Conversational peers and idea generation: Evidence from a field experiment

Working paper

(with Rembrand Koning)

Why do some people generate better ideas than others? We conducted a field experiment at a startup bootcamp to evaluate the impact of informal conversations on the quality of product ideas generated by participants. Specifically, we examine how the personality of an innovator (their openness to experience, capturing creativity) and the personalities of her randomly assigned conversational peers (their extraversion, measuring willingness to share information) affects the innovator’s ideas. We find that open innovators who spoke with extroverted peers generated significantly better ideas than others at the bootcamp. However, closed individuals produced mediocre ideas regardless of with whom they spoke, suggesting limited benefits of conversations for these people. More surprisingly, open individuals, who are believed to be inherently creative, produced worse ideas after they spoke with introverted peers, suggesting individual creativity’s dependence on external information. Our study demonstrates the importance of considering the traits of both innovators and their conversational peers in predicting who will generate the best ideas.

When peers don’t have an effect: the impact of prior connections

Working paper

(with Rembrand Koning)

When do peers affect performance? In this article, we propose that individuals or teams with many preexisting connections interact with fewer of their nearby peers and are thus less affected by them. We test this hypothesis using data from a field experiment conducted at a startup bootcamp in New Delhi, India. We find that teams whose members have existing relationships with others in the bootcamp interact less with neighboring teams, and thus their performance is unaffected by their peers. In contrast, peers affect the performance of teams without preexisting connections. Our findings highlight how preexisting connections, which are often a source of knowledge and influence, can limit new interactions and thus the power of social incentives and peer effects to improve performance.

When does advice impact startup performance?

Forthcoming in Strategic Management Journal

(with Aaron Chatterji, Solene Delecourt and Rembrand Koning)

Why do some entrepreneurs thrive while others fail? We explore whether the advice entrepreneurs receive about managing their employees influences their startup’s performance. We conducted a randomized field experiment in India with 100 high-growth technology firms whose founders received in-person advice from other entrepreneurs who varied in their managerial style. We find that entrepreneurs who received advice from peers with a formal approach to managing people—instituting regular meetings, setting goals consistently, and providing frequent feedback to employees—grew 28% larger and were 10 percentage points less likely to fail than those who got advice from peers with an informal approach to managing people, two years after our intervention. Entrepreneurs with MBAs or accelerator experience did not respond to this intervention, suggesting that formal training can limit the spread of peer advice.

iSPIRT: M&A Connect (Part B)

Stanford GSB Case Study

(with Sarah Rosenthal)

Part B explores the launch of M&A Connect, a one-man initiative led by Sanat Rao, to serve as a matchmaker between viable, high-potential Indian startups and U.S.-based acquirers such as Google, AutoDesk, and Intel.  Students learn how Rao approached the challenge of finding inroads into the corporate development departments of these American companies in order to connect them with virtually unknown Indian startups.  While he has achieved success, the process is ongoing and the future of M&A Connect continues to unfold. Also see Part A.

 

Learning Objective

 

The learning objective of the case is to provide students with an opportunity to apply social network theory to a real life business challenge. As Rao, students are asked to navigate the challenges and opportunities and determine a pathway forward for launching M&A Connect based on limited financial resources and numerous constraints. What personal and professional networks should he tap into, what resources can he use, what value can he bring to the respective audiences with whom he is speaking? Once students learn the details around how Rao actually launched the program, they are then asked to evaluate the next steps in Part B. How can he overcome the dual challenge/opportunity that iSPIRT’s status as a nonprofit brings? What new challenges does he face as he attempts to identify the “top” entrepreneurs throughout India while at the same time trying to establish credibility with the top tier technology firms in the U.S.? As Rao refines his model, how can he go about scaling it such that iSPIRT can have