Entrepreneurship

Entrepreneurship is a featured research topic and an initiative at Harvard Business School
 
Our long tradition of research in Entrepreneurship goes back to the 1930's and 1940's with the “the father of venture capitalism,” General Georges Doriot, and Joseph Schumpeter’s theory of innovation as a process of “creative destruction.” Building on our intellectual roots, our scholars come from disciplines including economics, finance, sociology, strategy, business history, management, and social entrepreneurship. A number of our faculty come from practice as venture capitalists and start-up founders. We focus our research on the identification and pursuit of entrepreneurial opportunities; domestic and international funding of entrepreneurial endeavors; innovation, particularly technological innovation in international ventures; the environments in which entrepreneurs make decisions; and social entrepreneurship. As our research contributes new insights, we are advancing the world’s understanding of complex entrepreneurial issues and helping to increase the entrepreneurial success of our students and practitioners worldwide. 
  1. Profits and Sustainability: A History of Green Entrepreneurship

    G. Jones

    This book explores the question whether profits and sustainability are compatible through the lens of a history of green entrepreneurship worldwide between the nineteenth century and today. It tells the story of the extraordinary and often eccentric men and women who defied convention and imagined that business could help save the planet, rather than consume it. The social and religious beliefs that drove many of these individuals are explored, as the book looks at how they overcame huge obstacles to execute their strategies in industries as diverse as renewable energy, organic food, natural beauty, eco-tourism, recycling, architecture, and finance. The pioneering efforts to build certification schemes and environmental reporting are examined, alongside the contested relationship between green business and governments. The struggles of early pioneers appear to have been rewarded by the growth of environmental awareness among consumers, business leaders, and others in recent years, but the Earth's environmental health continues to deteriorate. If profits and sustainability have proved challenging to reconcile, the book argues that one reason was how they were both defined.

    Keywords: Environmental Entrepreneurship; business history; Green Business; sustainability; Entrepreneurship; Ethics; Business History; Religion; Environmental Sustainability; Agriculture and Agribusiness Industry; Banking Industry; Beauty and Cosmetics Industry; Consumer Products Industry; Alternative Energy Industry; Financial Services Industry; Food and Beverage Industry; Green Technology Industry; Tourism Industry; Africa; Asia; Europe; Latin America; North and Central America; Oceania;

    Citation:

    Jones, G. Profits and Sustainability: A History of Green Entrepreneurship. New York: Oxford University Press, 2017. View Details
  2. Homophily in Entrepreneurial Team Formation

    Paul A. Gompers, Kevin Huang and Sophie Q. Wang

    We study the role of homophily in group formation. Using a unique dataset of MBA students, we observe homophily in ethnicity and gender increases the probability of forming teams by 25%. Homophily in education and past working experience increases the probability of forming teams by 17% and 11 % respectively. Homophily in education and working experience is stronger among males than females. Further, we examine the causal impact of homophily on team performance. Homophily in ethnicity increases team performance by lifting teams in bottom quantiles to median performance quantiles, but it does not increase the chance of being top performers. Our findings have implications for understanding the lack of diversity in entrepreneurship and the venture capital industry.

    Keywords: Groups and Teams; Diversity; Familiarity; Entrepreneurship; Venture Capital; Performance;

    Citation:

    Gompers, Paul A., Kevin Huang, and Sophie Q. Wang. "Homophily in Entrepreneurial Team Formation." Harvard Business School Working Paper, No. 17-104, May 2017. View Details
  3. Street League Skateboarding

    Robert F. Higgins and Christine Snively

    In 2013, Street League Skateboarding, a professional skateboarding league founded in 2010, just concluded its annual Street League World Tour. The growing action sports property had purchased time on ESPN2 to air its events, and though ESPN was the most-watched sports television network in the U.S., Street League President Brian Atlas had become impatient with the network’s lack of support. Atlas planned to meet with network representatives in the coming months to discuss their 2014 contract, but was recently approached by FOX Sports, which had just launched the new FOX Sports 1 cable television network and was working to sign sports properties. Atlas considered Street League’s relationship with ESPN, the league’s finances, and attempts to raise capital. For a new action sports property such as Street League, what business model made the most sense?

