Thomas R. Eisenmann
Howard H. Stevenson Professor of Business Administration
Thomas R. Eisenmann is the Howard H. Stevenson Professor of Business Administration at the Harvard Business School and Faculty Co-Chair of the HBS Rock Center for Entrepreneurship. He studies the management of new ventures. Eisenmann teaches an MBA elective course, Product Management 101, in which students specify and supervise development of a software application. In recent years, Eisenmann has served as Chair of Harvard's MBA Elective Curriculum—the second year of the MBA Program—and as course head of The Entrepreneurial Manager, taught to all 900 first-year MBA students. He twice co-led a Harvard Innovation Lab course, Cultural Entrepreneurship in New York City, in which students from across Harvard spent a winter break week in New York exploring new ventures in fashion, food, and fine arts, and co-led four similar winter break trips to Silicon Valley. Eisenmann also created the MBA electives Launching Technology Ventures, which examines challenges that entrepreneurs encounter when starting and scaling new information technology businesses, and Managing Networked Business (now called The Online Economy), which surveys strategies for platform-based businesses that leverage network effects.
Professor Eisenmann received his Doctorate in Business Administration ('98), MBA ('83), and BA ('79) from Harvard University. Prior to entering the HBS Doctoral Program, Eisenmann spent eleven years as a management consultant at McKinsey & Company, where he was co-head of the Media and Entertainment Practice. Eisenmann is on the editorial board of Strategic Management Journal. He currently serves as a director on the boards of Harvard Business Publishing and Harvard Student Agencies, the world’s largest student-run corporation.
Blogs: Platforms & Networks, Launching Tech Ventures (course blog with student posts)
Managing Startups: Best Blog Posts
Managing Startups compiles 72 blog posts on technology startup management from successful entrepreneurs and venture capitalists, such as Fred Wilson, Steve Blank, Ash Maurya, Joel Spolsky, Marty Cagan, Jason Calacanis, and Chris Dixon. Divided into 13 areas of focus, the book's contributors cover a wide range of topics, for example: metrics you need to run your startup; lean prototyping techniques; outsourcing mistakes; practical tips for customer acquisition; branding guidelines; why a choir of angel investors may not sing in harmony; how to manage a startup board; and leading causes of startup failure.
Product Management 101
Product Management 101 (PM 101) is a project-based MBA elective that uses a learning-by-doing approach to teach the basics of the high-tech product manager role. Student teams design and supervise development of a software application, and then launch it. The course features mentoring by HBS alumni and volunteers from the Boston Product Management Association; frequent peer-to-peer critiques of work-in-progress; and skill-building workshops (e.g., on user experience research techniques, user interaction design, post-launch analytics, etc.).
This teaching case asks how to design a beta test in the context of a product requiring radical behavioral change and demonstrates how hypotheses about the pattern of customer adoption for a new technology product can drive decisions about distribution strategy and partnership choices. The case is set in early 2014, when business development executives at Google were formulating a distribution strategy for Glass, a wearable computer that projected information on a display viewable with an upward glance. Options, which were not mutually exclusive, included 1) continuing to sell Glass directly through online channels; 2) creating an open platform to allow any eyewear manufacturer to create frames compatible with Glass; and 3) negotiating a partnership with a leading eyewear manufacturer to jointly develop and market Glass.
Strategies for Two-Sided Markets
Many blockbuster products and services that have redefined the global business landscape are built around platforms that tie together two distinct groups of users in a network. Examples include credit cards that link consumers and merchants; operating systems that connect computer users and application developers; and HMOs that bring together patients and health care providers. Due to network effects, platform products often enjoy increasing returns to scale. Yet many firms struggle to establish and sustain two-sided platforms because they confront a Catch-22: It is difficult to mobilize one group until the other is on board, and vice versa. In this Harvard Business Review article, Eisenmann, Geoffrey Parker and Marshall Van Alstyne draw on recent theoretical work to guide executives negotiating the challenges of two-sided platforms.
During weeklong January-term trips to New York City in 2013 and 2014, students from across Harvard University studied cultural entrepreneurship: new ventures in fashion, food, fine arts, and design. Students explored how such ventures are launched, and how proximity to NYC's rich ecosystem of established companies, investors, and supporting organizations (e.g., universities, foundations, trade press, industry associations) influenced the ventures' evolution. The trips, sponsored by Harvard’s Innovation Lab and co-led by Eisenmann, SEAS's Beth Altringer, and i-Lab Managing Director Gordon Jones, featured visits to startups focused on the creative arts, such as Birchbox, Kickstarter, Etsy, and Makerbot; corporations and other established organizations that support cultural entrepreneurship—such as DVF, Fashion Institute of Technology, James Beard Foundation, W Magazine, and Macy’s; and venture capital firms that invest in creative industries. Students also met with alumni mentors and learned the basics of design thinking in a workshop led by consultants from IDEO.
I recently kicked off a research project on entrepreneurial failure that I hope will result — in a year or so — in a book to be titled False Start.
In tandem with my colleague Shikhar Ghosh,
who has been studying the causes and consequence of startup failure
for years, I plan to develop a new, case-based MBA elective on the topic. I've written before about how entrepreneurs' egos
can contribute to their ventures' demise. To kick off my new project, I shared a personal reflection on what we can learn failure in the form of a commencement address to my high school alma mater.
This teaching case profiles Andreessen Horowitz (a16z), a venture capital firm launched in 2009 that quickly broke into the VC industry's top ranks. The case recounts the firm's history; describes its co-founders' motivations and their strategy for disrupting an industry in the midst of dramatic structural change; and asks whether a16z's success to date has been due to its novel organization structure. In late 2013, a16z's 22 investment professionals were supported by 43 recruiting and marketing specialists—an "operating team" that was an order of magnitude larger than that of any other VC firm. Furthermore, the operating team aimed to not only assist a16z portfolio companies, but also to be broadly helpful to all parties in the Silicon Valley ecosystem, including search firms, journalists, PR agencies, and Fortune 500 executives. The bet: by providing "no-strings-attached" help to ecosystem partners, the partners might someday reciprocate by steering founders seeking funding to a16z. The case asks whether this bet makes sense and whether a16z should seek to double its scale over the next few years.
Due to network effects and switching costs in platform markets, entrants generally must offer revolutionary functionality. Platform envelopment offers a second entry path: one that does not rely upon Schumpeterian innovation. Examples of successful envelopment include Microsoft’s launch of Internet Explorer; Google’s Android platform; and LinkedIn’s move into recruiting markets. Through envelopment, a provider in one platform market can enter another platform market, combining its own functionality with the target's in a multi-platform bundle that leverages shared user relationships. Bundling exploits economies of scope and price discrimination opportunities. Further, envelopers may capture market share by foreclosing an incumbent's access to customers, and in doing so harness the network effects that previously protected the incumbent. This Strategic Management Journal article by Eisenmann, Geoffrey Parker and Marshall Van Alstyne presents a typology of envelopment attacks based on whether platform pairs are complements, weak substitutes, or functionally unrelated, and analyzes conditions under which these attack types are likely to succeed.