Turning Failure into Fuel: When Can Serial Entrepreneurs Learn from Failure?

Abstract

Building on prior research, we explore the impact of previous venture failure on entrepreneurial decision-making and subsequent venture performance. We leverage rich, US-based survey data of 893 serial entrepreneurs to examine external contextual factors that impact learning mechanisms. Specifically, we examine the relationship between venture failure, a multitude of distinct responses between ventures, and the performance outcomes of subsequent ventures among serial entrepreneurs. Our analysis indicates that serial entrepreneurs are likely to change industry, environmental dynamism, and macroeconomic conditions between ventures and find evidence of change in macroeconomic conditions impacting firm survival performance outcomes.

Keywords: entrepreneurship, strategy, learning, failure, serial entrepreneurship, organizational learning