The fundamental uncertainty of new technologies at their earliest stages implies that it is virtually impossible to know the true potential of a venture without learning about its viability through a sequence of investments over time. Nanda and Rhodes-Kropf show how this process of experimentation can be particularly valuable in the context of entrepreneurship because most new ventures fail completely, and only a few become extremely successful. The researchers also shed light on important costs to this process of experimentation, and demonstrate how these can fundamentally alter both the rate and direction of startup innovation across industries, regions and periods of time.
This paper was distributed as Working Paper 21278, where an updated version may be available.
A long theoretical literature has analyzed optimal patent policy design, yet there is very little empirical evidence on a key empirical parameter needed to apply these models in practice: namely, the relationship between patent strength and research investments. Wiliiams argues that the dearth of empirical evidence on this question reflects two challenges — the difficulty of measuring specific research investments, and the fact that finding variation in patent protection is difficult — and summarizes the findings from two of her recent investigations which have made progress in starting to overcome these two empirical challenges (Budish, Roin and Williams (forthcoming) and Williams (2013)).
This paper was distributed as Working Paper 21246, where an updated version may be available.
Recent years have seen the emergence of a new institutional form in the entrepreneurial ecosystem: the seed accelerator. These fixed-term, cohort-based, "boot camps" for startups offer educational and mentorship programs for startup founders, exposing them to wide variety of mentors, including former entrepreneurs, venture capitalists, angel investors, and corporate executives; and culminate in a public pitch event, or "demo day," during which the graduating cohort of startup companies pitch their businesses to a large group of potential investors. In practice, accelerator programs are a combination of previously distinct services or functions that were each individually costly for an entrepreneur to find and obtain. The accelerator approach has been widely adopted by private groups, public and government efforts, and by corporations. While proliferation of accelerators is clearly evident, with worldwide
estimates of 3000+ programs in existence, research on the role and efficacy of these programs has been limited. In this article, Hochberg provides an introduction to the accelerator model and summarizes recent evidence on their effects on the regional entrepreneurial environment.