The people behind the technology Citation for published version (APA): Dolmans, S. A. M. (2013). The people behind the technology: decision making in technology commercialization. Technische Universiteit Eindhoven. https://doi.org/10.6100/IR760960 DOI: 10.6100/IR760960 Document status and date: Published: 01/01/2013 Document Version: Publisher’s PDF, also known as Version of Record (includes final page, issue and volume numbers) Please check the document version of this publication: • A submitted manuscript is the version of the article upon submission and before peer-review. There can be important differences between the submitted version and the official published version of record. People interested in the research are advised to contact the author for the final version of the publication, or visit the DOI to the publisher's website. • The final author version and the galley proof are versions of the publication after peer review. • The final published version features the final layout of the paper including the volume, issue and page numbers. Link to publication General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal. If the publication is distributed under the terms of Article 25fa of the Dutch Copyright Act, indicated by the “Taverne” license above, please follow below link for the End User Agreement: www.tue.nl/taverne Take down policy If you believe that this document breaches copyright please contact us at: [email protected]providing details and we will investigate your claim. Download date: 23. Nov. 2020
164
Embed
The people behind the technology · awesome coach, for sharing your personal experiences and for bringing out ... It is hard to image today’s world without the technological inventions
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
The people behind the technology
Citation for published version (APA):Dolmans, S. A. M. (2013). The people behind the technology: decision making in technology commercialization.Technische Universiteit Eindhoven. https://doi.org/10.6100/IR760960
DOI:10.6100/IR760960
Document status and date:Published: 01/01/2013
Document Version:Publisher’s PDF, also known as Version of Record (includes final page, issue and volume numbers)
Please check the document version of this publication:
• A submitted manuscript is the version of the article upon submission and before peer-review. There can beimportant differences between the submitted version and the official published version of record. Peopleinterested in the research are advised to contact the author for the final version of the publication, or visit theDOI to the publisher's website.• The final author version and the galley proof are versions of the publication after peer review.• The final published version features the final layout of the paper including the volume, issue and pagenumbers.Link to publication
General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright ownersand it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.
• Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal.
If the publication is distributed under the terms of Article 25fa of the Dutch Copyright Act, indicated by the “Taverne” license above, pleasefollow below link for the End User Agreement:www.tue.nl/taverne
Take down policyIf you believe that this document breaches copyright please contact us at:[email protected] details and we will investigate your claim.
ter verkrijging van de graad van doctor aan de Technische Universiteit Eindhoven, op gezag van de rector magnificus prof.dr.ir. C.J. van Duijn, voor een commissie aangewezen door het College voor Promoties, in het
openbaar te verdedigen op maandag 9 december 2013 om 16:00 uur
door
Sharon Anna Maria Dolmans
geboren te Geleen
Dit proefschrift is goedgekeurd door de promotoren en de samenstelling van de promotiecommissie is als volgt: voorzitter: prof.dr. A.G. de Kok 1e promotor: prof.dr. A.G.L. Romme copromotor(en): dr.ir.arch. I.M.M.J. Reymen dr.ir. J.C. van Burg (VU University Amsterdam) leden: prof.dr. P. Mustar (Mines ParisTech) prof.dr. T. Elfring (VU University Amsterdam) dr. P.M. Le Blanc
To change the world,
Start with one step
And however small,
The first step is hardest of all
But once you get your gait,
You will walk in tall
The things you never did,
Cause you might die trying
Dave Matthews Band – You Might Die Trying (Stand Up, 2005)
VII
Acknowledgements
Albert Einstein once said that science is a wonderful thing – if one does not
have to earn one's living at it. After spending nearly four years at the ITEM
group, I can safely say that science is indeed a wonderful thing – especially if
you can earn your living with it!
Completing this dissertation would not have been possible without the
support, enthusiasm and humor of my colleagues at the ITEM group. I am
very grateful to my promotor Georges Romme. Georges, thank you for all
your support, wise advice and for giving me the freedom and confidence to
make my own decisions throughout the process. As a dean, you have one of
the busiest schedules out there, but you have always made time for me –
regardless of whether that was on short notice, during evenings or on
weekends. I truly appreciate that.
I am very grateful to my co-promotor Isabelle Reymen. Isabelle, thank
you for being so much more than a supervisor! Not only have you taught me
about research, but I also learned a great deal about teaching, industry
collaboration, project funding and university life. Thank you for being an
awesome coach, for sharing your personal experiences and for bringing out
the best in me. I hope to learn many more things from you in the future.
I am also very grateful to my co-promotor Elco van Burg. Elco, even
though we have only worked together at ITEM during the first part of my
PhD project, the impact of our discussions extends far beyond that. I have
greatly enjoyed our brainstorm sessions – always feeling a bit smarter
afterwards. Also, thank you for introducing me to the qualitative method,
you have really changed my view on research!
Moreover, I would like to thank Marion, Bianca and Frederieke for your
unconditional support, whether it concerned work or personal matters.
Without your genuine interest and care, working here would not be the
same. Further gratitude goes to Marijke and Marjan, thank you for all your
support.
VIII
Fred, thank you for giving me the opportunity to continue my work at
ITEM – I am looking forward to start my new job as assistant professor!
Lydie, who knew a PhD project would land me a new best friend! Thank you
for all the good times and for always being there for me – on the job or off
the job. Bob, without you I would have never applied for (and eventually
completed) this PhD project. Thank you for all your support over the years –
by always being one step ahead and preparing me for what is next, you have
made (and continue to make) my job much more enjoyable.
Also, many “thank you’s” go out to G-man, Mr. the Lion, Jing, Reggie,
Katrin, Le Freak, LuukELuuk, Meike, Thijs ‘P’, Mc Skipper, Jelle, Ying and
everyone else that regularly worked in or visited the AIO-tuin!
I would also like to thank the TU/e Innovation Lab for their financial
and non-financial support as well as the European Commission for their
financial support as part of the EFORCE project.
I am very grateful to Scott Shane for inviting me to work at Case
Western Reserve University for part of my PhD project. Scott, thank you for
having me over! In addition to working with and learning from a great
researcher, I learned a lot about myself. Visiting Cleveland was an invaluable
adventure, one I will never forget.
The completion of my dissertation would also not have been possible
without the support of my family. I am extremely grateful to my parents,
Rita and Rob, for raising me as they did – without your love and support I
would have never gotten this far. Thank you for encouraging me to be
curious, social and independent, and for stimulating me to be critical, but
always with respect. I am pretty sure these qualities make me a better person
but certainly also a better researcher. And, thank you Leonne, Leo, Janine
and Didier for your care, sincere interest, understanding and support.
Last – and not least, but most – I want to thank Piet (Jeroen Frissen).
Thank you for your love and patience, for unconditionally supporting me, for
always believing in me, and for (at times) pushing me to accomplish things I
would never consider possible.
Sharon Dolmans, Helmond, 2013
IX
Table of contents
Chapter 1 Introduction 1
1.1 Outline of this dissertation 4
PART I Decision making in universities 9
Chapter 2 The perceived value of inventor status 11
2.1 Introduction 12
2.2 Theory 14
2.3 Organizational Setting 16
2.4 Method 17
2.5 Results 23
2.6 Discussion 23
Chapter 3 Do technology licensing officers favor particular
inventors for start-ups? 29
3.1 Introduction 30
3.2 Theory 31
3.3 Method 36
3.4 Results 40
3.5 Discussion 44
X
PART II Decision making in new technology ventures 49
Chapter 4 Decision making in new technology ventures:
Resource positions in action 51
4.1 Introduction 52
4.2 Theory 54
4.3 Method 59
4.4 Findings 74
4.5 Discussion 90
Chapter 5 Conclusions 99
5.1 Findings 102
5.2 Implications 107
5.3 Limitations and Directions for Future Research 112
5.4 Closing Comments 115
References 117
Appendix I 135
Example invention disclosure - Inventor gender treatment 135
Appendix II 139
Interview protocol for semi structured interviews 139
Summary 147
Curriculum Vitae 153
Chapter 1
Introduction
The commercialization of new technologies, and in particular technologies
developed at universities, is one of the major drivers of economic
development by creating both economic and societal value (Lockett, Siegel,
p-values (one sided), *p<0.10, ** p<0.05; ***p<0.01 1 Cohen’s d (Cohen, 1988, 1992) as a measure of effect size, calculated using the pooled standard deviation:
√( )
( )
Small Medium Large Cohen’s d effect size (t-test difference in means)
.20 .50 .80
2.6.1 Implications
Besides demonstrating the direct effect of status on the evaluation of new
technology, our findings have several important implications for (research
on) university technology commercialization. First, this study shows how
CHAPTER 2 25
research on university technology commercialization can potentially gain
from investigating how social structure enters into the decision-making
processes of technology licensing officers (Podolny & Stuart, 1995; Podolny,
1993). By highlighting the role of inventor status, our results extend prior
findings on the importance of inventor characteristics in evaluating the
commercial potential of inventions (Jensen & Thursby, 2001; Shane, 2004;
Siegel, Waldman, & Link, 2003), thereby rebalancing the literature’s focus
on the (technological) attributes of the inventions themselves (Podolny &
Stuart, 1995). Future research on university technology commercialization
should therefore incorporate the sociological processes inherent in the
evaluation and commercialization of university inventions.
Second, by acknowledging status processes one can better understand
the decisions of technology licensing officers about university inventions.
Our results provide insight into how technology licensing officers influence
the process of technology commercialization, by demonstrating these
officers are sensitive to inventor status when they evaluate new inventions.
Licensing officers may rely on inventor status to resolve uncertainty about
the quality of a university invention (Podolny & Stuart, 1995) and use it as a
signal (Podolny, 1993) of the technical and market value of an invention. As
such, inventor status may provide a sense of credibility to those claims about
the invention that are hard to ascertain (Shane & Khurana, 2003; Shane,
2004).
Our findings suggest an important avenue for future research: should
licensing offices use mechanisms to evaluate university inventions that allow
them to ignore the inventor’s status? Our experiments show that licensing
officers perceive the inventions of department chairs and members of the
National Academy of Sciences as having greater commercial potential than
those of other academics. Whether licensing officers should take inventor
status into consideration when evaluating inventions depends on whether or
not inventor status actually improves the odds of a successful commercial
outcome.
Some research argues that higher status researchers produce inventions
of greater commercial value (Shane, 2004; Zucker & Darby, 1997),
suggesting that technology licensing officers might be accurately inferring a
26 THE PERCEIVED VALUE OF INVENTOR STATUS
greater commercial potential of inventions developed by high status
inventors. While this argument seems plausible for the effect of our member
of the National Academy of Sciences manipulation, a similar argument does
not appear to be applicable to the effect of department chairs. Unlike
membership in the National Academy of Sciences, becoming a department
chair is typically not contingent on academic achievement. Therefore, the
department chair effect suggests a status effect that is less likely to reflect the
actual commercial potential of the researcher’s invention. In this respect,
licensing officers may be biased in their evaluation of the work of high status
faculty members resulting in an inaccurate perception of quality that stems
from status. Such biases in the evaluation of high status actors may also be
the result of factors such as respect, doubts of one’s own competence to
criticize a renowned actor, or fear of offending an influential person, which
can result in less careful assessments with less strict criteria (Merton, 1968;
Zuckerman & Merton, 1971). Our results thus suggest the need for future
research that can determine whether the effects of status on evaluators’
perceptions of value are efficient or a source of bias. Future research should
therefore address to what extent various inventor status characteristics can
indeed be seen as a valid proxy or signal of underlying technological quality
or tacit knowledge.
Furthermore, inventor status may facilitate the commercialization
process by attracting the attention of potential licensees and signaling quality
to scientific and financial communities (Allen, Link, & Rosenbaum, 2007;
Audretsch & Stephan, 1996; Elfenbein, 2007). In this regard, future work
should also investigate whether status effects (in general, or such as
identified in this study) translate to industry evaluations of university
technologies.
2.6.2 Limitations
The study in this chapter has some limitations. First, our decision to conduct
a randomized experiment to examine the effect of inventor status on
licensing officer evaluation resulted in a stylized research setting. Although
we took several measures to make the experiment realistic, the licensing
CHAPTER 2 27
officers were asked to conduct a simplified and time-constrained evaluation
process rather than a more iterative, multistage selection process (Shane,
2004). Moreover, authentic invention disclosure documents may not always
contain inventor status characteristics (like National Academy of Sciences
membership). Therefore, our experimental design might have evoked a
clearer association between those attributes and the invention itself than is
the case when university licensing officers evaluate authentic disclosures of
inventions. While we have no evidence to suggest that our results are an
artifact of the stylized nature of the research design, it is possible that the
patterns observed were either over- or understated as a result of the research
design adopted.
Second, the treatments used in this experiment were selected on the
basis of interview data with the director of a technology licensing office and
prior research. Future research should explore which other inventor status
characteristics licensing officers might be sensitive to when evaluating
university inventions.
Third, our findings may not be generalizable to technology transfer
offices outside the US. Cultural differences, for instance, may lead licensing
officers elsewhere to respond differently to the status treatments employed
in this study. Although we have no evidence to suggest that these results
would not generalize to other countries, additional research is needed to
show that they can be generalized.
2.6.3 Conclusion
This study built on randomized experiments to investigate how inventor
status affects evaluators’ assessments of the value of new technology in the
context of university technology commercialization. During these
experiments, technology licensing officers at US research universities were
invited to evaluate new university inventions in which everything except the
inventor’s status was held constant. This research design serves to overcome
the typical difficulties of isolating status effects while controlling for quality.
Our results show that the status of the inventors who disclose university
inventions influences technology licensing officers’ evaluations of these
28 THE PERCEIVED VALUE OF INVENTOR STATUS
inventions. In particular, technology licensing officers believe the inventions
of high status inventors have more commercial potential, suggesting that the
inventions of high status inventors are more likely to be commercialized.
These findings provide significant ground for future research on status
processes in relation to university technology commercialization.
This chapter has shown how technology licensing officers may rely on
inventor characteristics to assess the commercial potential of new university
inventions. Chapter 3 builds on these insights by investigating the influence
of various inventor attributes on technology licensing officers’ support for
spinoff creation.
Chapter 3
Do technology licensing officers favor
particular inventors for start-ups?*
Technology licensing officers play an important role in commercializing university
inventions. Anecdotal data indicates that characteristics of inventors may
influence licensing officers’ decisions about which inventions should (not) be
commercialized. To examine the effect of faculty member characteristics on the
support that licensing officers give to spinoff company creation, this study builds on
randomized experiments with more than 200 technology licensing officers at
universities in the US. Licensing officers appear to be negatively disposed to
(disclosures by) female inventors and positively disposed to (disclosures by)
Chinese-named Asian inventors with industry experience who are easy to work
with.
* This chapter is based on: Shane, S., Dolmans, S.A.M., Jankowski, J., Reymen,
I.M.M.J., Romme, A.G.L. (2012). Which Inventors do Technology Licensing Officers
Favor for Start-ups? and has been accepted for publication in Frontiers of
Entrepreneurship Research (2012). Currently under review at The Journal of
Technology Transfer.
Earlier versions of this study have been presented at the 2012 Babson College
Entrepreneurship Research Conference (Forth Worth TX, USA), the 2012 CIR
Tilburg Conference on Innovation, (Tilburg, The Netherlands) and the 2012
Technology Transfer Society (T2S) Annual Conference (New York NY, USA).
30 DO LICENSING OFFICERS FAVOR PARTICULAR INVENTORS
3.1 Introduction
Technology licensing offices play an important role in commercializing
university inventions (Thursby and Thursby, 2002; Owen-Smith and Powell,
2003; Clarysse et al., 2005). Because the property rights to inventions made
by faculty, staff and students often belong to the institutions where these
inventions were developed, technology licensing officers often regulate
which inventions are commercialized through the creation of spinoff
companies.
Anecdotal data indicates that technology licensing officers are
influenced by the characteristics of the inventors who disclose those
inventions (Shane, 2004, 2005). However, systematic evidence of this
relationship has yet to be established. Whereas Chapter 2 investigated the
role of inventor status on the perceived commercial potential of new
inventions, this study explores whether inventor characteristics influence the
support that technology licensing officers give to the creation of spinoff
companies.
This study draws on experiments with 239 technology licensing officers
at 88 universities. The licensing officers were asked to evaluate identical
invention disclosures, to which we randomly assigned various inventor
characteristics. We found statistically significant differences in the rate at
which the licensing officers recommended spinoff company creation,
depending on the inventor characteristics.
Our findings are important to researchers and practitioners in several
ways. First, they provide insight into the influence that inventor attributes
have on the creation of university spinoffs, rebalancing the literature’s focus
on the attributes of the inventions themselves. Second, they help us to better
understand the decisions of technology licensing officers about university
inventions, providing insight into how these individuals influence the
process of technology commercialization (Shane, 2004; Siegel et al., 2007).
Third, this study serves to identify the preferences of licensing officers for
particular types of inventors, suggesting attributes that will help inventors to
increase their odds of founding a spinoff.
CHAPTER 3 31
3.2 Theory
Why do some university inventions, like the Google search algorithm, lead to
the creation of new companies, while others, like the sports drink Gatorade,
get licensed to existing companies? To date, researchers studying this
question have largely focused on the characteristics of the inventions
themselves. Previous research has shown that only few inventions are
sufficiently important, generic, disruptive and early stage, or with sufficient
patent protection, to be appropriate for the formation of a new company
(Pressman, 2002; Shane, 2004).
