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Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship Mario Morello [email protected]
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Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Apr 13, 2017

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Page 1: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Mario Morello [email protected]

Page 2: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Over 110 sources referenced and hundreds more reviewed In-depth interviews and thematic coding

15 digital entrepreneurs from the US, UK, Denmark, Norway and Italy took part in this qualitative study.

Page 3: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

vContentSummary 4-5Theory 6-23Methodology 24-25Findings 26-45Conclusions 46-51

Objective 1: To explore the notion of opportunity formation (creation, discovery and narrative) amongst moderate and extreme digital entrepreneurs.Objective 2: To gain an insight into the role of networks in opportunity formation amongst moderate and extreme digital entrepreneurs.Objective 3: To understand how moderate and extreme digital entrepreneurs manage opportunities with stakeholders within their networks.

Page 4: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Prevalent view: Opportunities come into existence from the recombination of relations and time in a continuum.

Summary

Opportunity formation as a process: identification of problems or unmet needs, which are usually found in traditional industries. Those problems can evolve into ideas.The entrepreneur transforms ideas into opportunities through high quality information.

Information can be acquired through strong relations within networks which help digital entrepreneurs to see the environment through different lenses.

Page 5: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Stakeholders should be managed in an open and transparent manner through special attention, regular communication and a clear strategy.This is to forge strong relations which favour dynamism and induce a joint effort towards increased opportunity formation.

Effective stakeholder management will ensure an active flow of information from both sides of the relationship.This will lead to stronger and trustworthy relations which are essential, in line with the shift from know-how to know-who.

Summary

Page 6: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Theory

Page 7: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

vTheory

Opportunity formation

Stakeholder management

Network theory

Business

Knowledge

Institutional

Type of opportuniti

es

Classification of

networksHow they

occurEffect on

informationKnow-how to know-

whoEfficient tie formation

Creation

Discovery

Narrative

Interpretation

Trust

Diversity

Brokerage

Quality

Quantity

Speed

Personal

Business

Density

Centrality

Page 8: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Do you want to skip the theory and go straight to the findings?

Go to slide 26

Page 9: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

An entrepreneur is “an individual who shifts economic resources out of an area of lower production into one of higher yield and production”, a planner rather than a risk taker (Jean-Baptiste Say 1803).

An opportunity is defined as an “unexploited project” that is present when competitive imperfections occur in product or factor markets.

Entrepreneurship is the scholarly field that “seeks to understand how opportunities to bring into existence ‘future’ goods and services are discovered, created, and exploited, by whom, and with what consequence” (Venkataraman 1997).

Entrepreneurship

Page 10: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Market and economic conditions are key to understanding entrepreneurship, as the entrepreneur is the ‘disruptive’ force that generates economic growth by rendering certain industries outdated while creating new ones (Schumpeter 1976).

Digital economy

The entrepreneur is the catalyst for radical economic change.

Recent market and economic conditions have changed due to increased ability “to process and transfer information instantly and freely and the digitalisation of processes and activities” (Davidson and Vaast 2010).

These changes have defined a new economy known as the ‘digital economy’.

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v

Digital entrepreneurship is “a subcategory of entrepreneurship in which some or all of what would be physical in a traditional organisation has been digitised” (Hull at al. 2007).

While ICT is associated with many organisations’ processes, significantly it is the foundation and critical infrastructure of digital entrepreneurial activities.

Defining digital entrepreneurship

Mild digital entrepreneurs

hip

A supplement or complement to

traditional setting in a digital economy

Moderate digital

entrepreneurship

The foundation of the enterprise on the basis of the digital infrastructure

Extreme digital entrepreneurshi

p

Venturing into the digital economy in which the entire venture is digital

Page 12: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Digital And Traditional Entrepreneurship: A Comparison

Ease of entry (digital businesses may take considerably less time to create)

Ease of manufacturing and storing (in the digital world, inventory is meaningless and manufacturing is not cost-intensive)

Ease of distribution (in the digital marketplace, distribution is more cost-effective and efficient)Digital workplace (ICT allows entrepreneurs to take advantage of potential employees and partnerships worldwide without geographical limitations)

Digital goods (modification of digital products can be established without critically interrupting the production and sales process)

Digital services (in the digital environment, services can be conducted through an automated process at a relatively low cost)

Digital commitment (development of commitment in virtual companies may present greater challenges than in physical companies)

Page 13: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Entrepreneurs pursue opportunities beyond the resources currently controlled (Stevenson et al. 1985).

