Principles of Organizational Behavior, 3rd Edition

25Achieve Entrepreneurial Growth Through Swiftness and Experimentation¹

JAUME VILLANUEVA,² HARRY J. SAPIENZA,³ AND J. ROBERT BAUM⁴

²Rutgers Business School, Newark & New Brunswick, Rutgers University

³University of Minnesota

⁴University of Maryland

Entrepreneurs must manage much greater uncertainty in decision‐making than do leaders of established businesses, and they must do so with fewer resources and while facing better‐endowed competitors. Uncertainty is extreme for entrepreneurs because they typically introduce new‐to‐the‐market products and processes, new channels of distribution, and even completely novel business models. Little market information is available to resolve uncertainty, and the products or processes they wish to introduce may be untested. However, the reward for being first to serve a market niche or for being the first to establish a presence in a new market territory can be astounding. For example, Brian Chesky and Joe Gebbia (Airbnb), Sergey Brin and Larry Page (Google), Steve Jobs (Apple), Oprah Winfrey (Harpo Productions), and Michael Dell (Dell) all acted effectively to overcome resource shortages, failed products, skeptics, and production challenges. They did it, in part, through the rapid introduction of new products, services, and business models. However, quick action alone is not sufficient to ensure ongoing success. Indeed, an emerging trend in entrepreneurial practices has been to emphasize the critical importance for “high‐aspiration” entrepreneurs ...