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  4. Escaping the Prior Knowledge Corridor: What shapes the Number and Variety of Market Opportunities identified before Market Entry of Technology Start-ups?
 
research article

Escaping the Prior Knowledge Corridor: What shapes the Number and Variety of Market Opportunities identified before Market Entry of Technology Start-ups?

Gruber, Marc  
•
MacMillan, I. C.
•
Thompson, J. D.
2013
Organization Science

The choice of the firm's market environment is one of the fundamental decisions of firm founders. We study the pre-entry generation of founders' market choice sets by investigating their search for market opportunities in which the firm's technological resources, as embodied in a product or service, can be commercialized. Analyzing data collected through personal interviews with founders of 496 technology ventures, we find that founding teams with more diverse industry experience and more diverse external knowledge sourcing relationships identify not only a larger number of but, in particular, more varied (distant) market opportunities. However, the extent to which strategic variety of such opportunities is identified depends on the founders' technological expertise, whereas technological expertise is less relevant in identification of the number of opportunities. Furthermore, by showing that the extent and nature of the firm's pre-entry opportunity set has a significant effect on the likelihood of subsequent firm diversification, we document how initial constraints in founders' choice sets can have a lasting impact on the growth potential that the new firm exploits over time. We discuss the implications of our findings for the literatures on organizational learning and innovation, entrepreneurship, as well as the strategy literature examining firm growth, diversification, and value creation.

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Type
research article
DOI
10.1287/orsc.1110.0721
Web of Science ID

WOS:000314086500016

Author(s)
Gruber, Marc  
MacMillan, I. C.
Thompson, J. D.
Date Issued

2013

Publisher

INFORMS

Published in
Organization Science
Issue

1/2013

Start page

280

End page

300

Subjects

choice sets

•

opportunity identification

•

external knowledge sourcing

•

entrepreneurship

•

market search landscapes

•

resource-based view

•

diversification

•

organization habitat selection

•

distant search

Editorial or Peer reviewed

REVIEWED

Written at

EPFL

EPFL units
ENTC  
Available on Infoscience
February 7, 2012
Use this identifier to reference this record
https://infoscience.epfl.ch/handle/20.500.14299/77583
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