Social Interaction: A Determinant of Entrepreneurial Team Venture Success

An important issue to explain the success of new ventures is mostly ignored by the research of entrepreneurship: the social interaction within entrepreneurial teams. The purpose of this paper is to introduce the concept of social interaction, which was originally developed for innovation teams in the field of entrepreneurship research and theory.The theoretical discussion proves if an adoption of the social interaction to the field of entrepreneurship is theoretically possible. Using the data of 159 German entrepreneurial teams, the effects of social interaction on new business success are empirically proven. The introduced measurement model, which consists of six dimensions, shows a high quality in the empirical test. The quality of the social interaction within entrepreneurial teams is crucial for the new venture success. An empirical comparison with the frequently used team conflicts confirm that the measurement of conflicts is not a sufficient substitute measurement for social interaction. Overall, the social interaction in entrepreneurial teams could be seen as an important but not only factor of business success.     

Birds of a feather get lost together: new venture team composition and performance

This study explores the relationship between new venture team composition and new venture persistence and performance over time. We examine the team characteristics of a 5-year panel study of 202 new venture teams and new venture performance. Our study makes two contributions. First, we extend earlier research concerning homophily theories of the prevalence of homogeneous teams. Using structural event analysis we demonstrate that team members?? start-up experience is important in this context. Second, we attempt to reconcile conflicting evidence concerning the influence of team homogeneity on performance by considering the element of time. We hypothesize that higher team homogeneity is positively related to short term outcomes, but is less effective in the longer term. Our results confirm a difference over time. We find that more homogeneous teams are less likely to be higher performing in the long term. However, we find no relationship between team homogeneity and short-term performance outcomes.     

Task Conflict,Narcissism and Entrepreneurial Capability in Teams Planning a Business: A Moderated Moderation Approach to Explaining Business Planning Performance

Drawing on the dynamic self‐regulatory processing model of narcissism, we hypothesize that in teams planning a business, task conflict relates positively to business planning performance and that this link is reinforced by the team's narcissism. By integrating aspects of human capital theory, this brighter side of narcissism is amplified where the narcissism is aligned with entrepreneurial capability and the team members' belief in their entrepreneurial capability. The findings of the moderated moderation analysis examining 66 teams of entrepreneurship students support the study's assumptions and provide meaningful implications for social psychology and personality researchers in entrepreneurship.     

Demographic diversity for building an effective entrepreneurial team: is it important?

Although traditional entrepreneurship literature often views entrepreneurship as an economic battle of a “lonely hero”, the prevalence of entrepreneurial teams is an emerging economic reality. This study examines the influences of demographic diversity variables in terms of age, gender, and functional background and team process variables in terms of team-level cognitive comprehensiveness and team commitment on entrepreneurial team effectiveness. With field interview data from 174 entrepreneurs representing 79 entrepreneurial teams, this study suggests that demographic diversity is not important for entrepreneurial team effectiveness, whereas the team process variables positively influence team effectiveness. The findings also suggest that the diversity in terms of gender, age and functional background does not contribute to the team-level cognitive comprehensiveness and team commitment. Finally, the study explores implications of the findings for practice and future research.     

Teams developing business ideas: how member characteristics and conflict affect member-rated team effectiveness

Team researchers have found that the diversity to effectiveness ratings are mediated by team conflict. Using a sample of 73 teams developing their business ideas, I found direct effects of diversity and conflict on member-rated team effectiveness. Here, I explain how the circumstances under which these teams operate can lead to these findings. For these teams, task conflict was found to relate negatively to member-rated team effectiveness. This finding contrasts with research on organizational teams, where task conflict usually relates positively to team effectiveness ratings. I also found that both diversity and average member experience influence member-rated effectiveness. These findings imply that diversity, conflict, and ratings of team effectiveness may differ for teams developing business ideas as compared to organizational teams. Thus, findings from organizational team research should be applied with caution to teams developing business ideas and possibly to new venture teams in general.     

