Entrepreneurship Theories

  Serial entrepreneurship refers to the repeated behaviours of entrepreneur.     “There are two types of entrepreneurs: novice entrepreneurs, who launch a business for the first time, and habitual entrepreneurs, which include serial entrepreneurs, who launch businesses sequentially, and portfolio entrepreneurs, who run multiple businesses concurrently.” ( Plehn-Dujowich, 2010)   Plehn-Dujowich suggests that serial entrepreneurs differ substantially from first time entrepreneurs. They argue that the serial entrepreneurs develop new capabilities over time that makes them more effective entrepreneurs. For instance, they may develop heuristics that guide their decision processes that reduce the analysis task needed to assess risks. These types of advantage lead to equal or higher success rates for serial entrepreneurs and a higher likelihood of sticking to entrepreneurship as a career choice. Serial entrepreneurship theory starts with the idea that entrepr...

Most entrepreneurs work for organizations before or while they start their businesses. There is macho entrepreneurship dogma that says you have to go all in, experience "the fear" and dedicate yourself for 80 hours a week to your venture. Implicit in this is the notion that an entrepreneur cannot succeed if they hedge their bets by keeping one foot in employment. But isn't this a bad assumption? Why go all in to a startup if startup success stories are probabilistic events, not givens?    Hybrid entrepreneurship refers to entrepreneurship whereby an employee starts a business on the side and keeps their stable and sustaining day job until the startup reaches a certain size. Ardianti et al. (2022) suggests that hybrid entrepreneurs experience a distinct psychological well-being than other entrepreneurs, perhaps because they are keeping their foot in the door of stability. Once the business is large enough to command the founder's full attention, then the emp...

There exists much confusion about the difference between "employee spinouts" and "corporate spinoffs". It is due to the ambiguous use of these terms both in practice and in academia (Yeganegi et al., 2024).    The following is an attempt to differentiate these phenomena based on who enjoys ownership benefits. At a basic level, spinouts involve employees that turn into entrepreneurs that launch startups, whereas spinoffs are corporate divisions/units turned independent companies.   An Employee spinout ("spinout") is the outcome of the independent decisions of employees that leave their employment to start a new venture or company (i.e., employees-turned-entrepreneurs). Neither the parent organizations nor their investors typically receive any ownership shares in a spinout (although they may sometimes take a small equity stake in exchange for IP rights). Spinouts are owned and controlled by former employees and their own investors (e.g., venture capitalists...

Scholars have divided entrepreneurship into different categories. For example, self-employed individuals are often not considered entrepreneurs. To be an entrepreneur, there has to be an organization being built. There is even a growing sense that only scalable forms of entrepreneurship should be encouraged (Shane, 2009). Another way to slice up entrepreneurs is to separate between necessity and opportunity entrepreneurs (Harding, 2002). Most entrepreneurship theories focus on opportunity entrepreneurship, but perhaps scholars should also embrace broader views that include entrepreneurship that is based on necessity, or at least consider a greater diversity of entrepreneurship (Welter et al., 2017). This approach looks at the motivations of the entrepreneurs, thus can be considered a motivational theory. Basically, if you have one of the two motives, you are more likely become an entrepreneur. Necessity entrepreneurs are individuals who start businesses because they cannot find a ...

What is the disruptive innovation theory of entrepreneurship? Disruptive innovation theory of was developed by Harvard Business School professor Clayton Christensen in his famous book entitled The Innovator’s Dilemma (2003) . Christensen’s core argument is that new entrants succeed when they pursue disruptive innovation whereas incumbents tend to pursue sustaining innovations. Disruptive innovations are technologies, products and business models that are lower performing than incumbent offerings along traditional dimensions of performance, but compensate with increased simplify, convenience, customizability, or affordability. For example, the Nintendo Wii disrupted the Xbox and Sony Playstation by offering lower quality graphics in exchange for the simplicity in the intuitive movements offered by gyroscopic technology added to the controllers. This allowed younger children, game novices, and older gamers to be able to learn to play with a minimal learning curve. Sustaining inn...