A Constructivist Approach for Technology-based Entrepreneurship

XXIII ISPIM Conference

Barcelona – June 20th

Ferran Giones (1), Zhao Zhou (2), Dr. Francesc Miralles (1), Dr. Bernhard Katzy (2)

(1) La Salle – Ramon Llull University

(2) CeTIM – Leiden University

Agenda

• Introduction

• Background

• Literature Review

• Method & Data

• Results

• Conclusions

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Introduction

• Technology-based entrepreneurship driver of economic growth and social wealth.

• Dominant entrepreneurship models fail to provide reliable guidelines for uncertainty-rich Tech-based entrepreneurship.

• Alternative theoretical perspectives for entrepreneurial opportunities emergence aim to mitigate this gap.

• This research explores through the lenses of the constructivist view how opportunities became objective in six case studies.

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Background

• Mechanisms to support entrepreneurial opportunities not working well with tech-based entrepreneurship:

• Institutionalized view of how entrepreneurship works based on industrial era assumptions (Honig & Karlsson 2004).

• Evidences of entrepreneurship promotion policies mixed results (Shane 2009).

• What is different in Technology-based entrepreneurship?

• A priori technology-related uncertainty conditions entrepreneur action (Teece 2010, McMullen & Shepherd 2006), in a process of plan and action (Baker et al. 2003).

• Difficulties to clearly identify the objective opportunity.

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Literature Review

• Competing perspectives on opportunity identification:• Discovery perspective: objective opportunities exist available to those that

can see them (Alvarez & Barney 2007).

• Alternative perspectives: propose that opportunities emerge through entrepreneurs action in their social context (Klein 2008)

• The constructivist view as an alternative perspective (Wood & McKinley 2010) to study opportunity objectification:• Opportunity origin (initial idea) description combines elements from given

social context and individual perceptions.

• Consensus among knowledgeable peers drives to opportunity emergence.

• This research explores the social interaction processes in the opportunity objectification following the constructivist view.

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Method & Data

• Method:

• Exploratory objective

• Inductive approach based on a multiple-case study with 6 technology-based entrepreneurs.

• Sample:

• Cases in telecom (2), electronics (2) and software (2).

• Entrepreneur profiles: novice (4) and experienced (2), academic researchers (2) and technology managers (4).

• Data collection & analysis:

• Interviews and secondary sources collected in 2009-2011.

• Stories: from first thoughts initial idea to the objective opportunity.

• Individual case stories and cross-case comparison.

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Results (1/3)

• Opportunity construction process in technology-based entrepreneurship seen to combine structure and individual elements (as suggested in Wood & McKinley 2010)

• Idea origin in a given social structure triggers a process of iteration with knowledgeable peers using their pre-existent network.

“I’ve been many years doing research on asynchronous circuits…it has began to be important as the mobile devices market has developed”(Powchip founder).

• Regardless of potential mismatch between entrepreneur knowledge and experience and venture idea (not explained by “discovery perspective”)

• Emergence explained entrepreneur’s social action (oriented consensus building processes) as they perceive to have the ability to make things happen (as described in “constructivist view”) :

“I started working from scratch for a new technological solution, changing everything” (Winet founder).

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Results (2/3)

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• Iteration with knowledgeable peers:

• Entrepreneur relies on already existing network of direct personal ties (Newbert & Tornikoski 2010), without a planned peer selection mechanism:

“talking with an entrepreneur in integrated circuits that I knew from prior research projects” Winet Founder.

• Different patterns of action observed in experienced entrepreneurs:

• Pre-existent network includes both technology research and market knowledge peers:

“it was my previous business partner that insisted on exploring together the changes that internet and digital TV would produce” DigiTV Founder.

• Experienced entrepreneurs seen to be aware of the mechanisms to accelerate idea refinement (in line with Dew et al. 2009 and Politis 2008).

Results (3/3)

• Consensus building

• Strategizing the social exchange (consistent with “constructivist view”):

• Technology assessment: obtaining “encouraging feedback from the conversations with colleagues and experts” (Hying founder).

• Market sensemaking (Weick et al. 2005): “You cannot get stuck in an idea and stop listening to the or looking at the market” (DigiTV founder).

• Produces gains in social legitimacy (as in Tornikoski 2009) to further advance in the consensus building process and mitigate stakeholders’ uncertainty perception:

“A third party evaluates the technology and raises the confidence level on the idea” (Powchip founder).

• Resulting in a process of transformation where entrepreneurs and stakeholders perceptions evolve together to reach opportunity objectification (as suggested by Wood & McKinley 2010).

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Conclusions

• Institutionalized models of entrepreneurship do not hold well with Tech-based entrepreneurship.

• Constructivist view (Wood & McKinley 2010) enriches the opportunity “discovery perspective” uncovering the social construction processes in the opportunity emergence.

• Results suggest the need for promotion policies that take into account the “social construction” of opportunities:

• Provide support to iteration & consensus building processes.

• Consider the benefits of social construction processes as opportunity emergence accelerator.

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