What can outliers teach us about entrepreneurial success?
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 23 March 2023
Issue publication date: 24 October 2023
Abstract
Purpose
Studies of unicorns and gazelles can offer detailed information about the process of enterprise development but are unrepresentative as examples of entrepreneurial success. In presenting a novel method for outlier analysis, this article combines insights from case studies of unusual organizations with explanatory frameworks that management scholars have applied to broader samples of firms, irrespective of their survival.
Design/methodology/approach
The authors illustrate the approach to outlier analysis using a prominent case from economic history: the House of Rothschild, founded during the 18th century, which became the most famous investment bank in Europe. Following the iterative refinement of mechanisms using comparison data on Jewish enclave firms, this analysis sheds light on the sources of dissimilarity in outcomes between Rothschild and the comparison group.
Findings
The study results suggest that the House of Rothschild's longevity can be explained via the mechanisms of risk sequencing, intergenerational transfers and spatial brokerage. The authors show that these mechanisms are not idiosyncratic to one enterprise but instead generalize to other family firms.
Originality/value
Outlier analysis encourages a rapprochement between case study and large-N research. The high failure rate of new organizations means that those yielding a large amount of information to researchers tend to be exceptional. By obtaining data on a comparison group of startups founded by similar entrepreneurs, analysts can probe the mechanisms of success identified for unicorns or gazelles.
Keywords
Acknowledgements
The authors would like to thank Ted Baker, Matteo Cristofaro, Stanislav Dobrev, Seok-Woo Kwon, Valery Yakubovich and participants in the 2021 AOM session on research challenges in entrepreneurship for their helpful feedback. The first author was supported by a fellowship at the Max Planck Institute for the Study of Societies (MPIfG) to collect initial data for this project.
Publisher’s Note: The publisher of Journal of Small Business and Enterprise Development has withdrawn this article: What Can Outliers Teach Us About Entrepreneurial Success? 10.1108/JSBED-01-2023-0004 from Vol 30. Issue 3. It has come to our attention that, due to an error in the production process, the published article was compiled into the issue incorrectly. The publishers of the journal sincerely apologise to the readers.
Citation
Ruef, M., Birkhead, C. and Aldrich, H. (2023), "What can outliers teach us about entrepreneurial success?", Journal of Small Business and Enterprise Development, Vol. 30 No. 6, pp. 1088-1108. https://doi.org/10.1108/JSBED-01-2023-0004
Publisher
:Emerald Publishing Limited
Copyright © 2023, Emerald Publishing Limited