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Prior research on business idea change focuses on when entrepreneurs resist making changes and how to implement changes effectively but misses a crucial fact: entrepreneurs have choices when it comes to business idea changes. Thus, current theory has yet to grapple with the heterogeneity of business idea change. Dividing the business idea into a core and periphery, we develop and test a theory of the relationship between negative feedback and business idea change and the performance implications of making changes to each part. Using a unique sample of 305 ventures participating in the I-Corps program across 24 cohorts, we find that entrepreneurs are most responsive to negative feedback about the core of their business idea and that only business idea changes to the core are positively related to subsequent performance. [ABSTRACT FROM AUTHOR]

Rational heuristics or simple rules have been theorized to aid entrepreneurial decision-making in uncertain and dynamic environments. While theoretically appealing, prior research has not moved much beyond theorizing and making inferences using case studies. This paper quantitatively explores the validity of rational heuristics as a strategic tool for new venture performance. We model the way in which organizations create simple rules using a machine leaning algorithm that replicates the Bayesian updating process by which individuals and organizations craft simple rules for everyday decision-making. To contrast the effectiveness of our modeled rational heuristics, we compare our results against two traditional decision- making processes: expert judge based and expert econometrician based. We find that rational heuristics are systematically more successful than the other approaches in predicting new venture performance and can be applied in a quick and frugal manner, much like the theory predicts. [ABSTRACT FROM AUTHOR]

Rational heuristics or simple rules have been theorized to aid entrepreneurial decision-making in uncertain and dynamic environments. While theoretically appealing, prior research has not moved much beyond theorizing and making inferences using case studies. This paper quantitatively explores the validity of rational heuristics as a strategic tool for new venture performance. We model the way in which organizations create simple rules using a machine leaning algorithm that replicates the Bayesian updating process by which individuals craft simple rules for everyday decision-making. To contrast the effectiveness of our modeled rational heuristics, we compare our results against a traditional, expert judge based decision-making process. We find that rational heuristics are systematically more successful than experts in predicting new venture performance and can be applied in a quick and frugal manner, much like the theory predicts. [ABSTRACT FROM AUTHOR]

Do business accelerators affect new venture performance? If so, how? We investigate these questions in the context of Start-Up Chile, an ecosystem accelerator. We focus on two treatment conditions typically found in business accelerators: basic services (cash and co-working space) and additional entrepreneurship schooling. Using a regression discontinuity design, we show that schooling bundled with basic services can significantly increase new venture performance. Instead, we find no support for causal effects of basic services by their own. Our results are consistent with analogous interventions in subsistence microenterprises, and are most relevant for ecosystem accelerators attracting young and early stage businesses. [ABSTRACT FROM AUTHOR]

This paper focuses on the antecedents of the cognitive refinements that young firms undergo as they strive to define a viable business model. Drawing from detailed data on the business model honing processes of 143 founding teams over an 8-week period and in-depth fieldwork including longitudinal interviews with founding team members, we ask whether specific search behaviors and founder characteristics drive business model change. Our findings show that searching for market information and experimenting activate the business model refinement process. Moreover specific team compositions, such as having a member with management training, have significant heterogeneous effects on the business model validation process. This paper contributes to the emerging discussion about business model change, and to the distinction between opportunity and strategy. [ABSTRACT FROM AUTHOR]

Though institutions are typically described as immutable forces that dictate behaviors and desires, they nevertheless evolve through time. Questions remain about the antecedents, characteristics and predictability of institutional change. Prior work has typically addressed this puzzle by focusing on meso- and macro-levels of society, emphasizing the way that structure imposes itself on actions. Understudied are the micro-levels of institutional change, which illuminate the way that actions modify structure. This paper analyses Start-Up Chile, a policy aimed at changing the taken-for- granted beliefs and behaviors of domestic entrepreneurs by prompting a social interaction with foreign entrepreneurs who have different beliefs and behaviors. We discovered that domestic entrepreneurs' institutional cognitive and normative attributes were successfully modified. We theorize that an externally induced collision of distinct institutions caused a change in the trajectory of the domestic institution, by exposing individuals to alternative beliefs and behaviors that they could employ to achieve their day-to-day tasks. An important implication is that--under the right circumstances--institutional trajectories can be redirected. [ABSTRACT FROM AUTHOR]

Identifying business opportunities under high uncertainty is an important skill for entrepreneurs. This study aims at extending our knowledge on how to improve individual-level business opportunity identification under conditions of uncertainty. Based on a longitudinal field study of 121 start-up entrepreneurs, we tested the role of exploration as a mediator and entrepreneurial self-efficacy as a moderator for opportunity identification. Our findings suggest that entrepreneurial self-efficacy acts as a cross-level moderator of the indirect effect of state uncertainty on the number of opportunities identified through exploration. Practical implications aimed at increasing entrepreneurial self-efficacy and exploration are discussed. [ABSTRACT FROM AUTHOR]