Entrepreneurial Management

- 2024
- Working Paper
Case Studies of the Emulation of Chinese Entrepreneurial Business Models

By: Josh Lerner, Junxi Liu, Jacob Moscona and David Yang

This working paper presents four short case studies of emerging market businesses whose founders emulated Chinese firms. These examples are part of a more systematic pattern, documented extensively in Lerner et al. (2024), in which businesses developed in China were more applicable to the demands, constraints, and characteristics of other emerging markets than were businesses developed in and for the U.S. or other high-income countries.
- 2024
- Working Paper
Case Studies of the Emulation of Chinese Entrepreneurial Business Models

By: Josh Lerner, Junxi Liu, Jacob Moscona and David Yang

This working paper presents four short case studies of emerging market businesses whose founders emulated Chinese firms. These examples are part of a more systematic pattern, documented extensively in Lerner et al. (2024), in which businesses developed in China were more applicable to the demands, constraints, and characteristics of other emerging...
- October 2024
- Article
Founder-CEO Compensation and Selection into Venture Capital-Backed Entrepreneurship

By: Michael Ewens, Ramana Nanda and Christopher Stanton

We show theoretically that a critical determinant of the attractiveness of VC-backed entrepreneurship for high-earning potential founders is the expected time to develop a startup’s initial product. This is because founder-CEOs’ cash compensation increases substantially after product development, alleviating the non-diversifiable risk that founders face at startup birth. Consistent with the model’s predictions of where the supply of entrepreneurial talent is likely to be most constrained, we find that technological shocks differentially altering the expected time to product across industries can explain changes in both the rate of entry and characteristics of individuals selecting into VC-backed entrepreneurship.
- October 2024
- Article
Founder-CEO Compensation and Selection into Venture Capital-Backed Entrepreneurship

By: Michael Ewens, Ramana Nanda and Christopher Stanton

We show theoretically that a critical determinant of the attractiveness of VC-backed entrepreneurship for high-earning potential founders is the expected time to develop a startup’s initial product. This is because founder-CEOs’ cash compensation increases substantially after product development, alleviating the non-diversifiable risk that...
- September 2024
- Case
Xendit: Hiring for Growth

By: Jeffrey F. Rayport, Steve Castano, Quoc Anh Nguyen and Claire Wu

In 2019, Xendit, a growth-stage Southeast Asia (SEA) fintech venture based in Jakarta, was looking to hire a Head of Sales and Head of Product to lead its next phase of growth. Founded by Moses Lo and Tessa Wijaya, Xendit provided payment infrastructure, modeling itself as the Stripe of SEA. It was the first Indonesian company to be accepted into Y Combinator, and it had raised over $18 million in its Series A round in 2018. By 2019 it was processing $6.5 billion worth of transactions per year, growing at 10% month over month, and had recently announced plans to raise a $65-million Series B round. The company attributed much of its success to hiring smart and tenacious generalists who could adapt to new situations, learn quickly, and bring an execution mindset. But the organization was maturing, and specialists were increasingly required. Sourcing executives with the right skillset and cultural fit for Xendit was a challenge. Fintech was in its infancy in SEA, resulting in a shallow pool of industry talent. Bringing in talent from outside SEA was tricky due to the importance of regional knowledge and language proficiency. As the founders looked to hire new leaders to drive core growth while also expanding into the Philippines, they also sought talent that could help professionalize the organization. Promoting from within had the advantage of rewarding loyalty and ensuring cultural fit, while bringing in seasoned talent from outside offered deep skillsets and new approaches, provided they could fit with Xendit's culture. The founders had narrowed down their choices to two candidates for the Head of Product and Head of Sales positions. Now they needed to make a decision.
- September 2024
- Case
Xendit: Hiring for Growth

By: Jeffrey F. Rayport, Steve Castano, Quoc Anh Nguyen and Claire Wu

In 2019, Xendit, a growth-stage Southeast Asia (SEA) fintech venture based in Jakarta, was looking to hire a Head of Sales and Head of Product to lead its next phase of growth. Founded by Moses Lo and Tessa Wijaya, Xendit provided payment infrastructure, modeling itself as the Stripe of SEA. It was the first Indonesian company to be accepted into...

