Entrepreneurial ventures pivot. Pivots refer to changes to a new venture’s strategic direction by reallocating their activities, resources, and/or attention to problems and opportunities. Though new venture’s pivots have been largely conceptualized as purely rational information-based choices based on firm learning goals and market feedback, we theorize that they are also driven by noisy signals, specifically, the new ventures’ proximity to their entrepreneurial ecosystem. We use a custom-built longitudinal dataset of 881 new ventures (2018-2024) using a novel measurement approach to identify the frequency (number) and intensity (degree of change) of pivots. We describe and measure the effect of different dimensions of entrepreneurial ecosystem proximity on the pivot frequency and intensity. Our findings help to explain why choices on entrepreneurial pivots reflect the cost of being exposed to high-information and attention-scarce environments, where new ventures strive to maintain a balance between internal rational choices and a necessary degree of distinct uniqueness.