Opportunity formation for entrepreneurs

A classification of opportunities which are interconnected and mutually reinforcing:

Business opportunities, aimed at generating a financial profit such as commercialisation of an innovation

Knowledge opportunities, aimed at developing, expanding and circulating a domain-related knowledge base

Institutional opportunities, aimed at leveraging resources in order to create new institutions or transform existing ones

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v

Scholarship has recognised that opportunity formation takes place under conditions of uncertainty which follow a continuum from total ignorance to “near certainty” (Schumpeter 1976).

Different schools in opportunity formation

Discovery NarrativeCreationEntrepreneur

ial interpretatio

n

Four main schools in opportunity formation have been investigated:

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v

Opportunities are exogenously given and arise from shocks including technological, regulatory and political changes (Kirzner 1997).

According to this perspective, ‘alert’ individuals are able to seize opportunities which already exist in the context independently of the entrepreneur’s efforts (Shane and Venkataraman 2000).

They are in the external world to be discovered through the mechanism of ‘alertness’ or ‘undirected search’ which is defined as “scanning at all times” (Casson and Wadeson 2007; Kirzner 1997, p.72).

Prior to the occurrence of any kind of shock, the actor’s situation is one of “utterly unknown ignorance” (Kirzner 1979, p.72).

Discovery

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v

Opportunities arise from endogenous shocks and are socially constructed by entrepreneurs through the mechanism of ‘action and reaction’ (Weick 1979).

According to this perspective, opportunities are produced by the entrepreneurs’ efforts in a subtext of creative energy (Baker and Nelson 2005; Garud and Giuliani 2013).

Opportunities are about experimentation, playfulness and creativity which enable actors to create value from nothing (Aldrich and Kenworthy 1999; Baker and Nelson 2005).

Prior to the occurrence of endogenous shocks, the actor is in a situation of “fundamental uncertainty” (Dequech 2006, p.111).

Creation

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v

Discovery and creation are dynamic forces and meaning-making emerges from the interaction of relational space and durational time (Garud and Giuliani 2013).

Opportunities arise through a recombination process of social and material components where any act of creation is an act of discovery, and vice versa (Garud et al. 2010).

Narrative

“The way actors give meaning to available information through the imposition of an opportunity template on that information set” (Barreto 2012, p.373).

vEntrepreneurial interpretation

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v

The entrepreneur finds and exploits opportunities through knowing things that others do not. “What is precarious at one time becomes predictable at another time because of new information“ (Stinch-combe 1990, p. 7).

Information gathering is therefore essential to opportunity formation. It is also argued that entrepreneurship in itself is the outcome of information asymmetries existing in the different segments of the market (Shane 2000).

A network theory has been used to explain how networks affect the quality, quantity and speed of information and resource acquisition (Barringer and Ireland 2006).

Information

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v

Networks consist of interrelated relationships between a set of actors (Hoang and Antoncic 2003). It has been acknowledged that they are highly valuable resources (Coviello 2006) as entrepreneurs can be more productive as part of a cooperative network rather than as solo actors (Casson 1997).

Meaning-making is the result of relations or ties and “the key to success lies in the ability to develop and maintain a personal network” (Johannisson 1988, p.83).

Defining network theory

The entrepreneurial function exists and develops in a network of relations which affect each other (Ribeiro and Roig 2007).

Page 20: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Business networks comprise those support people, such as bankers, lawyers, accountants, and business consultants, who provide services to business owners. (Anderson et al. 1994, p.2).

v

Personal networks are a collection of individuals who may or may not be known to each other and who, in some way contribute something to the entrepreneur, either passively, reactively or proactively whether specifically elicited or not.

Personal & business networksPersonal networks consist of social relationships including family, friends and acquaintances (Klyver and Foley 2013).

Both networks can facilitate opportunity formation through synergistic relationships. They can provide complimentary resources and information at different stages of the value chain (Nummela 2002) with the ultimate benefit of decreasing uncertainty.

The quantity, quality and speed of information is influenced by the strength and amount of ties (relations) that exist in the network. In particular, Granovetter (1973) argued that ‘weak ties’ contribute more to the entrepreneur than the ‘strong ties’.

