Transcript of "Laura Mata Garcia's thesis Designing Entrepreneurship"
Creating Enterprise Through Design Culture
Dipartimento di Design
Dottorato di ricerca in Design
January 2011 - March 2014
Coordinator: Prof- Francesco Trabucco
For the obtainment of the degree
Doctor of Philosophy in Design
Candidate: Laura Y. Mata García
Supervisor: prof. Alessandro Deserti
Co-supervisor: Prof. Carlos Teixeira
Opponent: Dr. Toni-Matti Karjalainen
This work would not have been possible without the support of many people. It is now
crystal clear to me that research is a collective endeavor, and although I am the one
executing it, many people contributed very signiﬁcantly and without their help this
work would not have been possible.
First and foremost, I want to thank those directly involved in the creation of this work.
Special thanks to my supervisor Prof. Alessandro Deserti for the countless hours that
he dedicated to this work despite his busy schedule. His guidance and advising were
fundamental for me in this journey. Another enormous thank you goes to Prof. Carlos
Teixeira, whose help was fundamental for me. The passion, rigor and commitment he
puts into his work were an inspiration. Being able to join him around the world as part
of the Dream:in project was an invaluable experience. He also dedicated numerous
hours to my work and I deeply appreciate that. A special thanks goes also to Dr. Toni-
Matti Karjalainen, for dedicating his time to act as my opponent, reading my work
and providing valuable feedback as well as for the opportunity to spend time with
his research group in Aalto University in 2012. It was a very helpful and valuable
From my research group in Politecnico di Milano; I want to thank deeply Prof.
Flaviano Celaschi for giving me the opportunity to join the research group in the ﬁrst
place, back in 2009 and entering this fascinating community that has the privilege to
stand on the edge of human knowledge and being able to share it with each other and
the students. Special thanks goes to Prof. Manuela Celi, who was always available to
provide feedback for me, and provided a sympathetic ear for personal matters as well.
Our written collaborations were fundamental in my training as a researcher. Another
special thank you goes to Prof. Giorgio Casoni. The experience of working together
in Mantova was fundamental for my growth as a professional and as a researcher. His
enthusiasm and “let’s-ﬁnd-application-in-real-life” approach is inspiring. Thank you
also to Chiara Colombi, Elena Formia, Xiaobo Qian and Jennifer Rudkin, for their
friendship, support and the times spent together in this journey.
Other colleagues from Politecnico di Milano that receive a special thanks are Simona
Murina, for being always available to sort through the bureaucracy and paper work to
keep the place running, Maria Ventura for her patience and availability and Cristina
Argentiero who was always available as well and helped sort many of the trips that this
work required, some of them on a very short notice.
From the Parsons The New School for Design team that was directly involved in the
Dream:in experience in India, I want to thank Bridget Sheerin, Subodh Divekar and
Fernanda Alcocer who dedicated time for me even though their master thesis deadlines
were around the corner. I also want to thank Ms. Sonia Manchanda for hosting us in
India, and organizing the seminar. The exchanges and the experiences of “living” the
subject of our study (instead of just studying it) were extremely inspirational.
From the New School team that joined us in China, a deep thanks goes to Nelson
Lo, his super translation and cultural mediation skills made all the diﬀerence for us.
Another deep thanks goes to Sophie Han Lou, her super organizing and management
skills made everything possible, and the exchanges we had were also very enriching
for me personally. A super special thanks goes to Delmo Oliveira that provided me
with over 450 pictures of the event practically overnight. His help was invaluable in
reconstructing the material. To the rest of the team that was part of the adventure;
Hellem Pedroso, Tracy Lin, Helena Wong and Angie Rodríguez, a deep heartfelt thank
you for letting me join the team. Who thought doing ﬁeldwork could be so much fun?
From Tsinghua university I want to thank all the organizers of the Dream:in event,
Prof. Cai Jun, Yian Guan, Yuanyuan Liu and everyone else that made the event possible.
Thank you to the students that accepted to be part of the experiment and became my
guinea pigs for one day!
During these years I have met many colleagues that provided support and inspiration
in one way or another, thanks to Raﬀaella Trocchinaesi, Marinella Ferrara, Rui Roda,
Peter Krogh, Miikka Lehtonen, Fawaz Bakhotmah, Namkyu Chun, Lia Krucken,
Gabriel Hernández, Seçil Ugur, Pelin Arslan, Hazal Gumus and Roberto Iñiguez. Your
feedback, support and pats on the back when things got rough were deﬁnitely helpful.
I feel proud to be part of this community of enthusiastic and inspiring people.
A huge thanks goes also to Rodrigo Marcos who helped me manage the challenge of
sorting out all the data and presenting it visually. His help as well as his unconditional
friendship are invaluable to me.
A special thanks goes to Huang Yanli, who helped me translate all the material from
the workshops. His help was very precious.
Last but not least, I want to thank the people in my personal life who made all the
diﬀerence. First and foremost, thanks to my partner Massimo Menichinelli for all the
love and support he provided along these years, for all the weekends and holidays spent
working (and not complaining). I feel honored to have him in my life. Super special
thanks to my parents, Laura R. García and Raúl Mata for supporting this endeavor,
both morally and materially. I would not be here today if it was not for them.
This work is dedicated to all of you.
Table of Contents
1) Preface 17
a) Designing Entrepreneurship: Relevance Today 22
i) Which entrepreneurship? 23
ii) Relationship between Design and Business 25
b) Basic Assumptions
i) Business and entrepreneurship are based on a premise of
repetition and efficiency 26
ii) Creating new ventures is risky and requires a diﬀerent
mindset, prone to exploration and trial and error learning 27
iii) Design possesses tools, cultures and a mindset that
encourage experimentation 28
c) Hypothesis 28
i) Research Objectives 30
d) Research design and methodology 31
e) Results 33
First part – Designing entrepreneurial opportunities
1. The importance of entrepreneurial opportunity
1.1. The entrepreneurial process 36
1.2. Deﬁnition of entrepreneurial opportunity 37
1.3. The discovery perspective 40
1.4. The creationist perspective 41
1.5. Reconciliation between discovery and creation perspectives 43
1.6. Individual cognitive factors that contribute to the discovery/
creation of entrepreneurial opportunities 45
1.6.1 Creativity 46
1.6.2 Dealing with Ill-deﬁned Problems 47
1.6.3 Generalization over small samples and use of heuristics 47
1.6.4 Alertness and “connecting the dots”. 48
1.6.5. Knowledge of how to serve markets 50
1.7. Discussion: the possible contribution of design to opportunity
2 Business Models as Enactors of Entrepreneurial
Opportunities: Possible Design Contributions 55
2.1 A brief history of the business model construct 56
2.2 Deﬁnition of business model 57
2.3 The relevance of design for business modeling 58
2.4 Business Modeling As Entrepreneurial Opportunity
Enactment: What about design?
2.5 Designing Instruments For Business Model Design 64
2.6 Designing The Value Proposition 68
2.7 Key Insights 72
Second Part – Generating new enterprises through design culture
3. Creating design-oriented enterprises: case studies
3.1 A brief history of design-oriented companies 74
3.2 Product Based case studies of design-oriented companies 76
3.2.1 Selection Criteria 77
3.3 Case Study: Dyson 79
3.3.1 Analysis of the Dyson Case 81
3.4 Case Study: Kartell 82
3.4.1 Analysis of the Kartell Case 87
3.5 Discussion: Lessons learned from product-centered ﬁrms 88
3.6 Case studies of design-oriented ICT companies 89
3.6.1 Findings 91
3.7 Case Study: Airbnb 92
3.7.1 Analysis of the Airbnb Case 94
3.8 Case Study: Instagram 95
3.8.1 Analysis of the Instagram Case 96
3.9 Discussion: Lessons learned from ICT ﬁrms 97
3.10 Conclusions 98
4. Support ecosystems for design-driven entrepreneurship
4.1 Introduction 100
4.2 Historical aspects 100
4.3 Existing models of support systems
4.3.1 Incubator 102
a) Pratt Design Incubator 103
b) Incubation RCA 104
4.3.2 Accelerators 105
a) Hardware accelerators 107
i) HAXLR8R 108
(a) The Design Accelerator 109
4.3.3 Co-working spaces 110
a) The Stitch Factory 111
4.3.4 Entrepreneurial Ecosystems and events 112
a) Aalto Entrepreneurship Society 113
b) The Designer Fund 114
4.4 Insights from the case studies 115
4.5 Conclusions 119
Third Part – Development of the Hypothesis and Experimental
5. Insights from the literature and case study explorations
a) Existing approaches to design entrepreneurship:
Designing the business oﬀering
b) Gap in the literature identiﬁed: Lack of a design approach
to discovering/creating entrepreneurial opportunities
c) Similarities between the FEI of the entrepreneurial
process and the New Product Development Process
5.1 Developing the Research Hypothesis: Using Service Design
Instruments as Aids in the Opportunity Generation/
Discovery Phase (FEI)
5.2 Why Service Design Instruments? 127
5.3 Experimental testing of the hypothesis: a few preliminary
6. Field Experiment within the DREAM:IN China project
6.1. Background 133
6.1.1. The Dream:in Project Structure 133
6.1.2. The core of the project: the Conclave 134
6.1.3. The role of design in the Dream:in project 138
6.2. Experiment design 139
6.2.1. Premises 139
6.2.2. Hypothesis and Objectives 140
6.2.3. Research Questions 140
6.2.4. Methodology 140
6.3. The Workshop: Beijing 142
6.3.1. Results 147
6.3.2. Difficulties and Insights on Potential Improvements 152
a) During The Workshop 153
b) After the Workshop 154
6.3.3. Interpretation of the Results and Implications 154
6.4. Conclusions 156
7.1. Synthesis of the Research 159
7.2. Results and Original Contribution 162
7.2.1. Theoretical contribution: Similarities between the
Front-end of Innovation of the Entrepreneurial
Process and the New Product Development Process.
