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Entrepreneurship

Entrepreneurship

    • Article

    Entrepreneurship as Experimentation

    By: William R. Kerr, Ramana Nanda and Matthew Rhodes-Kropf

    Entrepreneurship research is on the rise, but many questions about its fundamental nature still exist. We argue that entrepreneurship is about experimentation: the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level, investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency, and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences.

    • Article

    Entrepreneurship as Experimentation

    By: William R. Kerr, Ramana Nanda and Matthew Rhodes-Kropf

    Entrepreneurship research is on the rise, but many questions about its fundamental nature still exist. We argue that entrepreneurship is about experimentation: the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of...

    • January 2014 (Revised October 2014)
    • Case

    Andreessen Horowitz

    By: Thomas R. Eisenmann and Liz Kind

    Andreessen Horowitz (a16z), a venture capital firm launched in 2009, has quickly broken into the VC industry's top ranks, in terms of its ability to invest in Silicon Valley's most promising startups. 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. a16z's 22 investment professionals are supported by 43 recruiting and marketing specialists—an "operating team" that is an order of magnitude larger than that of any other VC firm. Furthermore, the operating team aims 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 closes by asking whether a16z should seek to double its scale over the next years.

    • January 2014 (Revised October 2014)
    • Case

    Andreessen Horowitz

    By: Thomas R. Eisenmann and Liz Kind

    Andreessen Horowitz (a16z), a venture capital firm launched in 2009, has quickly broken into the VC industry's top ranks, in terms of its ability to invest in Silicon Valley's most promising startups. The case recounts the firm's history; describes its co-founders' motivations and their strategy for disrupting an industry in the midst of dramatic...

    • February 2014
    • Background Note

    Raising Startup Capital

    By: Jeffrey Bussgang

    Entrepreneurs typically focus their full energies on business-building. But raising capital is a core part of building a valuable business. Developing expertise in raising capital is more than a necessary evil, it is a competitive weapon. Master it and you will be in a better position to make your company a massive success. But how do you finance a new venture? In this note, I will try to help answer this question by addressing the following topics: Types of funding. The two major types of startup capital are equity funding and debt funding although there are a few hybrid flavors as well. Sources of funding. These include venture capital firms, angel investors, crowd-funding, and accelerators/incubators. What investors look for. Each source has a different funding process and set of criteria which you need to understand before seeking funding from that source. The mechanics of equity funding. Seeking and securing funding involves setting amounts, agreeing to terms, and defining relationships.

    • February 2014
    • Background Note

    Raising Startup Capital

    By: Jeffrey Bussgang

    Entrepreneurs typically focus their full energies on business-building. But raising capital is a core part of building a valuable business. Developing expertise in raising capital is more than a necessary evil, it is a competitive weapon. Master it and you will be in a better position to make your company a massive success. But how do you finance...

    • January 2014
    • Article

    The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

    By: William R. Kerr, Josh Lerner and Antoinette Schoar

    This paper documents that ventures that are funded by two successful angel groups experience superior outcomes to rejected ventures: they have improved survival, exits, employment, patenting, web traffic, and financing. We use strong discontinuities in angel funding behavior over small changes in their collective interest levels to implement a regression discontinuity approach. We confirm the positive effects for venture operations, with qualitative support for a higher likelihood of successful exits. On the other hand, there is no difference in access to additional financing around the discontinuity. This might suggest that financing is not a central input of angel groups.

    • January 2014
    • Article

    The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

    By: William R. Kerr, Josh Lerner and Antoinette Schoar

    This paper documents that ventures that are funded by two successful angel groups experience superior outcomes to rejected ventures: they have improved survival, exits, employment, patenting, web traffic, and financing. We use strong discontinuities in angel funding behavior over small changes in their collective interest levels to implement a...

    • September 2014 (Revised December 2014)
    • Case

    The Ullens Center for Contemporary Art

    By: Mukti Khaire and Nancy Hua Dai

    Since its opening in Beijing in November 2007 as the first non-profit art center in China, UCCA had been operating with the mission to "promote the continued development of the Chinese art scene, foster international exchange, and showcase the latest in art and culture to hundreds of thousands of visitors each year." For the past six years, UCCA had worked with more than 100 artists and designers to present 87 art exhibitions and 1,826 public programs to over 1.8 million visitors, including many important leaders from all over the world. Given the context of the economic and political environment in the rapidly changing Chinese art market, the founders and senior management of UCCA wondered what they could do to achieve growth and financial viability while continuing to realize their mission.

