Measure Twice, Cut Once: Scaling Novel Business Models in the Nascent Online Fashion Industry

Tidhar, Ron; Eisenhardt, Kathleen M.

doi:10.5465/ambpp.2021.12264abstract

Cited by 9 publications

(3 citation statements)

References 45 publications

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“…We also contribute to renewed scholarly conversations on scaling and growth, considering how scaling concerns may result in a degree of self‐restraint in firms' resource mobilization. Here, we build off the literature highlighting the many challenges that firms face in scaling and utilizing slack resources, as well as the perils of unmanaged growth (DeSantola & Gulati, 2017; Tidhar et al, 2023; Wasserman, 2008). Thus, whereas much of the reputation and resource mobilization literatures presupposes that firms are seeking resources (Gao et al, 2017; Hallen et al, 2020), we theorized that high‐reputation firms may be particularly self‐restraining their demand for resources out of concern for the internal challenges that scaling poses in maintaining quality.…”

Section: Discussionmentioning

confidence: 99%

“…We thus theorize that higher-reputation firms may be especially concerned about aggressive resource mobilization that may facilitate growth but also risks a firm's quality and reputation. Here, high-reputation firms may be concerned about various scaling challenges, including growth sustainability (Tidhar et al, 2023), refining and replicating processes (McDonald & Eisenhardt, 2020), recruiting additional human talent (Boeker & Wiltbank, 2005), and expanding management systems (DeSantola et al, 2023). Accordingly, higher-reputation firms may be especially likely to seek to pace their resource mobilization and growth.…”

Section: The Impact Of Market Heat On Higher-reputation Firmsmentioning

confidence: 99%

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Windows versus waves of opportunity: How reputation alters venture capital firms' resource mobilization

DeSantola,

Zhelyazkov,

Hallen

2023

Strategic Management Journal

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Research SummaryThis paper investigates how reputation affects firm responses to resource mobilization opportunities. We theorize that lower‐reputation firms are likely to be particularly responsive to resource mobilization opportunities because they are otherwise constrained. By contrast, higher‐reputation firms have access to greater resource supply and may self‐restrain demand. We test these arguments in the context of venture capital (VC) firms raising investment funds. We indeed find that lower‐reputation VCs are more responsive to opportunities presented by recent successes. Unexpectedly, we find that high‐reputation VCs are more responsive to market‐wide heat. Through multi‐method follow‐on analyses, we propose that while recent successes constitute “windows of opportunity” upon which firms act with individual discretion, hot market conditions serve as “waves of opportunity,” exerting a push on the resource mobilization of all firms and influencing their propensity toward scaling up.Managerial SummaryWe explore how low‐ and high‐reputation venture capital (VC) firms respond to fundraising opportunities such as recent successes or hot market conditions. We show that low‐reputation VCs are more likely to fundraise from limited partners in response to firm‐specific “windows of opportunity” (such as after a portfolio company IPO) because it is a rare chance to attract resource provider attention. By contrast, high‐reputation firms are more likely to fundraise at their own pace, regardless of short‐term successes. However, we unexpectedly find that high‐reputation firms are more likely than low‐reputation ones to take advantage of market‐wide “waves of opportunity” (i.e., hot markets), likely because they benefit from increased fundraising process efficiency. Our study illustrates how hot market periods may be unusually advantageous fundraising opportunities for high‐reputation firms and may be a key driver of when such firms scale up.

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Section: Discussionmentioning

confidence: 99%

Section: The Impact Of Market Heat On Higher-reputation Firmsmentioning

confidence: 99%

Windows versus waves of opportunity: How reputation alters venture capital firms' resource mobilization

DeSantola,

Zhelyazkov,

Hallen

2023

Strategic Management Journal

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“…Perhaps most telling is research by Tidhar, Hallen, and Eisenhardt (2021), who examine three pairs of firms that began in the nascent online fashion industry. The pairs have distinct business models: retail, marketplace, and rental.…”

Section: Hybrid Strategy and Moderate Uncertainty Marketsmentioning

confidence: 99%

Strategy and Uncertainty: Resource-Based View, Strategy-Creation View, and the Hybrid Between Them

Furr

Eisenhardt

2021

Journal of Management

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The resource-based view (RBV) makes a significant contribution to strategy by explaining the relationship between resources and firm performance. Particularly in low uncertainty markets, executives have the foresight and time to build strategically valuable resources in current markets and leverage them into related markets. RBV is also relevant for understanding strategies for market entry, extending the value of technology resources, and broadening the locus of resources within ecosystems. Conversely, in high uncertainty markets like nascent or disrupted ones, RBV seems less germane. Resources may not yet exist or their value (and rarity) may be indeterminate (or changing). Here, we contribute the Strategy Creation (SC) view—joining strategizing by doing, thinking, and shaping. It offers a strategic logic that fits highly uncertain markets. Finally, we contribute the insight that RBV and SC are complements under moderate uncertainty, such as growth markets and technology transitions. Overall, we propose that uncertainty forms a crucial boundary condition for RBV that distinguishes between qualitatively different strategic logics.

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What is scaling?

Bohan,

Tippmann,

Levie

et al. 2024

Journal of Business Venturing

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Measure Twice, Cut Once: Scaling Novel Business Models in the Nascent Online Fashion Industry

Cited by 9 publications

References 45 publications

Windows versus waves of opportunity: How reputation alters venture capital firms' resource mobilization

Windows versus waves of opportunity: How reputation alters venture capital firms' resource mobilization

Strategy and Uncertainty: Resource-Based View, Strategy-Creation View, and the Hybrid Between Them

What is scaling?

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