However, anecdotal data suggests that inventor characteristics also
influence whether a spinoff will be founded (Shane, 2004). Spinoffs demand
that inventors undertake additional technology development (Jensen &
Thursby, 2001), acquire resources (Shane & Cable, 2002) and establish new
0.0201, Cohen’s d = 0.30. But there was no statistically significant
difference in the degree of dissuasion from starting a business between the
treatment group receiving an Chinese-named Asian inventor (M = 2.20, SD
=1.19) and the control group receiving an American-named Caucasian
inventor (M =2.42, SD =1.09), t(237) = 1.52, p = 0.1298, Cohen’s d = 0.19.
42 DO LICENSING OFFICERS FAVOR PARTICULAR INVENTORS
We found that licensing officers were significantly less likely to dissuade
inventors with industry experience from starting a company (M = 2.02, SD
=1.13), compared to inventors without industry experience (M =2.84, SD
=1.34), t(237) = 5.09, p = 0.0000, Cohen’s d = 0.67. Moreover, licensing
officers were more likely to recommend inventions by inventors with
industry experience (M = 3.09, SD =1.07) to their university’s venture capital
fund, compared to those of inventors without industry experience (M =2.72,
SD =1.13), t(237) = 2.60, p = 0.0099, Cohen’s d = 0.34.
Licensing officers were significantly less likely to dissuade inventors
perceived as easy to work with (M = 3.09, SD =1.07) from starting a
company, compared to inventors who are difficult to work with (M = 3.17, SD
=1.40), t(237) = 2.44, p = 0.0154, Cohen’s d = 0.32. However, there is no
statistically significant difference in the likelihood that licensing officers
would recommend a spinoff to the university’s internal venture capital fund
between inventors who are easy to work with (M =2.38, SD = 1.02) and
inventors who are difficult to work with (M =2.30, SD = 1.15), t(237) = 0.52, p
= 0.6035, Cohen’s d = 0.07.
CHAPTER 3 43
Table 3.3: Comparison of the Experimental and Control Groups
Treatments (inventor
characteristics) N
Dissuade inventor
from starting a company
t-value da
Recommend to university
venture capital fund
t-value da
Male 119 2.09
(0.97)
3.55 (0.95)
Female 120 2.53
(1.26) 3.03** 0.39
3.37 (0.95)
1.46 0.19
American- named
123 2.42
(1.09)
3.32 (0.97)
Chinese- named
116 2.20 (1.19)
1.52 0.19 3.60
(0.92) 2.34* 0.30
Industry Experience
121 2.02 (1.13)
3.09 (1.07)
No Industry Experience
118 2.84 (1.34)
5.09**** 0.67 2.72 (1.13)
2.60** 0.34
Easy to Work With
117 2.75
(1.25)
2.38 (1.02)
Difficult to Work With
122 3.17
(1.40) 2.44* 0.32
2.30 (1.15)
0.52 0.07
t p< 0.10; * p<0.05; **p<0.01; ***p<0.001; ****p<0.0001 a Cohen’s d (Cohen, 1988, 1992) as a measure of effect size, calculated using the pooled standard deviation:
√( )
( )
Small Medium Large
Cohen’s d effect size (t-test difference in means)
.20 .50 .80
3.4.1 Robustness checks
To confirm the robustness of the effects we found, we ran ordinary least
squares regression models to predict our two dependent variables with
licensing officer characteristics as control variables. Each regression model
included a treatment as the main predictor variable and licensing officer age,
experience, gender, technical field, and highest degree as control variables.
As Table 3.4 shows, the results are robust to the inclusion of these additional
controls.
44 DO LICENSING OFFICERS FAVOR PARTICULAR INVENTORS
Table 3.4: OLS Regressions including licensing officer controls
* p<0.05; **p<0.01; ***p<0.001; ****p<0.0001 a Dummy variable equal to 1 for treatment group b Categorical variable representing highest education level licensing officer, 0=Associate degree; 1 = BSc degree; 2 = MSc degree; 3 = PhD c Dummy variable indicating whether the licensing officer’s educational background includes this field
3.5 Discussion
Understanding how inventor characteristics influence technology licensing
officers’ support for spinoff creation is critical to the theory and practice of
The radical subjectivist strand of Austrian economics (Lachmann, 1976,
1986) further suggests that it is not only perceptions of (potential) resource
availability, but also the imagined actions enabled by these resources that
play an important role (Chiles et al., 2007; Chiles, Tuggle, McMullen,
Bierman, & Greening, 2010; Foss et al., 2008; McMullen, 2010). If
evaluations of resource availability depend on how entrepreneurs imagine
making use of resources to support a venture (Cohen et al., 1972; George,
2005; Mishina et al., 2004), their dissimilar imagining creates heterogeneity
in perceived resource positions. The imagined action scenarios vary partly
according to how entrepreneurs make use of the resources they have at
hand, such that a similar resource base (e.g., equal amounts of available
funds) can have different implications for different entrepreneurs (Baker &
Nelson, 2005; Chiles, Tuggle, et al., 2010; Mosakowski, 2002).
Because resource positions are perceptual and dependent on imagined
action scenarios, and sensemaking processes influence decision making,
firm-level measures of constraints and slack, as used in most studies, appear
inadequate for understanding the relationship between resource positions
and decision making. Moreover, resource availability, foreseen resource
demand and imagined futures may change with time, creating a need to
consider resource positions from a process perspective.
4.3 Method
This study adopts a process research approach (Langley, 1999) to explore
resource positions and decision making over time. Using in-depth case
60 DECISION MAKING IN NEW TECHNOLOGY VENTURES
studies that incorporate multiple sources of data, we help advance theory by
studying (the underlying dynamics of) resource positions and how they
affect decision making (Lee, 1999; Locke, 2001; Yin, 2009). This qualitative
research design is appropriate, considering the (1) absence of adequate
metrics for measuring resource positions, which implies the need for an
exploratory approach; (2) perceptual and relative nature of resource
positions, which demand a method that can incorporate (real-life) contextual
conditions; and (3) ephemeral nature of resource positions, which renders
cross-sectional research largely inadequate.
4.3.1 Case selection
We selected three high-tech start-up firms in different emerging industries.
The relation between resource positions and decision making is easier to
establish for nascent than for mature firms (Renko et al., 2010), and the
creation and development processes of start-ups often involve decision
making under uncertainty (McMullen & Shepherd, 2006), such that
resources have key roles, especially for high-tech start-ups (Alvarez &
Busenitz, 2001). Therefore, we selected start-ups in the telecom and solar
energy industries, which were relatively immature industries at the time our
focal start-ups were founded (1997, 1999, and 2000). Because their
industries were marked by high degrees of uncertainty, the entrepreneurs
had substantial freedom to choose their venture’s path to market, rather than
having to conform to mature market structures (Ambos & Birkinshaw,
2010).
Each case covers the venture’s development, from idea conception,
through the founding of the venture, to commercial exploitation and market
interaction. With our objective of studying resource positions and their
influence on decision making and venture development, we needed to study
the venture from its very start, to determine how initial resource positions
affect its development and entrepreneurial decision making (Shane & Stuart,
2002; Sorensen & Stuart, 2000; Stinchcombe, 1965), and for a period long
enough to allow for some evolution (Ambos & Birkinshaw, 2010). We
selected ventures that were founded at approximately the same time and in
CHAPTER 4 61
the same country (The Netherlands), to avoid substantial variance due to
differences in national culture or economic climate. To avoid a (strong)
success bias, we selected two successful ventures (i.e., substantial growth in
staff and/or revenues) and one failure (i.e., no growth, insolvency,
bankruptcy). An overview of the three cases (SunCo, ChipCo and TextCo) is
provided in Table 4.1.
Table 4.1: Overview of Cases
SunCo ChipCo TextCo
Country of origin The
Netherlands The
Netherlands The
Netherlands Period covered in study 1997-2010 2000-2003 1999-2010 Number of events 36 30 41 Total number of interviews 9 9 10 Number of archival documents 63 54 32
4.3.2 Data collection
The data include archival and interview data. The archival data collected (149
documents) consist of annual reports, strategic planning documents,
patents, company presentations, newspaper articles, web articles and public
interviews. Interviews (28 in total) were conducted with the founders,
employees, investors and other important stakeholders of the ventures.
During the semi-structured interviews, we first invited the interviewees to
elaborate on their role in the organization and describe the development
trajectory of the venture. Subsequently, we posed questions about important
decisions during the venture’s development trajectory, especially those
related to the management team and employees, products and services,
property protection, locations and facilities. The interview protocol can be
found in Appendix 11. We also asked about environmental shifts, such as
market dynamism or important changes in the business environment. If the
interviewee mentioned significant events, we asked follow-up questions to
obtain sufficient details. During these discussions we raised additional
62 DECISION MAKING IN NEW TECHNOLOGY VENTURES
questions, when relevant, about (initial) resource endowments, resource
needs, resource acquisition, and planning and decision making. (The
complete interview protocol is available on request.) The interviews lasted 69
minutes on average and were conducted by at least two interviewers; with
the exception of one telephone interview, all interviews were conducted face-
to-face. If necessary, we requested additional information or conducted
follow-up interviews for clarification. Each interview was digitally recorded
and transcribed.
4.3.3 Data analysis
To investigate how resource positions evolve and influence decision making,
we sought to identify resource positions at the time of the decision and
processes by which they influenced decision making. Therefore, the data
analysis consisted of three steps, using coding procedures developed by Van
de Ven & Poole (1990).
First, we analysed the interview transcripts together with archival data to
create a case-specific event list of important decisions—locations,
management team, employees, products and services, investments, clients,
suppliers, partners, and competitors—for each firm. Significant decision-
making events such as introducing a first product, contacting a potential
customer or hiring an employee involve various degrees of creativity.
Creative decision making typically entails the exploration of new ideas, areas,
products or technologies. In each case, a member of the research team
identified and coded these events, and then these initial event lists were
subjected to extensive discussions among the research team, until we
reached consensus on their identification. For each event, we recorded the
time of occurrence, to facilitate chronological ordering. We used QSR Nvivo
software to code the events, which helped us maintain a chain of evidence
across the raw interview data, archival data, and events (Yin, 2009). To
mitigate any retrospective bias, we collected data about each significant event
from at least two sources (e.g., interviews and documents), such that any
biases or memory lapses were likely offset by those of other informants
(Golden, 1992; Huber & Power, 1985). In addition, we concentrated on
CHAPTER 4 63
significant events, which are easier to remember more accurately (Chell,
2004). Finally, we sent the event lists to the interviewees for validation. The
final lists (30–41 events per case) enabled us to consider single decision-
making events, as well as their longitudinal implications (Langley, 1999).
Second, the analysis focused on determining the decision-making
process for each event. We coded these processes according to the decision
trigger (or decision-motivating tension (Zeleny, 1982) and subsequent
decision outcome, in the form of an observed action. Two types of decision
triggers demand action by entrepreneurs: organizational objectives and
environmental change. Both triggers emerged from our data analysis and
also correspond with previous research (Cheng & Kesner, 1997; Keeney,
1994; Voss et al., 2008). In addition, we coded the resource position, as
perceived by the entrepreneurs, according to the decision to be made in
relation to each particular event. The decision-making process coding began
with all three members of the research team coding the first 30 events of the
TextCo case together. Next, one team member coded the remaining events in
the first case and discussed these codes with the team. Two team members
used the refined coding rules to code the remaining two cases; that is, each
case was coded by at least two team members. The subsequent discussion
led to some minor changes, but all differences in codes assigned by different
coders were resolved through discussion. For the observed resource position
codes, we found that we needed a more elaborate discussion; so two
members of the research team worked together to identify the resource
positions perceived by the entrepreneurs and establish appropriate
categorizations. These categories thus materialized from our data, rather
than prior theory, related to the different resources available relative to
demand at the time of the decision. After carefully (re)examining all events,
we iteratively refined and aggregated the categories, which produced a
coding scheme that we applied to code all the events again. Table 4.2
displays the final coding scheme, definitions, and illustrative quotes.
64 DECISION MAKING IN NEW TECHNOLOGY VENTURES
Table 4.2: The Resource Positions Identified (Coding Scheme)
Resource Position
Description Illustrative Quote
Constraint Shortage of resource availability relative to resource demand
Financial Shortage available cash or other financial means
Everybody, every start-up, received 40 million dollars to build their own fab. And well, we raised 7 million dollars that year, and yes, that is of course way too little to build your own fab. (Founder ChipCo)
Capacity Shortage of operational or production capacity
Suddenly, demand drastically increased.… And then, I immediately started planning for a new factory, so we could expand. (Founder SunCo)
Capability Shortage of human resources or know-how
What became apparent, was that they had very strong technological capabilities, but a lot less experience in terms of product feel, and on top of that almost no commercial experience. (VC investor ChipCo)
Slack Excess of resource availability relative to resource demand
Financial Excess available cash or other financial means
So every weekend I came back with maybe 5000 guilders we charged [the nightclubs] for the text messages. So all nightclubs continuously paid upfront for these text messages … we have always been funded by our customers. (Founder TextCo)
Capacity Excess operational or production capacity
[After buying a factory] we had more volume, that’s good, but then came the crisis … we saw that there was going to be a lot of oversupply. (Founder SunCo)
Capability Excess human resources or know-how
You just have to realize you’re able to do more than just selling modules. We have a great deal of skills here and sometimes we are able to help or advise our customers, who are stuck with a project, because we do it ourselves. (Founder SunCo)
The analysis ultimately yielded six resource positions (i.e., perceived
resource availability relative to perceived resource demand) at the time of a
decision. We identified three types of constraints: financial, capacity, and
capability. In accordance with our conceptualization of resource positions,
CHAPTER 4 65
these three types of constraints mirror the three types of resource slack we
identified (financial, capacity, and capability). Financial resource positions
reflect the relative availability of cash or other financial means; capacity
resource positions refer to operational or production capacity; and capability
resource positions involve human resources or know-how (see Table 4.2).
Unlike previous research in this area that mainly draws on firm-level
measures (Daniel et al., 2004; Mishina et al., 2004), we define resource
positions as the abundance or shortage of resources perceived by the
entrepreneur. A focus on (the heterogeneity among) individual
entrepreneurs is essential, because researching firm-level phenomena must
start with the individuals constituting these firms (Abell, Felin, & Foss,
2008; Felin & Foss, 2005; Foss, 2011).
To facilitate further in-depth analyses, we created tables with
information about the decision-making processes in each start-up. These
tables include, for all events, the (decision-making) event number, year the
event took place, decision trigger, resource position at the time of the
decision, decision outcome, and illustrative quotes. For each case, Tables
4.3–4.5 show the decision-making processes for key decision-making events.
66 DECISION MAKING IN NEW TECHNOLOGY VENTURES
Eve
nt
Year
Deci
sion
Tri
gger
Reso
urc
e P
osi
tion
Deci
sion
Ou
tcom
e
Illu
stra
tive
Qu
ote
319
99
Need f
or
off
ice s
pac
e a
fter
fou
ndin
g.
Fin
anci
al s
lack
. F
ou
nder
1 an
d F
ou
nder
2 e
stab
lish
a n
ew
en
tity
, S
un
Co,
faci
lita
ted b
y th
eir
exi
stin
g
bu
sin
ess
es.
Th
ey
nam
e t
heir
com
pan
y af
ter
Fou
nder
2’s
com
pan
y, a
s th
is n
ame is
alre
ady
est
ablish
ed a
nd h
as a
good
repu
tati
on
in
th
e c
on
stru
ctio
n in
du
stry
.
Wh
en
you
tal
k a
bou
t st
arti
ng,
it w
as v
ery
sm
all-sc
ale,
faci
lita
ted b
y th
at a
noth
er
smal
l co
mpan
y I
ow
ned.
It w
as ju
st m
e,
wit
h o
ne o
ther
gu
y. W
e d
id n
ot
star
t w
ith
hu
ge in
vest
men
ts.
Bu
t bu
ilt
up v
ery
slo
wly
. (F
ou
nder
1 S
un
Co)
419
99
Fou
nder
2 s
ees
pote
nti
al in
a sp
eci
fic
tech
nolo
gy
and
wan
ts t
o p
urs
ue t
he
deve
lopm
en
t of
this
tech
nolo
gy
Fin
anci
al s
lack
&
capab
ilit
y
con
stra
int.
Th
e f
ou
nders
com
mit
man
y re
sou
rces
to
this
tech
nolo
gy
deve
lopm
en
t, a
nd t
o
est
ablish
th
e n
ew
tech
nolo
gy,
more
people
and t
ech
nolo
gic
al s
peci
alis
ts a
re h
ired.
We d
id in
vest
a g
reat
deal
in
deve
lopm
en
t. C
om
par
ed t
o m
any
oth
er
com
pan
ies,
real
ly a
lot.
Bu
t it
is
beca
use
, to
th
e o
ther
shar
eh
old
er
[Fou
nder
2],
it
was
wort
h
the m
on
ey.
He t
old
us:
“th
is is
wh
at I
wan
t to
do,
this
is
my
pro
ject
. I
will pu
t in
a
lot
of
mon
ey
beca
use
I b
elieve
in
it.
” (F
ou
nder
1 S
un
Co)
820
01
Addit
ion
al in
pu
t
(tech
nolo
gic
al e
xpert
ise)
for
tech
nolo
gy
deve
lopm
en
t is
needed.
Fin
anci
al s
lack
&
capab
ilit
y
con
stra
int.
Str
ategic
coopera
tion
is
star
ted w
ith
rese
arch
in
stit
ute
s in
th
e N
eth
erl
ands
and
abro
ad t
o p
erf
orm
speci
fic
tech
nolo
gic
al
deve
lopm
en
t.
