Entrepreneurial ventures’ market choices: essays from the solar photovoltaic industry

Abstract

This dissertation seeks to understand how entrepreneurial ventures make technology commercialization decisions on the product market and under conditions of demand heterogeneity Furthermore, it seeks to understand how entrepreneurial strategies unfold and their consequence for ventures and industry alike. To this end, I carry out three empirical studies of the solar photovoltaic industry. The first study explores the drivers of the decision to enter a niche product market. Despite the key role of niche markets for a disruptive strategy, we still know little about which ventures make this choice. I characterise mainstream and niche markets in terms of the different commercialization challenges to be encountered in each one of them. I find empirical support for the role of prior experience on having preferences for different commercialization challenges, underscoring the role of cognition on the decision to enter niche markets. In the second study, I explore the factors that lead ventures to enter markets with low technology-market fit. Grounding the commercialization journey of start-ups in the technology-to-market linking process, I study how industry-level factors can make the process cognitively more or less taxing. I find empirical support for the idea that increasing capital availability creates a bias that leads ventures towards poorly fitting markets, despite their belief to be making a promising choice. Moreover, I show that the more choices were previously made by other ventures, the easier it is to choose highly fitting markets. The third study focuses on how the strategies of dominant firms unfold over time and affect venture-level and industry- level outcomes. More specifically, I identify two strategies – a technology-driven one and a paradigm-driven one – that are critical to move the industry to early commercialization but set up conditions that prevent further uncertainty reduction to reach sales take-off and maturity, condemning the industry to a slow retrenchment.