A spinout's biggest competitor may be the parent company, not other entrepreneurs

Spinouts, or new ventures started by employees leaving a parent firm, often outperform other types of new firms. But a new study published in the Strategic Management Journal finds that when parent firms identify and implement ideas internally, they outperform spinouts. For example, if employees at Microsoft leave the parent and start their own spinout in the competing industry, the spinout potentially needs to compete against a new establishment formed by Microsoft in the same industry.