The tortoise versus the hare: Progress and business viability differences between conventional and leisure-based founders

Phillip H. Kim, Kyle C. Longest and Stephen Lippmann

Journal of Business Venturing, 2015, vol. 30, issue 2, 185-204

Abstract: Social science researchers have long pursued answers to the puzzle of why some people achieve certain milestones more quickly than others and whether rate of progress matters for long-run outcomes. This “tortoise versus hare” puzzle raises the question of whether speed is a valid indicator of viability in an undertaking: Are those with slower rates of progress any less off in terms of long-run achievement when compared to their faster counterparts? We investigate this “tortoise and hare” puzzle in the context of business formation, an activity pursued by millions in the United States. Our analysis of a nationally representative survey of U.S. business founders revealed that leisure-based founders were slower to make progress initially, but after a certain time threshold, their progress was no different than other conventional types of founders. More importantly, leisure-based founders showed more favorable initial economic and non-economic outcomes, as these founders were more likely to consistently report early sales and profitability and were more committed to investing time into their ventures. Our study findings have both theoretical and practical implications for the evaluation of venture performance, when the rate of progress is considered to be a leading indicator of new business viability.

Keywords: Start-up activities; Leisure-based founders; Organizing speed; Business viability; Growth curve modeling (search for similar items in EconPapers)
JEL-codes: L26 M13 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:30:y:2015:i:2:p:185-204

DOI: 10.1016/j.jbusvent.2014.02.005

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