Abstract

A topic of interest to researchers is how business start and the activities that business owners engage in before they launch their ventures (Venkataraman, 1977). Historically, scholars have described the business startup process as following a standard process. The process involves recognizing an opportunity, collecting data, and launching the business. More recently researchers have argued that this description, called “discovery theory,” only applies when an opportunity is obvious (Alvarez & Barney, 2007). In this context the role of the entrepreneur is to “discover and exploit” those opportunities that “arise exogenously.” A new school of thought, called “creation theory,” differs from discovery theory and argues that some business ideas do not exist exogenously and originate with the entrepreneur. In this instance the entrepreneur essentially invents the idea (Alvarez & Barney, 2007). Rather than simply validate an obvious idea, the startup process is used to tweak, mold, change, modify, and improve an evolving idea. In addition, the ideal timing of when a step in the business startup process is emphasized will vary depending on whether an idea is discovery or creation initiated.

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