Entrepreneurial learning: Developing opportunities and business models

Doctoral thesis, 2006

The purpose of this dissertation is to explore and describe the entrepreneurial process with an emphasis on how technology-based entrepreneurs learn as they perceive and exploit opportunities. The thesis draws on a variety of entrepreneurship-oriented literature such as Austrian economics, entrepreneurial learning and the resource-based view, and it features four empirical studies, primarily among start-up ventures in the emerging Swedish mobile Internet industry. The results indicate that the dominant ‘opportunity discovery’ conceptualisation can be reconceptualised as ‘opportunity development’ to better represent the processual nature of technology-based entrepreneurship. This would also enhance our possibilities to develop tools and models of use for practitioners. The initial opportunity perceptions in these start-ups are often rudimentary, and then substantially developed—in processes that may be iterative, intrusive and interactive. Another conclusion is the need to attend to entrepreneurial learning in order to better understand ‘opportunity development’, thereby rendering our view of the entrepreneurial process more dynamic. In doing so, the thesis illustrates how entrepreneurial learning can be analysed at the infrequently used venture level, and thereby contributes to entrepreneurial learning literature. A concept that has been derived from a number of theories is presented: the business model. The concept allows analyses of entrepreneurial learning, but also captures the development of opportunities over time, partly because it addresses core dimensions of the entrepreneurial process. The value of using the business model as an analytical tool is accentuated by its role as a boundary object between researchers and practitioners. The empirical studies also suggest that entrepreneurial learning in the venture often takes place through experimentation with different business models. In view of the observed need for business model changes in early phases, entrepreneurs and venture capitalists might advantageously delay committing large resources until the business model of a venture has stabilised. The idea of ‘business modelling’ as a disciplined method for developing the business model is launched. It concerns making important assumptions explicit and turning them into hypotheses that are tested on the market. Unsuccessful ones are refuted, whereas success is considered to demonstrate viability. Depicting business modelling as a method leads to the concept of learning methodologies—recurrent patterns of thought and action—which is suggested as a contribution to entrepreneurial learning literature. To discuss the association of learning with performance, it is argued that we must first determine what learning methodology is present. The dissertation shows one example of learning methodologies that correlate positively with venture growth. Analogously to earlier research aiming to correlate individual traits with success, it is consequently suggested that learning methodologies might serve as a complementary approach.