# The Promise Vendor
## Strategic Ambiguity and the Capital-Flexibility Paradox in Deep-Tech Ventures
> **Dissertation Dashboard** | MIT PhD
> **Advisors**: Charlie Fine (Operations) · Scott Stern (Strategy)
> **Candidate**: Angie H. Moon
> **Shared Folder**: `_thesis_package/`
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# PART I: STATIC REFERENCE [Status: STABLE 📚]
> **STABLE = Less volatile.** Theoretical foundations that change slowly. Good starting point for deep dives.
## 📚 Core Literature Map
![[papers-thesis.base]]
### Primary Theoretical Foundations
| Paper | Core Idea | Thesis Application |
| :------------------- | :-------------------------------------------------------------------- | :------------------------------------------- |
| **Ghemawat91** | Strategy = commitment via sticky assets; **flexibility has option value** | Golden Cage mechanism; AOC formalization |
| **Spence73** | Signaling under asymmetric information | Precision prescription (null hypothesis) |
| **Eisenberg84** | Strategic ambiguity enables projection | Believer investor mechanism |
| **Bolton02** | Product differentiation under uncertainty | S₂ parameter mapping to V |
| **Barney91** | Resources create competitive advantage | Boundary condition: when resources constrain |
### Ghemawat91: Commitment as Dynamic Constraint
> 📖 **Deep Dive**: [[📜ghemawat_commitment_the_dynamic_of_strategy]]
**Book**: *Commitment: The Dynamic of Strategy*
**Central Thesis**: Strategy is about commitment—**costly, hard-to-reverse choices** that create persistent differences via **lock-in, lock-out, lags, and inertia**.
**Three-Layer Value Architecture**:
| Layer | Function | Mapping to thesis |
| :------------- | :-------------------- | :-------------------- |
| Positioning | Static value creation | Promise precision V |
| Sustainability | Defending value | Stakeholder alignment |
| **Flexibility** | **Value of revisability** | **k* = F⁻¹(CR)** |
**Type I vs Type II Organizations** (Ch.7):
| Type | **Error Bias** | Structure | Thesis Mapping |
|:---|:---|:---|:---|
| Type I | **Omission errors** | Hierarchical, serial | **Analyst**: demand precision |
| Type II | **Commission errors** | Horizontal, parallel | **Believer**: accept ambiguity |
**Key Quote**: "Flexibility isn't synonymous with safety... it is an abundant store of **potentially valuable revision possibilities**."
**Direct Applications**:
1. **AOC** = Ghemawat91's lock-in via sticky assets = "**capital becomes concrete**"
2. **CR** = **commitment-intensive choice threshold**
3. **k*** = flexibility chapter: "**capital as options vs capital as concrete**"
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### Eisenberg84: Strategic Ambiguity
> 📖 **Deep Dive**: [[📜Eisenberg1984_Ambiguity_Communication]]
**Paper**: "Ambiguity as Strategy in Organizational Communication"
**Core Insight**: "The more ambiguous the message, the greater the room for projection."
**Functions of Ambiguity**:
1. **Unified diversity**: Diverse stakeholders coalesce around shared language
2. **Preserving options**: Vague commitments avoid **premature lock-in**
3. **Enabling deniability**: Abstract promises allow flexible interpretation
**Thesis Application**: Explains why Believer investors prefer vague promises—they project their own vision onto abstract positioning.
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### Signaling Theory: The Precision Prescription
**Spence73**: High-quality actors distinguish themselves via costly, verifiable signals.
**Connelly et al. (2011)**: Applied to entrepreneurship—precise promises reduce information asymmetry.
**Camuffo et al. (2020)**: "Scientific approach" to entrepreneurship emphasizes falsifiable hypotheses.
**Our Contribution**: Precision prescription holds only for **verification-oriented (Analyst)** audiences. For **projection-oriented (Believer)** audiences, vagueness dominates.
