Full Steam Ahead or Abandon Ship? An Empirical Investigation of Complete Pivot Decisions

Wood, Matthew; Palich, Leslie E.; Browder, Russell E.

doi:10.1111/jsbm.12437

Cited by 27 publications

(33 citation statements)

References 99 publications

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“…However, recombining existing resources is only part of the overall conceptualization of resourcefulness. Other aspects of resourcefulness include stretching (Sonenshein, 2017), entrepreneur frugality (Michaelis et al, 2020), leveraging ones' imagination to transform resources into means (Kier & McMullen, 2018), goal‐based orientations toward venture survival (Josefy, Harrison, Sirmon, & Carnes, 2017; Paik, 2014), unorthodox entrepreneurial hustle behaviors (Fisher, Stevenson, & Burnell, 2020; Fisher, Stevenson, Neubert, et al, 2020), perseverance in the form of grit (Duckworth, Peterson, Matthews, & Kelly, 2007; Mueller, Wolfe, & Syed, 2017), and proactive entrepreneurial actions such as pivoting (Grimes, 2018; Kirtley & O'Mahony, 2020; Wood, Palich, & Browder, 2019). We focus directly on stretching behaviors (Sonenshein, 2017) in this research because of our empirical reliance on financial resources in the form of grants.…”

Section: Discussionmentioning

confidence: 99%

Do policy makers take grants for granted? The efficacy of public sponsorship for innovative entrepreneurship

Stevenson

Kier

Taylor

2020

Strategic Entrepreneurship

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Research Summary We investigate the short‐ and long‐term effects of public sponsorship in the form of grants on venture growth and subsequent investment funding. We adopt a temporal approach and assess our results using discontinuous growth modeling. This approach allows us to unpack the complexity of sponsorship interventions and provide insights into how quickly, how long, and under what conditions grants augment growth. Using a proprietary sample of 129 ventures located in eight incubators, we find that securing an initial grant increases the rate at which ventures acquire private investment capital but not revenue over time. We draw on resourcefulness theory and signaling theory and explore the moderating role of venture size. We discuss our contributions to the entrepreneurship and public policy literatures. Managerial Summary Are public grants effective at sparking entrepreneurial growth? To deepen our understanding of public policies that are designed to promote innovative entrepreneurship, we investigate the short‐ and long‐term effects of new venture grant sponsorship. We study 129 ventures located in eight business incubators over a 4‐year period. Our results indicate that although there are initial advantages to receiving a grant, there are also potential shortcomings as grant receipt does not directly influence long‐term revenue growth. We theorize that having abundant access to grant capital reduces the ventures need to “stretch” resources and grow revenue over time. Yet, initial grants seem to signal to investors that the venture represent a “good bet” as investment trajectories follow the opposite growth pattern, increasing steadily over time.

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Section: Discussionmentioning

confidence: 99%

Do policy makers take grants for granted? The efficacy of public sponsorship for innovative entrepreneurship

Stevenson

Kier

Taylor

2020

Strategic Entrepreneurship

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“…The extreme version of perseverance is no change in either dimension. The extreme version of a pivot is what Blank (2013) referred to as a restart and Wood et al (2019) referred to as a complete pivot-abandoning the "initial offering in favor of a completely new concept." In many ways, a complete pivot is consistent with the notion of termination of a particular startup effort.…”

Section: Building Block 5: Persevere or Pivot With Course Of Actionmentioning

confidence: 99%

The Lean Startup Framework: Closing the Academic–Practitioner Divide

Shepherd

Gruber

2020

Entrepreneurship Theory and Practice

213

159

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The lean startup framework is one of the most popular contributions in the practitioner-oriented entrepreneurship literature. This study seeks to generate new insights into how new ventures are started by describing the five main building blocks of the lean startup framework (business model, validated learning/customer development, minimum viable product, perseverance vs. pivoting, market-opportunity navigation), enriching the framework with existing research findings, and proposing promising research opportunities in a way that reduces the academic−practitioner divide. In so doing, we hope to enhance researchers’ understanding of the startup process; provide knowledge for educators; and, ultimately, improve the startup process for practitioners.

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“…From the cognitive stream, the analysis identified that the recognition stage may be influenced by individual differences, biases and how entrepreneurs frame information and uncertainty (Grimes, 2018). Wood et al (2019Wood et al ( , p. 1642) point out that entrepreneurs' interpretations, aspirations and judgments concerning their firm's performance and future alternatives affect the risk preferences and the attributions and measurements of a missed revenue projection. They state that "the greater the disparity between aspiration levels and actual outcomes, the more willing the decision-maker will be to consider more radical change options, such as complete pivots.…”

Section: Recognitionmentioning

confidence: 99%

Pivot decisions in startups: a systematic literature review

Chaparro

Gomes

2021

IJEBR

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PurposeEntrepreneurs' pivot decisions are poorly understood. The purpose of this paper is to review the existing literature on pivot decisions to identify the different conceptualizations, research streams and main theoretical building blocks and to offer a baseline framework for future studies on this phenomenon.Design/methodology/approachA systematic literature review of 86 peer-reviewed papers published between January 2008 and October 2020, focusing on the pivot decision in startups, was performed through bibliometric, descriptive and content analyses.FindingsThe literature review identifies four research streams concerning the pivot concept – pivot design, cognitive, negotiation and environmental perspectives. Building on previous studies, this paper provides a refined definition of a pivot that bridges elements from the four research streams identified: a pivot comprises strategic decisions made after a failure (or in the face of potential failure) of the current business model and leads to changes in the firm's course of action, resource reconfiguration and possible modifications of one or more business model elements. This study proposes a framework that elaborates the pivot literature by identifying four stages of the pivot process addressed in the existing literature: recognition, generating options, seizing and testing and reconfiguration.Originality/valueThis study provides a comprehensive review, enabling researchers to establish a baseline for developing future pivot research. Furthermore, it improves the conceptualization of pivots by summarizing prior definitions and proposing a refined definition that places decision-making and judgment at its center. That introduces new contextual and behavioral elements, contributing to a better understanding of how entrepreneurs assess alternative courses of action and envision possible outcomes to redirect a venture after failure.

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Full Steam Ahead or Abandon Ship? An Empirical Investigation of Complete Pivot Decisions

Cited by 27 publications

References 99 publications

Do policy makers take grants for granted? The efficacy of public sponsorship for innovative entrepreneurship

Do policy makers take grants for granted? The efficacy of public sponsorship for innovative entrepreneurship

The Lean Startup Framework: Closing the Academic–Practitioner Divide

Pivot decisions in startups: a systematic literature review

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