7.2.2. Experimental Veriﬁcation: Entrepreneurial
Opportunity identiﬁcation May be Systematized 163
7.2.3. Experimental Veriﬁcation: Using Service Design
Tools in the Discovery/Creation of Entrepreneurial
7.2.4. Production of Instruments: Design of a Service Design
Toolkit for the generation of Business Ideas 167
7.3. Limitations of the Research 168
7.4. Relevance and Implication of Findings for Academia and
7.4.1.Academic relevance 168
7.4.2. Relevance for Practice 169
7.5. Reﬂections on Open Questions for Future Research 170
7.5.1. The quality and innovativeness of business ideas using
this methodology 170
7.5.2. Discovery vs. Creation of Entrepreneurial
Opportunities: A Design Perspective?
7.5.3. Possible Applications of Service Design Tools in Non-
Design Related areas 173
8. Bibliography 175
9.1. Appendix 1: Design Driven Firms Case Studies 187
9.2. Appendix 2: Design-Driven Entrepreneurship Support
Systems Case Studies 189
9.3. Appendix 3: Selection of Service Design Tools
9.4. Appendix 4: Workshop Planner 215
9.5. Appendix 5: Service Design Simpliﬁed Frameworks 217
9.6. Appendix 6: Workshop Outputs 231
Index of Figures
Figure 1. Creation and destruction of jobs by
new ﬁrms and existing ﬁrms.
Figure 2. The positioning of this work
within larger macro-topics 23
Figure 3. Mainstream idea of design as an
agent capable of inﬂuencing organizational
Figure 4. Similarities between the
product-development process and the
entrepreneurial process 29
Figure 5. The diﬀerent subtopics explored by
this research 31
Figure 6. The research structure 31
Chapter 1. The Importance of
Figure 1. Complex factors that inﬂuence the
formation of new ventures
Figure 2. Process model of entrepreneurial
venture creation. 37
Figure 3. Value creation capability
Figure 4. Mapping of the diﬀerent strains
of entrepreneurial research that analyze the
variables that contribute to opportunity
Chapter 2. Business Models as Enactors of
Entrepreneurial Opportunities: Possible
Figure 1. Components of business models
affinity diagram 57
Figure 2. Elements of a Choices-
Consequences Business Model 62
Figure 3. Ryanair’s business model
representation with its virtuous cycles 63
Figure 4. Osterwalder and Pigneur’s
business model canvas 65
Figure 5. Business Model Framework. IDEO
Figure 6. The Lean Canvas. 67
Fig. 7. The Social Enterprise Tool. NESTA
Figure 8. The Product-Service System
Figure 9. . Intersection of value creation
for multiple actors leads to meaningful
Figure 10. Design as a mediator. 69
Figure 11. Some examples for meaningful
value propositions using the value creation
Figure 12. Example of a systemic value
proposition with value ﬂows and a variety of
diﬀerent actors 71
Chapter 3. Creating design-oriented
enterprises: Lessons from Case Studies
Figure 1. The cyclone at the lumberyard that
inspired James Dyson 80
Figure 2. The Dyson G-Force vacuum
Figure 3. A recent Dyson vaccum cleaner
Figure 4. Dyson hand drier 82
Figure 5. James Dyson with the Air
Multiplier, the bladeless fan 82
Figure 5 & 6. The ﬁrst product designed by
Giulio Castelli using Nastrocord 84
Figure 7. Early Kartell products designed by
Gino Colombini 84
Figure 8. The 4999 Chair, designed by
Marco Zanuso and Richard Sapper 84
Figure 9. Universale chair, designed by Joe
Figure 10. Bookworm library designed by
Ron Arad 84
Figure 11. Mr. Impossible chair by Philippe
Figure 12. Louis Ghost chair, by Philippe
Figure 13. Bourgie Table Lamp by Ferruccio
Figure 14. Dr. Glob chair by Philippe Starck 86
Figure 15. Kartell Shoes by Moschino 86
Figure 16. La Marie Chair by Philippe Starck 86
Figure 17. Traditional role of design in
Figure 18. Service-based design-driven
entrepreneurship: design shapes the
business strategy 97
Chapter 4. Support systems for design-
Figure 1. The Business Incubator
Figure 2. Some of the companies currently
incubating in the Pratt Design Incubator 104
Figure 3. Two of the most successful
startups from Innovation RCA
Figure 4. Two products created by some of
the hardware companies in HAXLR8R. 108
Figure 5. The Haxlr8r three tracks for
Figure 6a. A product from the startup Khora.
Figure 6b. Electrical commuting bicycles
from The Conscious Commuter. 110
Figures 7a & 7b. Images from The Stitch
Factory in Las Vegas. 112
Figure 8. Some of the most famous Internet
startups that had a designer founder or
Figure 9. Example of the graphic mapping.
Case Study: Design Incubator (Serbia).
Figure 10. Incubation RCA mapping.
Figure 11. The diﬀerent levels of design
Figure 12. Diﬀerent standard formats of
entrepreneurial support actors and their
positioning along the entrepreneurial
Figure 13. The mapping of the case studies
shows clearly gaps in the lower right
quadrant, which corresponds to investment
and funding. 120
Chapter 5. Insights from the literature and
case study explorations.
Figure 1. Traditional role of design in
design-driven entrepreneurship. 124
Figure 2. The New Concept Development
Model (NCD) provides a common
language and a visual representation to the
components of the Front End of Innovation. 125
Figure 3. The design process and the
entrepreneurial process shown in parallel. 126
Figure 4. Hypothesis: Design could enable the generation and
development of business ideas. 127
Figure 5. A model of the sub-phases inside
the front-end of innovation with the space
that was tackled during the experimentation
Chapter 6. Field Experiment Within the
Dream:in China Project
Figure 1. The diﬀerent phases of the
Dream:In project with their respective
Figure 2. Participant proﬁles for the
Conclave workshop and their respective
Figure 3. Idea Development Diagram
Figure 4. Dream Ideation Framework 137
Figure 5. Example of simpliﬁed design
framework elaborated taking the
widespread Mindmapping design tool 142
Figures 6,7 & 8. Participants who used the
simpliﬁed service design tools during the
ﬁrst day of workshop. 143
Figures 9, 10, 11 & 12. Participants of the
control group during the ﬁrst day of
Figure 13. Overview of all the frameworks
produced by the teams using the tools in day
Figures 14, 15 & 16. Dream Ideation
Frameworks produced by teams using the
service design tools. 145
Figures 17, 18 & 19. Dream Ideation
Frameworks produced by teams NOT using
the service design tools. 146
Figure 20. One of the groups using the SDT
during the second day of the workshop
(Violet Team) 148
Figures 21 & 22. Team Green 2 using the
tools in the second day started prototyping
out of their own initiative when faced with
the Business Model Canvas tool
Figure 23, 24 & 25. Teams from the control
group (NOT using the tools) on the second
day of the workshop. 149
Figure 26. Outcome from team purple-
during day 2 of the workshop working using
the service design tools. 150
Figure 27. Outcome from team green 2
during day 1 of the workshop working by
Figure 28. Outcome from team green 2
during day 2 of the workshop working using
the service design tools 150
Figure 31. Outcomes from control group
during day 2 of the workshop working NOT
using the service design tools 151
Figure 32a. Graphic synthesis of the results
of the ﬁrst day of workshop.
Figure 32b. Graphic synthesis of the results
of the second day of workshop 152
Figure 33. The way participants ﬁlled the
dream ranking tool 153
Figure 34. How I expected participants to
use the tool. 153
Chapter 7. Conclusions
Figure 1. The design process and the
entrepreneurial process shown in parallel 160
Figure 2. Map of areas of service design
Figure 3. The perspective of this work:
design can have a role in the earliest phases
of the entrepreneurial process. 166
This research is the result of the work of ﬁve years spent in Politecnico di Milano, ﬁrst
as a research fellow and then as a doctoral candidate. It’s also an international research
that was developed mixing two diﬀerent ways of doing, thinking and conceiving
design: the Italian culture of design, and speciﬁcally the Polytechnic culture embraced
inside our school and the American way of approaching design, as it is lived within
Parsons The New School of Design and its roots in the IIT Institute of Design through
the invaluable contribution of my co-advisor, Prof. Carlos Teixeira.
The topic started forming quite organically following the experience as a research
fellow working for Small-Medium Enterprises in the Mantua region (Italy). The overall
goal of the collaboration with those companies was to enable them to become design-
driven and foster design culture within the organizations.
The year was 2009 and the eﬀects of the Great Recession that began in 2008 in the
United States were starting to be felt in Italy in full force. Some of the companies
that participated were in serious ﬁnancial difficulties, struggling to keep aﬂoat. Some
others were going through generational family successions that created a lot of tension
between the members of the families. These factors left the companies with no energy
or resources to invest in design.
I discovered through experience that trying to change an existing company is very
hard, and requires a lot of commitment, time, resources and even a little bit of good
It was that moment when we started speculating, what if instead of working with
existing SMEs we worked with small young companies, or even startups? What if
What could possibly be a designerly contribution to that area?
I come myself, from a very entrepreneurial culture. I was born and raised in Monterrey,
Mexico. A city that was founded in the middle of nowhere, with a semi-arid weather
that can roast the city with temperatures over 40ºc for 10 months a year, freeze it in
the winter with temperatures below 0º, and ﬂood it with torrential rains and even
hurricanes in the fall is the entrepreneurial hotbed of Mexico and it’s most prosperous
city. I have no doubt that the reasons behind the city’s prosperity have to with its
entrepreneurial character and its toughness and perseverance to thrive in such a
I came to Italy 10 years ago to study design and learn and embrace the Italian way of
doing design. I became fascinated with the work of professors Deserti and Celaschi,
and my colleagues of the Advanced Design Research group. As time went by, the more
I learned about the contributions of design in the Front End of Innovation, developing
scenarios and innovation pathways, looking at trends and weak signals, using design
as an instrument to envision a desired future the more it fascinated me, and the more
I was convinced that these instruments could be useful in other contexts, not strictly
design-related. Thus, the threads that made the topic started coming together. What
can design bring to the entrepreneurial process, and specially to its earliest phases?
