Essays on product and process management for new ventures over digital platforms

Abstract

New ventures face operational, financial, and marketplace challenges after introducing their first products but before fully transforming into established firms. Recent examples of new ventures pursuing rapid growth strategies that ultimately lead them to collapse under their own weight has raised two questions: (1) how are survival and growth for new ventures related, and (2) how can new ventures pursue data validated growth strategies associated with product and process development over digital platforms? We examine these questions by setting up three studies. In our first study, we conducted a cohort analysis of new ventures to examine the dynamics of survival and growth. Our results show at least two stages for new ventures, a learning stage where survival and growth are independent outcomes, and a commercialization stage where survival and growth are intertwined. We observe that the transition between these two stages is not cleanly delineated and involves a prolonged period of product refinement and validation via market-based experimentation. In follow-on studies, we focus on product development over digital platforms in the tabletop gaming industry to look deeper at these transitions. Our second study examines the customer contexts new ventures must consider to process knowledge available on social media platforms using the transactional memory system (TMS) theory. Our analysis shows that new ventures must extend conventional TMS by accounting for how knowledge structures are affected by customer identity on a social media platform and how the scope of knowledge flows enlarges over time as more customers provide input. Our third study further assesses product and process choices by examining how self-expression can be used to leverage backers over a crowdfunding platform. Results show that incorporating self-expression as an input mechanism can not only increase backer participation which can contribute to product validation, but crowd driven selection mechanisms can also ease process coordination burden.