    • September 2014 (Revised December 2014)
    • Case

    The Ullens Center for Contemporary Art

    By: Mukti Khaire and Nancy Hua Dai

    Since its opening in Beijing in November 2007 as the first non-profit art center in China, UCCA had been operating with the mission to "promote the continued development of the Chinese art scene, foster international exchange, and showcase the latest in art and culture to hundreds of thousands of visitors each year." For the past six years, UCCA...

    • 2014
    • Discussion Paper

    The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?

    By: Dina D. Pomeranz

    The microfinance revolution has transformed access to financial services for low-income populations worldwide. As a result, it has become one of the most talked-about innovations in global development in recent decades. However, its expansion has not been without controversy. While many hailed it as a way to end world poverty and promote female empowerment, others condemned it as a disaster for the poor. Female empowerment has often been seen as one of the key promises of the industry. In part, this is based on the fact that more than 80% of its poorest clients, i.e., those who live on less than $1.25/day, are women. This paper discusses what we have learned so far about the potential and limits of microfinance and how insights from research and practice can help inform the industry's current products, policies and future developments.

    • 2014
    • Discussion Paper

    The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?

    By: Dina D. Pomeranz

    The microfinance revolution has transformed access to financial services for low-income populations worldwide. As a result, it has become one of the most talked-about innovations in global development in recent decades. However, its expansion has not been without controversy. While many hailed it as a way to end world poverty and promote female...

Initiatives & Projects

The Arthur Rock Center for Entrepreneurship and the Social Enterprise Initiative encourage innovation to address the large-scale issues that beset society.
Entrepreneurship
Social Enterprise

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.

Initiatives & Projects

The Arthur Rock Center for Entrepreneurship and the Social Enterprise Initiative encourage innovation to address the large-scale issues that beset society.

Entrepreneurship
Social Enterprise

Recent Publications

Threadless: The Renewal of an Online Community

By: Shane Greenstein, Karim Lakhani and Christian Godwin
  • February 2021 |
  • Case |
  • Faculty Research
Threadless, an online apparel company and artist community which Jake Nickell founded in 2000, continued to maintain its status as a top company in the online apparel industry during its second decade. From 2010 to 2020, Threadless continued to operated its crowd-sourcing platform, while it transitioned away from traditional screen printing to a digital print-on-demand model. Concurrently, the company jettisoned its warehouse and built a worldwide network of manufacturers that could print and ship Threadless orders on demand. Threadless also launched a new platform called Artist Shops that allowed graphic artists to sell apparel in uniquely branded online stores, with the option of having Threadless manage their pricing and promotional events. The software Threadless developed to facilitate its manufacturing network and Artist Shops platform also led Threadless to increasingly view itself as a technology company performing intermediary services, rather than merely an online apparel company. The onset of the COVID-19 pandemic in 2020 accelerated the company’s transition, triggering the sale of Threadless’s office and a move to working from home. Nickell wondered what the next steps for the company should be.
Keywords: Business Model; Decision Making; Entrepreneurship; Innovation And Invention; Leading Change; Management; Marketing; Product Launch; Operations; Supply Chain; Distribution; Networks; Sales; Strategy; Adaptation; Technology; Software; Technology Platform; Apparel And Accessories Industry; Technology Industry; North America
Citation
Educators
Related
Greenstein, Shane, Karim Lakhani, and Christian Godwin. "Threadless: The Renewal of an Online Community." Harvard Business School Case 621-056, February 2021.

