The evolution of interorganizational relationships in emerging ventures: An ethnographic study within the new product development process

• Longitudinal, qualitative study of new ventures and interorganizational relationships
• During the new product development process, relationships evolve from pure outsourcing interactions to deep alliances.
• Socioemotional bonds can form within relationships, with the potential to be harmful or fatal.
• Enmeshment tends to form during tense periods of during design and commercial emergence process.
• New ventures can become conscious of the toxic relationships, and can recover.

Emerging ventures rarely have the resources they need, which often force them to reach beyond their boundaries to access these resources. While the field has acknowledged how critical external relationships are in the emergence process, we lack an understanding of how these relationships evolve. Drawing on fourteen longitudinal case studies, this article begins to fill that gap by examining how emerging ventures use interorganizational relationships to discover, develop, and commercialize new products. We found that emerging ventures tended to establish outsourcing relationships early and that many outsourcing relationships progressed into alliances. This suggests that these early relationships are dynamic, evolve through the emergence process, and may be critical to the successful emergence of a venture. We also discovered that many entrepreneurs developed strong socioemotional bonds with their alliance partners. Unexpectedly, our study revealed that in many cases these socioemotional bonds clouded the entrepreneur's judgment of the partner's abilities and led to problems that threatened the venture's survival.