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.

Featured Works

Article | Journal of Economic Perspectives
Entrepreneurship as Experimentation
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.
Keywords: Entrepreneurship; Innovation and Invention;

Citation:
Kerr, William R., Ramana Nanda, and Matthew Rhodes-Kropf. "Entrepreneurship as Experimentation." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 25–48. View Details
Cite View Details Read Now Related
Case | HBS Case Collection | January 2014 (Revised October 2014)
Andreessen Horowitz
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.
Keywords: Business Model; Venture Capital; Disruption; Entrepreneurship; Industry Structures; Financial Services Industry; California;

Citation:
Eisenmann, Thomas R., and Liz Kind. "Andreessen Horowitz." Harvard Business School Case 814-060, January 2014. (Revised October 2014.) (request a courtesy copy.) View Details
Cite View Details Educators Purchase Related
Background Note | HBS Case Collection | February 2014
Raising Startup Capital
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.
Keywords: fund raising; venture capital; venture capital term sheet; venture creation/development; venture investing; venture philanthropy; entrepreneurial finance; entrepreneurial management; entrepreneurs; entrepreneurship; Jumpstart Our Business Startups (JOBS) Act; Non-equity financing; Convertible notes; convertible debt; debt financing; Raising Capital; National Venture Capital Association; venture capital firm compensation; crowdfunding; crowd-funding; Startup; start-up; startup management; Startups; angel investors; angels; accelerator; Venture Capital; Financing and Loans; Entrepreneurship; Business Startups; Financial Services Industry; United States;

Citation:
Bussgang, Jeffrey. "Raising Startup Capital." Harvard Business School Background Note 814-089, February 2014. View Details
Cite View Details Educators Purchase Related
Article | Review of Financial Studies | January 2014
The Consequences of Entrepreneurial Finance: Evidence from Angel Financings
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.
Keywords: Business Ventures; Financing and Loans; Interests; Employment; Patents; Web; Operations; Entrepreneurship; Business Exit or Shutdown;

Citation:
Kerr, William R., Josh Lerner, and Antoinette Schoar. "The Consequences of Entrepreneurial Finance: Evidence from Angel Financings." Review of Financial Studies 27, no. 1 (January 2014): 20–55. View Details
Cite View Details Find at Harvard Read Now Related
Case | HBS Case Collection | September 2014 (Revised December 2014)
The Ullens Center for Contemporary Art
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.
Keywords: art world; art gallery; art market; Arts; Nonprofit Organizations; Entrepreneurship; China;

Citation:
Khaire, Mukti, and Nancy Hua Dai. "The Ullens Center for Contemporary Art." Harvard Business School Case 815-022, September 2014. (Revised December 2014.) View Details
Cite View Details Educators Purchase Related
Discussion Paper | 2014
The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?
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.
Keywords: Microfinance; Entrepreneurship in emerging markets; entrepreneurship; gender; Women's Empowerment; entrepreneurs; Saving; savings; credit; credit supply; Insurance; Development economics; development finance; Behavioral economics; Gender; Microfinance; Social Entrepreneurship; Developing Countries and Economies; Banking Industry; Public Administration Industry; Financial Services Industry; Insurance Industry; Latin America; Kenya; Chile; India; Asia; Africa;

Citation:
Pomeranz, Dina D. "The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?" EY Thought Leadership Series, February 2014. View Details
Cite View Details Read Now Related

Recent Publications

Working Paper | 2019
Keeping the Little Guy Down: A Debt Trap for Lending with Limited Pledgeability
Ernest Liu and Benjamin N. Roth
Microcredit and other forms of small-scale ﬁnance have failed to catalyze entrepreneurship in developing countries. In these credit markets, borrowers and lenders often bargain over not only the division of surplus but also contractual ﬂexibility. We show these lending relationships may lead to endogenous poverty traps for poor borrowers if future income is not pledgeable, yet richer borrowers unambiguously beneﬁt. Improving the bargaining position of rich borrowers can harm poor borrowers, as the lender tightens restrictions and prevents them from growing. The theory rationalizes the low average impact and low demand of microﬁnance despite its high impact on larger businesses.
Keywords: Entrepreneurship; Developing Countries and Economies; Microfinance; Problems and Challenges;

