Abstract

Despite the extensive use of naturally-occurring, fitness-based algorithms in a wide range of disciplines, nothing has been presented to-date that leverages this modeling technique in entrepreneurship. This omission is unfortunate because few domains are more relevant to natural selection-inspired models than the survival of new organizations. In nature, an organism has three choices when confronted by a predator: fight, freeze, or flee. In competitive markets, new organizations face a similar set of survival choices. Turning to entrepreneurship, we ask: when should an entrepreneur freeze or flee in response to a threat? And, what does nature prescribe regarding these two strategies? We delve into this issue by testing a naturally occurring survival response algorithm drawn from observations of vulnerable organisms (Sylvilagus floridanus (SF), the Eastern Cottontail rabbit) responding to predatory threats. Our core prediction is that deviations from the strategy prescribed by nature will, on average, result in a higher rate of firm mortality.

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