Page 21: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Network characteristics as identified by Rowley (1997):• Network density (the relative number of ties in the network that

connect actors together)• Network centrality (an individual actor’s power in a network)

v

The ‘strength’ of a tie is “a combination of the amount of time, the emotional intensity, the intimacy (mutual confiding), and the reciprocal services which characterise the tie” (Granovetter 1973, p.1361).

The power of weak and strong ties

These characteristics affect the flow of information and the relationships between stakeholders within the network with a knock-on effect on opportunity formation (Rowley 1997). Stakeholders include competitors, suppliers, customers, distributors and governments (Sharma and Johanson 1987).

The creation of ties is therefore a time consuming act. Entrepreneurs benefit from having both many ties and a combination of strong and weak ties.

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v

“Firms have to take into account and integrate the needs of all its [sic] stakeholders in the way they operate their business to create and distribute value” (Schlierer et al. 2012, p.39).

“The focal organisation is more than simply the central point of its own stakeholders: it is also a stakeholder of many other focal points in its relevant social system” (Rowley 1997, p.892).

This highlights the shift from know-how to know-who (Stalk 1998) which involves “the social capability to cooperate and communicate with different kinds of people and experts” (Lundvall 1998, p.417) in order to form ties.

“If you create your network with trust, diversity and brokerage, you can raise your level of information from what you know to who you know” (Uzzi and Dunlap 2006, p.60).

Stakeholder management

Page 23: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Effective information is gained through the complimentary qualities of ties whether weak or strong (Hansen 1999). Indeed, “as weak ties transform into strong ties to capture value from the new knowledge, the diminishing knowledge benefits from strong ties forces firms to search for new knowledge through weak ties” (Lowik et al. 2012, p.241).

This ‘dual network’ of key strong ties together with a “periphery of weak ties” requires increased efficiency in order to achieve completed ties while employing relatively little time and effort (Hallen and Eisenhardt 2012, p.37).

Stakeholder management

Page 24: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Methodology

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v

This exploratory research is influenced by an interpretive worldview (Daymon and Holloway 2002). Interpretivism seeks to understand the ‘social world’ using fieldwork to uncover the meanings by which people comprehend their own experiences, behaviours and communication (Denscombe 2007).

Methodology

The subjective input of participants is the key to exploring the reality as this is constructed by human beings interacting with each other and giving meanings to their actions.

This research has used an inductive philosophy in which objectives are researched in order to create general conclusions or theories (Bryman 2008), while keeping an open mind towards end results (Perkmann and Walsh 2009).The adoption of in-depth interviews allowed for adaptation of the interaction between the interviewer and the participant (Mack et al. 2005). This led to the revelation of a greater amount of information (Stacks 2002).

Page 26: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Findings

Page 27: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Prevalent view: The digitalisation of processes increases the amount of opportunities open to the entrepreneur. This is due to the entrepreneur perceiving a decreased risk in identifying a vast array of opportunities in digital entrepreneurship as opposed to traditional entrepreneurship.

Less risk, more opportunities

Before I identify an opportunity, I see an idea and think about whether I can exploit it.

I know that through digital technology things are cheaper and quicker to produce so I look at the world with different eyes and I am open to more opportunities because the path to failure is not as daunting as in traditional settings.

Page 28: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: Opportunity formation is a three phase process. First, there is a problem, issue, unmet need, pain point or hurdle that is present in the environment. From there, an idea is born which, if reputed viable, creates value and becomes an opportunity.

If it is a problem for me and if it is a problem for my immediate group, there exists a problem, first of all… Once you have a problem you have to think of a possible solution and you think, will other people buy it or would other people be happy to have this solution for an existing problem? If I answer yes to all of those questions, to me that’s an opportunity.

vOpportunity formation: a three phase process

In traditional industries things are complicated, expensive and manual. Digital is an opportunity for me to automate the process, to pick one service and offer it to people who didn't have access to that service previously because of the internet infrastructure that allows me to do that.

Page 29: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: We aim for opportunities which generate profit as well as acquire and expand a knowledge base. The focus is on knowledge opportunities while institutional opportunities are not deemed as valuable.

v

Generate profit and expand the knowledge base

Geo-cultural differences were mentioned as factors affecting the identification of the most valuable opportunities.

Knowledge is by far the greatest opportunity which ultimately leads to profit…I am sceptical of institutions just to create institutions. I am much more interested in social structures.

In Silicon Valley they don’t really think about the money as long as you manage to meet a need. In Europe they typically look at the money.

