New market creation through exaptation: The role of the founding team's prior professional experience

Abstract

This paper focuses on the creation of new markets through technological exaptation i.e. the repurposing of existing technologies to serve new functions in a different market domain. We conceptualize the ability of new ventures to create new market applications for existing technologies as dependent on the knowledge, skills, and cognitive frames developed by the founding teams’ members during their professional careers. Specifically, we hypothesize that the extent of the founding team's employment experience across different organizations influences the probability that the new venture will create a new market through technological exaptation. We also explain why experience in entrepreneurially prominent organizations changes this relationship at various levels of prior employment experience. We test our arguments using data on blockchain startups (and their founders/co-founders) in the worldwide energy sector established between 2010 and 2019. The results show that the likelihood that a new venture develops a new market application for blockchain technology in the energy sector is associated with the professional experience of the founding team members. We discuss the implications of these findings.