Towards a operable entrepreneurship nexus : conceptualizing venture ideas and their characteristics

We support Shane and Venkataraman’s (2000) basic idea of an “entrepreneurship nexus” where characteristics of the actor as well as those of the “opportunity” they work on influence action and outcomes in the creation of new economic activities. However, a review of the literature reveals that very little progress has been made on the core issues pertaining to the nexus idea. We argue that this is rooted in fundamental and insurmountable problems with the “opportunity” construct itself. As an alternative, we suggest the admittedly subjective notion of New Venture Idea as a more workable alternative. We provide a comprehensive definition and explanation of this construct, and take steps towards improved conceptualization and operationalization of its subdimensions. With some further work on these conceptualizations and operationalizations it should be possible to implement a comprehensive research program that can finally deliver on the promise outlined by Shane and Venkataraman (2000).

A portrayal of new entrants into the Australian economy (Entrepreneurial individuals and ventures)

This paper provides a descriptive overview of the venture creation in Australia, those who participate in it and the types of firms they build. Findings of interest in this paper include: • The majority of business founders (89 per cent) state the motivation to start a new business is opportunity-driven rather than necessity driven. • The extent of under-representation of women business founders in Australia appears to be lower than international comparisons and has decreased over time. • Australian business founders tend to possess significant ‘human capital’ many are university-educated, and large shares have different types of experience that may benefit the start-up. • The major industries for start-up activities are Retailing; various service industries (Business Consulting; Health, Education and Social; other Consumer services); Construction, Manufacturing, and Agriculture. • A large proportion of CAUSEE respondents (49 per cent nascent firms and 46 per cent young firms) are members of start-up teams, which is similar to international comparisons.

Innovation and change in new ventures

This paper examines the innovativeness of nascent and young entrepreneurial firms in Australia. Findings of interest in this paper include: • The vast majority of new ventures offer some degree of innovation in some aspect of their business, be it the product, the process, their market selection or their marketing approach. • With close to 75 per cent claiming they do more than taking mere imitations to the market, novelty in the product/service is the type of innovation most commonly offered by start-up firms. • The innovativeness of start-ups varies by industry. Construction start-ups stand out as particularly low in innovation across all indicators, while Manufacturing stands out the most in the positive direction. • Team start-ups other than spouse teams have higher novelty, as do ventures started by founders with prior start-up experience. • There is no association between the founders’ level of education and the novelty of the ventures they (try to) create.

What it means to be green : an examination of early stage environmental and sustainability focused firms

This paper examines ‘green’ entrepreneurial nascent and young firms in Australia. Findings of interest in this paper include: • Green entrepreneurs are more likely to be highly educated and have an extended depth of experience within their industry and are more likely to have started a business prior to their current venture. • Green entrepreneurs exhibit increased levels of innovation, with an increased focus on new & high technology, R&D and the development of proprietary technology. • Green entrepreneurs are most likely to be based upon a product rather than a service and have a higher emphasis upon growth when compared with non-green entrepreneurs. • Green entrepreneurial firms tend to have a longer venture creation process and draw financial resources from a larger number of sources and rely more upon equity as a means of financing their venture.

ACE research vignette 030 : Is venture capital investment the key to success?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Professor Per Davidsson, reports on a paper which synthesizes available research on the effects of VC funding on the performance of the funded firm.

The Role of Social and Human Capital Among Nascent Entrepreneurs

This study examines nascent entrepreneurship by comparing individuals engaged in nascent activities (n=380) with a control group (n=608), after screening a sample from the general population (n=30,427). The study then follows the developmental process of nascent entrepreneurs for 18 months. Bridging and bonding social capital, consisting of both strong and weak ties, was a robust predictor for nascent entrepreneurs, as well as for advancing through the start-up process. With regard to outcomes like first sale or showing a profit, only one aspect of social capital, viz. being a member of a business network, had a statistically significant positive effect. The study supports human capital in predicting entry into nascent entrepreneurship, but only weakly for carrying the start-up process towards successful completion.

Does Venture Opportunity Variation Matter? Investigating Systematic Process Differences Between Innovative and Imitative New Ventures

The central thesis in the article is that the venture creation process is different for innovative versus imitative ventures. This holds up; the pace of the process differs by type of venture as do, in line with theory-based hypotheses, the effects of certain human capital (HC) and social capital (SC) predictors. Importantly, and somewhat unexpectedly, the theoretically derived models using HC, SC, and certain controls are relatively successful explaining progress in the creation process for the minority of innovative ventures, but achieve very limited success for the imitative majority. This may be due to a rationalistic bias in conventional theorizing and suggests that there is need for considerable theoretical development regarding the important phenomenon of new venture creation processes. Another important result is that the building up of instrumental social capital, which we assess comprehensively and as a time variant construct, is important for making progress with both types of ventures, and increasingly, so as the process progresses. This result corroborates with stronger operationalization and more appropriate analysis method what previously published research has only been able to hint at.

