July 2007

Compete or Cooperate?
For generations, would-be entrepreneurs and economists believed that start-up companies were created to bring new innovations to market rapidly and to compete with or displace established firms. The noted economist Joseph Schumpeter famously referred to this process of continuous innovation and displacement as “creative destruction.” Due to this conventional wisdom, the first instinct of most executives at start-ups today is to try to use new technology to outcompete larger, more established and less innovative firms.

Joshua S. Gans

David H. Hsu

Scott Stern