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Entrepreneurship

Entrepreneurship

    • Article

    Entrepreneurship as Experimentation

    By: William R. Kerr, Ramana Nanda and Matthew Rhodes-Kropf

    Entrepreneurship research is on the rise, but many questions about its fundamental nature still exist. We argue that entrepreneurship is about experimentation: the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level, investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency, and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences.

    • Article

    Entrepreneurship as Experimentation

    By: William R. Kerr, Ramana Nanda and Matthew Rhodes-Kropf

    Entrepreneurship research is on the rise, but many questions about its fundamental nature still exist. We argue that entrepreneurship is about experimentation: the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of...

    • January 2014 (Revised October 2014)
    • Case

    Andreessen Horowitz

    By: Thomas R. Eisenmann and Liz Kind

    Andreessen Horowitz (a16z), a venture capital firm launched in 2009, has quickly broken into the VC industry's top ranks, in terms of its ability to invest in Silicon Valley's most promising startups. The case recounts the firm's history; describes its co-founders' motivations and their strategy for disrupting an industry in the midst of dramatic structural change; and asks whether a16z's success to date has been due to its novel organization structure. a16z's 22 investment professionals are supported by 43 recruiting and marketing specialists—an "operating team" that is an order of magnitude larger than that of any other VC firm. Furthermore, the operating team aims to not only assist a16z portfolio companies, but also to be broadly helpful to all parties in the Silicon Valley ecosystem, including search firms, journalists, PR agencies, and Fortune 500 executives. The bet: by providing "no-strings-attached" help to ecosystem partners, the partners might someday reciprocate by steering founders seeking funding to a16z. The case closes by asking whether a16z should seek to double its scale over the next years.

    • January 2014 (Revised October 2014)
    • Case

    Andreessen Horowitz

    By: Thomas R. Eisenmann and Liz Kind

    Andreessen Horowitz (a16z), a venture capital firm launched in 2009, has quickly broken into the VC industry's top ranks, in terms of its ability to invest in Silicon Valley's most promising startups. The case recounts the firm's history; describes its co-founders' motivations and their strategy for disrupting an industry in the midst of dramatic...

    • February 2014
    • Background Note

    Raising Startup Capital

    By: Jeffrey Bussgang

    Entrepreneurs typically focus their full energies on business-building. But raising capital is a core part of building a valuable business. Developing expertise in raising capital is more than a necessary evil, it is a competitive weapon. Master it and you will be in a better position to make your company a massive success. But how do you finance a new venture? In this note, I will try to help answer this question by addressing the following topics: Types of funding. The two major types of startup capital are equity funding and debt funding although there are a few hybrid flavors as well. Sources of funding. These include venture capital firms, angel investors, crowd-funding, and accelerators/incubators. What investors look for. Each source has a different funding process and set of criteria which you need to understand before seeking funding from that source. The mechanics of equity funding. Seeking and securing funding involves setting amounts, agreeing to terms, and defining relationships.

    • February 2014
    • Background Note

    Raising Startup Capital

    By: Jeffrey Bussgang

    Entrepreneurs typically focus their full energies on business-building. But raising capital is a core part of building a valuable business. Developing expertise in raising capital is more than a necessary evil, it is a competitive weapon. Master it and you will be in a better position to make your company a massive success. But how do you finance...

    • January 2014
    • Article

    The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

    By: William R. Kerr, Josh Lerner and Antoinette Schoar

    This paper documents that ventures that are funded by two successful angel groups experience superior outcomes to rejected ventures: they have improved survival, exits, employment, patenting, web traffic, and financing. We use strong discontinuities in angel funding behavior over small changes in their collective interest levels to implement a regression discontinuity approach. We confirm the positive effects for venture operations, with qualitative support for a higher likelihood of successful exits. On the other hand, there is no difference in access to additional financing around the discontinuity. This might suggest that financing is not a central input of angel groups.

    • January 2014
    • Article

    The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

    By: William R. Kerr, Josh Lerner and Antoinette Schoar

    This paper documents that ventures that are funded by two successful angel groups experience superior outcomes to rejected ventures: they have improved survival, exits, employment, patenting, web traffic, and financing. We use strong discontinuities in angel funding behavior over small changes in their collective interest levels to implement a...

