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)
Lean Startup Management Practices
Many information technology startups have embraced "lean startup" management practices. Lean startups confront high levels of uncertainty about both customer problems and product solutions: the strength of demand for new solutions to prospective customers' problems is not well understood, nor is it clear how new solutions to these problems should be built. Lean startups address this uncertainty through very rapid cycles of hypothesis-driven, customer-centric experimentation. Objectives include: building, measuring, and learning at an accelerated pace; failing fast; and constantly improving a product based on nearly-immediate customer feedback. Lean startup practices often encompass: 1) launching with a "minimum viable product," that is, the smallest possible set of features that will meet the needs of early evangelists; 2) reliance on free open source software modules and "agile" software development methods in which requirements and solutions evolve iteratively through the collaboration of cross-functional teams; 3) intensive use of customer interviews, surveys and split market testing to gauge demand for new features; and 4) bootstrapping and avoiding heavy investments in customer acquisition to keep burn rates low until hypotheses about customer problems and product solutions are verified. Eisenmann's research on lean startups focuses on identifying contingencies under which different practices are economically attractive and determining which practices apply to new ventures outside the information technology sector.
Managing Networked Businesses
Platform-based businesses that leverage network effects face a distinctive set of management challenges. A platform encompasses components and rules that facilitate interactions between the platform's users. A platform-based product or service exhibits a network effect when the platform's value for any one user depends on the number of other users with whom the focal user can interact. When network effects are strong, increasing returns to scale may lead to winner-take-all (WTA) outcomes. Competition in platform-mediated networks can be unforgiving: if winners take all, losers take nothing. Consequently, if they confront WTA dynamics, managers must decide whether to race to acquire customers and whether to share their new platform with rivals rather than fight for dominance. They also must contend with boom-bust valuations engendered by investors' expectations for rapid growth, and with government policy-makers' concerns about monopolies' market power. Finally, managers must design organization structures and governance processes suited for making 'bet-the-company' decisions. Eisenmann's research addresses these management challenges, focusing on: 1) contingencies under which accelerated growth strategies are attractive; 2) when aspiring platform providers should pool efforts with prospective rivals versus developing proprietary platforms; 3) conditions under which "closed" platforms—that is, platforms that restrict participation at the provider and/or user level—should be opened as they mature, and vice versa; and 4) how dominant platform providers in one market can envelop platforms in adjacent markets through bundling strategies.