Can accelerators pick the most promising startup ideas no matter their provenance? Using unique data from a global accelerator where judges are randomly assigned to evaluate startups headquartered across the globe, we show that judges are less likely to recommend startups headquartered outside their home region by 4 percentage points. Back-of-the-envelope calculations suggest this discount leads judges to pass over 1 in 20 promising startups. Despite this systematic discount, we find that—in contrast to many past studies—judges can discern startup quality and are no better at evaluating local firms. These differences emerge because the pool of startups accelerator judges evaluate is both broader and less “local,” suggesting that judging ability depends on the composition of the companies they are tasked with evaluating.
This is the first study to consider the relationship between open source software (OSS) and entrepreneurship around the globe. This study measures whether country-level participation on the GitHub OSS platform affects the founding of innovative ventures, and where it does so, for what types of ventures. We estimate these effects using cross-country variation in new venture founding and OSS participation. We propose an approach using instrumental variables, and cannot reject a causal interpretation. The study finds that an increase in GitHub participation in a given country generates an increase in the number of new technology ventures within that country in the subsequent year. The evidence suggests this relationship is complementary to a country’s endowments, and does not substitute for them. In addition to this positive change in the rate of entrepreneurship, we also find a change in direction—OSS contributions lead to new ventures that are more mission- and global-oriented and are of a higher quality. Together, the results suggest that OSS can boost entrepreneurial activity, albeit with a human capital prerequisite. We consider the implications for policies that encourage OSS as a lever for stimulating entrepreneurial growth.
Selected Working Papers
Can strategy help startups compensate for constraints in local endowments like venture capital, market size, and talent pools that prior work finds important for startup performance? This paper addresses this question by interviewing executives of 253 scaling software ventures from over 30 economies and scoring the alignment of their market and organizational choices to detect whether they have a strategy, developing the first dataset of its kind. The study finds that having a strategy negatively moderates the relationship between HQ city and economy endowments and startup performance. This effect is concentrated among startups in more irreversible circumstances. The results suggest that strategy is a substitute for local endowments, with the potential to help startups overcome resource scarcities that constrain growth around the world.
Internationalization—gaining exposure to cross-border markets—is often the result of an entrepreneur’s experimentation and strategy around their core business. Scholars have shown how entrepreneurs develop products or services, and after achieving some traction, turn to international markets to help them continue growing and scaling their businesses. Yet, what may be neglected in this prior work is how internationalization may not always be the result of—but instead the catalyst to—new information, entrepreneurial discovery and sensemaking, and important developments in an entrepreneur’s core business. Through an inductive field study of 84 entrepreneurs across 27 countries in the global technology industry, we examine how internationalization influences the entrepreneurial process and the profound effect that it has on how entrepreneurs identify and exploit opportunities. We find that internationalization shapes the way these entrepreneurs engage in experimentation, and in turn, how they define their business. We propose a process model that sheds light on how entrepreneurs (a) define, (b) scope, and (c) externally validate ideas based on their international exposure—a process that aids them in creating and capturing value. Our findings show how cross-border markets may offer unanticipated information to entrepreneurs, which adjusts their perceived choice sets and helps them ultimately define their business, contributing to research on experimentation and internationalization and new theory on how cross-border exposure shapes innovation and growth.
Product platforms have emerged as vehicles for startups to reach and learn from users from around the world. Do global startups with greater prior exposure to users outside of their headquarters region expand their user base more after featuring on these platforms than do local ones? This paper tests this question using data from a digital product platform where IT startups from around the world launch their product to get early users. It shows that the user effects of platforms accrue more to local rather than to global startups. While global startups do not see meaningful increases in users after posting, local startups see a roughly one-fifth boost in page visits, driven by foreign region users. These local startups see an increase in their share of foreign users by twelve percentage points and update their websites to orient toward these audiences. Together, these analyses suggest that product platforms enable local startups to learn about foreign demand, revealing how product platforms can help startups explore new international orientations, rather than entrenching pre-existing ones.