Direct and Indirect Effects of Passion on Growing Technology Ventures

• DOI: http://doi.org/10.1002/sej.1213
• Published date: 01 June 2016
• Author: Melissa S. Cardon,Mateja Drnovsek,Pankaj C. Patel
• Date: 01 June 2016

DIRECT AND INDIRECT EFFECTS OF PASSION ON

GROWING TECHNOLOGY VENTURES

MATEJA DRNOVSEK,

1

* MELISSA S. CARDON,

2

and PANKAJ C. PATEL

3

1

Faculty of Economics,University in Ljubljana, Ljubljana, Slovenia

2

Lubin School of Business, Pace University, Pleasantville, New York,U.S.A.

3

Miller College of Business, Ball State University, Muncie, Indiana, U.S.A.

Research summary: Entrepreneurial passion has gained credence in recent years in explaining

entrepreneurial efforts,yet examination of the dynamics of this emotionand its effects on venture

growth is still in its infancy. Building on the literature on entrepreneurial motivation and

entrepreneurial passion, we develop and test a model of entrepreneurial passion, goals, and

venture growth. We utilize path analysis on a two-wave sample of founders from 122 high

technology firms. We find direct positive effects of passion for developing on venture growth

and an indirectpositive effect mediated by goal commitment, but not goal challenge. Implications

for research and practice are discussed.

Managerial summary: In this study, we show that entrepreneurs’positive feelings of

entrepreneurial passionare positively associatedwith venture growth.We focus on a specifictype

of entrepreneurial passion—passion for developing a venture. Based on the findings from our

study, we suggest that it is important for entrepreneurs to channel their passion for developing

toward identifying challenging business goals and increasing commitment to business goals.

We show that entrepreneurs who increase commitment toward business goals based on passion

for developing realize higher venture growth. However, developing challenging goals based on

passion does not lead to higher venture growth. Copyright © 2016 Strategic Management

Society.

INTRODUCTION

Several researchers have examined the relationship

between a founder and a firm at multiple points

in the venture’s life cycle, from the founding process

(Gartner, 1990; Venkataraman, 1997) until the sepa-

ration of the entrepreneur from the venture (Shepherd,

2003; Shepherd and Haynie, 2009), to find that ‘the

overall enterprise is not viable without the entre-

preneur’(Gartner, 1990: 18). This may be especially

salient in the case of technology ventures (Beckman

et al., 2012) because a high tech entrepreneur is seen

as a cornerstone in the development of technology-

related opportunities and, ultimately, in venture

success (Arthurs and Busenitz, 2003).

One of the qualities associated with entrepreneurs,

and one often referred to in work on individual moti-

vation (e.g., Duckworth et al., 2007), is the emotion

of entrepreneurial passion. Entrepreneurial passion

involves positive and intense feelings focused on

particular roles that are central to the identity of an

entrepreneur (Cardon et al., 2009). Academics and

practitioners concur that passion is a critical aspect

of the entrepreneurial process (Cardon et al., 2009;

Smilor, 1997), with important implications for the

motivation and energy (Bierly, Kessler, and

Christensen, 2000; Brännback et al., 2008), persis-

tence (Cardon and Kirk, 2015; Smilor, 1997), and

work effort (Chang, 2001) of entrepreneurs. Much of

the published work on passion in entrepreneurship is

Keywords: entrepreneurial passion; goal commitment; goal

challenge; venture growth

*Correspondence to: Mateja Drnovsek, Faculty of Economics,

University in Ljubljana, Kardeljevaploscad 17, 1000 Ljubljana,

Slovenia. E-mail:mateja.drnovsek@ef.uni-lj.si

Strategic Entrepreneurs hip Journal

Strat. EntrepreneurshipJ., 10:194–213 (2016)

Published online4 May 2016 in Wiley Online Library (wileyonlinelibrary.com). DOI:10.1002/sej.1213

Copyright © 2016 Strategic Management Society

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theoretical or focused on outcomes involving

individual behavior (Murnieks, Mosakowski, and

Cardon, 2014), rather than venture outcomes. The

notable exception is a study by Baum and Locke

(2004), who foundsupport for an indirect relationship

between passion for work and firm performance.