    • September 2014 (Revised December 2014)
    • Case

    The Ullens Center for Contemporary Art

    By: Mukti Khaire and Nancy Hua Dai

    Since its opening in Beijing in November 2007 as the first non-profit art center in China, UCCA had been operating with the mission to "promote the continued development of the Chinese art scene, foster international exchange, and showcase the latest in art and culture to hundreds of thousands of visitors each year." For the past six years, UCCA had worked with more than 100 artists and designers to present 87 art exhibitions and 1,826 public programs to over 1.8 million visitors, including many important leaders from all over the world. Given the context of the economic and political environment in the rapidly changing Chinese art market, the founders and senior management of UCCA wondered what they could do to achieve growth and financial viability while continuing to realize their mission.

    • September 2014 (Revised December 2014)
    • Case

    The Ullens Center for Contemporary Art

    By: Mukti Khaire and Nancy Hua Dai

    Since its opening in Beijing in November 2007 as the first non-profit art center in China, UCCA had been operating with the mission to "promote the continued development of the Chinese art scene, foster international exchange, and showcase the latest in art and culture to hundreds of thousands of visitors each year." For the past six years, UCCA...

    • 2014
    • Discussion Paper

    The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?

    By: Dina D. Pomeranz

    The microfinance revolution has transformed access to financial services for low-income populations worldwide. As a result, it has become one of the most talked-about innovations in global development in recent decades. However, its expansion has not been without controversy. While many hailed it as a way to end world poverty and promote female empowerment, others condemned it as a disaster for the poor. Female empowerment has often been seen as one of the key promises of the industry. In part, this is based on the fact that more than 80% of its poorest clients, i.e., those who live on less than $1.25/day, are women. This paper discusses what we have learned so far about the potential and limits of microfinance and how insights from research and practice can help inform the industry's current products, policies and future developments.

    • 2014
    • Discussion Paper

    The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?

    By: Dina D. Pomeranz

    The microfinance revolution has transformed access to financial services for low-income populations worldwide. As a result, it has become one of the most talked-about innovations in global development in recent decades. However, its expansion has not been without controversy. While many hailed it as a way to end world poverty and promote female...

Initiatives & Projects

The Arthur Rock Center for Entrepreneurship and the Social Enterprise Initiative encourage innovation to address the large-scale issues that beset society.
Entrepreneurship
Social Enterprise

Our long tradition of research in Entrepreneurship goes back to the 1930's and 1940's with the “the father of venture capitalism,” General Georges Doriot, and Joseph Schumpeter’s theory of innovation as a process of “creative destruction.” Building on our intellectual roots, our scholars come from disciplines including economics, finance, sociology, strategy, business history, management, and social entrepreneurship. A number of our faculty come from practice as venture capitalists and start-up founders. We focus our research on the identification and pursuit of entrepreneurial opportunities; domestic and international funding of entrepreneurial endeavors; innovation, particularly technological innovation in international ventures; the environments in which entrepreneurs make decisions; and social entrepreneurship. As our research contributes new insights, we are advancing the world’s understanding of complex entrepreneurial issues and helping to increase the entrepreneurial success of our students and practitioners worldwide.

Initiatives & Projects

The Arthur Rock Center for Entrepreneurship and the Social Enterprise Initiative encourage innovation to address the large-scale issues that beset society.

Entrepreneurship
Social Enterprise

Recent Publications

How to Identify the Perfect Cofounder

By: Julia Austin
  • July–August 2025 |
  • Article |
  • Harvard Business Review
One of the first and most important decisions entrepreneurs make is whether to go it alone or bring on cofounders. Many investors favor startups with multiple founders, believing that a team reduces business risk by diversifying skills, sharing responsibilities, and preventing burnout. But forcing a cofounder relationship can do more harm than good: Research has shown that conflict within the founding team is one of the primary reasons high-potential startups fail. Entrepreneurs should consider bringing on a cofounder if they have unmet needs in three key areas: partnership, expertise, and experience. Finding the right cofounder is not as difficult as finding a life partner, but it’s close. It is critical to think carefully about what you want in a cofounder and spend time nurturing prospective relationships. Key steps in the courtship process include conducting a listening tour, writing a job description, “dating” various candidates, and having a prenuptial conversation.
Keywords: Entrepreneurship; Business Startups; Partners and Partnerships; Experience and Expertise
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Austin, Julia. "How to Identify the Perfect Cofounder." Harvard Business Review 103, no. 4 (July–August 2025): 108–117.