About the Unit

The Entrepreneurial Management Unit strives to raise the level of academic work in the field of entrepreneurship, in methodological rigor, conceptual depth, and managerial applicability. We also strive to improve the odds of entrepreneurial success for our students and for practitioners worldwide.

Because it is such a complex phenomenon, entrepreneurship must be studied through multiple lenses. We use three.

The process of entrepreneurship - We seek to understand the processes of entrepreneurial activity in start-ups and established firms by examining the antecedents and consequences of various forms of entrepreneurial opportunity identification and opportunity pursuit for individuals, organizations, and industries. We see experimentation and innovation in products, services, processes, and business models as central to entrepreneurial activity.
The finance of entrepreneurship - We seek to understand the financing of entrepreneurial ventures by studying the antecedents and consequences of entrepreneurial funding decisions both domestically and internationally.
The context of entrepreneurship - We seek to understand the ways in which entrepreneurs both respond to and shape the context in which they operate, by examining the history of entrepreneurship across time and national borders and by analyzing the legal and cultural contexts for managerial action.

Please also visit the Arthur Rock Center for Entrepreneurship.

Recent Publications

Case Studies of the Emulation of Chinese Entrepreneurial Business Models

By: Josh Lerner, Junxi Liu, Jacob Moscona and David Yang

2024 |
Working Paper |
Faculty Research

This working paper presents four short case studies of emerging market businesses whose founders emulated Chinese firms. These examples are part of a more systematic pattern, documented extensively in Lerner et al. (2024), in which businesses developed in China were more applicable to the demands, constraints, and characteristics of other emerging markets than were businesses developed in and for the U.S. or other high-income countries.

Citation

Read Now

Founder-CEO Compensation and Selection into Venture Capital-Backed Entrepreneurship

By: Michael Ewens, Ramana Nanda and Christopher Stanton

October 2024 |
Article |
Journal of Finance

We show theoretically that a critical determinant of the attractiveness of VC-backed entrepreneurship for high-earning potential founders is the expected time to develop a startup’s initial product. This is because founder-CEOs’ cash compensation increases substantially after product development, alleviating the non-diversifiable risk that founders face at startup birth. Consistent with the model’s predictions of where the supply of entrepreneurial talent is likely to be most constrained, we find that technological shocks differentially altering the expected time to product across industries can explain changes in both the rate of entry and characteristics of individuals selecting into VC-backed entrepreneurship.

Keywords: Entrepreneurship; Venture Capital; Executive Compensation

Xendit: Hiring for Growth

By: Jeffrey F. Rayport, Steve Castano, Quoc Anh Nguyen and Claire Wu

September 2024 |
Case |
Faculty Research

In 2019, Xendit, a growth-stage Southeast Asia (SEA) fintech venture based in Jakarta, was looking to hire a Head of Sales and Head of Product to lead its next phase of growth. Founded by Moses Lo and Tessa Wijaya, Xendit provided payment infrastructure, modeling itself as the Stripe of SEA. It was the first Indonesian company to be accepted into Y Combinator, and it had raised over $18 million in its Series A round in 2018. By 2019 it was processing $6.5 billion worth of transactions per year, growing at 10% month over month, and had recently announced plans to raise a $65-million Series B round. The company attributed much of its success to hiring smart and tenacious generalists who could adapt to new situations, learn quickly, and bring an execution mindset. But the organization was maturing, and specialists were increasingly required. Sourcing executives with the right skillset and cultural fit for Xendit was a challenge. Fintech was in its infancy in SEA, resulting in a shallow pool of industry talent. Bringing in talent from outside SEA was tricky due to the importance of regional knowledge and language proficiency. As the founders looked to hire new leaders to drive core growth while also expanding into the Philippines, they also sought talent that could help professionalize the organization. Promoting from within had the advantage of rewarding loyalty and ensuring cultural fit, while bringing in seasoned talent from outside offered deep skillsets and new approaches, provided they could fit with Xendit's culture. The founders had narrowed down their choices to two candidates for the Head of Product and Head of Sales positions. Now they needed to make a decision.

