Tuesday, March 23, 2021

How Much to Know? Entrepreneur Experience and Venture Failures

We are well aware of the advantages of knowledge, both when doing something conventional and when making innovations. People who teach entrepreneurship do it because knowledge helps the foundation of a successful venture. But is there such a thing as too much knowledge?

When I work alone, more knowledge is better – it generally gives performance at a higher level, and it gives the creativity that can yield outstanding outcomes. My earlier researchon innovations in the comic book industry is one of many research projects showing this effect. Things get more complicated when multiple people come together to do something complex like founding a new venture. The great benefit of having much knowledge and many kinds of knowledge is the potential for combinations that others cannot think of. The problem with doing this in a team is that combining knowledge requires communication, and communication gets harder when each member has different types of knowledge.

So how to resolve this dilemma? Research by Florence Honoré published in Academy of Management Journal shows a nice path.
The idea is simple: variety in knowledge is great as long as it stays within one person, but teams should also have shared knowledge that transfers directly to the problem they are solving.

This makes sense if we think of specialized knowledge as roughly equivalent to languages. People with shared experience speak the same language, while people who have different experiences need to translate. A person with many kinds of knowledge is a polyglot, and that is OK because we are all good at talking to ourselves.

So what did the research show? New ventures were at great risk of failing if their venture team had a mixture of experiences across team members, and this problem got worse the more founders had earlier been employed by multiple firms. On the other hand, more shared experience among the founders helped the firms survive, and this was especially true if the venture had multiple founders who transitioned from the same prior employer to founding a venture together.  

The implication for entrepreneurship is obvious. A team with experience in the same industry that they are forming a venture in will perform better, and they will do especially well if they make sure to also have one member with a variety of experiences. And, they should listen carefully to that person, because it is exactly the integration of knowledge from this polyglot member that can benefit the venture most. In other words, this research is another win for diversity in business.

HonorĂ©, Florence. 2021. "Joining Forces: How Can Founding Members’ Prior Experience Variety and Shared Experience Increase Startup Survival?" Academy of Management Journal forthcoming.

11 comments:

  1. This post is extremely radiant. I extremely like this post. It is outstanding amongst other posts that I ve read in quite a while. Much obliged for this better than average post. I truly value it! Iaso Tea

    ReplyDelete
  2. I am continually amazed by the amount of information available on this subject.What you presented was well researched and well worded in order to get your stand on this across to all your readers. Luxury nails

    ReplyDelete
  3. Great to be here in your article or post, whatever, I figure I ought to likewise buckle down for my own site like I see some great and refreshed working in your site. tipos de mesas

    ReplyDelete
  4. Ooohhh! Now this has some heavy calories dear friends, like real heavy calories! It is a 2000 Calorie Diabetic Diet Plan great for the muscular giants to satisfy their hunger cravings and simultaneously maintain blood sugar levels in their bodies if they are diabetic.

    ReplyDelete
  5. This post is extremely radiant. I extremely like this post. It is outstanding amongst other posts that I ve read in quite a while. Much obliged for this better than average post. I truly value it!
    sa gaming

    ReplyDelete
  6. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often. 918kissme

    ReplyDelete
  7. I have to look for goals with essential information on given point and offer them to instructor our inclination and the article. vorzeitiger Samenerguss Medikament

    ReplyDelete
  8. Really good article. thanks for sharing. really informative. The business is a 300 unit apartment building in downtown Montreal .
    We are looking for help renting more of our apartments.

    ReplyDelete
  9. Great to be here in your article or post, whatever, I figure I ought to likewise buckle down for my own site like I see some great and refreshed working in your site.
    luck

    ReplyDelete
  10. This content is simply exciting and creative. I have been deciding on a institutional move and this has helped me with one aspect. Schmerzmittel Apotheke

    ReplyDelete