We t
ry t
o g
et
the k
now
ledge w
e n
eed f
rom
an
ywh
ere
; n
ot
on
ly d
eve
lopin
g it
wit
hin
ou
r org
aniz
atio
n.
We a
re d
oin
g s
om
e c
o-d
eve
lopm
en
t ac
tivi
ties
in-h
ou
se,
beca
use
th
ey
are o
f key
import
ance
, bu
t w
e a
void
doin
g t
oo m
uch
ou
rselv
es.
At
[Un
ivers
ity
X]
kn
ew
how
to m
ake c
ryst
als.
We f
igu
red:
then
th
ey
can
als
o m
ake
sola
r ce
lls.
So w
e c
on
tact
ed t
hem
an
d s
tart
ed join
t deve
lopm
en
t, t
ogeth
er
wit
h
rese
arch
in
stit
ute
s in
th
e N
eth
erl
ands.
(C
TO
Su
nC
o)
1020
02
Du
tch
ren
ew
able
en
erg
y
subsi
die
s ar
e u
nexp
ect
edly
stopped.
An
tici
pat
ed
fin
anci
al c
on
stra
int.
Fou
nder
1 exp
lore
s doin
g p
roje
cts
acro
ss
the b
ord
er
wit
h G
erm
any,
wh
ere
sola
r
en
erg
y is
sti
ll s
ubsi
diz
ed.
Th
e s
ubsi
dy
pro
gra
ms
of
man
y re
new
able
en
erg
y in
itia
tive
s w
ere
dis
con
tin
ued.
An
d s
o t
he e
nti
re D
utc
h s
ola
r en
erg
y in
du
stry
wen
t dow
n.
Th
e g
ran
ts
dis
con
tin
ued –
th
is b
eca
me e
viden
t al
read
y in
20
01.
So w
e h
ad t
o g
o a
bro
ad a
nd
that
was
act
ual
ly t
he ju
mp w
e m
ade.
(Fou
nder
1 S
un
Co)
1220
03
Ge
rman
sola
r ce
ll s
upplier
goes
ban
kru
pt,
wh
ich
alre
ady
rece
ived 3
00
K E
uro
in p
repay
men
ts f
rom
Su
nC
o.
Cap
acit
y co
nst
rain
t
& a
nti
cipat
ed
fin
anci
al c
on
stra
int.
Fou
nder
1 se
es
the o
pport
un
ity
of
takin
g
ove
r th
e s
upplier’
s fa
ctory
, to
get
som
e
mon
ey
bac
k a
nd a
t th
e s
ame t
ime e
xpan
d
their
bu
sin
ess
by
inte
gra
tin
g a
su
pplier
and
gett
ing a
fir
mer
footh
old
in
th
e G
erm
an
mar
ket.
Th
e [
supplier’
s] f
acto
ry lay
idle
in
Mar
ch 2
00
3, w
hile I
had
a f
ew
nic
e p
roje
cts,
for
on
e o
f w
hic
h I
had
deposi
ted 3
00
,00
0 E
uro
[to
th
e s
upplier]
wh
ich
was
now
wit
h
the t
rust
ee in
ban
kru
ptc
y. Y
ou
can
no
t im
agin
e h
ow
it
got
me in
a c
old
sw
eat
an
d
how
th
is k
ept
me a
wak
e.
I im
media
tely
sai
d t
o [
Fou
nder
2]:
“w
e n
eed t
o t
ake o
ver
that
bu
sin
ess
; th
e D
utc
h m
arket
is g
oin
g d
ow
n a
nd t
hey
hav
e o
ur
300
,00
0
Eu
ro.”
(F
ou
nder
1 S
un
Co)
1420
03
As
dem
and f
or
sola
r pan
els
incr
eas
es,
pro
du
ctio
n
capac
ity
falls
short
.
Fin
anci
al s
lack
&
capac
ity
con
stra
int
Fou
nders
in
creas
e p
rodu
ctio
n in
th
e
Ge
rman
fac
tory
th
at t
hey
just
took o
ver
and
pla
n a
n a
ddit
ion
al f
acto
ry t
o p
rodu
ce
modu
les
for
the e
xpect
ed d
em
and.
We t
ook o
ver
and in
Septe
mber
the f
acto
ry w
as u
p a
nd r
un
nin
g a
gai
n.
Beca
use
of
the h
igh
dem
and,
at t
he e
nd o
f th
e y
ear
we w
ere
pro
fita
ble
agai
n,
wit
h c
utb
acks
in t
he o
rgan
izat
ion
. A
nd t
hen
I im
media
tely
sta
rted p
lan
nin
g a
new
fac
tory
,
wh
ere
we c
ou
ld e
xpan
d.
(Fou
nder
1 S
un
Co)
Tab
le 4
.3:
Dec
isio
n-M
akin
g P
roce
ss f
or
Key
Eve
nts
, S
un
Co
CHAPTER 4 67
Eve
nt
Year
Deci
sion
Tri
gger
Reso
urc
e P
osi
tion
Deci
sion
Ou
tcom
e
Illu
stra
tive
Qu
ote
22
20
08
Tech
nolo
gy
deve
lopm
en
t is
not
pro
gre
ssin
g,
maj
or
pro
ble
ms
appear
du
rin
g
pilot
pro
du
ctio
n.
Fin
anci
al s
lack
&
capab
ilit
y
con
stra
int.
Addit
ion
al in
vest
men
ts in
tech
nolo
gy
deve
lopm
en
t to
solv
e t
he t
ech
nolo
gic
al
pro
ble
ms
and k
eep t
he d
eve
lopm
en
t on
trac
k.
We a
re r
un
nin
g b
eh
ind s
chedu
le.
Bu
t th
e c
on
cept
is s
o c
on
vin
cin
g a
nd [
Fou
nder
2]
is s
o c
on
vin
ced it
will beco
me a
su
ccess
th
at h
e ju
st p
ush
es
it t
hro
ugh
. T
his
is
actu
ally
als
o e
ntr
epre
neu
rsh
ip:
just
say
th
at w
e s
hou
ld p
ers
eve
re,
believe
in
it.
(CT
O S
un
Co)
23
20
08
Sh
ort
age o
f ra
w m
ateri
al in
the m
arket
dri
ves
up t
he
pri
ces,
su
bst
anti
al
pre
pay
men
ts a
re n
eeded t
o
secu
re s
uff
icie
nt
mat
eri
al.
Su
nC
o is
un
able
to p
ay
these
lar
ge p
re-p
aym
en
ts.
Fin
anci
al
con
stra
int.
Th
ey
co-in
vest
in
a U
S s
ilic
on
pla
nt
to g
et
more
reliab
le s
upply
an
d s
table
pri
ces
for
delive
ry.
We o
nly
mad
e s
ola
r m
odu
les
and w
e d
id n
ot
hav
e t
he m
on
ey
to g
row
very
aggre
ssiv
ely
. A
nd a
t th
at m
om
en
t th
ere
was
a b
ig s
hort
age o
f ra
w m
ateri
al in
th
e
valu
e c
hai
n.
… Y
ou
had
to p
ay m
illion
s of
dollar
s in
adva
nce
in
ord
er
to g
et
delive
ry c
on
trac
ts.
We c
ou
ld n
ot
do m
uch
… w
e c
an d
o b
ett
er
ou
rselv
es,
so
there
fore
we w
ante
d t
o b
e in
th
e r
aw m
ateri
al b
usi
ness
ou
rselv
es.
(F
ou
nder
1
Su
nC
o)
Th
at's
wh
y w
e p
arti
cipat
ed in
a U
S-b
ased join
t ve
ntu
re w
ith
a r
aw m
ateri
al
pro
du
cer.
Th
ere
by
we s
ecu
red t
he b
asic
mat
eri
al f
or
sola
r m
odu
les.
(CO
O S
un
Co)
25
20
08
Tech
nolo
gy
deve
lopm
en
t is
not
pro
gre
ssin
g a
nd t
he
eco
nom
ic c
risi
s se
ts in
.
Cap
abilit
y
con
stra
int
&
fin
anci
al c
on
stra
int.
Join
t ve
ntu
re w
ith
an
Eas
t-A
sian
com
pan
y to
pro
du
ce a
rela
ted t
ech
nolo
gy,
as
a bac
ku
p
for
the o
rigin
al t
ech
nolo
gy.
Du
e t
o t
he c
rise
s an
d w
hile n
ot
bein
g m
arket-
read
y w
ith
ou
r fi
rst
gen
era
tion
[pro
du
cts]
, th
e d
eve
lopm
en
t beca
me u
nder
pre
ssu
re.
So w
e h
ad t
o d
ela
y th
e
deve
lopm
en
t, r
edu
ce t
he t
eam
to t
he c
ore
team
, an
d w
e c
on
tin
ued w
ith
th
e
chose
n t
ech
nolo
gy.
. .. [
Did
we w
ant
to]
pu
t [t
he d
eve
lopm
en
t] a
side:
neve
r. T
hin
k
how
to p
roce
ed:
yes.
Th
ere
fore
we t
ried t
o c
on
nect
wit
h [
the E
aste
rn A
sian
com
pan
y].
We s
aid:
we c
on
tin
ue t
ogeth
er
wit
h t
hem
, w
e c
an a
ccele
rate
, an
d
spre
ad t
he r
isks.
An
d n
ow
we h
ave a
sit
uat
ion
bett
er
than
eve
r im
agin
ed.
(Fou
nder
1 S
un
Co)
3020
09
Du
e t
o t
he e
con
om
ic c
risi
s,
dem
and f
or
sola
r m
odu
les
dro
ps,
cre
atin
g c
ash
flo
w
pro
ble
ms;
ban
ks
hal
t lo
ans.
Fin
anci
al
con
stra
int.
Su
nC
o s
tart
s n
egoti
atio
ns
wit
h [
a
com
peti
tor]
for
a jo
int
ven
ture
, w
hic
h is
needed t
o c
om
bin
e c
apac
itie
s an
d f
un
din
g.
Th
e a
nn
ou
nce
men
t of
the m
erg
er
also
serv
es
as a
n a
ssu
ran
ce t
o t
he b
anks
that
Su
nC
o is
still su
stai
nab
le.
An
in
tere
stin
g m
om
en
t w
as o
ur
pla
nn
ed m
erg
er
wit
h [
a co
mpeti
tor]
. In
fac
t, w
e
just
bou
gh
t ti
me w
ith
th
e b
anks,
to g
et
ou
r in
tere
st r
ates
at a
reas
on
able
leve
l
and t
o r
est
ore
ou
r tr
ust
wort
hin
ess
at
the b
anks
in 2
00
9.
(CO
O S
un
Co)
3420
10S
un
Co a
nd a
com
peti
tor
negoti
ate t
he p
oss
ible
merg
er
bu
t ca
nn
ot
agre
e
on
th
e p
rice
. S
un
Co s
tays
indepen
den
t.
Fin
anci
al s
lack
.S
un
Co w
ith
dra
ws
from
th
e m
erg
er;
th
e
(fin
anci
al)
need f
or
coopera
tion
has
dis
appear
ed a
s w
ell.
We t
alked f
or
mon
ths.
We c
ou
ld n
ot
get
on
th
e s
ame p
age a
nd m
ore
an
d m
ore
we g
ot
the f
eelin
g t
hat
it
was
not
goin
g t
o h
appen
. A
t so
me p
oin
t, t
he n
egoti
ators
lost
th
eir
belief
in t
he c
oopera
tion
. In
th
e f
irst
qu
arte
r of
20
09
, [t
he m
arket]
was
very
bad
. T
he s
eco
nd [
qu
arte
r] w
as s
ligh
tly
less
, bu
t in
th
e lat
ter
hal
f of
the y
ear
the m
arket
qu
ite r
eco
vere
d.
We e
ven
tual
ly h
ad n
et
pro
fits
in
20
09
; n
ot
very
mu
ch,
bu
t st
ill. (
Fou
nder
1 S
un
Co)
68 DECISION MAKING IN NEW TECHNOLOGY VENTURES
Eve
nt
Year
Deci
sion
Tri
gger
Reso
urc
e P
osi
tion
Deci
sion
Ou
tcom
e
Illu
stra
tive
Qu
ote
420
00
VC
in
vest
or
noti
ces
that
the p
rofe
ssor
and P
hD
stu
den
ts a
re s
tru
gglin
g
wit
h d
efi
nin
g t
heir
bu
sin
ess
.
Fin
anci
al s
lack
&
capab
ilit
y
con
stra
int.
A C
EO
is
hir
ed b
y th
e V
C in
vest
or
to k
ick
star
t th
e n
asce
nt
ven
ture
by
sett
ing u
p t
he
bas
ic o
rgan
izat
ion
al s
tru
ctu
res,
wri
tin
g a
bu
sin
ess
pla
n a
nd b
asic
ally
defi
nin
g t
heir
bu
sin
ess
.
I lin
ked t
he f
ou
r te
chn
ical
fou
nders
to [th
e C
EO
] in
ord
er
to t
alk t
o e
ach
oth
er.
Th
e t
eam
mat
ched a
nd s
tart
ed p
lan
nin
g a
bu
sin
ess
. M
y th
ou
gh
t w
as: if
th
ey
com
e w
ith
a g
ood p
lan
, th
en
we a
re g
oin
g t
o f
inan
ce it.
(V
C I
nve
stor
Ch
ipC
o)
Th
e p
rofe
ssor
did
not
see it,
an
d h
ad n
o idea
how
to s
tart
a c
om
pan
y. S
o t
hey
had
man
y dis
cuss
ion
s on
wh
at t
hey
cou
ld d
o, w
here
to f
ocu
s on
, pro
du
cts,
etc
. S
o [th
e
VC
in
vest
or]
tri
ed t
o c
oac
h t
hem
, bu
t it
resu
lted in
noth
ing. T
hen
th
ey
called m
e:
“Go
tal
k t
o t
he p
rofe
ssor
and h
is P
hD
stu
den
ts.”
Th
ese
ch
ips
are d
esi
gn
ed f
or
the t
ele
com
mar
ket
and m
y bac
kgro
un
d is
in t
he t
ele
com
mar
ket.
(C
EO
Ch
ipC
o)
720
01
Ph
Ds
and C
EO
look t
o s
tart
com
pan
y an
d f
un
din
g is
secu
red b
y m
ean
s of
a V
C
con
trac
t.
Fin
anci
al s
lack
.C
hip
Co is
fou
nded, th
e f
ou
ndin
g t
eam
is
com
pose
d, an
d o
ffic
e s
pac
e is
hir
ed t
o h
ave
som
e s
pac
e o
uts
ide t
he u
niv
ers
ity
faci
liti
es.
Wh
en
th
e s
ign
atu
re f
or
the m
on
ey
was
th
ere
, w
e c
ou
ld leav
e o
ur
jobs
[at
Un
ivers
ity
X]; a
t le
ast
for
som
e t
ime t
here
was
sal
ary.
… W
hen
we w
ere
real
ly
separ
ated f
rom
th
e u
niv
ers
ity,
we c
ou
ld t
hin
k in
a d
iffe
ren
t w
ay. T
his
was
th
e
mom
en
t w
e r
eal
ly s
tart
ed t
hin
kin
g a
bou
t th
e f
irst
form
of
a bu
sin
ess
pla
n.
(Fou
nder
1 C
hip
Co)
1020
01
Fou
ndin
g t
eam
needs
to
dete
rmin
e t
he (
scope o
f
the)
firs
t pro
du
ct.
Cap
abilit
y sl
ack &
fin
anci
al s
lack
.
Th
ey
inve
st in
pro
du
ct d
eve
lopm
en
t of
a
hig
h-e
nd s
yste
m-in
tegra
tin
g c
hip
for
the
tele
com
mar
ket,
wh
ich
wou
ld d
em
on
stra
te
the c
utt
ing-e
dge t
ech
nolo
gy
and c
apab
ilit
ies
of
Ch
ipC
o.
On
th
e o
ne s
ide, w
e h
ad t
he V
C’s
, pu
shin
g u
s to
pro
ceed d
eve
lopin
g t
he h
oly
gra
il n
ot
to f
ocu
s on
sim
ple
su
b-p
rodu
cts.
We t
hou
gh
t: w
e m
ake f
irst
som
e
hyb
rid m
odel fo
r a
cou
ple
of
sim
ple
pro
du
cts
to g
et
alre
ady
som
e r
eve
nu
e w
hile
we c
on
tin
ue t
he d
eve
lopm
en
t of
more
com
ple
x pro
du
cts.
[T
he V
C in
vest
or]
was
tota
lly
agai
nst
th
is, w
e h
ad t
o c
om
ple
tely
focu
s on
th
e h
oly
gra
il.…
Th
is w
as n
ot
a
real
pro
du
ct, it
was
a d
em
on
stra
tor
… w
hic
h s
how
ed a
ll a
spect
s of
ou
r
tech
nolo
gic
al c
apab
ilit
ies.
(F
ou
nder
1 C
hip
Co)
1220
01
Th
e t
ele
com
mar
ket
cras
hes
and a
nti
cipat
ed
dem
and d
rops
sign
ific
antl
y.
Fin
anci
al s
lack
.D
esp
ite t
he m
arket
chan
ges,
Ch
ipC
o
con
tin
ues
the d
eve
lopm
en
t of
its
pro
du
ct.
