Cutting your teeth: The beginning of the learning curve

We explore learning-by-doing in an important setting not previously explored — the context of one or more complex experiences encountered in novel circumstances. We explore characteristics that lead to learning at the beginning of the learning curve. We use data from survey responses of 2,111 entrepreneurs to examine performance of startup firms as a measure of outcomes produced by learning-by-doing from prior founding experience. Results indicate substantial productivity benefits accruing from prior entrepreneurial experience. We are the first to exploit panel data on the entire individual history of firm founding to control for individual fixed effects. Areas where entrepreneurs show possible learning effects include the inclination and/or ability to more quickly go through the process of recognizing an opportunity, developing it, and executing the exit strategy.