Habitual Entrepreneurs Research Articles

Born Outside of Wedlock, Died as a Millionaire: Getting Wealthy by Being Entrepreneurially Resourceful

The rise from rags to riches i.e., from poverty to wealth has inspired as a topic both novelists and historians, but often their texts are just chronological or sub-thematic writings without any clear theoretical focus. In the present study, the learned entrepreneurial resourcefulness has been selected to be the main theoretical perspective. In addition, we can follow from a life-long description how a youngster called Julius (Julius Johnsson; 1845-1923) born in the poverty rose to wealth. The context is Finland, mainly in the 19th century, and the historian’s biographical data are used as empirical evidence. Our analytical tool is a 2x2-matrix, which makes it possible to study both individual and collective resourcefulness and both proactive and reactive behaviour in the growth process. The key findings emphasize proactive, self-initiated behaviour. Both individual and collective resourcefulness have helped the youngster in his development ”from a Russian bastard” to a Finnish millionaire. The nature of his resourcefulness has been not only cognitive but also affective and, most of all, conative. Resourcefulness has helped Julius to recognize opportunities and overcome resource constraints in the transition to a wealthy habitual entrepreneur and a respected businessman. Earlier body of knowledge regarding resourcefulness is complemented with our analytical matrix which can be regarded as the main methodological contribution and which offers a novel framework for the forthcoming studies aiming at adding knowledge on entrepreneurial resourcefulness. Keywords: biography, entrepreneurial behaviour, entrepreneurial resourcefulness, habitual entrepreneur, learning

Hybrid entrepreneurs: The value of experience

ABSTRACTHybrid entrepreneurs—individuals acting simultaneously as entrepreneurs and employees—are often considered to be in a transitional stage toward becoming full-time entrepreneurs. However, they may also exit a venture or remain hybrid entrepreneurs. In this research, we investigate how being a hybrid entrepreneur impacts innovative opportunity recognition through entrepreneurial learning and how the exit experience may influence this mechanism. We use a standard logit approach, a causal mediation analysis, and the multilevel random effect model as a robustness test on a large cross-sectional sample of individuals of different ages and from 90 countries to test our hypothesis. Our findings indicate that, in the context of hybrid entrepreneurship, the exit phase could be part of a recursive stage rather than a final step. This implies that hybrid entrepreneurs can also be considered habitual entrepreneurs, as they may experience exits as an integral and iterative aspect of their entrepreneurial journey. We also found that this habitual entrepreneurship experience mediates the relationship between hybrid entrepreneurs and their potential to recognize opportunities and their innovative behavior.

Differences between habitual and novice entrepreneurs in funding negotiations

PurposeNegotiations with venture capitalists (VCs) play a crucial role in the entrepreneurial financing process. Habitual entrepreneurs are generally able to secure more venture capital funding and on better deal terms than novices. This study investigates the disparities in negotiation competencies between habitual and novice entrepreneurs during VC funding negotiations.Design/methodology/approachThis study employed a qualitative approach to investigate the variation in negotiation competencies between habitual and novice entrepreneurs, utilizing the negotiation competency model (NCM). The data analysis and interpretation adopted an inductive concept development approach. A total of 21 semi-structured interviews were conducted with seasoned VCs located in Europe, all of whom had actively engaged in funding negotiations with both habitual and novice entrepreneurs.FindingsThe findings revealed substantial disparities between novice and habitual entrepreneurs in VC negotiations. Although not all competencies of the NCM exhibited variances, the results indicate three primary dimensions contributing to these differences: expertise, reputation, and negotiation competence.Originality/valueThis study is groundbreaking as it represents one of the earliest empirical investigations into the entrepreneurial negotiation competencies within VC negotiations. The findings endeavor to narrow the gap between novice and habitual entrepreneurs in VC negotiations by pinpointing the distinct variations between these two groups, which hold significant practical implications. Furthermore, this study expands the conceptual framework of the NCM by identifying supplementary competencies within the realm of VC negotiations.

