Parallel Experimentation as Entrepreneurial Strategy: Effects on Innovativeness, Exit and Resourcing

Linus Hietaniemi; Juhana Peltonen

doi:10.5465/AMBPP.2019.14554abstract

Parallel Experimentation as Entrepreneurial Strategy: Effects on Innovativeness, Exit and Resourcing

Linus Hietaniemi^*, Juhana Peltonen

^*Corresponding author for this work

Entrepreneurship, Management and Organisation, Helsinki

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › Scientific › peer-review

Abstract

Our study examines how experimenting with multiple businesses simultaneously can drive startup performance. We hypothesize that entrepreneurs who experiment with multiple businesses simultaneously face two interrelated tradeoffs: firstly, experimentation allows these so-called portfolio entrepreneurs to generate more innovative startups, but at the same time, they are more resource-constrained than their peers. Secondly, the startups of portfolio entrepreneurs underperform in the short run but, given the benefits of experimentation and selection, outperform their peers in the long run. To test our hypotheses, we use linked employer-employee data for Finnish entrepreneurs between 1995 and 2015. Our findings support our hypotheses and, as such, provide new insight into the drivers of entrepreneurial performance.

Original language	English
Title of host publication	Academy of Management Annual Meeting Proceedings
Publication date	01.08.2019
DOIs	https://doi.org/10.5465/AMBPP.2019.14554abstract
Publication status	Published - 01.08.2019
MoE publication type	A4 Article in conference proceedings
Event	Academy of Management Annual Meeting 2019: Understanding the Inclusive Organization - Boston, United States Duration: 09.08.2019 → 13.08.2019 Conference number: 79

Keywords

512 Business and Management

Areas of Strength and Areas of High Potential (AoS and AoHP)

AoHP: Strategic and entrepreneurial praxis
AoS: Leading for growth and well-being

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Cite this

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title = "Parallel Experimentation as Entrepreneurial Strategy: Effects on Innovativeness, Exit and Resourcing",

abstract = "Our study examines how experimenting with multiple businesses simultaneously can drive startup performance. We hypothesize that entrepreneurs who experiment with multiple businesses simultaneously face two interrelated tradeoffs: firstly, experimentation allows these so-called portfolio entrepreneurs to generate more innovative startups, but at the same time, they are more resource-constrained than their peers. Secondly, the startups of portfolio entrepreneurs underperform in the short run but, given the benefits of experimentation and selection, outperform their peers in the long run. To test our hypotheses, we use linked employer-employee data for Finnish entrepreneurs between 1995 and 2015. Our findings support our hypotheses and, as such, provide new insight into the drivers of entrepreneurial performance.",

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