After the Idea: What It Really Takes to Create and Scale a Startup

By: Julia Austin
  • 2025 |
  • Book |
  • Faculty Research
A lot of entrepreneurs are great at the idea part but do not anticipate the details required to actually run and scale a new venture. Drawing on my experience at renowned startups like Akamai Technologies, VMware, and DigitalOcean and the hundreds of founders and startups I have educated, coached, and advised, #AfterTheIdea is full of time-tested strategies to help founders, joiners and investors navigate the operational challenges of startup ventures, including validating problem hypotheses, building and scaling the functional areas of a business, team management, and more. This accessible set of techniques is for anyone determined to turn a great idea into a solid success.
Keywords: Entrepreneurship; Business Startups; Business Plan; Growth and Development Strategy; Business or Company Management
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Austin, Julia. After the Idea: What It Really Takes to Create and Scale a Startup. Basic Venture, 2025.

IQanat: Empowering Rural Youth in Kazakhstan

By: Boris Groysberg and Maxim Pike Harrell
  • May 2025 |
  • Case |
  • Faculty Research
In June 2025, IQanat CEO Aliya Salikova considered scaling opportunities for the foundation, which provided educational opportunities for children from rural regions of Kazakhstan. Established by Kazakhstani businessman and philanthropist Aidyn Rakhimbayev, IQanat sought to address the stark disparity between academic resources in urban and rural parts of the country. The foundation developed mentorship programs and built a flagship school which admitted 100 new rural students a year on a full scholarship basis. To select its students, IQanat conducted an “Olympiad,” a set of tests that assessed 50,000 students annually on academic abilities, emotional intelligence, and specific skillsets. IQanat also offered students who did not receive scholarships access to short, intensive on-campus events or online educational programs. By 2025, the IQanat school and programs had produced more than 2,000 alumni who had been admitted to universities in 16 countries. The initiative’s funding model had also evolved, shifting from an exclusive reliance on Rakhimbayev’s donations to a donor base of 218 trustees—Kazakhstani business leaders who oversaw IQanat at the regional or district level. Salikova planned to oversee the opening of four new schools across the country over the next 5–10 years, along with expanding access to online programs. IQanat also began partnering with universities to track the long-term outcomes of its graduates, aiming to continually improve programs that supported the career success and well-being of its students. How would the foundation sustain momentum with donors and make the most meaningful difference for generations of rural students in Kazakhstan?
Keywords: Mission and Purpose; Organizational Change and Adaptation; Leadership; Social Enterprise; Entrepreneurship; Social Entrepreneurship; Growth and Development Strategy; Growth Management; Education Industry; Central Asia
Citation
Educators
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Groysberg, Boris, and Maxim Pike Harrell. "IQanat: Empowering Rural Youth in Kazakhstan." Harvard Business School Case 425-077, May 2025.

'Net Zero in Action': Impact Investing at the McKnight Foundation

By: Lauren Cohen, Christina R. Wing and Sophia Pan
  • May 2025 |
  • Case |
  • Faculty Research
Elizabeth McGeveran, Vice President of Investments at the McKnight Foundation, reflected on how to effectively advance the organization’s net-zero strategy. The foundation had committed 10% of its endowment to building a portfolio of impact investments and was among the first family foundations to embrace ESG investing—despite the limited availability of robust metrics. McKnight recognized that sustainable investing did not equate to sacrificing returns; in fact, the foundation had already demonstrated its ability to generate competitive performance. Still, leadership acknowledged that some growing pains and short-term deviation from traditional benchmarks were inevitable. The question now was: how could they continue to succeed in their ESG strategy—and, more importantly, position themselves as a market signal, setting higher expectations for fund managers on environmental and social governance?
Keywords: Investment Fund; Philanthropy; Charitable Donations; Sustainability; Foundation; Impact Investing; ESG; Family Business; Forecasting and Prediction; Private Sector; Renewable Energy; Social Entrepreneurship; Climate Change; Environmental Sustainability; Green Technology; Financial Strategy; Investment Funds; Investment Portfolio; Institutional Investing; Corporate Accountability; Corporate Social Responsibility and Impact; Mission and Purpose; Private Ownership; Philanthropy and Charitable Giving; Social Issues; Sustainable Cities; Financial Services Industry; Minnesota; United States
Citation
Educators
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Cohen, Lauren, Christina R. Wing, and Sophia Pan. "'Net Zero in Action': Impact Investing at the McKnight Foundation." Harvard Business School Case 225-095, May 2025.

