SMU BUSINESS CONFERENCE PAPER SERIES Exploiting an Opportunity : Entrepreneurs’ Assessment of Imitation Threat and Liability of Newness

How do entrepreneurs decide to begin a full scale operation (i.e., exploitation of a new opportunity) in the entrepreneurial process? The question is investigated in a conjoint experiment with 55 entrepreneurs of high tech new ventures. The results suggest that entrepreneurs’ exploitation decision is positively affected by potential profitability (a low threat of imitation) and negatively by the elements of mortality risk (liability of newness). The present study also suggests that entrepreneurs conjointly consider liabilities of newness and the threat of imitation in their decis ion to exploit an opportunity.