Entrepreneurship Theories

The Intersection of Sweat and Equity: What is Sports-Based Entrepreneurship? The sports industry is no longer just about the game on the field; it is a global economic powerhouse. As the sector evolves, a specific sub-discipline has emerged to capture the unique dynamics of this market: Sports-Based Entrepreneurship . But what does this term actually mean? At its core, sports-based entrepreneurship involves the application of entrepreneurial principles—innovation, risk-taking, and proactiveness—to the sporting context. It is not limited to owning a team; it encompasses the creation of new products, services, and technologies that enhance the experience for athletes, fans, and stakeholders. Drivers of Industry Growth According to research by Ratten (2011), this field is expanding rapidly due to several converging factors: Technological Disruption: Technology is helping to take sports and athletes to the next level. From wearable biometrics and VR training simulations t...

The Power of Business Model Innovation: Strategy & Examples The ability of an entrepreneur to develop a distinctive business model separate from their rivals is intimately related to the success of an enterprise. Business Model Innovation is the art of redesigning how a business develops, delivers, and appropriates value. The key to success is not just having a good idea, but the ability to implement that idea effectively through a well-designed framework. Why It Matters Successful execution requires entrepreneurs to understand their customers' needs, identify market opportunities, and develop a clear value proposition . By innovating the business model, entrepreneurs can create a competitive advantage and position their companies for long-term success. Innovation can take many forms, including: Creating a new pricing strategy (e.g., Freemium). Developing a unique distribution channel (e.g., Direct-to-Consumer). Adopting a subscription-based recurrin...

The Psychology of Social Entrepreneurship: From Compassion to Xenophilia (opposite Xenophobia) The field of entrepreneurship is generally defined by the pursuit of opportunities to add value. However, for social entrepreneurs , the stakes are different. This unique breed of business leader aims to tackle complex social issues—often in different cultural contexts—in addition to producing economic value. But what drives someone to take on this double burden? Research into the motivations of social entrepreneurs reveals a complex psychological landscape that goes far beyond simple charity. The Traditional View: Altruism vs. Self-Interest There are two prevailing theories regarding what sparks a social venture: Prosocial Motives: The most common explanation is that altruism and compassion inspire social entrepreneurs to provide social benefits. According to Miller et al. (2012), this "heart-led" approach is the primary engine for social change. Self-Interes...

What is a Corporate Spin-off? Definition, Strategy, and Examples Corporate Spin-offs: Definition and Strategy A corporate spin-off is a strategic decision by an organization's managers to form a new, independent organization for a specific unit of the company. Physically, the unit might move to a new location or stay in the same building, but operationally, it begins to function under a different corporate entity. How it Works: Compensation and Shares In a standard spin-off, the owners of the parent firm typically receive shares in the new spin-off company. This serves as compensation for allowing the unit to leave the parent's portfolio. For public companies , the spin-off receives a new ticker symbol and trades independently from the parent company's stock. This allows the market to value each entity separately, deciding if the split was a good idea for one, both, or neither. Why do Companies Spin-off? (Strate...

Power in Entrepreneurship 1. The Ubiquity of Power in Entrepreneurship Power lets actors influence others towards desired ends. Power provides an alternative lens on entrepreneurship to institutional, networks and cognition lenses from an economic sociology perspective. Our introductory conceptualisation surfaces multifaceted dynamics of this fundamental force that most entrepreneurship literature, unlike social sciences and management, treats somewhat loosely, latently or lopsidedly. Power “comes from everywhere” (Foucault, 1978, p. 96). Not only well-resourced states and legacy firms, but entrepreneurs can shape the perception and development of entrepreneurial opportunities and potentially influence power structures. 2. A Triple-Tiered Framework: Forms, Types, and Actors We pioneer a power lens for entrepreneurship research comprising three forms, two overarching types and three main actor groups. First, building on Wrong’s (2017) work in sociology y...