A proclivity for entrepreneurship: A comparison of entrepreneurs,small business owners,and corporate managers

Despite intensive inquiry, relatively little is known about the entrepreneur, the central figure in entrepreneurship. The question of how an individual who operates his or her own business differs from a corporate manager remains unanswered. In addressing this question, the primary purpose of this study was to investigate the potential of psychological constructs to predict a proclivity for entrepreneurship. The research model includes three classic themes in the literature: achievement motivation, risk-taking propensity, and preference for innovation.A survey of 767 small business owner-managers and corporate managers was assembled from a 20-state region, primarily the southeastern United States. The participants completed a questionnaire composed of the Achievement Scale of the Personality Research Form, the Risk-Taking and Innovation Scales of the Jackson Personality Inventory and questions pertaining to numerous individual and organizational variables. Respondents were first divided into two groups, managers and small business owner-managers. Subsequently, due to the often cited variations in entrepreneurs, the owner-managers were further categorized as either an entrepreneur or small business owner, using the widely cited Carland et al. (1984) theoretical definitions. Entrepreneurs are defined by their goals of profit and growth for their ventures and by their use of strategic planning. Alternatively, small business owners focus on providing family income and view the venture as an extension of their personalities. In this study, both groups of owner-managers were simultaneously compared with managers using hierarchical set multinomial LOGIT regression.The results indicated that the psychological constructs are associated with small business ownership, but with some important caveats. As hypothesized, those labeled entrepreneurs were higher in achievement motivation, risk-taking propensity, and preference for innovation than were both the corporate managers and the small business owners. This profile of the entrepreneur as a driven, creative risk-taker is consistent with much of the classic literature concerning the entrepreneur. Nonetheless, not all of the owner-managers fit this profile. When compared with managers, the small business owners demonstrated only a significantly higher risk-taking propensity. In terms of the constructs studied, the small business owners were more comparable to managers than to entrepreneurs.In addition to theoretical and methodological implications, the results presented here have important implications for small business owner-managers of both types. A major issue is the connection between the owner’s psychological profile and the characteristics of the venture, including performance. It would appear that psychological antecedents are associated with owner goals for the venture. Some owners will be more growth oriented than will others, and performance should be assessed in light of the owner’s aspirations for the venture. Moreover, owners should be aware of their own personality sets, including risk preferences, which may be more or less suited to different venture circumstances, including those with relatively high levels of risk.Planning in small businesses appears to enhance venture performance. Research has demonstrated the connections between psychological factors and planning behaviors in small businesses. Those labeled entrepreneurs in this study have goals of profit and growth, and tend to engage in more planning. An awareness of these psychological preferences and concomitant attention to planning behaviors have the potential to improve the performance of the venture, irrespective of owner aspirations.Venture teaming is becoming more popular among entrepreneurs. Balanced venture teams appear to improve the chances of entrepreneurial success (Timmons 1990), but a common source of conflict among venture team members is inconsistent or ambiguous motives for the new venture. Awareness of venture partners’ psychological predispositions in areas such as risk-taking could be used to identify and reconcile areas of potential conflict, and enhance the planning process in the small firm. In sum, an individual’s awareness of his or her psychological profile provides a number of advantages, not only to existing entrepreneurs, but also to aspiring entrepreneurs who should assess their perceived entrepreneurial opportunities against the backdrop of their psychological proclivity for entrepreneurship.     

Do others think you have a viable business idea? Team diversity and judges' evaluation of ideas in a business plan competition

The study examines how team diversity affects external evaluation of the teams' business ideas. Using an information perspective, we argue that task-related diversity of member characteristics enhance team effectiveness. Nontask diversity hurt team effectiveness by steering teams away from their tasks. Some support was found. Task-related diversity of education level was positively related with evaluation while nontask diversities of age and employment status negatively related with evaluation. The positive relationship of task diversity on evaluations was higher for larger teams. The findings were robust across different functional forms for the demographic factors. Implications of team affects on venture outcomes are discussed.     

