Essays on nascent entrepreneurship

The three chapters in this thesis help answer how entrepreneurs successfully collaborate in early (pre-firm) stages to reduce uncertainty and establish a productive firm.
Chapter 1 aims to characterize the strategically significant entrepreneurial risks, efforts, and costs related to the use of social capital, which are hinted at, but unspecified, in discussions of network maintenance, churn, and recalibration (Hallen et al., 2020; Perry-Smith & Mannucci, 2017; Vissa, 2012; Vissa & Bhagavatula, 2012). It outlines the theoretical basis for these “interaction costs” and presents a framework of the costly behaviors necessary to initiate, maintain, and rest network collaborations. Entrepreneurial social networks are presented as a context typified by scarcity, diverse institutional logics, and a thin boundary between the entrepreneur’s personal life and business efforts. Entrepreneurs must therefore engage in costly behaviors to actively manage social risks and maintain relationships that invite entrepreneurial collaboration. It concludes by discussing how such costs may shape early strategy, entrepreneurial cognition, and risk perception and lead to heterogenous outcomes in the time spent in nascent stages, the scale of the firm, and the likelihood of failure.
Chapter 2 is an empirical investigation of how pre-firm entrepreneurs mitigate and manage transaction costs (Coase, 1937; Williamson, 1981, 1993). Through an analysis of a novel data set including more than a thousand pre-firm collaborative communications initiated by 26 nascent entrepreneurs, it explains that entrepreneurs are less likely to experience high transaction costs when they engage both socially and financially incentivized actors on a given task as opposed to relying wholly on paid collaborators. It shows how entrepreneurs can leverage social collaborators to strategically disambiguate collaborative tasks, to widen their contextual understanding of the transaction, and to improve contracting efforts in ways that substantively mitigate transaction risks and uncertainties. The emergent theoretical framework emphasizes the role of social capital in shaping early entrepreneurial transactive relationships, and thus challenges extant models that consider early social and market contexts in isolation as well as expands our understanding of the relationship between pre-firm social and financial capital to include not only resource accumulation but resource application.
Chapter 3 serves to more fully specify the strategic context in which pre-firm entrepreneurs must match tasks, resources, and collaborators across their social and market contexts to achieve their goals under conditions of high uncertainty (Clough et al., 2019). This chapter reviews the early entrepreneurship literature to outline four pre-firm entrepreneurial tasks along with their optimal collaborators: conceptualization, contextualization, substantiation, and capitalization. Each task helps answer the question: how does an entrepreneur turn an idea into uncertainty-reducing signals and the inputs of a firm (support, business plan, prototypes, etc.)? The model it presents suggests that the realization of entrepreneurial intentions often relies not only on having sufficient capital to engage collaborators, but also the strategic choice of when to engage social versus market collaborators and resources.

Keywords: transaction cost economics
social factors
entrepreneurial strategy
entrepreneurial collaboration
social networks
early entrepreneurship
product development
Advisor: Ozcan, P
Whittington, R