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Field
Trial Status
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Before
in_development
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After
on_going
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Trial End Date
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Before
September 09, 2022
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After
September 09, 2024
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Last Published
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Before
December 28, 2021 02:04 PM
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After
July 07, 2024 09:53 PM
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Intervention (Public)
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Before
A managerial capital intervention will focus in how to run the current company as efficiently as possible, while an entrepreneurial capital intervention will focus on exploring, validating and capturing market needs and business opportunities. On one hand, if entrepreneurs lack managerial capital, the intervention should help entrepreneurs to implement organizational changes such as the establishment of concrete routines, the creation of specific incentives for employees, or improving inventory management. In contrast, an intervention based on entrepreneurial capital should help founders discover and capture higher value opportunities for their products and services, much like the lean startup method induces founders to come up with new business ideas and converge faster on the viability of their ideas (Leatherbee & Katila, 2020). This can be done by providing entrepreneurs with mentors who have an entrepreneurial mindset (e.g., Sarasvathy, 2001; Busenitz and Barney, 1997) and consulting services oriented towards the exploratory stages (as opposed to the exploitative stages) of business creation.
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After
A managerial capital intervention will focus in how to run the current company as efficiently as possible, while an entrepreneurial capital intervention will focus on exploring, validating and capturing market needs and business opportunities. On one hand, if entrepreneurs lack managerial capital, the intervention should help entrepreneurs to implement organizational changes such as the establishment of concrete routines, the creation of specific incentives for employees, or improving inventory management. In contrast, an intervention based on entrepreneurial capital should help founders discover and capture higher value opportunities for their products and services, much like the lean startup method induces founders to come up with new business ideas and converge faster on the viability of their ideas (Leatherbee & Katila, 2020). This can be done by providing entrepreneurs with mentors who have an entrepreneurial mindset (e.g., Sarasvathy, 2001; Busenitz and Barney, 1997) and consulting services oriented towards the exploratory stages (as opposed to the exploitative stages) of business creation.
This experiment aims to answer these questions by implementing a Randomized Control Trial (RCT) in Colombia, in collaboration with the Cali Chamber of Commerce (CCC), the same Institution who executed the program where Gonzalez-Uribe and Reyes (2020) find an impact of entrepreneurial schooling under a no-cash design for young businesses. This RCT will provide entrepreneurs with differential treatments: one aimed at improving management practices and making the established opportunity more efficient (i.e., exploitation), while the other one will be aimed at discovery, validation, capture and scaling of novel opportunities (i.e., exploration).
The main objective of this experiment is to identify what type of non-financial capital has the larger impact on start-up performance (i.e., sales, growth, profits and jobs)? And whether that type differs by innovative level of the business idea, characteristics of the entrepreneur, or stage of development of the firm.
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Primary Outcomes (End Points)
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Before
Entrepreneurship sales, growth, profits and jobs
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After
Short-term outcomes (after the program closure):
• Demo-day score: the pitch score as evaluated by judges in the demo-day (see above for more details on demo-day scores)
• Change in business practices index as measured by surveys
• Change in innovation and openness to new information index as measured by surveys
Primary long-term outcomes (within 1 and 2 years of application):
• Sales as measured by administrative data and surveys
• Business survival as measured by administrative data
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Sample size (or number of clusters) by treatment arms
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Before
There will be at least 77 firms for each treatment arm, i.e. 154 firms in total. This will depend on the budget allocation obtained by the project (the sample could be increased).
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After
The planned number of firms and clusters is 360 (180 per treatment arm).
After the completion of the first stage, the second stage will include the top scoring 75 firms of each treatment arm (according to the application scores) for a total of 150 firms and clusters.
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Power calculation: Minimum Detectable Effect Size for Main Outcomes
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Before
The minimum detectable effect is $21M COP (with a power of 0.8).
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After
The minimum detectable effect is $32M COP (with a power of 0.8, and using ANCOVA). The parameters and assumptions we used to produce this estimate are:
1. The revenue within one year of participation for previous cohorts of participants in the program is $107M COP, with a standard deviation of $133M COP (on a baseline revenue of $96M COP). The previous cohorts of participants have been offered services most similar to our managerial capital treatment arm, so we use these numbers as an estimate of the effect in the managerial capital arm of our experiment.
2. The sample size we use is the 360 firms that participate in both the first and the second stage of the experiment.
3. We assume one follow-up and a correlation of 0.6.
4. To replicate the MDE of $32M COP, use the following routine in stata: sampsi 107 139, n1(180) n2(180) sd1(133) pre(1) post(1) r01(0.6). This MDE corresponds to 0.3 standard deviations.
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Secondary Outcomes (End Points)
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Before
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After
Secondary long-term outcomes (within 1 and 2 years of application):
• Profits as measured by surveys
• Number of employees as measured by surveys and administrative data
• Wages as measured by surveys and administrative data
• Change in business practices index as measured by surveys
• Time dedicated to administrative, exploration and exploitation tasks
• Execution of exploration and exploitation activities
• Delegation of organizational tasks
• Change in innovation and openness to new information index as measured by surveys
• Online activity as measured by Alexa
• Number of followers on Linkedin, Twitter and/or Facebook (if it applies to the firm)
Score of the project (used for selection), and program classification of too entrepreneurs
Quality of the business model (innovativeness and scalability)
Characteristics of the entrepreneur and its team (education, sex, labor experience, experience as entrepreneur, and skill)
Initial stage of the firm (measured in terms of sales)
Initial stage of the entrepreneur’s focus (measured in terms if exploration and exploitation focus and activities)
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