Open Entrepreneurship - Yetis Thesis Proposal


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Zeynep Yetis' thesis proposal presented in June 2013 at the Stockholm School of Economics.

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  • 10.22
  • Understanding how open source communities sustain themselves adds a layer of complexity to a relatively unknown model of organizing. Therefore, I started researching open source communities with the purpose to understand the underlying drivers of the sustainability of these communities. I aimed to explore the different sets of community actors and to investigate the structures by which actors influence decision-making, share power and resources, and self-organize to achieve sustainability. Therefore asked RQ1!A review of the research on open source community literature showed that there has been attempts to measure success in OSS projects (Crowston et al., 2003; 2006). Sustainability of an open source community is defined as its ability “to continue providing benefits formembers over the long term” (Butler, 2001: 47).
  • Need to define entrepreneur…Major finding of Article 1 entrepreneurs have a crucial role in the OpenSimulator community, has directed me to look into entrepreneurial activities in open source communities. Findings presented in Article 1 indicated that a diverse set of stakeholdersemerges with each stakeholder playing a specific role in resource contribution. In light of these findings, it can be suggested that entrepreneurs are thedriving force and as a result are the stakeholder group with the most power, but also thatthey have a strategic role in connecting to diverse stakeholders in the community to cocreatevalue.Considering the difficulties entrepreneurs have in attracting the necessary resources due to the uncertainties of their new venture and the liabilities of newness and small size (Aldrich & Ruef, 2006; Baker & Nelson, 2005), open source communities can help entrepreneurs in overcoming these difficulties by providing them some of the necessary resources for their ventures. Therefore one can suggest that open source communities may provide access to valuable global resources that are not available to entrepreneurs locally. This would suggest that one would expect to see entrepreneurs pursuing entrepreneurial activity inYet, one might also expect that entrepreneurs who are driven by private interestsand who have a profit-based rational behavior would choose either to not participate inopen source communities or to participate by free-riding on the efforts of others in thecommunity as opposed to contributing their resources to a community that could thenmake the outcomes of these efforts free to anyone, including competitors that seek them.In fact, Olsen suggested that small firms should avoid investing their resources in openinnovationcommunities because they can easily free-ride (Olsen 1965, Waguespack andFleming, 2009).
  • An entrepreneur is defined as any individual who founds an organization for the purpose of obtainingeconomic benefits through the sale or use of his/her product and/or service (Shane & Venkataraman, 2000).
  • Social Capital: Sum of the actual and potential resources embedded within, available through, andderived from the network of relationships possessed by an individual or social unit”(Nahapiet & Ghoshal, 1998: 243)
  • OSS communities, in which activities are conducted and contributions are made voluntarily, community’s ability to conduct residual tasks may be even more important.OCBs are described as “affective driven behaviors”(Faraj and Sproull, 2000) “that individuals who know, identify with, and understand eachother are more likely to support team activities by engaging in OCBs” (Sha and Chang(2012), p. 311). OCBs "lubricate the social machinery of the organization" (Smith et al.,1983: 654), therefore researchers have suggested that citizenship behaviors enhanceorganizational effectiveness (Bolino et al., 2002).Developing a strong sense of commitment makes individuals feel obligated toshare knowledge (Podsakoff et al., 2000) and help other members. A high level ofrelational capital is therefore linked to reciprocity and commitment. It can also explainwhy members who receive organizational support are likely to engage in organizationaloutcomes (Robinson and Morrison, 1995, Sha and Chang, 2012). Therefore one can alsoexpect individuals with OCBs to be committed to the organization they are a part of andits sustainability
  • “Institutionalization theory is a story about how higher-level aggregates throughthe diffusion and imposition via networks of norms, beliefs, and authority-shapechoices for lower-level aggregates (see Scott, 1995: 141-143). Conversely, social capitaltheory is a story about how social networks provide resources to lower-level aggregatesorganizationswithin societies, units within organizations, and individuals within unitswithwhich the lower-level aggregates can reshape the higher-level aggregates andrenegotiate their place within them.“ (Adler and Kwon (2002), p. 33-34).
