HOW TO ACCELERATE LEARNING

152 Pages·2013·1.26 MB·English

HOW TO ACCELERATE LEARNING: ENTREPRENEURIAL VENTURES
PARTICIPATING IN ACCELERATOR PROGRAMS

Susan L. Cohen

A dissertation submitted to the faculty of the University of North Carolina at Chapel Hill in
partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Kenan-
Flagler School of Business.

Chapel Hill
2013

Approved by:

Howard Aldrich
Richard Bettis
Christopher Bingham
Atul Nerkar
Albert Segars
© 2013
Susan Lee Cohen
ALL RIGHTS RESERVED
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ABSTRACT
SUSAN L. COHEN: How to Accelerate Learning: Entrepreneurial Ventures Participating in
Accelerator Programs
(Under the direction of Christopher B. Bingham)

This study uses theory building and theory elaboration methods to suggest how firms
accelerate learning. Although prior research establishes that firms learn at different rates, less
is known about how some firms, especially those in knowledge-based industries, accelerate
learning. The research setting is nine accelerators—entrepreneurship education programs that
accelerate learning during venture gestation. Since 2005, these modern incubators have
offered cohorts of nascent firms seed financing, education, and mentorship during intensive
three-month programs that culminate in high-stakes pitch presentations. Today, there are
approximately 300 accelerators across five continents that have collectively helped 2500
firms raise $1.8 billion in funding. Thus, accelerators are an important phenomena and an
ideal setting to observe accelerated learning. There are several findings. First, learning is
accelerated by mentor overload—time-compressed interactions with external advisors that
delay implementation. Mentors expand strategic options. Second, learning is accelerated by
director experts who rapidly accumulate and transfer expertise to nascent ventures. Directors
narrow strategic options. Third, learning is accelerated by divided teams—founding team
members who split up rather than band together during experience accumulation. Finally,
learning is accelerated by cohort peers—peer ventures who are concurrently rivals and
helpers. More broadly, this study contributes to organizational theory by bringing to light the
central but heretofore hidden role of learning-coordination costs. This study also contributes
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to strategy by challenging the widely held assumption of time-compression diseconomies and
to entrepreneurship by shifting the emphasis from changing strategic direction, often referred
to as “pivoting,” to making strategic commitments. Finally this study contributes to
entrepreneurship by pioneering academic research on the purpose and effectiveness of
accelerators, explaining what they do and comparing them to incubators and angel investors.

KEYWORDS: Organizational learning, accelerated learning, entrepreneurship,
accelerators, entrepreneurship education, learning-coordination costs, cohort peers

