Laura Huang is an Assistant Professor of Management and Entrepreneurship. Professor Huang’s research examines early-stage investment decisions, and how perceptions and cues influence an individuals’ ability to make important, high-stakes decisions. She is currently studying how an investor’s gut feel plays a role in entrepreneurial decision-making, in addition to business viability data.
Professor Huang has led many, many lives (I’m not exaggerating). She first started out as an electrical engineer and obtained her masters in engineering.
“I thought I was going to be an engineer for life. I was designing stents with Johnson and Johnson and was pulled onto a technical marketing team. This introduced me to business problems such as how are we going to sell it in a new industry, which opened the doors to new things for me.”
Discovering her affinity for sales and marketing, she shifted into that department. Next, upon completing her MBA at INSEAD, she went into investment banking.
“I was doing a lot of deals in emerging markets. There’s a lot of entrepreneurship in emerging markets, and so while there I also volunteered in Thailand, Cambodia, helping fisherman start their fishing businesses. I found that to be fascinating and was interested in the people side of things, which was so different from engineering.”
So, she decided to get her PhD in organizational behavior and study entrepreneurship, during which she consulted for early stage firms in Europe, North America, and Asia. Needless to say, Professor Huang has probably done something that relates to what you’re interested in.
“Right now my research looks at the perceptions, persuasion, attributions that happen within the entrepreneurship process. So much of entrepreneurship that we focus on is the business model, the idea, but…so much of that is driven by things like their gut feel or their perceptions about the entrepreneur.”
“What’re some of the more interesting things you’ve found?”
“I have one paper where we’re looking at the role of attractiveness, of how attractive the investor thinks the person pitching is.”
Professor Huang grins and says, “For a while we struggled with what to call this paper. Maybe the ‘Brad Pitt Effect?’ Basically attractive people are funded more than non-attractive people.”
I nod my head yes, that seems obvious enough. But apparently there’s an extra boost that males get. For example, if you’re an unattractive male, you don’t get as much of a boost as an attractive male. For females, there’s no difference for attractive vs. unattractive.
“Another interesting thing I’ve found is that people with non-native American accents are not funded as readily as people with native accents. That’s not altogether surprising but what IS surprising is that it’s actually because you’re interpreted as having weaker political skill and you’re not able to influence people. This is good news for people with non-standard accents because it’s not a matter of how well you communicate; it’s demonstrating how quickly and readily that you have the influence and political skill to an investor.”
The key takeaway is that decisions are being made based on perceptual characteristics; decision-making is not that clear cut, especially in entrepreneurship where things are so high risk.
“In the absence of certainty, how do people make their decisions? By relying on things that are typically seen as emotional biased assessments. But to the investors, they’re actually reliable predictors that they have these cognitive models.”
I asked Professor Huang what advice she has for those interested in entrepreneurship, knowing all this.
“First, I think the aggregate really matters. It’s not just the idea itself, but it’s demonstrating that you have what it takes to execute on whatever might come your way. Because things are going to change, the idea is going to change, so it’s important to instill faith that you can do it. Second, and this is just a personal opinion, you should wait as long as possible to obtain funding. It just gives you more time to experiment, to figure out what your core product is going to be, and your valuation will be higher. Third, my research tells me that the people issues are what’s most important. Overwhelmingly the reason why entrepreneurs fail is because of things that have to do with team dynamics and interpersonal relationships. You have to make sure you have a shared vision, understanding and values that can bindyou together.”
1. What is your favorite word? Articulate
2. What is your least favorite word? Sloppy
3. What makes you happy? Family and friends
4. What makes you unhappy? Tragedy
5. What sound do you love? Child’s laughter
6. What sound do you hate? Pain
7. What is your favorite curse word? Bitch
8. What profession other than yours would you like to attempt? I would love to start my own non-profit or foundation
9. What profession would you not like to do? Actress
10. If heaven exists, what would you like to hear God say when you arrive at the pearly gates? Welcome, we’re so glad you’re here.