UCL School of Management is delighted to welcome Andrea Contigiani, Wharton to host a seminar discussing “Experimentation, Learning, and Appropriability in Early-Stage Ventures”
This study examines the tension between learning and appropriability in the experimentation process of early-stage ventures. I argue that, when formal intellectual property is weak, the learning benefit of experimentation may be offset by its imitation risk. I test this argument using a novel hand-collected dataset of 1200+ US-based software ventures, exploiting the software release life cycle to measure experimentation and the US Supreme Court ruling Alice Corp v CLS Bank International as exogenous shock weakening the degree of formal intellectual property. Following the ruling, affected ventures experiment less but enter the market earlier. Furthermore, experimentation in the post-ruling regime is negatively associated with performance. The evidence suggests that the learning-appropriability tension plays a central role in early-stage ventures, providing boundary conditions for the use of experimentation in entrepreneurship. This study contributes to the emerging debate around entrepreneurial strategy, combining insights from the literatures on organizational learning and appropriability.