Citation:
Liu, Ernest, and Benjamin N. Roth. "Keeping the Little Guy Down: A Debt Trap for Lending with Limited Pledgeability." Working Paper, March 2019. View Details
Cite View Details Read Now Related
Case | HBS Case Collection | April 2019
Wayfair
Jeffrey F. Rayport, Susie Ma and Matthew Preble
In 2016 Niraj Shah and Steve Conine, founders of online home goods retailer Wayfair, are faced with a decision about how to improve user experience on their e-commerce sites. A key driver of consumer interest and conversion to purchase in the home category is visual imagery, which has traditionally been generated not by the retail channel rather than by manufacturers. Catalog retailers, in particular, are famous for visually romancing the category. As a comprehensive offering, Wayfair hosts over seven million SKUs on its site, so it must solve for the lack of visual assets from manufacturers by generating visual assets of its own. Initially, the company embarks on a plan to produce these images using traditional photography studios and professional staffs, but costs mount and throughput is too slow. Seeking a solution, Shah and Conine assess the likelihood of using technology – specifically, high-resolution 3D modeling from low-resolution 2D images – to address the challenge. Resolving this issue is especially pressing, given that Wayfair has just launched private label lines and a host of what it calls lifestyle brands, which require support from high-end visual merchandising. As a consequence, the question of how to provision visual assets becomes a question of how fast Wayfair can grow. This case presents the factors involved in deciding what direction to take – a reliable path using traditional methods or a risky path using bleeding-edge technologies.
Keywords: visual assets; Corporate Entrepreneurship; Decision Making; Business or Company Management; Growth Management; Innovation and Invention; Operations; Strategy; Technology; Retail Industry; Service Industry; United States; Massachusetts;

Citation:
Rayport, Jeffrey F., Susie Ma, and Matthew Preble. "Wayfair." Harvard Business School Case 819-045, April 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | March 2019
MoviePass: The 'Get Big Fast' Strategy
Benjamin C. Esty and Daniel Fisher
In August 2017, MoviePass dramatically lowered its subscription price from $50 per month to just $10 for up to one movie per day. The idea was to rapidly scale the business to the point where they could generate incremental revenue streams from related businesses (e.g., a share of ticket and concession revenues from theaters, advertising revenue from movie studios; and revenue from ride-sharing companies). Within two days, Moviepass had gotten 150k new subscribers; within six months, they had more than 2 million. But as of February 2018, the company faced three challenges: theaters were resisting the concept, investors were shorting the stock in record numbers, and competitors were beginning to appear. Could CEO Lowe convince investors that they did, indeed, have a viable business model and could monetize their growing subscriber base? At the same time, Lowe had to decide whether to raise subscription prices to cover the growing losses or keep prices low to attract subscribers as quickly as possible.
Keywords: Market entry; growth strategy; profit vs. growth; subscription business; cash burn; Data Analytics; get-big-fast; buyer power; strategy implementation; movie industry; Racing; Entrepreneurship; Market Entry and Exit; Growth and Development Strategy; Business Strategy; Value Creation; Disruption; Motion Pictures and Video Industry; United States;

