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Do great technological ideas make great business opportunities? Entrepreneur’s self-regulatory focus in opportunity building
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Do great technological ideas make great business opportunities? Entrepreneur’s self-regulatory focus in opportunity building


Presentation at: 2013 IEEE International Technology Management Conference & 19th ICE Conference, At Den Hague. …

Presentation at: 2013 IEEE International Technology Management Conference & 19th ICE Conference, At Den Hague.
How do technology-based entrepreneurs transform technological ideas into business opportunities? We explore how individual’s self-regulatory focus and institutional forces influence in the opportunity construction process. This research addresses the apparent paradox between the exploration efforts of the entrepreneur to find a use for the technological idea, with the institutional pressure advance to opportunity exploitation. We use an inductive multiple-case study with a sample of three technology-based entrepreneurs to shed some light on the phenomena. The results suggest that there is a two-stage process in the transformation of an idea into an opportunity; entrepreneur’s ability to moderate their self-regulatory focus is seen to play an important role in this process. These findings hold several implications for entrepreneurs and stakeholders interested in promoting technology-based entrepreneurship.

Published in Business , Technology
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  • 1. Do great technological ideas make great business opportunities? Entrepreneur’s self-regulatory focus in opportunity building 2013 IEEE International Technology Management Conference & 19th ICE Conference 24-26 June 2013, Den Haag Ferran Giones ( Dr. Francesc Miralles ( Full Text:
  • 2. Agenda 1. Introduction 2. Literature Review 3. Method & Data 4. Results 5. Discussion and conclusion 2
  • 3. 1. Introduction • Technology-based Entrepreneurship: • Entrepreneurship + Technology Innovation challenges (Hsu 2008). • Multiple influences in the transformation of technological ideas into successful market opportunities: • Interplay between: individual cognitive traits, technological development, institutional pressures. • Prior research proposes self-regulatory theory (cognitive processes) to further explore the phenomena (Hmieleski & Baron 2008). • Promotion focus: to complete the opportunity development • Institutional pressures => Prevention focus • The inductive multiple-case study results have implications for entrepreneurs and policy makers. 3
  • 4. 2. Literature review (I) • In technology entrepreneurship: idea ≠ opportunity (Teece 2010; Shane 2012). • Discovery vs Creation • Idea: subjective & Business Opportunity: market solution • In uncertain and dynamic contexts, entrepreneur’s action helps understand opportunity development (McMullen & Shepherd 2006) (“Bricolage”). • Social construction of opportunities perspective (Wood & McKinley 2010). • Preliminary market actions, “effectuation” (Sarasvathy 2001). • Interactions with context influence legitimacy (Tornikoski 2009). • Interactions influence entrepreneur’s confidence (Dimov 2007). 4
  • 5. 2. Literature review (II) • But interactions rise information available on exploration and exploitation paths – complexity (Hsu 2008). • Focus on exploring the cognitive differences in information processing (Baron 2007) to explain the opportunity development actions. • Self-regulatory theory (Kuhl 1992) to explain how individuals select between: • Exploit opportunity at hand, minimize losses, avoid setbacks, follow initial plan -> prevention focus. • Fit with institutional pressures (Honig & Karlsson 2008) • Explore further opportunities, look for new achievements, motivated by future potential growth -> promotion focus. • Positive influence in dynamic contexts (Hmieleski & Baron 2008) • Does promotion cognitive biases favor the entrepreneurs idea to opportunity transformation? 5
  • 6. 3. Method & Data • Inductive multiple case-study. • Three cases: BesTV, Miraveo, Securiforest. • Entrepreneurs with different profiles and levels of experience on technology entrepreneurship. • Share same institutional context. • Different technological ideas and final opportunity. • Interviews and secondary data to build cases describing the idea to opportunity evolution. • Construct definitions: • Technological idea: initial subjective idea that sparked the entrepreneurship process (see Shane 2012). • Business opportunity: definition of problem-solution with market feedback (Ardichvili et al. 2003). • Following Fisher (2012): Entrepreneur’s self-description of action • Interaction between data and theory (Individual case story) 6
  • 7. 3. Description of Sample 13/04/11 Entrepreneur ProfileName Bestv Miraveo Securiforest Founder Education & Background Graduate in Political Science and MBA - Serial entrepreneur Graduate and PhD Computer Science - University Associate Professor Graduate and MBA in Business Administration - Executive Manager Entrepreneurial experience Experience entrepreneur with prior projects with technology products No prior experience Experience in new product development but not in startups Technological idea Digital television broadcasting architecture Communication protocol for wireless networks Virtual multiplatform operating system Business Opportunity Offer “on demand” rich data services to broadcasters using their existing infrastructure Offer spontaneous communication networks to mobile communities with no need for equipment installation Offer software testing on multiple environments to IT teams in large corporations
  • 8. 4. Results • From idea to opportunity evolution: • Complex Process • Uncertainty, Choices & Feedback • Promotion focus observed in initial transformation process of the technological idea: • “I started looking for potential applications” Miraveo founder • Mixed focus (prevention & promotion focus) observed in business opportunity development: • “we need to identify all potential sources of risk” & “before I would make opportunistic choices, now I need to study the financial return” BesTV founder • “investors want to see the opportunity” Securiforest founder • Identification of changes in the observed self-regulatory focus of entrepreneurs: • “as you advance, you look more carefully at potential opportunities” BesTV founder. 8
  • 9. 4. Results 13/04/11 Description of the idea to opportunity evolution Bestv Miraveo Securiforest Technology idea situation Technological idea emerged from prior industrial research developments Potential application of a scientific research outcome to the industrial context Existent technology transferred to another context Initial transformation process Promotion focus Oriented exploration – no major changes of search path Promotion focus Pivoting around the central technological idea Promotion focus Different paths explored in parallel to find the business opportunity Business opportunity development Prevention focus – dealing with investors pressure and consolidation of the market opportunity Promotion focus is moderated – in search of additional opportunities Promotion focus is moderated - selected new technologies and new opportunities Degree of change in the industry/market Stayed in the initial market of the technological idea Moved sequentially exploring different markets Explored different markets in parallel
  • 10. 5. Discussion and conclusion (I) • Enrich prior research using self-regulatory theory in entrepreneurship (Hmieleski & Baron 2008). • Changes in observed entrepreneur’s self-regulatory focus. • Institutional pressures not seen as a constrain for opportunity development (contrary to Karlsson and Honig 2009). • Adjust self-regulatory focus as a capability in the idea into business opportunity transformation. • Observation of prevention focus adoption as entrepreneurs get closer to their business opportunity, adjusting to institutional pressures. 10
  • 11. 5. Discussion and conclusion (II) • Limitations: need for additional research to: • More objective measures entrepreneur’s self-regulatory focus and decision making mechanisms. • Extended longitudinal study to reduce dependency on self- reporting. • Extend the sample • Improve the measurement of the context (Social Network Analysis) • Additional Industries • Implications: • Self-regulatory theory as a valuable perspective to study cognitive biases influence on entrepreneurial action in early stages. • Need for adjusted support mechanisms that take into account the different stages of the idea to opportunity evolution process. 11