Entrepreneurship Theories

Could one become addicted to the idea of being an entrepreneur? Countries vary in terms of how their people view entrepreneurs, and entrepreneurship as a career path. In some places, entrepreneurship may be viewed negatively, or associated with corruption. However, the prevailing view of the entrepreneur in the Western Media is the heroic entrepreneur meme. These are often outsiders that manage to disrupt incumbencies and are associated with ideas such as democracy, freedom, and liberty. Perhaps the positive view of the practice has led to entrepreneurship becoming a desirable pursuit for individuals searching for a lifestyle and character to identity with. These types of individuals have been given names over time including the "Wantrepreneur", Veblenian Entrepreneur or "Untrepreneur". These labels refer to individuals who pursue entrepreneurship not with true innovative intentions, or a desire to solve a problem, or to satisfy a need -- but solely for the look and...

What is a Born Open Startup? A startup that is born open is one that rejects the notion of proprietary knowledge appropriation (e.g,. obtaining patents ). In fact, software patents are probably the born open crowd's worst abomination.   Instead, a born open startup views itself as a part of a ecosystem of firms that work cooperatively and competitively. They typically are autonomous but have some interconnected goals. Open source startups participate in the development of a community of firms with a shared governing policy to prevent the appropriation of the technology. According to Mekki MacAulay, " Open strategy involves the collective production of a shared good in an open fashion such that the resulting product is available to all, including competitors. In the case of open entrepreneurship, 'born-open' startups are entrepreneurial ventures whose business models are designed specifically based around a collective good. Such business models can be effectiv...

Distinct from the popular medical/psychological definition of generativity, which defines the concept as a need to nurture and guide younger people and contribute to the next generation, the generativity theory in relation to entrepreneurship focuses on the development of technology stemming from the foundations set by previous innovations.   Think of platforms that enable entrepreneurs to create ventures that fit that very specific platform niche. Amazon, for example has millions of independent sellers, there's a whole cohort of software developers exploiting Apple's watch platform. Immediately after Apple first announced that the watch would have physical sensors on it, thousands of sport and medical tech startups flocked to the space. Thus, not only do new platforms create spaces for entrepreneurship, but changes to platform features can also create new spaces for entrepreneurial entry.   Unplanned melody No one is really in charge of scientific or engineering discoveries t...

  Another biological theory is the childhood adversity theory. While researchers have looked at resilience in adults, few have examined the how childhood adversity may affect entrepreneurial entry later in life. Using a variant of the underdog theory, which looks at how negative experience shape an individual's resilience. Recent research has looked at samples of entrepreneurs from a famine in China (1959–1961) and from war-torn Vietnam. Both studies find that individuals who endured childhood adversity are more likely to become entrepreneurs.  Churchill et al. measure adversity as the bombing intensity experienced by the entrepreneurs in early childhood. They find that as the bombing intensity increased, so did the chance that the children grow up to become entrepreneurs. The effect size is about 5% increase in entrepreneurial entry for a 10% increase in bombing intensity. Cheng et al. measure adversity as the experience of starvation during the societal upheavals of C...

Architectural innovation focuses on changes in product architecture and their advantages/disadvantages for incumbents and new entrants (Henderson and Clark, 1990), where many of those new entrants are going to be entrepreneurs and their startups. The bottom line of the theory for entrepreneurs is that "architectural innovation" is a promising avenue for new entrants to go after because it is difficult for incumbent to pursue such innovations. Architectural innovation is usually competence-destroying for incumbents to follow. By contrast, other types of innovations benefit incumbents, such as incremental innovations (improving components), modular innovations (swapping components) and even radical innovations (developing new capabilities in areas without legacy products). Theory basics The theory starts with the idea that a product or service is made up of components that fit together according to a type of design called "product architecture", which is either modula...