The CHIPS Program Office (Abridged)

By: Mitch Weiss and Sebastian Negron-Reichard
  • April 2025 |
  • Case |
  • Faculty Research
In February 2023, U.S. Commerce Secretary Gina Raimondo weighed signing off on a Notice of Funding Opportunity (“NOFO”) with at least one unconventional provision: a pre-application (“pre-app”) to the actual application for parts of $39 billion in direct semiconductor manufacturing incentives. The funding had been made available through the U.S. Department of Commerce by the CHIPS and Science Act (“CHIPS”) passed a few months earlier. Her team had also proposed additional measures for the NOFO. They’d added upside sharing provisions to align incentives. They’d included funding milestones so that only awardees making progress would receive additional funds. And they’d drafted a rolling process, so apps didn’t have to be evaluated all at once. Each mechanism, along with the pre-apps, they hoped, would help regain U.S. technological leadership while protecting taxpayer funds. Raimondo would have to decide whether the NOFO as conceived set the stage to do precisely that.
Keywords: Entrepreneurship; Public Sector; Government Administration; Government Legislation; Motivation and Incentives; Semiconductor Industry; Public Administration Industry; United States
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Weiss, Mitch, and Sebastian Negron-Reichard. "The CHIPS Program Office (Abridged)." Harvard Business School Case 825-192, April 2025.

With a Little Help from My Family: Informal Startup Financing

By: Brian K. Baik, Johan Ludvig S. Karlsen and Katja Kisseleva
  • 2025 |
  • Working Paper |
  • Faculty Research
Using Norwegian administrative data, we identify family equity investments in startups and examine their effects on investor returns and firm behavior. Informal investors earn lower returns than external individuals, and the firms they back are less likely to secure institutional financing or achieve a successful exit. These startups also follow more conservative strategies. Instrumental variable estimates suggest that family members do not cause conservative behavior; rather, they select into firms that take fewer risks. Additional tests support altruism as the driving motive. Informal capital is thus a behaviorally distinct source of startup funding, shaped by relational and non-pecuniary objectives.
Keywords: Early Stage Finance; Informal Investment; Household Finance; Risk Taking; Entrepreneurial Finance; Entrepreneurship; Personal Finance; Family and Family Relationships; Business Startups; Investment; Norway
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Baik, Brian K., Johan Ludvig S. Karlsen, and Katja Kisseleva. "With a Little Help from My Family: Informal Startup Financing." Harvard Business School Working Paper, No. 25-053, April 2025.

The Experimentation Machine: Finding Product–Market Fit in the Age of AI

By: Jeffrey J. Bussgang
  • 2025 |
  • Book |
  • Faculty Research
Leverage AI to be a 10x Founder

Today’s most successful founders know that the startups that learn the fastest will win. In The Experimentation Machine, I reveal how AI is transforming the way startups find product-market fit and scale.

Applying timeless methods and cutting-edge tools, I will show you how to turn your startup into an AI-powered experimentation machine—learning faster and building smarter with leaner teams. Join the new class of ‘10x Founders’ who are building valuable companies faster than ever.
  1. Why founders who use AI will replace those who don’t
  2. How to design, sequence, and rigorously run startup experiments
  3. Tools 10x Founders use to create superpowers and leverage
  4. How to scale your startup without growing headcount
  5. Redefining ‘Product-Market Fit’ for the AI Age
Keywords: AI; Founder; Startup; AI and Machine Learning; Technology Adoption; Business Startups; Entrepreneurship; Market Entry and Exit
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Bussgang, Jeffrey J. The Experimentation Machine: Finding Product–Market Fit in the Age of AI. Damn Gravity Media, 2025.