Advancing (Neuro)Entrepreneurship Cognition Research Through Resting-State fMRI: A Methodological Brief

Despite many calls, functional brain magnetic resonance imaging (fMRI) studies are relatively rare in the domain of entrepreneurship research. This methodological brief presents the brain-imaging method of resting-state fMRI (rs-fMRI) and illustrates its application in neuroentrepreneurship for the first time. In contrast to the traditional task-based fMRI approach, rs-fMRI observes the brain in the absence of cognitive tasks or presentation of stimuli, which offers benefits for improving our understanding of the entrepreneurial mind. Here, we describe the method and provide methodological motivations for performing brain resting-state functional neuroimaging studies on entrepreneurs. In addition, we illustrate the use of seed-based correlation analysis, one of the most common analytical approaches for analyzing rs-fMRI data. In this illustration, we show that habitual entrepreneurs have increased functional connectivity between the insula (a region associated with cognitive flexibility) and the anterior prefrontal cortex (a key region for explorative choice) as compared to managers. This increased connectivity could help promote flexible behavior. Thus in brief, we provide an exemplar of a novel way to expand our understanding of the brain in the domain of entrepreneurship. We discuss possible directions for future research and challenges to be addressed to facilitate the inclusion of re-fMRI studies into neuroentrepreneurship.

What makes some people habitual entrepreneurs? Decomposing habitual entrepreneurship in the light of Lazear’s theory

PurposeIn spite of the recognised significance of habitual entrepreneurship, enough is not known about the drivers that lead individuals to become habitual entrepreneurs. Drawing from Lazear’s theory of entrepreneurship, this paper addresses the specifics of habitual entrepreneurs in terms of different human capital-related factors, including breadth and diversity of experience and education. This paper aims to elucidate what makes some people habitual entrepreneurs.Design/methodology/approachIn this empirical study on a broad data set (1,538 surveys), the authors juxtapose habitual entrepreneurs with ex-entrepreneurs who decided to give up and chose a salary job after running their first and only firm. The authors formulate four hypotheses that are tested by using a logit regression to model the probability of being a habitual entrepreneur vs giving up entrepreneurship and choosing a salary job.FindingsThe probability of being a habitual entrepreneur increases with the diversity of both managerial and professional experience, as well as with the breadth of education. In addition, entrepreneurial self-efficacy supports setting up more than one firm.Practical implicationsThe findings actualise knowledge of whether habitual entrepreneurs are unique concerning their pools of human capital. They broaden the knowledge of the backgrounds of the decision to start up a business again.Originality/valueThis paper contributes to the current entrepreneurship discussion by offering an enhanced understanding of habitual entrepreneurship. The phenomenon of repeatedly engaging in entrepreneurship is a promising source of knowledge that enables us to better understand entrepreneurship. In addition, the authors verify and extend Lazear’s theory to a new group of entrepreneurs.

The Antecedents to Habitual Entrepreneurship: Exploring the Role of Entrepreneurs’ Narcissism and Educational Level

Abstract This paper aims to analyze the antecedents leading to habitual entrepreneurship by investigating the role of entrepreneurs’ narcissism and their level of education. While the literature provides a general understanding of what motivates individuals to pursue their entrepreneurial ideas, the possible antecedents to the individual’s decision to become a habitual entrepreneur remain unexplored and untested. Relying on a sample of 343 start-up entrepreneurs, hypotheses are tested through the partial least squares analysis. Results show that entrepreneurs’ educational levels fully mediate the relationship between narcissism and the choice to become habitual entrepreneurs. The study contributes to the literature on entrepreneurs’ personality, decision-making, and human capital, also underlining a few practical implications.

