Constituents of New Value Creation in the Course of Entrepreneurial Opportunity Development

Entrepreneurship is a young field of study that rests at the heart of modern theories of economic development. Several studies have had immense endeavors to explain many of phenomena in entrepreneurship as well as entrepreneurial opportunity and entrepreneur’s economic function. Still, we know little about how entrepreneurial action takes place under the condition of risk and uncertainty. Having value proposition as a central construct and building upon entrepreneurship literature, this dissertation is a further contribution to our current knowledge, particularly in entrepreneurial opportunity evaluation. It embodies four distinct but interrelated studies. Using a variety of independent and mediating variables and constructs such as gender, risk disposition, expertise, innovativeness, intention, self-efficacy, attitude, subjective norms, empathy, learning, and opportunity style, it seeks to address the challenge these factors create in the course of opportunity development for entrepreneurs. The study No.1 examines “how different representations of entrepreneurial opportunity can influence the risk preference of entrepreneurs and non-entrepreneurs, and whether this differs between men and women”. A survey methodology was used with a random sample of 135 entrepreneurs and 126 non-entrepreneurs. The methodology was presented through a new risky choice framework containing five entrepreneurial opportunities. The first results indicate that framing information of opportunity caused significant differences in risk preferences between the entrepreneurs and non-entrepreneurs and also between the males and females. In negative situations, except for the lowest risk level of the experiment, the male entrepreneurs tended to choose higher risky opportunities than the female entrepreneurs. However, neither group showed a preference for the lowest opportunity return in certainty. In addition, a comparative analysis showed that there were more differences between the four groups in the negative situations than in the positive situations. The detailed differences and risk preferences of each of the four groups were also analyzed. The study No.2 inspects the moderating roles of the founder’s experience and innovation degree on the relationship between opportunity confidence and new value creation intention (NVCI) at the pre-founding stage of a business. For this purpose, it uses survey data from 157 prospective entrepreneurs in the ICT industry from university incubators in Iran. Using SEM, result show that experience, alone, does not moderate the relationship between opportunity confidence and NVCI. However, if entrepreneurs have required opportunity confidence, then medium and high-level innovation can increase the likelihood of acting on the opportunity for novice and experienced entrepreneurs, respectively. For novice entrepreneurs, the innovation variance from low to medium moderates the relationship between opportunity confidence and intent. In fact, this relationship is strengthened by the medium novelty level. Whereas, for experienced entrepreneurs, the variance from medium to high, moderates the relationship that is strengthened by the high novelty level. The study No.3 explores the crucial factors that form the pre and post intentionality to create new values, particularly the post intention factors that facilitate opportunity enactment. It shows how intention impacts motivation-mustering to learn about practical knowledge concerning value proposition facilitator (VPF), which in turn influences value creation enactment. A survey methodology has been applied to a randomly selected sample of 213 entrepreneurs from 16 incubators in Iran. Using SEM and longitudinal data, the results showed that attitudes toward value creation and value creation self-efficacy significantly impacted the intentionality to create new value. Moreover, VPF has a direct effect on value creation enactment so that, it partially mediates the relationship between new value creation intention (NVCI) and value creation enactment. The findings did not support the influence of subjective norms neither on NVCI nor on value creation enactment. Finally, the study No.4 seeks to shade light on the black-box of value co-creation in entrepreneurship and on the process through which the entrepreneur’s new value proposition meets the customer’s problem and pain in particular. Later I will discuss that successful entrepreneurs are often more empathic than unsuccessful entrepreneurs. Those entrepreneurs that offer their new values through an empathic relationship, learn a vital market knowledge (practical knowledge) that in turn shapes a shared mental model between them and the beneficiary that increases the likelihood of value co-creation engagement. Moreover, the performance of this relationship improves if there is a match between entrepreneurs’ learning approach and their initial opportunity insight. Furthermore, there is another matching mechanism between learning skills and the dimensions of empathy that enhances empathy capacity for entrepreneurs. These two matching mechanism at the end have a paramount influence on the value co-creation effectiveness.