Open at birth? Why new firms do (or don't) use open innovation

Research SummaryOpen innovation is about firms harnessing knowledge flows across firm boundaries, but limited research has examined the nature and antecedents of these flows for start-up firms, as well as the interdependence of inbound and outbound flows. From a new sample of start-up firms making 3D printers, we show how their degree of openness for inbound and outbound knowledge flows relates to the firms' initial capabilities and founding intentions. From this, we suggest that the patterns of openness are influenced more by initial factor endowments than a firm-specific process of emergent strategy development. Managerial SummaryInnovative firms often face trade-offs between open and proprietary strategies, particularly in industries and segments where online communities and other collaborations provide a pool of shared knowledge for the entire industry. This study illuminates these trade-offs by comparing the choices made by the founders of 3D printer manufacturers. For products based on modular systems, it shows the range of choices that firms have on their degree of inbound openness (using external technology) and outbound openness (sharing their own technology)as well as the interdependencies of these choices. Finally, it points to long-term implications of early entrepreneurial decisions: firms that leverage external technology can enter markets more quickly, but their innovation options will be limited unless they have capabilities for proprietary innovation.