Presentation on entrepreneurship theories discussion on the technology-based endeavors. This a document for discussion on further research steps.

1. Exploring Entrepreneurial Action Theories in Technology-based Nascent Ventures NITIM Munich Internal Seminar CeTIM – June 15th Ferran Giones Supervisor: Dr. Francesc Miralles 13/04/11

3. Research on Entrepreneurship

4. Research Project

5. Literature Review

6. Research Question

7. Research Design

8. Results & Discussion

9. Further research

10. Conclusions13/04/11 2

12. Changes in society and economic environment: technology, markets dynamism, globalization…have an impact on entrepreneurship processes.

13. At the same time, entrepreneurs are shaping new markets, bringing to market new technologies, producing disruptions in established environments…

14. General research focus:

15. Why some entrepreneurs are successful and others not?

16. How can institutions help entrepreneurs to develop their business ideas?

17. What elements influence the development of an entrepreneurial venture?

18. What makes technology-based entrepreneurs different from other entrepreneurs?3

20. Shed light on elements to explain the perceived difficulties in crafting a value proposition and a business model in technology-based ventures.

21. Contribute to current academic understanding of entrepreneurial action, providing support for theory development.

22. Provide insights for nascent entrepreneurs, institutions and stakeholders interested in the development of successful entrepreneurs.4

23. 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. 5

24. 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. Research on Entrepreneurship 6

27. Is it difficult for technology-based entrepreneurs to define the value proposition of their nascent ventures?

28. If so, what elements make it difficult?

29. Outcomes:

30. Shed light on factors that influence the level of difficulty perception on the definition of the value proposition in technology-based ventures.

31. Insights for nascent entrepreneurs and institutions involved in successful entrepreneurship promotion.13/04/11 8

32. 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) 9

33. 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. 10

34. 15/06/2011 Research Project Sample 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. 11

35. 1. Identification of key points in each interview and codification. 15/06/2011 Research Project Data Analysis 12

36. 2. Emergence of concepts through analysis of interview key points: 15/06/2011 Research Project Data Analysis 13

37. 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. 15/06/2011 Research Project Data Analysis Cross- analysis of Interview P-05 14

38. 4. Iterating between literature and emergent categories: Idea of iterative contrast with existing literature to find support for the emerging elements: 15/06/2011 Research Project Data Analysis 15

39. 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. 15/06/2011 Research Project Data Analysis 16

40. 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)). 17

41. 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. Research ProjectResults & Discussion 15/06/2011 18

42. 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. Research ProjectConclusions 19

43. 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? 20

44. 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. 21