2020
DOI: 10.31235/osf.io/g6wjn
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Biased sampling of early users and the direction of startup innovation

Abstract: Using data from a prominent online platform for launching new digital products, we document that the composition of the platform's `beta testers' on the day a new product is launched has a systematic and persistent impact on success. Specifically, we use word embedding methods to classify products launched on this platform as more or less focused on the needs of female customers, and show that female-focused products launched on a typical day—when nine-in-ten users on the platform are men—experience 40% less g… Show more

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Cited by 3 publications
(6 citation statements)
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“…That said, later rounds of evaluation, where there is likely an opportunity to use local references and networks, may still require localized capabilities to best pick which global startups are most promising. Crucially, however, any global approach depends on accelerators revising their processes to reduce the impact of bias—in this case foreign bias—that all too often enters the evaluation of diverse and heterogenous samples (Brooks, Huang, Kearney, & Murray, 2014; Cao et al, 2021).…”
Section: Discussionmentioning
confidence: 99%
See 3 more Smart Citations
“…That said, later rounds of evaluation, where there is likely an opportunity to use local references and networks, may still require localized capabilities to best pick which global startups are most promising. Crucially, however, any global approach depends on accelerators revising their processes to reduce the impact of bias—in this case foreign bias—that all too often enters the evaluation of diverse and heterogenous samples (Brooks, Huang, Kearney, & Murray, 2014; Cao et al, 2021).…”
Section: Discussionmentioning
confidence: 99%
“…For entrepreneurs, our findings suggest caution when acting on feedback from accelerators. While past studies show that accelerators, by providing signals on startup's quality to the entrepreneur, are an important source of learning (Cohen, Bingham, & Hallen, 2019; Howell, 2020; Lyons & Zhang, 2018; Yu, 2020), such signals may lead entrepreneurs astray when they originate from a nonrepresentative sample or from biased actors (Cao et al, 2021). In our case, judges’ foreign discounting implies that the signals from accelerators may be distorted for firms from regions under‐represented among accelerator judges.…”
Section: Discussionmentioning
confidence: 99%
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“…In order to determine if a startup's product offerings are more likely to appeal to either men, women or both genders equally, we construct a measure of the product gender orientation. This measure is identical to the product gender orientation measure developed by Cao, Koning and Nanda (2020).…”
Section: Product Gender Orientationmentioning
confidence: 99%