Abstract

New technology entrepreneurs face a tough tradeoff while making decisions related to entry timing—when should they stop developing and start selling? Early technology entrants can gain a first mover advantage by being the first to come out with a new technology gaining early customers and capturing significant market share. However, empirical evidence also suggests that later entrants survive longer indicating that they are able to improve their technology and increase the performance advantage thereby offering fitter products. On the other hand, delaying market entry is fraught with the potential risk of being driven out of a profitable market a problem exacerbated in technology driven markets with demand externalities suggesting brief windows of entry for technology entrepreneurs. However, research on entry timing suffers from lack of data on the effect of early or late entry on venture performance. For instance, we can only know the performance of iPhone since its launch in June, 2007 but not how it would have performed say a few years earlier or a few years later. In this study, I attempt to empirically test if new ventures suffer from an incorrect decision related to entry timing.

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