Department of Industrial Engineering & Decision Analysis [Joint IEDA/ISOM seminar] - Strategies for Milestone-driven Start-ups

10:30am - 11:30am

New venture start-ups need to “survive” through multiple stages of reaching milestone targets. This work investigates the strategies for start-ups in a milestone-oriented setting by examining a model of a new venture, where its state is captured by a diffusion process. The entrepreneur can choose between multiple activities (or controls), which incur different cost and determine the drift and the variance of the process. Depending on whether the process reaches an upper boundary or a lower one, the start-up firm succeeds or fails. This work solves for the optimal policy and provides an explicit characterization of its structure. In particular, the optimal policy only uses activities from a set characterized by a so-called efficient frontier curve that orders the activities by intuitive metrics. A unique feature of the model is that depending on the model parameters, the efficient frontier curves can be of different types, resulting in qualitatively different structures of the optimal policy.

Event Format
Speakers / Performers:
Prof. Zhengli Wang
HKU, Faculty of Business and Economics, Business School

Dr. Zhengli Wang is an Assistant Professor in the Innovation & Information Management area at the Business School of the University of Hong Kong (HKU). Prior to joining HKU, he obtained a PhD in Operations, Information & Technology from Stanford Graduate School of Business and a Bachelor in Math from Massachusetts Institute of Technology. His research interests involve stochastic modeling and applications of machine learning methods in the context of entrepreneurship, healthcare and online platforms.

Recommended For
Faculty and staff
PG students
Department of Industrial Engineering & Decision Analytics
Department of Information Systems, Business Statistics & Operations Management
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