Th
en
th
e c
risi
s ca
me a
nd s
o y
ou
cou
ld s
ee t
he e
nti
re s
em
icon
du
ctor
indu
stry
collap
se. A
s a
con
sequ
en
ce, so
me p
arti
es
open
ed u
p t
heir
pro
du
ctio
n f
acilit
ies,
wh
ich
we c
ou
ld u
se [to
deve
lop o
ur
pro
du
ct]. (
CE
O C
hip
Co)
1520
01
Ch
ipC
o n
eeds
to e
stab
lish
dedic
ated p
rodu
ctio
n
faci
liti
es
(a ‘fa
b’)
for
their
inte
gra
tin
g c
hip
.
Fin
anci
al
con
stra
int,
capab
ilit
y co
nst
rain
t
& c
apac
ity
con
stra
int
Ch
ipC
o s
ear
ches
for
par
tners
to o
uts
ou
rce
the p
rodu
ctio
n, si
nce
it
does
not
hav
e
en
ou
gh
mon
ey
for
its
ow
n p
rodu
ctio
n
faci
liti
es.
[Th
e C
EO
] an
d I
were
lookin
g t
o b
uild a
fab
ou
rselv
es,
an
d in
par
alle
l w
e looked
wh
eth
er
we c
ou
ld ju
st u
se e
xist
ing f
acilit
ies.
Th
at w
as a
ctu
ally
un
usu
al in
th
is
bu
sin
ess
. E
very
body,
eve
ry s
tart
-up, re
ceiv
ed 4
0 m
illion
dollar
s to
bu
ild t
heir
ow
n
fab. A
nd w
ell, w
e r
aise
d 7
million
dollar
s th
at y
ear
, an
d y
es,
th
at is
of
cou
rse w
ay
too lit
tle t
o b
uild y
ou
r ow
n f
ab. B
ut
that
mad
e u
s re
aliz
e t
hat
we h
ad t
o d
o t
hin
gs
in a
dif
fere
nt
way
. S
o w
e s
tart
ed lookin
g f
or
pro
du
ctio
n p
artn
ers
. A
nd t
hat
is
exa
ctly
th
e p
ath
we e
nded u
p t
akin
g. (F
ou
nder
1 C
hip
Co)
Tab
le 4
.4:
Dec
isio
n-M
akin
g P
roce
ss f
or
Key
Eve
nts
, C
hip
Co
CHAPTER 4 69
Eve
nt
Year
Deci
sion
Tri
gger
Reso
urc
e P
osi
tion
Deci
sion
Ou
tcom
e
Illu
stra
tive
Qu
ote
1920
02
Pro
du
ct d
eve
lopm
en
t an
d
pro
cess
im
pro
vem
en
t
requ
ire a
ddit
ion
al
em
plo
yees
and p
rodu
ctio
n
run
s
Fin
anci
al c
on
stra
int
(an
tici
pat
ed),
capac
ity
con
stra
int
Th
e C
hip
Co t
eam
deci
des
to in
creas
e t
he
nu
mber
of
test
ru
ns,
to e
nab
le q
uic
ker
adju
stm
en
ts o
f th
e p
rodu
ct w
ith
th
e a
im t
o
keep d
eve
lopm
en
t on
tra
ck.
At
on
e p
oin
t w
e h
ad t
hat
7 m
illion
. In
itia
lly,
we d
id o
ne d
esi
gn
ru
n e
very
mon
th.
We im
pro
ved o
ur
ow
n p
roce
ss e
very
ru
n, as
we w
ere
in
ven
tin
g s
om
eth
ing n
ew
.
On
e r
un
tak
es
a 10
0.0
00
Eu
ro, as
all p
arti
es
hav
e t
o p
erf
orm
th
eir
tas
ks
eve
ry
run
. B
ut
we a
lso h
ad o
ur
dai
ly c
ost
s of
keepin
g t
he b
usi
ness
goin
g; w
e h
ad t
o p
ay
20
sta
ff m
em
bers
, th
e r
en
tal fe
es
et
cete
ra. It
is
a ve
ry c
ost
ly b
usi
ness
. T
hen
we
incr
eas
ed t
o t
wo r
un
s a
mon
th a
nd w
e b
urn
ed o
ur
mon
ey
eve
n f
aste
r. (
CE
O
Ch
ipC
o)
26
20
02
Cu
stom
er
feedbac
k o
n
sam
ple
s of
the in
tegra
tin
g
chip
in
dic
ates
the p
rodu
ct
can
not
be in
corp
ora
ted in
the e
xist
ing d
esi
gn
s of
pote
nti
al c
ust
om
ers
.
Cap
abilit
y sl
ack &
anti
cipat
ed f
inan
cial
con
stra
int.
In v
iew
of
futu
re m
on
eta
ry c
on
stra
ints
,
Ch
ipC
o s
tart
s exp
lori
ng o
pti
on
s fo
r an
alte
rnat
ive p
rodu
ct (
bas
ed o
n its
exi
stin
g
tech
nolo
gy)
th
at c
ust
om
ers
can
im
ple
men
t
more
eas
ily
in t
heir
desi
gn
s.
Wh
en
it
beca
me c
lear
th
at t
he r
oad
map
for
inte
gra
ted p
rodu
cts
was
act
ual
ly
mu
ch f
urt
her
ahead
th
an w
e t
hou
gh
t, t
hey
[th
e C
hip
Co t
eam
] defi
ned f
or
exa
mple
a n
ew
pro
du
ct w
hic
h u
sed t
he s
ame f
un
ctio
ns
in a
com
ple
tely
dif
fere
nt
way
, in
th
is c
ase a
mon
itori
ng c
hip
. ... It
was
more
a n
ich
e m
arket
than
[in
tegra
tin
g c
hip
], b
ut
at t
hat
tim
e, th
e f
eelin
g t
hat
we n
eeded t
o g
en
era
te
reve
nu
e b
eca
me s
tron
ger
and s
tron
ger…
Th
e lon
g-t
erm
vis
ion
did
not
chan
ge,
bu
t th
e q
uest
beca
me: ok, w
hat
is
needed f
or
tom
orr
ow
? (V
C I
nve
stor
Ch
ipC
o)
27
20
02
Ch
ipC
o w
ants
to s
tart
pro
du
cin
g a
n a
ddit
ion
al
pro
du
ct b
ut
has
no r
eve
nu
e
from
th
e in
tegra
tin
g c
hip
.
Fin
anci
al
con
stra
int.
Fac
ilit
ated b
y th
e e
xist
ing V
C in
vest
ors
, th
e
fou
ndin
g t
eam
vis
its
more
th
an 4
0 V
Cs
to
attr
act
addit
ion
al f
un
din
g.
I vi
site
d 4
0 in
tern
atio
nal
in
vest
ors
in
hal
f a
year
an
d p
rese
nte
d t
he b
usi
ness
pla
n.
An
d I
tri
ed t
o s
um
mar
ize t
he e
nti
re c
om
pan
y in
a f
ew
Pow
erP
oin
t pag
es.
Tw
elv
e
of
them
were
in
tere
sted in
th
e c
om
pan
y, b
ut
dro
pped o
ut
on
e b
y on
e.
(CE
O C
hip
Co)
28
20
03
Ch
ipC
o e
xperi
en
ces
the
rein
forc
ing e
ffect
s of
a
collap
sed t
arget
mar
ket,
no
pro
du
ct s
ales
and f
ew
fin
anci
ng o
pti
on
s.
Fin
anci
al
con
stra
int.
To g
en
era
te o
pti
on
s to
con
tin
ue t
he
com
pan
y, C
hip
Co’s
fou
nders
an
d e
ngin
eers
star
t exp
lori
ng e
ven
more
alt
ern
ativ
e
applica
tion
s of
Ch
ipC
o’s
tech
nolo
gy,
eve
n in
very
dis
tan
t fi
eld
s, s
uch
as
mobilit
y an
d
defe
nce
applica
tion
s.
At
the m
om
en
t th
at e
very
body…
, th
at t
he t
ele
com
mar
ket
collap
sed, th
at c
lien
ts
told
us
not
now
, n
ot
at t
his
mom
en
t, t
hen
we s
tart
ed lookin
g a
t al
tern
ativ
es.
Yes,
beca
use
, st
ill w
e w
ere
able
to b
uild a
bou
t an
yth
ing. S
o w
e looked a
t a
pro
ject
to
mak
e a
su
perc
om
pu
ter.
…W
e looked a
t m
ilit
ary
applica
tion
s. A
ll s
ort
s of
com
mu
nic
atio
ns,
su
ch a
s bac
k-u
p f
acilit
ies
for
ban
ks.
... W
e a
lso looked a
t oth
er
applica
tion
s, lik
e m
oti
on
sen
sors
. W
e looked a
t th
e S
egw
ay, beca
use
we c
ou
ld
inte
gra
te t
he g
yrosc
opes
that
keep t
he t
hin
g u
pri
gh
t on
a s
qu
are m
illim
etr
e. W
e
hav
e looked a
t m
any
opport
un
itie
s w
here
we c
ou
ld h
ave c
reat
ed o
ther
applica
tion
s. (
Fou
nder
1 C
hip
Co)
70 DECISION MAKING IN NEW TECHNOLOGY VENTURES
Eve
nt
Year
Deci
sion
Tri
gger
Reso
urc
e P
osi
tion
Deci
sion
Ou
tcom
e
Illu
stra
tive
Qu
ote
219
99
Th
e f
ou
nders
com
e u
p
wit
h t
he idea
to u
se S
MS
tech
nolo
gy
for
nig
htc
lub
adve
rtis
ing.
Cap
acit
y sl
ack,
capab
ilit
y sl
ack &
fin
anci
al c
on
stra
int
Th
e f
ou
nders
sta
rt e
xperi
men
tin
g w
ith
SM
S.
Th
ey
collect
ph
on
e n
um
bers
an
d s
en
d
mess
ages
con
tain
ing t
he w
eekly
pro
gra
mm
e o
f th
e n
igh
tclu
b.
Th
ey
use
exi
stin
g c
on
tact
s, a
nd t
he u
niv
ers
ity’
s an
d
par
en
ts’
reso
urc
es.
As
stu
den
ts,
we ju
st h
ad lit
tle e
xpen
ses.
… T
he f
irst
tw
o y
ear
s w
e w
ork
ed w
ith
ou
t
sala
ry.
We s
tart
ed f
airl
y eas
y, e
ach
tim
e t
akin
g s
mal
l st
eps;
we n
eve
r h
ad a
n
inve
stm
en
t re
qu
irin
g a
big
ste
p..
... W
e h
ad a
modem
an
d a
[te
leph
on
e p
rovi
der]
ph
on
e t
o u
plo
ad a
nd p
ost
th
e m
ess
age t
o a
nu
mber.
Th
is w
as d
on
e f
or
a list
of
100
nu
mbers
, eac
h n
um
ber
separ
ately
. F
or
a h
un
dre
d n
um
bers
, th
is w
as
feas
ible
. S
o,
we a
sked o
ur
par
en
ts if
we c
ou
ld u
se t
heir
tele
ph
on
e lin
e a
nd s
om
e
sock
ets
for
plu
ggin
g in
th
e lap
top.
(Fou
nder
1 T
ext
Co)
1020
00
Fou
nders
get
seve
ral
inve
stm
en
t off
ers
.
Fin
anci
al s
lack
.T
he f
ou
nders
refu
se s
eve
ral in
vest
men
t
off
ers
to k
eep f
ull c
on
trol ove
r th
eir
bu
sin
ess
. T
hey
deci
de t
o g
o f
or
cash
-flo
w
fin
anci
ng a
nd d
o n
ot
need in
vest
men
t to
fin
ance
th
eir
sm
all deve
lopm
en
t st
eps
at
the m
om
en
t.
For
us,
it
was
a c
hoic
e w
heth
er
or
not
we w
ante
d t
o h
ave e
xtern
al f
inan
cers
.
Man
y co
mpan
ies
in t
his
sect
or
hav
e a
t so
me p
oin
t ch
ose
n f
or
ven
ture
cap
ital
an
d
oth
er
inve
stors
. W
e h
ave c
on
scio
usl
y ch
ose
n n
ot
to u
se e
xtern
al f
inan
cin
g,
thou
gh
we h
ad t
wen
ty t
imes
the c
han
ce t
o d
o s
o,
if w
e w
ante
d.
Th
is is
a st
rate
gic
choic
e w
e m
ade:
“Can
you
pay
it
you
rself
to f
acilit
ate g
row
th?.
.. O
r w
ou
ld y
ou
gro
w m
ore
if
you
wou
ld h
ave m
ore
mon
ey
and w
ou
ld it
be m
ore
pro
du
ctiv
e if
you
get
shar
eh
old
ers
cap
ital
?” W
e d
elibera
ted o
ver
this
ch
oic
e o
ver
and o
ver
agai
n.
(Fou
nder
2 T
ext
Co)
1420
01
A s
peci
fic
SM
S s
erv
ice,
Pre
miu
m S
MS
(vo
tin
g in
TV
sh
ow
s) is
intr
odu
ced t
o
the m
arket
by
com
peti
tor
[Sm
artT
ext
].
Fin
anci
al s
lack
.T
he f
ou
nders
deci
de n
ot
to p
urs
ue
pre
miu
m S
MS
; th
ey
do n
ot
believe
in
th
e
con
cept.
Th
ey
con
tin
ue t
heir
focu
s on
bu
lk
SM
S (
sen
din
g m
ult
iple
mess
ages
at o
nce
).
In 2
00
1, a
com
peti
tor
[Sm
artT
ext
] …
sta
rted w
ith
th
is idea
of
Pre
miu
m S
MS
,
togeth
er
wit
h [
a popu
lar
TV
-sh
ow
were
con
test
ants
com
pete
to s
tay
in a
hou
se].
Th
e w
hole
idea
was
th
at y
ou
can
vote
by
mean
s of
SM
S f
or
wh
o s
hou
ld leav
e t
he
hou
se,
and y
ou
need t
o p
ay a
gu
ilder
[for
voti
ng].
So w
e r
eal
ly m
ade a
bad
deci
sion
at t
hat
mom
en
t, b
eca
use
we d
id n
ot
believe
in
it.
(F
ou
nder
2 T
ext
Co)
1720
02
Fou
nders
wan
t to
exp
and
their
bu
sin
ess
in
th
e
nig
htc
lub s
ect
or,
an
d o
ne
of
the f
ou
nders
lik
es
to
exp
eri
men
t w
ith
intr
odu
cin
g d
iffe
ren
t
pro
du
cts.
Cap
abilit
y sl
ack.
Fou
nder
1 in
trodu
ces
a n
ew
pro
du
ct:
reco
rdin
g v
ideos
of
par
ties
at n
igh
tclu
bs
and
sellin
g t
he v
ideos
on
DV
D.
More
ove
r, h
e
star
ts (
amon
g o
ther
thin
gs)
im
port
ing a
nd
sellin
g w
hit
e g
love
s.
Seve
ral ti
mes
I re
ally
tri
ed t
o b
rin
g o
ther
pro
du
cts
to m
arket,
ju
st b
eca
use
I lik
e
it.
We d
id r
eal
ly q
uit
e b
izar
re t
hin
gs
in t
he c
lub m
arket.
I s
et
up ‘
[DV
D p
rodu
ct]’
for
clu
bs.
We w
en
t w
ith
fiv
e p
eople
an
d m
e a
s ca
mera
man
to c
lubs
and r
eco
rded
videos,
wh
ich
we t
hen
bu
rned o
n D
VD
an
d p
eople
cou
ld b
uy
them
for
35 D
ollar
s
or
Eu
ros.
It
was
so m
uch
fu
n,
bu
t ve
ry lab
ou
r in
ten
sive
. It
was
not
real
ly a
gre
at
succ
ess
. ..
. In
Pola
nd e
very
body
was
wear
ing w
hit
e g
love
s; t
hey
love
bla
ck lig
ht.
So,
I th
ou
gh
t, let’
s im
port
wh
ite g
love
s fr
om
Ch
ina.
Gre
at f
un
an
d w
e c
an
exp
eri
men
t w
ith
th
em
in
th
e c
lub m
arket.
We w
ill se
e w
heth
er
we w
ill m
ake
[su
ccess
ful] b
usi
ness
ou
t of
it.
Bu
t it
was
not
a m
ega
bu
sin
ess
model. S
o,
we t
ried
seve
ral th
ings.
(F
ou
nder
1 T
ext
Co)
21
20
03
Th
e f
ou
nders
wan
t to
gro
w
their
com
pan
y by
off
eri
ng
more
serv
ices.
Fin
anci
al s
lack
&
capab
ilit
y sl
ack.
Th
e f
ou
nders
in
vest
in
rese
arch
an
d
deve
lopm
en
t an
d f
ile a
pat
en
t (f
or
100
K
EU
R)
on
a n
ew
pro
du
ct.
We s
tart
ed t
hin
kin
g:
if w
e s
en
d a
text
mess
age t
o a
file [
of
ph
on
e n
um
bers
], w
e
can
als
o s
en
d a
n e
-mai
l. S
o w
e e
xten
ded o
ur
syst
em
wit
h e
mai
l. W
e h
ave a
pat
en
t
on
[m
ail se
rvic
e]
and o
n [
fire
wal
l se
rvic
e].
(F
ou
nder
2 T
ext
Co)
T
able
4.5
: D
ecis
ion
-Mak
ing
Pro
cess
fo
r K
ey E
ven
ts,
Tex
tCo
CHAPTER 4 71
Eve
nt
Year
Deci
sion
Tri
gger
Reso
urc
e P
osi
tion
Deci
sion
Ou
tcom
e
Illu
stra
tive
Qu
ote
22
20
04
A n
igh
tclu
b r
eco
mm
en
ds
exp
lori
ng t
he P
olish
mar
ket
and in
vite
s
fou
nders
to P
ola
nd.
