Hans Rawhouser (Management, Entrepreneurship and Technology) recently had a paper published in Journal of Business Venturing Insights. The paper, titled “Horse and Cart: The Role of Resource Acquisition Order in New Ventures” uses agent-based simulation to give insight about the order in which entrepreneurs should acquire different types of resources.
The simulation classifies resources according to their ability to promote search for opportunities or execution of existing opportunities. The simulation indicates that entrepreneurs that first acquire resources (e.g., hiring employees, buying equipment) to execute on a specific opportunity may waste time and effort before realizing the deficiencies of that opportunity, compared to those that acquire resources that enable opportunity validation (e.g., initial market testing).
These effects are stronger when the environment is more uncertain and dynamic and it is harder to know whether opportunities are valuable. This research provides initial evidence supporting a recent widespread shift in entrepreneurial education from emphasis on business planning to the use of the lean startup methodology in testing business ideas. Rawhouser teaches both business planning and lean startups at UNLV.