Page 30: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: Opportunities arise from the combination of endogenous and exogenous shocks. Timing is important in identifying an opportunity as the digital environment is fast moving. Opportunities emerge from the interaction of relational space and durational time.

Opportunities emerge from talking to people who have experience within a specific field and being aware of innovation. I talk with my mom about her experiences, for example. That alone doesn't give me ideas but when I combine that insight with my background from IT and digital and innovation. From that an opportunity might be born.

An opportunity is about time and space. It's about the position in which you are in life. If you are in an environment that doesn't really force you to look at things creatively, you are not going to find the people that may help you and encourage you to push those ideas along.

v

Opportunities emerge in a combination of shocks

Page 31: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

I think an opportunity always has to be something which is good in terms of revenue …knowledge and education…and creating great work in developing your brand. I would always say that really I aim to have at least 2 of those 3..

Prevalent view: Opportunities are not formed fully-fledged and can be created and discovered through various mechanisms. We tend to apply a pattern when looking for opportunities.

v

Applying a pattern to opportunity formation

Minority view: We look for hidden opportunities by scanning the environment at all times.

The process of finding an idea or an opportunity is like groping in the dark. You don’t know what you are looking for…you feel there is something you are curious about.

If there are three obvious good reasons to do something and no obvious bad reasons not to do it then it’s worth putting it in the list of opportunities.

Page 32: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: Information acquisition in the digital economy is easier and faster than ever before.

Social media changed the way I seek information. I don't proactively look for information anymore [it] comes to me from a circle knowledge of people that exposes me to the information I need to know.

In Investment Management they always say cut your losses and let your profits run and I think, similarly, if you abstract enough information as an entrepreneur, you make decisions quickly.

Nowadays I am usually only one click removed from who I want to be speaking to.

Prevalent view: The quality and quantity of information is important to gain insight into the macro and micro environment but the speed with which meaning-making emerges is paramount.

vInformation to gain insight into macro and micro environment

Page 33: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: Peer validation is a significant first step in opportunity formation. However, to make sense of a set of information that is by its nature incomplete, we believe that the entrepreneur’s interpretation is ultimately the key.

It used to be that I would do a lot of research… but that doesn’t work anymore. Today…we have come used to looking at something that isn’t quite done using what it’s there.

Gut feeling is the launching pad to move forward. The difference between an entrepreneur and a business intelligence person is to turn the information you have into action.

vPeer validation as a first step

Page 34: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: Networks exist online and offline and serve different purposes. It is beneficial to be a member of numerous formal and informal networks as they add different value.

Different needs make us belong to different networks. All are essential and have different strengths and it’s important to know which one to use depending on what you want to achieve.

You shouldn't have a coffee with someone just for a chat. You must have a need upfront. You can always meet with people and find opportunities but statistically in most cases you are wasting your time. Those are called party entrepreneurs.

It is about choosing the right parallels, the right proxies.

Minority view: Networks need to be nurtured as long as they serve a foreseeable purpose.

vNetworks in a continuum

Page 35: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Networks vary from: networks of founders; professional associations; interest networks; friends and family; alumni networks; previous employers to former colleagues. Membership of networks is influenced by the entrepreneur’s past experience as much as the present situation.

This is due to the increase in the number of networks available to entrepreneurs which in turn require stronger relations in order to make them relevant and valuable.

I don't see a separation between the two. I am an entrepreneur all day long. If I can leverage my grandmother’s sister’s brother for some kind of information, I'll do that.

vMerging personal and business networks

Prevalent view: Business and personal networks are merging or have already merged.

Page 36: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: Different networks are used at different stages as either a sounding board, a source of information or to maintain focus in opportunity formation.

Family is the critical source to sober you up. Friends tend to cheer you up rather than giving the best advice.

Ideas grow on trees. It’s a matter of what kind of fruit you are going to pick and if you have the time to eat it. It’s not easy. You have to bring it down. You have to collect the ladder, you have to climb, you have to get down, you have to have some kind of approval to do that, you have to access the garden to do that and so on.

You end up testing the water with all of your networks. The first person would be a friend or family, someone very close to you on a personal level regardless of the industry. Then you reach out to your business network.

v

Ideas grow on trees: test the water with your networks

Page 37: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: The quality and quantity of relations within a network is important. To build stronger relations, the network should be open and an entrepreneur should always be giving as much as taking. This helps to establish the level of trust necessary to move relationships from weak to strong which in turn enhances the quality and speed of information. .

