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Radicalness of technological inventions and young venture performance: the role of technological competition and product diversity

Research output: Contribution to journalJournal article

Published

Journal publication date11/2013
JournalIEEE Transactions on Engineering Management
Journal number4
Volume60
Number of pages11
Pages728-738
Early online date16/10/13
Original languageEnglish

Abstract

Opportunities often emerge in the form of technological inventions that offer ways to create or deliver new value to prospective customers across a broad range of industries. This study investigates how the radicalness of technological inventions is tied to performance (sales growth) in young technology-based ventures. Using a combination of survey and patent data from 85 spin-offs from public research institutions in Germany, we identify the degree of technological competition and product diversification as important moderators in the relationship between technological radicalness and venture performance. Radicalness is found to have a positive impact on sales growth when competition in the particular technology field is high and when the venture's product portfolio is not diversified. Overall, these findings contribute to a better understanding of when and how ventures can successfully exploit radical technological inventions.