    Keywords: Entrepreneurship; Television Entertainment; Sports; Product Launch; Sports Industry; Entertainment and Recreation Industry; United States;

    Citation:

    Higgins, Robert F., and Christine Snively. "Street League Skateboarding." Harvard Business School Case 817-145, May 2017. View Details
  4. Cotopaxi: Managing Growth for Good

    Andy Wu and Laura Huang

    Cotopaxi, an innovative outdoor gear business targeting millennials, focuses on profit and social impact. This registered benefit corporation was formed by Davis Smith who coalesced his experiences as a Wharton MBA student along with professional knowledge from an unpaid internship in Peru and his previous e-commerce startups in the US and Brazil. Cotopaxi’s social cause is fighting global poverty; their target is to donate 10% of their profits but as a new capital-intensive business they give 2% of their revenue. Their income streams are mainly direct to consumer sales along with corporate sales and a special experience based event—Questival. Their direct to consumer model lowers costs compared to competitors and allows Cotopaxi to offer lower prices, but they face a challenge in positioning their products as high quality.

    Keywords: entrepreneurship; social venture; benefit corporation; B-Corp; retail; consumer products; Apparel; social impact; Social Entrepreneurship; Business Model; Product Positioning; Social Enterprise; Mission and Purpose; Consumer Products Industry; Retail Industry;

    Citation:

    Wu, Andy, and Laura Huang. "Cotopaxi: Managing Growth for Good." Harvard Business School Case 717-488, May 2017. View Details
  5. Entrepreneurship, Policy, and the Geography of Wind Energy

    G. Jones

    This study examines the geography of the global wind energy industry before 2000. Between 1980 and 2000, the global generating capacity of wind power grew from 13 megawatts to 17,400 megawatts, but two-thirds of that capacity was in Denmark, Germany, Spain, and the United States. Wind turbine manufacture was clustered in Denmark and the United States through to the late 1980s, when there was a sudden rise of new entrants, especially Germany. The study shows that natural resource endowment is a poor explanatory variable for this geographical skewing. Public policy was a more important factor, although its impact was nuanced. The most important policy development was in California with the adoption of feed-in tariffs, subsidies, and tax credits in the 1980s. However the poor technological capabilities of U.S.-based firms meant that it was Danish and other foreign companies that benefitted most. Subsequently the combination of public policies to grow wind energy and local manufacturer requirements provided a major stimulus for the emergence of local firms in Germany and Spain. U.S. firms were unable to develop internationally competitive products partly because of a rush to capture lucrative contracts dependent on transient public policies and partly because of a failure to develop institutional structures for the industry as a whole.

    Keywords: renewable energy; wind power; entrepreneurship; Business and Government; business history; Renewable Energy; Entrepreneurship; Geography; Business and Government Relations; Policy; Business History; Energy Industry; Green Technology Industry; Asia; Europe; United States;

    Citation:

    Jones, G. "Entrepreneurship, Policy, and the Geography of Wind Energy." Chap. 12 in Green Capitalism? Business and the Environment in the Twentieth Century, edited by Hartmut Berghoff and Adam Rome, 206–231. Hagley Perspectives on Business and Culture. Philadelphia, PA: University of Pennsylvania Press, 2017. View Details
  6. Conversational Peers and Idea Generation: Evidence from a Field Experiment

    Sharique Hasan and Rembrand Koning

    High-quality ideas and the individuals who generate them are critical to the success of organizations. In this article, we take a micro-network perspective on idea generation and incorporate personality theory into a multi-level model of information acquisition and idea generation. We posit that innovator and peer personality are critical factors conditioning who will generate high-quality ideas, and that our proposed mechanisms have implications at both individual and team levels. Using data from a randomized field experiment embedded in a startup boot camp for early stage entrepreneurs, our findings show that innovators who are more open to experience do generate better ideas, but only when they converse with extroverted peers. Further, we find that teams populated with such openness-extroversion dyads perform substantially better—having both a higher pool of novel information and better recombinative capability with the team. We discuss implications for future research on the individual and social determinants of innovation.