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DEDICATION

To Zachary, Ali, Sophie
and Neil

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ACKNOWLEDGEMENTS
Words can only begin to express how grateful I am for the amazing support I received
from so many people. My husband, Neil, treated my academic training as a job. His respect
and belief in me and my education not only kept me going when times were tough but also
made me feel important. I love him and am thankful for his support! I am also grateful for
my children, Zachary, Ali and Sophie, who always made me smile. They listened to me talk
about my research and provided surprisingly insightful comments. They are the center of my
world. My mother and stepfather, Nancy and Jerry, provided encouragement and reality
checks throughout. I could always count on them for support. I’m also grateful for the help
my in-laws, Sheila and Joel, provided. I especially thank my step-brother and sister-in-law
Dan and Lotta who inspired me to pursue my doctorate.
I am so very grateful for Virginia Kay’s friendship and camaraderie. We even had fun
studying for comps, so long as we moved ever 20 minutes the lights even stayed on. I am
also fortunate to be a part of a fabulous group of doctoral students. I extend a special thank
you to Songcui Hu who always smiled when sharing her experiences with me. I’m grateful
for my very good friend Jennie Schott who listened to my trials and tribulations, and for the
never ending hospitality of Amanda and Jeff Peppercorn and Amy and Nick Shaheen.
I am extremely grateful for the thoughtful advice provided by my dissertation
committee. Al Segars believed in me from the very start. Most of all, he taught me the
importance of committing. From my first semester as a doctoral student, Howard Aldrich
patiently and kindly reminded me to study big, important questions and taught me how to do
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so. He believed that my research could make a difference, which continues to inspire me.
Atul Nerkar taught me the importance of scholarly “taste” and was always ready to strategize
with me. Atul sharpened my thinking during every stage of my doctoral studies. I am also
grateful for the many long conversations with Rich Bettis, mostly over “real” coffee.
Above all, I am grateful for all that my advisor, Chris Bingham, has sacrificed to
advance my research—reading through pages of transcripts, listening to my crazy ideas, and
even reading drafts while on vacation. I appreciate so much about Chris, particularly his
patience, intellect and genuine intellectual curiosity. I consider myself extremely fortunate to
have studied under Chris, and I am certain that there will be an impressive entourage of
students behind me.
I also acknowledge many scholars who provided feedback on my work, especially
Mike Christensen, J.P. Eggers, Marianne Feldman, Nathan Furr, Ben Hallen, David Kirsch,
Ethan Mollick, Fiona Murray, Jeff Pollack, Alicia Robb, Scott Rockart, Kristin Wilson and
Ted, Zoller. I’d also like to thank Mary Tripsas and Lisa Jones Christensen for taking me
under their wings.
I’m grateful for the anonymous informants who took time from their own start-ups,
investments and accelerators to speak to me. I literally could not have completed this
research without their help. Although I cannot thank them by name, I am extremely
appreciative. I’d like to extend a special thank you to my pilot site and the affiliated
accelerator directors and venture founders who spoke to me, sometimes for several hours.
Finally, I acknowledge the generous financial support of the Batten Institute of the
Darden Business School and the Kenan-Flagler Business School at the University of North
Carolina.
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TABLE OF CONTENTS
LIST OF TABLES………………………………………………………………....... xi
LIST OF FIGURES…………………………………………………………………..xii
CHAPTER 1: INTRODUCTION………………………………………………….…. 1
CHAPTER 2: THEORETICAL AND EMPIRICAL BACKGROUND……………... 5
2.1. Organizational learning…………………………………….….… 5
Accelerated Learning Definition……..……………….……… 5
2.2. Learning Modes……………………………………….…………. 6
2.2.1. Experiential…………………………………………….. 6
2.2.2. Learning from Others…………………………………. 10
2.2.3. Experimental………………………………………….. 13
2.2.4. Trial and Error…………………………………………14
2.2.5. Improvisation…………………………………………. 15
2.2.6. Learning Mode Discussion…………………………….17
2.3. Time Compression……………………………………………… 17
2.3.1. Time Compression Diseconomies…………………… 17
2.3.2. Time Compression Economies……………………….. 19
2.4. Organizational Speed…………………………………………… 20
2.4.1. Pacing…………………………………………………. 21
2.4.2. Planning………………………………………………. 23
2.4.3. Prior Experience……………………………………… 25
2.4.4. Team Composition and Traits………………………... 26
2.5. Literature Discussion…………………………………………… 27
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CHAPTER 3: METHODS………………………………………………………….. 32
3.1. Research Setting………………………………………………... 32
3.2 Definition of Accelerators………………………………………. 32
3.3 History of Accelerators………………………………………….. 34
3.4. Comparison: Accelerators, Incubators and Angels…………….. 36
3.5 Research Setting………………………………………………… 38
3.6. Research Design…………………………………………………39
3.7. Exploratory Work………………………………………………. 42
3.8. Data Sources……………………………………………………. 43
3.9. Data Analysis…………………………………………………… 44
3.10. Accelerated Learning…………………………………………. 46
CHAPTER 4: HOW TO ACCELERATE ORGANIZATIONAL LEARNING……. 50
4.1. Mentor overload………………………………………………... 50
4.2. Director experts………………………………………………… 63
4.3. Divided Teams………………………………………………….. 75
4.4. Cohort Peers……………………………………………………. 84
CHAPTER 5: DISCUSSION…………………………………………………………95
5.1. Framework: Accelerated Learning…………………………….. 95
5.2. Organization Theory……………………………………………. 99
5.3. Strategy…………………………………………………………102
5.4. Entrepreneurship………………………………………………. 104
CHAPTER 6: CONCLUSION…………………………………………………….. 107
APPENDICES………………………………………………………………………112
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APPENDIX 1—ACCELERATOR DIRECTOR INTERVIEW GUIDE………….112
APPENDIX 2—VENTURE FOUNDER INTERVIEW GUIDE………………… 117
APPENDIX 3—MENTOR INTERVIEW GUIDE………………………………. 123
REFERENCES…………………………………………………………………… 128

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