A founding-team model of creating a venture's culture

As many new ventures are started by founding teams, it is these founding teams that likely engage in creating their venture's culture. We draw on theories of cultural dynamics and the literature on team cognitive diversity to investigate the creation of a new venture's culture. Specifically, we theorize how a founding team's cognitive diversity impacts the team's production of cultural information and the transmission of that information throughout the venture. Cognitive diversity directly influences the founding team's production of cultural information by shaping the diversity of the information set and the speed of its production. Moreover, cognitive diversity can give rise to faultlines within the venture, impacting how venture members interpret cultural information. Importantly, our model suggests a complex interplay between the production and interpretation of cultural information. Understanding culture creation in new ventures is important because a new venture's culture shapes its legitimacy and thus its access to stakeholder resources for venture emergence.     

Network to passion or passion to network? Disentangling entrepreneurial passion selection and contagion effects among peers and teams in a startup accelerator

Entrepreneurial passion is socially contagious. However, do entrepreneurs also select whom they interact with based on passion similarity? The complex interdependencies between social networks and entrepreneurial passion remain undertheorized and empirically puzzling. Using a stochastic actor-oriented model (SIENA) and four waves of panel data, we test hypotheses about the co-evolution of social networks and entrepreneurial passion during a 5-month startup accelerator program. We observe that social ties occur more frequently among peer entrepreneurs who are similar in levels of passion for founding. Initial homophily selection explains 34% of this observed similarity whereas social contagion explains 57%. Finally, we find that passion for founding is more contagious among members of startup teams than across other peer ties. Surprisingly, none of these effects are significant for passion for inventing. We discuss the theoretical and practical implications of these findings.     

知识型创业中的复合创业行为：企业家精神的视角

在创业行为的各个部分都达到高效率是非常困难的,因此很多知识型创业企业在很早就失败了。知识型创业者不仅需要对高技术环境中的创新活动非常敏感,也需要创新型管理组织的新活动、市场营销以及商业模式等。这需要创业者在早期的复合创业行为的企业家精神为主要资源来应付新创企业可能的衰退。本文回顾了知识型创业的企业家精神,构建了知识型创业中的复合创业行为的企业家精神的特征与概念框架,并提出了未来知识型创业活动可能的潜在的相关研究领域。     

Entrepreneurial visions in founding teams: Conceptualization,emergence, and effects on opportunity development

Prior research on entrepreneurial visions has typically taken a leadership perspective and explored how the founders’ future images of their ventures motivate themselves and followers. Drawing on an upper echelon perspective and longitudinal case studies of eight founding teams, this study finds that founders’ entrepreneurial visions do not only capture the future images of their ventures, but also the future images of the founders’ relationship with it. Taking into account this personal aspect of visions, we show that within a founding team, the members’ visions can be incongruent, i.e., they cannot be realized simultaneously within the current venture. While our data reveal that vision incongruence tends to occurs when all team members perceive to have an equal status, vision congruence emerges when the attributed status in the team is heterogeneous. Founding teams with more congruent visions tend to follow a focused opportunity development path, while those with less congruent visions tend to follow a comprehensive opportunity development path. Depending on the teams’ behaviors in the face of challenging situations either path can lead to successful opportunity commercialization or failure. We discuss the implications of these findings for the literatures on entrepreneurial visions, opportunities, and upper echelons.     