  • In positivist / scientific research, the researcher is concerned with gaining knowledge in a world which is objective using scientific methods of enquiry. Methods associated with this paradigm include experiments and surveys where quantitative data is the norm. Analysis methods using statistical or mathematical procedures are frequently used, and conclusions drawn from the research setting may be used to provide evidence to support or dispel hypotheses generated at the start of the research process; in other words by deduction rather than induction. The emphasis is on measurement, whether this be of scientific quantities e.g. time or speed through experimental activities, or of attitudes, behaviours and opinions through surveys and questionnaires.
  • Many different parties involved in the community. Companies, entrepreneurs. Companies use it because it can be cheaper than writing the code in house. Entrepreneurs do it because they consult or build grids and sell. Image Source:
  • Bitcoin is a peer-to-peer (P2P) network virtual currency scheme based on a collectivelydeveloped and maintained open source software platform. It operates with no centralauthority through collectively developed and maintained open source software. There areno financial institutions involved in the transactions; community members themselvesperform all these tasks. Bitcoin’s exchange rate is determined by supply and demand, andit is possible to spend Bitcoins on both virtual and real goods and servicesDesigned andimplemented in 2009, Bitcoin has rapidly grown from being an idea to becoming alegitimate currency with more than USD 1 billion in bitcoins in circulation4. A deal inDecember 2012 with French financial firms Aqoba and Credit Mutuel led to Bitcoin-Central, a currency exchange, being awarded an International Bank ID number andbecoming a Payment Services Provider equal to services such as PayPal.5Started by a “so called japansese programmer who left after a while. No idea who he is. December 2012 Bitcoin Central became a Payment Services Provider(PSP) under European laws, with an International Bank ID number and thus able to issuedebit cards, conduct real-time transfers to other banks, and accept transfers into its owncoffers.One area of interest is the range of start-ups entering theBitcoin ecosystem. For example, BitPay, an electronic payment processing system for theBitcoin currency, enables merchants to accept bitcoins as a form of payment. Coinbase, aSan Francisco start-up founded in June 2012, provides a Bitcoin transaction platform formerchants and consumers and charges a one percent fee on top of each transaction.However, most of its revenue comes from letting users buy and sell bitcoins directly fromand to Coinbase. Today
  • Mention tagging and netnographySNS – social networking sites, eglinkedin, twitter, We divided the data into two periods: 1) August 2007 to September 2009 and 2) October 2009 to October 2011. Not only did this division represent relatively equal periods, but it also represented: an internal change in which the code reached a relatively stable development state at the end of September 2009 (the code reached maturity)2) an external change in which much of the hype and interest surrounding virtual worlds after a significant peak in 200 had faded .
  • To determine which individuals were the most active in the community since2009 and potentially have the most informal power due to their centrality, I conducted anout-degree social network analysis of the Bitcoin forum data. After identifying the top 10individuals in terms of forum posting activity, I then investigated their profiles todetermine such things as organizational affiliation, interest, and demographicinformation. This identification process using secondary Internet sources took on average15 to 20 minutes for each individual.Bottom-up approach of semantic analysis was used on the Bitcoin forum datawhereby the relationship between each Bitcoin forum user's posts and the proper nounsthey contain are analyzed. This enables the identification of the topics that people fromdifferent parts of the world have discussed within the Bitcoin community during its firstfour years. The Stanford Log-linear Part-of-Speech Tagger (Toutanova et al., 2003) wasused to automatically assign parts of speech, such as noun, proper noun and verb, to eachword in the posts. I then extracted a word list of all the proper nouns posted on theBitcoin forum.To explain, two wordshave a short social distance if they are often used in posts written by the sameindividuals, and a long social distance if they are mainly used in posts written by differentindividuals. In this manner, I was able to determine the distribution of topics across thecommunity or, in other words, the social structure of the discussion in the community.
  • Considering the growing importance of the online freelancing economy and e-entrepreneurshipin the global economy, my dissertation aims to contribute to theentrepreneurship literature as it has so far has supported the importance of onlinecommunities to entrepreneurs as arenas for building social capital and leveraging anetwork of diverse resources for personal and collective benefits.Entrepreneurial activity is viewed as central to economic output and labor employment (Busenitz et al. 2003).
