Experiments by 'Visionaries'

Abstract

How do visionaries design experiments when they need to convince sceptical resource providers? This paper develops a model where entrepreneurs and incumbent firms face fundamentally different challenges in pursuing disruptive technologies. While visionaries may be optimistic about a technology's prospects, they often require resources controlled by others with more conservative beliefs. We show that these resource constraints lead entrepreneurs to design experiments that maximise persuasive power rather than informational value; choosing ``raise the bar" experiments that generate clear positive signals when technologies succeed. In contrast, incumbent firms with internal authority prefer ``best foot forward" experiments that clearly identify technological failures. We extend the baseline model in four directions: sequential experimentation, where entrepreneurs strategically build credibility through stepping-stone projects; correlated technologies, where entrepreneurs exploit informational spillovers; heterogeneous resource owner beliefs, where targeted experimental design creates information cascades; and asymmetric exploitation costs, where incumbents face authority erosion that eventually leads them to adopt entrepreneurial experimental strategies. These insights help explain observed patterns in technological disruption, from Tesla's progression from the Roadster to Model 3, to the evolution of organisations like Xerox PARC from bold innovators to conservative entities

Keywords: disruption, innovation, bias, experiments, visionaries