Fin
anci
al s
lack
&
capab
ilit
y sl
ack.
Th
e f
ou
nders
acc
ept
the in
vita
tion
, beca
use
they
perc
eiv
e t
hat
th
ey
can
not
gro
w in
th
eir
Du
tch
hom
e m
arket
anym
ore
. T
hey
open
an o
ffic
e in
Pola
nd, fa
cilita
ted b
y lo
cal
con
tact
s th
ere
.
In 2
00
4, on
e o
f ou
r cu
stom
ers
in
th
e c
lub m
arket
had
fam
ily
in P
ola
nd a
nd a
sked
us
to c
om
e a
lon
g t
o P
ola
nd. S
o, w
e w
en
t to
Pola
nd a
nd looked a
rou
nd. T
here
were
als
o n
igh
tclu
bs
that
wan
ted t
o d
o s
om
e a
dve
rtis
ing. S
o, w
e c
opie
d t
he m
odel
we h
ad in
Th
e N
eth
erl
ands
[to P
ola
nd]: g
oin
g t
o t
he c
lubs,
tal
kin
g t
o p
eople
, etc
..
We f
ou
nd a
nic
e c
leve
r la
dy,
we r
en
ted o
ffic
e s
pac
e, an
d w
en
t th
ere
eve
ry m
on
th.
Th
at a
ll w
en
t w
ell. (F
ou
nder
1 T
ext
Co)
24
20
04
As
it s
tart
s opera
tin
g
ou
tsid
e n
igh
tclu
bs,
speed
and d
elive
ry s
tati
stic
s
beco
me v
ery
im
port
ant
to
cust
om
ers
in
logis
tics
an
d
ban
kin
g s
ect
ors
.
Fin
anci
al s
lack
&
capab
ilit
y
con
stra
int.
Th
e f
ou
nders
in
itia
te t
he d
eve
lopm
en
t an
d
intr
odu
ctio
n o
f th
eir
mon
itor
serv
ice, a
SM
S p
lan
nin
g a
nd m
on
itori
ng s
yste
m (
that
can
als
o b
e u
sed b
y oth
er
mar
ket
par
ties)
.
Th
ey
[a logis
tics
com
pan
y] h
ave in
tegra
ted S
MS
in
th
eir
pla
nn
ing s
yste
m. W
e s
aw
imm
edia
tely
th
at t
his
serv
ice ju
st h
as t
o w
ork
; if
a m
ess
age is
late
, th
ey
arri
ve lat
e
at a
cu
stom
er.
.... S
o t
hen
we w
en
t th
rou
gh
a lear
nin
g p
roce
ss: h
ow
we a
re g
oin
g
to m
on
itor
and p
arti
cula
rly
how
are
we g
oin
g t
o s
en
d t
hose
text
mess
ages
and
[ch
eck
] h
ow
well t
hat
goes?
Very
qu
ickly
it
was
tak
en
to a
mu
ch h
igh
er
leve
l. …
Th
is is
a pro
du
ct t
hat
tak
es
the s
erv
ice t
o a
mu
ch h
igh
er
leve
l. (
Fou
nder
1
Text
Co)
26
20
06
Text
Co n
oti
ces
the h
uge
succ
ess
of
[Sm
artT
ext
] w
ith
Pre
miu
m-S
MS
.
Fin
anci
al s
lack
&
capab
ilit
y sl
ack.
Text
Co s
tart
s deve
lopin
g P
rem
ium
-SM
S
tech
nolo
gy.
Th
is d
eci
sion
was
a s
trat
egic
move
; th
e s
ame t
ech
nolo
gy
cou
ld b
e s
old
to
oth
er
com
peti
tors
as
well.
[Sm
artT
ext
] an
d t
he T
V r
an o
ff w
ith
pre
miu
m S
MS
. A
t a
cert
ain
mom
en
t, I
thou
gh
t, w
e s
hou
ld a
ctu
ally
do s
om
eth
ing w
ith
it.
We t
ook t
he d
eci
sion
. It
was
qu
ite a
siz
eab
le in
vest
men
t, b
ut
mon
thly
reve
nu
es
are h
igh
as
well. A
nd w
e w
en
t
on
th
e m
arket
wit
h a
revo
luti
on
ary
new
pri
cin
g m
odel fo
r th
at m
arket.
Ou
r
com
peti
tor
[Sm
artT
ext
] ear
ned p
erh
aps
5 ce
nt
per
text
mess
age; w
e s
aid: ju
st
giv
e u
s 50
0 E
uro
per
mon
th. T
he t
ele
visi
on
sh
ow
pro
du
cers
lik
ed t
his
idea
very
mu
ch s
ince
it
low
ere
d t
heir
cost
s w
ith
som
e 1
00
k E
uro
. (F
ou
nder
1 T
ext
Co)
3520
08
A lar
ge D
utc
h b
ank
exp
eri
en
ces
pro
ble
ms
wit
h
its
curr
en
t S
MS
serv
ice
pro
vider.
Cap
abilit
y sl
ack.
Text
Co’s
fou
nders
appro
ach
th
e b
ank a
nd
off
er
their
serv
ices.
Wit
h t
heir
exp
ert
ise,
Text
Co s
tart
s S
MS
serv
ice f
or
ban
kin
g (
a
new
mar
ket)
, at
a n
ew
serv
ice leve
l.
Ou
r co
mpeti
tor
exp
eri
en
ced p
roble
ms
wit
h t
he t
ech
nolo
gy
beca
use
th
ey
had
had
man
y pers
on
nel ch
anges,
so n
o o
ne k
new
how
th
e s
yste
m w
ork
ed. S
o t
his
was
ou
r ch
ance
.... W
e t
ook o
ver
two y
ear
s ag
o. T
his
was
very
exc
itin
g, beca
use
th
ey
actu
ally
sen
d a
lmost
fiv
e t
ext
mess
ages
eve
ry s
eco
nd o
f eve
ry w
eek-d
ay. S
o t
hat
mean
s th
at if,
for
just
on
e m
inu
te, th
ey
are n
ot
pay
ing a
tten
tion
, th
en
30
0 t
ext
mess
ages
go w
ron
g, an
d b
eca
use
it
con
cern
s a
ban
k, it
mean
s th
at f
or
eve
ry t
ext
mess
age a
cu
stom
er
is m
issi
ng p
aym
en
ts. (F
ou
nder
1 T
ext
Co)
3720
09
Indu
stry
sta
ndar
ds
are
movi
ng t
o 2
4-h
ou
r
cust
om
er
support
.
Fin
anci
al s
lack
&
capac
ity
slac
k.
Text
Co s
tart
s 24
-hou
r su
pport
to c
on
trol
SM
S t
raff
ic a
nd s
erv
ice. T
hey
star
t w
ith
a
few
people
to s
et
up t
he 2
4-h
ou
r su
pport
cen
tre.
Th
e lig
ht
has
not
been
tu
rned o
ff s
ince
Jan
uar
y 20
09
. S
o t
here
are
alw
ays
people
here
. ... W
e r
eal
ly d
eci
ded n
ot
to o
uts
ou
rce [th
is 2
4h
serv
ice], b
ut
to d
o it
ou
rselv
es.
A r
eas
on
able
in
vest
men
t, b
ut
there
are
als
o m
any
people
usi
ng t
he
[ban
k]. I
t co
nce
rns
a te
xt m
ess
age t
hat
you
get
wh
en
you
log in
to y
ou
r [b
ank]
acco
un
t. P
eople
log o
n t
o t
heir
acc
ou
nt
at n
igh
t, s
o it
shou
ld a
lway
s w
ork
. A
nd
then
it
is r
eal
ly n
ice if
you
get
to t
ell y
ou
r cl
ien
ts: w
e a
re lookin
g a
t yo
ur
syst
em
.
Th
is in
clu
des
all S
MS
or
oth
er
pro
du
cts.
(F
ou
nder
1 T
ext
Co)
72 DECISION MAKING IN NEW TECHNOLOGY VENTURES
Finally, we conducted in-depth analyses of the decision-making processes.
To trace patterns in resource positions over time, we created a graphical
overview of the resource positions per event per case (see Figure 4.2). By
combining these overviews with detailed descriptions of the events in the
decision-making process tables (e.g., Tables 4.3–4.5), the nature of the
resource positions could be studied. Noting the large variety in resource
position configurations, involving combinations of different types of slack
and constraints, we grouped events with similar resource positions across
cases, to analyse their relation with decision making. In so doing, we drew
on several tabular representations to group events by the types of resource
slack, resource constraints and their particular combinations. However, in
grouping the events and establishing a link between resource positions and
decision making, we did not identify any direct, consistent effects of resource
positions. Therefore, we redirected our attention toward the underlying
dynamic complexity that appears to influence the relationship between
resource positions and decision making.
CHAPTER 4 73
Figure 4.2: Transient and Multidimensional Resource Positions (Perceived)
with regard to their subjective perceptions of resource positions (Foss et al.,
2008).
A micro-level perspective of dynamic perceived resource positions over
time entails both subjective and volatile resource availability and subjective
and variable imagined resource demands. For example, TextCo’s
entrepreneurs experienced both financial slack and constraints during 2007,
depending on their perceptions of their financial resources available relative
to the amount they needed. Its founders were looking to expand the
company, but financial constraints limited their ability to do so, so the
founders made the decision to start looking for investors, as TextCo Founder
2 explained:
First, that did not work really well, because we didn’t have a track record.… Then we hired someone to make a business plan and slides and then we went to visit 10 investors.
Yet in the same year, TextCo’s founders experienced enough excess financial
resources to take over entire divisions of competing companies. Founder 2
further noted,
[In] 2007, there were so many acquisitions. And we took part in that too.… And we did that twice, successfully. So we just told competing companies: “We are buying your division!”… We told them: “Yes, you will sign over your customers to us and we will give you money in return.”
In summary, considering resources positions as perceived and transient
offers an appropriate approach, because it provides a more accurate, fine-
grained representation than do firm-level measures. These observations also
correspond well with events that can be tracked in firm-level measures.
Returning to Figure 4.2, we find that the solid bars representing TextCo’s
financial resource positions do not exhibit a particular pattern but move
almost randomly up and down over time, in line with the company’s internal
cash flow financing strategy and organic growth. SunCo’s financial resource
positions in Figure 4.2 instead indicate a wave-like pattern, representative of
its initial large financial commitments to product development, followed by
the constraining effects of the economic downturn. ChipCo’s financial
resource positions in Figure 4.2 also display a pattern consistent with its
(anticipated) venture capital rounds and subsequent bankruptcy: financial
slack during the first rounds of venture capital, followed by a series of
CHAPTER 4 79
constraints related to costly production. Later, in anticipation of new
funding, it made investments to speed up the development process, but the
inability to attract additional funding led ChipCo to declare bankruptcy.
Figure 4.3: Financial Slack: Firm-Level vs. Perceived Resource Positions
(TextCo)
2007
(c) Current assets – current liabilities (€)
0
- 1600
(a) Cash (€)
0
50
(b) Current assets / current liabilities
0
1
28 29 30 31 32 33 34
CONSTRAINT
SLACK
(d) Perceived resource positions
event #
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
80 DECISION MAKING IN NEW TECHNOLOGY VENTURES
Figure 4.4: Financial Slack: Firm-Level vs. Perceived Resource Positions
(SunCo)
2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
2004 2005 2006 2007 2008 2009 2010 2011
17 18 19 20
2007
event #
SLACK
CONSTRAINT
(c) Current assets – current liabilities (€)
0
(a) Cash (€)
0
(b) Current assets / current liabilities
0
1
(d) Perceived resource positions
- 70000
36000
CHAPTER 4 81
Figure 4.5: Financial Slack: Firm-Level vs. Perceived Resource Positions
(ChipCo)
2000 2001 2002 2003 2004 2005
2000 2001 2002 2003 2004 2005
2000 2001 2002 2003 2004 2005
6 7 8 9 10 11 12 13 14 15 16 17 18
(c) Current assets – current liabilities (€)
5000
0
(a) Cash (€)
0
5000
(b) Current assets / current liabilities
0
18
(d) Perceived resource positions
2001
event #
CONSTRAINT
SLACK
82 DECISION MAKING IN NEW TECHNOLOGY VENTURES
4.4.3 Multidimensional resource positions
Different types of resource constraints and resource slack can be perceived
simultaneously, as also illustrated in Figure 4.2. In contrast with one-
dimensional measures that indicate firms experience either resource
constraints or slack, we observe simultaneous combinations of constraints
and slack. Therefore, resource positions appear multidimensional, in contrast
with the conventional wisdom that implies constraints or slack are absolute
positions in time (Bradley, Wiklund, et al., 2011; Nohria & Gulati, 1996; Tan
& Peng, 2003). By identifying financial-, capacity- and capability-related
resource positions (see Table 4.2), we observe that entrepreneurs can
experience constraints and slack capabilities at the same time, as illustrated
by ChipCo’s event 14 in Figure 2. In 2001, the founders of ChipCo
anticipated severe financial constraints; they needed to secure a second
round of VC funding but also received a complaint from another company
claiming patent infringement. ChipCo’s CEO explained:
During the second round funding we faced a blocking patent, … where we would have to pay royalties of about 20 percent on everything we sold and a sign-up fee of, I believe, half a million, really ridiculous.…We were in the middle of [securing] that investment round and our [potential VC investor] told us: “This is a major event, so we will need to see. This changes the entire situation.”
At the same time, ChipCo employed top-notch scientists, with plenty of
underutilized (slack) capabilities. According to its CEO,
The brainpower of our guys, I mean, we had about four or five PhD’s from [university X], super smart guys, real beta’s—tremendous amount of respect for those guys who all got their PhD at the intersection of physics and electrical engineering, real eggheads with international status.… They worked to see if they could come up with a re-design to work around the patent. Within two weeks they came up with seven re-designs…!
In this example, financial constraints arising from patent infringement and
slack capabilities jointly characterized the resource position at the time of the
decision; together they spurred creative solutions. The finding that
entrepreneurs can (simultaneously) perceive different types of constraints
and slack reflects early theorizing about the role of resources in
1967), and it signals that attempts to attribute particular effects to one-
CHAPTER 4 83
dimensional measures are highly problematic. The use of one-dimensional
measures can result in outcomes driven by unobserved factors, which may
explain the mixed prior findings regarding the effects of resource slack and
constraints. Resource slack or constraints thus cannot be scrutinized in
isolation; instead, they must be examined in more comprehensive ways.
4.4.4 Mixed effects of constraints and slack: Underlying
dynamics
We now turn to exploring how perceived, anticipated and relative resource
positions pertain to decision making. Previous research has not been able to
provide consistent insights regarding the effects of resource constraints or
slack. We grouped events with similar resource positions in tables to
establish a link between resource positions and decision making; however,
we did not detect a recurrent or systematic pattern at the event level. The
perception of constraints in some instances motivates entrepreneurs to
engage in some creative explorations (e.g., Table 4.4, event 28, ChipCo);
whereas entrepreneurs perceiving constraints in other settings do not
pursue that direction (Table 4.3, event 25, SunCo). Similar results arise with
regard to the effects of slack resources (Table 4.5, events 14 versus 21,
TextCo). At times, constraints encourage the production of creative ideas; at
other times, slack resources stimulate such ideas; and in still other instances,
neither constraints nor slack induce creative solutions. But why do
constraints and slack not have univocal effects?
In line with our theoretical argument, our findings show that a decision
outcome is unlikely to relate directly to an observed resource position. The
relationship between resource positions and decision making instead
depends on several underlying dynamics, including those at the individual,
temporal, and resource position levels. In the remainder of this subsection,
we ground these key factors and relationships in the data.
84 DECISION MAKING IN NEW TECHNOLOGY VENTURES
4.4.4.1 Individual dynamics
Analysis of the relation between resource positions and decision outcomes
suggests entrepreneur-specific effects. Different entrepreneurs have unique
backgrounds and perceptions of their ventures’ resource availability and
demands that lead them to construct specific ideas about how to make their
decisions; the decision outcome observed likely arises from the interaction
between the entrepreneurs leading the venture. For example, both SunCo
and TextCo started with two founders, each with their own perceptions of
resource availability, resource demands, and options to develop the venture.
SunCo’s Founder 1, who previously had started and operated a small energy
company, explained how his background influenced his view of the
situation:
I wasn’t born rich. At one time, I started in a chicken barn of 500 square meters.… That’s where I started with, to first prove that it works, so I put in the small amount of money I owned.
Then, after he met SunCo Founder 2:
So we started SunCo. I owned half of the company and [Founder 2] the other half.… When you talk about starting, it was very small scale, facilitated by another small company I owned. It was just me, with one other guy. We did not start with huge investments. But built up very slowly … dipping your toes in the water to feel how warm it is, to find out whether to proceed or hold back.
SunCo Founder 2 came from a multinational company and believed there
were no financial constraints, which resulted in a different approach to the
venture. The company’s chief technology officer, one of the first employees,
explained:
[Founder 2] came in and said: “I want to make solarpanels, go figure it out!”… In addition to the entrepreneurship style of [Founder 2], the beginning of the story is: this founder wants this specific technology, and that’s what we started with.
SunCo Founder 1 added:
We did invest a great deal in development. Compared to many other companies, really a lot. But it is because, for [Founder 2], it was worth the money. He told us: “this is what I want to do, this is my project. I will put in a lot of money because I believe in it.”
