EXPRESS: A Theory of Product-Form Strategy: When to Market Know-how, Components, or Systems?

Commercializing technological innovations is a strategic goal in entrepreneurial ventures and established firms. One fundamental decision that remains understudied in this context is the form in which the innovation is to be commercialized. We term this decision the firm's  product-form strategy (PFS) for the innovation. In Study 1, we employ a theories-in-use approach and, using in-depth interviews and field observations with technology entrepreneurs and angel investors, develop a theory of PFS –to market the innovation as either know-how, a component, or a system – and identify the primary drivers of this choice. The theory is tested using a multi-method, multi-context approach. In Study 2, we use proprietary investment proposals generated by entrepreneurial ventures when they seek support from angel investors. In Study 3, we test the theory using video transcriptions of technology proposals from Shark Tank. In Study 4, we assess the internal validity of the theory with active angel investors as subjects. We find consistent support for our theory and conclude with implications for theory and managerial practice.