Issue to be Considered for Entrepreneurship -1

What Do Entrepreneurs Do?

Over twenty years ago, Gartner (1988) made a compelling case for studying what entrepreneurs do rather than who they are--namely that they undertake activities leading to the creation of organizations. Since then, the field of entrepreneurship research has come to consider "opportunity" as the central construct of its distinctive domain (Venkataraman, 1997). For now, we can begin our exposition of the entrepreneurial method with the provisional assertion that entrepreneurs recognize, find and make opportunities (Alvarez & Barney, 2007; Sarasvathy, Dew, Velamuri, & Venkataraman, 2003). Conventional wisdom as well as a large portion of academic research has focused on how good entrepreneurs are at searching for opportunities and finding and exploiting them (Baron & Ensley, 2006; Erikson, 2001; Shane & Venkataraman, 2001; Singh, 2001). Which begs the question, of course, where all these opportunities come from in the first place? Who leaves the big bills on the sidewalk for the alert entrepreneur to find and cash in? Answers range from new developments in science and technology to the dynamics of the socio-economic environment including demographic, regulatory, and institutional changes (Shane, 2004). These answers, while quite correct in some cases, are far from complete. For (a) not all entrepreneurial opportunities are created through demographic, regulatory, and institutional changes--some are co-created through the entrepreneurial process itself; (b) in fact, some of those demographic, regulatory, and institutional changes themselves result from entrepreneurial drivers, conscious or unconscious, intentional or unintended; and (c) even when opportunities may originate in demographic, regulatory, and technological changes, they are subject to the Panglossian fallacy--namely that they can be claimed to pre-exist the process and deemed "discoverable" precisely because the process discovered them. Counterfactually, it is virtually impossible to prove the existence of opportunities that did not come to be. Finally, it is also possible to conceptualize opportunities in different ways so that what appears as discovered at one point in time may be shown to have been co-created at another

For example, there is mounting empirical evidence that opportunities are often created by the entrepreneurial process itself--in other words, entrepreneurs and their stakeholders often end up co-creating new opportunities that neither they nor those of us in their immediate periphery could or did anticipate (Read et al., 2009; Sarasvathy, 2008). What is more interesting is that the most experienced entrepreneurs explicitly implement such a co-creation process--that is, they act and behave in ways that generate and power this virtuous cycle (Read et al.). Entrepreneurial efforts thus generate a perpetual motion machine, as it were, that moves Adam Smith's invisible hand beyond static efficiency into an endless dynamic of new opportunities. But there is a kicker to this cornucopian process--namely, that the nature of these new opportunities is inherently unpredictable--even what counts as an "opportunity" becomes in a way difficult to define before it actually comes to be.

For example, what was the elevator pitch for Starbucks? Coffee consumption in the United States had been on a steady downward trend for almost two decades before Starbucks was created. Could one really argue that this was a market waiting to be tapped by an alert visionary? Nor was it an act of heroic individual creativity--Howard Schultz did not found the original Starbucks company nor was Starbucks the first specialty coffee shop. Peets Coffee was already a niche business in California. The tapestry of the Starbucks we know so well today was painstakingly stitched together from a variety of stakeholder inputs including those from customers, commercial artists, and community leaders who knowingly or unknowingly participated in a co-creation process that has transformed urban landscapes from Seattle to Ankara (Koehn, 2001).

How about Google? Clearly not the first commercially viable search engine--and certainly not the magnitude of success envisioned even by its own founders who were at one time eager to sell it for a million dollars. Luckily for them, there were no takers (Battelle, 2006; Vise, 2005). If we are to twist the Google story to fit our theories of latent demand, then we would be hard put to describe what is not a potential market. Our sidewalks will be strewn with big bills, or even constructed entirely out of stacks of currency that we only need pick up as we go (Kirzner, 1973, 2009; Olson, 1996). Surely we need a way out of this absurdity.