entrepreneurship theories - discussion in cetim
DESCRIPTION
Presentation on entrepreneurship theories discussion on the technology-based endeavors.This a document for discussion on further research steps.TRANSCRIPT
Exploring Entrepreneurial Action Theories in Technology-based Nascent Ventures
NITIM Munich Internal Seminar
CeTIM – June 15th
13/04/11
Ferran Giones
Supervisor: Dr. Francesc Miralles
Agenda
• Introduction• Research on Entrepreneurship• Research Project
• Literature Review• Research Question• Research Design• Results & Discussion
• Further research• Conclusions
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Introduction
• Entrepreneurship as an engine of economic growth.
• Changes in society and economic environment: technology, markets dynamism, globalization…have an impact on entrepreneurship processes.
• At the same time, entrepreneurs are shaping new markets, bringing to market new technologies, producing disruptions in established environments…
• General research focus: • Why some entrepreneurs are successful and others not?• How can institutions help entrepreneurs to develop their business ideas?• What elements influence the development of an entrepreneurial venture?• What makes technology-based entrepreneurs different from other
entrepreneurs?
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Introduction
• Expected Outcomes:
• Shed light on elements to explain the perceived difficulties in crafting a value proposition and a business model in technology-based ventures.
• Contribute to current academic understanding of entrepreneurial action, providing support for theory development.
• Provide insights for nascent entrepreneurs, institutions and stakeholders interested in the development of successful entrepreneurs.
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Research on Entrepreneurship
• Research on Entrepreneurship?• Young field of research: consolidation starts around 2000, growing
fast. • Sharing strong linkages with economics, management (strategic &
small business), psychology, sociology...
• Entrepreneurship research has usually looked at entrepreneur’s traits (are they different?) and opportunity characteristics (what is an entrepreneurial opportunity?)
• Recently, there is an increased focus into processes:• How are opportunities identified? Identification Theories.• How do entrepreneurs exploit opportunities? Entrepreneurship
Theories / Entrepreneur’s action theories.
• Our research focuses on the opportunity transformation process: entrepreneur’s action theories.
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• Entrepreneurial action theories
• Study entrepreneurs’ engagement in exploiting an opportunity (McMullen & Shepherd, 2006).
• Focus in the entrepreneur as source of action and decision-making• Benefit from current research in opportunity identification
processes (Alvarez & Barney, 2007).
• Different descriptions of entrepreneurial action:• Causation: predictive logic (goal-driven) in “risk” like
environments.• Effectuation: bricolage with resources at hand in remnant
uncertain environments.
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Research on Entrepreneurship
• Entrepreneurial action theories
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Perspectives/ Categories “Causation” “Effectuation”
Entrepreneur logic
• Predictive logic -> Effects to select means (goal-driven)
• Plan (Delmar & Shane, 2003)• Design-Precedes-Execution
(Baker et al. 2003)
• Locus of control -> means to effects
• Creative, use of affordable loss
Opportunity identification
• Discovery, role of prior knowledge (Shane, 2000)
• Creation, constructivist view (Wood et al. 2010; Klein, 2008)
Instruments or mechanisms
• Business Plan (described in Honig (2004))
• Bricolage, improvisation (Baker & Nelson 2005)
• Lean start-up
Environment • Risk: uncertainty on available data (Milliken.1987) • Uncertainty (Knight, 1921)
Source: adapted from Sarasvathy (2001) and Dew et al. (2008).
Research on Entrepreneurship
Research Project Description
• Research question: • Is it difficult for technology-based entrepreneurs to
define the value proposition of their nascent ventures?• If so, what elements make it difficult?
• Outcomes:– Shed light on factors that influence the level of difficulty
perception on the definition of the value proposition in technology-based ventures.
– Insights for nascent entrepreneurs and institutions involved in successful entrepreneurship promotion.
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Research ProjectLiterature Review
• The value proposition:• Economic concept:
• Customer benefits or willingness to pay vs. economic costs (Peteraf & Barney, 2003).
• In entrepreneurship: • Value creating insight (Magretta, 2002) that articulates the
business model (Osterwalder et al., 2005; Morris & Shindehutte, 2005).
• It is unclear how value propositions are defined in current environments:
• It is subject to constant revision to regain market fit (Teece, 2010).• Emergence of alternative approaches: trial-error, experimentation,
bricolage processes (Baker et al., 2003).• Plan or storm the castle (Brinckmann, 2010)
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Research Project Design
• Research Question:• Is it difficult for technology-based entrepreneurs to find their value proposition?
• If so, are there elements to describe what makes it difficult?
• Method selection• Exploratory research: theory-building inductive field study (Miles & Huberman, 1994).
• Data collection• Semi-structured interviews with 21 entrepreneurs in nascent ventures.• Interview questions: origin of business idea?, how did you start?, how are you
developing it?