“Who am I?” / “Who are we?” Social identity theory (SIT) has long been a mainstay of social psychological thinking about politics and human behaviour in general. SIT is at its core a theory about in-groups and out-groups, as easily formed social constructions that can manifest with real consequences. Consider football hooligans beating each other over their team colours. We all have multiple identities, and some scholars propose that the more central one's entrepreneurial identity, compared with family and other identities, the more likely they will start a venture, grow a startup, or develop a capability (Hayter et al., 2021). "I am an Entrepreneur" In entrepreneurship, SIT is pointed at the entrepreneurial identity (EI), defined as a set of attitudes, beliefs and behaviours reinforcing being an entrepreneur. According to Shepherd et al. (2018) "a meaningful self-identity is central to individuals’ psychological functioning and well-being." The li...

International Entrepreneurship: Innovation Across Borders Is starting a business in Canada the same as starting one in Japan? And what happens when a startup tries to sell to both countries on Day One? International Entrepreneurship (IE) is a unique domain that sits at the intersection of international business, entrepreneurship, and strategy. While mainstream entrepreneurship often focuses on domestic growth, IE focuses on cross-border and cross-cultural dimensions. Defining the Field According to the seminal definition by Oviatt and McDougall (2005) : "International entrepreneurship is the discovery, enactment, evaluation, and exploitation of opportunities—across national borders—to create future goods and services." This definition moves beyond simple "exporting." It suggests that the opportunity itself is international in nature. The Three Pillars of Research Jones et al. (2011) reviewed over 300 articles to classify exactly what this...

Family Entrepreneurship: The Backbone of the Global Economy When we think of startups, we often imagine a lone wolf in a garage. But the data suggests a different reality: most businesses are a family affair. "75% of entrepreneurs in 48 economies around the world said that their family was involved in starting their businesses, either as co-managers or co-owners. The vast majority of startups around the world are, in fact, family businesses." — Babson College Beyond Succession: Pooling Resources Historically, research focused on Succession —the passing of the torch from one generation to the next. While legacy is important, modern theory recognizes that family entrepreneurship is also about the creation of new ventures. Chrisman et al. (2003) argue that the true power of families lies in their unique ability to pool resources . Families can mobilize labor, capital, and social connections faster than non-family teams because of high trust and shared goal...

What is Digital Entrepreneurship? Ecosystems, Theory, and Future Trends Digital Entrepreneurship: Theory, Ecosystems, and the Future When we think about a digital entrepreneur , we might imagine a single person making millions of dollars through a fully automated website or app. That seems very different from the traditional view of entrepreneurship as a process of organization-building. Where is the organization in digital entrepreneurship? The Rise of Digital Business Models According to a literature review by Zaheer et al. (2019), the specific focus on 'digital entrepreneurship' is relatively new, gaining traction around 2013. Before that, research focused primarily on the transformation of existing business models due to the internet and e-commerce. It only became a distinct research stream when entrepreneurs started making waves with digital business models that possess very small human organizational footprints but massive reach. Di...

The Complex Link Between Entrepreneurship and Narcissism The relationship between entrepreneurship and narcissism has been a topic of intense interest among researchers and scholars for many years (Campbell et al., 2011). While the stereotype of the "arrogant visionary" is common, the data reveals a nuanced reality. While some studies suggest that narcissistic traits can drive entrepreneurial success, others argue they often result in negative outcomes for both the entrepreneur and their ventures (Leung et al., 2021). Do Entrepreneurs Score Higher in Narcissism? Generally, entrepreneurs tend to score higher on measures of narcissism than non-entrepreneurs. Researchers suggest that moderate levels of narcissism may actually be beneficial in specific scenarios. These traits are often associated with: Increased self-confidence. A higher tolerance for risk-taking. Charisma and the ability to persuade stakeholders. For example, a confident CEO may be m...