CHAPTER 4 85
TextCo Founder 1 also recognized the differences between his and Founder
2’s perceptions:
You need to grow every dimension of your company. At first, this was difficult to get used to. Because it meant one had to make large investments which were, at that time, somewhat excessive, but needed in future. And this is where an important difference between me and [Founder 2] becomes visible. [Founder 2] is more of a visionary, he is able to foresee the future, what will be needed, and invest. I’m more conservative: Should we really do this? Why not focus on minimal investment? This is a very interesting and healthy tension. Whose plan of action is taken, comes down to who has the most convincing arguments.
These examples effectively show how prior experiences influence
entrepreneurs in making sense of their perceived resource availability and
demand (Weick, 1995). Not only individual perceptions play a role (Chiles et
al., 2007; Chiles, Vultee, et al., 2010), but interactions within the
organization also affect the relationship between perceived resource
positions, decision making and creativity (Ford & Gioia, 2000; McMullen,
2010). Many decisions made by SunCo and TextCo arose from negotiated
compromises, based on inter-subjectivity or joint sensemaking by pairs of
entrepreneurs with different attitudes (Weick, 1995), which influenced the
overall creativity in these decisions (Ford & Gioia, 2000). However, the
founders also actively engaged in perspective taking, allowing their partners
sufficient resources and time to experiment.
4.4.4.2 Temporal dynamics
Regarding the connection among multiple events within a case, our findings
suggest that the influence of resource positions on decision making is not
consistent over time but rather is subject to temporal dynamics. Past
experiences (paths) influence the decision-making process and thus the
relationship between resource positions and decision outcomes. Such path-
dependent effects occur when entrepreneurs only see options along their
existing path, despite possible changes in their perceived resource position.
In this case, entrepreneurs decide according to routine first (i.e., choosing
the familiar path) rather than according to their current, changed resource
position.
86 DECISION MAKING IN NEW TECHNOLOGY VENTURES
The product development phase at the VC-backed ChipCo clearly
revealed path-dependent effects. Its initial financial slack facilitated a
development trajectory, free of short-term financial and environmental
pressures; later ChipCo persisted with the development of its product, even
in the face of severe resource constraints. Founder 1 explained that, at first,
he believed all necessary resources were available:
When we started, both VC investors told us: “don’t bother about attracting subsidies. It is a lot of effort and a lot of hassle. If you need more money, then just ask for more money and you will get more money” … they [VC investors] pushed us: “Continue the development of the Holy Grail, don’t focus on simple sub-products [to generate cash-flow].”
The CEO added:
…it was just invested based on the needs of the technology. This has that much potential; this will turn out just fine. Something will come out of this: that has been the starting point.
Because the founders of ChipCo believed their resource demands would
always be met, they set out to develop a cutting-edge product that would
incorporate all the technical expertise available to them.
However, by the final stages of the product development process,
ChipCo’s target (telecom) market appeared on the brink of collapse, creating
vast uncertainty. ChipCo’s founding team still perceived ample financial
slack, in the form of substantial (existing and potential) VC funding.
Founder 2 reflected on the decision to proceed with product development:
Actually, it was the wrong time to … when you look back; it was really a very odd period to start a company. Actually, it is just not possible. A shrinking market and a completely new technology.
As ChipCo continued with its product development activities, the costs
increased drastically. Despite these (anticipated) financial constraints—a
significant change in resource position—the team still decided to continue
with the initial idea and even increased the number of design runs. The CEO
explained why ChipCo persisted, even when the perceived resource position
changed from financial slack (7 million Euro of VC funding) to financial
constraints (high development costs):
CHAPTER 4 87
At one point we had that 7 million. Initially, we did one design run every month. We improved our own process every run, as we were inventing something new. One run takes a 100.000 Euro, as all parties have to perform their tasks every run. But we also had our daily costs of keeping the business going; we had to pay 20 staff members, the rental fees, et cetera. It is a very costly business. Then we increased to two runs a month and we burned our money even faster.
In addition to high operating fees and a collapsing telecom market, another
problem surfaced: Customers were not willing to buy ChipCo’s products
because they were not able to integrate them into existing systems. Faced
with even greater financial constraints, ChipCo’s leadership saw few
alternatives other than continuing to develop products for the telecom
market. According to its VC investor:
At that time, the feeling that we needed to generate revenue became stronger and stronger.… The long-term vision did not change, but the quest became: ok, what is needed for tomorrow?
The entrepreneurs did not want to give up on ChipCo’s long-term (product
development) goals, so they conceived of an intermediate product for the
telecom market that would be more marketable but still based on the
developed technology (i.e., slack capabilities). Founder 1 indicated:
But then we thought about another application, a monitoring application, as this does not demand a significant redesign of the system. This can be plugged in [existing systems of telecom providers], and then we can at least sell something. It is based on the same technology we are already using, but then with [more] channels.… And yes, I think we were a little too late with that.
In the end, after confronting the consequences of a collapsed market,
ChipCo’s investors resigned themselves to failure. At that point, the
founding team of the insolvent ChipCo finally saw how the routine had
failed: ChipCo’s path had constrained the options that the founders could
imagine, even when the situation (and resource position) kept changing. As
soon as the founders were no longer able to follow the existing path, they
acknowledged the need to explore alternative ideas. Founder 1 explained:
88 DECISION MAKING IN NEW TECHNOLOGY VENTURES
At the moment that everybody … that the telecom market collapsed, that clients told us not now, not at this moment, then we started looking at alternatives. Yes, because, still we were able to build about anything.… The time to develop something to be used in a different market; this takes time and money. Both we did not have.
ChipCo’s product development process thus illustrates that when
entrepreneurs decide to stick to an existing path, unaffected by changes in
resource positions, it impedes the timely imagination and exploration of
creative solutions.
The SunCo case revealed a similar path dependency in its response to
resource constraints. Such path dependency affects the relationship between
resource position and decision making: Past experiences constrain the
options entrepreneurs are able to imagine, even when changes in their
resource position give them a reason to become creative. That is,
unconstrained, forward-looking imagination can drive the creative decision-
making process more effectively (as Austrian argument states, e.g., Chiles et
al., 2007; Chiles, Tuggle, et al., 2010; Foss et al., 2008; McMullen, 2010),
whereas approaches that rely on previous paths and experiences can
1995) by making entrepreneurs less receptive to changes in resource
positions.
4.4.4.3 Resource position dynamics
Our findings suggest different types of resource constraints and slack are
perceived simultaneously; together they make up the overall resource
position perceived at the time of the decision. Perceived constraints and
slack jointly influence the way entrepreneurs make decisions, so perceptions
of different resource configurations have different effects. In 2008, SunCo
set out to establish international sales offices for its modules, which led it to
assess its resource position (Figure 4.2, event 19). According to SunCo’s
chief operating officer:
CHAPTER 4 89
I think we were more a module producer. So, we built modules. But, as we grew, only building modules was not sufficient to create enough volume [to make profit].… When I arrived, there was a kind of organization that had a track record and a number of people who had, say, expertise [of project management] in their heads.… You just have to see you are capable of doing much more than just selling modules. So there is a lot of capability here and sometimes we can use those capabilities to help customers who are stuck with a project, we can help those customers because we are used to doing it too.… So we have an additional channel, an additional outlet to bring products to the market. Because we also add value, not just [deliver] a module, but a complete system, you generate an interesting margin.
Thus, SunCo established a second line of business, in view of both
(anticipated) financial constraints and slack capability. This example
suggests it was the perception of this specific combination of constraints and
slack that stimulated the novel idea of a second line of business, rather than
the need to generate higher margins or underutilized existing capabilities.
When entrepreneurs perceive a combination of various resource positions,
this specific combination affects their decision-making process, which
makes it impossible to trace observed effects back to single resource
positions. Moreover, studying resource positions in isolation may result in
an incomplete picture of the entrepreneur’s perceived situation, which fails
to account for any combination-specific effects of resource positions.
In the ChipCo case, we also observed an influence of perceived resource
combinations (e.g., Figure 4.2, event 15). In 2001, when ChipCo’s founders
started planning the production of their first product, they experienced for
the first time all three types of resource constraints, because of the resources
demanded: they did not have a cleanroom to develop their product (capacity
constraint), nor did they have sufficient financial resources to build their
own cleanroom facility (financial constraint), and the team also lacked the
proper experience (capability constraint). The founders faced tough
challenges, as ChipCo’s CEO recalled:
With respect to operations, it is highly complex and incredibly expensive, it is a nightmare. So I almost developed a stomach-ache because of this, apart from the fact that I had absolutely no idea what it [building a cleanroom] was about. I cannot build such a thing.…
90 DECISION MAKING IN NEW TECHNOLOGY VENTURES
Because, unlike other start-ups in the industry, ChipCo lacked sufficient
financial resources to build a cleanroom, Founder 1 noted their production
decision had to involve creative elements:
Everybody, every start-up received 40 million dollars to build their own fab [cleanroom]. And well, we raised 7 million dollars that year, and yes, that is of course way too little to build your own fab. But that made us realize that we had to do things in a different way. So we started looking for production partners. And that is exactly the path we ended up taking.
This particular combination of constraints pushed ChipCo’s founding team
to come up with the idea for production partners. What would they have
done, though, had they experienced fewer resource constraints or a different
combination of constraints and slack? The way entrepreneurs make sense of
their context and the options they imagine appears to depend on the
(situation- and time-specific) perceived combination of resource positions.
These findings demonstrate how perceived combinations of different types
of resource constraints and/or slack enter the decision-making process and
influence the entrepreneur, generating idiosyncratic options with varying
degrees of creativity. Therefore, the results of the study in this chapter extend
entrepreneurship theory, in particular with regard to the process of resource
(re)combination (Chiles et al., 2007; Chiles, Vultee, et al., 2010; Foss et al.,
2008; Schumpeter, 1934), by showing how entrepreneurs not only engage in
imaginative (re)combinations of existing resources but also can be guided by
imaginative (re)combinations of perceived resource slack and resource
constraints.
4.5 Discussion
In this chapter, we have explored the characteristics of resource positions
and how they influence entrepreneurial decision making and creativity.
Viewing resource slack and resource constraints as two extremes on a
spectrum of resource positions constitutes an important step toward
integrating the resource slack and resource constraints literature, which
represent core discourses on organizational ingenuity. Perceived resource
positions reflect the entrepreneur’s imagination of available resources
relative to demand including anticipated resources or resource demands.
CHAPTER 4 91
Furthermore, resource positions are transient imaginations, allowing the
entrepreneur to move along the constraint–slack spectrum over time.
Resource positions are multidimensional constructs too; our findings show
that entrepreneurs perceive different types of constraints and slack
simultaneously (e.g., capacity constraints and financial slack), in line with
prior work that has acknowledged the multidimensional nature of resources
(e.g., Hannan & Freeman, 1977; Voss et al., 2008).
Such perceived, anticipated and relative resource positions influence
creative decision making, but not systematically. Constraints and slack do
not have univocal effects, but rather lead to idiosyncratic decisions by
entrepreneurs. Constraints sometimes encourage inventive behavior, or
slack resources might induce innovative activities; in other cases, neither
constraints nor slack results in creative decisions. The relationship between
resource positions and (creative) decision making thus is highly complex,
influenced by underlying dynamics that tend to remain hidden in firm-level
studies that rely on cross-sectional measures (Felin & Foss, 2005). By
studying perceived, anticipated, and relative resource positions over time at
the decision-making level, we demonstrate that the processes by which
resource positions influence decision making depend on individual,
temporal, and resource position dynamics. These results have notable
implications for research and theory about the relationship between
resources and creativity in decision making.
4.5.1 Perceived resource positions and individual
dynamics
Resource positions reflect an entrepreneur’s perception of available
resources relative to demand. Unlike previous research that has tended to
overlook the role of individuals in organizations (Abell et al., 2008; Felin &
Foss, 2005; Foss, 2011) because it adheres mainly to firm-level measures
(Daniel et al., 2004; Voss et al., 2008), we conceptualize resource positions
as the abundance or shortage of resources perceived by the entrepreneur.
Perceived resource availability and demand are entrepreneur-specific and
92 DECISION MAKING IN NEW TECHNOLOGY VENTURES
highly subjective, in line with sensemaking (e.g.,Cornelissen & Clarke, 2010;
Weick, 1995) and Austrian economics (e.g., Foss & Ishikawa, 2007; Foss et
al., 2008) research. An entrepreneur’s imagination influences the subjective
evaluation of available resources (Chiles et al., 2007; Chiles, Tuggle, et al.,
2010; McMullen, 2010), so firm-level measures cannot address the
heterogeneously perceived value of available resources in relation to
imagined action scenarios. The commonly used, financial, firm-level
measures, which result in contradictory characterizations of a start-up’s
resource position, thus are less appropriate for describing the effects of
resource slack and constraints.
The idea that resource positions are transient imaginations has
important implications for related studies, because the relationship between
resource positions and decision making is subject to individual-level
dynamics. Different entrepreneurs perceive resource availability relative to
imagined demand in distinct ways—as clearly exemplified by the two SunCo
founders—and therefore make different decisions. Our findings thus extend
prior research that suggests that founders likely engage in creative and
innovative activity by nature, by habit, or in response to certain resource
The studies presented in this dissertation investigated decision making in
technology commercialization from the perspective of two key stakeholders,
universities and new technology ventures. The studies give insight in the
decision making processes of these stakeholders by pointing to specific
factors that guide decision making in universities and new technology
ventures along the stages of the commercialization process. Given that the
commercialization of new technologies is becoming increasingly important
in view of the major challenges our society faces, the findings presented in
this dissertation provide several valuable insights.
The findings in Part I show that the evaluation and selection of new
technologies for commercial development is not merely a process of
selecting among technological features. That is, sociological aspects enter the
decision making process of evaluators and serve as a heuristic in
determining the commercial potential of uncertain early stage technological
inventions. If policymakers, university officials and commercialization
professionals are not aware of such patterns in the evaluation and selection
of new technologies, this can have detrimental consequences – not only for
the success rate of technology commercialization but also for our society at
large. For example, the findings in Chapter 3 point to a potential gender bias
in the selection of technological inventions. Such biases in the early selection
stage of the technology commercialization process may have large
consequences if groundbreaking or lifesaving technologies remain
undeveloped.
The findings of Part II have demonstrated that entrepreneurs
undertaking the commercial development of new technologies are
influenced by their perceptions of available resources. In particular, having
too many resources may create path dependency in the commercialization of
new technologies. Major resource commitments to technology development
116 CONCLUSIONS
trajectories may hinder the flexibility and creativity necessary to overcome
problems in the technology commercialization process. These findings have
important implications for stakeholders looking to improve the success rate
of technology commercialization. For example, startup funds or subsidy
programs should be aware of how entrepreneurs’ perception of resource
availability may stimulate or hinder creative decision making.
In sum, the findings presented in this dissertation enhance our
understanding of decision making under conditions of uncertainty by
shedding light on parts of the technology commercialization process that
have mostly been treated as a black box.
References
Abell, P., Felin, T., & Foss, N. J. (2008). Building micro-foundations for the routines, capabilities, and performance links. Managerial and Decision Economics, 29(6), 489–502.
Acs, Z. J. (2010). High-impact entrepreneurship. In Handbook of entrepreneurship research (pp. 165–182). New York, NY: Springer.
Agarwal, R., Sarkar, M. B., & Echambadi, R. (2002). The conditioning effect of time on firm survival: An industry life cycle approach. Academy of Management Journal, 45(5), 971–994.
Allen, S. D., Link, A. N., & Rosenbaum, D. T. (2007). Entrepreneurship and human capital: Evidence of patenting activity from the academic sector. Entrepreneurship Theory and Practice, 31(6), 937–951.
Alvarez, S. A., & Barney, J. B. (2007). Discovery and creation: alternative theories of entrepreneurial action. Strategic Entrepreneurship Journal, 1(1-2), 11–26.
Alvarez, S. A., & Busenitz, L. W. (2001). The entrepreneurship of resource-based theory. Journal of Management, 27(6), 755–775.
Amabile, T. M. (1996). Creativity and innovation in organizations. Harvard Business School, 5(9), 396–239.
Ambos, T. C., & Birkinshaw, J. (2010). How do new ventures evolve? An inductive study of archetype changes in science-based ventures. Organization Science, 21(6), 1125–1140.
Ambos, T. C., Mäkelä, K., Birkinshaw, J., & D’Este, P. (2008). When does university research get commercialized? Creating ambidexterity in research institutions. Journal of Management Studies, 45(8), 1424–1447.
Arrow, K. (1962). Economic welfare and the allocation of resources for invention. In R. R. Nelson (Ed.), The rate and direction of inventive activity: Economic and social factors (pp. 609–626). Princeton, NJ: Princeton University Press.
Audretsch, D. B., & Stephan, P. E. (1996). Company-scientist locational links: the case of biotechnology. The American Economic Review, 86(3), 641–652.
118 REFERENCES
Azoulay, P., Ding, W. W., & Stuart, T. E. (2007). The determinants of faculty
patenting behavior: Demographics or opportunities? Journal of Economic Behavior & Organization, 63(4), 599–623.
Azoulay, P., Stuart, T. E., & Wang, Y. (2012). Matthew: Effect or fable? (NBER Working Paper No. 18625).
Baker, T., & Nelson, R. E. (2005). Creating something from nothing: Resource construction through entrepreneurial bricolage. Administrative Science Quarterly, 50(3), 329–366.
Banbury, C. M., & Mitchell, W. (1995). The effect of introducing important incremental innovations on market share and business survival. Strategic Management Journal, 16(S1), 161–182.