In a context of deep economic recession, I sincerely hope that this research contributes
to advance a design perspective on entrepreneurship, to bring design expertise and
capabilities to the entrepreneurial process, and bridge both disciplines so that maybe
more entrepreneurs can proﬁt from design and perhaps more designers might decide
to become entrepreneurs.
“Really, what we’re doing as designers is, ultimately, and inevitably, designing
the business of the companies that we’re working for. Whether you like it or not,
the more innovative you try to be, the more you are going to aﬀect the business
and the business model.”
-Tim Brown (2005), Speech at the Rotman Business Design Conference
a. Designing entrepreneurship: relevance today
Net Job Change - Start-ups
Net Job Change - Existing Firms
Source: Business Dynamics Statistics, Tim Kane
Entrepreneurship has gained a lot of
attention in recent times, in which
the economic crises has reﬂected
severely in massive unemployment
– particularly among young people
in Europe. It has become the focus
of attention of governments and
private sector alike particularly
because it has been positively
correlated to job creation. Authors
like Acs and Armington (2003),
Audretsch and Fritsch (1996), Carree
and Thurik (1998, 1999a), Thurik
(19996) and Robbin, Pantuosco,
Parker and Fuller (2000) in Bunyasrie
(2010) all have correlated positively
entrepreneurship and economic growth in diﬀerent industrialized regions. In the
United States, start-ups created 3 million jobs annualy between 1996 and 2006 whereas
all other ages of ﬁrms, including companies in their ﬁrst full years of existence up to
ﬁrms established two centuries ago, are net job destroyers, losing 1 million jobs net
668 startups which created a net of 51,000 new jobs — over half of the total number.
According to studies performed by the Kauﬀman foundation, start-ups create the most
, reﬂect how much the world’s largest industrialized Western economy depends on
new ﬁrms for job creation.
of entrepreneurship relevance other than jobs created, such as the number of patents
generated. However, in the design industry, not all design creations are patented, and
as such patents are an unreliable measurement of industry size and growth.
The importance of new small ﬁrms to the economy has been the result of many
structural shifts. Many studies indicate that there has been a structural shift in the
OECD economies from large companies competing through mass production,
product diﬀerentiation, and economies of scale, towards smaller companies relying
Figure 1. Creation and destruction of jobs by new ﬁrms and
existing ﬁrms. The Kauﬀman Foundation.
Figure 2. The positioning of this work within larger macro-topics.
SPECIFIC INTEREST OF
on knowledge, initiative and ﬂexibility.
This transition from a “managed economy” towards an “entrepreneurial economy”
appears to have taken place between the mid-1970s and the early 1990s. (Acs, 1996 and
this shift are increased global competition, changes in demand and demographics,
“new economy” or more recently “knowledge economy”) the main focus of economic
activities is information: its acquisition, manipulation and transmission. This is
greatly enhanced by ICT, which allow teams of people to collaborate together in non-
hierarchical networks that allow them to self-organize and innovate (Den Ouden, 2011)
i) Which entrepreneurship?
It is widely acknowledged that there are many diﬀerent types of entrepreneurship, as
well as entrepreneurs. Most authors would divide entrepreneurship into two diﬀerent
spheres: those seeking proﬁt, traditional businesses, and those with a non-proﬁt aim.
These organizational forms are largely divided among three criteria: their search for
proﬁt, their social impact and an organizational form that divided proﬁt among its
members (co-ops). However, for the sake of simpliﬁcation, this research is focused in
for proﬁt entrepreneurship.
Although many authors1
have advocated for entrepreneurial research on
opportunities to include also opportunities exploited by existing ﬁrms,
instead of through the creation of new ﬁrms this research will largely focus on
entrepreneurship and opportunity exploitation through the creation of new ﬁrms.
One of the ﬁrst tasks before approaching the research was to deﬁne precisely what
type of entrepreneurship we are referring to. Many authors have diﬀerent deﬁnitions
that range from extremely general to very speciﬁc, and vary according to the context
1 Shane, S.A. (2003) A General Theory of Entrepreneurship: The Individual – Opportunity nexus. Edgar Elvar
Publishing, Inc. Massachusetts, USA. P. 267
where the deﬁnition is situated as well as the scientiﬁc discipline used as a framework
For the sake of this research, the preferred deﬁnition of entrepreneurship is based on
two major pillars: ﬁrst of all, as advocated by Schumpeter in the German tradition. This
deﬁnition focuses on the entrepreneur as an innovator and inspirer, the implementer
of creative destruction, creating instability, disequilibria and economic development
of the mechanism for change and economic development, and entrepreneurship is the
undertaking of new ideas and new combinations, (i.e. innovations). An entrepreneur
would have 5 basic ways of manifesting entrepreneurship: introducing a new good,
a new method of production, a new market, a new source of supply of intermediate
goods, and a new organization (Karlsson, Friis and Paulsson, 2004; Salgado-Banda,
). Wennekers and Thurik (1999) provide a more complete deﬁnition:
“Entrepreneurship is the manifest ability and willingness of individuals, on their own,
in teams, within and outside existing organizations to perceive and create new economic
opportunities (new products, new production methods, new organizational schemes and
new product-market combinations) and to introduce their ideas in the market, (acting) in
the face of uncertainty and other obstacles, by making decisions on location, form and the
use of resources and institutions”4
Secondly, this work will adopt the opportunity-based deﬁnition of entrepreneurship,
thus, the entrepreneur is assumed to be acting because s/he recognizes (or creates)
an entrepreneurial opportunity unlike necessity-based entrepreneurs who start
businesses because they have no other work options and they need a source of income.
The Global Entrepreneurship Report deﬁnes the latter type of entrepreneurship as
It is therefore now acknowledged that entrepreneurs, in a Schumpeterian perspective
act as innovators. Innovation – the introduction of new and/or improved products,
services and production processes, or marketing methods is the driving force of a
nation’s economic growth and improves competitiveness of its ﬁrms. (Oerlemans
et al. 20016
) However, most of current research is focused on technology-driven
innovations and its role in generating IT startups. Most of the research comes from
the management, economics or entrepreneurship research and the role of design is not
acknowledged as a lever that can spark entrepreneurship, besides being the content of
the business oﬀering.
2 Karlsson, C., Friis, C., & Paulsson, T. (2004). Relating entrepreneurship to economic growth. (CESIS/
JIBS), September, (13), 1–27. Retrieved from http://papers.cesis.se/CESISWP13.pdf
3 Salgado-Banda, H. (2007). Entrepreneurship and economic growth: An empirical analysis. Journal of
Developmental Entrepreneurship, 52(55), 1–46. Retrieved from http://www.worldscientiﬁc.com/doi/abs/10.1142/
4 Wennekers, S., & Thurik, R. (1999). Linking entrepreneurship and economic growth. Small Business
Economics, 27–55. Retrieved from http://www.springerlink.com/index/M63P6311184114Q5.pdf
5 Kelley, D. J., Singer, S., & Herrington, M. (2011). The Global Entrepreneurship Monitor 2011 Global Report.
Retrieved from http://www.gemconsortium.org/docs/2409/gem-2011-global-report
6 Oerlemans, L.A.G., Buys, A.J., and Pretorius, M.W. Research Design for the South African Innovation Sur-
vey 2001, Working Paper 01.02, The Netherlands: Eindhoven Centre for Innovation Studies, 2001.
ii) The Relationship Between Design and Business
In order to establish the foundations and basic assumptions of this work, it is ﬁrst
necessary to take a look at the relationship between design and business, in a wider
During the last decade, design and business grew closer to each other, ﬁnding in
Design Thinking a common ground where an interdisciplinary approach could take
shape: design researchers and practitioners became interested in strategy and business
while the management scholars and practitioners became interested in design as if
mutually acknowledging that both ﬁelds could beneﬁt from each other’s contribution.
The ﬁrst notable appearance of the term Design Thinking, bound to the idea that design
research could and should become an independent area of study, was in Bruce Archer’s
statement “there exists a designerly way of thinking and communicating that is both
diﬀerent from scientiﬁc and scholarly ways of thinking and communicating, and as
powerful as scientiﬁc and scholarly methods of enquiry when applied to its own kinds
of problems.” (Archer, 19797
From then on, research on Design Thinking worked to extract and model designers’
thinking processes and cognitive style, their tools for application, the composition
of design teams and the interaction among its components, the procedures and
the processes that designers activate. (Dorst and Dijkhuis, 19958
; Dorst and Cross,
). Starting from Archer’s idea and from Lawson’s (198010
) research on the mental
process that architects undertake in solving problems, Rowe (198711
) popularized the
term Design Thinking. Traditionally, this ﬁeld of research was based on the premise
of analyzing designers and design practice to understand the “designerly” ways of
problem ﬁnding, setting and solving by observing the ways they approach the design
of diﬀerent artifacts. (Cross, 198212
; Schon, 198413
; Schon, 198714
) According to the most
relevant studies, designers use envisioning capabilities, divergent idea generation,
visualization tools, synthesizing and prototyping, just to mention some of the
skills and tools generally associated with designers and their cognitive style. Design
Thinking can tackle ill-deﬁned or indeterminate problems (Buchanan, 199215
) with a
solution-oriented attitude (Cross, 1982), generating ideas and transforming them into
new solutions (Buchanan & Margolin, 199516
Following the expansion of its scope, Design Thinking moved away from design
practice as a promising approach for dealing with problems in diﬀerent ﬁelds by
employing formalized processes and techniques that can be applied by professionals of
all disciplines, not necessarily by designers. Design Thinking became a new robust
7 Archer, B. (1979) Design as a Discipline. Design Studies. 1 (1), pp. 17-20
8 Dorst, K. & Dijkhuis, J. (1995) Comparing Paradigms for Describing Design Activity. Design Studies. 16
(2). pp. 261-74.
