CREATION AND

DISCOVERY
DISCOVERY AND
CREATION.
There are two theories;
• Discovery theory
• Creation theory
They depict different perspectives on how opportunities are
created

Discovery Theory assumes opportunities that already exist

waiting to be exploited

Creation Theory assumes opportunities that are created through

internal factors but previously did not exist
DISCOVERY THEORY
• Opportunities are a culmination of competitive imperfections in the
market
• These opportunities are independent of the entrepreneur and there
is a difference between an entrepreneur and a non entrepreneur
• Discovery theory is driven by external factors like change in tastes,
development in technology.
• Decision making in discovery is risky since many entrepreneurs can
spot and take up the opportunity so one needs to be better.
Alertness is needed.
CREATION THEORY
• Opportunities aren’t from external factors but
rather internal factors. Searching is not required
because there are no mountains to climb but
rather one has to build their own mountain.
• Opportunities don’t just pop up randomly due to
external events in an industry or market, instead
entrepreneurs actively create opportunities
through their own actions and decisions.
• Opportunities don’t stand on their own.
CREATION THEORY CONTINUED

• Creation theory is uncertain because the end is not

known for example towel skirts.
• Try and error.
• Decision making context in creation theory is
uncertain.
• No documentation about an opportunity so
information doesn’t exist.
 DISCOVERY AND CREATION; IMPLICATIONS FOR
EFFECTIVE ENTREPRENEURIAL ACTION.

LEADERSHIP DECISION MAKING HUMAN RESOURCE

Discovery theory relies on Discovery theory decision making is In discovery theory, one is able to
individual’s prior knowledge about risky. know skills needed so its easy to
the markets and products. This Creation theory decision making is hire.
requires expert leaders. uncertain. In creation theory, it is not easy to
Creation theory is creative and effectively hire because one doesn’t
requires charismatic leadership. know the skills needed.
 MORE IMPLICATIONS

STRATEGY FINANCE MARKETTING

In discovery, strategy is based on In discovery, it is easy to get funds One can effectively specify the
prior information since you have a from external sources. product, price, distribution channel,
clear plan and strategies are In creation, entrepreneurs finance promotion strategy and customer
focused. themselves also referred to as boot service strategies.
In creation, the strategies are strapping. One can’t effectively specify the
experimental and should be flexible. product, price, distribution channel,
promotion strategy and customer
service strategies.
IMPLICATIONS

• In discovery, one needs

to do their best to
SUSTAINING compete because there
COMPETITIVE is rapid competition.
ADVANTAGE •
In creation, its easy to
compete effectively.
DIGITAL ENTREPRENEURSHIP
AND ITS SOCIOMATERIAL
ENACTMENT
ABSTRACT
How we can better understand the
nature of entrepreneurship in the
digital economy.
• Entrepreneurship in the digital
economy entails 3 distinct yet
interrelated types of opportunities:
business, knowledge and
institutional.
• Entrepreneurship practices in the
digital economy are inherently
sociomaterial.
Entrepreneurship in regard to the digital
economy, has Information Technology (IT)
and new media that play a significant role in
transforming business processes and models
as indicated below:
• Entrepreneurship in the digital economy:
The context traces the evolution of the term
entrepreneurship from its historical focus on
risk-taking to the concept that encompasses
individuals pursing perceived opportunities.
Entrepreneurs are described as those who
search for and exploit opportunities often
leading to changes in institutions and markets.
While digital economy creates profits, it also
challenges established actors in those fields to
maintain a sustainable competitive advantage
due to the dynamic nature of digital
technologies.
•An analytic model of digital entrepreneurship
•We refer to digital entrepreneurship as the pursuit of
opportunities based on the use of digital media and
other information and communication technologies
by the digital entrepreneurs. In doing so, they
exacerbate changes in the competitive landscape, as
they attempt to seize the opportunities and thereby
potentially further the creative destruction process of
the digital economy.
•Business entrepreneurship
• Here new business-related, digital
ventures aim at generating a financial
profit and are directly inscribed into the
economic realm, such as creation of a
new company or commercialization of
an innovation.
•Knowledge Entrepreneurship
• Knowledge entrepreneurship in the digital economy
involves identifying and pursuing opportunities
related to information and knowledge to develop,
expand and share domain-specific knowledge.
• The knowledge entrepreneur must have sufficient
personal knowledge capital to be able to create value
and/or wealth using that knowledge capital.
Examples of potential knowledge entrepreneurs
include consultants, journalists, academics and
pundits.
•Institutional Entrepreneurship
• This has been defined as the activities of actors who
have an interest in particular institutional
arrangements and who leverage resources to create
new institutions or transform existing ones. Their
primary objectives may be to generate legitimacy for
themselves and their ventures and to transform the
institutional field by promoting meaning of new
practices through their discursive practices.
 Digital entrepreneurship, a multi-faceted phenomenon

The traditional focus on individual types of entrepreneurship

and the emerging recognition of synergies between all the
three types that is to say business, knowledge and institutional
entrepreneurship, researchers have explored how these types
interact and contribute to digital entrepreneurship. Successful
digital entrepreneurs often combine these opportunities for
example Google Inc. is a business venture with knowledge and
institutional implications. It also highlights the concept of
“sociomateriality” and its relevance to digital entrepreneurship.
•Sociomaterial practices and digital ventures;
Sociomateriality emphasizes the
interconnectedness of the social and material
aspects in various practices, particularly in the
context of digital entrepreneurship.
•The sociomateriality suggests that digital
entrepreneurship is deeply embedded in a
network of relationships involving technology,
customers and more. This perspective challenges
the traditional view of entrepreneurs as
autonomous agents and highlights the role of
material components, like digital technology.
Business entrepreneurship and sociomaterial practices

eHarmony, a pioneering online dating service, distinguishes itself by

using a comprehensive questionnaire to create detailed profiles of
users, searching for compatible partners using a proprietary algorithm.
Customers pay a premium for this service, justified by its ability to find
high-quality matches for long-term relationships. The eHarmony
business relies heavily on IT, with users accessing the platform online,
making electronic payments, and interacting with potential matches
through the website.
Knowledge entrepreneurship and sociomaterial practices;
eHarmony, an online dating service practices knowledge
entrepreneurship by conducting online studies, encouraging user
participation et cetra. It also serves as a repository for “relationship
science” knowledge by researching the personality traits that seem to
be associated with successful marriages. This approach supports face-
to-face and online interactions, expert-led research, and contributions
from the user community, primarily relying on web-based tools and
social networks for knowledge sharing.
Institutional entrepreneurship and sociomaterial
practices

eHarmony demonstrates actions to preserve societal

institutions and institutional entrepreneurship to bring
about change. Institutional entrepreneurship is evident for
example in eHarmony’s attempts to establish the task of
finding a romantic partner as a “science.” eHarmony
carries out its institutional entrepreneurship practices
through traditional advertising on television and online
advertising.
 A proposed research agenda
These knowledge entrepreneurs promote their expertise
through blogging, sponsored links and online advertising. In
the research we see the exploration in the symbiotic
relationship between knowledge and business
entrepreneurs, given the changing landscape of media. In
summary, it suggests that the model of digital
entrepreneurship described can serve as a foundation for
studying new ventures in the digital economy.