Abstract

We build on the evolving literature on the role of pre-founding knowledge by exploring how individual experiences are shaped pre-founding and are then translated into venture-level actions post founding. We combine an ethnographic study at a newly formed technology venture with in-depth analysis of the 3016-page pre-founding communication log between the new venture founding team members during the entire process of founding team formation. We show that three accumulation mechanisms, socialization, experimentation and imitation shape a shared understanding about the new venture’s strategy. We suggest that this shared understanding leads to entrenched actions in a powerful and causative manner and that founders develop post-founding actions to reinforce this shared understanding. Our findings reveal a paradox by showing how prior socialization experience imposes rigid thinking in a founding team which at the same time impose the stability and commitment to change and innovate in the industry.

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