The creation of new organizations is a major driver of economic development (Schumpeter 1934). Despite this, founders, the people who create those new organizations, are largely absent from past academic research. It is much harder to get systematic data on privately-held companies, so past research has focused almost exclusively on public companies, where founders rarely still number among the members of the top management team. However, young, private start-ups can differ markedly from large public companies (particularly regarding the motivation, presence, and impact of founders on the companies they started), making it risky to extrapolate from research on non-founders to the realm of founder issues.
To help fill this important gap in our knowledge, the core of my work focuses on Founder Frustrations: the critical issues, choices, and challenges that founders face in starting and building their organizations. These issues are especially salient in the high-potential ventures on which my research focuses, and a goal of this research is to be able to provide guidance to founders on how to avoid, minimize, or overcome these challenges as they build their companies.
I approach my research using both multiple disciplinary lenses and multiple methodological approaches. The core lens through which I examine founder issues is an organizational one, tapping relevant sociological and psychological work. However, where appropriate, I also integrate work from microeconomics. From a methodological standpoint, given the lack of existing research on many of these issues, I use both field-based methods (to understand the phenomenon, craft my research questions, and sometimes write cases that explore the core issues I’m studying) and quantitative methods (to test my hypotheses on a systematic basis). Depending on the research question, I might integrate both field and quantitative methods in a single paper or focus on just one method.
My quantitative data comes from a survey that gathers data each year from about 200 private information-technology (IT) ventures and about 150 private life-sciences (LS) ventures. I have conducted the IT survey every year since 2000 and the LS survey every year since 2002, partnering with three professional services firms that publish a wide variety of position-by-position summary results in annual Compensation Reports. Feel free to email me if you are a top executive at a private company in either the IT or LS industries and want to participate in the survey.
To date, my research papers have made extensive use of the IT survey data. For instance:
- my “Founder-CEO Succession” paper (see above) used the 2000 IT data in its event-history analyses,
- my “Entrepreneurial Compensation,” “Rich versus King,” and “Mentoring and Monitoring” papers (posts on them will be coming soon) are using the 2000-2002 IT data, and
- the upcoming “Equity Splits” and “Entrepreneurial Handcuffs” papers will use the 2005 IT dataset.
(Note: I am currently exploring how best to use the Life Sciences data, and am open to any suggestions about important founder-related differences between the IT and LS domains that would be worth studying.)