"Without question, the existing cohorts of entrepreneurs are going through the most severe of stress," said Professor Reddi Kotha, who is Associate Professor of Strategic Management and Academic Director, Master of Science in Innovation, at the Lee Kong Chian School of Business.
"The survival rate in entrepreneurship is already very low and this would make it much lower," he added. "On one hand, some people who were considering entrepreneurship might not enter the ranks."
"But on the other hand, during an economic crisis, those who may have been laid off or had job opportunities curtailed, may become ‘necessity entrepreneurs’," said Associate Professor Kotha, whose research interests and areas of expertise are in entrepreneurship, family business, and technology and innovation.
Whether driven by opportunity or necessity, start-up enterprises have been the subject of research for Associate Professor Kotha and his collaborators for a number of years now. One of his recent projects was a year-long pilot study on the impact of management training for 200 start-up entrepreneurs in Singapore.
The impetus for the pilot project to train entrepreneurs came from a desire to understand the constraints they face and to help them develop capabilities for potential success.
This also meant not screening participants and selecting the "best".
"We invited entrepreneurs to join the research programme and then assigned the entrepreneurs to two cohorts: treatment and control and provided the cohorts training at different points in time. This helps, from an academic and research standpoint, to determine to what extent the training is responsible for their ultimate success, rather than the selection process."
He and his collaborators, INSEAD Associate Professor Balagopal Vissa, former SMU Assistant Professor Anne-Valerie Ohlsson-Corboz and SMU Postdoctoral Fellow Dr Yimin Lin, have been analysing data from that pilot, which yielded promising initial results and suggested that the training workshops, focussing on the use of social capital, had a positive effect on growth and employment increase for the start-ups.
This has led to a larger follow-up study with Associate Professor Kotha and Associate Professor Vissa joined by an IT industry veteran Dr Lim Chon-Phung, a fellow researcher who earned a PhD in General Management from SMU in 2018.
Involving more than 300 start-ups, chosen from 500 initial respondents, and focusing on training to aid growth and internationalisation, the study’s first round was conducted in October and November 2019, with round two planned for August and September of 2020.
The main goal of the project is to discern the type of management training necessary that would have an impact on an early-stage start-up’s ability to grow and scale up successfully.
After training in core skills has been conducted, the researchers track the firms’ performance to see if the training leads to better outcomes in the course of their life cycle.
Associate Professor Kotha noted that the potential impact might only be seen 12 months or longer after the fact, and that the pilot and follow-up projects were only meant to be "one-off".
However, a spinoff initiative made possible by the pilot may have greater longevity and more far-reaching consequences for the local start-up scene.
Building on the research initiated by Associate Professor Kotha, Dr Lim has developed a course for the SMU Academy aimed at entrepreneurs, founders of start-ups and SME business owners who want to scale their business.
Scheduled to launch in October 2020, the programme, called the SMU Executive Certificate in Leading New Business to Growth, teaches the development of strong business models, robust go-to-market strategies and the building of effective social networks.
Helping entrepreneurs is a subject close to Associate Professor Kotha’s heart.
"From the supply side of things, I see my role and SMU’s role as training and providing the platform for our students and entrepreneurs, to enable them to identify and develop businesses that create value for society," he said. "I see it as bringing together the practice and academic sides to benefit our students and entrepreneurs."
Another line of research he has undertaken is the impact of family on enterprises and their prospects for success.
"Family is the bedrock of entrepreneurship. However, there is a naive view that family businesses may be unprofessional and kinship ties may cause complications," he said. "We’ve challenged this notion and developed arguments when family ties vary between founders and initial employees; it influences the performances of start-ups."
In a joint project with SMU’s Associate Professor Gokhan Ertug and Linköping University’s Professor Peter Hedstrom, Associate Professor Kotha developed and tested this theory with a sample of data from start-ups in Stockholm and the research resulted in the paper "Kin ties and the performance of new firms: A Structural Approach", which is forthcoming in the Academy of Management Journal.
Family and social networks are also the subject of an earlier paper co-authored with SMU LKCSB’s Dean, Professor Gerry George, "Friends, family or fools: Entrepreneur experience and its implications for equity distribution and resource mobilization", published in 2012 in the Journal of Business Venturing.
Associate Professor Kotha’s own experience with entrepreneurship, prior to his academic career, had to do with family as well. He got his Bachelor of Commerce degree from Nizam College in Hyderabad in 1994 and worked as an accountant trainee for a few years before helping his brother to set up a distribution business in coastal Andhra Pradesh.
In 2000, he went on to pursue his MBA from Babson College in the United States with the intention of gathering international work experience and returning to entrepreneurship.
"However, during the MBA program, I had a fellowship and worked with Professors William Bygrave and Julian Lange at Babson with other research fellows assisting them in their research on the venture capital industry," he said. "The fellowship piqued my interest in academic research. With the encouragement of my research advisors, I decided to change track and pursue academia."
After getting his MBA in 2002, he did his PhD in Entrepreneurship at the London Business School, which he obtained in 2007. Later that year, he joined the Lee Kong Chian School of Business as an Assistant Professor. He and his partner, now
wife, were both graduating with their doctorate degrees and they wanted to find jobs in the same city.
"Singapore offered exciting possibilities and SMU in particular was exciting as an institution that provided the environment for junior faculty to grow and develop as researchers. I am delighted to be at SMU, where my colleagues do world-class research, and our teaching emphasis and standards are super high."
As an educator and researcher, Associate Professor Kotha is clear on his objectives.
"I want my research to shift towards more direct impact on the field. Putting together such studies and interventions takes enormous resources, it takes longer and takes much more effort," he said, adding that he is fortunate to be able to do all this at SMU.
He is now preparing to collaborate on another project that looks to help SME leaders adopt research and technology from universities.
To Associate Professor Kotha, the importance of his research lies not just in the training interventions for the participating companies. His intention is to make his research available in the public domain, for other researchers and organisations
to learn from and build on its findings.
"We go through a systematic review and whatever we do, we use an open platform and share all our materials in the public domain. If others find it useful, they can take it further."