| Abstract: |
Although biotech start-ups fail or succeed based on their research few
attempts have been made to examine if and how they strategize in this core of
their activity. Popular views on Dedicated Biotech Firms (DBFs) see the
inherent uncertainty of research as defying notions of strategizing, directing
instead the attention to the quality of their science, or the roles of boards,
management, and collaborative networks etc. Using a unique comprehensive
dataset on Danish and Swedish biotech start-ups in drug discovery this paper
analyzes their research strategies. Adopting a Simonean point of departure we
develop a contingency view on complex problem solving which structures the
argument into three steps: 1) Characterising the problem architectures
addressed by different types of DBFs; 2) Testing and confirming that DBFs form
requisite research strategies, by which we refer to problem solving approaches
developed as congruent responses to problem architectures; 3) Testing and
confirming that financial valuation of firms is driven by achievements
conforming to requisite research strategies. These strategies, in turn,
require careful combination of multiple dimensions of research. Findings
demonstrate that Shonhoovens classical argument that “strategy matters” is
valid not only for the larger high-tech firms covered by her study, but also
for small research-based start-ups operating at the very well springs of
knowledge where science directly interacts with technologies. Even though a
lot more research is needed along these lines, these findings offer new
implications for the understanding, management, and financing of these firms. |