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### Real Options in Strategy
| Paper | Contribution | Thesis Connection |
|:---|:---|:---|
| Kogut & Kulatilaka01 | Capabilities as options | **Flexibility value formalization** |
| Huchzermeier & Loch01 | R&D project flexibility | **Staged commitment logic** |
| McGrath99 | Failing forward | Learning from abandoned options |
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## 📖 Paper-Specific Citations
### Paper U: Vague Promise
| Citation | Use |
|:---|:---|
| Eisenberg84 | Strategic ambiguity theory |
| Spence73 | Signaling null hypothesis |
| Sillince et al.12 | Rhetoric and ambiguity |
| Guzman & Stern20 | Observable founding choices |
### Paper C: Commitment Trap
| Citation | Use |
|:---|:---|
| Ghemawat91 | **Commitment mechanisms** |
| Barney91 | Resource-based theory |
| Leonard-Barton92 | **Core rigidities** |
| Levinthal & March93 | **Success trap** |
### Paper N: Promise Vendor
| Citation | Use |
|:---|:---|
| Arrow51 | **Newsvendor foundation** |
| Dixit & Pindyck94 | **Investment under uncertainty** |
| Bolton et al.02 | Differentiation parameter S₂ |
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# PART II: DYNAMIC DASHBOARD [Status: EVOLVING 🚧]
> **EVOLVING = Higher volatility.** Check **logic flow only**. Numbers and details are still in flux.
## 🖥️ Live Dashboard
<div><iframe src="https://html-preview.github.io/?url=https://github.com/hyunjimoon/tolzul/blob/master/Front/On/love(cs)/strategic_ambiguity/empirics/src/scripts/paper_generation/dashboard/scale/scale_dashboard.html" width="100%" height="1000" frameborder="0"></iframe></div>
🔗 [**Open Full Screen**](https://html-preview.github.io/?url=https://github.com/hyunjimoon/tolzul/blob/master/Front/On/love(cs)/strategic_ambiguity/empirics/src/scripts/paper_generation/dashboard/scale/scale_dashboard.html)
> 💡 **Viewer's Guide**: This live view tracks the **rate of convergence** (modification frequency), not the final text. Use this to gauge when the **"Slow Evolution" phase transitions to the final sprint**.
---
## 1. Core Thesis
**Research Question**: When do the commitments that secure early resources become **constraints on long-term success**?
**Central Finding**: Promise precision and venture growth exhibit a **U-shaped relationship**. Both highly precise and highly vague positioning outperform intermediate positioning, where **25.6% of ventures become trapped**.
**Mechanism**: **Audience segmentation**. Precise promises attract Analyst investors who verify specific claims. Vague promises attract Believer investors who project their own vision. Intermediate positioning activates neither evaluation mode.
**Paradox**: Early capital **reduces strategic flexibility** (ρ = -0.052), yet flexibility **predicts growth** (ρ = +0.159). Flexible ventures achieve **2.7× higher growth** than rigid ventures.
---
## 2. Three Papers
### Paper U: Vague Promise and Venture Growth
**RQ**: When is vagueness valuable despite signaling theory's precision prescription?
| Hypothesis | Statement | Result |
|:---|:---|:---|
| **H0** | Vagueness monotonically reduces growth | **Rejected** |
| **H1** | Both extremes outperform intermediate | **Supported** |
**Sample**: N = 408,784 ventures across 4 industries
| Quartile | Survival |
|:---:|:---:|
| Q1 (Precise) | 5.7% |
| Q2 | 2.9% |
| Q3 | 4.0% |
| Q4 (Vague) | **8.6%** |
**Murky Middle Penalty**: Δ = **+2.1pp to +3.7pp** across industries
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### Paper C: The Commitment Trap
