On the Origin of Entrepreneurial Theories: How Entrepreneurs Craft Complex Causal Models with Theorizing and Data
Abstract
The emerging theory-based view depicts entrepreneurs as sophisticated thinkers who form, update, and act on rich causal theories. In support of this view, recent empirical work has demonstrated both (a) the value of theories as well as (b) the importance of experimentation for testing and refining theories. Yet, the process by which entrepreneurs initially form these theories remains largely unobserved. To address this gap, we conduct a longitudinal study of nine consumer platform ventures over five years. Our primary contribution is to illuminate how entrepreneurs move from the spark of an initial idea to an actionable theory. This process begins with a thesis, which is an initial, poorly formed idea that guides subsequent learning and theorizing. To elaborate this thesis, entrepreneurs then knit together multiple distinct mental theorizing practices, as well as different approaches to generating new data. Extending prior work, we articulate the distinct roles these practices play in terms of adding novelty, identifying new subproblems, and explicating beliefs. We also add insight into the role of data generation in spurring further theorizing. Overall, we contribute empirical evidence and a rich processual understanding of how entrepreneurs articulate complex causal theories.
https://kenaninstitute.unc.edu/publication/on-the-origin-of-entrepreneurial-theories-how-entrepreneurs-craft-complex-causal-models-with-theorizing-and-data/
