This study draws on the knowledge-based view and organizational learning theory to explore the link between pre-entry production innovation strategies and the early development of spin-outs. Specifically, we suggest curvilinear relationships of early sales growth with exploitation (U-shaped) and exploration (inverted U-shaped). We also suggest that simultaneous organizational ambidexterity will hamper spin-out growth. Findings from 154 technology spin-outs support our suggestions. The study contributes the extant literature by showing the existence of curvilinear effects and focusing on spin-outs as an underexplored, but important context.