  • Sharing their way to success through leveraging their social capital to identify and realize opportunities
  • Open Entrepreneurship - Yetis Thesis Proposal

    1. 1. OPEN ENTREPRENERSHIP:EXPLORING ENTREPRENEURSHIPIN OPEN SOURCE COMMUNITIESZeynep YetisStockholm School of EconomicsDepartment of Marketing and StrategyCenter for Strategy and CompetitivenessSupervisor: Dr. Robin Teigland, SSETHESIS PROPOSAL PRESENTATION1June 2013
    2. 2. Presentation StructureFinishIntroduction & BackgroundTheoretical Background & Research PurposeOverview of ArticlesResearch QuestionsEmpirical BackgroundData Collection and Methods of AnalysisContributions2Time FrameStart
    3. 3. The FirmThe CollectivevsE.g., Microsoft~ Built by employees withinorganizational boundariesE.g., Linux~ Built by users and distributedfreely regardless of affiliation~ 3rd mode of organizingeconomic activity?Models of Knowledge Creation
    4. 4. “Open source” communitiesexpanding beyond software
    6. 6. • Attempts to measure success in OSS projects (Crowston etal., 2003; 2006).• Yet, no substantial attempts to investigate factors thataffect sustainability of open source communities.• Therefore Article 1 aimed to answer following researchquestion:How can open source communities continuouslyachieve benefits that are attractive to all partiesinvolved in order to sustain its operations?Background for Dissertation Work
    7. 7. • Major finding of Article 1 entrepreneurs havecrucial role in OpenSimulator community• But would one expect to see entrepreneurial involvementin open source communities?• OSS (open source software) communities can helpentrepreneurs in overcoming liabilities of newness andsmall size (Aldrich & Ruef, 2006; Baker &Nelson, 2005), and may provide access to valuable globalresources that are not available to entrepreneurs locally.• But at same time, entrepreneurs can participate by free-riding on efforts of others in community.Dominant presence ofentrepreneurs…
    8. 8. • A review of of both entrepreneurship and online communityliteratures that encompasses open source communitiesshowed that there is increasing evidence that OSScommunities are becoming arenas for entrepreneurs to set-up their businesses (Giuri et al., 2008; Gruber andHenkel, 2006; Haefliger et al., 2010; Piva et al., 2012; Priem etal., 2012; Shah, 2005; Shah and Tripsas, 2007; Stam, 2010;Stam and Elfring, 2008; Thistoll, 2011; Von Krogh andHaefliger, 2010; Waguespack and Fleming, 2009).Entrepreneurship in Open SourceCommunities
    9. 9. • German national• Female entrepreneur• Founder and director of Avination VirtualLimited, a UK-based company operatingAvination, an immersive 3D virtual environmentfor entertainment, education, and commerce• Active core member of the OpenSimulator projectwith high level of developer expertise• Defines herself as a virtual world role-playenthusiast• Melanie and her global team at Avination developfeatures using OpenSimulator code as base, whichthey then monetize through sale on their grid• When these features became “old hat” as Melanieputs it (usually after six months), Avinationreleases these features for free to OpenSimulatorcommunityExample of anentrepreneur, Melanie
    10. 10. RESEARCHPURPOSEMain research purpose of my dissertation is to investigateactivities of entrepreneurs in open source communities.
    13. 13. RQ1: How do entrepreneurs identify businessopportunities in open source communities throughtheir networks?RESEARCH QUESTION 1• Opportunity identification is integral part of entrepreneurialventure creation (Shane and Venkataraman, 2000).• Since I am interested in understanding how entrepreneurs setup and maintain their business in OSS communities, I wouldlike to investigate how entrepreneurs recognize opportunitiesin OSS platforms and how networks of entrepreneurs effectopportunity identification processes.
    14. 14. RQ2: How do entrepreneurs contribute to thecreation and accumulation of social capital in anopen source community?RESEARCH QUESTION 2• Entrepreneurship research has clearly pointed to importance ofsocial capital (Nahapiet & Ghoshal, 1998).• Social capital is both individual and group level concept(Lin, 2001), and recent entrepreneurship research suggests thatinterorganizational social capital is important for start-upperformance (Pirolo & Presutti, 2010).• More attention should be paid to entrepreneurs and theirparticipation in open source communities. In particular impactof their participation in building of communities’ socialcapital.