Entrepreneurship and well-being: Past,present, and future

Entrepreneurship research typically emphasizes firm-level outcomes such as growth and performance. However, people pursue entrepreneurship for deeply personal, idiosyncratic reasons. Therefore, as in other self-organized human pursuits, how entrepreneurship relates to fulfillment and well-being is of utmost importance. In this paper, we provide an overview of the well-being concept, related research, and its connection to entrepreneurship. We define entrepreneurial well-being as the experience of satisfaction, positive affect, infrequent negative affect, and psychological functioning in relation to developing, starting, growing, and running an entrepreneurial venture. We explain this definition of entrepreneurial well-being and review significant developments in our field and the broader field of well-being. Highlights of social, technological and institutional trends illustrate key areas for future research that can enhance our understanding of these phenomena. The eight papers in this special issue focus on entrepreneurial well-being each offering a specific perspective on how scholars can theorize and study the antecedents and consequences of entrepreneurship related to well-being.     

Passion for entrepreneurship or passion for the product? A conjoint analysis of angel and VC decision-making

Passion is important to venture investors, but what specifically do they want entrepreneurs to be passionate about? This study theorizes that angel investors and venture capitalists consider both entrepreneurs' passion for activities related to the product or service the venture provides (i.e., product passion) and passion for founding and developing new ventures (i.e., entrepreneurial passion). We demonstrate that both types of passion become more appealing when the investor perceives that the entrepreneur is highly open and receptive to feedback, suggesting that openness to feedback mitigates potential concerns associated with passion in its extremes. We further find that venture investors differ in their consideration of passion; angel investors and venture capitalists with more investing experience place greater emphasis on the combination of product passion and openness to feedback, whereas those with more entrepreneurial experience emphasize the combination of entrepreneurial passion and openness to feedback.     

Who Learns What?—A Study Based on Entrepreneurs from Biotechnology New Ventures

Despite a proliferation of research in the field of entrepreneurship, our understanding of entrepreneurial learning remains limited. We do not have systematic answers to many key questions. To what extent does the context of the learning shape that learning? How does the prior experience of an entrepreneur influence what they learn in new ventures? Does the specific role that the entrepreneur plays in a new venture, and the characteristics of the venture team, influence learning? To address this gap, and to progress the broader program of empirical research into entrepreneurial learning, we need to more fully explicate both the context and the content of learning. That is the objective and contribution of this study. We find that prior experience, the “division of (decision‐making) labor” and the “knowledge” characteristic of the venture team shape learning. One implication is that future research will need to assess more carefully both the content of new learning from the new venture experience, and the context of learning.     

Towards a theory of entrepreneurial teams

This article examines the role of entrepreneurial teams in processes of entrepreneurial discovery. It addresses two main questions. The first investigates the implications of economic theory for the possibility of team entrepreneurship. Because leading economic theories focus almost exclusively upon individual decision-makers, we propose a broader notion of entrepreneurship that includes enterprising teams as well as individuals. We define entrepreneurship as a profit-seeking problem-solving process that takes place under conditions of structural uncertainty.The second question examines the conditions that are conducive to joint entrepreneurial action and the formation of entrepreneurial teams. We suggest that bounded structural uncertainty and perceived strong interdependence arising from common interest can jointly “prime” team entrepreneurship.     

Early teams: The impact of team demography on VC financing and going public

This study investigates how top management team (TMT) demographic characteristics affect firm outcomes for young high technology firms in Silicon Valley. We study how team composition and turnover shape an entrepreneurial firm's ability to attract venture capital and its ability to successfully complete an initial public offering. We find that broad access to information by virtue of having top management team members that have worked for many different employers (diverse prior company affiliations) and have diverse prior experiences (functional diversity) tend to be associated with positive outcomes. In addition, entrants to and founder exits from the TMT increase the likelihood that a firm achieves an IPO. TMT exits, in turn, reduce the likelihood of achieving an IPO. Results also suggest that prior human capital experience is consistently associated with positive firm outcomes. These findings suggest that team experiences, composition and turnover are all important for bringing new insights to the firm and are associated with the likelihood that an entrepreneurial firm will succeed.     

