This dissertation uses an Inference to the Best Explanation approach for two essays on the evolution of the Lithium-ion battery industry (1991—2023). In the first essay, I consider an industry-level perspective and use quantitative and qualitative data to document the emergence and evolution of the Li-ion battery industry. The observations of multiple waves of new firm entry and more than one instance of sales takeoff highlight an empirical puzzle. Thus, I propose a conceptual framework of Market transformation (MT) that is qualitatively related to but distinct from the traditional frameworks of Industry Emergence and Disruption. By comparing the predictions of the Industry Emergence and Disruption approaches with those of the proposed MT framework, I argue that the proposed framework provides a better explanation for the observed evolutionary trajectory of the Li-ion battery industry. In the second essay, I consider the strategic choices of application markets and entrepreneurial strategies from a firm-level perspective to examine how did start-ups choose their entrepreneurial entry strategy when application markets are characterized by different sizes and levels of uncertainty. Assembling a dataset of 151 US-based battery start-ups founded in the Li-ion battery industry, I report on the start-ups’ choices of application markets and entrepreneurial strategies at entry across three distinct periods in the evolution of the Li-ion battery industry. The observation of only 16% of start-ups choosing a specialization-in-generality strategy while 84% of start-ups choosing alternative strategies during a period of increasing uncertainty (2006—2012) highlights an empirical puzzle. Thus, looking across the multi-decade history of the Li-ion battery industry, the uncertainty triggered by the successful commercialization of consumer electric vehicles (i.e., industry demand shock of the Tesla Roadster) spurred start-ups to enter with different strategic bets; it also triggered investors to support those bets. By elaborating and evaluating the list of possible explanations, I infer that the increasing levels of uncertainty associated with each application market generated uncertainty profiles that start-ups selected based on the preferences and beliefs of their entrepreneurs or their investors about the nature of uncertainty, resulting in different strategic bets, as the best explanation.