring that organizational innovation generates value increasingly requires effective marketing management. Prior studies, however, report conflicting effects of chief marketing officer (CMO) leadership on how well the firm exploits innovation. These inconsistencies may be associated with firm-level innovation effort, customer focus, and industry type. We analyze archival data from 587 interviews with global CEOs to explain the effect of CMO leadership on outcomes of organizational innovation. CMO leadership of the firm’s primary innovation mode is positively associated with product–market innovation effort but not marginal revenue from innovation. CMO leadership also moderates the relationship between customer focus and innovation revenue. Predictive validity testing shows that these effects are especially important for service firms. The benefits of CMO-led innovation have specific limitations that firms must consider for organization-wide innovation efforts.

Bring the Noize: Syndicate and Role-Identity Co-Creation During Crowdfunding

This study reports the first multi-year, longitudinal crowdfunding case study. We use multiple data sources to explore micro-processes before, during, and after a crowdfunding campaign. We focus on the entrepreneur’s experience to generate micro- and meso-level theories about a crowdfunding process. A crowdfunding campaign is more than the sum of platform and site characteristics. Entrepreneurial behavior, informed by role-identity development, drives campaign outcomes. Role-identity may be fluid as the entrepreneur strives to generate a campaign syndicate. We propose three strategies for syndicate-based identity formation. The results significantly extend knowledge on the crowdfunding process by revealing the unique activities and choices during role-identity adaptation. Entrepreneurs planning crowdfunding campaigns should recognize the importance of role-identity in the formation of a syndicate that will support the campaign. An external website accompanies this article to make the extensive case data transparent and accessible.

Regenerative Medicine Venturing at the University-Industry Boundary: Implications for Institutions, Entrepreneurs, and Industry

Regenerative medicine research at university laboratories has outpaced commercial activity. Legal, regulatory, funding, technological, and operational uncertainty have slowed market entry of regenerative medicine treatments. As a result, commercial development has often been led by entrepreneurial ventures rather than large biopharma firms. Translating regenerative medicine across the university-industry boundary links academic scientists, technology transfer organizations, funders, and entrepreneurs. Conflicting motivations among the participants may significantly hinder these efforts. Unproven downstream business models for regenerative medicine delivery further complicate the entrepreneurial process. This chapter explores the challenges associated with entrepreneurial activity commercializing regenerative medicine science developed at research institutions.

The Role of Structured Intuition and Entrepreneurial Opportunities

Woodwards seminal research linking technology to optimal organizational form presented a contingent theory of managerial structure that, in effect, presented the organizational version of scientific management. Taylorism addressed individual work processes; Woodwards theory addressed organizational structural processes; deviations from optimized processes or systems reduced effectiveness. The very nature of contingency theory, however, relies on the implicit assumption that the production technology of the organization is the primary mechanism by which the firm generates value. In the case of the biotechnology and social networking firms, the underlying production technology and organizational structure are intermediaries to value creation, not production technologies per se.