    15. 15. RQ3a: What are the residual tasks in open source communities?RQ3b: Who conducts the residual tasks in open sourcecommunities? What role do entrepreneurs play in ensuring that theresidual tasks are conducted?RESEARCH QUESTION 3• Tasks that are deliberately not taken care of, so called residual tasks, mayhamper activity of an organization and threaten its longevity.• OCB (organizational citizenship behaviors) are suggested to enhanceorganizational effectiveness (Bolino et al., 2002).• Developing strong sense of commitment makes individuals feel obligatedto share knowledge (Podsakoff et al., 2000) and help other members. Ahigh level of social capital is therefore linked to reciprocity andcommitment.• Individuals with high degree of social capital are likely to be ones to carryout residual tasks in OSS communities, since those with high degree ofsocial capital are also highly committed to community and itssustainability.
    16. 16. RQ4a: What are the processes through which the Bitcoin actsas an institutional entrepreneur?RQ4b: What is the role of entrepreneurs in enabling these?RESEARCH QUESTION 4• Creating and maintaining legitimacy is as important as masteringtechnical tasks for an organization’s success (Adler and Kwon, 2002).• Social capital theory and institutionalization theories are intertwinedand complementary (Adler and Kwon, 2002).• In the Bitcoin community: Lower-level aggregates, especiallyentrepreneurs, are reshaping the higher-level aggregates, the financialinstitutions.• Entrepreneurs are a very active group in the Bitcoin community.• The aim is to understand how this emergent, self-organizing onlinecollective is acting as a game changer within the global financialindustry and the role of entrepreneurs in enabling this.
    19. 19. Two different research sites that are both open source communities:OpenSimulator was chosen because:• continuous activity since its foundation in 2007, indicatingsustainability, at least to date• diverse membership in terms of demographics(e.g., age, background, geography)Bitcoin was chosen because:• comprising of individuals with a wide variety of backgrounds• relatively high involvement of entrepreneurs in the community• a peer-to-peer currency that is rivaling the financial institutionsEMPIRICAL SETTINGS
    20. 20. OpenSimulator ProjectAn open source community comprising differentindividuals and organizations developing a multi-platform, multi-user 3D application enabling creationof customized virtual worlds.
    21. 21. 21
    22. 22. ‹#›
    24. 24. Text Analysis and SNA• Developer mailing list• Ohloh commit list• OpenSimulator wiki• SNS, blogs, homepages, etc.• Twenty-one interviews
    25. 25. Multi-method Case StudySocial network analysis &Semantic network analysis• Bitcoin Forum (English)• 1.15 mln posts by 21,903 people• 85% all posts / 89% all people• Secondary data• SNS, blogs, websites, etc.• The relationship between eachBitcoin forum user’s posts and theproper nouns they contained areanalyzed. 25
    27. 27. • OSS literature–Examine function of open source communities to entrepreneurs as arenasfor building social capital• Social capital literature–Extend social capital theory to OSS communities to show symbioticrelationship between OSS communities and entrepreneurs• Entrepreneurship literature–Address different ways used by entrepreneurs to recognize opportunitiesin OSS communities–Dialectical view of entrepreneurs as individuals who pursue both self andcollective interests (Van de ven et al., 2007)• Institutional Theory literature–Contribute to developing field of distributed institutionalentrepreneurship and role entrepreneurs play in pursuing distributedinstitutional entrepreneurshipI would further like to investigate the conditions that lead to openentrepreneurship and the impact of open entrepreneurship oncollective power.
    28. 28. Entrepreneurs openly engaging in social capital buildingactivities through free revealing of intellectual propertyand contribution of other resources with purpose ofpursuing self business-related interests while contributingto pursuit of mutual goals“Open Entrepreneurship”
    29. 29. Summer, 2013Work on Article 3 and submitAttend ECIS 2013 (European Conference of Information Systems)Attend Oxford Internet Institute Summer Doctoral ProgrammeFall, 2013Semester abroad at ETH Zurich with Dr. Georg von Krogh’s research groupWork on Article 6Collect data for Article 5Spring 2014Work on Article 5Fall 2014Finalizing dissertation manuscriptSpring, 2015Dissertation defenseTIME FRAME
    30. 30. QUESTIONS???I would like to acknowledge the very helpful support of mycolleagues, Paul Di Gangi of University of Alabama at Birmingham andTomas Larsson of Kairos Future, along with my supervisor, Dr. RobinTeigland at SSE.