The Corridor Principle

Posted: 17 Nov 2009

See all articles by Robert Ronstadt

Robert Ronstadt

affiliation not provided to SSRN

Date Written: 1988

Abstract

Considers the reasons why some entrepreneurs create multiple ventures--i.e., both serial and portfolio entrepreneurs. One concept, the Corridor Principle, is named as a possible reason for the multiple venture phenomenon. The Corridor Principle asserts that, just by starting a firm, entrepreneurs become aware of other startup opportunities they would not have seen nor taken advantage of if they had not established their original company. Six hypotheses are tested using a database which provides comparable data on both practicing entrepreneurs and former entrepreneurs (defined as individuals who started one or more ventures, but chose to end their entrepreneurial careers and go back to work for someone else). The data consist of responses from 1, 537 entrepreneurs and former entrepreneurs abstracted from a larger database of 4,100 respondents to Phase One of the National Entrepreneurship Study. The six hypotheses tested are: (1) most entrepreneurs create multiple ventures during their entrepreneurial careers; (2) the greater the number of startups, the longer the entrepreneur's career will be; (3) longer entrepreneurial careers will have a higher positive correlation with earlier career startups versus entrepreneurial careers begun later in life; (4) longer entrepreneurial careers will have a higher positive correlation with anticipated career startups versus entrepreneurial careers that are not anticipated; (5) among unanticipated first startups, longer entrepreneurial careers will result when the initial venture is related directly to the entrepreneur's prior experience; and (6) those entrepreneurs who have created more than a single venture, tend to do so early in their careers rather than later. Findings support the position that entrepreneurship is a dynamic, multi-venture process for a number of entrepreneurs. Also, a positive relationship exists between starting at least two ventures and a longer entrepreneurial career. Finally, a significant number of entrepreneurs create their second venture early in their careers. (SFL)

Keywords: Entrepreneurial orientation, Opportunity recognition, Portfolio entrepreneurs, Serial entrepreneurs, Individual traits, Age, Career choices

Suggested Citation

Ronstadt, Robert, The Corridor Principle (1988). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1504491

Robert Ronstadt (Contact Author)

affiliation not provided to SSRN

No Address Available

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