• Data Analysis• Coded key points, into concepts and category in an abstraction process (Allan, 2003).• Cross-interview analysis into a common group of categories.
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Research Project Sample
Nascent venture name Industry
P01 - Electonix Electronics
P02 - Usability Internet
P03 - HHRR Software Software
P04 - Medical Coding IT services
P05 - Innovation Services 1 IT services
P06 - Venturing IT services
P07- eRecovery eHealth
P08 - TDTBox Digital TV
P09 - WaterPower Renewable Energy
P10 - ChinaTravel eTravel
P11 - Laserpower Optic devices
P12 - Contengia IT services
P13 - Security Systems IT services
P14 - Creativity IT services
P15 - UbiquousWifi Telecom devices
P16 - Outsourcing IT services
P17 - Innovation Services 2 IT services
P18 - ElectroComputer Electronics
P19 - Data Secure Software
P20 - Ebusiness IT services
P21 - DigitalDevices IT services
• Based or connected with Technova incubator at La Salle Barcelona.
• Less than 3 years operating.• Diverse industries• Most of them with a high IT
intensity, in processes and products or services.
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1. Identification of key points in each interview and codification.
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Research Project Data Analysis
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2. Emergence of concepts through analysis of interview key points:
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Research Project Data Analysis
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3. Construction of categories: from a set of categories we expected to see to the data driven final set of categories.
- Each case can add a category or sub-category to the growing list.
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Research Project Data Analysis
Cross- analysis of Interview P-05
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4. Iterating between literature and emergent categories:• Idea of iterative contrast with existing literature to find support
for the emerging elements:
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Research Project Data Analysis
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• Resulting in a category and sub-category set:
- Elements that are perceived as important in the process of crafting the value proposition/business idea/business model.
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Cross-Case Analysis
Main Categories Sub-Categories
Financial Resources External funding
Founder seed funding
Investor knowledge
Business Strategy Market orientation / vision
Set Priorities
Revenue Model
Management Uncertainty
Control Risk/Loss
Product/Technology Market Fit
Decision making mechanism
Instruments
Entrepreneur Prior Experience / Knowledge
Attitude /Motivation / Confidence
Social Network/Team
Family business links
Situation
Control focus
Opportunity Previous Employer / existing clients
Idea identification
Search Information
Environment Changes in Environment
Technology resources Patents
Research Project Data Analysis
Research ProjectResults & Discussion
• Resulting elements help to explain the perceived difficulties to define the value proposition:
• Entrepreneur experience:• Experience as a knowledge resource does not reduce uncertainty in
technology-based ventures (in line with Teece (2010)).• To navigate through the difficulties, motivation and positive affect
guide the value proposition search through bricolage and improvisation mechanisms (in line with Baker et al. (2003).
• Opportunity nature:• Technology-based opportunities influence persistent uncertainty
perception (in line with McMullen & Shepherd (2006)). • Focus on technology development makes it more difficult to find the
market fit (consistent with Bhide (2000)).
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• Resulting elements help to explain the difficulties to define the value proposition (cont’d):
• Funding access:• Business plan formal requests do not fit with entrepreneurs’ needs
(in line with Honig (2004)).• Use of resources at hand related to adoption of flexible planning
mechanisms (in line with Sarasvathy (2001)).
• Technology resources:• Ambivalent effect: seen as a rigidity in the value proposition
search process, despite they are a visible resource for the nascent venture legitimating efforts.
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Research ProjectResults & Discussion
• Entrepreneurs in Technology-based ventures experience difficulties to define their value proposition.
• Research sheds light on perceived influencing elements:• Entrepreneur experience, opportunity nature, funding access
and technology resources.• Data shows unexpected influences taking into account current
entrepreneurial action theories.
• Relevant implications for both institutions and entrepreneurs:• Identification of multidimensional influences of elements in the
entrepreneurship process.
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Research ProjectConclusions
Further Research
1. Review the data collected using a different perspective (case-study like approach):• What were the difficulties at the beginning to find the business
model?• Which actions were made (described using entrep. theories)?• What are the difficulties now? Have they changed? Why?
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Further Research
2. Study another problem in the field:• Problem:
• Why do entrepreneurs decide not to join incubators/entrepreneurship support programs?
• Why is it a problem?• Institutional interest to accelerate the business idea exploitation
into a successful commercial venture. • Lack of market knowledge makes it difficult to exploit technology
potential value, find valuable applications.• Reduce network of nascent entrepreneurs makes it difficult to access
to resources, and accelerate the market validation of their ideas.
• Research approach:• Exploratory interviews with contrast cases: joined and not joined.• Capture information on the perceptions that motivated the
decision, and decision mechanisms.
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