This study draws on extensive ethnographic data and a multiple case study design to develop new theory about innovation processes and techniques. By contrasting the experiences and outcomes of five innovation projects in an educational technology company, the study considers two distinct, if often interrelated, strategies to navigating market uncertainty: theory building and theory testing. The paper theorizes how the appropriate balance between these two strategies is driven by the multiplicity, or number of and relationships between relevant stakeholders and stakeholder interests, in the innovation context. The data suggest that multiplicity increases the value of rigorous – and potentially more time-consuming – theory building, while simultaneously increasing the potential risks and costs of poorly grounded theory testing. These insights challenge contemporary views on innovation teaching and practice, which have increasingly emphasized action over analysis.