The role of skill versus luck in new venture survival

Abstract

In our paper ‘New venture survival: A review and extension’ in the International Journal of Management Reviews, we synthesized more than five decades of entrepreneurship, management and sociology research on the reasons why some new ventures survive and others fail. Based on our review and analysis, we provided an up‐to‐date systematization of the literature and a framework that includes important extensions to Stinchcombe's seminal work. Coad and Storey criticized our framework for basing venture outcome on skill—something that can be influenced by entrepreneurs and other stakeholders. In this paper, we argue that: (i) the distinction between survival and performance matters when thinking about the antecedents of these constructs; (ii) gambling is an incompatible analogy for entrepreneurship; and (iii) psychological processes cannot be ignored when studying new ventures’ survival. We also correct some points made by Coad and Storey about our findings. We encourage future studies on new venture survival to be cautious of adopting a view of venturing as a ‘game of chance’—which is, in our perspective, a potentially discouraging view for people pursuing entrepreneurship.

Immersed in Coleman's bathtub: multilevel dynamics driving new venture survival in emerging markets

“…, 2000; Soto-Simeone et al. , 2020; Soto-Simeone et al. , 2021) through a context-focused extension of Coleman's (1990) model.…”

“…Contributions and directions for future research First, we sought to extend the new venture survival literature (e.g. Antretter et al, 2019;Linder et al, 2020;Shepherd et al, 2000;Soto-Simeone et al, 2020;Soto-Simeone et al, 2021) through a context-focused extension of Coleman's (1990) model. Our examination of the interplays between an entrepreneur's perceptions of the uncertainties they might face in relation to the local institutional environment helped bring understanding of the lived experiences of the typical local entrepreneur to the forefront-also responding to recent calls for challenging entrepreneurship research orthodoxies, in this case related to the "otherness" framing tendencies of predominantly Anglo-centric research in the developing world (Pidduck and Tucker, 2022).…”

“…, 2000; Soto-Simeone et al. , 2020; Soto-Simeone et al. , 2021) by extending Coleman's model to the emerging market context.…”

“…First, we advance theory in new venture survival research (e.g. Antretter et al, 2019;Linder et al, 2020;Shepherd et al, 2000;Soto-Simeone et al, 2020;Soto-Simeone et al, 2021) by extending Coleman's model to the emerging market context. Specifically, we shed light on the importance of understanding the "lived experiences" (i.e.…”

Ex Ante Predictability of Rapid Growth: A Design Science Approach

“…These three viewpoints are novel, especially so when considered jointly, because they shift attention away from the general statistical predictability of HGEs and bear directly on the practical relevance of HGE predictions and ML in entrepreneurship research (see Le´vesque et al, 2022;Wiklund et al, 2011). 2 Our study builds upon scholarly work on (i) how and why certain firms survive and grow, whereas others shrink and exit (e.g., Abootorabi et al, 2021;Coad, 2009;Coad et al, 2016;Davidsson et al, 2010); (ii) whether firm growth is nearly random (e.g., Coad et al, 2013;Derbyshire & Garnsey, 2014;Schneck et al, 2021;Soto-Simeone et al, 2021); and (iii) the predictability of rapid growth and HGEs (e.g., Coad & Srhoj, 2020;Coad et al, 2014;Henrekson & Johansson, 2010;Weinblat, 2018). We also refer to studies using ML methods to explore ventures' performance (e.g., Barboza et al, 2017;Blohm et al, 2022;Guzman & Stern, 2020;Kaiser & Kuhn, 2020;McKenzie & Sansone, 2019;Megaravalli & Sampagnaro, 2019;Miyakawa et al, 2017;Sharchilev et al, 2018;van Witteloostuijn & Kolkman, 2019; see also Bargagli-Stoffi et al, 2021).…”