Forming a joint venture project team for multi-discipline engineering services in Australia

Joint venture design teams are formed to combine resources and expertise in order to secure multi-discipline engineering design services on major projects. Bringing together resources from two ordinarily competing companies to form one joint team is however challenging as each parent company brings to the project its own organisational culture, processes and team attitudes. This study examined the factors that impact on forming a successful joint venture project team. Three critical areas were identified from an extensive literature review; Joint Venture Arrangements, Parent Companies and Forming the Team; and a survey was conducted with professionals who have worked in joint venture project teams in the Australian building industry in order to identify factors that affected successful joint venture team formation, and the common lessons learnt. This study reinforced the importance of three key criteria - trust, commitment and compatibility - for partner alignment. The results also identified four key lessons learnt which included; selecting the right resources, enabling a collaborative working environment by way of project office, implementing an independent Joint Venture Manager, and allocating work which is best for project with fees reflecting risk where risk is disproportionate.

Practical Advice to Entrepreneurs Series by ACE Adjunct Professor Dean Shepherd: Practical advice on managing new venture survival

The author, Dean Shepherd, is of entrepreneurship—how entrepreneurs think, decide to act, and feel. He recently realized that while his publications in academic journals have implications for entrepreneurs, those implications have remained relatively hidden in the text of the articles and hidden in articles published in journals largely inaccessible to those involved in the entrepreneurial process. This series is designed to bring the practical implications of his research to the forefront.

Business planning in emerging firms : uses and effects

Business planning is at the core of entrepreneurship as it has implications for opportunity discovery and exploitation. This thesis' objectives are to disentangle the relationships between business planning and venture emergence to reconcile previous inconsistent findings. It reveals that the formalization of planning, the effort invested in the venture and the revision of the plan influence success for entrepreneurs in the process of launching their firm. This thesis provides generalizable results about the phenomenon of business planning by using a longitudinal random sample of emerging firms.

ACE research vignette 038 : Cracking the start-up code : does it matter when you do what?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette deals with the process of new venture creation, and specifically the sequence in which different ‘start-up activities’ are undertaken.

Much ado about nothing? The surprising persistence of nascent entrepreneurs through macroeconomic crisis

We hypothesize that a major macroeconomic crisis triggers four alternative responses among nascent entrepreneurs: disengagement, delay, compensation, and adaptation. We also suggest that commitment and ambition (or “high potential”) moderate these responses. Our most important finding is the relative absence of behavioral crisis responses. However, crises may make high-tech founders become more likely to disengage, whereas the opposite holds for founders far into the process. Our study sheds light on the mechanisms behind aggregate effects of crises on the number and type of start-ups in an economy, and can guide future research on the effect of crises on nascent entrepreneurship.

The impact of international potentials, entrepreneurial motivations and firm stages on new venture internationalisation

Past research on early internationalising firms often examined factors and motivations potentially influencing internationalisation activities separately. The purpose of this paper was to investigate a set of indicators and their interplay with each other. Firstly, the impact of (a) international potential in the form of the depth and diversity of international experience and network contacts was investigated. Secondly, it was examined to what extent (b) motivational factors and (c) firm stages affect the relationship between international potential and internationalisation activities. This paper used longitudinal data from the Comprehensive Australian Study of Entrepreneurial Emergence (CAUSEE). Results suggest that the international potential of a new venture as a whole is a significant determinant of subsequent internationalisation activities. However, having a diverse international experience from a variety of foreign countries appears to be more beneficial than a long-lasting experience from only a limited number of foreign countries. Furthermore, analyses showed that the interplay of high growth ambitions and the depth of international experience positively affect internationalisation activities. Opportunity or necessity driven entrepreneurship, however, neither exaggerate nor weaken the positive relationship between international potentials and internationalisation activities. Similarly, no moderation by firm stages was found.

Environmental dynamism as a moderator of the relationship between bricolage and firm performance

Many firms initially face significant resource constraints during attempts to develop and grow (Shepherd et al., 2000). One promising theory that explicitly links to ways entrepreneurial firms respond to resource constraints is bricolage (Lévi-Strauss, 1966). Bricolage is defined as “making do by applying combinations of the resources at hand to new problems and opportunities” (Baker & Nelson, 2005, p. 333). Bricolage aligns with notions of resourcefulness: using what’s on hand, through making do, and recombining resources for new or novel purposes. Through a bias for action and a refusal to enact limitations on the resources that are available to create solutions, bricoleurs can tackle unexpected complex challenges, take advantage of opportunities, and go where most other firms won’t, in their attempts at firm development. Bricolage studies have previously not empirically examined the impact of bricolage on firm performance. Our work contributes to the emerging behavioral theory of bricolage by offering the first empirical test evaluating the impact of bricolage on early stage firm performance (i.e. venture emergence in nascent firms and sales in young firms). Using new product development (NPD) theories of speed of development, co-creation and innovativeness, we theorise that bricolage has a positive effect on early stage firm performance. We then introduce environmental dynamism as a moderator which influences this relationship.