Brainlab: Imaging A MedTech Future

By: Regina E. Herzlinger, Gregory P. Licholai and Federica Gabrieli
  • February 2021 |
  • Case |
  • Faculty Research
Can Brainlab, a privately held firm, compete with giants like Medtronic and Amazon in delivering the Digital Operating Room of the future? The CEO is pondering solutions for secure exchange of medical information, pricing a new robotic imaging device, and reorganizing the firm. Thirty years have passed since the self-taught computer programmer Stefan Vilsmeier founded the firm and achieved dominance in many fields. How can he maintain it in the face of this new, powerful, and well-funded competition?
Keywords: Acquisition; Surgery; Robotics; Business Growth And Maturation; Growth And Development Strategy; Business Strategy; Corporate Strategy; Corporate Entrepreneurship; Health; Health Care; Health Care And Treatment; Innovation And Invention; Innovation And Management; Technological Innovation; Innovation And Strategy; Private Healthcare; Software; Hardware; Information Technology; Technology Platform; Europe; Germany; Acquisition; Business Growth And Maturation; Growth And Development; Business Strategy; Corporate Strategy; Corporate Entrepreneurship; Health Care And Treatment; Health; Innovation And Invention; Innovation And Management; Innovation Strategy; Technological Innovation; Software; Hardware; Information Technology; Health Industry; Europe; Germany; Munich
Citation
Educators
Related
Herzlinger, Regina E., Gregory P. Licholai, and Federica Gabrieli. "Brainlab: Imaging A MedTech Future." Harvard Business School Case 321-087, February 2021.

AptDeco: Circular Economy Furniture Marketplace

By: Ayelet Israeli and Jamie Merkrebs
  • February 2021 |
  • Case |
  • Faculty Research
AptDeco, a used furniture marketplace was growing rapidly in the tri-state area. The Co-Founders were confident that the business model, financial position, and unit economics positioned AptDeco for scaling in the massive $120 billion furniture market, despite its complexity and high costs. The co-founders were looking at different options to scale: working to convert sellers into buyers and vice versa, finding superusers that would fuel the supply for their platform, expand to new markets, rebrand with a sustainability focus. What is the best way for them to scale?
Keywords: E-commerce; E-commerce Strategy; Mobile; Digital Marketing; Word-of-mouth; Word-of-mouth Marketing; Word Of Mouth; Internet Marketing; Growth And Development Strategy; Growth Strategy; Platform; Platforms; Two Sided Markets; Two-sided Market; Two-sided Marketplace; Two-sided Markets; Two-sided Platforms; Two-sided Network; Black Entrepreneurs; Black Leadership; African Americans; Circular; Peer-to-peer Markets; Furniture Industry; Furniture; Growth Hacking; Monetization Strategy; Growth Management; Marketing Strategy; Entrepreneurship; Market Platforms; Marketing Channels; Online Advertising; Consumer Behavior; Acquisition; Growth And Development Strategy; Customer Focus And Relationships; Retail Industry; Consumer Products Industry; Technology Industry; Web Services Industry; United States; North America; New York (city, Ny); New York (state, Us)
Citation
Educators
Related
Israeli, Ayelet, and Jamie Merkrebs. "AptDeco: Circular Economy Furniture Marketplace." Harvard Business School Case 521-069, February 2021.

Lidya: Bringing Nigerian FinTech Innovation to Global Small and Medium Enterprises

By: Lauren Cohen and Spencer C.N. Hagist
  • February 2021 |
  • Case |
  • Faculty Research
Lidya CEO Tunde Kehinde must size up options for the expansion of his novel lending practices that drastically reduce the credit cycle in his developing Nigeria, and determine if expansion into Eastern Europe will prove successful or disasterous.
Keywords: Economics; Entrepreneurship; Finance; Strategy; Nigeria
Citation
Educators
Related
Cohen, Lauren, and Spencer C.N. Hagist. "Lidya: Bringing Nigerian FinTech Innovation to Global Small and Medium Enterprises." Harvard Business School Case 221-083, February 2021.