Mobvoi's Path Through Market Challenges and Business Reinvention

By: Paul A. Gompers and Shu Lin
  • March 2025 |
  • Case |
  • Faculty Research
Founded in 2012, Mobvoi evolved through multiple transformations—from AI-driven voice technology to smart wearables and later AI-generated content. Backed by major investors, the company navigated shifts in strategy while facing two failed IPO attempts. As market conditions shifted and funding dried up, founder Zhifei Li faced a critical decision—should Mobvoi attempt another IPO or chart a different course for its future?
Keywords: Business Startups; Entrepreneurship; AI and Machine Learning; Transformation; Initial Public Offering; Business Strategy; Technology Industry; China
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Gompers, Paul A., and Shu Lin. "Mobvoi's Path Through Market Challenges and Business Reinvention." Harvard Business School Case 825-158, March 2025.

Niramai: An AI Solution to Save Lives

By: Rembrand Koning, Maria P. Roche and Kairavi Dey
  • March 2025 |
  • Case |
  • Faculty Research
Founded in 2017, Niramai developed Thermalytix, a breast cancer screening tool. Thermalytix used a high-resolution thermal sensing device and machine learning algorithms to analyze thermal images and detect tumors. Its patented solution leveraged big data analytics, AI, and ML for reliable, early, and accurate breast cancer screening. Early clinical trials showed that the solution was equal to or, in some instances, more accurate than mammography available in India. The team was elated that they had developed an effective, low-cost, easier-to-use, non-invasive, and less painful solution for patients. As Manjunath considered the next phase of Niramai’s growth, she wondered if it was time to raise another round of funds and conduct a new, comprehensive clinical study. Should the trial be conducted in the U.S., where it would be significantly more expensive but with the possibility of an exponentially higher payout if the trials were successful? Or should they raise a smaller round now, do a larger trial in a populous developing country such as Indonesia, and focus on lower-to-middle-income countries?
Keywords: Entrepreneurship; AI and Machine Learning; Technology Adoption; Health Care and Treatment; Technology Industry; Health Industry; Asia; India; South Asia
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Koning, Rembrand, Maria P. Roche, and Kairavi Dey. "Niramai: An AI Solution to Save Lives." Harvard Business School Case 725-439, March 2025.

Skylight: Hit Product or Scalable Company?

By: Rembrand Koning, Christina Wallace and Jeff Huizinga
  • March 2025 |
  • Case |
  • Faculty Research
Skylight, originally a digital frame startup aimed at connecting dispersed families, expanded with a second product—Calendar—to help families manage schedules. Despite significant potential, Calendar struggled with persistent technical issues and poor customer satisfaction, distracting resources from Skylight’s profitable Frame and subscription service (Plus). Internal debate intensified as CTO Jake Kring passionately advocated further investment to fix Calendar’s issues, while CEO Michael Segal worried about diverting crucial resources from their successful core product. The case explores the tension between refining a promising but problematic new product versus focusing resources on a proven, successful core business.
Keywords: Culture; Software; Hardware; Entrepreneurship; Business Startups; Customer Satisfaction; Resource Allocation; Product Launch; Business Strategy; Expansion
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Koning, Rembrand, Christina Wallace, and Jeff Huizinga. "Skylight: Hit Product or Scalable Company?" Harvard Business School Case 825-143, March 2025.
More Publications

Faculty

William R. Kerr
Lynda M. Applegate
William A. Sahlman
Thomas R. Eisenmann
Geoffrey G. Jones
Ramana Nanda
Myra M. Hart
Rosabeth M. Kanter
Joseph B. Lassiter
Howard H. Stevenson
Josh Lerner
Paul A. Gompers
→See All

HBS Working Knowlege

    • 12 Nov 2024

    Inside One Startup's Journey to Break Down Hiring (and Funding) Barriers

    Re: Paul A. Gompers
    • 29 Oct 2024

    Can a Coffee Shop in Utah Help Solve Underemployment for People with Disabilities?

    Re: Richard S. Ruback
    • 15 Oct 2024

    What Sequoia Capital Can Teach Leaders About Sustaining Long-Term Growth

    Re: Jo Tango & Christina M. Wallace
→More Articles

Harvard Business Publishing

    • July–August 2025
    • Article

    How to Identify the Perfect Cofounder

    By: Julia Austin
    • April 2025
    • Case

    The CHIPS Program Office (Abridged)

    By: Mitch Weiss and Sebastian Negron-Reichard
    • 2021
    • Book

    Harvard Business Review Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise

    By: Josh Baron and Rob Lachenauer
→More Harvard Business Publishing
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