TY - JOUR
T1 - Jewels in the crown
T2 - Exploring the motivations and team building processes of employee entrepreneurs
AU - Shah, Sonali K.
AU - Agarwal, Rajshree
AU - Echambadi, Rajagopal
N1 - Funding Information:
information Ewing Marion Kauffman FoundationAll authors contributed equally. Special thanks go to the founders who graciously shared their time and experiences with us. We are grateful to the Ewing Marion Kauffman Foundation for their financial support. Seth Carnahan, April Franco, Hyeonsuh Lee, Eva Herbolzheimer, Holly Hunt, and Rose Kim provided stellar assistance with data compilation and analysis. The manuscript has benefited from comments by Howard Aldrich, Serguey Braguinsky, Kathy Eisenhardt, Alfonso Gambardella, Florence Honore, Samina Karim, Myriam Mariani, Charlie Williams, Rosemarie Ziedonis, two anonymous reviewers and participants at the 2016 Bocconi Innovation Diffusion workshop, the 2017 SMS Banff conference, the 2017 Academy of Management Conference, and in seminars at Universities of Colorado School of Law, Maryland, Michigan, and Southern California. All remaining errors are ours.
PY - 2019/9
Y1 - 2019/9
N2 - Research Summary: This study examines motivations and team building processes of employee entrepreneurs in the disk-drive industry. Our inductive, grounded theory building approach uncovers that ringleaders—founders who spearhead spinout creation—are driven by a nonpecuniary desire to create in a fertile environment, when they encounter frictions within the parent firm. Cofounders share the desire to create, but ensure departure on good terms to retain the option of returning to paid employment as a safeguard against entrepreneurial risk. We uncover an endogenous team building process in which more successful founding teams engage in “workplace instrumentality”—creating workplaces through deliberate selection of cofounders who have complementary functional knowledge, but are similar in that they possess superior problem-solving abilities, best-in-class talent, and common workplace values. Managerial Summary: The paper examines the motivations and founding team building processes of individuals who leave existing firms to create new ventures. In contrast to conventional wisdom that suggests preformed teams working on innovation projects leave together, we find founding teams are created when a “ringleader” chooses to venture out and subsequently seeks out cofounders. Ringleaders and cofounders alike are motivated by a desire to create given fertile opportunities and care deeply about equity, but ringleaders additionally experience at least one organizational push factor. Almost all founding teams are created to ensure the presence of complementary, functional knowledge. However, more successful spinouts also select cofounders who are hands on problem-solvers, best-in-class talent, and who share common workplace values.
AB - Research Summary: This study examines motivations and team building processes of employee entrepreneurs in the disk-drive industry. Our inductive, grounded theory building approach uncovers that ringleaders—founders who spearhead spinout creation—are driven by a nonpecuniary desire to create in a fertile environment, when they encounter frictions within the parent firm. Cofounders share the desire to create, but ensure departure on good terms to retain the option of returning to paid employment as a safeguard against entrepreneurial risk. We uncover an endogenous team building process in which more successful founding teams engage in “workplace instrumentality”—creating workplaces through deliberate selection of cofounders who have complementary functional knowledge, but are similar in that they possess superior problem-solving abilities, best-in-class talent, and common workplace values. Managerial Summary: The paper examines the motivations and founding team building processes of individuals who leave existing firms to create new ventures. In contrast to conventional wisdom that suggests preformed teams working on innovation projects leave together, we find founding teams are created when a “ringleader” chooses to venture out and subsequently seeks out cofounders. Ringleaders and cofounders alike are motivated by a desire to create given fertile opportunities and care deeply about equity, but ringleaders additionally experience at least one organizational push factor. Almost all founding teams are created to ensure the presence of complementary, functional knowledge. However, more successful spinouts also select cofounders who are hands on problem-solvers, best-in-class talent, and who share common workplace values.
KW - employee entrepreneurship
KW - founder motivations
KW - founding team formation
KW - knowledge spillovers
KW - strategic human capital
UR - http://www.scopus.com/inward/record.url?scp=85065432428&partnerID=8YFLogxK
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U2 - 10.1002/smj.3027
DO - 10.1002/smj.3027
M3 - Article
AN - SCOPUS:85065432428
VL - 40
SP - 1417
EP - 1452
JO - Strategic Management Journal
JF - Strategic Management Journal
SN - 0143-2095
IS - 9
ER -