In this research, we build on prior work on entre-

preneurial passion (Cardon et al., 2009), goal pursuit

(Baum, 2013), and entrepreneurial motivation (Foo,

2011; Uy, Foo, and Ilies, 2014) to propose a theory

of how entrepreneurial passion relates to venture

growth through a motivatedprocess of an individual’s

goal pursuit in high technology ventures. Drawing

from Cardon et al.’s (2009) conceptual framework,

we emphasize the role of passion for developing

firms. The focus on entrepreneurial passion for

developing stems from our interest in technology

ventures that have multiple growth goals, including

taking a technological idea from its inception to a

commercial use and, later, market adoption. We

theorize that an entrepreneur’s passion for develo-

ping will evoke those goal-setting mechanisms that

facilitate engagement of entrepreneurial skills and

acquisition of resources that are needed for attaining

entrepreneurial growth (Cardon et al., 2009).

Our first contribution is to the current literature on

growth of high technology ventures by acting on the

call of Baum, Locke, and Smith (2001: 299) who

suggested that ‘perhaps researchers ought to look

again at traits and motives, but through mediation

models that test more complex casual chains.’By

developing an integrative model of the motivation

mechanisms that connect individual-level variables

and venturegrowth, we respond to this call and extend

their work. While Baum et al. (2001) previously

found that passion for work has an impact on venture

growth, and this impact is fully mediated by growth

goals of the entrepreneur (Baum and Locke, 2004),

we build on thisfinding by examining the relationship

between passionand venture growth using passion for

developing, which is specific to the entrepreneurship

domain (Cardon et al., 2009). We also contribute to

the literature exploring how cognitive and affective

processesof entrepreneurs together relateto firm-level

outcomes. In particular, we extend currentknowledge

about the specific role of goal-related processes as

they relate to venture growth. While Baumand Locke

(2004) explored theeffects of static quantitative goals

that entrepreneurs set for a venture’s sales perfor-

mance and employment, the focus of our study is on

the more qualitative aspect of goal-related motivation

that occurs through setting challenging goals and an

entrepreneur’s commitmentto these goals. In addition,

we expand the nature of goals that entrepreneurs may

have beyond growth goals and focus on t he level of

goal challenge and goal commitment entrepreneurs

experienced for goals they have for their ventures.

For the majorityof them, this involved multiple goals,

rather than just a single focus on growth goals. This

approach gave us a more personalized and precise

set of goals thatentrepreneurs focuson, and it allowed

us to focus our tests on the potential association

between passion for developing and venture growth.

Our second contribution is to the literature on

emotions,where the majority of extant work examines

how emotionsof individual entrepreneursimpact their

cognitions (i.e., self-efficacy) and behaviors (i.e.,

persistence), but does not link entrepreneurial

emotions to firm outcomes. Although firm growth is

central to entrepreneurship research, we still do not

know enough about how entrepreneurs’cognitive

processes shape growth through goal commitment

and goal challenge(Davidsson, Delmar, andWiklund,

2006; Wright and Stigliani, 2013). The broader

(economic) relevance of firm growth as a strategic

option was recently empirically supported in a study

of technological regimes of industries (Delmar,

Wennberg, and Hellerstedt, 2011). Our specific

contribution to firmgrowth research is in establishing

empirical support for the relationship between

entrepreneurial passion and venture growth. This

relationship manifests through the specific type of

passion; entrepreneurial passion for developing,

where the role identity of ’developer’is central to

the intense feelings the entrepreneur experiences.

The notion of identity has become a prominent

construct in entrepreneurship research, including both

a generalized identity as an entrepreneur (Murnieks,

2007; Murnieks et al., 2014), identities focused on

more specific roles within the domain of

entrepreneurship (e.g., Cardon et al., 2009; Fauchart

and Gruber, 2011; Ho and Pollack, 2014), and the

ease within which an individual can hold multiple

identities (Powell and Baker, 2014). We contribute

to this growing work on entrepreneurial identity by

focusing on the implications of passion for the role

identity of venture developer on growth of high tech

ventures. Technology entrepreneurs are heroic

individuals (Schumpeter, 1942) with a full-blown

ability to discover, create, and exploit opportunities

that lie beyond the reach of most people (Garud and

Karnøe, 2003). In the context of technology

entrepreneurship, several individual related

Passion and Growing Technology Ventures 195

Copyright©2016 Strategic Management Society Strat. EntrepreneurshipJ., 10:194–213(2016)

DOI: 10.1002/sej