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Article
Publication date: 17 May 2022

Willy Das and Satyasiba Das

The purpose of this paper is to investigate and compare what criteria novice and habitual entrepreneurs use while adding members to the founding team.

Abstract

Purpose

The purpose of this paper is to investigate and compare what criteria novice and habitual entrepreneurs use while adding members to the founding team.

Design/methodology/approach

This paper uses conjoint analysis (CA) to provide the order of preference for the “choice attributes.” The logic of CA is that even if two or more attributes influence the choice, it is unlikely that those attributes will have equal importance for founders with different entrepreneurial experiences.

Findings

This paper found a significant difference in the ranking of the attributes by novice and habitual entrepreneurs. In novice entrepreneurs, the effect of direct ties in the form of kinship ties has the highest preference, followed by prior social contact and prior work relations. However, personal friendships and resource dependency received lesser importance than interpersonal attraction because of the similarity in vision, beliefs and values. Habitual entrepreneurs, however, valued resource dependency and prior work relations more than kinship ties. Also, unlike novice entrepreneurs, habitual entrepreneurs sought cofounders from their indirect ties.

Practical implications

There has been an explosion of interest and funding for programs that help entrepreneurs establish a cofounding team. The authors inform these programs related to the decision concerning assisting novice and habitual entrepreneurs.

Originality/value

While prior studies examined a single attribute at a time, the strength of this study lies in simultaneously tapping all attributes, along with multiple indicators for each attribute. Additionally, this study distinguishes the selection criteria of cofounders based on the entrepreneurial expertise of the lead founder.

Details

Journal of Entrepreneurship in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4604

Keywords

Book part
Publication date: 12 September 2003

Deniz Ucbasaran, Mike Wright, Paul Westhead and Lowell W Busenitz

Evidence suggests habitual entrepreneurs (i.e. those with prior business ownership experience) are a widespread phenomenon. Appreciation of the existence of multiple…

Abstract

Evidence suggests habitual entrepreneurs (i.e. those with prior business ownership experience) are a widespread phenomenon. Appreciation of the existence of multiple entrepreneurial acts gives rise to the need to examine differences between habitual and novice entrepreneurs (i.e. those with no prior business experience as a founder, inheritor or purchaser of a business). This paper synthesizes human capital and cognitive perspectives to highlight behavioral differences between habitual and novice entrepreneurs. Issues relating to opportunity identification and information search, opportunity exploitation and learning are discussed. Avenues for future research are highlighted.

Details

Cognitive Approaches to Entrepreneurship Research
Type: Book
ISBN: 978-1-84950-236-8

Article
Publication date: 8 August 2008

Diamanto Politis

This paper aims to present a study of the role of prior start‐up experience as a source of learning in the entrepreneurial process. Three learning outcomes are examined…

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Abstract

Purpose

This paper aims to present a study of the role of prior start‐up experience as a source of learning in the entrepreneurial process. Three learning outcomes are examined with respect to a comparison between habitual and novice entrepreneurs: skills for coping with liabilities of newness, preference for effectual reasoning, and attitudes towards failure.

Design/methodology/approach

This is an empirical study based on statistical analysis conducted on a sample of 231 Swedish entrepreneurs that have started a new independent firm in 2004.

Findings

The findings suggest that habitual and novice entrepreneurs differ significantly with regard to several interesting aspects of the hypothesized dimensions.

Research limitations/implications

The findings provide a better understanding of start‐up experience as a source of learning and its effects on the skills, preferences and attitudes of habitual entrepreneurs.

Originality/value

Previous research has suggested that prior start‐up experience is an important source of entrepreneurial learning, but has not put much effort into explaining how this particular type of experience influences various learning outcomes on an individual level. The present study advances these suggestions by showing how prior start‐up experience influences entrepreneurs' skills for coping with liabilities of newness, effectual reasoning and attitudes towards failures. Moreover, the study contributes to existing literature and research on entrepreneurial learning by developing explorative measures of individual learning outcomes that have been highlighted as influenced by prior experience in recent entrepreneurship research.

Details

Journal of Small Business and Enterprise Development, vol. 15 no. 3
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 8 August 2022

Pouria Nouri

Decision-making biases play substantial roles in entrepreneurs' decisions and the fate of entrepreneurial enterprises, as well. Previous studies have assumed all…

Abstract

Purpose

Decision-making biases play substantial roles in entrepreneurs' decisions and the fate of entrepreneurial enterprises, as well. Previous studies have assumed all entrepreneurs are homogeneous in their proneness to biases, therefore inadvertently creating a crucial research gap by ignoring the role of business experience in the genesis of biases. Furthermore, there is a lack of research on women entrepreneurs' decision-making biases. Thus, this paper's main objective is to explore two influential biases of overconfidence and over-optimism in novice and habitual women entrepreneurs.