9 Dorst, K. & Cross, N. (2001) Creativity in the Design Process: Co-Evolution of Problem–Solution. Design
Studies. 22(5) pp. 425–37.
10 Lawson, B. (1980) How Designers Think. The Design Process Demystiﬁed. Architectural Press-Elsevier,
11 Rowe, P. G. (1987) Design Thinking. The MIT Press, Cambridge, MA.
12 Cross, N. (1982) Designerly Ways of Knowing. Design Studies. 3 (4). pp. 221-27
13 Schön, D. (1984) The Reﬂective Practitioner. How Professionals Think in Action. Basic Books. New York,
14 Schön, D. (1987) Educating The Reﬂective Practitioner. Jossey-Bass. San Francisco, CA.
15 Buchanan, R. (1992). Wicked Problems in Design Thinking. Design Issues 8 (2), pp. 5-21.
16 Buchanan, R. & Margolin, V. (1995) Discovering Design: Explorations in Design Studies. Chicago University
design method or “a discipline that uses the designer’s sensibility and methods to
match people’s needs with what is technologically feasible and what a viable business
strategy can convert into customer value and market opportunity” (Brown, 200917
Behind Design Thinking stands the idea that managers should apply Design Thinking
and practices to improve business and succeed in future challenges (Kelley, 200118
Boland and Collopy, 200419
; Martin, 200920
): according to Brown (2009), thinking like
a designer can help managers and organizations to develop innovation in products,
services, processes, and strategy.
to some authors, abuse) helped position design as a discipline that could inﬂuence
aspects of the business process that were previously thought to be beyond the scope
of design, such as the business strategy (Image 2). Since 2008, this idea has become
mainstream and design is now routinely acknowledged to contribute to strategic
aspects of the business (Martin, 200921
b) Basic Assumptions
i) Business and entrepreneurship are based on a premise of repetition and efficiency
One of the reasons why, throughout this work I sustain that design can be a tool that
enables innovation and creativity is because it is a discipline that is based on diﬀerent
logical principles that are almost the opposite of those used in business. While
innovation requires entering unexplored ﬁelds, and introducing (still) unveriﬁed
solutions, established business organizations tend to rely on existing knowledge, or
else on procedures that have proven to be efficient and reliable.
) describes this “persistence of the past” as the natural condition of
established companies, since the predominance of analytical logic draws them to look
at the past as a way to predict the future. This is a recurrent knowledge bias, based on
the idea of linear evolution: if we map where we used to be yesterday, and where we are
today, we can tell which is the direction towards the future by extending the line that
joins the past to the present. Unfortunately, this assumption is proven true only when
tomorrow will be exactly like today: a condition quite far from the instable nature of
contemporary markets. Managing a company with this conservative mindset is like
driving a car looking at the rear-view mirror, yet this is still the predominant approach,
17 Brown, T. (2009) Change by Design. HarperCollins. New York, NY. P. 86
18 Kelley, T. (2001), The Art of Innovation. Lessons in Creativity from Ideo. Crown Business, New York.
19 Boland, R. J. & Collopy, F. (2004) Managing as Designing. Standford University Press. Stanford, CA.
20 Martin, R. (2009) The Design of Business. Harvard Business School Press, Boston, MA.
21 Martin, R. (2009) The Design of Business. Why Design Thinking is The Next Competitive Advantage. Har-
vard Business Press. Boston, MA.
22 Martin (2009) Ibid. Pp. 44 - 45
Figure 3. Mainstream idea of design as an agent capable of inﬂuencing organizational strategy
stemming from the work of Brown (2009)
for a number of reasons that Martin (2009) describes in detail. The variability of
contemporary markets has thus become a quite relevant problem for managers: while
their historical attitude and knowledge are based on deductive and inductive thinking,
the integration of adductive thinking is now highly required.
The world of business is characterized by a constant tension between change,
requiring the capacity and the tools to enter unexplored territories, and preservation,
bound to the need of repeating, optimizing and standardizing processes to make them
eﬀective and efficient. Martin (200923
) refers to this tension as that between validity
and reliability, or else between the need of exploration and that of exploitation, telling
that it cannot be solved but just managed and balanced.
Studies on organizational change pinpointed the relevance of this issue: Lawrence
) dedicated an article to how to deal with resistance to change long ago, and
from then on the topic was widely discussed in the frame of change management.
At the same time, studies on product innovation highlighted the importance of
managing the interfunctional conﬂicts occurring during the innovation processes (for
example: Xie, Song & Stringfellow, 199825
). These conﬂicts reveal the diﬀerent mindset
of diﬀerent areas/divisions of an organization, the natural resistance to change that
characterizes both individuals and organizations, and the need of repetition as a base
for efficient processes.
Organizations sense both the need to innovate and the risks associated to innovation
and change, and naturally develop an attitude towards these contradictory
perceptions, bound to their culture (internal factors) and to the characteristics of the
environment they are immersed in (external factors). This attitude can be defensive
or oﬀensive, passive or active: some companies understand the need of change only
when competitors or new entrants start aﬀecting their business, while others pursue
innovation and change actively.
In the perspective of the entrepreneurial risk, new ventures represent the highest
achievement: in the famous Ansoﬀ’s product/market matrix we can place them in the
same position of a corporate diversiﬁcation (new products for new markets unrelated
to the current technological and marketing base).
ii) Creating new ventures is risky and requires a diﬀerent mindset, prone to
exploration and trial and error learning.
New ventures are in fact characterized by a high level of uncertainty and risk; there
is a need to deal with systemic problems related to the creation of an entire value
chain; the need to build new networks to develop and sustain the new businesses; the
difficulty to give incontrovertible proof of the potential success of the entrepreneurial
idea. This last characteristic, together with the need to reduce the risk, led to a typical
two-step structure of the venture capital funding scheme: seed money to get to the
“proof of concept”, and real funding to start-up and ramp-up the business.
An interesting lesson coming from design culture is bound to its “trial and error”
mindset. While in business the fear of error is the most powerful motivation of
stillness, in design it is regarded as a natural condition of innovation. Even if the idea
of resilience was discussed in the business ﬁeld, noticing that companies can recover
and learn from errors, and base on them their future success (Hamel & Valikangas,
; Gunther McGrath, 201127
), the fear of error still stands as the greatest cultural
23 Martin (2009) Ibid. Pp. 53-54
24 Lawrence, P. R. (1954) How to Deal with Resistance to Change. Harvard Business Review. 32 (3). pp. 49-57
25 Xie, J. Song, M.X. & Stringfellow, A. (1998) Interfunctional Conﬂict, Conﬂict Resolution Styles, and New
Product Success: A Four-Culture Comparison. Management Science. 44(12). Part 2 of 2. pp. 192-206.
26 Hamel, G. & Valikangas, L. (2004) The Quest for Resilience. Harvard Business Review. 81 (9). pp. 52-63
27 Gunther McGrath, R. (2011) Failing by Design. Harvard Business Review. 89(4). pp. 77-83
barrier to change and innovation.
This throws light to another interesting feature of the design tools: they are
not based on the idea to fully preﬁgure a future situation from the very beginning, but
to continuously adjust it along its construction, and even to completely change the
direction if some new intuition or unexpected event suggests so.
In new entrepreneurial ventures the fear of error might be at the same time a
safe and a misleading sentiment: it will help reducing risk, but will force concentrating
on the reliability rather than on the validity of the idea. Viability studies build an
analytical frame around business ideas, and are thus likely to select not those with
the highest potential of being desirable, but those with the lowest potential risk.
A designerly mindset would help in applying a diﬀerent attitude at diﬀerent stages:
the decision to kick-oﬀ a new business should be based on the validity of the idea
(prevalence of adductive reasoning), while analytical tools should be used to assess and
make it robust (prevalence of inductive and deductive reasoning).
Entrepreneurial process phase Idea generation and validation Idea prototype and assessment
Design process phase Front end of innovation New product development
Prevailing mode of reasoning Abductive Deductive and inductive
What to consider Validity Reliability
Table 1. Modes of reasoning in the diﬀerent phases of construction of a new entrepreneurial venture
Design Thinking could be an answer to the fear of new ideas and change pervading the
world of business: a large number of consultancies are today focused on introducing
a culture of innovation into companies through Design Thinking. Within this frame,
to creativity, and the use of design skills is essentially seen as a way to force out-of-the-
box thinking in situations that inhibit innovation. Today, some authors like Deserti
and Rizzo (2013), and even Brown himself, question the application of design thinking
like a linear, decontextualized, top-down efficiency-based process like total quality or
Six Sigma methodologies in the 1990s. However, that debate is beyond the scope of
iii) Design possesses tools, cultures and a mindset that encourage experimentation
While recognizing the importance of creative and divergent thinking in the front-end
of innovation, it should be noted that what design can really bring to business is not just
creativity, but a comprehensive way of facing the question of innovation, balancing the
constant tension between change and preservation. In this comprehensive perspective,
actors and stakeholders. This point was well deﬁned by Vandenbosh & Gallagher (2004)
: while contemporary managerial perspective on innovation is fraught with the idea
of out-of-the-box thinking, what should be learned from design is not a further push
towards a romantic view of creativity but the capability to stay “inside the box”, thus,
innovating while respecting constraints.
