Talking Inside the Corridor or Navigating the Labyrinth: Market Experience and Elaboration in Teams

Abstract

Tech-push ventures need to perform market search to find a viable initial market. A venture’s market search is at once constrained and enabled by founding teams’ prior market experiences. This study disentangles the effects of breadth and depth of market experience, and elucidates the way that these types of experience shape two pathways to new venture performance: talking inside the knowledge corridor or navigating the knowledge labyrinth. We argue that depth and breadth of market experiences of the team drive the extent of two forms of information elaboration: information exchange or task conflict. While deep market experience facilitates information exchange, it limits the team to a market corridor. In contrast, teams with broad market experience can benefit from task conflict, but only if they can navigate the market knowledge labyrinth. Teams with a lead founder high in openness to experience are able to leverage task conflict into better performance, while ventures with a highly conscientious lead founder suffer from task conflict. Data from a sample of 101 tech-push ventures representing 250 founders support hypotheses regarding how prior market experiences in the founding team shapes team information exchange and task conflict, and their effects on initial viability of the venture.