Facing emergent business challenges, entrepreneurs often seek guidance from experienced advisors. We study how a startup advisor leads the entrepreneur’s exploration by choosing which alternative(s) to suggest and in what sequence. Through a dynamic game-theoretic model, we show that the advisor should strategically recommend alternatives based on the entrepreneur's execution capability, trial costs, and correlation between alternatives. When the trial of the first alternative fails, the advisor should readily offer a new alternative if the entrepreneur’s capability is either very high or very low. To motivate and sustain the entrepreneur’s exploration over time and across solutions, the advisor may find it optimal to recommend inferior solutions before superior ones, or recommend multiple solutions simultaneously.
Zeya Wang is a Ph.D. candidate in Operations Management at the Scheller College of Business, Georgia Institute of Technology. He is advised by Professors Morvarid Rahmani and Karthik Ramachandran. He earned his Master’s degree in Economics at Duke University and his Bachelor’s degree in Economics at Nanjing University.
He is interested in the fields of innovation and technology management, with a primary focus on entrepreneurial operations. His research, fueled by extensive collaboration with incubators and startups, delves into the decision-making processes of early-stage entrepreneurs. He explores various strategies for entrepreneurs and relevant stakeholders to mitigate the inherent risks of entrepreneurship and aims to provide insights that enable them to navigate business uncertainties more effectively in their operations.