Design/methodology/approach

The data for this study were collected by conducting semi-structured interviews with 21 Iranian novice and habitual women entrepreneurs active in four high-tech sectors of biotech, nanotech, aerospace and advanced medicine. The gathered data were analyzed by thematic analysis.

Findings

According to the findings, while habitual entrepreneurs are prone to all three types of overconfidence (overestimation, overplacement and overprecision) and over-optimism, novice entrepreneurs do not show any signs of overplacement or overprecision.

Practical implications

There are certain valuable implications resulting from this study that could be of use for not only future researchers in the field of entrepreneurial decision-making and women entrepreneurship but also for women entrepreneurs running entrepreneurial enterprises, especially small businesses.

Originality/value

This paper offers certain novel contributions to the field of entrepreneurship by not only exploring biases in women entrepreneurs exclusively but also scrutinizing biases in novice (first-time) and habitual (experienced) entrepreneurs comparatively.

Details

Journal of Organizational Effectiveness: People and Performance, vol. 9 no. 4
Type: Research Article
ISSN: 2051-6614

Keywords

Article
Publication date: 4 May 2012

Florian Kirschenhofer and Christian Lechner

This paper aims to focus on the role of team and entrepreneurial experience for firm performance of serial entrepreneurs in the multi‐media industry.

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Abstract

Purpose

This paper aims to focus on the role of team and entrepreneurial experience for firm performance of serial entrepreneurs in the multi‐media industry.

Design/methodology/approach

The research assumes that serial entrepreneurs have certain advantages over novice entrepreneurs, such as the development of effective start‐up teams and entrepreneurial experience effects. Disadvantages, however, are also mentioned in the literature, and these are assumed to out‐balance the advantages, leading to mixed research findings. The hypotheses are tested on a sample of 52 European multimedia companies.

Findings

The results show a positive impact of relevant entrepreneurial experience and evidence both team advantages as well as disadvantages. Team diversity had a positive impact on performance while the extent of repeated partnerships (or relative team stability) had a negative impact on performance. Moreover, entrepreneurial experience helps to build better diverse teams but has no impact on repeated partnerships.

Research limitations/implications

The degree of experience of serial entrepreneurs in the same industry matters, and suggests that more experience is better. The findings challenge a general assumption about serial entrepreneurs: that the building of superior teams creates performance differences. Team diversity drives performance and the study could also show that habitual entrepreneurs are better in building diverse teams (through a positive moderation of team diversity by entrepreneurial experience). However, relying heavily on previous partners is counter‐productive. Limitations of this study are due to self‐reported data, small sample size and survivor bias.

Practical implications

Entrepreneurs need to focus on opportunities and resource needs linked to these opportunities, and use their experience to build stronger teams but to resist the temptation of replicating perceived past success formula by over‐relying on previous partners. The latter is also important for stakeholders in the entrepreneurial venture.

Originality/value

This paper tests various assumptions and propositions about serial entrepreneurship that are rarely based on sound evidence. The role of entrepreneurial experience to build better diverse teams and the role of repeated partnerships constitute an original contribution to habitual entrepreneurship research.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 18 no. 3
Type: Research Article
ISSN: 1355-2554

Keywords

Book part
Publication date: 18 July 2006

Deniz Ucbasaran, Paul Westhead and Mike Wright

Although it has been argued that overconfidence can lead to failure (Hayward et al., forthcoming), business failure can undermine assumptions about the self that are…

Abstract

Although it has been argued that overconfidence can lead to failure (Hayward et al., forthcoming), business failure can undermine assumptions about the self that are integral to (1) confidence in one's decision-making accuracy and (2) the motivation to engage in tasks.

Details

Entrepreneurship: Frameworks And Empirical Investigations From Forthcoming Leaders Of European Research
Type: Book
ISBN: 978-1-84950-428-7

Article
Publication date: 24 December 2021

Pouria Nouri

Decision-making biases play decisive roles not only in entrepreneurs’ decisions but also in the fate of entrepreneurial businesses. While the extant literature in this…

Abstract

Purpose

Decision-making biases play decisive roles not only in entrepreneurs’ decisions but also in the fate of entrepreneurial businesses. While the extant literature in this regard is relatively rich, it has predominantly focused on certain biases like overconfidence and overoptimism at the expense of other possibly influential biases, which could influence entrepreneurial decisions. Thus, to address this serious research gap, this paper aims to explore four of the less-researched biases of escalation of commitment, the illusion of control, confirmation and the belief in the law of small numbers in entrepreneurial decisions.

Design/methodology/approach

By taking a qualitative approach, the data for this study were collected through face-to-face interviews with 19 Iranian habitual (experienced) entrepreneurs running small businesses and analyzed by a qualitative thematic analysis.

