ACE research briefing paper 002: learning and adaptation in the business creation process

This year marks the completion of data collection for year three (Wave 3) of the CAUSEE study. This report uses data from the first three years and focuses on the process of learning and adaptation in the business creation process. Most start-ups need to change their business model, their product, their marketing plan, their market or something else about the business to be successful. PayPal changed their product at least five times, moving from handheld security, to enterprise apps, to consumer apps, to a digital wallet, to payments between handhelds before finally stumbling on the model that made the a multi-billion dollar company revolving around email-based payments. PayPal is not alone and anecdotes abounds of start-ups changing direction: Sysmantec started as an artificial intelligence company, Apple started selling plans to build computers and Microsoft tried to peddle compilers before licensing an operating system out of New Mexico. To what extent do Australian new ventures change and adapt as their ideas and business develop? As a longitudinal study, CAUSEE was designed specifically to observe development in the venture creation process. In this research briefing paper, we compare development over time of randomly sampled Nascent Firms (NF) and Young Firms(YF), concentrating on the surviving cases. We also compare NFs with YFs at each yearly interval. The 'high potential' over sample is not used in this report.

ACE research briefing paper 003 : international perceptions and aspirations

2010 marked the completion of data collection for year three (Wave 3) of the CAUSEE study. This report uses data from the first three years. Australia's population is noted for its mixed international background. The ABS 2006 census reports showed that almost a quarter of Australian population were born overseas, contributing to a high degree of cultural diversity. This report examines the international background and experience of Australian business founders as well as their aspired and actual participation in international markets. In this research briefing paper, we compare Nascent Firm (NF) and Young Firm (YF) groups and also 'Regular' start-ups in both categories with their High Potential counterparts. When we compare characteristics at one point in time and we compare developments over time. Unless otherwise stated the findings we comment on are 'statistically significant'. That is, there is less than 5 per cent risk that they would appear by chance if there is no true difference in the population form which the samples were drawn.

ACE research briefing paper 004 : emerging and young high potential start-ups

In this report we take a look at what separates high potential emerging and young start-ups from others. We compare the characteristics, intentions and behaviours of start-ups that we judge to be 'high potential' with other start-ups. We utilise the first two years of data from the CAUSEE study. We also compare Australian start-ups with a similar study conduced in the US.

Entertainment architecture : constructing a framework for the creation of an emerging transmedia form

This thesis investigates the radically uncertain formal, business, and industrial environment of current entertainment creators. It researches how a novel communication technology, the Internet, leads to novel entertainment forms, how these lead to novel kinds of businesses that lead to novel industries; and in what way established entertainment forms, businesses, and industries are part of that process. This last aspect is addressed by focusing on one exemplary es-tablished form: movies. Using a transdisciplinary approach and a combination of historical analysis, industry interviews, and an innovative mode of ‘immersive’ textual analysis, a coherent and comprehensive conceptual framework for the creation of and re-search into a specific emerging entertainment form is proposed. That form, products based on it, and the conceptual framework describing it are all re-ferred to as Entertainment Architecture (‘entarch,’ for short). The thesis charac-terises this novel form as Internet-native transmedia entertainment, meaning it fully utilises the unique communicative characteristics of the Internet, and is spread across media. The thesis isolates four constitutive elements within Entertainment Architec-ture: story, play, ‘dance,’ and ‘glue.’ That is, entarch tells a story; offers playful interaction; invites social interaction between producer and consumer, and amongst consumers (‘dance’); and all components of it can be spread across many media, but are so well interconnected and mutually dependent that they are perceived as one product instead of many (‘glue’). This sets entarch apart from current media franchises like Star Wars or Halo, which are perceived as many products spread across many media. Entarch thus embraces the commu-nicative behaviour of Internet-native consumers instead of forcing them to de-sist from it, it harnesses the strengths of various media while avoiding some of their weaknesses, and it can sustain viable businesses. The entarch framework is an innovative contribution to scholarship that al-lows researchers to investigate this emerging entertainment form in a structured way. The thesis demonstrates this by using it to survey business models appro-priate to the entarch environment. The framework can also be used by enter-tainment creators — exemplified in the thesis by moviemakers — to delimit the room for manoeuvre available to them in a changing environment.