Decision-making biases in women entrepreneurs: the novices vs the habitual

PurposeDecision-making biases play substantial roles in entrepreneurs' decisions and the fate of entrepreneurial enterprises, as well. Previous studies have assumed all entrepreneurs are homogeneous in their proneness to biases, therefore inadvertently creating a crucial research gap by ignoring the role of business experience in the genesis of biases. Furthermore, there is a lack of research on women entrepreneurs' decision-making biases. Thus, this paper's main objective is to explore two influential biases of overconfidence and over-optimism in novice and habitual women entrepreneurs.Design/methodology/approachThe data for this study were collected by conducting semi-structured interviews with 21 Iranian novice and habitual women entrepreneurs active in four high-tech sectors of biotech, nanotech, aerospace and advanced medicine. The gathered data were analyzed by thematic analysis.FindingsAccording to the findings, while habitual entrepreneurs are prone to all three types of overconfidence (overestimation, overplacement and overprecision) and over-optimism, novice entrepreneurs do not show any signs of overplacement or overprecision.Practical implicationsThere are certain valuable implications resulting from this study that could be of use for not only future researchers in the field of entrepreneurial decision-making and women entrepreneurship but also for women entrepreneurs running entrepreneurial enterprises, especially small businesses.Originality/valueThis paper offers certain novel contributions to the field of entrepreneurship by not only exploring biases in women entrepreneurs exclusively but also scrutinizing biases in novice (first-time) and habitual (experienced) entrepreneurs comparatively.

Individual Entrepreneurial Orientation: What Are The Characteristics And How Do They Evolve?

The purpose of this paper is to deepen the understanding of how entrepreneurs interpret the five dimensions of entrepreneurial orientation (i.e., autonomy, proactiveness, innovativeness, competitiveness, and risk-taking). We employed a qualitative study interviewing self-selected committed single venture entrepreneurs (n=17) and habitual entrepreneurs (n=15) in Australia. Our results indicate that the EO dimensions manifest differently, and their characteristics change over time while our participants' attitudes towards the firm's financial and non-financial goals evolved as well.

A comparative study of novice and habitual entrepreneur’s choice for founding team member

PurposeThe purpose of this paper is to investigate and compare what criteria novice and habitual entrepreneurs use while adding members to the founding team.Design/methodology/approachThis paper uses conjoint analysis (CA) to provide the order of preference for the “choice attributes.” The logic of CA is that even if two or more attributes influence the choice, it is unlikely that those attributes will have equal importance for founders with different entrepreneurial experiences.FindingsThis paper found a significant difference in the ranking of the attributes by novice and habitual entrepreneurs. In novice entrepreneurs, the effect of direct ties in the form of kinship ties has the highest preference, followed by prior social contact and prior work relations. However, personal friendships and resource dependency received lesser importance than interpersonal attraction because of the similarity in vision, beliefs and values. Habitual entrepreneurs, however, valued resource dependency and prior work relations more than kinship ties. Also, unlike novice entrepreneurs, habitual entrepreneurs sought cofounders from their indirect ties.Practical implicationsThere has been an explosion of interest and funding for programs that help entrepreneurs establish a cofounding team. The authors inform these programs related to the decision concerning assisting novice and habitual entrepreneurs.Originality/valueWhile prior studies examined a single attribute at a time, the strength of this study lies in simultaneously tapping all attributes, along with multiple indicators for each attribute. Additionally, this study distinguishes the selection criteria of cofounders based on the entrepreneurial expertise of the lead founder.

Exploring decision-making biases among Iranian entrepreneurs: some novel insights

Purpose Decision-making biases play decisive roles not only in entrepreneurs’ decisions but also in the fate of entrepreneurial businesses. While the extant literature in this regard is relatively rich, it has predominantly focused on certain biases like overconfidence and overoptimism at the expense of other possibly influential biases, which could influence entrepreneurial decisions. Thus, to address this serious research gap, this paper aims to explore four of the less-researched biases of escalation of commitment, the illusion of control, confirmation and the belief in the law of small numbers in entrepreneurial decisions. Design/methodology/approach By taking a qualitative approach, the data for this study were collected through face-to-face interviews with 19 Iranian habitual (experienced) entrepreneurs running small businesses and analyzed by a qualitative thematic analysis. Findings According to the results, the environmental uncertainty, the reluctance to lose face and the experiences of previous failures contributed to the escalation of commitment, while disregard for external factors beyond one’s control caused the illusion of control, factors like prior successful businesses in the same sector, looking for resorts to manage uncertainty, along with the decision to exploit opportunities resulted in the confirmation bias, while the expenses of conducting sweeping pilot tests in the market and the reluctance to reveal a business secret to the competitors were the main contributors of the belief in the law of small numbers. Originality/value This study is a pioneer in scrutinizing four less-researched but important biases in entrepreneurs and, thus extending the line of research in this regard.