Yellow Digital Retailers, Ltd.: Providing Solar Electricity to Transform Rural Africa

By: Lynda M. Applegate, Frank V. Cespedes and Michael Norris
  • February 2021 |
  • Case |
  • Faculty Research
In 2020, Mike Heyink and Maya Stewart, co-founders of the Pay-as-you-Go Solar company Yellow were considering how to grow their startup. They had achieved some success in their first market, Malawi, and had recently entered Uganda, where business was slower. What did they need to do to succeed in new markets? How could they continue to grow the business in Malawi?
Keywords: Business Model; Business Startups; Developing Countries And Economies; Alternative Energy; Renewable Energy; Social Entrepreneurship; Green Technology; Salesforce Management; Diversification; Expansion; Energy Industry; Africa; South Africa; Malawi; Uganda
Citation
Educators
Related
Applegate, Lynda M., Frank V. Cespedes, and Michael Norris. "Yellow Digital Retailers, Ltd.: Providing Solar Electricity to Transform Rural Africa." Harvard Business School Case 821-041, February 2021.

Bespoken Spirits: Disrupting Distilling

By: Benjamin C. Esty and Daniel Fisher
  • January 2021 |
  • Case |
  • Faculty Research
On October 7, 2020, Bespoken Spirits publicly announced it had received $2.6 million of seed funding for its “sustainable maturation process,” a process that could produce award-winning whiskey’s in just days rather than years using a novel technology and data science. The technology dramatically reduced the time, cost, and environmental impact (it required less energy and less wood) of making whiskey. At the same time, the technology could also be used to enhance a whiskey’s taste profile which could allow producers to charge more for their products. To date, entrepreneurs Stu Aaron and Martin Janousek had proven they could produce whiskey at scale and with desired properties. Having validated the concept, they now had to decide whether to continue making whiskey themselves or use their technology to process it for others. In short, they had to decide whether to be a product-based, B2C company or a service-based, B2B company, or both? If they decided to be a service business, should they emphasis the Maturation-as-a-Service (MaaS, faster and lower cost production) or the Customization-as-a-Service (CaaS, creation of customized products with unique taste profiles) business in the short term?
Keywords: Business Ventures; Business Strategy; Competitive Advantage; Disruption; Entrepreneurship; Environmental Sustainability; Cash Flow; Disruptive Innovation; Innovation Strategy; Brands And Branding; Consumer Products Industry; Food And Beverage Industry; Service Industry; United States; California
Citation
Educators
Purchase
Related
Esty, Benjamin C., and Daniel Fisher. "Bespoken Spirits: Disrupting Distilling." Harvard Business School Case 721-419, January 2021.

Brigad: The Future of Work

By: Nien-he Hsieh, Elena Corsi and Daniela Beyersdorfer
  • January 2021 |
  • Case |
  • Faculty Research
In 2019 Florent Malbranche, CEO and co-founder of the French tech startup Brigad, pondered the next growth steps. Founded in 2015, Brigad’s objective was two-fold: to help restaurants and bars find qualified staff for punctual shifts, and to make it easier for blue-collar workers to work as freelancers and benefit from these offers. In addition to the matching, Brigad offered businesses help with invoicing, payments, and hiring paperwork, and offered “Brigaders” access to fairly-paid work placements and some benefits usually reserved to employees. Headquartered in Paris, Brigad had expanded to Lyon and in 2018 to London. The company navigated in a complex environment, characterized by evolving legislation on the status of self-employed workers as well as negative publicity and challenges faced by platforms using freelancers in several EU countries. Backed by a recent funding round, Brigad’s management was nevertheless convinced it should scale in line with its mission to make work attractive and accessible to all. The question was how best to do so. Should they expand further geographically or consider new industry verticals?
Keywords: Entrepreneurship
Citation
Educators
Related
Hsieh, Nien-he, Elena Corsi, and Daniela Beyersdorfer. "Brigad: The Future of Work." Harvard Business School Case 321-104, January 2021.