Do balanced skills help nascent entrepreneurs to make progress in the venture creation process?

We analyze longitudinal data on innovative start-up projects and apply Lazear’s jack-of-all-trades theory to investigate the effect of nascent entrepreneurs’ balanced skills on their progress in the venture creation process. Our results suggest that those nascent entrepreneurs who exhibit a sufficiently broad set of skills undertake more gestation activities towards an operational new venture. This supports the notion that a balanced skill set is an important determinant of entrepreneurial market entry.

Action’s place in the venture creation process

This study examined the effect that venture creation action has on the outcomes of nascent entrepreneurship. A conceptual model was developed which proposes action as a fundamental mechanism in venture creation. Thus, action should rightly be considered as a means which transmits the effects of venture resource endowments on to venture creation outcomes. This conceptual model was empirically supported in a random sample of nascent ventures. Ventures with higher levels of human or social capital were found to be more active in venture creation. In turn, more active venture attempts were more likely to achieve improved venture creation outcomes. Further, human and social capital, on their own, exhibit little direct influence on the venture outcomes achieved. These findings confirm action’s central place in the venture creation process.

Entrepreneur optimism and the new venture creation process

By integrating two theoretical approaches to entrepreneurship research, the psychology of the entrepreneur and the entrepreneurship process, this paper proposes a new conceptual model examining entrepreneur behaviour and emotion across the new venture development process. Existing macro level research on the new venture creation process recognises the entrepreneur as a central agent in the process yet generally avoids, at each stage of the process, an examination of the micro level psychological experiences of the individual entrepreneur. Similarly, behavioural research examining entrepreneur individual differences has neglected to systematically explore the emotion and behaviour of the entrepreneur across the cycle of the new venture creation process. We propose a conceptual framework that integrates the exploitation phase of the new venture creation process with the psychological capital element of optimism and behaviour of the individual entrepreneur. Propositions for future research to facilitate deeper insight into the impact of entrepreneur behaviour and emotion on the new venture creation process and ultimately the success or failure of the new venture are offered.

Territorial strategies and regions

The notion of territorial strategy emerged in the 1990s and has become more and more popular since. It refers to that combination of factors purposely assembled by governments, private and public companies, universities, and industrial associations to exploit a specific geographic competitive advantage in order to boost economic growth through the development of entrepreneurial activity and innovation. Three factors are generally considered to be the building blocks of a territorial strategy: natural resources, human capital, and industrial capabilities. Natural resources derive from environ­ mental conditions and represent raw materials or land available in a region. The presence of natural resources characterizes the typology of an industry (related to tourism, oil, wood, fish, and so forth) that exists or could exist in a certain area. Human capital refers to the stock of competences available in a certain region resulting from education and work experience. Industrial capabilities relate to complex constructs of specialized expertise, the confidence to apply knowledge and skills in various contexts and under changing conditions, and an ability repeatedly to improve methods and processes in a specific industry.

Micro-credit is necessary but not sufficient for entrepreneurs in desperate poverty

Micro-credit has often been used as a poverty alleviation strategy. However, there is little evidence to suggest that micro-credit alone can promote economic activities because micro-credit does not teach anything by itself (Brett 2006; Mayoux 1999; Sievers & Vandenberg 2007). Mistakenly, the focus of micro-credit has been the alleviation of immediate poverty, rather than the development of economic activity that would provide a long term solution. Paraphrasing the age old saying, "Give a man a fish and you feed him for a day, teach him to fish and you will feed him for a life time" micro-credit enables the fisherman to buy a net, but in many cases does nothing to ensure that he knows how to use it to benefit his family and the community. If the borrower doesn't know how to use the net, he will return to his old way of doing things-but with the added burden of having to pay back the debt. Given the state of extreme poverty experienced by the vast majority of the population in developing countries, borrowed money is often used for purposes other than creating the foundations for a sustainable economic growth. Typical examples of how micro-credit is generally used include covering funeral costs, buying food, medicines, and other similarly important necessities. The main problem that derives from using loans in this way is that apart from not improving living conditions in a sustainable manner, borrowers are also exposed to the risk of over-indebtedness, with its subsequent human and social implications.