Citation:
Esty, Benjamin C., and Daniel Fisher. "MoviePass: The 'Get Big Fast' Strategy." Harvard Business School Case 719-455, March 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | March 2019
The DivaCup: Navigating Distribution and Growth
Ayelet Israeli
When the mother-daughter founders of DivaCup set out with a mission to disrupt the menstrual care industry with an innovative product form, they initially struggled to gain legitimacy and convince retailers to carry their unique product. Fifteen years later, the product was available online and in more than 35,000 retail stores worldwide, and the company was struggling with omnichannel distribution challenges and frequent violations of their pricing policy due to intense competition among channel partners. International distribution and the prevalence of gray market sellers were causing large price dispersions across markets, which was harming the brand further. In October 2018, the entry of a formidable competitor, P&G (owner of menstrual care brands Tampax and Always), into the niche product segment causes the CEO and her team to consider the best plan to reposition and differentiate its product to broaden its appeal to users of other product forms, while maintaining its market leadership in the menstrual cup segment. This challenge is made more difficult due to prevalent miseducation about menstrual care and menstrual cups in particular.
Keywords: female; female ceo; Female Entrepreneur; female protagonist; health ＆ wellness; healthcare; price policies; minimum advertised price; differentiation; positioning; Growth; Health; Health Care and Treatment; Price; Disruption; Distribution; Distribution Channels; Competitive Strategy; Competition; Growth Management; Mission and Purpose; Product Development; Product Marketing; Product Launch; Product Positioning; Advertising; Business Startups; Internet; Entrepreneurship; Social Entrepreneurship; Social Issues; Social Enterprise; Retail Industry; Medical Devices and Supplies Industry; Manufacturing Industry; Health Industry; Green Technology Industry; Education Industry; Distribution Industry; Consumer Products Industry; Canada; United States; United Kingdom;

Citation:
Israeli, Ayelet. "The DivaCup: Navigating Distribution and Growth." Harvard Business School Case 519-055, March 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | March 2019
Choosing the Right Esports Business Model
David Collis and Alexander MacKay
Two esports entrepreneurs must choose on which business model to focus their time and money. After successfully launching an online esports coaching platform, a number of new opportunities emerge in the rapidly growing esports space which now has close to 1 billion gamers and an online audience that is greater than the Superbowl. Should they focus on a B2C business, a B2B business? Develop an analytics capability to support "sabremetrics" for esports or a content creation capability? How can they best exploit ownership of the world's top team in the "Hearthstone" league. The choice will depend on the future industry structure and how the two can most effectively "follow the money".
Keywords: entrepreneurial ecosystems; business development; Business Ventures; Entrepreneurship; Business Model; Management; Strategy; Sports; Entertainment and Recreation Industry; Information Technology Industry; Media and Broadcasting Industry; Sports Industry; Video Game Industry; North and Central America; Europe; Asia;

Citation:
Collis, David, and Alexander MacKay. "Choosing the Right Esports Business Model." Harvard Business School Case 719-459, March 2019. View Details
Cite View Details Educators Related
Other Article | Medium
#HerImpact: Leading the Innovation Lifecycle
Lynda M. Applegate
This blog post describes how entrepreneurs can scale their leadership and organization as they scale their business.
Keywords: innovation ＆ entrepreneurship; life-cycle; Innovation and Management; Entrepreneurship; Beauty and Cosmetics Industry; United States;

Citation:
Applegate, Lynda M. "#HerImpact: Leading the Innovation Lifecycle." Medium (March 4, 2019). View Details
Cite View Details Read Now Related
Article | Strategic Management Journal | March 2019
When Does Advice Impact Startup Performance?
Aaron Chatterji, Solène Delecourt, Sharique Hasan and Rembrand Koning
Why do some entrepreneurs thrive while others fail? We explore whether the advice entrepreneurs receive about managing their employees influences their startup's performance. We conducted a randomized field experiment in India with 100 high-growth technology firms whose founders received in-person advice from other entrepreneurs who varied in their managerial style. We find that entrepreneurs who received advice from peers with a formal approach to managing people—instituting regular meetings, setting goals consistently, and providing frequent feedback to employees—grew 28% larger and were 10 percentage points less likely to fail than those who got advice from peers with an informal approach to managing people, two years after our intervention. Entrepreneurs with MBAs or accelerator experience did not respond to this intervention, suggesting that formal training can limit the spread of peer advice.
Keywords: entrepreneurial management; field experiment; peer effects; entrepreneurial ecosystems; advice; Management Style; Management Practices and Processes; Knowledge Dissemination; Entrepreneurship; Performance; India;

