The strategic responses of start-ups to regulatory constraints in the nascent drone market

Some start-ups treat regulatoryconstraints as exogenous and beyond their control, while other start-ups treatregulatory constraints as endogenous and possible to influence. However, thusfar, no explanation has been offered for why start-ups differ in their responsesto regulatory constraints. Based on 49interviews with start-ups and other industry actors this paper examines start-ups’responses to regulatory constraints in the market for drone applications. Wefind that variation in start-ups’ responses is instigated by start-ups’ temporalorientation. Start-ups pursuing applications targeted at present markets orfuture potential markets treat regulation as exogenous. In contrast, start-ups thatpursue market applications bridging current and future potential markets aremore likely to treat regulation as endogenous.