ACE research vignette 018 : experiments in the MBA classroom : the case of time frames in project teams

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepeneurship researchers. In this vignette, Dr Rene Bakker considers project team dynamics and how executive education can be enriched by studying them in the classroom.

ACE research vignette 020: Entrepreneurial becoming - a self-induced transformation

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. In this vignette, Dr Marcello Tonelli and Associate Professor Carol Dalglish consider the delivery of entrepreneurial education through experiential learning in a developing context.

ACE research vignette 017: The new venture mortality myth

This series of research vignettes is aimed at sharing current and interesting research findings from our team of internatinal Entrepreneurship researchers. In this vignette, Dr Jonathan Levie of the University of Strathclyde notes wide and persistent gaps between perceptions and measures of new business mortality, and discusses possible implications.

Built to last versus meant to end : time bounds specification in strategic alliances

This article explores an important temporal aspect of the design of strategic alliances by focusing on the issue of time bounds specification. Time bounds specification refers to a choice on behalf of prospective alliance partners at the time of alliance formation to either pre-specify the duration of an alliance to a specific time window, or to keep the alliance open-ended (Reuer & Ariňo, 2007). For instance, Das (2006) mentions the example of the alliance between Telemundo Network and Mexican Argos Comunicacion (MAC). Announced in October 2000, this alliance entailed a joint production of 1200 hours of comedy, news, drama, reality and novella programs (Das, 2006). Conditioned on the projected date of completing the 1200 hours of programs, Telemundo Network and MAC pre-specified the time bounds of the alliance ex ante. Such time-bound alliances are said to be particularly prevalent in project-based industries, like movie production, construction, telecommunications and pharmaceuticals (Schwab & Miner, 2008). In many other instances, however, firms may choose to keep their alliances open-ended, not specifying a specific time bound at the time of alliance formation. The choice between designing open-ended alliances that are “built to last”, versus time bound alliances that are “meant to end” is important. Seminal works like Axelrod (1984), Heide & Miner (1992), and Parkhe (1993) demonstrated that the choice to place temporal bounds on a collaborative venture has important implications. More specifically, collaborations that have explicit, short term time bounds (i.e. what is termed a shorter “shadow of the future”) are more likely to experience opportunism (Axelrod, 1984), are more likely to focus on the immediate present (Bakker, Boros, Kenis & Oerlemans, 2012), and are less likely to develop trust (Parkhe, 1993) than alliances for which time bounds are kept indeterminate. These factors, in turn, have been shown to have important implications for the performance of alliances (e.g. Kale, Singh & Perlmutter, 2000). Thus, there seems to be a strong incentive for organizations to form open-ended strategic alliances. And yet, Reuer & Ariňo (2007), one of few empirical studies that details the prevalence of time-bound and open-ended strategic alliances, found that about half (47%) of the alliances in their sample were time bound, the other half were open-ended. What conditions, then, determine this choice?

Strategic renewal and competitive advantage in opportunity-driven and conservative new ventures

Strategic renewal has received relatively little attention in the context of new ventures. We examine the relationship among strategic renewal, competitive advantage and performance in opportunity-driven and conservative new ventures. Based on longitudinal data of a random sample of almost 373 new ventures, the link between strategic renewal and performance can be better understood by adding the mediating role of competitive advantage. Our results indicate that increased levels of strategic renewal positively relate to competitive advantage in conservative ventures, but not in opportunity-driven ventures. These findings place a different perspective on the dominant view that entrepreneurs should be opportunity maximizers. It suggests that both conservative and opportunity-driven new ventures can be successful if they follow different paths of strategic renewal in shaping competitive advantage.