Early-stage business model experimentation and pivoting

Recent literature suggests entrepreneurs struggle to pivot—or fundamentally change aspects of their venture—due to identity-based resistance to change. Yet, when entrepreneurs receive negative feedback, overcoming this resistance may be important to pivoting their business model. We adopt a convergent, mixed methods research design to explore when and why some entrepreneurs overcome resistance to change in response to negative feedback during early-stage business model experimentation. Building upon qualitative data that we gathered and analyzed, we theorize entrepreneurs may resist pivoting their value proposition relative to other business model components despite receiving negative feedback on this aspect of their business model. However, we find three factors – entrepreneurial experience, startup mentoring, and team size – may enable entrepreneurs to pivot in response to negative feedback. We theorize that these factors broaden a startup team's perspective, enabling value proposition pivoting during early-stage business model experimentation. We test these relationships with quantitative data from 80 startups engaged in business model experimentation and find support across hypotheses. We contribute to understanding when and why entrepreneurs pivot aspects of their business models in response to negative feedback during early-stage business model experimentation.Executive summaryThe entrepreneurship literature suggests startups may benefit from experimentation and pivoting different parts of their business model in response to negative feedback from stakeholders (Andries et al., 2021; Camuffo et al., 2020; Shepherd and Gruber, 2021). In early stages of starting a new venture, a business model refers to a cognitive schema or belief about an activity system that could potentially create and capture value (Massa et al., 2017; Shepherd and Gruber, 2021). Business model experimentation is the process of testing assumptions underlying this potential business model and pivoting business model assumptions in response to negative feedback (Andries et al., 2013; McDonald and Eisenhardt, 2020; Leatherbee and Katila, 2020). Building upon prior literature, we define business model pivoting as a fundamental change to parts of the business model (Berends et al., 2021; Snihur and Clarysse, 2022; Shepherd and Gruber, 2021). Yet, literature also suggests founders often struggle to pivot assumptions despite negative feedback. Motives to preserve and protect certain assumptions relevant to founders' identities can interfere with pivoting (Grimes, 2018; Kirtley and O'Mahony, 2023; Zuzul and Tripsas, 2020). Despite the general understanding that founders struggle to change their ideas, however, the entrepreneurship literature currently lacks precise insight into when and why founders can overcome resistance to pivoting.In this research, we explore when and why startups pivot different parts of their business model. We do so within the context of early-stage business model experimentation, where founders explicitly state assumptions about different parts of their potential business model, test those assumptions against stakeholder feedback, and are encouraged to pivot business model components in response to negative feedback. Through a mixed methods research design, we find (1) founders tend to resist pivoting their value propositions relative to other parts of a business model in response to negative feedback; and (2) entrepreneurial experience, startup mentoring, and team size enables startups to overcome this resistance to pivoting in response to negative feedback. We theorize these factors broaden founders' perspectives (Warshay, 1962), contributing to a greater willingness to pivot during experimentation.We contribute to the literature on entrepreneurial pivoting by explaining nuanced variation in pivoting distinct business model components during experimentation. This contribution is important because it reveals that resistance to pivoting the business model may be more complex than previously thought. We also contribute to the literature at the nexus of business model experimentation and entrepreneurial cognition by finding that entrepreneurial experience, startup mentoring, and team size enable startups to pivot despite psychological resistance to pivoting in response to negative feedback because it broadens founders' perspectives. This insight is important theoretically because it advances what we know about enabling experimenting with business models under conditions of uncertainty. The research presented here has clear and important implications for practice. This research suggests founders often resist changing the value proposition versus other components of their business models in early stages of venture development. This resistance can impede experimentation and pivoting in response to negative feedback. To the extent founders want to broaden their perspective to enable pivoting their value propositions in response to negative feedback during early stages of venture development, our data suggest they may be able to do so by recruiting members with entrepreneurial experience on their team (or gain entrepreneurial experience themselves), engage frequently with startup mentors, and increase the size of their team. Overall, we view the breath of perspective that comes from experience and interactions with others as an advantage for entrepreneurs when experimenting with their business models during early stages of venture development.     