In recent years, the focus of attention of many designers has turned to the earliest
phases of the design process, the so-called “Fuzzy Front End of Innovation” (FFEI). The
FFEI has become important because, according to Reid and De Brentani (2004), “the
activities and decisions comprised in the FFEI are the starting point and, therefore,
Figure 4. Similarities between the product-development process and the entrepreneurial process. Ela-
boration by the author.
determine the direction of any new product path, it is clear that a better understanding
of the activities and decisions comprising this starting point ultimately could lead to
competitive advantage”. Additionally, according to Smith and Reinertsen (1991), of all
the actions ﬁrms can take to improve their NPD process, those taken at the fuzzy front
end give the greatest time savings for the least expense”. Thus, actions taken place
during the FFEI, could potentially provide the most beneﬁts with the least eﬀort in the
new product development process.
Diﬀerent stages of the innovation process ask for diﬀerent designerly mindsets: while
in the front-end of innovation a primarily explorative attitude supports the generation
of new ideas, their honing requires considering many constraints. Moving along the
innovation funnel to transform an idea into a product to be marketed requires both
the adductive leaps of mind that might make that idea innovative, and the analytical
processes based on deductive and inductive thinking that give the possibility of
developing and honing it. Design is thus far from being a “compact” activity: in almost
all the literature on design methods it is actually described as a complex process,
requiring diﬀerent attitudes and competences at diﬀerent stages.
This knowledge led to an intuition that eventually became the hypothesis of this
process? Both aim to produce new products or services to be introduced to the market,
however in the entrepreneurial process the scale and complexity increase importantly.
Just as many products fail because there was not an appropriate FFEI process leading
to the pursuit of products very few people want to buy, could the same reasoning be
applied to the entrepreneurial process?
This intuition was supported by the ﬁnding of the work of Barringer and Gresock
(2008), which became the bridge linking the design discipline, and the traditional
stage-gate process in product development as a way to structure the front-end of the
entrepreneurial process and apply the same competences of product development
to the generation and assessment of business ideas. Barringer and Gresock (2008)
report a study of 600 entrepreneurs in which only 31% of them had done a business
plan before starting the venture. Although this is enough reason for serious concern
for entrepreneurship scholars since planning is acknowledged to be a critical, they
claim that it could be easily inferred that, if developing a business plan is still a widely
underdeveloped activity, pre-business plan activities such as identifying business ideas,
developing them and assessing them are even weaker or non-existent.
Barringer and Grasock proposed to transfer the State-GateTM
model to the
front-end of the entrepreneurial process because of its success and popularity in
product-development literature. However, the front-end is not considered part of the
new product development process and a linear process is not deemed appropriate for
the FEI. According to Koen (2002) many of the practices carried out during the NPD
don’t apply to the front-end, because the nature of the work, commercialization date,
funding level, revenue expectations and other factors are fundamentally diﬀerent
and the activities in the FEI are often chaotic, unpredictable and unstructured.
However, there is little literature regarding entrepreneurial experiences in which
design plays a key role in early stages of new ﬁrms. There are basically two major strands
of research that deal with the relationship between design and entrepreneurship:
Designers as entrepreneurs, either designing and selling their own products
(typically furniture, clothing or other traditional design-intensive products) or
selling their design services from a “creative industries” perspective.
Design as an instrument that acts in the front-end of innovation in existing
ﬁrms in new product development processes (however, this is not related to
entrepreneurship but rather, to intrapreneurship).
process until now has not been addressed in research, neither from entrepreneurship
nor from design scholars.
Thus, the hypothesis of this work began to take form. Given that design has developed
instruments and a mindset to deal with the fuzziness and vagueness of the front-end
of innovation and that both processes aim to introduce a new product or service to
the market, could design bring some of these instruments to the early phase of the
entrepreneurial process? And if so, how?
Following these observations, it became quite quite clear that it was worth exploring
the earliest phases of the entrepreneurial process from a design perspective, and more
speciﬁcally how design can help identify and construct business ideas.
The hypotheses of the research was constructed as follows:
Design can be a driver of entrepreneurship by enabling the generation, setting up
and development of business ideas to turn them into potential entrepreneurial
i) Research Objectives
The research has two types of objectives. The general objectives are:
To provide a panorama of the phenomenon of design-led entrepreneurship.
The speciﬁc objectives are:
To codify the diﬀerent existing models of design-led entrepreneurship.
To identify design instruments that may be transferrable to the entrepreneurial
The research area is the role of design in the generation, setting up and development
of business ideas before the decision to exploit the opportunity and build the
Figure 5. The diﬀerent subtopics explored by this research
venture. The design focus is on contribution design tools and design culture could
bring to the earliest phases of the entrepreneurial process.
If time allows, the ﬁnal design output will be macro-tool (or perhaps a toolkit) that
enables entrepreneurs (or aspiring entrepreneurs) to shape their business idea in order
to perhaps, creating a business opportunity.
Speciﬁc objectives of each section of the thesis will be subsequently described.
d) Research Design and Methodology
WITH A DESIGN-
A TOOLKIT OF
TOOLS IN AN
Figure 6. The research structure. The top row describes the methodology used in the section, the
central row describes the content of the research and the bottom row describes the outcomes of
The research was structured in three distinct blocks: a ﬁrst part of literature review, a
second part of case studies analysis and an experimental action research part (ﬁgure
First part – Designing entrepreneurial opportunities
A central construct and fundamental pillar of business ventures is the entrepreneurial
since they were largely overlooked in entrepreneurship literature and the construct
has remained subject of much debate.
Among the many research questions that come when studying opportunities are: What
are entrepreneurial opportunities? Do opportunities exist and are waiting to be discovered
or are created? If they are discovered, why do some people discover them and others don’t?
If they are created, how is it possible to do so? What are the factors that contribute to the
discovery/creation of an opportunity? Is this an individual or a collective endeavor? Can
design contribute to the production of business opportunities?
Although synthetically, the ﬁrst chapter will summarize the contributions of
entrepreneurship research on the opportunity construct and its implications for this
discovery (creation), since many cognitive traits possessed by successful entrepreneurs
overlap with many skills designers are formally trained in.
The second chapter will describe the business model construct, which is essential
to understand the logic behind a proﬁt-making business and how designers have
contributed to the process of business model design. Some authors such as Eppler and
and Eppler, Hoﬀmann and Bresciani (2011)29
argue that the visual
solutions and visual artifacts designers bring to the business model design process can
greatly help teams working in business model innovation because visual tools “help
teams collect, process and distribute information, structure an inclusive and creative
process (…), develop scenarios in order to explore the feasibility of new business
models,(…) sense customer needs and business model requirements, minimize the
risks of failure through testing new business model prototypes (…) and facilitate
knowledge creation and transfer”.30
The central argument of this chapter is that the
business model and the entrepreneurial opportunity are strongly related, and that
design could help framing and shaping the entrepreneurial opportunity in the same
fashion as it is facilitating and enabling the design of business models.
Second part – Generating New Enterprises Through Design Culture
In chapter three, two sets of case studies will be analyzed. These two sets of cases
represent two diﬀerent experiences in design entrepreneurship: the ﬁrst one, which
is historical analyzes product-based design-oriented companies, particularly Italian
companies operating in design intensive industries; the second one, which is a more
recent phenomenon, analyzes the ongoing trend in the United States of designers who
have become founders of very successful IT companies. The chapter focuses speciﬁcally
on how these companies were created and what was the role of design in the discovery
or creation of the entrepreneurial opportunity that led to the creation of the ﬁrm.
Chapter four will analyze case studies of diﬀerent models of support systems for
entrepreneurs, particularly design-related entrepreneurship, such as incubators,
accelerators, co-working spaces, etc. in order to understand the diﬀerences of each
format, the services they provide and the type of support that each actor proposes. The
chapter maps the diﬀerences between the various formats and outlines the gaps that
few of the actors have covered and that would be necessary to support better design-
28 Eppler, M. J., & Hoﬀmann, F. (2011). Challenges and Visual Solutions for Strategic Business Model
innovation. In M. Hülsmann & N. Pfeﬀermann (Eds.), Strategies and Communications For Innovations (pp. 25–36).
Berlin, Heidelberg: Springer Berlin Heidelberg. doi:10.1007/978-3-642-17223-6
29 Eppler, M. J., Hoﬀmann, F., & Bresciani, S. (2011). New Business Models Through Collaborative Idea
Generation. International Journal of Innovation Management, 15(06), 1323–1341. doi:10.1142/S1363919611003751
30 Eppler, M. J., & Hoﬀmann, F. (2011) Ibid. P. 26
Third Part. Development of the Hypothesis and Experimental Veriﬁcation.
Chapter ﬁve will summarize the ﬁndings from the previous two sections and detail
how they have contributed to the formation of the research hypothesis. Particularly in
this chapter, the hypothesis is fully formed.
The hypothesis of this work is that the design discipline possesses tools,
methodologies, frameworks and a “designerly mindset” that could make the creation,
framing, positioning, development and assessment of business ideas more reliable
and efficient when exploring entrepreneurial opportunities. These toolsets could be
transferred from the ﬁeld of design to that of business to support the construction of
new entrepreneurial ventures. The word “construction” is used since some of these
tools are a step ahead of preﬁguring: they are not just meant to design, but to dialogue,
convince, construct, assess, and build a working prototype. (Nesta, 201131
). The author
opted for selecting service design tools as a potentially valid alternative for structuring
the front-end of the entrepreneurial process because they enable and facilitate the
framing, design, prototyping and assessment of complex intangible artefacts that
require developing networks of actors and partners that support execution (Blomkvist,
; Meroni & Sangiorgi, 201133
The sixth chapter of the research describes the experimental veriﬁcation of the
hypothesis, in the context of an entrepreneurial open innovation platform. The
platform was founded by prof. Carlos Teixeira, who kindly agreed to co-supervise
the authors’ work, and Sonia Manchanda, founder of IDIOM design consultancy in
Bangalore, India. The platform was founded and conceived in 2010 and started as a
pilot project in India in January and February 2011. The project consists of three phases
called Dream, Believe and Realize. However the focus of the research is in the Believe
phase, when a workshop called “The Conclave” takes place. During the workshop
participants reﬁne the business ideas with the help of a multidisciplinary team with
the objective of empowering and facilitating the creation and innovation process.