iOpenEye: Theater and #MeToo in Nigeria

By: Caroline M. Elkins, Tarun Khanna and Joyce J. Kim
  • January 2021 |
  • Case |
  • Faculty Research
In 2014, Ifeoma Fafunwa, an award-winning playwright and director, founded iOpenEye, a commercial production company dedicated to driving social change through performance art. iOpenEye’s flagship theatrical production was called “Hear Word! Naija Woman Talk True,” which shared narratives of Nigerian women's struggles. By 2019, “Hear Word!” had debuted internationally, playing sold-out shows at distinguished venues like the American Repertory Theater and at the renowned Edinburgh International Festival. By spring 2020, COVID hit and venues closed, offering Fafunwa new possibilities, such as streaming content and reconsideration of production scale. What steps would it take to have iOpenEye and "Hear Word!" be successful five years down the line? Fafunwa contemplated her next move knowing that whatever it was, it had to be an iOpenEye 2.0 business model.
Keywords: Theatre; Social Change; Entrepreneurship; Social Enterprise; Entertainment; Social Issues; Health Pandemics; Organizational Change And Adaptation; Business Model; Nigeria
Citation
Educators
Related
Elkins, Caroline M., Tarun Khanna, and Joyce J. Kim. "iOpenEye: Theater and #MeToo in Nigeria." Harvard Business School Case 321-111, January 2021.

Andela: Africa's AWS for Talent

By: Caroline M. Elkins, Tarun Khanna and Joyce J. Kim
  • January 2021 |
  • Case |
  • Faculty Research
Five years after the company’s founding, Andela, a company that built and trained remote engineering teams, became arguably Africa’s greatest technology unicorn. By January 2019, Andela raised $100 million in Series D funding. As Andela looked to scale in an increasingly competitive landscape, its goal was to democratize trust and become an “Amazon Web Services” (AWS) for software engineering talent. With their windfall investment and the advent of COVID, Andela had to figure out their “2.0 model” to permit scaling. How would Andela stack up in a growing landscape of global remote talent companies? Could Andela become not just Africa’s, but the world’s AWS for trusted software engineering talent?
Keywords: Education In Africa; Entrepreneur; Remote Work; Software Engineering; Edtech; Entrepreneurship; Education; Software; Engineering; Growth And Development Strategy; Africa
Citation
Educators
Related
Elkins, Caroline M., Tarun Khanna, and Joyce J. Kim. "Andela: Africa's AWS for Talent." Harvard Business School Case 321-113, January 2021.

mPharma (A)

By: Rembrand Koning, John D. Macomber, Pippa Tubman Armerding and Wale Lawal
  • January 2021 |
  • Case |
  • Faculty Research
mPharma pioneered electronic prescriptions in Ghana, and aimed to increase drug affordability and accessibility in Africa, but the company remained unprofitable. Following investor concerns about mPharma's business, CEO Gregory Rockson considered alternative business models and services that could increase mPharma's profitability and impact.
Keywords: Strategy; Entrepreneurship; Acquisition; Health; Business Model; Health Industry; Technology Industry; Ghana
Citation
Educators
Related
Koning, Rembrand, John D. Macomber, Pippa Tubman Armerding, and Wale Lawal. "mPharma (A)." Harvard Business School Case 721-428, January 2021.
More Publications

Faculty

Lynda M. Applegate
Thomas R. Eisenmann
Richard G. Hamermesh
Myra M. Hart
Geoffrey G. Jones
Rosabeth M. Kanter
William R. Kerr
Joseph B. Lassiter
Josh Lerner
Ramana Nanda
William A. Sahlman
Howard H. Stevenson
→See All

HBS Working Knowlege

    • 15 Dec 2020

    Biased Sampling of Early Users and the Direction of Startup Innovation

    by Ruiqing Cao, Rembrand Koning, and Ramana Nanda by Ruiqing Cao, Rembrand Koning, and Ramana Nanda
    • 20 Oct 2020

    Flight to Safety: How Economic Downturns Affect Talent Flows to Startups

    by Shai Benjamin Bernstein, Richard Townsend, and Ting Xu
    • 13 Oct 2020

    Fencing Off Silicon Valley: Cross-Border Venture Capital and Technology Spillovers

    by Ufuk Akcigit, Sina T. Ates, Josh Lerner, Richard Townsend, and Yulia Zhestkova
→More Articles

Harvard Business Publishing

    • May 2013
    • Article

    How to Negotiate with VCs

    By: Deepak Malhotra
    • January 2021
    • Case

    Bespoken Spirits: Disrupting Distilling

    By: Benjamin C. Esty and Daniel Fisher
    • 2017
    • Book

    HBR Guide to Buying a Small Business: Think Big, Buy Small, Own Your Own Company

    By: Richard S. Ruback and Royce Yudkoff
→More Harvard Business Publishing
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