Entrepreneurs who operate in nascent markets are often faced with a lack of support. One way to arouse interest in and enthusiasm for a new venture within those markets is to pitch the idea in ways that explicitly tie the venture to emerging hype about the nascent market—a collective vision and promise for the market’s future. In so doing, hype can serve as a means to generate early access to resources and other forms of support from stakeholders. However, the more entrepreneurs link their new ventures to such emerging hype, the greater the risk that they will face heightened expectations which could limit their flexibility to respond to changes in the marketplace. As such, it is important to explore how entrepreneurs can engage with hype while still retaining their flexibility to pivot. This subject is addressed by
@Danielle Logue and
@Matthew Grimes in their recent
Academy of Management Journal article entitled “Living Up to the Hype: How New Ventures Manage the Resource and Liability of Future-Oriented Visions within the Nascent Market of Impact Investing.”
Just like the term “entrepreneur,” “hype” is frequently used in the media. Yet, whereas the former has attracted significant attention from the management literature, the latter has largely been overlooked. As Grimes notes, “we’re living in an age of hype … I remember doing a Google News search for the term ‘hype’ on December 23 … back in 2020 and there were just so many articles written on hype on that day alone but, if you were to do a search … in the Academy of Management [Journals], you wouldn’t get a huge number of returns, so there seems to be a disconnect between how much hype is discussed publicly and how much it is discussed in terms of our scholarship.”
As usual for qualitative research, the authors did not enter the field with this theoretical framework in mind, but rather with an interest in the empirical context. As Logue explained, she chose to explore the context of impact investing, because there was “such rapidly growing global interest, excitement, and frankly hype about its potential to address societal problems.” She had successfully applied for funding from the Australian Research Council “to look at how some of the early social stock exchanges were going to work and if that could be adopted in Australia too, so it was really from the ground up looking at these settings in London, Singapore and Toronto, and following them along.” She added that “it was quite an exciting time to do the field work when everything was starting … It was very hectic and challenging at times. As you know, one of the exchanges collapsed. So part of it was then trying to track down on LinkedIn what happened to the employees, as that enterprise disappeared … you're trying to speak to entrepreneurs who maybe don't want to tell you, at that time, just how badly things are actually going.”
Once they started to explore the differences between these social stock exchange cases, Logue and Grimes realized that “emerging outcomes were very distinctive, but it wasn’t quite clear what was driving those differences. And, at this point in time, we hadn't really thought about hype as an important lens through which to understand this phenomenon. But the more we started looking at our data, we kept coming back to this idea of ‘hype.’ I think the tendency as researchers is always to say, ‘Well, okay, but hype is not something that people have studied before, so how do we locate this theoretically? How do we take hype and embed it in some existing theory?’ … We kept thinking ‘Wait! Actually, hype is theoretically interesting! It's not that this is some kind of side construct – this is the construct that we need to pull out and study and understand more’” (Grimes).
Once they had decided to pursue hype as a theoretical lens, they were surprised that, “When we kept on presenting this work in different places, it was generating a lot of engagement and interest because … people were seeing that this was occurring in many different empirical settings – you can see the headlines every day. There was something about how hype is actually happening all around us, so people could really pick up on [it]” (Logue). Grimes added that “the ability to walk into really any scholarly community and start talking about hype, more generally, … as soon as you bring up these ideas – it was so generative in the sense that everybody in the room found ways of linking into what you’re talking about … either by way of constructive critiques or in terms of seeing how they could apply these ideas to their own work and figure out ways to build on [it]”. As such, it can be hoped that this publication will start a vibrant discussion and inspire future research projects on the subject.