Keywords: Finance; Entrepreneurship; Jobs and Positions; Sales; Product; Financial Services Industry; Technology Industry; Southeast Asia; Indonesia; Philippines

Citation

Educators

4 Steps That Can Optimize Your Sales Process

By: Frank V. Cespedes, Scott Peterson and Daniel Weinfurter

September 24, 2024 |
Article |
Harvard Business Review (website)

Sales is a performance art where outcomes matter, so most advice here focuses on closing the sale. But a close is the result of actions and choices that occur earlier in the process: how much time and effort to spend on customer discovery (understanding what and to whom you are selling), lead qualification (separating the suspects from true prospects), and performance management (time spent on training, reviews, and other activities that help to create a continuous improvement culture in business-development efforts). Each element is more important when interest rates (and therefore working capital costs) rise and selling cycles lengthen. This article discusses what one company did to improve how it allocates effort in these areas, and the implications for pricing, cost-to-serve, cash-conversion cycles, and profitable growth in many other businesses.

Keywords: Sales; Customer Satisfaction; Growth and Development Strategy; Competitive Advantage

Citation

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Purchase

Comun: Partners in Peril

By: Jeffrey J. Bussgang and Alexis Lefort

September 2024 |
Case |
Faculty Research

In spring 2023, Abiel Gutierrez and Andres Santos, co-founders of Comun, faced a critical decision at their fintech startup serving Latino immigrants. Having launched their product the previous year, they experienced rapid growth but encountered rising fraud and increasing regulatory barriers imposed by their banking partner, Piermont. These challenges threatened the company's core value proposition and the viability of its unit economics. Gutierrez and Santos were at a crossroads: Should they switch partners, a risky move given their limited financial runway, or stick with their current flawed infrastructure and risk stalling the company's growth? The case explores the complexities of partner reliance, regulatory hurdles, and the difficult strategic choices early-stage startups must navigate.

Keywords: Fintech; Startup; Partnerships; Business Development; Banking Industry; Financial Services; Venture Capital; Financial Services Industry; Latin America; United States

Citation

Educators

XYZ Robotics

By: Jeffrey J. Bussgang, Brian Mao Fu, Shu Lin and Jamie Gong

September 2024 |
Case |
Faculty Research

Founded in 2018, XYZ Robotics was a China-based startup specializing in robotic picking solutions and 3D machine vision products. Amid an economic downturn and intense competition, the company faced considerable financial challenges and needed to determine the best way to allocate its limited resources between its two product lines.

Keywords: Robotics; Startup; 3D Systems; China; China

Citation

Educators

Investing in the Next Generation: The Long-Run Impacts of a Liquidity Shock

By: Patrick Agte, Arielle Bernhardt, Erica M. Field, Rohini Pande and Natalia Rigol

September 2024 |
Article |
American Economic Review

How do poor entrepreneurs trade off investments in business enterprises versus children's human capital, and how do these choices influence intergenerational socio-economic mobility? To examine this, we exploit experimental variation in household income resulting from a one-time relaxation of household liquidity constraints (Field et al., 2013), and track schooling and business outcomes over the subsequent 11 years. On average, treatment households, who were made wealthier through the experiment, increase human capital investment such that their children are 35% more likely to attend college. However, schooling gains only accrue to children with literate parents, among whom college attendance nearly doubles. In contrast, treatment effects on investment among the illiterate accrue only on the business margin and are accompanied by adverse educational outcomes for children. As a result, treatment lowers relative educational mobility. In a forecasting exercise, we find that earnings gains for literate households are four times larger than the earnings gains for illiterate households, raising earnings inequality. Our findings highlight how parental investment choices can contribute to a growth in intergenerational earnings inequality despite reductions in urban poverty.

Keywords: Socio-economic Mobility; Entrepreneurship; Education; Income; Literacy; Poverty

Citation

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