From Common Ground To Breaking New Ground: Founding Team's Prior Shared Experience And Start-Up Performance

Start-ups founded by team members with prior shared experience in incumbent firms tend to perform better than other start-ups. While the prior shared experience brings relevant knowledge and coherent routines, the knowledge is also by definition redundant and can corner the new firms in local search and limit innovation. I propose that start-ups may mitigate the negative aspects of shared prior experience by including in the founding team individuals with extensive experience in multiple prior jobs or industries � i.e., job hoppers. I find that job hoppers positively moderate the effect of shared experience on performance. I also find that job hoppers who bring knowledge from outside the start-up industry are beneficial to teams with prior shared experience within the start-up industry and that job hoppers who bring knowledge from the start-up industry are beneficial to teams with prior shared experience outside the start-up industry. Consequently, the job-hoppers may embody both the positive disruptive effect and the introduction of relevant complementary knowledge. With these results, the paper uncovers a novel mechanism that underlies the knowledge complementarities in founding teams.