One of the things that I have got very used to is seeing opportunities, and filtering them by three paths in the beginning and then probably 75% of them not being appropriate for me.

What I like to be able to do is to find other people that they might be appropriate for. I would probably say that I action or chase 25% of opportunities I see. I probably pass on 25% to other people and then the other 50% I would probably still classify as being valuable.

vBe open and give as much as you take

Page 38: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Minority view

It’s about giving to the network what they want. Obviously the normal top three, pint, dinner or a drink doesn’t hurt.

Opportunities come from 2nd degree connections. They bring the unexpected and provide more inspiration. First degree you usually pretty much know what to expect. The new usually comes from people I share contacts with. The more you move away from the people you know, the more insight you will get.

vFeed the network

Page 39: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: To build stronger and more valuable relationships, communication is needed in a way that is personalised to the individual. This process is increasingly time-consuming due to the expansion of networks. Social media act as a facilitator when face-to-face conversations are not possible.

It takes diligence and over-communication. It’s about adding value. Rather than spamming.

Lots going on because I have so many networks. It takes a lot of organisation and purpose. Each network has got its own language and delivers particular benefits. It's just a matter of understanding before starting, make a plan with clear objectives, adapt but follow it. It needs continuity.

vCommunication personalised to the individual

Page 40: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: In stakeholder management, there is a need to align stakeholders with the entrepreneur’s vision in order to favour dynamism and induce a joint effort towards increased opportunity formation.

Managing stakeholders is very delicate and you learn over time. The most important thing is aligning them with your vision, objectives, timeline, deadline, roles, what it's involved etc. I give a lot of flexibility to them as I would expect some flexibility from them.

vAlign stakeholders to your vision

Page 41: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: An entrepreneur should aim to manage opportunities with stakeholders in a transparent and open manner, thus making them feel valued and building a higher degree of trust. This is to ensure an effective flow of information from both parties in the relationship which results in stronger relations.

If we keep them updated on what we are working on, because we know it best, it makes it easy for them to present then opportunities to us… It becomes a question of openness because the more I am sharing and forthcoming with information from my side; the easier it is for everybody else to give a quick opinion but also the opportunity to help.

By sharing info with them, you build a high degree of trust which is very important and also, it helps to solve doubts. They help me to stay focused and to stay all on the same page as a team.

v

Manage stakeholders in an open and transparent manner

Page 42: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: The depth of information that should be shared varies according to the stakeholder involvement.

It is only right to give the right people the knowledge and the content that they need to know.

It’s strategic. There is a need to know basis…if it’s not in your remit, why would you need to be involved in this? It causes the risk of missed opportunities, I think.

vShare depending on stakeholder involvement

Page 43: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Minority view

I am a bit of a mercenary about stakeholders, they are something you have to live with, you don't decide to live with as opposed to my networks I choose to be involved in. Most of the time, it could be a pain. With my networks, they feed me, with stakeholders I feed them.

[They] are not necessarily important to discover opportunities but for validating and executing. A good network is extremely important and actually totally necessary.

vDifferences between stakeholders and entrepreneurial networks

Prevalent view: Stakeholder networks contribute to opportunities at different stages and in different ways..

Page 44: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Prevalent view: Stakeholders can contribute to testing ideas and help the entrepreneur to scan the environment.

I discuss ideas, partly to listen to myself, partly to get feedback and then I present them again to get a fresh view. The more hit rate I get, the closer I feel that this is an opportunity.

My strategy now is little and often so very, very concise pieces of information are delivered at high frequency and because of that, it is quite habitual now.

I like to work with them in person. I just think that there is so much room for misinterpretation in digital communications especially in email that is too risky to put the really important dialogue within those relationships into a medium that could be misunderstood.

Prevalent view: Primary stakeholders need special attention and care, regular communication and a clear strategy.

vSpecial attention, regular communication and a clear strategy

Page 45: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

It is suggested that the increased importance of efficient stakeholder management is due to the shift from know-how to know-who which was acknowledged by most participants.

There is always someone that can do it better, differently and online opens up this infinite resource. You are not just dealing with people on your doorstep, you are dealing globally. There is a massive network there available to you...even if they are not necessarily involved in your network directly, you can create a new network with them if you have a shared interest.

vThe shift from know-how to know-who

Page 46: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Share this presentation if you liked it and get in touch with any suggestions to continue, expand and evolve the research.