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99 –120.
Baumol, W. J. (1993). Formal entrepreneurship theory in economics: Existence and bounds. Journal of Business Venturing, 8(3), 197–210.
Becchetti, L., & Trovato, G. (2002). The determinants of growth for small and medium sized firms. The role of the availability of external finance. Small Business Economics, 19(4), 291–306.
Bercovitz, J., & Feldman, M. (2008). Academic entrepreneurs: Organizational change at the individual level. Organization Science, 19(1), 69–89.
Berger, J., Conner, T. L., & Fisek, M. H. (1974). Expectation states theory: A theoretical research program. Cambridge, MA: Winthrop.
Berger, J., Rosenholtz, S. J., & Zelditch, M. (1980). Status organizing processes. Annual Review of Sociology, 6, 479–508.
Bhide, A. (1992). Bootstrap finance: the art of start-ups. Harvard Business Review, 70(6), 109–117.
Bottazzi, G., Secchi, A., & Tamagni, F. (2012). Financial constraints and firm dynamics. Small Business Economics, forthcoming.
Bourgeois, L. J. (1981). On the measurement of organizational slack. Academy of Management Review, 6(1), 29–39.
Bourgeois, L. J., & Singh, J. V. (1983). Organizational slack and political behavior among top management teams. In Academy of Management Proceedings (Vol. 43, pp. 43–49).
Bouty, I. (2000). Interpersonal and interaction influences on informal resource exchanges between R&D researchers across organizational boundaries. Academy of Management Journal, 43(1), 50–65.
REFERENCES 119
Bradley, S. W., Shepherd, D. A., & Wiklund, J. (2011). The importance of slack for new organizations facing “tough” environments. Journal of Management Studies, 48(5), 1071–1097.
Bradley, S. W., Wiklund, J., & Shepherd, D. A. (2011). Swinging a double-edged sword: The effect of slack on entrepreneurial management and growth. Journal of Business Venturing, 26(5), 537–554.
Bromiley, P. (1991). Testing a causal model of corporate risk taking and performance. Academy of Management Journal, 34(1), 37–59.
Bundy, W. M. (2002). Innovation, creativity, and discovery in modern organizations. Westport, CT: Greenwood Publishing Group.
Bunker Whittington, K., & Smith-Doerr, L. (2005). Gender and commercial science: Women’s patenting in the life sciences. The Journal of Technology Transfer, 30(4), 355–370.
Burg, E. van, Romme, A. G. L., Gilsing, V. A., & Reymen, I. M. M. J. (2008). Creating University Spin-Offs: A Science-Based Design Perspective. Journal of Product Innovation Management, 25(2), 114–128.
Chell, E. (2004). Critical Incident Technique. In C. Cassell & G. Symon (Eds.), Essential guide to qualitative methods in organizational research. London, UK: Sage.
Cheng, J. L. C., & Kesner, I. F. (1997). Organizational slack and response to environmental shifts: The impact of resource allocation patterns. Journal of Management, 23(1), 1–18.
Chiles, T. H., Bluedorn, A. C., & Gupta, V. K. (2007). Beyond creative destruction and entrepreneurial discovery: A radical Austrian approach to entrepreneurship. Organization Studies, 28(4), 467–493.
Chiles, T. H., Tuggle, C. S., McMullen, J. S., Bierman, L., & Greening, D. W. (2010). Dynamic creation: Extending the radical Austrian approach to entrepreneurship. Organization Studies, 31(1), 7–46.
Chiles, T. H., Vultee, D. M., Gupta, V. K., Greening, D. W., & Tuggle, C. S. (2010). The philosophical foundations of a radical Austrian approach to entrepreneurship. Journal of Management Inquiry, 19(2), 138–164.
Christensen. (1997). The innovator’s dilemma: When new technologies cause great firms to fail. Harvard Business Press.
Clarysse, B., Wright, M., Lockett, A., Van de Velde, E., & Vohora, A. (2005). Spinning out new ventures: A typology of incubation strategies from European research institutions. Journal of Business Venturing, 20(2), 183–216.
120 REFERENCES
Cohen, M. D., March, J. G., & Olsen, J. P. (1972). A garbage can model of
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative science quarterly, 128–152.
Colyvas, J., Crow, M., Gelijns, A., Mazzoleni, R., Nelson, R. R., Rosenberg, N., & Sampat, B. N. (2002). How do university inventions get into practice? Management Science, 48(1), 61–72.
Corley, E. A., & Sabharwal, M. (2007). Foreign-born academic scientists and engineers: producing more and getting less than their US-born peers? Research in Higher Education, 48(8), 909–940.
Cornelissen, J. P., & Clarke, J. S. (2010). Imagining and rationalizing opportunities: Inductive reasoning and the creation and justification of new ventures. Academy of Management Review, 35(4), 539–557.
Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ: Prentice-Hall.
Daft, R. L. (1983). Organization theory and design. New York: West.
Daniel, F., Lohrke, F. T., Fornaciari, C. J., & Turner, R. A. (2004). Slack resources and firm performance: a meta-analysis. Journal of Business Research, 57(6), 565–574.
Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18(3), 301–331.
De Carolis, D. M., Yang, Y., Deeds, D. L., & Nelling, E. (2009). Weathering the storm: The benefit of resources to high-technology ventures navigating adverse events. Strategic Entrepreneurship Journal, 3(2), 147–160.
Dechenaux, E., Goldfarb, B., Shane, S., & Thursby, M. (2008). Appropriability and commercialization: evidence from MIT inventions. Management Science, 54(5), 893–906.
Dew, N., Read, S., Sarasvathy, S. D., & Wiltbank, R. (2009). Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices. Journal of Business Venturing, 24(4), 287–309.
Dew, N., & Sarasvathy, S. D. (2007). Innovations, stakeholders & entrepreneurship. Journal of Business Ethics, 74(3), 267–283.
Ding, W. W., Murray, F., & Stuart, T. E. (2006). Gender differences in patenting in the academic life sciences. Science, 313(5787), 665 –667.
REFERENCES 121
Dolmans, S. A. M., Burg, E. van, Reymen, I. M. M. J., & Romme, A. G. L. (2013). Dynamics of resource slack and constraints: Resource positions in action. Organization Studies, (forthcoming).
Dolmans, S. A. M., & Reymen, I. M. M. J. (2013). Inter-institutional conflicts in technology commercialization ecosystems. Presented at the First international entrepreneurship research exemplars conference: Entrepreneurial ecosystems and the diffusion of start-ups, Catania, Italy.
Donaldson, L. (2001). The contingency theory of organizations. Thousand Oaks, CA: Sage.
Drucker, P. F. (1999). Innovation and entrepreneurship. New York, NY: HarperCollins.
Ebben, J. (2009). Bootstrapping and the financial condition of small firms. International Journal of Entrepreneurial Behaviour & Research, 15(4), 346–363.
Ebben, J., & Johnson, A. (2006). Bootstrapping in small firms: An empirical analysis of change over time. Journal of Business Venturing, 21(6), 851–865.
Edelman, L., & Yli-Renko, H. (2010). The impact of environment and entrepreneurial perceptions on venture-creation efforts: Bridging the discovery and creation views of entrepreneurship. Entrepreneurship Theory and Practice, 34(5), 833–856.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10-11), 1105–1121.
Elfenbein, D. W. (2007). Publications, patents, and the market for university inventions. Journal of Economic Behavior & Organization, 63(4), 688–715.
Felin, T., & Foss, N. J. (2005). Strategic organization: A field in search of micro-foundations. Strategic Organization, 3(4), 441–455.
Ford, C. M., & Gioia, D. A. (1995). Creative action in organizations: Ivory tower visions and real world voices. London, UK: Sage.
Ford, C. M., & Gioia, D. A. (2000). Factors influencing creativity in the domain of managerial decision making. Journal of Management, 26(4), 705–732.
Foss, N. J. (2011). Invited editorial: Why micro-foundations for resource-based theory Are needed and what they may look like. Journal of Management, 37(5), 1413–1428.
122 REFERENCES
Foss, N. J., & Ishikawa, I. (2007). Towards a dynamic resource-based view:
Insights from Austrian capital and entrepreneurship theory. Organization Studies, 28(5), 749–772.
Foss, N. J., Klein, P. G., Kor, Y. Y., & Mahoney, J. T. (2008). Entrepreneurship, subjectivism, and the resource-based view: Toward a new synthesis. Strategic Entrepreneurship Journal, 2(1), 73–94.
Fox, M. F. (2005). Gender, family characteristics, and publication productivity among scientists. Social Studies of Science, 35(1), 131 –150.
Franklin, S., Wright, M., & Lockett, A. (2001). Academic and surrogate entrepreneurs in university spin-out companies. The Journal of Technology Transfer, 26(1-2), 127–141.
Gans, J. S., & Stern, S. (2003). The product market and the market for “ideas”: commercialization strategies for technology entrepreneurs. Research Policy, 32(2), 333–350.
Garud, R., & Karnøe, P. (2003). Bricolage versus breakthrough: distributed and embedded agency in technology entrepreneurship. Research Policy, 32(2), 277–300.
George, G. (2005). Slack resources and the performance of privately held firms. Academy of Management Journal, 48(4), 661–676.
Gibbert, M., & Scranton, P. (2009). Constraints as sources of radical innovation? Insights from jet propulsion development. Management & Organizational History, 4(4), 385–399.
Golden, B. R. (1992). Research notes. The past is the past–or is it? The use of retrospective accounts as indicators of past strategy. Academy of Management Journal, 35(4), 848–860.
Gopalakrishnan, S., & Damanpour, F. (1997). A review of innovation research in economics, sociology and technology management. Omega, 25(1), 15–28.
Grandi, A., & Grimaldi, R. (2003). Exploring the networking characteristics of new venture founding teams. Small Business Economics, 21(4), 329–341.
Grandi, A., & Grimaldi, R. (2005). Academics’ organizational characteristics and the generation of successful business ideas. Journal of Business Venturing, 20(6), 821–845.
Greve, H. R. (2003). A behavioral theory of R&D expenditures and innovations: Evidence from shipbuilding. Academy of Management Journal, 46(6), 685–702.
REFERENCES 123
Hannan, M. T. (1998). Rethinking age dependence in organizational mortality: Logical formalizations. American Journal of Sociology, 104(1), 126–164.
Hannan, M. T., & Freeman, J. (1977). The population ecology of organizations. American Journal of Sociology, 82(5), 929–964.
Hannan, M. T., & Freeman, J. (1984). Structural inertia and organizational change. American Sociological Review, 149–164.
Hannan, M. T., & Freeman, J. (1993). Organizational ecology. Harvard University Press.
Hargadon, A. B., & Bechky, B. A. (2006). When collections of creatives become creative collectives: A field study of problem solving at work. Organization Science, 17(4), 484–500.
Heiner, R. A. (1983). The origin of predictable behavior. The American Economic Review, 73(4), 560–595.
Hoang, H., & Antoncic, B. (2003). Network-based research in entrepreneurship: A critical review. Journal of Business Venturing, 18(2), 165–187.
Hoegl, M., Gibbert, M., & Mazursky, D. (2008). Financial constraints in innovation projects: When is less more? Research Policy, 37(8), 1382–1391.
Hoegl, M., Weiss, M., & Gibbert, M. (2010). The influence of material resources on innovation project outcomes. In IEEE International Conference on Management of Innovation and Technology (ICMIT), 2010.
Huber, G. P., & Power, D. J. (1985). Retrospective reports of strategic-level managers: Guidelines for increasing their accuracy. Strategic Management Journal, 6(2), 171–180.
Hunt, J. (2009). Which immigrants are most innovative and entrepreneurial? Distinctions by entry visa. National Bureau of Economic Research Cambridge, MA., USA.
Hvide, H. K., & Møen, J. (2010). Lean and hungry or fat and content? Entrepreneurs’ wealth and start-up performance. Management Science, 56(8), 1242–1258.
Iansiti, M., & Levien, R. (2004). The keystone advantage: What the new dynamics of business ecosystems mean for strategy, innovation, and sustainability. Harvard Business Press.
Jacobson, R. (1992). The“ Austrian” school of strategy. Academy of Management Review, 17(4), 782–807.
124 REFERENCES
Jensen, & Meckling, W. H. (1976). Theory of the firm: Managerial behavior,
agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Jensen, R. A., Thursby, J. G., & Thursby, M. C. (2003). Disclosure and licensing of university inventions: The best we can do with the s** t we get to work with’. International Journal of Industrial Organization, 21(9), 1271–1300.
Jensen, R. A., & Thursby, M. C. (2001). Proofs and prototypes for sale: The licensing of university inventions. American Economic Review, 91(1), 240–259.
Kahneman, D., & Lovallo, D. (1993). Timid choices and bold forecasts: A cognitive perspective on risk taking. Management Science, 39(1), 17–31.
Kahneman, D., Slovic, P., & Tversky, A. (1982). Judgment under uncertainty: Heuristics and biases. Cambridge University Press.
Kaplan, S. N., & Zingales, L. (1997). Do investment-cash flow sensitivities provide useful measures of financing constraints?*. Quarterly Journal of Economics, 112(1), 169–215.
Kaplan, S. N., & Zingales, L. (2000). Investment-cash flow sensitivities are not valid measures of financing constraints*. Quarterly Journal of Economics, 115(2), 707–712.
Katila, R., & Shane, S. (2005). When does lack of resources make new firms innovative? Academy of Management Journal, 48(5), 814–829.
Keeney, R. L. (1994). Creativity in decision making with value-focused thinking. Sloan Management Review, 35, 33–33.
Kerr, W. R. (2008). The Ethnic Composition of US Inventors. HBS Finance Working Paper No. 08-006; Harvard Business School Entrepreneurial Management Working Paper No. 08-006.
Kirzner, I. M. (1997). Entrepreneurial discovery and the competitive market process: An Austrian approach. Journal of Economic Literature, 35(1), 60–85.
Klein, P. G. (2008). Opportunity discovery, entrepreneurial action, and economic organization. Strategic Entrepreneurship Journal, 2(3), 175–190.
Knight, F. H. (1921). Risk, uncertainty and profit. New York: Hart, Schaffner and Marx.
REFERENCES 125
Kor, Y. Y., Mahoney, J. T., & Michael, S. C. (2007). Resources, capabilities and entrepreneurial perceptions*. Journal of Management Studies, 44(7), 1187–1212.
Krabel, S., & Mueller, P. (2009). What drives scientists to start their own company?: An empirical investigation of Max Planck Society scientists. Research Policy, 38(6), 947–956.
Krabel, S., Siegel, D. S., & Slavtchev, V. (2012). The internationalization of science and its influence on academic entrepreneurship. The Journal of Technology Transfer, 37(2), 192–212.
Kurtzberg, T. R., & Amabile, T. M. (2001). From Guilford to creative synergy: Opening the black box of team-level creativity. Creativity Research Journal, 13(3-4), 285–294.
Lachmann, L. M. (1976). From Mises to Shackle: An essay on Austrian economics and the kaleidic society. Journal of Economic Literature, 54–62.
Lachmann, L. M. (1986). The market as an economic process. Blackwell Oxford; New York.
Lampel, J., Honig, B., & Drori, I. (2011). Call for papers for special issue “Discovering creativity in necessity: Organizational ingenuity under institutional constraints.” Organization Studies, 32(4), 584–586.
Landry, R., Amara, N., & Rherrad, I. (2006). Why are some university researchers more likely to create spin-offs than others? Evidence from Canadian universities. Research Policy, 35(10), 1599–1615.
Langley, A. (1999). Strategies for theorizing from process data. Academy of Management Review, 24(4), 691–710.
Lee, T. W. (1999). Using qualitative methods in organizational research. London, UK: Sage.
Levinthal, D. A. (1997). Adaptation on rugged landscapes. Management Science, 43(7), 934–950.
Levinthal, D. A., & March, J. G. (1993). The myopia of learning. Strategic Management Journal, 14(2), 95–112.
Lin, Z., Pearce, R., & Wang, W. (2008). Imported talents: demographic characteristics, achievement and job satisfaction of foreign born full time faculty in four-year American colleges. Higher Education, 57(6), 703–721.
126 REFERENCES
Link, A. N., Siegel, D. S., & Bozeman, B. (2007). An empirical analysis of the
propensity of academics to engage in informal university technology transfer. Industrial and Corporate Change, 16(4), 641 –655.
Litschert, R. J., & Bonham, T. W. (1978). A conceptual model of strategy formation. Academy of Management Review, 3(2), 211–219.
Locke, K. (2001). Grounded theory in management research. London, UK: Sage.
Lockett, A., Siegel, D. S., Wright, M., & Ensley, M. D. (2005). The creation of spin-off firms at public research institutions: Managerial and policy implications. Research Policy, 34(7), 981–993.
Lubart, T. I. (2001). Models of the creative process: Past, present and future. Creativity Research Journal, 13(3-4), 295–308.
March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), 71–87.
March, J. G., & Simon, H. A. (1958). Organizations. New York, NY: John Wiley.
Marino, K. E., & Lange, D. R. (1983). Measuring organizational slack: a note on the convergence and divergence of alternative operational definitions. Journal of Management, 9(1), 81–92.
Markman, G. D., Siegel, D. S., & Wright, M. (2008). Research and technology commercialization. Journal of Management Studies, 45(8), 1401–1423.
McMullen, J. S. (2010). Perspective taking and the heterogeneity of the entrepreneurial imagination. In R. Koppl, S. Horwitz, & P. Desrochers (Eds.), What is so Austrian about Austrian Economics? (Advances in Austrian Economics., Vol. 14, pp. 113–143).
