Gestation in new technology ventures: Causal brakes and effectual pedals

Abstract

Gestation speed has long been acknowledged as an important proximate measure of venture performance. Yet, research into its antecedents remains scarce. Through a longitudinal study of eight new technology ventures, we examine in-depth the relationships between the use of causal and effectual logics and gestation speed. Our data show that heuristics from both logics can act as pedals or brakes on gestation speed. However, we also find that nascent entrepreneurs who apply effectuation as their predominant decision-making logic gestate more quickly than their peers. The inductive model we develop from the findings offers nine mechanisms relating decision heuristics to proximate performance. Additional longitudinal data provide evidence for a positive relationship between higher gestation speed and the probability of long-term success.