Person:

Koning, Rembrand

When do conversations lead people to generate better ideas? We conducted a field experiment at a startup boot camp to evaluate the impact of informal conversations on the quality of product ideas generated by participants. Specifically, we examine how the personality of an innovator (openness to experience, capturing creativity) and the personalities of her randomly assigned conversational peers (extroversion, measuring willingness to share information) affects the innovator's ideas. We find that open innovators who spoke with extroverted peers generated significantly better ideas than others at the boot camp. However, closed individuals produced mediocre ideas regardless of the individuals they interviewed, suggesting limited benefits of conversations for these people. More surprisingly, open individuals, who are believed to be inherently creative, produced worse ideas after they spoke with introverted peers, suggesting individual creativity's dependence on external information. Our study demonstrates the importance of considering the traits of both innovators and their conversational peers in predicting who will generate the best ideas.

Recent scholarship argues that experimentation should be the organizing principle for entrepreneurial strategy. Experimentation leads to organizational learning, which drives improvements in firm performance. We investigate this proposition by exploiting the time-varying adoption of A/B testing technology, which has drastically reduced the cost of testing business ideas. Our results provide the first evidence on how digital experimentation affects a large sample of high-technology start-ups using data that tracks their growth, technology use, and products. We find that, although relatively few firms adopt A/B testing, among those that do, performance improves by 30%–100% after a year of use. We then argue that this substantial effect and relatively low adoption rate arises because start-ups do not only test one-off incremental changes, but also use A/B testing as part of a broader strategy of experimentation. Qualitative insights and additional quantitative analyses show that experimentation improves organizational learning, which helps start-ups develop more new products, identify and scale promising ideas, and fail faster when they receive negative signals. These findings inform the literatures on entrepreneurial strategy, organizational learning, and data-driven decision making.

Why do some entrepreneurs thrive while others fail? We explore whether the advice entrepreneurs receive about managing their employees influences their startup's performance. We conducted a randomized field experiment in India with 100 high‐growth technology firms whose founders received in‐person advice from other entrepreneurs who varied in their managerial style. We find that entrepreneurs who received advice from peers with a formal approach to managing people—instituting regular meetings, setting goals consistently, and providing frequent feedback to employees—grew 28% larger and were 10 percentage points less likely to fail than those who got advice from peers with an informal approach to managing people, 2 years after our intervention. Entrepreneurs with MBAs or accelerator experience did not respond to this intervention, suggesting that formal training can limit the spread of peer advice.

Can managers influence the formation of organizational networks? In this article, we evaluate the effect of joint tasks on the creation of network ties with data from a novel field experiment with 112 aspiring entrepreneurs. During the study, we randomized individuals to a set of 15 joint tasks varying in duration (week-long teams to 20-min conversations). We then evaluated the impact of these interactions on the formation and structure of individuals’ social networks. We find strong evidence that these designed interactions led to the systematic creation of new friendship and advice relations as well as changes to the participants’ network centrality. Overall, network ties formed after a randomized interaction account for about one-third the individuals a participant knows, of their friendships, and their advice relations. Nevertheless, roughly 90% of randomized interactions never become social ties of friendship or advice. A key result from our research is that while joint tasks may serve to structure the social consideration set of possible connections, individual preferences strongly shape the structure of networks. As a consequence, there will likely remain a considerable unpredictability in the presence of specific ties even when they are designed.

We conduct a field experiment at an entrepreneurship bootcamp to investigate whether interaction with proximate peers shapes a nascent startup team's performance. We find that teams whose members lack prior ties to others at the bootcamp experience peer effects that influence the quality of their product prototypes. A one-standard-deviation increase in the performance of proximate teams is related to a two-thirds standard-deviation improvement for a focal team. In contrast, we find that teams whose members have many prior ties interact less frequently with proximate peers, and thus their performance is unaffected by nearby teams. Our findings highlight how prior social connections, which are often a source of knowledge and influence, can limit new interactions and thus the ability of organizations to leverage peer effects to improve the performance of their members.

Recent field experiments demonstrate that advice, mentorship, and feedback from randomly assigned peers improve entrepreneurial performance. These results raise a natural question: what is preventing entrepreneurs and managers from forming these peer connections themselves? We argue that entrepreneurs may be under-networked because they lack the necessary social skills—the ability to communicate effectively and interact collaboratively with new acquaintances—that allow them to match efficiently with knowledgeable peers. We use a field experiment in the context of a business training program in Togo to test if a short social skills training module increases the number and complementarity of peers that participants choose to learn from. We find that social skills training led entrepreneurs to match with 50% more peers and that more of those matches were based on complementary managerial skill. Finally, the training also increased entrepreneurs’ monthly profits by approximately 20%. Further analyses point to improvements in networking and advice as the drivers of performance improvements. Our findings suggest that social skills help entrepreneurs build relationships that create value for both themselves and their peers. The online appendix and data are available at https://doi.org/10.1287/mnsc.2022.4334 .