Habitual entrepreneurship in digital platform ecosystems: A time-contingent model of learning from prior software project experiences

The emergence of large-scale digital platforms such as Facebook, Google Play and Apple App Store around 2008 has created opportunities for independent entrepreneurs to offer their self-developed software applications (“apps”) to large groups of platform users. The development and release of tens of thousands of apps by thousands of independent developers has created dynamic entrepreneurial ecosystems. This paper investigates whether and how learning by independent habitual entrepreneurs unfolds in substantively different ways in such dynamic platform-based environments. We argue that in these entrepreneurial ecosystems, the timing of learning efforts becomes essential. For Facebook app developers, we find that learning from their own prior app projects remains feasible. However, entrepreneurs have only a few months during which they can benefit from what they learned from a prior app project. This study supports the feasibility of time-contingent learning from prior app projects for increasingly prevalent dynamic entrepreneurial ecosystems such as digital platforms. Implications for future research and management practice are outlined.

Why Do Some Entrepreneurs Develop Venture Portfolios? And how do they Do So? A Meso-Level Analysis

The question how decisions made by entrepreneurs affect their individual business ventures is essential to research in entrepreneurship. While knowledge on the role of entrepreneurial learning and habits (Aldrich and Yang 2014), the influence of uncertainty on organizing entrepreneurial activities (Alvarez and Barney 2005) and the role of past career practices on entrepreneurial decision making (Engel, van Burg, Kleijn and Khapova 2017) is widely established, yet little is known on how this applies to entrepreneurs “simultaneously owning and engaging in a portfolio of entrepreneurial interests” (Carter and Ram 2003, p. 374). As such, portfolio entrepreneurs are a distinctive group of habitual entrepreneurs whom received increased and sustained scholarly attention over the recent years (Wiklund and Shepherd 2003 and 2008, Baert, Meuleman, Debruyne and Wright 2016, Lechner, Kirschenhofer and Dowling 2016, and Cruz and Justo 2017). However, yet little empirical evidence exists to explain variation within this group of entrepreneurs (Kutzewski, Bahlmann and Stam 2020); nor do we know how and through which practices the formation of business portfolios is affected. We conducted research asking why, how and with what effect, portfolio entrepreneurs engage in their activities. To answer these questions, a comparative multi-case study design was chosen. The research unit comprised management decisions made by individual portfolio entrepreneurs. Based on a case sample comprising the explorative and exploitative activities of 21 portfolio-entrepreneurs with a combined portfolio of 129 companies, this research found ample evidence that various forms of intention (Why?), decision making and coordination (How?) exist simultaneously within the same portfolio (With what effect?). The result of this research contributes to our understanding of how entrepreneurial principles through which portfolio-entrepreneurs organize their activities affect the structure of venture portfolios.

Standing up against crisis-induced entrepreneurial uncertainty: Fewer teams, more habitual entrepreneurs

The global spread of coronavirus disease 2019 (COVID-19) caused by the novel coronavirus SARS-CoV-2 (severe acute respiratory syndrome coronavirus–2) has led to drastic infection control measures that have dramatically affected societies and economies worldwide. Against this background, it is the purpose of this commentary to illustrate how innovative entrepreneurial activity in particular has been affected by the rising uncertainty caused by the first COVID-19 wave. By comparing innovative North American and European startups established pre-crisis and during the first wave of the pandemic, this commentary suggests that startups founded in the crisis are characterised less by entrepreneurial teams and more by habitual entrepreneurs. Interestingly, female entrepreneurial activity seems not to have been affected by the crisis when measured as the proportion of women founders involved in innovative startups pre-crisis and during crisis. The commentary thus, illustrates what particular type of entrepreneur persists during rising uncertainty and allows us to draw conclusions for policy-making and further research on the interface of entrepreneurship, crisis and uncertainty.