You can usually grab me for a chat in London or you can find me in the United States and Canada in May and June 2014.

I will be in New York, Boston, Miami, San Francisco and Toronto, so give me a shout if you fancy a chat or think there is someone interesting and inspiring I should meet along the way.

Get in touch

17-19 May New York

19-23 May Boston

24 May-4 June Miami

4-18 June San Francisco

19-21 June Toronto

22 June London

[email protected]

linkedin.com/in/mariomorello

@morellopr

Mario Morello

Page 47: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

vConclusions

Page 48: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

The first step in the process is the identification of problems or unmet needs, which are usually found in traditional industries. Those problems can evolve into ideas which digital entrepreneurs transform into opportunities. In order to complete this process, entrepreneurs need information which it is easier to find than ever before.

The quality and quantity of information acquisition are important and its speed is paramount as the digital environment is fast moving. In order to give meaning to available information, which is incomplete by nature, the entrepreneurs interviewed tend to impose an opportunity template on that information set.

Finally, through peer validation and their own interpretation, they decide whether what they are presented with is an opportunity or not.

ConclusionsPrevalent view: Opportunities come from the combination of endogenous and exogenous shocks through a process whereby every act of creation is an act of discovery and vice versa. Opportunities come into existence from the recombination of relations and time in a continuum.

Page 49: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Interestingly, business and knowledge opportunities are believed to be mutually reinforcing and more valuable than institutional opportunities. Their relative value is influenced by geo-cultural factors.

The research also suggests that the digitalisation of processes increases the number of opportunities the entrepreneur is able to recognise or create as digital entrepreneurship requires fewer resources than traditional entrepreneurship, thus the potential path to failure is less daunting. This affects entrepreneurs’ opportunity realisation significantly.

When exploring the role of networks in opportunity formation, this study found that the digital entrepreneurs interviewed belong to numerous and varied online and offline networks, which are both formal and informal. Those networks add different value while serving different purposes such as source of information or sounding board for ideas.

The quality and quantity of relations within networks were found to be important in opportunity formation because those characteristics influence the quality, quantity and speed of information needed to make more informed decisions and see the environment through different lenses. In particular, strong relations were found to deliver greater benefits than weak relations as they enhance the flow of information.

vConclusions

Page 50: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

The proliferation of networks aided by ICT makes networks challenging to manage. This is also identified in the management of individual relations. The digital entrepreneurs interviewed seek to make networks open in order to develop and maintain strong relations. This is achieved by giving as much as taking from the network.

Communications which are personalised to the individual are a key aspect in developing and maintaining strong relations. However, this process is increasingly time-consuming even though social media act as a facilitator when face-to-face conversations are not possible.

As a result, considering strong relations to be the most valuable ones, the entrepreneurs interviewed seek to move business relations to social relations. It is unsurprising then that the study found that the boundaries between personal and business networks have merged or are merging as entrepreneurs attempt to do so.

vConclusions

Page 51: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

Regarding stakeholder management, there is a need to align stakeholders with the entrepreneur’s vision in order to favour dynamism and induce a joint effort towards increased opportunity formation. In order to do so, stakeholders should be managed in an open and transparent manner through special attention, regular communication and a clear strategy.

This will ensure an effective flow of information from both sides of the relationship, resulting in stronger and trustworthy relations. In addition, this is important to enable stakeholders to contribute to opportunity formation, depending on their involvement. In line with the shift from know-how to know-who, effective stakeholder management is increasingly essential, as networks with trust and diversity can raise the entrepreneurs’ acquisition of information.

vConclusions

Page 52: Opportunity formation, stakeholder management and the role of personal and business networks in digital entrepreneurship

v

Share this presentation if you liked it and get in touch with any suggestions to continue, expand and evolve the research.

You can usually grab me for a chat in London or you can find me in the United States and Canada in May and June 2014.

I will be in New York, Boston, Miami, San Francisco and Toronto, so give me a shout if you fancy a chat or think there is someone interesting and inspiring I should meet along the way.

Get in touch

17-19 May New York

19-23 May Boston

24 May-4 June Miami

4-18 June San Francisco

19-21 June Toronto

22 June London

[email protected]

linkedin.com/in/mariomorello

@morellopr

Mario Morello