Research Areas

Below are examples of projects conducted by ENTC researchers.

Entrepreneurial opportunity recognition and exploitation

Opportunity recognition is a defining element of entrepreneurship. We empirically study how entrepreneurs identify innovative business opportunities, how they evaluate them and how they exploit them. We base our research on decision-making theory, social identity theory, and the resource-based view.

Founder identity

In 2015, the scale we developed to measure founder identity, along with Thomas Zellweger (University of St. Gallen) and Philipp Sieger (University of Bern), was published in the Journal of Business Venturing. We also collaborate with Holger Patzelt and Nicki Breugst from the Technical University of Munich (TUM) on opportunity identification at the team level.

Business model design in technology ventures

Business models are considered key to value creation and value capture from innovation, and thus are also key to the successful launch and establishment of new ventures. Yet, despite of the importance of business models for start-up success, research investigating business models in the realm of entrepreneurship is still scant and existing work is not yet well integrated with the more general literature on business models. Moreover, a dynamic lens on business model design that incorporates learning and adaptation over time is core to improving our understanding of new venture emergence, yet largely absent from existing discussion.

Therefore, our main goal in this research project, done in collaboration with Dietmar Grichnik (St. Gallen), is to study business model antecedents, processes and outcomes in the context of new technology ventures, and to better integrate the work on business models with the major findings in entrepreneurship research. To capture the dynamic aspect of business model design, we give special emphasis to the experimentation and adaptation (“pivoting”) of business models over time.

Entrepreneurial marketing: commercializing innovative technologies

Business mortality statistics suggest that, depending on the industry in question, discontinuance rates of new ventures can be as high as 70% in the first five years. Yet, other results indicate that certain practices in new venture management considerably reduce the likelihood of failure. In particular, marketing is considered to be a major key to the success of new firms. E.g., research studies have concluded that a professional analysis of the target market can reduce venture failure rates by up to 60%. Research also has found that venture capitalists rate the overall importance of marketing for the success of new firms at 6.7 on a scale of 7, a rating that is higher than that of all other business functions. Though entrepreneurial marketing is a core to the success of new firms, theoretical and empirical knowledge on this topic is still scant. ENTCs research on entrepreneurial marketing and technology commercialization focuses on the early phases of the entrepreneurial process.

Venture capital: funding decisions & evaluation process

Studies on the investment processes of VCs and in particular on the criteria VCs employ to make their investment decisions have a relatively long tradition in entrepreneurship research, with the first studies ranging back to the 1970s. These studies have produced a number of valuable insights into the VC decision process. The results are often interpreted as direct evidence on the long-term success factors of new firms, because professional investors who earn their money by investing in new firms are considered to possess much experience in distinguishing winners from losers. Though research gives key insights into the criteria used in the evaluation process, more recent studies reveal that previous results might be misleading due to methodo­logical shortcomings, as most research in this area relies on post hoc methodologies which typically suffer from problems of recalling past information, and biases in the decision process of VCs.

We have collaborated with Dietmar Harhoff/Karin Hoisl (LMU), Joachim Henkel (TUM) and Nik Franke (WU Vienna) to improve on the literature by using experimental data collection and by employing conjoint analysis.

In another research project, we analyze archival data illustrating early-stage investors’ reasons for rejection at the time each decision was made. Our findings suggest there are a number of factors and venture characteristics, not previously considered, which drive the VC decision-making process.

Necessity entrepreneurship 

Necessity-based entrepreneurship is typically associated with developing nations, yet it is also a common phenomenon in many Western economies. For instance, of the 572’000 new businesses founded in Germany in 2004, roughly 2/3 were necessity-based enterprises, i.e. firms that were founded by unemployed individuals who chose to become self-employed by starting a new firm. In our research, we seek to better understand how these individuals identify opportunities and exploit them successfully. To inform our study, we draw on the literature on opportunity recognition, human capital theory and psychological theory.

In this research, ENTC collaborated with Prof. John Dencker at Northeastern University. Part of this decade-long project was funded by the Swiss National Science Foundation (SNF) and the Kauffman Foundation.