    Keywords: creativity; peer effects; field experiment; entrepreneurship; Creativity; Interpersonal Communication; Collaborative Innovation and Invention; Entrepreneurship;

    Citation:

    Hasan, Sharique, and Rembrand Koning. "Conversational Peers and Idea Generation: Evidence from a Field Experiment." Harvard Business School Working Paper, No. 17-101, May 2017. View Details
  7. Coordination Frictions in Venture Capital Syndicates

    Ramana Nanda and Matthew Rhodes-Kropf

    An extensive literature on venture capital has studied asymmetric information and agency problems between investors and entrepreneurs, examining how separating entrepreneurs from the investor can create frictions that might inhibit the funding of good projects. It has largely abstracted away from the fact that a startup typically does not have just one investor but rather several VCs that come together in a syndicate to finance a venture. In this paper, we therefore argue for an expansion of the standard perspective to also include frictions within VC syndicates. Put differently, what are the frictions that arise from the fact that there is not just one investor for each venture, but several investors with different incentives, objectives, and cash flow rights who nevertheless need to collaborate to help make the venture a success? We outline the ways in which these coordination frictions manifest themselves, describe the underlying drivers, and document several contractual solutions used by VCs to mitigate their effects. We believe that this broader perspective provides several promising avenues for future research.

    Keywords: venture capital; Syndication; networks; entrepreneurship; Venture Capital; Networks; Entrepreneurship;

    Citation:

    Nanda, Ramana, and Matthew Rhodes-Kropf. "Coordination Frictions in Venture Capital Syndicates." Harvard Business School Working Paper, No. 17-089, April 2017. View Details
  8. Private Equity and Industry Performance

    Shai Bernstein, Josh Lerner, Morten Sorensen and Per Stromberg

    The growth of the private equity industry has spurred concerns about its potential impact on the economy more generally. This analysis looks across nations and industries to assess the impact of private equity on industry performance. Industries where PE funds have invested in the past five years have grown more quickly in terms of productivity and employment. There are few significant differences between industries with limited and high private equity activity. It is hard to find support for claims that economic activity in industries with private equity backing is more exposed to aggregate shocks. The results using lagged private equity investments suggest that the results are not driven by reverse causality. These patterns are not driven solely by common law nations such as the United Kingdom and United States, but also hold in Continental Europe.

    Keywords: Private Equity; Markets; Entrepreneurship; Performance; Economy;

    Citation:

    Bernstein, Shai, Josh Lerner, Morten Sorensen, and Per Stromberg. "Private Equity and Industry Performance." Management Science 63, no. 4 (April 2017): 1198–1213. View Details
  9. Edwin Land: The Art and Science of Innovation

    Tom Nicholas, Christopher Stanton and Matthew Preble

    Throughout the second half of the 20th century, Polaroid first invented—and then continuously reinvented—the field of instant photography. Under the leadership of its mercurial founder Edwin Land, the company regularly released new instant cameras and films, often without any market research. Land created a culture of innovation and exploration within Polaroid that became conducive to the development of new customer value propositions. However, this proved difficult to sustain over the long run, and the business ultimately went into bankruptcy in 2001. How did Polaroid rise to a position of such preeminence, and was its downfall inevitable?

    Keywords: instant photography; company history; Change Management; Disruption; Forecasting and Prediction; Entrepreneurship; Business History; Innovation Strategy; Disruptive Innovation; Innovation and Management; Intellectual Property; Patents; Product Marketing; Brands and Branding; Product Launch; Product Development; Chemical Industry; Consumer Products Industry; United States;

    Citation:

    Nicholas, Tom, Christopher Stanton, and Matthew Preble. "Edwin Land: The Art and Science of Innovation." Harvard Business School Case 817-107, March 2017. View Details
  10. Catalant: The Future of Work?

    Thomas Eisenmann, Jeffrey F. Rayport and Christine Snively

    Catalant, founded in 2013 as an online marketplace where MBAs could bid on consulting projects posted by small- to medium-sized businesses, had expanded by 2016 to provide Fortune 1000 companies with access to over 35,000 independent experts. The founders envisioned extending their matching solutions to help enterprises staff projects with a mix of current employees and external experts, hypothesizing that the “future of work” would involve more flexible employment arrangements. They debated how much to invest in new functionality versus improving their existing marketplace, and how to pitch their evolving strategic vision to investors.

    Keywords: Entrepreneurship; Human Resources; Recruitment; Labor; Market Platforms; Growth and Development Strategy; Employment Industry; Consulting Industry; United States;

    Citation:

    Eisenmann, Thomas, Jeffrey F. Rayport, and Christine Snively. "Catalant: The Future of Work?" Harvard Business School Case 817-103, March 2017. View Details
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