Restarting for the thrill: Behavioural addiction to entrepreneurship

Objective: The aim of the article is to highlight the behavioural addiction to entrepreneurship by entrepreneurs. Research Design & Methods: We followed a qualitative design in order to ascertain the publications to date with regards to behavioural addiction to entrepreneurship. Findings: The study found that there seems to be a behavioural addiction to entrepreneurship by serial and habitual entrepreneurs, who continuously receive incentives from entrepreneurship development agencies without tangible businesses. Implications & Recommendations: The implication of the study is that so many genuine entrepreneurs are overlooked for serial and habitual entrepreneurs because they seem to have experience in acquiring incentives without succeeding in running businesses. We recommend that entrepreneurship development agencies need to be aware of the behavioural addiction to entrepreneurship and monitor sponsored entrepreneurs on an annual basis. Contribution & Value Added: The study brings about a novel angle in the entrepreneurship literature, whereby the success rate is overemphasized due to the benefits of entrepreneurship in creating jobs. But we highlight the need to evaluate and monitor entrepreneurs as they benefit from incubators, funding and mentorships.

Entrepreneurial reentry after failure: a review and future research agenda

PurposeThis paper aims to review the academic literature on entrepreneurial reentry after failure in an attempt to highlight the contribution to the knowledge, identify research gaps and outline an agenda for future research.Design/methodology/approachSeveral databases such as ABI/Inform Global, Academic Search Complete, Business Source Premier and Emerald Full Text were used to find peer-reviewed journal articles. Different search terms were used, such as entrepreneurial reentry, failure of habitual entrepreneurs, reentry intentions, entrepreneurial failure, serial entrepreneurship and venture failure. A total of 27 articles were finally selected and included in the final analysis. Using thematic codes, the selected articles were manually coded.FindingsThe concept of entrepreneurial reentry after failure has recently gained some attention from entrepreneurship scholars, but still, there are significant gaps in the literature. A wide range of entrepreneurship theories can potentially provide the necessary impetus to guide future research. The current literature remains largely inconclusive with inconsistent findings. This underlines the need to focus on this domain to conduct more studies to develop knowledge. The available literature is largely focused on exploring antecedents of entrepreneurial reentry after failure. Therefore, the author’s understanding remains limited with regard to other aspects of entrepreneurial reentry after failure, such as context of reentry and outcomes of reentry. Moreover, future studies also need to include the developing country context for better understanding of entrepreneurial reentry after failure.Originality/valueTo the best of the author's knowledge, the current paper is the first identifiable review of the literature on entrepreneurial reentry after failure. The suggested areas of future research will potentially help in addressing the identified research gaps and further strengthening the theoretical foundations of this emerging research domain. Identified themes in the literature will also potentially help aspiring entrepreneurs to better understand the antecedents, contextual settings and outcomes of reentry after failure. This practical perspective will help failed entrepreneurs in particular to be more aware of the dynamics of reentry after failure and better manage the reentry process.

Novice and habitual entrepreneurs and external business support exploitation

Habitual entrepreneurs have become an important group of entrepreneurs who make a large contribution to the process of wealth creation. Previous studies have indicated that habitual entrepreneurship is a widespread phenomenon, hence, policy makers and practitioners should target support tailored to the special needs of novice and habitual entrepreneurs. This article aims to present results of a study regarding the role of prior business experience in the inclination to use external business support and the choice of various forms of this support. Research was conducted on a sample of 373 Polish small innovative enterprises in the fourth quarter of 2017. Enterprises were surveyed by means of a questionnaire using the Computer Assisted Telephone Interviewing technique. The scale of habitual entrepreneurs in the examined sample is 32,44 % and is comparable with research carried out in other countries. The findings suggest that habitual entrepreneurs use external business support to a greater extent than novice entrepreneurs but differences between various forms of support used by novice and habitual entrepreneurs are not significant. The presented research results are a starting point for further detailed analyses that should be undertaken to explore the characteristics of habitual entrepreneurs: whether and to what extent entrepreneurs learn from their own experience, what is the impact of success or failure in previous businesses on the current behaviour of entrepreneurs and their companies, and what implications this has for the development of the future SME support policy.

