Are IT entrepreneurs more likely than non-IT ones to reattempt entrepreneurship after a failure?

Abstract

Internet and mobile devices have made IT ubiquitous and rapid technology evolution has led to diminishing cost of ownership for IT products. Consequently, entrepreneurs who create IT products and services are viewed with broad interest by investors, researchers, governments, and incubators. This research proposes that IT entrepreneurs need to be distinguished from those in other sectors and studied as a unique typology in any entrepreneurship research and investigates whether IT entrepreneurs are more likely to reattempt entrepreneurship due to the influence of five external factors viz., Funding availability, Opportunity cost, Value of knowledge acquired in failure, and Technology evolution and IT and non-IT entrepreneurs view failure differently. The theoretical rationale for bifurcating entrepreneurs as IT and Non-IT for analysis emerged from a) the recent observation that the top five companies in the US by market capitalization are all IT ventures whereas in 2001 when only one constituted the list, b) rapid growth in the application of ML and AI in all sectors, and c) the observed differences between IT and Non-IT entrepreneurs with respect to the five external factors. We theorize that variations in the external factors may differently influence IT and Non-IT entrepreneurs’ decision to reattempt and/or sentiments about failure. The objective of this thesis is to recommend new policies and modifications to existing ones if IT entrepreneurs are observed to have distinct advantages/disadvantages compared to Non-IT ones.Our mixed method approach included an online quantitative survey that measured the influence of the five factors on a scale and qualitative semi-structured interviews to comprehend the sentiments that led to the responses in the survey. To understand the degree of influence of the five external factors quantitatively, hypothesis testing and regression analysis were adopted whereas a thematic analysis was performed on qualitative data.The evidence from our data indicated that non-IT entrepreneurs viewed venture failures more negatively than did IT ones and surprisingly that the sentiments about Funding availability were identical between IT and non-IT entrepreneurs. However the Opportunity cost, the Value of knowledge acquired, the Stigma of failure, and the Technology evolution were higher in their respective measures for IT entrepreneurs than for non-IT ones. Finally it was shown that IT entrepreneurs were more likely to reattempt entrepreneurship after failure than do Non-IT ones.Based on the findings of this study, we recommend that new policies relating to leasing of capital equipment, job opportunities upon failure, public announcement campaigns to mitigate the Stigma of failure, the creation of specific targeted loan/funding mechanisms, and special training and education be formulated to mitigate the disadvantages that are unique to non-IT entrepreneurs.The findings of this study underline how the typology based research can expose certain characteristics of entrepreneurship that may not be evident otherwise. This study may be unique in juxtaposing IT and Non-IT entrepreneurs through the lens of five external factors. Entrepreneurs have been documented to be heterogeneous and this research lays the foundation for further focused research on IT entrepreneurs especially due to the role played by IT in people’s lives.