Marc Gruber

Look Before You Leap: Market Opportunity Identification in Emerging Technology Firms

Entrepreneurs play a fundamental role in bringing new technologies to market. Because technologies are often configurable to serve a variety of different markets, it is possible for entrepreneurs to identify multiple market opportunities prior to the first market entry of their emerging firms, and if they elect to do so, to therefore have a choice of which market to enter first. The empirical results presented in this paper offer three new insights regarding this important early-stage choice in new firm creation. First, they reveal that serial entrepreneurs have learned through prior start-up experience to generate a “choice set” of alternative market opportunities before deciding which one to pursue in their new firm creation. Second, the analysis indicates that entrepreneurs who identify a “choice set” of market opportunities prior to first entry derive performance benefits by doing so. Third, the positive relationship between the number of market opportunities identified prior to first entry and new firm performance is nonlinear and subject to decreasing marginal return. The research literature has yet to acknowledge the notion of multiple opportunity identification prior to entry, and the related idea of selecting the most favorable market opportunity for the creation of a new technology firm.

Pre-Entry Knowledge, Learning, and the Survival of New Firms

New firms are endowed with knowledge and experience at birth through the human capital of their founder(s). Existing empirical research suggests that this pre-entry knowledge and experience will influence the firms chances of survival; however, the mechanisms underlying this relationship have yet to be investigated. We seek to better understand and unpack this relationship. Specifically, we study the extent to which a founders pre-entry knowledge of the business activity and pre-entry management experience influence the effectiveness of two subsequent learning activities---namely, early-stage business planning and product-line change. Our findings suggest that pre-entry knowledge and management experience increase firm survival through moderating the effects of these subsequent learning activities. We also find that learning activities are not always beneficial; in our sample, early-stage business planning is associated with decreased firm survival, and product line change is associated with increased firm survival. We examine these patterns using survey data collected from 436 individuals in the Munich region who founded their own firms as an alternative to continued unemployment. Our results have theoretical implications for the entrepreneurship, evolutionary economics, and organizational learning literatures.

Venture Capitalists' Evaluations of Start-Up Teams: Trade-Offs, Knock-Out Criteria, and the Impact of VC Experience

The start–up team plays a key role in venture capitalists’ evaluations of venture proposals. Our findings go beyond existing research, first by providing a detailed exploration of VCs’ team evaluation criteria, and second by investigating the moderator variable of VC experience. Our results reveal utility trade–offs between team characteristics and thus provide answers to questions such as “What strength does it take to compensate for a weakness in characteristic A?” Moreover, our analysis reveals that novice VCs tend to focus on the qualifications of individual team members, while experienced VCs focus more on team cohesion. Data were obtained in a conjoint experiment with 51 professionals in VC firms and analyzed using discrete choice econometric models.

New ventures based on open innovation – an empirical analysis of start-up firms in embedded Linux

An important and intriguing aspect of e-entrepreneurship is the formation of new ventures in the domain of open source software (OSS). Previous research on these ventures has primarily looked at the design of business models. The purpose of this paper is to explore how three key challenges of venture management – the liabilities of newness and smallness of start-ups and market entry barriers – affect new ventures in OSS. Based on empirical data from personal interviews and a large scale survey, we find that several liabilities that are typically discussed in the entrepreneurship literature are much less of a challenge for new ventures in OSS. Our findings have implications for the emerging theory on e-entrepreneurship and for entrepreneurs considering to exploit business opportunities based on OSS and on open innovation in general.

Marketing in New Ventures: Theory and Empirical Evidence

Marketing is considered to be of utmost importance for the success of new ventures. Therefore, research on entrepreneurial marketing has increased considerably since the late 1980s. Its findings are varied and vibrant, yet also large and extremely fragmented, and a comprehensive theory of entrepreneurial marketing is still lacking. This situation proves to be a major hurdle for further advances, as the status quo of research cannot be accessed without major efforts. To help researchers and lecturers synthesize the growing body of knowledge, this paper brings together and reviews important research findings in entrepreneurial marketing. Thus, the paper creates a much needed map of the field, making this highly relevant topic readily accessible. Furthermore, the paper provides directions for future research, showing that many key questions of this field (e.g., various strategies and tactics of low-cost marketing) must be explored more thoroughly.

