Faculty & Research
Thomas R. Eisenmann

Thomas R. Eisenmann

Howard H. Stevenson Professor of Business Administration

Howard H. Stevenson Professor of Business Administration

Entrepreneurial Management
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Thomas R. Eisenmann
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Featured Work Publications Research Summary Awards & Honors

Thomas R. Eisenmann is the Howard H. Stevenson Professor of Business Administration at the Harvard Business School, Faculty Co-Chair of the HBS Rock Center for Entrepreneurship, Faculty Co-Chair of the Harvard MS/MBA Program, Faculty Co-Chair of the Harvard College Technology Innovation Fellows Program, and Faculty Chair of the HBS California Research Center. Eisenmann teaches the MBA elective Entrepreneurial Failure and the MS/MBA core courses Technology Venture Immersion and Launch Lab.  In recent years, he has served as Chair of Harvard's MBA Elective Curriculum—the 2nd year of the MBA Program—and as course head of The Entrepreneurial Manager, taught to all 900 1st-year MBAs. With colleagues, he launched the MBA electives Making Markets, which focuses on marketplace design, Scaling Technology Ventures, Entrepreneurial Sales & Marketing, and Product Management 101, in which students specify and supervise development of a software application.  Eisenmann also created the January Term Startup Bootcamp for first-year MBAs and the MBA electives Launching Technology Ventures and Managing Networked Business, which surveyed strategies for platform-based businesses that leverage network effects. 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 study entrepreneurship in Silicon Valley.

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. He currently serves as a director on the board of Harvard Business Publishing.

Blog: Platforms & Networks

Twitter: @teisenmann

Featured Work
Why Startups Fail
Publication date: March 30, 2021
My book Why Startups Fail: A New Roadmap for Entrepreneurial Success is organized in three parts. Part I looks at three common failure patterns for early-stage startups, illustrating each with an anchor case study, then describing ways to avoid that type of failure. Part II follows the same format, presenting three failure patters for late-stage, resource rich startups. Part III shifts perspective from why startups fail (and how to avoid failure) to how to fail better – how to decide whether/when to pull the plug; how to shut down in ways that preserve integrity and relationships; and then how to heal, learn from the experience, and decide what to do next.
Harvard MS/MBA
Faculty Co-Chair

The Harvard MS/MBA confers an MBA from HBS and a Master of Science in Engineering Sciences from Harvard's Paulson School of Engineering & Applied Sciences. Each year, the program enrolls about 30 students who have an undergraduate degree in engineering, computer science, or a related technical field and at least two years of full-time work experience in technology product development. The two-year program prepares students to lead technology ventures by extending their understanding of engineering, building design skills, and providing a strong foundation in general management.

Making Markets
MBA Elective Course
Over the past twenty years, entrepreneurs have created and captured enormous value by launching new marketplaces. Examples include Airbnb, Alibaba, eBay, Google, Rakuten, and Uber, among many. Making Markets (M²), an MBA elective jointly developed with Prof. Scott Kominers, examines entrepreneurial opportunities to remedy market failures by building new platforms and marketplaces from scratch or by redesigning existing ones.
Scaling Technology Ventures
MBA Elective Course
Scaling Technology Ventures, jointly developed with Jeffrey Rayport, examines the challenges confronting entreprneurs in rapidly growing technology ventures, with a focus on formulating strategy; designing organizational structure, systems, and culture; and managing "growing pains" across the product, engineering, sales, marketing, and business development functions.
HBS Startup Bootcamp
The HBS Startup Bootcamp is an immersion program for first-year HBS MBA candidates that uses a learning-by-doing approach to build skills required to succeed as an early stage entrepreneur. During the January term, students attend morning workshops to learn new skills, then during afternoon and evening studio sessions, with help from practitioner experts, apply those skills to advance their team's venture concept. The Bootcamp culminates with a pitch to seasoned entrepreneurs, VCs, and faculty.
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 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.). 
Andreessen Horowitz

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.

Managing Startups: Best Blog Posts
Thomas Eisenmann, Editor

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.

Cultural Entrepreneurship in NYC
Harvard Innovation Lab January-Term Immersion Trip

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.

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.

Platform Envelopment

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.

Books
Journal Articles
Book Chapters
  • Eisenmann, Thomas R., Geoffrey Parker, and Marshall Van Alstyne. "Opening Platforms: When, How and Why?" Chap. 6 in Platforms, Markets and Innovation, edited by Annabelle Gawer. Cheltenham, U.K. and Northampton, MA: Edward Elgar Publishing, 2009. View Details
  • Eisenmann, T. R. "Corporate Intervention in Resource Allocation." Chap. 12 in From Resource Allocation to Strategy, edited by Joseph L. Bower and Clark Gilbert. U.K.: Oxford University Press, 2005. View Details
  • Eisenmann, Thomas R., and Joseph L. Bower. "The Entrepreneurial M-Form: A Case Study of Strategic Integration in a Global Media Company." Chap. 13 in From Resource Allocation to Strategy, edited by Joseph L. Bower and Clark Gilbert. U.K.: Oxford University Press, 2005. View Details
  • Eisenmann, Thomas R. "Valuation Bubbles and Broadband Deployment." Chap. 4 in The Broadband Explosion, edited by Robert D. Austin and Stephen P. Bradley. Boston: Harvard Business School Press, 2005. View Details
Working Papers
Cases and Teaching Materials
Research Summary
Entrepreneurial Failure
Most startups fail. Why? Are there recurring patterns that can be anticipated and avoided? If entrepreneurs fail, how can they do so in ways that leave their reputations, relationships, and integrity intact? And, how can they learn from the experience, heal, and determine whether to pursue another startup?

My research on entrepreneurial failure addresses these questions. Findings are presented in: 1) a book, Why Startups Fail, to be published in March 2021; 2) a case-based MBA elective course, Entrepreneurial Failure; and 3) a working paper, "Determinants of Early-Stage Startup Performance," that analyzes survey data from 470 seed-stage startups.
Keywords: Entrepreneurship; Startups; Failure; Entrepreneurship; Failure
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.
Awards & Honors
Winner of the 2015 Case Centre Award in the Entrepreneurship category for “Dropbox: ‘It Just Works’” with Michael Pao and Lauren Barley (HBS Case 811-065).
Won a 2011 European Case Clearing House (ecch) Award in the Strategy and General Management category for his case with Benjamin G. Edelman, "Google Inc." (HBS Case 910-036) and another ecch Award in the Entrepreneurship category for his case with Mikołaj Jan Piskorski, David Chen, and Brian Feinstein, "Facebook’s Platforms" (HBS Case 808-128).
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