Findings

According to the results, the environmental uncertainty, the reluctance to lose face and the experiences of previous failures contributed to the escalation of commitment, while disregard for external factors beyond one’s control caused the illusion of control, factors like prior successful businesses in the same sector, looking for resorts to manage uncertainty, along with the decision to exploit opportunities resulted in the confirmation bias, while the expenses of conducting sweeping pilot tests in the market and the reluctance to reveal a business secret to the competitors were the main contributors of the belief in the law of small numbers.

Originality/value

This study is a pioneer in scrutinizing four less-researched but important biases in entrepreneurs and, thus extending the line of research in this regard.

Details

Journal of Entrepreneurship in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 1 December 2003

Mika Pasanen

Multiple entrepreneurship can offer an alternative approach to understanding business growth mechanisms. Despite the growing interest in entrepreneurs who have been…

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Abstract

Multiple entrepreneurship can offer an alternative approach to understanding business growth mechanisms. Despite the growing interest in entrepreneurs who have been involved in more than one venture, few studies have focused on serial and portfolio entrepreneurship. This article explores the prevalence of multiple entrepreneurship among successful small and medium‐sized enterprises (SMEs) in peripheral locations, and compares SMEs owned by multiple business entrepreneurs with SMEs owned by single business entrepreneurs. Multiple business entrepreneurs were defined as SME owner‐managers who are both serial and portfolio owners simultaneously. Among successful owner‐managed SMEs 22 per cent of firms were owned by such multiple entrepreneurs, and only 50 per cent by single business entrepreneurs. The comparison revealed 11 variables that showed differences between these two groups of SMEs. Multiple entrepreneurship was emphasized among entrepreneurs of growth firms. The findings suggest that more attention should be paid to the roles of the multiple entrepreneurs in regional economic development.

Details

Journal of Small Business and Enterprise Development, vol. 10 no. 4
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 29 May 2020

Pouria Nouri

Escalation of commitment is one of the most important decision-making biases among entrepreneurs and may deprive them of valuable resources and even result in their…

Abstract

Purpose

Escalation of commitment is one of the most important decision-making biases among entrepreneurs and may deprive them of valuable resources and even result in their eventual failure. Many entrepreneurs become escalated to their ongoing plans by allocating more resources, even after receiving negative feedbacks regarding those plans. Although the escalating behavior is an inherent part of the entrepreneurial cognition, previous studies have mostly ignored its antecedents among entrepreneurs. This dearth of studies is more severe regarding women entrepreneurs, whose biases have rarely been investigated. Therefore, this paper aims to explore the antecedents of the escalation of commitment among women entrepreneurs.

Design/methodology/approach

To explore the antecedents of the escalation of commitment in women entrepreneurs’ decisions based on their lived experiences, this paper used a narrative inquiry. The data were collected by conducting in-depth interviews with three Iranian women entrepreneurs running small businesses and analyzed by narrative data analysis.

Findings

According to the findings, bitter memories of previous failures, overconfidence and familial pressure are the main antecedents of the escalation of commitment in women entrepreneurs.

Practical implications

This study has a very important managerial implication for women entrepreneurs, who should know that while decision-making biases may occur unintentionally, they are able to reduce the harmful effects and enhance the benefits of biases by knowing their most common signs.

Originality/value

This study is a pioneer in exploring women entrepreneurs’ biases and took a novel approach by conducting a narrative analysis of women entrepreneurs’ escalation of commitment.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 13 no. 2
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 5 June 2017

Dan Long, Zi-yao Xia and Wang-bin Hu

The purpose of this paper is to bridge the obvious gap presented in research on antecedents of effectuation by building a research model from the perspectives of…

Abstract

Purpose

The purpose of this paper is to bridge the obvious gap presented in research on antecedents of effectuation by building a research model from the perspectives of effectuation and entrepreneurial opportunity.

Design/methodology/approach

This paper examines the effects of patterns of opportunity discovery and the innovativeness of entrepreneurial opportunity on the decision-making process of effectuation in new venture creation. Eight hypotheses are put forward and examined by hierarchical multiple logistic regression. The data in this paper are based on the first two rounds of survey data from Chinese Panel Study of Entrepreneurial dynamics.

Findings

The empirical results show that patterns of opportunity discovery have significant positive effects (at least partially) on effectuation. Namely, entrepreneurs employing fortuitous discovery tend to use available means and leverage contingency. And with lower innovativeness of opportunity, entrepreneurs are more likely to use affordable loss and leverage contingency.

Research limitations/implications

The study is limited to each dimension of effectuation based on the single-item measure, which cannot completely reflect the effectual construct. More research should to be done to improve measures of effectuation.

Practical implications

The findings are useful for entrepreneurs to make effective decisions whether to choose effectuation in the face of different patterns of opportunity discovery. Besides, it provides the advice on how to cope with the innovativeness of opportunity and seize entrepreneurial opportunities to entrepreneurs.

Originality/value

This paper first systematically studies the effects of entrepreneurial opportunity on effectuation, making up for the obvious gap of research on antecedents of effectuation.

1 – 10 of 772