Citation:
Chatterji, Aaron, Solène Delecourt, Sharique Hasan, and Rembrand Koning. "When Does Advice Impact Startup Performance?" Strategic Management Journal 40, no. 3 (March 2019): 331–356. View Details
Cite View Details Find at Harvard Read Now Related
Case | HBS Case Collection | February 2019
Hot Chicken Takeover
William R. Kerr, Manjari Raman and Olivia Hull
By December 2018, entrepreneur Joe DeLoss’s fried chicken company, Hot Chicken Takeover, has opened three restaurants in Columbus, Ohio using an unconventional employment model that helps people with criminal records get back on their feet. DeLoss is proud of the supportive employment environment he has cultivated, but wonders how to scale it beyond Columbus.
Keywords: Fair chance employment; fair chance hiring; open hiring; inclusive hiring; criminal record; homelessness; therapeutic employment; corporate culture; Managing the Future of Work; Food; Entrepreneurship; Social Entrepreneurship; Values and Beliefs; Fairness; Human Resources; Compensation and Benefits; Recruitment; Employees; Retention; Selection and Staffing; Innovation Strategy; Job Offer; Job Interviews; Human Capital; Leadership; Growth Management; Corporate Social Responsibility and Impact; Mission and Purpose; Social Enterprise; Social Issues; Poverty; Welfare or Wellbeing; Food and Beverage Industry; Ohio; United States;

Citation:
Kerr, William R., Manjari Raman, and Olivia Hull. "Hot Chicken Takeover." Harvard Business School Case 819-078, February 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | February 2019
Extend Fertility: Conceiving the Market for Egg Preservation (A)
Debora L. Spar and Olivia Hull
In April 2003, entrepreneur and MBA student Christy Jones was planning a new venture to help women preserve their fertility. Her company, Extend Fertility, would commercialize a technique known as egg freezing, in which a woman’s eggs were extracted and stored at low temperatures until she was ready to become a mother. To date, the emerging technology had mostly been used to preserve the fertility of cancer patients whose treatment course could damage their eggs. Jones’s business would target a massively broader population: healthy women wishing to postpone motherhood. Before Jones could launch Extend Fertility, she needed to answer two pressing questions. What, exactly, would an egg-freezing service be selling? And to whom?
Keywords: Assisted reproduction; entrepreneur; health and wellness; fertility; infertility; Women's health; Creating markets; egg freezing; fertility clinic; Strategy; Demographics; Gender; Entrepreneurship; Health Care and Treatment; Innovation and Invention; Marketing; Science; Technology; Innovation Strategy; Technological Innovation; Commercialization; Science-Based Business; Marketing Strategy; Business Plan; Product Marketing; Product Launch; Product Positioning; Mission and Purpose; Personal Development and Career; Social Issues; Integration; Health; Ethics; Health Industry; United States;

Citation:
Spar, Debora L., and Olivia Hull. "Extend Fertility: Conceiving the Market for Egg Preservation (A)." Harvard Business School Case 719-019, February 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | February 2019
Maccabitech: The Promise of Israel's Healthcare Data
Scott Duke Kominers and Carin-Isabel Knoop
Dr. Varda Shalev bridges technology and medicine through Maccabitech, a “research and innovation wing” of Israel’s Maccabi Healthcare Services (MHS) that partners with research institutions, pharmaceutical companies, and startups. Shalev hopes to scale Maccabitech's efforts through the creation of a platform that will enable external researchers to access MHS data. Yet it is unclear how best to structure the platform and its policies. How can Maccabitech maximize impact while still creating value for MHS? And what risks does Maccabitech need to manage?
Keywords: big data; healthcare; Data and Data Sets; Two-Sided Platforms; Health Care and Treatment; Innovation and Invention; Research; Entrepreneurship; Risk Management; Israel;

Citation:
Kominers, Scott Duke, and Carin-Isabel Knoop. "Maccabitech: The Promise of Israel's Healthcare Data." Harvard Business School Case 819-032, February 2019. View Details
Cite View Details Educators Related

See all faculty publications on Entrepreneurship »

Faculty & Research

Featured Works

Initiatives & Projects

Faculty

Seminars & Conferences

HBS Working Knowledge

Harvard Business Publishing