Neurodiversity in Entrepreneurship: Turning Mental Health Into an Asset Historically, mental health conditions were viewed solely as problems requiring medical intervention or counseling. A common misconception persists that neurodivergent individuals are less capable than their neurotypical peers. However, modern research challenges this view. While neurodivergent individuals often perceive and process information differently than what is considered "normal," this difference does not equate to inability. In fact, neurological variations have been linked to significant success, particularly in the world of entrepreneurship. The Link Between Mental Health and Business Research indicates a strong correlation between entrepreneurship and mental health conditions. In a landmark study, Freeman et al. (2019) surveyed 335 individuals, including 242 entrepreneurs. The results were striking: 49% of the entrepreneurs reported having one or more lifetime mental health conditio...

The External Enabler Framework (Davidsson, Recker & von Briel, 2020) is a conceptual toolbox developed for analyzing the strategic and fortuitous influence of changes to the business environment in entrepreneurial pursuits. External Enabler (EE) refers to significant changes to the business environment, such as new technologies, regulatory changes, macroeconomic shifts, demographic and sociocultural trends, changes to the natural environment, and the like. The basic assumption of the EE body of work is that every such change will benefit some entrepreneurial initiatives even if it disadvantages other economic activities. EE analysis focuses on those enabled; other frameworks are needed for analyzing negative consequences of change. Moving Beyond "Objective Opportunity" The EE concept was introduced as a more workable alternative to “objective opportunity” for realizing the idea of entrepreneurship as a nexus of enterprising agents and favorable ...

The Dark Side of Entrepreneurship: Can You Be Addicted to the Lifestyle? Could one become addicted to the idea of being an entrepreneur? Countries vary in terms of how their people view entrepreneurs and entrepreneurship as a career path. In some places, entrepreneurship may be viewed negatively or associated with corruption. However, the prevailing view of the entrepreneur in Western Media is the heroic entrepreneur meme . These figures are often portrayed as outsiders who manage to disrupt incumbencies and are associated with ideas such as democracy, freedom, and liberty. The Rise of the "Wantrepreneur" Perhaps the positive view of the practice has led to entrepreneurship becoming a desirable pursuit for individuals searching for a lifestyle and character to identify with. These types of individuals have been given names over time including: The "Wantrepreneur" The Veblenian Entrepreneur The "Untrepreneur" These labels refer to in...

What is a Born Open Startup? Definition and Strategies What is a Born Open Startup? Definition & Strategy A startup that is "Born Open" is one that rejects the traditional notion of proprietary knowledge appropriation (e.g., obtaining patents). For these companies, software patents are often viewed as an obstacle rather than an asset. Instead, a Born Open startup views itself as part of an ecosystem . These firms typically operate autonomously but share interconnected goals, participating in a community with shared governance to prevent the exclusive appropriation of technology. [Image of diagram comparing closed innovation vs open innovation funnel] The Philosophy of Open Strategy According to Mekki MacAulay (2010): "Open strategy involves the collective production of a shared good in an open fashion such that the resulting product is available to all, including competitors. In the case of open entrepreneurship, ...

Generativity Theory: How Digital Platforms Spark Unplanned Entrepreneurship When most people hear the word "generativity," they think of the psychological definition: the need to nurture and guide the next generation. However, in the context of digital entrepreneurship, Generativity Theory has a very different, powerful meaning. It focuses on how technology develops based on foundations set by previous innovations. It explains how platforms (like Apple or Amazon) create ecosystems where unplanned, third-party innovation can thrive. What is Generativity in Tech? No one is solely in charge of scientific or engineering discoveries that prompt commercial exploitation at scale. The leading voice on this subject, Jonathan Zittrain (2006) , defines generativity as: “Technology’s overall capacity to produce unprompted change driven by large, varied, and uncoordinated audiences.” The keyword here is “unprompted.” This suggests that innovations and outcomes are unpla...