The team is made up of students, professors, entrepreneurs, industry experts, ONG
members and local authorities, among many others. Then, the ideas are pitched and
reﬁned, and teams who have a good idea and want to carry on and start the venture
move to the next phase, in which they are mentored and put in contact with a network
The chapter is divided in two parts; the ﬁrst one analyzes and dissects the structure of
the DREAM:IN platform in order to understand the model. The second part describes
the experiment, a workshop performed within the ﬁrst phase of the DREAM:IN China
project in Beijing. The experiment applied a series of simpliﬁed service design tools
during a workshop aimed to generate business ideas. One group used the tools and a
larger control group did not. The results of the workshop are described, as well as the
The research provides an overview of the phenomenon of design-led entrepreneurship,
The empirical evidence correlates positively the use of service design tools with the
marked increase in efficiency, reliability and rigor in business idea generation from the
participants that used them. This is a promising sign for aspiring entrepreneurs since
31 NESTA (2011). Prototyping Public Services. Retrieved from www.nesta.org.uk/library/documents/Proto-
32 Blomkvist, J. (2010). Conceptualising Prototypes in Service Design. Linköping University. Retrieved from
33 Meroni, A. & Sangiorgi, D. (2011) Design for Services. Gower Publishing. Surrey, England.
these instruments could be used systematically to manage the uncertainty and risk and
generate valid and robust business ideas in the earliest phases of the entrepreneurial
process, a crucial moment in the birth of a new venture. Entrepreneurs could then,
focus their time and energy in searching, framing, developing and assessing business
ideas in a structured and rigorous manner avoiding inefficient activities and the waste
of scarce and precious resources.
The tools also helped the participants get a marked increase in efficiency both of
time and material resources. The tools are inexpensive to design and print (they can
be used at no cost) as well as materials for the workshop therefore valuable results
can be achieved with very little resources. This is no small factor for bootstrapping
entrepreneurs, especially in this tough economy, so they need to be assertive about
where they spend their valuable time, money and energy. The results are encouraging
in this direction: valuable results can be achieved with very little.
The positive results from the workshop also point at the potential of the use of design
produced more detailed and comprehensive ideas, analyzed the issues at stake more
deeply, and satisﬁed multiple constraints and guidelines in a reliable and systematic
way. The design tools also enabled the participants to use their tacit knowledge about
their culture and personal expertise to contribute and enrich business concepts. This
is also an auspicious sign of the potential of design in knowledge brokering.
Overall, the use of design tools and strategies correlated positively with the quality and
quantity of the results produced. Furthermore, the design tools helped structure and
de-mystify the front-end of the entrepreneurial process. Participants could focus on
generating valuable ideas and reﬁne them through multiple iterations without being
distracted by factors related to managing the work process, the learning curve of the
design instruments or cognitive overload brought on by the complexity of the issues
The design of new services is quite similar to that of the starting up of new
entrepreneurial ventures: they might have a material substrate, but they primarily
pose problems related to the business model and to the ecosystem of actors and
stakeholders. Designing a new service requires the construction of a complex network
- which means that it is really new to the company that brings it to the market - its
development is quite close to that of shaping a new business. The toolset used to build
a new service can be thus adopted to give shape to a new entrepreneurial venture,
since the front-end of new product (or service) development and the front-end of the
entrepreneurial process are very similar. This similarity opens up promising cross-
pollination of methods between design and entrepreneurship.
The experimental model, using service design tools as aids in structuring the front-
end of the entrepreneurial process, proposed reliable and replicable design strategies
for dealing with multiple aspects to be considered when designing business ideas,
and introduces the novelty of the contribution of design tools to add rigor, validity,
reliability and efficiency to the front-end of the entrepreneurial process.
1. The importance of entrepreneurial opportunity
A central construct and fundamental pillar of business ventures is the entrepreneurial
since they were largely overlooked in entrepreneurship literature.
Among the many research questions that come when studying opportunities are: What
are entrepreneurial opportunities? Do opportunities exist and are waiting to be discovered
or are they created? If they are discovered, why do some people discover them and others
don’t? If they are created, how is it possible to do so? What are the factors that contribute
to the discovery/creation of an opportunity? Is this an individual or a collective endeavor?
Although much attention and energy has been dedicated to a generic approach to the
discovery and creation of entrepreneurial opportunities from an entrepreneurship
Can design contribute to the discovery of business opportunities? If so, what could be some
of the contributions of design of their discovery?
Although synthetically, this chapter will summarize the contributions of
entrepreneurship research on the opportunity construct and attempt to link design
thinking with cognitive traits necessary to discover business opportunities.
1.1. The entrepreneurial process
There is a wide acknowledgement that the entrepreneur is the person who perceives/
creates an opportunity and creates an organization to pursue it. The entrepreneurial
process involves all the functions, activities and actions associated with perceiving
opportunities and creating organizations to pursue them. Bygrave (2010) describes the
factors that inﬂuence the entrepreneurial process highlighting the fact that there is
always a triggering event that pushes the entrepreneur to pursue an entrepreneurial
opportunity. The diagram synthesizes the many complex factors that contribute to
the formation of new entrepreneurial ventures.
However, Bhave (1994) proposes a non-linear, iterative, feedback-driven, conceptual
and physical process highlighting that, even after the business concept has been
Figure 1 Bygrave (2010) p. 4 Adapted from Moore (1986)
Locus of Control
INNOVATION TRIGGERING EVENT IMPLEMENTATION GROWTH
STRATEGIC FEEDBACK OPERATIONAL FEEDBACK
SENSEMAKING PROCESS SUPPLY & DEMAND
OPPORTUNITY STAGE TECHNOLOGY SETUP & ORGANIZATION
deﬁned, feedback from other actors (suppliers, customers, distributors, etc.) along the
process can lead the entrepreneur into modifying his/her initial idea. This results into
the entrepreneurial process being a non-linear iterative process.
Murphy (2009, 2010)1
; refers that many authors, although acknowledging that
existence of ambiguity on the ontological status of opportunities in entrepreneurship
However, most authors agree that the entrepreneurial opportunity is fundamental for
the existence of the new venture and that it is placed very early in the entrepreneurial
process although the debate on their nature and role in the entrepreneurial process is
still ongoing (Murphy, 2010)2
1.2.Deﬁnition of entrepreneurial opportunity
A ﬁrst step in identifying what an opportunity is, depends on the school of thought.
Shane (2003) 3
deﬁnes an entrepreneurial opportunity, as “a situation in which a
person can create a new means-end framework for recombining resources that the
entrepreneur believes will yield a proﬁt”.4
Other authors like Plummer, Haynie & Godesiabois (2007)5
opportunities according to diﬀerent economic perspectives (Table 1), however, Shane
(2003) notes that these perspectives assume that the entrepreneurial opportunity is
always proﬁtable, whereas this is not always the case.6
1 Murphy, P.J. (2009) A model of the discovery, assembly, and viability of entrepreneurial opportunities.
Entrepreneurship: values and responsibility. Retrieved from: http://works.bepress.com/profpjm/7
2 Murphy, P. J. (2010). A 2x2 conceptual foundation for entrepreneurial discovery theory. Entrepreneurship
Theory and Practice, 35(2). Wiley InterScience Early View DOI: 10.1111/j.1540-6520.2010.00368.x
3 Shane, S.A. (2003) A General Theory of Entrepreneurship: The Individual – Opportunity nexus. Edgar Elvar
Publishing, Inc. Massachusetts, USA. P. 18.
4 Murphy, P.J. (2009) A model of the discovery, assembly, and viability of entrepreneurial opportunities. Entre-
preneurship: values and responsibility. Retrieved from: http://works.bepress.com/profpjm/7
5 Plummer, L.A., Haynie, J.M., Godesiabois, J. (2007) An Essay on the Origins of Entrepreneurial Opportuni-
ty. Small Business Economics. 28:363-379.
6 Some of the deﬁnitions of opportunity included in the table are non-productive such as rent seek-
ing. Technically other non-productive activities could also be considered entrepreneurial opportunities such as
organized crime, therefore although the deﬁnitions could ﬁt a variety of activities the context and content of the
economic activity must be taken into consideration.
Figure 2 Process model of entrepreneurial venture creation. Adapted from Bhave (1994)
Theory Foundations Type of
SCP Porter Structure-
Firm as a
of three generic
by unmet needs
Firm as a
of the ﬁrm and
its access to
legal form) are
ﬁrm as a
to assets put to
Assess the nature
of the difficulties
for a given
ﬁrm, market or
for reducing or
the mode of
(ﬁrm or market)
a key decision is
of the ﬁrm (ex.
What to make
and what to
ﬁrm as a
to search and
selection of new
Selection of a
is not possible,
optimize lead to
be “found” by
of search and
of a ﬁrms’
rents based on
capacity in future
the face of
allow for the
Table 1: Classiﬁcation of entrepreneurial opportunities. (Plummer, Haynie & Godesiabois, 2007)
Plummer, Haynie & Godesiabois (2007), identify in their table the diﬀerent factors
that could account for a ﬁrms’ superior performance and thus, be an essential part of
the opportunity construct.
