Team Heterogeneity in Startups and its Development over Time

Ulrich Kaiser, Bettina Müller

    Research output: Working paperResearch

    Abstract

    We investigate the workforce heterogeneity of startups with respect to education, age and wages. Our explorative study uses data on the population of 1,614 Danish firms founded in 1998. We track these firms until 2001 which enables us to analyze changes in workforce composition over time. Such a dynamic analysis constitutes a hitherto neglected area of entrepreneurship research. To assess relative workforce heterogeneity, we construct a simulated benchmark to which we compare observed workforce heterogeneity. We find that the initial workforce is relatively homogeneous compared to our benchmark. Our result holds both for non-knowledge-based and, to a lesser extent, knowledge-based startups. This seems surprising since a vast management literature advocates heterogeneous teams. The difficulties associated with workforce heterogeneity (like affective conflict or coordination cost) as well as “homophily” (people’s inclination to bound with others with similar characteristics)
    hence appear to generally overweigh the benefits of heterogeneity (like greater variety in perspectives or more creativity). We also document that workforces become more heterogeneous over time startups add workers with skills different from the workforce at startup. The initial supposedly “poor” mix of workforce characteristics is hence adjusted as the startup matures. This increase in workforce heterogeneity is, however, smaller compared to our benchmark but substantially larger than is team additions had the same characteristics as the initial team members.
    Original languageEnglish
    Place of PublicationBonn
    PublisherIZA
    Number of pages28
    Publication statusPublished - 2013
    SeriesIZA Discussion Paper
    Number7284
    SeriesZEW Discussion Papers
    Number13-058

    Keywords

    • Entrepreneurship
    • Start-ups
    • Skill Heterogeneity
    • Team Dynamics

    Cite this

    Kaiser, U., & Müller, B. (2013). Team Heterogeneity in Startups and its Development over Time. Bonn: IZA. IZA Discussion Paper, No. 7284, ZEW Discussion Papers, No. 13-058
    Kaiser, Ulrich ; Müller, Bettina . / Team Heterogeneity in Startups and its Development over Time. Bonn : IZA, 2013. (IZA Discussion Paper; No. 7284). (ZEW Discussion Papers; No. 13-058).
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    Team Heterogeneity in Startups and its Development over Time. / Kaiser, Ulrich; Müller, Bettina .

    Bonn : IZA, 2013.

    Research output: Working paperResearch

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