Fostering the growth of student start-ups from university accelerators: an entrepreneurial ecosystem perspective

AbstractDespite their significance, firms created by students have been the subject of little research. Adopting the entrepreneurial ecosystem framework, this paper examines the growth of student start-ups, especially those that participate in university accelerators. Focused on the University of Toronto, this paper contributes to an understanding of how university accelerators can better support the entrepreneurial efforts of students. It is clear that firms that participate in accelerators with a screening process have a stronger performance in both employment and product growth. Moreover, a habitual entrepreneur director or a more intensive accelerator program is found to have more positive effects on product growth at firms than on employment growth.

Determinants of novice, portfolio, and serial entrepreneurship: an occupational choice approach

In this paper, we first develop an original theory in which, based on their individual skills and the quality of their business, entrepreneurs can keep their original business (and thus remain novice entrepreneurs), start and keep a new business in the same or another sector along their current business (therefore becoming portfolio entrepreneurs), transfer or shut their original business down to either start a new one (turning themselves into serial entrepreneurs), or enter the labor market as wage workers. We then use the insights from our theory to develop three main hypotheses that are finally tested for a 10-year panel dataset (2001 to 2010) of more than 4000 Vietnamese manufacturing firms. We estimate an occupational choice model and a survival model and find that (i) a greater endowment of human capital is associated with a higher likelihood of a business owner to become a serial or a portfolio entrepreneur; (ii) a higher quality of the new business is associated to a higher likelihood that it is run by any type of habitual entrepreneur. Particularly, high entrepreneurial skills together with a high-quality business positively influence the likelihood of an individual to be serial or portfolio entrepreneur; (iii) ceteris paribus, firms run by serial or portfolio entrepreneurs tend to stay in business longer, although high-quality ones run by novice entrepreneurs endowed with high entrepreneurial skills are those with the lowest probability to leave the market.

Entrepreneurial Experience and Usage of External Business Support

Previous studies demonstrate that policy makers and practitioners should target support tailored to special needs of novice and habitual entrepreneurs. This paper aims to present a study of the role of prior business experience in the inclination to use external business support and the choice of various forms of this support. Research were conducted on a sample of 373 Polish small innovative enterprises in the fourth quarter of 2017. Enterprises were surveyed by means of a questionnaire using the CATI (Computer Assisted Telephone Interviewing) technique. The findings suggest that habitual entrepreneurs use external business support to a greater extent than novice entrepreneurs but differences between various forms of support used by novice and habitual entrepreneurs are not significant. The presented research results are a starting point for further detailed analyses that should be undertaken to explore the characteristics of habitual entrepreneurs: whether and to what extent entrepreneurs learn from their own experience, what is the impact of success or failure in previous businesses on the current behaviour of entrepreneurs and their companies, and what implications this brings for the development of the future SME support policy.

Habitual entrepreneurs in the making: how labour market rigidity and employment affects entrepreneurial re-entry

We investigate the impact of country-level labour market regulations on the re-entry decision of experienced entrepreneurs, whereby they become habitual entrepreneurs. Multilevel logit models on entry decisions among 15,709 individuals in 29 European countries show that labour market regulations have a positive influence on the decision to re-enter into entrepreneurship. This positive impact is stronger among individuals holding wage jobs at the time of re-entry compared to those that do not. Our results indicate that novice and habitual entrepreneurs may respond very differently to labour market rigidity. We discuss and provide tentative explanations for these differences and outline potential policy implications.