These authors claim that it can be deducted from these perspectives a support for the
idea that opportunities are objective not subjective phenomena that theoretically exist
outside of the individual7
Most authors divide opportunities in two major types: Kirznerian and Schumpeterian.
of entrepreneurial information involves the introduction of new information or just
diﬀerential access to existing information. In simple words, Kirznerian opportunities
are viewed as “discoveries” whereas Schumpeterian opportunities are viewed as
Schumpeterian opportunities Kirznerian opportunities
Requires new information Does not require new information
Very innovative Less innovative
Involves creation Involves discovery
Table 2. Taken from Shane (2003)
The debate on whether opportunities are found or created has been going on for
decades, with authors presenting inconclusive and contradictory results that will be
detailed in the following pages.
On a very basic level however, all opportunities must include references to three
central characteristics: potential economic value (i.e. the capacity to generate proﬁt),
newness (i.e. some product, service or technology that did not exist previously), and
perceived desirability (e.g. moral and legal acceptability of the new product or service
in society)(Baron, 2007).
Opportunities begin in a very elemental form, as fuzzy constructs such as “imprecisely-
deﬁned market needs, or under-employed resources or capabilities” (Kirzner,1997).
The latter may include basic technologies, inventions for which no market has
been deﬁned, or ideas for products and services. Prospective customers may or
may not be able to articulate their needs, interests or problems (Von Hippel, 1994).”
(known or unknown) and the value sought (or market needs). Deﬁned value creation
capability includes speciﬁcations or intellectual, human, ﬁnancial and/or physical
resources (e.g. general speciﬁcations for a product/service). In the matrix, value
sought may represent problems and value creation capability may represent solutions.
This matrix, which the abovementioned authors adapted from the creativity literature
(Getzels, 1962), diﬀerentiates between opportunities based on their origin and degree
of development. The authors however point out that these phases could be subsequent,
with opportunities going through the four phases. Nevertheless, it is assumed that the
solutions are technology-based.
7 Plummer, L.A., Haynie, J.M., Godesiabois, J. (2007) Ibid. P. 373
Baron (2006) recalls that opportunities emerge from a complex pattern of changing
conditions – changes in technology, economic, political, social and demographic
conditions. They come into existence at a given point in time because of a juxtaposition
or conﬂuence of conditions that did not exist previously but is now present.
For Byers, Dorf and Nelson (2010)
an opportunity is a timely and favorable juncture of circumstances providing a good
chance for a successful venture. They acknowledge that discovering (or creating)
opportunities is a creative process that relates a need to the methods, means or services
of describing a good opportunity is to describe the customer’s pain, which represents
the extent of need for the solution of a problem. Thus, a high value solution is sought
by a customer who feels signiﬁcant pain or need.
1.3. The discovery perspective
One of the two major perspectives on the origin of entrepreneurial opportunities
is the discovery approach. According to these authors, opportunities exist and are
objective entities that are waiting to be discovered by alert individuals.
The basic assumption of this perspective is that there are sub-utilized resources in
existence and the entrepreneur re-conﬁgures these resources so they can yield a proﬁt.
An example would be, for instance, the existence of an empty commercial space in
a neighborhood. The entrepreneur might then decide, based in diﬀerent cognitive
processes, that if s/he set up a restaurant in that place, s/he might yield a proﬁt. In
doing so, s/he establishes a new means-end framework for a proﬁt.
Shane (2003) argues that this process, since it is cognitive, can only be carried out by an
individual. Therefore most research on the Kirznerian perspective is focused on why
some individuals perceive opportunities and not others.
Critics of this perspective argue that these types of opportunities are not innovative
(for example, speculating with values in the stock market and or buying and reselling
a property for a proﬁt are also examples of Kirznerian opportunities). “Discovery
entrepreneurs” focus on predicting systematic risks, formulating complete and
stable strategies and procuring capital from external sources. The advantage of these
Figure 3. Value Creation Capability. Adapted from Ardichvili et al. (2003)
entrepreneurs comes from being the ﬁrst to decide to exploit them. However, since the
information about these opportunities and their exploitation is widely available these
ﬁrst mover advantages are difficult to sustain (Lieberman and Montgomery, 1988).
Nevertheless, discovery authors mention some individual traits that contribute to the
“discovery” of entrepreneurial opportunities. These traits could enable entrepreneurs
to react to information in their environment and produce numerous business ideas.
designers could be well equipped to detect and perceive entrepreneurial opportunities.
This does not imply that they could be successful entrepreneurs but merely that they
could be better trained at detecting potential opportunities.
However, the current trend is to integrate some of this “designerly” capabilities into
business curricula, or to create design-driven curricula created ex-facto for business
managers, given that design has been deemed a suitable answer to the challenges
of ﬁnding new ways of thinking and working, that can be applied in situations of
complexity, uncertainty and ambiguity and generate new insights and new solutions
(Matthews, Bucolo and Wrigley, 2011).
Some of the early attempts to integrate design education in business curricula included
joint courses by the Rotman School and the Ontario College of Art and Design; The
Illinois Institute of Technology’s Institute of Design, a nine-month-long executive
master’s degree program in design methods; and Stanford University’s $35 million
commitment to launch its ‘d.school’, for people from large companies and startups to
come to learn design thinking.
1.4.The Creationist Perspective
In creation theory, opportunities to produce and sell new products or services
do not exist until entrepreneurs act to create them. According to this theory,
entrepreneurs do not “recognize” opportunities and act upon them but rather, they
act and wait for a feedback from the market. Then they readjust their initial oﬀering
and act again. In acting, entrepreneurs create opportunities that could not have
been known without the actions they took. Entrepreneurs also may not be able to
foresee how the market will react to their oﬀering and can only have hypotheses.
A key diﬀerence between a “business idea” or “creative idea” and an entrepreneurial
opportunity from a creationist point of view is the fact that the entrepreneur
must act on the idea so it can become an opportunity (Dimov, 2007)
. A fundamental fact for classifying as an entrepreneur is do to something about the
idea, since entrepreneurship can be characterized as acting in the face of uncertainty
such when it is considered to be viable. Thus, it’s the work of the aspiring entrepreneur
to work in the idea, make it as robust as possible, assess it and test it in order to turn it
into an opportunity.
Dimov deepens this ontological contradiction:
“It is not about the idea per se; rather, it is about ﬁnding out whether the idea
can really deliver its original promise. But then, how far should my idea stretch
in order to be considered entrepreneurial, i.e. an opportunity? How can eventual
commercial viability – and who is to make this judgment? - Have a bearing on
whether what I am thinking bout here and now, before I have done anything about
it or as I am taking the very ﬁrst toward pursuing it, be considered an opportunity?”
His deﬁnition of entrepreneurial opportunity embraces creativity as a fundamental
part of the generation of the idea: “Opportunity as a creative product in entrepreneurship
is the progress (idea + action) along a continuum ranging from an initial insight to a fully
shaped idea about starting and operating a business”. This is the deﬁnition that will be
used throughout this work.
In the creationist perspective, the opportunities are ﬁrst and foremost, imagined. The
viability of the idea remains to be seen. Then, a sense-making process will begin in
order to clarify the viability of this vision of a possible future. The sense-making process
needs the feedback of the entrepreneurs’ peers and members of his social network.
During this process the idea will be reﬁned and it will progress from “opportunity”
into a more structured form of business concept. As the business concept is reﬁned
it becomes more complex, including product/service concept (what is to be oﬀered),
market concept (to whom it will be oﬀered), supply chain/marketing/operations
concept (how the product/service will be delivered to the market)(Cardozo, 1986).
This development process, which some authors call objectiﬁcation, involves proactive
eﬀorts much like that of new product development but the development process here
gives rise to an entire business, not just a product (Pavia, 1991).
A key point of this theory is the generation of new knowledge by acting and
creating. The process is reﬁned and repeated for as many times as possible. This
process, called eﬀectuation, is acknowledged to be messy and non linear. As
such, the opportunity develops as a social construction and does not exist apart
from the entrepreneur (Shackle, 1979; Sarasvathy, 2001; Baker and Nelson, 2005)
. In this context of high uncertainty what matters the most is not just reorganizing
existing resources and information but rather, asking the right questions,
designing new experiments, remaining ﬂexible and learning (Mintzberg,1994).
When entrepreneurs do not have well understood and deep knowledge of the
opportunities they are enacting, learning by doing is a more eﬀective guide to
entrepreneurial action than detailed planning (Argote, 1999 in Álvarez and Barney,
2007). Entrepreneurs in these conditions develop their own knowledge structures
through repeated experiments and then use those knowledge structures to give the
information they create form and meaning (Walsh,1995 in Álvarez and Barney, 2007).
Furthermore, even though the creationist perspective acknowledges the role of the
individual in the creation of the initial business idea, the picture is not complete.
Dimov (2007) argues that the context, the environment and the entrepreneur’s social
circle can heavily inﬂuence the entrepreneur in this very early stage. Because in this
perspective opportunities are viewed as social constructions, a key ability of the
entrepreneur would be the ability to reach consensus and produce coalition building
to eﬀectively inﬂuence current economic and social structures in ways that give rise
to opportunities for proﬁt (Shackle, 1979; Weick, 1979; Giddens, 1984; Sarasvathy,
2001; Dimov, 2007; Felin and Zenger, 2009 in Wood and McKinley, 2010). Thus, the
entrepreneur ﬁrst envisions his or her idea, and then initiates a sensemaking process
to clarify the viability of the idea.
This sensemaking process takes place through interactions between the entrepreneur
and his or her peers: for example, family, friends, and mentors. If the entrepreneur
decides to exploit the opportunity, then he or she attempts to enact the opportunity
by engaging the social structure and trying to involve potential stakeholders into
supporting the venture. The support of these individuals is needed to turn the
opportunity into a working business (Lounsbury and Glynn, 2001 in Wood and
McKinley, 2o1o). In this perspective consensus building is a key to the successful
enactment of opportunities and that social relationships and reputation help facilitate
that task (Wood and McKinley, 2010).
1.5. Reconciliation between discovery and creation perspectives.
In recent years, however, a few authors have come to the conclusion that both
discovery and creation theory can coexist, or perhaps even be two ends of the spectrum.
