Research

Selected Working Papers

The role of growth strategy for innovative startups is theoretically ambiguous and much debated among practitioners. I interviewed executives of 253 scaling software ventures from 34 countries and scored the internal consistency of their market and organizational plans to measure growth strategy, developing the first dataset of its kind. US startups have a 0.3 standard deviation higher growth strategy score than do others. Yet, having a growth strategy predicts performance more for non-US startups, for which a one standard deviation increase in the growth strategy score is associated with an increase in valuation by over a third. Additional analyses suggest that mistakes are more costly in non-US contexts because of financial, talent, and cultural differences, making growth strategy that helps anticipate sources of failure more important. Creating a growth strategy, however, is more difficult without the ability to learn from prior mistakes. Together, this research suggests that in institutional contexts where mistakes are more costly, growth strategy matters more, but is also harder to develop.

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 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.

Internationalization—gaining exposure to cross-border markets—often results in the aftermath of an entrepreneurial venture’s initial success. Ventures develop strong products or services, and they rely on international markets to help them continue growing and scaling their businesses. Yet what is often overlooked is the reverse: how internationalization may influence early-stage ventures—those who are still shaping their businesses into hopeful successes. Through an inductive field study of the global technology industry, we examine how internationalization influences the entrepreneurial process and the profound effect that it has on how early-stage ventures identify and exploit opportunities. We find that internationalization shapes the way early-stage ventures engage in experimentation, and in turn, how they define their business. We propose a process model in which internationalization helps ventures (a) define, (b) scope, and (c) externally validate ideas that can create and capture value through expansion and narrowing mechanisms. Together, we show that experimentation not only helps entrepreneurs adapt to new international markets—as shown in existing work—but that internationalization also may shape entrepreneurs’ core experimentation and ultimate strategy development.

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.