Summary Science-based entrepreneurship - Science and Business Management
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Course
Science-based entrepreneurship
Institution
Universiteit Utrecht (UU)
This document is a summary of all the articles and slides from the course science-based entrepreneurship from the master's Science and Business Management.
Science-based entrepreneurship
Content
Boso et al artictle: Do entrepreneurs always benefit from business failure experience?..................................2
Main points of Bono article..................................................................................................................................5
Main points from slides........................................................................................................................................6
Linder et al article: Many Roads Lead to Rome: How Human, Social, and Financial Capital are Related to New
Venture Survival............................................................................................................................................ 8
Main points of Linder article..............................................................................................................................11
Plank et al: The Neuroscience of Empathy.................................................................................................... 14
Main points of Plank et al. article......................................................................................................................20
Fleck & Asmuth article: Building Capacity for creativity: rediscovering the inner superhero as a mechanism
for developing a creative mindset for entrepreneurial problem-solving........................................................25
Camburn et al: Design prototyping methods: state of the art in strategies, techniques and guidelines..........27
Main points of Camburn et al. article................................................................................................................31
Shepherd & Gruber: The lean startup framework: closing the academic-practitioner divide..........................34
Main insights Shepherd & Gruber......................................................................................................................41
Questions from slide...........................................................................................................................................45
Yang et al: Search and execution: examining the entrepreneurial cognitions behind the lean startup model.48
Important insights Yang et al.............................................................................................................................52
Questions from slides.........................................................................................................................................53
Breznitz & Zhang: Fostering the growth of student start-ups from university accelerators: an entrepreneurial
ecosystem perspective................................................................................................................................. 55
Important insights from Breznitz & Zhang.........................................................................................................58
Slides Utrecht Holdings/UtrechtInc/NWO..........................................................................................................60
Questions for exam............................................................................................................................................61
Mansoori: Enacting the lean startup methodology.......................................................................................64
Important insights Mansoori article..................................................................................................................68
Van Ewijk & Weber: The value of knowing what you want: Goal hierarchy and entrepreneurial intentions...71
Important insights Van Ewijk.............................................................................................................................73
Information from slides that is important..................................................................................................... 75
Design thinking = used to generate ideas (replaced Market Opportunity Navigator)
Lean startup = used to test ideas and hypothesize
,Boso et al artictle: Do entrepreneurs always
benefit from business failure experience?
Short summary
The article discusses the relationship between learning from failure, entrepreneurial alertness,
and new venture performance. The study finds that learning from failure positively influences
entrepreneurial alertness, which in turn has a positive impact on new venture performance.
The findings suggest that entrepreneurs who are able to learn from their failures and develop a
heightened sense of alertness are more likely to achieve better performance in their new
ventures. These results highlight the importance of failure as a learning opportunity and the
role of entrepreneurial alertness in identifying and capitalizing on new opportunities.
The paper
Business failure has shown to not always influence new venture performance. Rather, it
influences new venture performance when it is channeled through entrepreneurial learning
under conditions of increasing levels of entrepreneurial learning and a greater degree of
alertness to new business opportunities.
Business failure entails a feeling of loss and a process of recovery for entrepreneurs. It
generates financial, social and psychological losses. This phase is often followed by a period
of sense-making and learning from the failure, and subsequently an entrepreneurial re-
emergence. It is argued that an ability to learn from failure may be a process through which
entrepreneurs re-engage in new actions.
Literature gap:
1. Literature explains that learning from failure is an important entrepreneurial process.
BUT knowledge is lacking on how learning from failure connects business failure
experience to new venture performance.
2. Previous literature explains how an entrepreneur’s cognitive ability influences new
venture performance BUT not how an entrepreneur’s alertness to new business
opportunities complements or substitutes for the entrepreneur’s ability to learn to
boost new venture performance.
3. Previous studies focused on developed markets. However, sub-Saharan Africa is noted
for chronic business environment turbulence which makes new start-ups fail.
Need for the study: Start-up failure rate is 90% with start-ups accounting for nearly 70% of
employment globally and 90% in developing world.
Goal of the study: To examine whether and under what conditions business failure
experience influences subsequent entrepreneurial actions.