They are rarely found “pure” in practice, and many authors acknowledge that most
entrepreneurial opportunities entail a phase of discovery, a phase of creation and even
the inﬂuence of luck.
opportunities and advice that most of them are a mixture of the following factors:
1. Pro-active search: Individuals identify opportunities through purposeful,
deliberate search. The abovementioned authors highlight the fact that
many authors pinpoint at this modality of discovery within existing
organizations (corporate entrepreneurship).
2. Problemistic search: Search of solutions to speciﬁc problems expressed in
terms of dissatisfaction with the performance of existing activities.
3. Fortuitous discovery: Opportunities are discovered fortuitously by
those individuals that are alert to changes in the environment and “have
the ability to notice without search”. Other authors acknowledge that
entrepreneurs must have also knowledge in order to recognize potential
opportunities when they arise.
4. Opportunity creation: As proposed by Schumpeter, the opportunity is
created by the entrepreneur or the ﬁrm and the consumer is “educated” to
desire the particular product
. In this perspective opportunities can be created in ﬁve areas: the
introduction of a new good, a new method of production, the opening of
a market, the conquest of a new source of supply and the carrying out of
the new organization of any industry. This model particularly is the one
that has longest development times and requires high levels of individual
creativity and action since, as Shane (2003) recalls, it must be remembered
that opportunities in themselves lack agency. The mere existence of an
opportunity does not spontaneously result in exploitation. This can only
happen through the action of a human being.
Chandler et al. (2003) give the example of an animal bandage company created by a
retired magazine manager, as an example of the difficulty of classifying opportunities.
The manager’s cat got into a ﬁght and needed stitches. When the cat was brought
home from the veterinarian he started knocking things over because of the collar they
put him to stop him from licking his wounds. He and his wife fashioned a bandage out
of a stocking for him to use as a control top. This eventually became the company’s
ﬁrst and primary product. This story involves nearly all of the above-mentioned
factors: a fortuitous circumstance (the cat ﬁght), focused problemistic search (ﬁnding
a substitute for the collar), and opportunity creation (creating a new product and new
company which did not exist before).
Other authors such as Baron (2007) although explicitly embracing discovery theory,
acknowledges that designing and developing a product involves creation. Thus,
discovery may be referred to the moment of perceiving a need or “connecting the dots”
in order to envision a potential opportunity however when it comes to designing an
oﬀering one can talk about creation.
One could, for instance, discover a market need or a change in consumers’ behavior
but then in order to satisfy this need, the entrepreneur should create a product or
service to satisfy this need.
1.6. Individual Cognitive Factors that could contribute to the discovery/creation
of entrepreneurial opportunities
Entrepreneurship research has been studying the factors that contribute to the
discovery/creation of entrepreneurial opportunities. So far, these contributions can be
mapped along two axis:
Figure 4. Mapping of the diﬀerent strains of entrepreneurial research that analyze the variables
that contribute to opportunity discovery/creation
This section of the research will focalize mostly in the research that has been
done in the areas covered by the inferior right quadrant: those factors inherent to
cognitive factors internal to the individual, since a ﬁrm body of literature supports the
notion that internal cognitive traits of people enable them to identify and construct
Support systems that enable the creation of new ﬁrms such as incubators, clustering,
venture capital etc., thus, external system models to the organization will be discussed
in chapter 4.
Since the initial phase of opportunity idea or “insight” happens inside the
individual’s mind, a big strain of research has focused on the personality traits,
cognitive processes, life experiences and knowledge possessed by individuals who
discover/create entrepreneurial opportunities. Some of the cognitive traits possessed
by alert entrepreneurs, overlap with cognitive traits that are also characteristic of
design thinking. Thus, it could be argued that designers may be more inclined to
spot opportunities because they are formally trained in the same thinking skills that
facilitate discovering them.
1.6.1.Individual cognitive factors: Creativity
Creativity is acknowledged to be an important factor in the discovery/creation of
entrepreneurial opportunities. However, detailed research is lacking and some of the
ﬁndings are mixed (Gielnik, Frese, Graf et al., 2011)8
. Creativity is best understood as
an iterative process of divergent and convergent thinking to generate, evaluate, reﬁne
and eventually come up with a creative idea. (Basadur et al., 1982; Mumford et al,.
1991; Ward et al., 1999). A systematic examination of creativity in the entrepreneurial
process would thus require disentangling the diﬀerent stages of both the creative
process and the entrepreneurial process.9
Some of the mixed ﬁndings relating to the
relationship between creativity and generation of entrepreneurial opportunities may
have to do with the fact that diﬀerent measures of entrepreneurial success are used
such as business ideas, business opportunities, venture growth, etc. which scholars
have attempted to link with creativity.
Shane (2003) also acknowledges that there is evidence that creativity and innovation
of a ﬁrm’s founders is positively linked to some measures of innovation and success of
a ﬁrm. Creativity can be deﬁned as a process that alternates divergent and convergent
thinking. Divergent thinking facilitates the generation of multiple novel, and original
ideas whereas convergent thinking facilitates the detection of applicable, correct and
useful ideas (Basadur et al., 1982; Brophy, 1998; Cropley, 2006; Mumford et al., 1991
in Gielnik at al., 2011.) Through divergent thinking, people produce an initial set of
multiple and original ideas that form the basis for subsequent stages of evaluation and
In the case of designers, it needs to be highlighted that although they have been
stereotyped and portrayed as being exclusively “creative” and “thinking outside of the
box” in popular media, they possess both sets of skills that distinguish creativity as an
asset: training in both divergent and convergent thinking.
It is also to be noted that although design is most notable for its “creative outcome”,
(creativity in the form of a product), in recent years design’s focus has shifted into
creativity as a process. Cross (200610
) reports that the mental insights deﬁned as
creative leaps are not as personal and idiosyncratic as the “romantic” popular notion of
the creative genius tends to repeat. In a protocol study done in 1998 with experienced
industrial designers, Cross and Dorst reported that all subjects when confronted with
a design problem had the same creative breakthrough. All nine linked together the same
pieces of available information and used this as a basis for their solution concept. All
nine thought their insight was a unique personal insight11
. Thus, it can be deducted
that the training and experience these designers had enabled them to combine the
Even in a discovery perspective the creativity factor is important, because according
to Kirznerian scholars, entrepreneurial opportunities mean the need to reorganize
resources into a new means-end framework. In order to do so an entrepreneur needs
8 Gielnik, M.M., Frese, M., Graf, J.M., Kampschulte, A. (2011) Creativity in the opportunity identiﬁcation
process and the moderating eﬀect of diversity of information. Journal of Business Venturing,27, (5), September
2012, Pages 559-576, ISSN 0883-9026, 10.1016/j.jbusvent.2011.10.003.
9 Gielnik et al. (2011) Ibid. P. 560
10 Cross, N.(2006) Designerly Ways of Knowing. Springer-Verlag. London. P. 85
11 Cross, N. (2006) Ibid. P. 86
imagination and creativity because it involves identifying, deﬁning and structuring
novel solutions to open-ended problems. (Harper, 1996; Sarasvathy, 2001 in Shane,
1.6.2. Dealing with ill-deﬁned problems
A fundamental characteristic of design thinking is the fact that it deals with ill-deﬁned
or wicked problems. As Cross (2006)12
“It is also now widely recognized that design problems are ill-deﬁned, ill- structured, or
‘wicked’ (Rittel and Webber, 1973). They are not the same as the ‘puzzles’ that scientists,
mathematicians and other scholars set themselves. They are not problems for which all the
necessary information is, or ever can be, available to the problem-solver. They are therefore
not susceptible to exhaustive analysis, and there can never be a guarantee that ‘correct’
solutions can be found for them. In this context a solution-focused strategy is clearly
preferable to a problem-focused one: it will always be possible to go on analyzing ‘the
problem’, but the designer’s task is to produce ‘the solution’.”
Thus, designers are used to dealing with open-ended problems and have developed
the ability to handle them and produce solutions, even in absence of all the possible
information about the problem. This also deals with another important traits that
entrepreneurs should possess when starting a venture: the ability to deal with
1.6.3 Generalization over small samples and use of heuristics
Another characteristic of entrepreneurs is their overconﬁdence in their own abilities.
This might be considered a positive optimism bias because overconﬁdence is the belief
in the accuracy of one’s judgment that is too high given actual data. Overconﬁdence
encourages people to exploit entrepreneurial opportunities (Busenitz, 1999) because it
leads people to take action in situations in which they do not have enough information
to assess the likelihood of their success, but where further investigation would reveal
the poor odds, a short opportunity half-life, or the low value of the opportunity facing
them (Busenitz and Barney, 1997; Johnson, 1986; Cassonm 1995; De Meza and Southy,
1996; Wu, 1989 in Shane, 2003).
This overconﬁdence is related to another cognitive trait that is characteristic not
only of entrepreneurs but of designers as well: a tendency to generalize over small
samples. This trait, called representativeness bias, encourages a person to exploit
entrepreneurial opportunities. Decisions to exploit opportunities must be made in
situations where there is little historical information to guide the decision. Moreover,
these decisions have to be made under signiﬁcant uncertainty, in settings in which
greater eﬀort to analyze information will not resolve that uncertainty (Busenitz and
Barney, 1997 in Shane, 2003). This is related to another individual trait: optimism,
meaning they expect positive outcomes even when such expectations are not
rationally justiﬁed (Hmierleski and Baron, 2009). Busenitz and Barney (1997) also
demonstrated that entrepreneurs tend to overestimate the probability of being right
and overgeneralize from a few characteristics or observations more than managers of
large, well established organizations.
Busenitz and Barney (1997) point to the use of heuristics, or “rules of thumb” as a way
12 Cross, N. (2006) Ibid. P. 7