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49 BizEd July/August 2014 SH I RONOSOV/TH I N KSTOCK Patience Pays Off For Startups ALTHOUGH SMALL STARTUPS might be eager to get their products to market to raise much-needed cash, they might do so to their future detriment, say Sreekumar Bhaskaran of Southern Methodist Univer- sity's Cox School of Business in Dallas, Texas; Sinan Erzurumlu of Babson College in Babson Park, Mas- sachusetts; and Karthik Ramachandran of the Georgia Institute of Technology's Scheller College of Business in Atlanta. Conventional wisdom holds that startups should launch quickly, start- ing with the first viable version of their offerings, so they can raise the capital needed to further develop and refine the product for a second launch. But if their first versions prove faulty, they can lose a great deal of goodwill. The authors cite one startup's hasty launch of an orthopedic implant. Con- vinced by the entrepreneurs of the prod- uct's benefits, doctors used the implant only to cope with post-surgical patient complications. Even though the firm's second version addressed the initial problems, the firm's reputation had suf- fered. Its founders eventually were able to convince doctors to give the product a second chance, but only after issuing apologies and losing potential sales. Although cash levels are always of concern to a fledgling company, it is in a startup's best interest to delay a new product's launch until it has developed a better, later version, the authors empha- size. That's true even if the first version is fairly strong. "What may seem to be immedi- ately profit maximizing may lead you to bankruptcy sooner," says Bhaskaran. "'Failing forward' is not the best strategy for startups." "Sequential Innovation by Start-ups: Balancing Survival and Profitability" is under review. A working version is available at Sreekumar Bhaskaran Sinan Erzurumlu Karthik Ramachandran GENDER BIAS AMONG hiring managers in STEM fields is alive and well, according to research by Ernesto Reuben of Columbia Business School in New York City; Paola Sapienza of Northwestern Univer- sity's Kellogg School of Management in Evanston, Illi- nois; and Luigi Zingales of the University of Chicago Booth School of Business in Illinois. In one experiment, the researchers asked nearly 200 participants, both male and female, to play the role of hiring managers. These participants first completed computer-based behavioral testing to determine how deeply they held stereotypes about the ability of men and women to succeed in math and science. Then, they were asked to "hire" one of 150 other participants to perform a mathematical task— correctly adding up as many two- digit numbers as possible in four minutes. The job candidates already had completed a test of their apti- tude in the task. In some cases, candi- dates revealed their scores to the hiring managers; in others, they did not. When the hiring managers had no information other than the candidates' gender, they all were twice as likely to hire a man as a woman. And when can- didates were able to reveal their scores? Women were still only half as likely to be hired. In both cases, bias often led individuals to hire someone whose score was lower than that of another candidate. This kind of outcome leads not only to a less diverse workforce but also to a potentially less capable one, says Reuben. "Leaving your personal experiences out of the process will likely land you the best candi- date. Otherwise, you are hurting your company." "How Stereotypes Impair Women's Careers in Science" was recently published in the Proceedings of the National Academy of Sciences. STEM and Stereotypes Ernesto Reuben

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