The Underdog Advantage: Does Childhood Adversity Create Entrepreneurs? While researchers have long studied resilience in adults, few have examined how childhood adversity specifically affects entrepreneurial entry later in life. Does early trauma break a person, or does it forge the skills necessary to build a business? Recent studies suggest the latter, pointing to a biological and psychological link between hardship and business creation. The Underdog Theory of Entrepreneurship To explain this phenomenon, scholars utilize the ‘Underdog Theory’ proposed by Miller and Le Breton-Miller (2017). The core premise is that life challenges require the development of adaptive skills that inadvertently make individuals better suited for entrepreneurship. "Negative personal circumstances of an economic, sociocultural, cognitive, and physical/emotional nature may have a … powerful role to play in getting people to become effective entrepreneurs" (...

Architectural Innovation: Why Startups Beat Incumbents Why do established industry giants often fail to adapt to new technologies, leaving the door open for startups? The answer often lies in Architectural Innovation . Based on the seminal work of Henderson and Clark (1990) , this theory suggests that while incumbents excel at improving existing products, they struggle significantly when the underlying structure—or "architecture"—of a product changes. This weakness creates a massive opportunity for entrepreneurs. The Four Types of Innovation To understand why architectural innovation is unique, we must look at how it differs from other types of changes: Incremental Innovation: Improving individual components (e.g., a faster processor). Incumbents dominate here. Modular Innovation: Swapping a component with a new concept while keeping the system the same (e.g., replacing an analog phone dial with a digital keypad). Radical Innovation: Developing e...

Competence Destroying Innovation: The Entrant's Advantage Why do industry giants often crumble when faced with new technology? According to the seminal work of Tushman & Anderson (1986) , the answer lies in whether an innovation destroys or enhances the firm's existing strengths. The theory posits a simple rule: Competence-destroying innovations are brought to market more successfully by new entrants (startups), while competence-enhancing innovations are dominated by incumbents. Defining Competence To understand the theory, we must first define what makes a firm "competent." Competence = Abilities + Resources An incumbent firm's competence is "destroyed" when a technological innovation renders their existing abilities or resources obsolete. A classic example is Blockbuster vs. Netflix . Blockbuster’s massive retail footprint (a resource) and logistics for managing physical stores (an ability) became liabilities when Netflix introdu...

Actor-Network Theory: Do Objects Have Agency in Entrepreneurship? Actor-Network Theory (ANT) , created by Bruno Latour, Michel Callon, and John Law, offers a radical way to look at how businesses are built. It describes a “material-semiotic" method of analysis that is distinct from mainstream network analysis. The key difference? ANT argues that non-human objects (technology, money, prototypes, contracts) are nearly as important in a network as human actors. The "Gun" Analogy: Understanding Hybrid Agency To understand how an object can have "agency," we look to a famous example provided by Latour (1999) regarding a person holding a gun: “You are different with the gun in your hand; the gun is different with you holding it. You are another subject because you hold the gun; the gun is another object because it has entered into a relationship with you.” Korsgaard (2011) interprets this to mean that neither the gun nor the person kills alone. ...

Serial Entrepreneurship Theory: Why Founders Build Again and Again Serial entrepreneurship refers to the repeated behavior of starting new ventures. However, in the academic literature, the distinction is more specific. Plehn-Dujowich (2010) categorizes founders into two main groups: Novice Entrepreneurs: Individuals launching a business for the first time. Habitual Entrepreneurs: This group includes Serial Entrepreneurs (who launch businesses sequentially) and Portfolio Entrepreneurs (who run multiple businesses concurrently). The Learning Curve Advantage Plehn-Dujowich argues that serial entrepreneurs differ substantially from first-time founders because they develop new capabilities over time. Experience allows them to develop heuristics (mental shortcuts) that guide their decision-making processes. While a novice might suffer from "analysis paralysis," a serial entrepreneur can assess risks quickly and effectively. These co...