Early Venture Evolution PDW

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Early Venture Evolution PDW Chuck Eesley (Stanford University) Lynn Wu (U. Penn – Wharton) Wesley Koo (Stanford University) David Hsu (U. Penn – Wharton)

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Quick overview – 2 studies Early stage – MOOC randomized experiment Later stage – Stanford alumni data

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Visions, Entrepreneurial Adaptation and Social Networks: Evidence from a Randomized Experiment on a MOOC Platform Charles Eesley (Stanford) Lynn Wu (Wharton)

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Early-stage programs Accelerator and incubator programs outside of universities, such as YCombinator, TechStars and the Founder Institute National Science Foundation has recently launched an $18M program to pair select engineers and scientists who win SBIR grants with mentors and to teach them a more adaptive process for startup creation (I-Corps)

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Difficult to Observe Entrepreneurial Processes Planning Approach Create an unwavering vision Persistent in executing the vision Less likely to modify the vision to leverage newly available resources Delmar and Shane, 2003; Porter, 1980 Adaptive Approach Take adv. of new resources and change the vision if necessary Suitable in uncertain environment such as early stage entrepreneurship? (Baker and Nelson 2005, Blank 2013, Brown and Eisenhardt 1997, McGrath 2010)

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Networks & Entrepreneurial Strategy Adaptive & Network Diversity Mentor with diverse networks offers new and novel information and opportunities. Adaptive entrepreneurs are likely to take advantage of the new resources. Planning & Network Diversity Entrepreneurs would not always use the resources from a mentor unless it conforms with the original vision. A mentor in a cohesive network may collaborate better with the entrepreneur.

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Networks & Entrepreneurial Strategies Difficult to observe endogenous matching process between mentors and mentees. Difficult to alter coworker and friendship ties. Difficult to observe the process of entrepreneurship. Randomized experiments could help.

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Setting & Data NovoEd class: Technology Entrepreneurship Class offered: Fall 2013 for 8 weeks Free to anyone Students in 61 countries in the world Goal: Create a video pitch at the end of the class

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Summary Statistics

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Did the Treatment Work?

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Treatment Effects On Outcomes

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Mentors and Performance

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Effects of Strategic Change on Venture Performance: The Implications of Change Location, Level and Top Management Team Composition   Charles Eesley Stanford University David Hsu Wharton School, Management Department, University of Pennsylvania Wesley Koo Stanford University

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Stanford Alumni Data Survey of 143,482 individuals—all living Stanford alumni, current faculty and selected (research) staff—to explore the influence of education on life and career choices. Responses were received from 27,780 individuals, for a response rate of 19.5 percent. These numbers are the percentage of respondents out of the total number in that category who received the email. Women: 19% Men: 19% Business: 23% Earth Sciences: 30% Education: 30% Engineering: 22% Law: 20% H&S: 13% Medicine: 27%

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Conclusion Contrary to work on discovery-driven planning, “lean startup”, we find that at the early stages, a planning approach appears to be more effective. Davis, Eisenhardt et al. (2009) simulation – suggests entrepreneurial firms add structure and established firms stick to stable environments. Adaptive approach is inferior to the planning approach contrary to the popular notion that adaptive is better for early stage entrepreneurship. However finding a mentor with high network diversity can mitigate the disadvantages of using adaptive approach. Important to examine processes of entrepreneurship through RCT to elicit causal inferences.