When does advice impact startup performance?

Published

Journal Article

© 2018 John Wiley & Sons, Ltd. 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, 2 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.

Full Text

Duke Authors

Cited Authors

  • Chatterji, A; Delecourt, S; Hasan, S; Koning, R

Published Date

  • March 1, 2019

Published In

Volume / Issue

  • 40 / 3

Start / End Page

  • 331 - 356

Electronic International Standard Serial Number (EISSN)

  • 1097-0266

International Standard Serial Number (ISSN)

  • 0143-2095

Digital Object Identifier (DOI)

  • 10.1002/smj.2987

Citation Source

  • Scopus