User Entrepreneurship Research Articles

Who are User Entrepreneurs? Findings on Innovation, Founder Characteristics, and Firm Characteristics (The Kauffman Firm Survey)

Little is known about the paths individuals traverse prior to founding firms and the ramifications of these different paths on entrepreneurial outcomes. We investigate one particular path and its effects: user entrepreneurship. User entrepreneurship describes entrepreneurship by individuals who create innovative products or services because they need them for their own use and subsequently found firms to commercialize their innovations. A small number of industry-level studies suggest that many important innovative products and services are first introduced to the commercial marketplace by user entrepreneurs. Detailed data support this idea and describe user entrepreneurs and their firms. Specifically, we distinguish between three types of user-founded firms and contrast these firms with both the full sample of firms and firms engaged in R&D activities with respect to founder demographics, firm characteristics, and patterns of revenue growth, job creation, R&D investment, and intellectual property creation. In addition, we provide the first documentation of the prevalence of user entrepreneurship in the United States: 10.7 percent of all startups and 46.6 percent of innovative startups founded in the United States that survive to age five are founded by users.

Under the radar: Industry entry by user entrepreneurs

We inductively develop a model of the commercialization process for new products or services user entrepreneurs undertake when entering an industry while drawing on proprietary technology developed in another industry. Extending the growing field of user entrepreneurship, we identify a two-phase approach to industry entry by user entrepreneurs who start “under the radar” of incumbent firms, gain experience, attract a first potential customer base, and then, in a second phase, engage in commercialization. During this process, a community of fellow users is of major importance for the entrepreneur, serving as a knowledge pool for skills development and experimentation with different commercialization paths. We study a nascent group of firms founded by users of video games who became entrepreneurs on entering the animation industry by producing Machinima, a new film genre characterized by shooting film in video games. We explain how user entrepreneurs gain access to complementary assets (video games) for their new use (shooting film), how they deal with intellectual property issues when using other firms’ assets, and how user entrepreneurs combine domain knowledge about film production with their experience in video games and the art of Machinima. Our propositions hold implications for management and policy.

Commercializing User Innovations by Vertical Diversification: The User-Manufacturer Innovator

This paper explores a pathway to commercializing user innovations hitherto not studied, namely, the vertical diversification of a user firm into an upstream industry supplying capital goods, and subsequent coexistence of user and manufacturing units. Such coexistence creates synergies regarding innovation, marketing, and financials. It enables the manufacturing unit to benefit from user innovations in its new product development, while the user unit profits from improved tools. Yet, selling the firm’s own user innovations risks loss of the competitive advantage originating from use of these innovations. We employ case evidence from firms in the fields of foundation engineering, tunnel construction, tea-packaging, and geological surveying to derive a set of five propositions regarding the conditions under which user-manufacturer diversification is attractive and viable in the long run. These conditions relate to innovation, marketing, the organization, and financial aspects. Our study offers three contributions. We show how user entrepreneurship can originate from established corporations rather than from individual user innovators; we carve out factors that favor the move toward and the success of user-manufacturer diversification; and we link user innovation and corporate strategy by showing how user innovation can affect the boundaries of organizations.

The Accidental Entrepreneur: The Emergent and Collective Process of User Entrepreneurship

We develop a process model of how users, an understudied source of entrepreneurship, create, evaluate, share, and commercialize their ideas. We compare and contrast our model to the classic model of the entrepreneurial process, highlighting the emergent and collective nature of the user’s entrepreneurial process. Users are often “accidental” entrepreneurs who happen upon an idea through their own use and then share it with others; more specifically, the development of an idea and subsequent experimentation, adaptation, and preliminary adoption often occur before that idea is formally evaluated as the basis of a commercial venture. Users also tend to engage in collective creative activity prior to firm formation — often within the social context provided by user communities — that results in the improvement of ideas. Finally, we provide detailed data on the prevalence of user entrepreneurship in the juvenile products industry.

The accidental entrepreneur: the emergent and collective process of user entrepreneurship

AbstractWe develop a process model of how users, an understudied source of entrepreneurship, create, evaluate, share, and commercialize their ideas. We compare and contrast our model to the classic model of the entrepreneurial process, highlighting the emergent and collective nature of the user's entrepreneurial process. Users are often ‘accidental’ entrepreneurs who happen upon an idea through their own use and then share it with others; more specifically, the development of an idea and subsequent experimentation, adaptation, and preliminary adoption often occur before that idea is formally evaluated as the basis of a commercial venture. Users also tend to engage in collective creative activity prior to firm formation—often within the social context provided by user communities—that results in the improvement of ideas. Finally, we provide detailed data on the prevalence of user entrepreneurship in the juvenile products industry. Copyright © 2007 Strategic Management Society.