McMullen, J. S., & Shepherd, D. A. (2006). Entrepreneurial action and the role of uncertainty in the theory of the entrepreneur. Academy of Management Review, 31(1), 132–152.
Mellahi, K., & Wilkinson, A. (2010). A study of the association between level of slack reduction following downsizing and innovation output. Journal of Management Studies, 47(3), 483–508.
Merges, R. P., & Nelson, R. R. (1990). On the complex economics of patent scope. Columbia Law Review, 90(4), 839–916.
Merton, R. K. (1968). The Matthew effect in science. Science, 159(3810), 56.
Mishina, Y., Pollock, T. G., & Porac, J. F. (2004). Are more resources always better for growth? Resource stickiness in market and product expansion. Strategic Management Journal, 25(12), 1179–1197.
REFERENCES 127
Moreau, C. P., & Dahl, D. W. (2005). Designing the solution: The impact of constraints on consumers’ creativity. Journal of Consumer Research, 32(1), 13–22.
Mosakowski, E. (2002). Overcoming resource disadvantages in entrepreneurial firms: When less is more. In M. A. Hitt, Ireland, R. Duane, Camp, S. Michael, & Saxton, Donald L. (Eds.), Strategic entrepreneurship: Creating a new mindset. Oxford, UK: Wiley-Blackwell.
Moses, O. D. (1992). Organizational slack and risk-taking behaviour: tests of product pricing strategy. Journal of Organizational Change Management, 5(3), 38–54.
Mosey, S., & Wright, M. (2007). From human capital to social capital: A longitudinal study of technology‐based academic entrepreneurs. Entrepreneurship Theory and Practice, 31(6), 909–935.
Mowery, D. C., Nelson, R. R., Sampat, B. N., & Ziedonis, A. A. (2001). The growth of patenting and licensing by US universities: an assessment of the effects of the Bayh-Dole act of 1980. Research policy, 30(1), 99–119.
Mowery, D. C., & Sampat, B. N. (2001). Patenting and Licensing University Inventions: Lessons from the History of the Research Corporation. Industrial and Corporate Change, 10(2), 317–355.
Murray, F., & Graham, L. (2007). Buying science and selling science: gender differences in the market for commercial science. Industrial and Corporate Change, 16(4), 657 –689.
Musso, P., & Schiavo, S. (2008). The impact of financial constraints on firm survival and growth. Journal of Evolutionary Economics, 18(2), 135–149.
Mustar, P. (1997). How French academics create hi-tech companies: The conditions for success or failure. Science and Public Policy, 24(1), 37–44.
Mustar, P., Wright, M., & Clarysse, B. (2008). University spin-off firms: lessons from ten years of experience in Europe. Science and Public Policy, 35(2), 67–80.
National Academy of Sciences. (n.d.). Retrieved August 2, 2012, from http://www.nasonline.org/
Nelsen, L. (1998). The rise of intellectual property protection in the American university. Science, 279(5356), 1460–1461.
128 REFERENCES
Nelson, Richard R., & Winter, S. G. (1982). An evolutionary theory of economic
change. Cambridge, MA: Belknap Press.
Nerkar, A., & Shane, S. (2007). Determinants of invention commercialization: An empirical examination of academically sourced inventions. Strategic Management Journal, 28(11), 1155–1166.
Nicolaou, N., & Birley, S. (2003). Social networks in organizational emergence: The university spinout phenomenon. Management Science, 49(12), 1702–1725.
Nohria, N., & Gulati, R. (1996). Is slack good or bad for innovation? Academy of Management Journal, 39(5), 1245–1264.
O’Brien, J. P. (2003). The capital structure implications of pursuing a strategy of innovation. Strategic Management Journal, 24(5), 415–431.
O’Shea, R., Allen, T. J., O’Gorman, C., & Roche, F. (2004). Universities and technology transfer: A review of academic entrepreneurship literature. Irish Journal of Management, 25(2), 11–29.
O’Shea, R., Chugh, H., & Allen, T. J. (2008). Determinants and consequences of university spinoff activity: a conceptual framework. The Journal of Technology Transfer, 33, 653–666.
Owen-Smith, J., & Powell, W. W. (2003). The expanding role of university patenting in the life sciences: assessing the importance of experience and connectivity. Research Policy, 32(9), 1695–1711.
Penrose, E. (1959). The theory of the growth of the firm. New York, NY: Wiley.
Pfeffer, J., & Salancik, G. R. (2003). The external control of organizations: A resource dependence perspective. Stanford, CA: Stanford University Press.
Podolny, J. M. (1993). A status-based model of market competition. American Journal of Sociology, 829–872.
Podolny, J. M. (1994). Market uncertainty and the social character of economic exchange. Administrative Science Quarterly, 39(3), 458–483.
Podolny, J. M., & Phillips, D. J. (1996). The Dynamics of Organizational Status. Industrial and Corporate Change, 5(2), 453–471.
Podolny, J. M., & Stuart, T. E. (1995). A role-based ecology of technological change. American Journal of Sociology, 100(5), 1224–1260.
Porac, J. F., Thomas, H., & Baden-Fuller, C. (1989). Competitive groups as cognitive communities: The case of the Scottish knitwear manufacturers. Journal of Management Studies, 26(4), 397–416.
REFERENCES 129
Pressman, L. (2002). AUTM licensing survey FY 2000. Northbrook, IL: Association of University Technology Managers.
Read, S., & Dolmans, S. A. M. (2012). Effectuation 10 year waypoint. International Review of Entrepreneurship, 10(1).
Renko, M., Reynolds, P. D., & Carsrud, A. L. (2010). Financial slack resources, firm birth, and early growth. Paper presented at the 2010 Academy of Management Conference.
Roberts, E. B., & Malone, D. E. (1996). Policies and structures for spinning off new companies from research and development organizations. R&D Management, 26(1), 17–48.
Roessner, D., Bond, J., Okubo, S., & Planting, M. (2013). The economic impact of licensed commercialized inventions originating in university research. Research Policy, 42(1), 23–34.
Romme, A. G. L. (2004). Unanimity rule and organizational decision making: A simulation model. Organization Science, 15(6), 704–718.
Romme, A. G. L. (2011). Organizational development interventions: An artifaction perspective. The Journal of Applied Behavioral Science, 47(1), 8–32.
Rosenberg, N. (1996). Uncertainty and technological change. In R. Landau, T. Taylor, & G. Wright (Eds.), The Mosaic of economic growth. Stanford, CA: Stanford University Press.
Ross, J., & Staw, B. M. (1993). Organizational escalation and exit: Lessons from the Shoreham nuclear power plant. Academy of Management Journal, 36(4), 701–732.
Rothaermel, F. T., Agung, S. D., & Jiang, L. (2007). University entrepreneurship: a taxonomy of the literature. Industrial and Corporate Change, 1–101.
Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2), 243–263.
Sarasvathy, S. D., & Dew, N. (2005). New market creation through transformation. Journal of Evolutionary Economics, 15(5), 533–565.
Sarasvathy, S. D., Dew, N., Read, S., & Wiltbank, R. (2008). Designing organizations that design environments: Lessons from entrepreneurial expertise. Organization Studies, 29(3), 331–350.
Sawyer, K. (2008). Group genius: The creative power of collaboration. New York, NY: Basic Books.
130 REFERENCES
Sawyer, K., & DeZutter, S. (2009). Distributed creativity: How collective
creations emerge from collaboration. Psychology of Aesthetics, Creativity, and the Arts, 3(2), 81–92.
Schumpeter, J. A. (1934). The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle. Oxford, UK.
Scott, W. R. (1987). Organizations: Rational, natural, and open systems. Upper Saddle River, NJ: Prentice Hall.
Seifert, R. W., Leleux, B. F., & Tucci, C. L. (2008). Nurturing Science-based Ventures. New York, NY: Springer.
Shane, S. (2000). Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11(4), 448–469.
Shane, S. (2001). Technological opportunities and new firm creation. Management Science, 47(2), 205–220.
Shane, S. (2004). Academic entrepreneurship: University spinoffs and wealth creation. Edward Elgar Publishing.
Shane, S. (2005). What Makes University Inventions Appropriate for Spin-offs? Unpublished manuscript.
Shane, S., & Cable, D. (2002). Network ties, reputation, and the financing of new ventures. Management Science, 48(3), 364–381.
Shane, S., & Khurana, R. (2003). Bringing individuals back in: the effects of career experience on new firm founding. Industrial and Corporate Change, 12(3), 519–543.
Shane, S., & Stuart, T. E. (2002). Organizational endowments and the performance of university start-ups. Management Science, 48(1), 154–170.
Shane, S., & Venkataraman, S. (2000). The Promise of Entrepreneurship as a Field of Research. The Academy of Management Review, 25(1), 217–226.
Sharfman, M. P., Wolf, G., Chase, R. B., & Tansik, D. A. (1988). Antecedents of organizational slack. Academy of Management Review, 13(4), 601–614.
Siegel, D. S., Veugelers, R., & Wright, M. (2007). Technology transfer offices and commercialization of university intellectual property: Performance and policy implications. Oxford Review of Economic Policy, 23(4), 640 –660.
Siegel, D. S., Waldman, D. A., Atwater, L. E., & Link, A. N. (2003). Commercial knowledge transfers from universities to firms:
REFERENCES 131
improving the effectiveness of university-industry collaboration. The Journal of High Technology Management Research, 14(1), 111–133.
Siegel, D. S., Waldman, D. A., Atwater, L. E., & Link, A. N. (2004). Toward a model of the effective transfer of scientific knowledge from academicians to practitioners: Qualitative evidence from the commercialization of university technologies*. Journal of Engineering and Technology Management, 21(1-2), 115–142.
Siegel, D. S., Waldman, D., & Link, A. N. (2003). Assessing the impact of organizational practices on the relative productivity of university technology transfer offices: An exploratory study. Research Policy, 32(1), 27–48.
Siegel, D. S., Wright, M., & Lockett, A. (2007). The rise of entrepreneurial activity at universities: Organizational and societal implications. Industrial and Corporate Change, 16(4), 489 –504.
Simcoe, T. S., & Waguespack, D. M. (2011). Status, quality, and attention: What’s in a (missing) name? Management Science, 57(2), 274–290.
Sine, W. D., Shane, S., & Gregorio, D. D. (2003). The halo effect and technology licensing: The influence of institutional prestige on the licensing of university inventions. Management Science, 49(4), 478–496.
Singh, J. V. (1986). Performance, slack, and risk taking in organizational decision making. Academy of Management Journal, 29(3), 562–585.
Song, M., Podoynitsyna, K., Van Der Bij, H., & Halman, J. I. M. (2008). Success factors in new ventures: A meta-analysis*. Journal of Product Innovation Management, 25(1), 7–27.
Sorensen, J. B., & Stuart, T. E. (2000). Aging, obsolescence, and organizational innovation. Administrative Science Quarterly, 45(1), 81–112.
Starbuck, W. H. (2004). Vita contemplativa: Why I stopped trying to understand the real world. Organization Studies, 25(7), 1233–1254.
Starbuck, W. H. (2006). The production of knowledge: The challenge of social science research. Oxford, UK: Oxford University Press.
Starr, J. A., & MacMillan, I. C. (1990). Resource cooptation via social contracting: Resource acquisition strategies for new ventures. Strategic Management Journal, 11, 79–92.
Stephan, P. E., & El-Ganainy, A. (2007). The entrepreneurial puzzle: Explaining the gender gap. The Journal of Technology Transfer, 32(5), 475–487.
132 REFERENCES
Stephan, P. E., & Levin, S. G. (2001). Exceptional contributions to US
science by the foreign-born and foreign-educated. Population Research and Policy Review, 20(1), 59–79.
Sterman, J. (2000). Business dynamics. New York, NY: Irwin-McGraw-Hill.
Stinchcombe, A. L. (1965). Organizations and social structure. In J. G. March (Ed.), Handbook of organizations (pp. 142–193). Chicago, IL: Rand McNally.
Stuart, T. E., Hoang, H., & Hybels, R. C. (1999). Interorganizational endorsements and the performance of entrepreneurial ventures. Administrative Science Quarterly, 44(2), 315–349.
Tan, J., & Peng, M. W. (2003). Organizational slack and firm performance during economic transitions: Two studies from an emerging economy. Strategic Management Journal, 24(13), 1249–1263.
Teece, D. J. (1986). Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy. Research Policy, 15(6), 285.
Thompson, J. D. (1967). Organizations in action: Social science bases of administrative theory. New York, NY: McGraw-Hill.
Thursby, J. G., & Kemp, S. (2002). Growth and productive efficiency of university intellectual property licensing. Research Policy, 31(1), 109–124.
Thursby, J. G., & Thursby, M. C. (2002). Who is selling the ivory tower? Sources of growth in university licensing. Management Science, 48(1), 90–104.
Thursby, J. G., & Thursby, M. C. (2005). Gender patterns of research and licensing activity of science and engineering faculty. The Journal of Technology Transfer, 30(4), 343–353.
Tversky, A., & Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453–458.
Van Dijk, S., Berends, H., Jelinek, M., Romme, A. G. L., & Weggeman, M. (2011). Micro-institutional affordances and strategies of radical innovation. Organization Studies, 32(11), 1485–1513.
Ven, A. H. van de, & Poole, M. S. (1990). Methods for studying innovation development in the Minnesota innovation research program. Organization Science, 1(3), 313–335.
Vergne, J. P., & Durand, R. (2011). The path of most persistence: an evolutionary perspective on path dependence and dynamic capabilities. Organization Studies, 32(3), 365–382.
REFERENCES 133
Vohora, A., Wright, M., & Lockett, A. (2004). Critical junctures in the development of university high-tech spinout companies. Research Policy, 33(1), 147–175.
Von Hayek, F. A. (1937). Economics and knowledge. Economica, 4(13), 33–54.
Voss, G. B., Sirdeshmukh, D., & Voss, Z. G. (2008). The effects of slack resources and environmental threat on product exploration and exploitation. Academy of Management Journal, 51(1), 147–164.
Wadhwa, V., Jasso, G., Rissing, B., Gereffi, G., & Freeman, R. B. (2007). Intellectual property, the immigration backlog, and a reverse brain-drain: America’s new immigrant entrepreneurs, Part III. The Kauffman Foundation.
Walter, A., Auer, M., & Ritter, T. (2006). The impact of network capabilities and entrepreneurial orientation on university spin-off performance. Journal of Business Venturing, 21(4), 541–567.
Weick, K. E. (1979). The social psychology of organizing (Topics in social psychology series). Boston, MA: Addison-Wesley.
Weick, K. E. (1993). The collapse of sensemaking in organizations: The Mann Gulch disaster. Administrative Science Quarterly, 628–652.
Weick, K. E. (1995). Sensemaking in organizations. Thousand Oaks, CA: Sage.
Williamson, O. E. (1981). The economics of organization: The transaction cost approach. The American Journal of Sociology, 87(3), 548–577.
Winborg, J. (2009). Use of financial bootstrapping in new businesses: a question of last resort? Venture Capital: An International Journal of Entrepreneurial Finance, 11(1), 71–93.
Winborg, J., & Landström, H. (2001). Financial bootstrapping in small businesses: Examining small business managers’ resource acquisition behaviors. Journal of Business Venturing, 16(3), 235–254.
Wolverton, M., Ackerman, R., & Holt, S. (2005). Preparing for leadership: What academic department chairs need to know. Journal of Higher Education Policy and Management, 27(2), 227–238.
Woodman, R. W., Sawyer, J. E., & Griffin, R. W. (1993). Toward a theory of organizational creativity. Academy of Management Review, 18(2), 293–321.
Wright, M., Hmieleski, K. M., Siegel, D. S., & Ensley, M. D. (2007). The role of human capital in technological entrepreneurship. Entrepreneurship Theory and Practice, 31(6), 791–806.
134 REFERENCES
Yin, R. K. (2009). Case study research: Design and methods. Thousand Oaks,
CA: Sage.
Zahra, S. A., & Nielsen, A. P. (2002). Sources of capabilities, integration and technology commercialization. Strategic Management Journal, 23(5), 377–398.
Zeleny, M. (1982). Multiple criteria decision making. New York, NY: McGraw-Hill.
Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic Management Journal, 31(5), 547–561.
Zucker, L. G., & Darby, M. R. (1997). Individual action and the demand for institutions star scientists and institutional transformation. American Behavioral Scientist, 40(4), 502–513.
Zuckerman, H., & Merton, R. K. (1971). Patterns of evaluation in science: Institutionalisation, structure and functions of the referee system. Minerva, 9(1), 66–100.
Appendix I
Example invention disclosure - Inventor gender
treatment
Background
You have been assigned the following 4 invention disclosures which were
submitted to your university’s technology transfer office by faculty inventors.
Your technology transfer office consists of 8 full time equivalent
professionals and receives an average of 160 disclosures per year. Although
each invention is assessed on its own merits, the office seeks patents on
about 50 percent of disclosures per year. The university operates an internal
investment fund that can invest up to $250,000 in start-ups founded by
entrepreneurs who license university inventions. Please read through the
information about the invention and its inventor and then answer the
questions that follow. Because this is a controlled experiment to see how
licensing officers make decisions about technologies, we ask that you not use
any resources other than those we provide you with to make your decisions.
Please be aware of the fact that when continuing to the next invention
disclosure it is not possible to navigate back. If you experience any
difficulties in accessing the experiment or if you have any questions, please