Tuesday, February 7, 2012 Strategic Human Resource Management Blog
Building a Winning Team by Chad Navis

Does your product open up a brand-new market space? Are you looking for resources to help your company take off?

I recently published two articles on the role of entrepreneurs in defining previously undiscovered market spaces.  According to my research, an entrepreneur’s first challenge is to help stakeholders (consumers, investors, etc.) clearly understand the value of the nascent market category: what it is about, how it is different from existing categories, and whether it is likely to succeed. This will help build resource and user support for the new venture. Paradoxically, I found that entrepreneurs may be more successful in tackling this challenge if they work collectively with their competitors to establish the market category, for example by promoting a shared identity of the new category, using analogies or metaphors to highlight similarities with and differences from familiar markets, and framing the benefits of strategic alliances for the category as a whole.

This research is important because it cautions entrepreneurs in nascent market spaces to resist the temptation to publicly espouse their distinctive competitive advantages before the new category is sufficiently established. A premature emphasis on distinctiveness could fall on deaf ears, or worse, create unnecessary confusion that delays or prevents the development of a coherent, well-understood market category. Only when shared understanding has begun to crystallize and the new market space has been recognized as “real” should the entrepreneur tackle the second challenge: to communicate the firm’s unique identity and distinctiveness from its competitors. 

Legitimate distinctiveness and the entrepreneurial identity: Influence on investor judgments of new venture plausibility.” (Navis, Chad and Glynn, Mary Ann. 2011. Academy of Management Review, 36: 479-499).

How new market categories emerge: Temporal dynamics of legitimacy, identity, and entrepreneurship in satellite radio, 1990–2005.” (Navis, Chad and Glynn, Mary Ann. 2010. Administrative Science Quarterly, 55: 439-471.)