Kauffman Foundation

U Researcher Receives $75,000 Grant from Kauffman Foundation to Study Diversity of Entrepreneurs

How does the personal background of entrepreneurs influence the products they create and sell? Josh Feng, an assistant professor in the Department of Entrepreneurship and Strategy at the University of Utah’s David Eccles School of Business, is answering this question with a new $75,000 grant from the Ewing Marion Kauffman Foundation, a non-profit that supports entrepreneurship education and access.

“We’re hoping to provide a systematic view on the relationship between the backgrounds of entrepreneurs and innovators and their consumers,” he said. “If you believe that people’s backgrounds matter for what types of products they try to bring to market, then your next move is to diversify their backgrounds. The more diverse the entrepreneurs are, it follows that the more diverse set of products we’ll see.”

Feng became interested in the intersection between industrial organization and public economics during his graduate studies at Harvard University. An accomplished researcher, he is familiar with the fields of intellectual property, pharmaceuticals, and entrepreneurship.

After publishing papers on drug pricing and patent trolls, Feng is currently working on a topic especially interesting to him — diversity in the innovation system — that won him a prestigious Knowledge Challenge grant.

“The majority of innovators and venture capital-backed entrepreneurs in America are men from affluent families living in a few coastal cities” Feng said. “The lack of innovators from other backgrounds could be due to discrimination, but it could also be preferences — some people might not want to start companies. It can also be financing… if you’re from a poor background, you’re not able to raise money as easily. What I’m interested in is the implications of this lack of diversity for consumers.”

One potentially important hypothesis Feng wanted to test was whether innovators’ backgrounds influence the types of products they bring to market. To study this social science side of entrepreneurship, Feng collects various data sets on entrepreneurs and consumers. He started with microdata, gathering information at the consumer level about what kind of products and services people purchase. Then Feng and his team compared their background information — age, gender, parental income, and location — to that of the founders they bought from. He has also found similar patterns across industries.

“We found very strong relationships in terms of the background of founders of consumers,” he said. “Female entrepreneurs sold more to female consumers. And it’s true not just of gender, but other demographics as well: older entrepreneurs sell more to older consumers, and entrepreneurs from richer families sell more to rich consumers.”

Feng will use the grant to add more researchers to his team, gathering broader data on both consumers and founders to continue work on the big question: how do we make the American innovation system work better for everyone?

Learn more about research and news at the Department of Entrepreneurship & Strategy at eccles.utah.edu/entp.

About the Author:

Jacqueline Mumford Jacqueline is a master of accounting graduate from the University of Utah. Specializing in tax, she works as an accountant studying the intersection of government and business. In her free time, she runs, plays Candy Crush, and reads novels. Twitter: @jacqmumford and LinkedIn here.

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