"Boundary-Crossing Job Mobility, New Product Area Entry and Performance of Entrepreneurial Ventures"

Abstract

How does career boundary-crossing affect an entrepreneur's new venture? When entrepreneurs cross industry or functional boundaries to lead startups, they may lack specific experience needed for performance. Conversely, the diverse experiences they carry can enhance exploration and lead to the emergence of innovation in startups. We highlight important consequences of career boundary-crossing, using a multi-industry longitudinal sample of hightechnology firms. We find that entrepreneurs who cross functional boundaries are more likely to lead their startups into new product areas. We also find that entrepreneurs' industry boundarycrossing is associated with startup failure, but it also increases the probability of an IPO.Research paper

The Paradox of Breadth: The Tension between Experience and Legitimacy in the Transition to Entrepreneurship

“…Second, scholars have theorized that broad functional experience reduces the costs of accessing resources, as entrepreneurs can perform a variety of tasks independently (Davidsson and Honig, 2003; Vissa, 2012). As Lazear (2005: 650) explained, “Even when entrepreneurs can hire others, they must be sufficiently well versed in a variety of fields to judge the quality of applicants.” More generally, the returns to the variety of experience should be positive for entrepreneurs, allowing individuals to recombine the knowledge and skills conducive to forming a new venture (Dokko and Wu, 2013). Balanced skills are particularly conducive to entrepreneurship because founders are usually responsible for a wide variety of functions, including identifying a value-creation opportunity in the market, conceptualizing the basic product, and designing entrepreneurial strategy for a new venture.…”