Entrepreneurial marketing and hybrid entrepreneurship: the case of JM Reid Bamboo Rods

ABSTRACT

Through the presentation of the case of James Reid, a hybrid entrepreneur that transitioned towards full-time entrepreneurship, this paper discusses a number of entrepreneurial marketing issues faced by a small business. When presented with several opportunities for business growth, Reid evaluates the extent to which growth could impact his business model, brand image and his passion. The case study demonstrates the importance of maintaining brand values and establishing a clear strategic orientation in order to create a strong brand. However, these are shown to also significantly limit the growth prospects of the business. The discussion of the case delves into these issues together with an examination of the entrepreneurial journey of a highly skilled transitory hybrid entrepreneur. This paper further introduces the concept of a comfort entrepreneur, one that willingly halts the growth of their venture, and examines the business implications thereof.     

Supporting innovation and venture development in established companies

Accumulated research findings call into question the ability of established corporations to develop and manage new ventures successfully. This article argues that the problem comes in large part from failing to differentiate between the requirements of administrative management—geared to managing existing activities and holding things in place to ensure continuation of already-developed activities—and the requirements of entrepreneurial management—designed to create change by developing something new. The two kinds of management are in tension and may interfere with each other, but every established organization needs both in order to get both innovation and efficiency.Innovations and new ventures have four particular characteristics that account for their special management requirements: uncertainty, knowledge-intensivity, competition with alternative courses of action, and boundary-crossing. Thus entrepreneurial management to support creation of the new puts a stress on such features as visionary leadership, “patient money,” planning flexibility, team continuity/stability, and interfunctional cooperation. But the usual requirements of administrative management in established corporations contradict these principles. Thus some companies try to set their new ventures apart from the old to avoid conflicts in management requirements. However, this this only partially solves the problem.All companies need both to manage ongoing activities and to create new ones—with the proportions of each depending on the nature of the business. They need to strike a balance between administrative and entrepreneurial management. The problem of venture development in established corporations occurs when administrative management comes to dominate and innovation is not valued sufficiently. The command system of administrative management needs to be replaced by a mutual adjustment system.High innovation companies build mutual adjustment into their design. They allow flexibility to move into an entrepreneurial mode. They are characterized by broader jobs: structures built around small business units or functionally complete project teams; cultures stressing the ability of people to contribute more over time; and easy access to the key “power tools” of information, support, and resources.A more entrepreneurial corporation minimizes hard-and-fast rules and procedures governed by a rigidly defined command structure and emphasizes instead flexibility and broadly-skilled sets of employees in flexible units that can be grouped or regrouped as changing circumstances require.Large corporations must institute deliberate programs to encourage innovation and entrepreneurship, including removing the roadblocks of unnecessary administrative requirements; encouraging integration across departments and functions: changing budgeting and accounting procedures and providing internal venture capital and special project funds; discretionary time; and new business performance measures.     

The contrasting interaction effects of improvisational behavior with entrepreneurial self-efficacy on new venture performance and entrepreneur work satisfaction

Although improvisation is often considered to be an elemental component of entrepreneurship, little work has been done to evaluate factors that influence the relationship of entrepreneur improvisational behavior with important outcome variables. In an attempt to partly fill this gap, the current study examines the moderating effect of entrepreneurial self-efficacy on the relationship of founders' improvisational behavior with both the performance of their startups and their individual level of work satisfaction using a national (United States) random sample of 159 entrepreneurs. In alignment with our predictions, improvisational behavior was found to have a positive relationship with new venture performance (i.e., sales growth) when exhibited by founders who were high in entrepreneurial self-efficacy, whereas improvisational behavior was found to have a negative relationship with new venture performance when exhibited by founders who were low in entrepreneurial self-efficacy. Contrary to our expectations, entrepreneurial self-efficacy was found to have a negative moderating effect on the relationship between entrepreneur improvisational behavior and work satisfaction.