Faculty Research Profile: David Kirsch

Entrepreneurial entry in an emerging industry is like exploring uncharted territory. Understanding what happened in the emerging Internet industry has also been something of a mystery—a mystery being unraveled with patience and meticulous care by David Kirsch, associate professor of management and entrepreneurship.

Kirsch has been winnowing the facts out of vast fields of anecdotal evidence, perception and conjecture for the past ten years. Kirsch, with collaborator and frequent co-author Brent Goldfarb, assistant professor of management and organization, became interested in the rise of the Internet, the technological transformation that followed and the successes and failures of new ventures during this time period.

“Someone once said of the dot com era that in a hurricane, even turkeys can fly,” says Kirsch. “It’s more accurate to say that in a hurricane, nothing can fly—everything just gets hurled around. As a business historian it is interesting to study the hurricane, to understand where the hurricane came from and why it acted the way it did. But it is also interesting to look at what we can learn about entrepreneurial entry and the success of entrepreneurial ventures. What does the big storm lay bare that is hard to observe in ordinary circumstances?”

Kirsch’s research interests span both the unique qualities that accompany the emergence of the Internet and the general lessons for entrepreneurs that can be gleaned from this unique period in history.

In a study on dot com entry, Kirsch found that despite significant losses suffered by investors, nearly 50 percent of 1990s dot-com startups survived at least five years. That success rate was better than or on par with other emerging industries, contradicting the traditional view that the majority of Internet companies landed belly up. The research also showed that the “Get Big Fast” strategy which so many new ventures pursued was ultimately unsuccessful, and may have actually played a role in some companies’ failures.

Access to business plans, marketing plans, technical plans, venture presentations, and other business documents is key to helping business historians and organizational researchers make sense of issues like venture success and failure in the dot com era. Kirsch is concerned about the issue of digital preservation of these records and since 2002 has been collecting business plans and documents from the early history of the dot-com era and compiling them in a digital database. An upcoming paper serves as an intellectual justification of this archival work, considering how the ephemerality of digital records and data scarcity will become the challenge for future organizational theorists.

Other studies steps back from examining the dot com era to take a general look at some of the issues surrounding entrepreneurship. In one recent study, Kirsch and his co-authors look at the relationship between a new venture’s organizational structure and its growth by examining a panel of early Internet service providers. “You always think that the whole point of new ventures is that they are responsive and fluid. Most entrepreneurs spend very little time organizing internally. But it turns out that having more structure, more defined roles and specialization, more early internal investment, is correlated with better performance over time,” says Kirsch.