Mavericks and Diplomats: Bridging Commercial and Institutional Entrepreneurship for Society’s Grand Challenges

Many of society’s grand challenges, like access to education, improved public health, and building smart infrastructure, occur in established fields, often ones where noncommercial logics matter. Grounded in a theory-building study of two well-matched EdTech ventures in the nascent MOOC market in the U.S. higher education field, we unpack their strategy formation processes. These ventures faced the dual problem of forming a successful strategy in a nascent market while changing an established field. Our primary contribution is a theoretical framework that identifies two distinct yet effective processes. One (Maverick) is a competitive, learning centric process, whereas the other (Diplomat) is a cooperative, diplomacy-centric one. Although distinct, these processes unexpectedly share the same decision weaving (i.e., hybrid) problem-solving structure that fits complex, novel problems like strategy formation. Broadly, we contribute to institutional theory and institutional entrepreneurship by introducing the diplomacy lens, its tactics, and firm performance. We contribute to learning theory and entrepreneurship by identifying the unique features of learning in established markets, including the limits to rapid experimentation and the value of collaborative learning for changing established fields. We add to practice by emphasizing the difficulty of achieving both commercial success and societal impact. Overall, we bridge the gap between institutional and commercial entrepreneurship. Funding: The authors gratefully acknowledge the generous research support of the Stanford Technology Ventures Program. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2020.13810 .