Research
My research focuses on entrepreneurial strategy, particularly how startups scale and why there are international differences in scaling. Specifically, it assesses the role of strategic decision-making and digital technologies in driving convergence and divergence in entrepreneurial growth around the world.
Publications
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.
Technology startups often scale by entering new markets. Doing so nearly at once as a full commitment allows them to gain more users to spur network effects, while doing so experimentally by staging market entries enables more learning. (When) do startups expand into new markets as full commitments or experimentally? We assess this question in the context of international expansion decisions. As the first study to track digital startup internationalization worldwide, we use BuiltWith data of website language tool adoption by nearly 50,000 software firms from 2001-2022. Startups, on average, adopt foreign language tools gradually across their lifecycle, even from smaller markets and with platform business models (characterized by network effects). Experimentation by smaller market startups with greater expansion incentives predicts greater internationalization. These results suggest that startups pursue market expansion experimentally.
Selected Working Papers
Prior work suggests that local financing is crucial for startup growth. But how does strategic fit shape this relationship? This study interviews 253 software startups from 34 economies and scores the internal and external fit of their market, moat, and organizational choices, developing the first dataset of its kind. The study finds that strategic fit attenuates performance differences between startups headquartered in less-versus more-financing-rich cities. This is driven by fit better predicting performance in less-financing-rich contexts than by variance in the adoption of fit across these contexts. Additional analyses indicate that fit prevents poor organizational and moat investments, which otherwise penalize startups in less-financing-rich contexts. These results suggest that strategic fit matters more when there is less external financing available.
How does participating in open source software (OSS) communities spur entrepreneurial growth? To address this question, we analyze novel data matching accounts from GitHub—the largest OSS hosting platform—to the universe of global software venture-backed firms identified by PitchBook. We find a robustly positive relationship between OSS contributions and entrepreneurial growth. These effects stem from mechanisms related to OSS contributions helping firms shape the direction of code, signal to potential acquirers and investors, and engage clients, rather than those related to learning about new software developments or cutting costs in software production. Consistent with these mechanisms, human capital, OSS policies, and market size positively moderate these effects, suggesting that OSS complements supply-side and demand-side country endowments. This research reveals that contributing to OSS can lead to entrepreneurial growth worldwide since sophisticated entrepreneurs can take strategic advantage of nudging code in a direction that fits their commercial interests as well as attracting acquirers and users. Further, we discuss important implications for policy and entrepreneurial strategy.
Attracting early adopters in new markets is crucial for startup growth. But it is not clear where startups should test to learn about demand in these markets. While testing with existing users can offer them clearer and cheaper signals, testing with new market ones can offer more transferable ones. This begs the question: (When) Do startups that test in existing or new markets attract more new market early adopters? I test this question in the context of international decisions on a digital product platform where startups post their early-stage products to attract early adopters from around the world. Taking advantage of variation in feature timing, I find that startups that test with a higher share of existing (local country) users initially attract more new market (foreign country) early adopters after they feature on the platform. This effect magnifies among startups headquartered in countries where fewer languages are spoken, making local signals clearer, but only when they are in product categories with small differences in tastes between countries where these signals are more transferable. Consistent with the idea that testing with local users gives clearer signals that improve product development, a supplementary experiment reveals that evaluators give higher ratings to products of startups that tested locally. Together, this study reveals that testing in an existing market can attract new market demand in more homogeneous contexts where signals are clearer but still transferable.
How does international exposure shape entrepreneurial pivots? Through a field study of 84 startups across 27 countries, we develop a model that uncovers how international exposure not only spurs ventures to update their understandings of the international market but also generates pivots in the addressed market. Structural differences between markets and entrepreneurs' cognitive openness makes new information about the international market more salient. This new information opens ventures' eyes to novel opportunities. Ventures then realize that the same opportunities always existed in the addressed market, but their initial taken-for-granted market assumptions blinded them. This prompts pivots in startups' core customer profile or offering. Together, the study shows that new market exposure is an important mechanism shaping entrepreneurial pivoting, with implications for entrepreneurial experimentation and strategy.
Does AI cheapen talk? Theory and evidence from global entrepreneurship and hiring (w/ Bo Cowgill and Pablo Hernandez-Lagos)
Screening human capital based on signals such as job applications or entrepreneurial pitches is crucial for organizations. Signals are informative insofar as they are costly. Generative AI (GAI) complicates screening by lowering the cost of producing impressive signals. We model the informational effects of GAI, showing that applicants' use of GAI can increase—but also decrease—an evaluator's screening mistakes. This result depends on how GAI affects experts' signals compared to non-experts'. Using experiments in hiring and startup investing, we estimate that the adoption of GAI (ChatGPT) lowers employers' and startup investors' screening accuracy by 4-9%. Consistent with our model, we also find that the use of GAI in some settings improves screening accuracy (in our case, non-English-speaking countries). These results show that GAI can profoundly shape screening accuracy.
The impact of communicating strategy on employee ideas: Evidence from a global startup field experiment (w/ F. Christopher Eaglin)
What is the impact of communicating strategy to employees in scaling ventures? As entrepreneurial ventures grow and add headcount, misalignment among employees can emerge, leading to inefficient and potentially detrimental decisions. Communicating strategy can realign employees' ideas to the firm's core framework but divert them from more distant and potentially optimal possibilities, constraining flexibility. Through a pre-registered field experiment involving 480 employees across 25 companies in 14 countries, we analyze the effects of a simple strategy communication intervention. We find that sharing the company's strategy increases the alignment of employees' ideas with company goals by 6% and enhances their differentiation from other firms by 2%. These effects are more pronounced in firms operating in lower-income contexts and non-regulated sectors where flexibility might be critical. Together, our findings suggest that communicating strategy presents a key trade-off for ventures, boosting efficiency, but at the potential expense of flexibility.