Specialists, Generalists, or Both? Founders’ Multidimensional Breadth of Experience and Entrepreneurial Ventures’ Fundraising at IPO

Different streams of research have led to contradictory conclusions about the venture performance implications of founders’ breadth of experience. Although extant empirical studies have explored the performance implications of founders’ breadth of experience at the start-up stage, we focus on the later stage of the initial public offering (IPO). We theorize that investors categorize venture founders based on two salient dimensions—their industry and functional background—and we relate this categorization to resource acquisition at IPO. To test our model, we use a hand-collected data set of 175 entrepreneurial IPOs in the Alternative Investment Market in London (2002–2013) and two randomized experiments. We theorize and find that compared with entrepreneurial ventures with a lead founder specializing in one industry or one function, investors generally devalue those with a category-spanning lead founder (a generalist). However, devaluation is less severe when a lead founder is a generalist in one dimension (e.g., industry) but a specialist in the other dimension (e.g., function). We also theorize and empirically test trust as a mechanism for the generalist penalty. Specifically, audience members (investors) have low trust in a generalist producer (founder) in contexts where the two parties consider entering into a partnership (equity investment at IPO), and so that generalist producer is devalued. Finally, we show that an external expert endorsement—in our case, from intensive venture capital affiliations—offsets the generalist penalty, especially when category spanning occurs in multiple category dimensions.

Category change in cultural fields: Practice deviation and the discursive maintenance of category meanings in jazz music

Deviation from normative practices is common in established categories, stimulating category gatekeepers to reevaluate their approaches to defining and enforcing category boundaries and meanings. While scholars agree that categories are mutable and dynamic, we lack a theoretical framework explaining the mechanisms through which practice deviation stimulates category change. Using structural topic modeling and inductive hand-coding of a large text corpus, I analyze critical reviews of jazz records between 1968 and 1975 to show the discursive mechanisms through which gatekeepers codify change in cultural categories. As jazz musicians experimented with new practices associated with a style now known as jazz fusion, critics discursively reordered their criteria for assessing membership, quality, and value in jazz music, expanding the jazz category into new realms yet retaining its semantic coherence. This paper contributes to research on category dynamics including change and subcategorization, and extends knowledge of category maintenance and gatekeeping in cultural fields.

Anchored Differentiation: The Role of Temporal Distance in the Comparison and Evaluation of New Product Designs

A new design can be compared with its contemporaries or older designs. In this study, we argue that the temporal distance between the new design and its comparison play an important role in understanding how a new design’s similarity with other designs contributes to its valuation. Construing the value of designs as a combination of their informational value and their expressive value, we propose the “anchored differentiation” hypothesis. Specifically, we argue that expressive value (which is enhanced by how much the new design appears different from others) is emphasized more than informational value (which is enhanced by how much the new design appears similar to others) compared with contemporary designs. Informational value, however, is emphasized more than expressive value when compared against designs from the past. Therefore, both difference from other contemporary designs (contemporary differentiation) and similarity to other past designs (past anchoring) help increase the value of a new design. We find consistent evidence for our theory across both a field study and an experimental study. Furthermore, we show that this is because temporal distance changes the relative emphasis on expressive and informational values. We discuss our contribution to the growing literature on optimal distinctiveness and design innovation by offering a dynamic perspective that helps resolve the tension between similarities and differences in evaluating new designs.