The open innovation research landscape: Established perspectives and emerging themes across different levels of analysis

Abstract This paper provides an overview of the main perspectives and themes emerging in research on open innovation (OI). The paper is the result of a collaborative process among several OI scholars – having a common basis in the recurrent Professional Development Workshop on ‘Researching Open Innovation’ at the Annual Meeting of the Academy of Management. In this paper, we present opportunities for future research on OI, organised at different levels of analysis. We discuss some of the contingencies at these different levels, and argue that future research needs to study OI – originally an organisational-level phenomenon – across multiple levels of analysis. While our integrative framework allows comparing, contrasting and integrating various perspectives at different levels of analysis, further theorising will be needed to advance OI research. On this basis, we propose some new research categories as well as questions for future research – particularly those that span across research domains that have so far developed in isolation.

Knowledge Recombination Across Technological Boundaries: Scientists vs. Engineers

Building on the seminal work of Thomas J. Allen, we contribute to the emerging microlevel theory of knowledge recombination by examining how individual-level characteristics of inventors affect the breadth of their technological recombinations. Our data set combines information from 30,550 European patents with matched survey data obtained from 1,880 inventors. The analysis supports the view that inventors with a scientific education are more likely to generate patents that span technological boundaries in our case, 30 broad, top-level technological domains than inventors with an engineering degree. A doctoral degree is associated with increased recombination breadth for all groups of inventors. The breadth of an inventors technological recombinations diminishes with increasing temporal distance to his education, but the differences between scientists and engineers persist over time. Our findings provide several new insights for research on inventors, the literature on organizational learning and innovation, and strategy research. This paper was accepted by Lee Fleming, entrepreneurship and innovation.

From Minds to Markets: How Human Capital Endowments Shape Market Opportunity Identification of Technology Start-Ups

The resource-based view suggests that firms’ heterogeneous resource endowments are important for explaining interfirm performance differences. To date, however, the literature provides little insight on the factors that shape the identification of markets in which firm resources, as embodied in a product or service, can create value for end customers. Building on entrepreneurship research and Penrose’s early resource-based work, the authors examine how four main types of pre-entry human capital endowments (i.e., the characteristics that the founders bring to the founding process) shape the identification of market opportunities for emerging technology firms. They find that prior entrepreneurial and management experience endowments enhance, while marketing and technological experience endowments constrain, the number of market opportunities identified. In addition, the authors find that the number of market opportunities identified depends on the combinations of generalized and specialized endowments in the founding team.

Exploring the Origins of Organizational Paths: Empirical Evidence From Newly Founded Firms

The notion of path dependence in organizational processes has intrigued scholars for several decades. Yet, while extant studies provide rich insights on the factors that cause persistence in organizational paths, research that explores the origins of organizational paths remains scant. Analyzing data collected from 446 firm founders, the author investigates the creation of product—market paths in new firms. The analysis reveals systematic relationships between key pre-entry human capital endowments of founders and the consideration of alternative solutions in path creation, thereby helping us to better explain, and predict, organizational path creation. Implications for the organizational and entrepreneurship literatures are discussed.

Research on marketing in emerging firms: key issues and open questions

In many industries, emerging firms derive their initial strength from R&D activities. Though technological capabilities are important for building technologically sound products, they are not sufficient for turning an emerging firm into a viable economic actor, as numerous examples illustrate. Based on a discussion of the specific challenges of marketing in new ventures and a brief overview on past and current research studies, this article focuses on reviewing research findings on four key topics: establishing a market orientation, building credibility and trust with stakeholders, establishing marketing alliances and low-cost marketing. Though previous research has produced important insights into each of these topics, there are still plenty of issues that offer promising opportunities for future studies.