Contributions of the study:
1. Several studies have proposed learning as a potential mechanism through which
failure experience might drive entrepreneurs to reengage, the analysis is incomplete.
a. This study integrates insights from experiential learning and resource-based
theories to examine how learning from failure connects business failure to new
venture performance.
i. experiential learning theory (failure experience provided entrepreneurs
with an opportunity to move forward to exploit a new opportunity)
, ii. Resource-based theory failure experience is a resource that feed into
the entrepreneur’s ability to transform the knowledge acquired through
failure experience into a new entrepreneurial action.
2. Research says alertness to new business opportunities provides the ability to recognize
and exploit opportunities to recover from losses. It remains unclear whether alertness
can facilitate or depress the effect of learning from failure on new venture
performance.
a. This study draws on the resource-based theory to identify alertness as a
cognitive capability that may condition the effect of failure experience
influences on new venture performance.
i. Alertness = ability of an entrepreneur to identify a new business
opportunity that has been overlooked by others.
3. Market conditions in developing societies are turbulent and is therefore also crucial to
understand.
Theory
Business failure is the cessation of involvement in a venture because it has not met a
minimum threshold for economic viability. The aftermath includes the business failure event,
business failure cost, sense-making and learning processes and re-emergence. There are four
distinctive phases of post entrepreneurial business failure:
1. Grief and despair
2. Transition
3. Formation
4. Legacy phases
A process or re-emergence occurs whereby the entrepreneur recovers from failure (behavioral
response). The final stage of recovery is starting and growing a new venture. People with
failure experience often exploit new business opportunities in a given period earlier than those
without. Failure drives subsequent venture creation. However, some studies say that it does
not always impact new venture creation. Some say there is an inverse U-shaped relationship
and some say there is no relationship. Thus, the relationship is inconclusive.
Studies indicate a need to examine how learning from failure serves as a conduit to
connecting failure experience to a new venture start-up. The ability to harness learning from
failure is an underlying mechanism causing people to start new businesses. There is a period
of sense-making and learning where key drivers of failure are considered, while making sense
to facilitate new learning. Failure provides rich experience and information from which
learning originates for new businesses.
Learning from failure is the cognitive capability of entrepreneurs to develop new knowledge
by drawing on prior failure experiences to identify and exploit new opportunities. Man’s
theoretical framework, views learning as a dynamic and evolving capability. From a resource-
based perceive, learning determines the entrepreneurs’ ability to integrate, build, and
reconfigure multiple sources of knowledge to identify and exploit opportunities in the market
environment. Learning determines the speed at which people realign experiences from prior
failure to exploit new business opportunities. Recovery and re-emergence from failure is
distinctive learning fostering higher-level learning capabilities, e.g. they draw on lessons
learnt to start and grow new ventures.
The theoretical framework says:
1. H1: business failure experience is positively related to new venture performance
, 2. H2: entrepreneurial learning mediates the effect of business failure on new venture
performance.
The ability to identify and exploit new entrepreneurial opportunities influences new venture
creation via the process of learning. Alertness is an ability that enables quick recovery and can
convert knowledge gained into a new venture creation. There are three elements of
entrepreneurial alertness:
1. Scanning and search; acquire information
2. Association and connection; organize information
3. Evaluation and judgement; interpret information
Alert people are more knowledgeable and sensitive to changes in the environment, and have
greater likelihood of exploiting opportunities. The higher the level of alertness, the higher the
possibility that individuals develop a positive attitude towards exploiting new opportunities.
Success in new ventures is driven by experiential knowledge of failure and greater alertness.
Alertness provides conscious search behavior and increased knowledge of failure and success
factors which helps them more accurately evaluate opportunities.
This study argues that because learning from a failure enables a person to incorporate
personal experiences to develop entrepreneurial knowledge base, the new venture
performance is boosted when complemented with the cognitive ability to process information
on new business opportunities. The new hypothesis is:
1. H3: The effect of business failure experience on new venture performance via
entrepreneurial learning capability is strengthened when entrepreneurial alertness
increases in magnitude.
Results
Entrepreneurs from the study revealed business failure as an important ingredient in their
learning activities. Entrepreneurs mentioned a business failure to have taken place if a
business is closed or sold to due bankruptcy, liquidation or if the business did not meet the
expectations of the entrepreneur.
Hypothesis 2 is accepted as a result of the findings that shows that when the path from failure
experience to new venture performance is channeled through learning, the effect of failure on
new venture performance drops. Hypothesis 1 and 3 are rejected. However, after further
evaluation, the findings suggest that the extent to which learning impacts new venture
performance is dependent upon increasing levels of learning and alertness, providing support
for H3.
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