**RQ**: When does early capital **constrain rather than enable** growth?
| Hypothesis | Evidence |
|:---|:---|
| H1: Flexibility → Growth | **ρ = +0.159*** |
| H2: Capital → Rigidity | **ρ = -0.052*** |
| H3: E × V interaction | Low V: -0.05; High V: +0.08 |
**Sample**: N = 123,906 ventures (panel)
**Flexibility Gap**: Top quartile achieves **2.7× median growth** of bottom quartile
**Golden Cage Mechanism**:
1. Capital requires specific promises
2. Promises attract aligned stakeholders
3. **Alignment compresses belief variance (σ² → 0)**
4. **Compressed variance blocks adaptation**
---
### Paper N: The Promise Vendor
**RQ**: How should founders choose the **optimal number of strategic options**?
**Core Model**:
```
CR = Cu / (Cu + Co)
k* = F⁻¹(CR)
```
Where:
- **Cu** = cost of **under-commitment** (lock-in to wrong path)
- **Co** = cost of **over-commitment** (diluted execution)
- **k*** = **optimal number of strategic options**
**Investor Heterogeneity**:
| Type | **Error Sensitivity** | k* |
|:---|:---|:---:|
| Analyst | High Co (waste) | ≈1 |
| Believer | High Cu (miss) | >1 |
---
## 3. Strategic Prescription
**The choice is structural, not preferential.**
Founders must select a coherent channel based on their environment's **cost structure**:
**Analyst Channel** (Low CR):
- When: Technology risk is low; **execution is the challenge**
- Action: Precise promises, verifiable milestones, **k* ≈ 1**
- Example: Software/SaaS ventures
**Believer Channel** (High CR):
- When: Uncertainty is high; **adaptation is paramount**
- Action: Abstract vision, strategic ambiguity, **k* > 1**
- Example: Deep-tech/AV ventures
**Critical Insight**: Intermediate positioning satisfies neither audience. Analysts cannot verify claims that are too vague. Believers cannot project onto promises that are too specific. The **survival penalty for intermediate positioning ranges from 2.1 to 3.7 percentage points**.
---
## 4. Evidence Summary
### Industry Heterogeneity (Paper U)
| Industry | Q1 | Q2 | Q3 | Q4 | **Δ** | χ² |
|:---|:---:|:---:|:---:|:---:|:---:|---:|
| Transportation | 5.66% | 2.89% | 4.02% | 8.63% | **+3.69pp** | 1430.9*** |
| Software | 7.77% | 4.80% | 6.76% | 7.98% | **+2.10pp** | 564.8*** |
| Hardware | 5.95% | 3.71% | 3.85% | 8.74% | **+3.57pp** | 398.6*** |
| Pharma | 8.79% | 5.73% | 6.20% | 10.56% | **+3.72pp** | 305.7*** |
### Causal Chain (Paper C)
```
Capital (E) ──(-0.052)──▶ Flexibility (|ΔV|) ──(+0.159)──▶ Growth (Y)
Combined: dY/dE = ∂Y/∂|ΔV| × ∂|ΔV|/∂E = (+)(−) < 0
```
### Strategic Cohorts
| Cohort | E (Median) | |ΔV| | Y |
|:---|---:|:---:|:---:|
| **Escape Velocity** | $257K | 40.2 | **3.01** |
| **Golden Cage** | $5.4M | 19.1 | 1.95 |
---
## 5. Theoretical Contributions
| Literature | Conventional View | **Our Boundary Condition** |
|:---|:---|:---|
| **Signaling** | Precision reduces asymmetry | **Only for Analyst audiences** |
| **RBV** | Resources enable advantage | **Resources can create rigidity** |
| **Real Options** | Options have value | **Capital destroys options via AOC** |
| **Lean Startup** | k=1 and iterate | **k* varies with CR** |
---
## 6. Practical Implications
**For Founders**:
1. **Diagnose industry CR** (Cu/Co ratio)
2. If CR < 0.5: Analyst channel (precise, **k ≈ 1**)
3. If CR > 0.5: Believer channel (vague, **k > 1**)
4. **Avoid intermediate positioning**
**For Investors**:
1. **Belief homogeneity = risk factor**
2. Maintain skeptics among stakeholders
3. **Stage capital to preserve flexibility**
**For Policymakers**:
1. "Pick-the-winner" **destroys adaptive capacity**
2. **Reward optionality preservation**
3. Penalizing pivots harms deep-tech
---
## 7. File Registry
| Document | Location | **Volatility** |
|:---|:---|:---|
| **Thesis Draft** | `_thesis_package/angie_thesis_draft_v0.pdf` | 🚧 High - Logic Check Only |
| **Figures** | `_thesis_package/figures/` | 🚧 High |
| **Paper Sections** | `_thesis_package/papers/U,C,N/` | 🚧 High |
| **Slides** | `_thesis_package/thesis_slides.md` | 🚧 High |
| **BULLETIN** | `_thesis_package/📢BULLETIN.md` | 📚 Low |
| **REGISTRY** | `_thesis_package/🗄️REGISTRY.md` | 📚 Low |
---
**Last Updated**: 2025-12-09