Unicorn companies, such as Facebook, Uber, and Airbnb, significantly impact our economies. This happens although they had a dramatic initial start – at least in terms of financial performance – that would have let any other “conventional” business close. In other words, Unicorns challenge the start-ups’ problems traditionally associated with early failure (liability of newness). This paper aims to understand what helps Unicorn firms initially survive despite huge losses. By adopting a behavioral lens, this historical case study article focuses on key strategic decisions regarding the famous social media Unicorn Snapchat from 2011 to 2022. The case combines secondary data and a thematic analysis of Snapchat founders’ and investors’ interviews/comments to identify the behavioral antecedents leading to Snapchat’s honeymoon. Snapchat network effect triggered cognitive biases of Snapchat founders’ and investors’ decisions, leading them to provide initial assets (i.e. beliefs/goodwill, trust, financial resources and psychological commitment) to the nascent Unicorn. Therefore, the network effect and biases resulted in significant antecedents for Snapchat’s honeymoon. The authors propose a general, theoretical framework advancing the possible impact of biases on Unicorns’ initial survival. The authors argue that some biases of the Unicorns’ founders and investors can positively support a honeymoon period for these new ventures. This is one of the first case studies drawing on a behavioral approach in general and on biases in particular to investigate the liability of newness in the Unicorns’ context.

Cristofaro, M., Giannetti, F., Abatecola, G. (2023). The Initial Survival of the Unicorns. A Behavioral Perspective of Snapchat. JOURNAL OF MANAGEMENT HISTORY, 29(4), 456-480 [10.1108/JMH-11-2022-0066].

The Initial Survival of the Unicorns. A Behavioral Perspective of Snapchat

Cristofaro M.
;
Abatecola G.
2023-02-06

Abstract

Unicorn companies, such as Facebook, Uber, and Airbnb, significantly impact our economies. This happens although they had a dramatic initial start – at least in terms of financial performance – that would have let any other “conventional” business close. In other words, Unicorns challenge the start-ups’ problems traditionally associated with early failure (liability of newness). This paper aims to understand what helps Unicorn firms initially survive despite huge losses. By adopting a behavioral lens, this historical case study article focuses on key strategic decisions regarding the famous social media Unicorn Snapchat from 2011 to 2022. The case combines secondary data and a thematic analysis of Snapchat founders’ and investors’ interviews/comments to identify the behavioral antecedents leading to Snapchat’s honeymoon. Snapchat network effect triggered cognitive biases of Snapchat founders’ and investors’ decisions, leading them to provide initial assets (i.e. beliefs/goodwill, trust, financial resources and psychological commitment) to the nascent Unicorn. Therefore, the network effect and biases resulted in significant antecedents for Snapchat’s honeymoon. The authors propose a general, theoretical framework advancing the possible impact of biases on Unicorns’ initial survival. The authors argue that some biases of the Unicorns’ founders and investors can positively support a honeymoon period for these new ventures. This is one of the first case studies drawing on a behavioral approach in general and on biases in particular to investigate the liability of newness in the Unicorns’ context.
6-feb-2023
Pubblicato
Rilevanza internazionale
Articolo
Esperti anonimi
Settore SECS-P/08 - ECONOMIA E GESTIONE DELLE IMPRESE
Settore ECON-07/A - Economia e gestione delle imprese
English
Con Impact Factor ISI
Behavioral Strategy; Unicorns; Biases; Liability of Newness; Case Study; Management History
https://www.emerald.com/insight/content/doi/10.1108/JMH-11-2022-0066/full/html
Cristofaro, M., Giannetti, F., Abatecola, G. (2023). The Initial Survival of the Unicorns. A Behavioral Perspective of Snapchat. JOURNAL OF MANAGEMENT HISTORY, 29(4), 456-480 [10.1108/JMH-11-2022-0066].
Cristofaro, M; Giannetti, F; Abatecola, G
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2108/314199
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