Figure What enables entrepreneurs to influence innovation diffusion

world who think of opportunities as quite structurally determined. For example, the arrival of the internet created a massive opportunity for the delivery of new goods and services more directly to the customer. The management theorist, Michael Porter, is often deemed to fall into this more deterministic camp, for example in using the five forces model to explain why it is that some firms are able to grow.80 However, there are others, such as Edith Penrose, who, before Porter, took a more voluntaristic approach. By this I mean that she did not see opportunities as unmovable, immutable truths, but rather in much the same way as sociologists see the rules and norms in a society - 'all structural properties of social systems are enabling as well as constraining'.81

Before business schools were doing it, Penrose set out in 1959 to explain why some firms grew more quickly and more successfully than others. In doing so she concentrated on the capacities developed by the members of a firm over time and through experience. Not surprisingly, she left a lot of room for the agency of entrepreneurs when it came to translating opportunities into growth:

The set of opportunities for investment and growth that its entrepreneurs and managers perceive is different for every firm, and depends on its specific collection of human and other resources. Moreover, the environment is not something 'out there', fixed and immutable, but can itself be manipulated by the firm to serve its own purposes.82

In short, one entrepreneur may be able to find opportunity where others do not.83 Or put another way, 'different entrepreneurs in the same circumstances might well achieve different results'.84

To be fair, even Porter has recognized that 'outsiders', such as entrepreneurs, may be better placed to exploit emergent opportunities since they 'may possess the different expertise and resources required to compete in a new way'.85 Statements such as this are entirely in line with the thinking of Schumpeter, who proclaimed that:

In most cases only one man or a few men can see the new possibility and are able to cope with the resistances and difficulties which action always meets with outside the ruts of human practice.86

In discussing the capacities of entrepreneurs, and what gives them their powers of creative destruction, Schumpeter placed particular emphasis on entrepreneurial vision, energy and tenacity, rather than on managerial skills.87 Successful innovation, he felt 'is a feat not of intellect, but of will', ultimately reliant on 'supernormal energy and courage'.88 There is indeed some truth to this statement. When you review the early experiences of entrepreneurs who are later successful, they have often had to endure tremendous hardship before seeing their innovations take hold.

Yet in explanations of entrepreneurial performance today, analysts tend to give greater emphasis to managerial capacity rather than pure will. For instance, the relatively high rate of failure for entrepreneurial start-ups is to be explained by the fact that entrepreneurs:

lack the methodology. They violate elementary and well-known rules. This is particularly true of high-tech entrepreneurs. ... But even hightech entrepreneurship need not be high-risk. ... It does need, however, to be systematic. It needs to be managed.89

Recall, for instance, Hughes's 1979 work that found that although Edison made the technological breakthrough, it was Samuel Insull's greater managerial ability that turned Edison's primarily urban-based grid electricity system into a region-wide system. The question, then, is how to account for these managerial capacities.

Analysts of entrepreneurial performance find that 'know-how may be the most critical in influencing the ultimate success or the failure of an enter-prise'.90 Such analysts agree that this quality derives strongly from prior experience and learning by doing.91 Entrepreneurs particularly benefit from prior involvement in well-managed companies.92 Similarly, it has been found that 'repetition', and thus 'an intimate detailed knowledge of the business', greatly improves the chances of success.93 Thus an entrepreneur who spins out of an existing company often has a distinct advantage over an inexperienced entrepreneur in the same sector.94

But entrepreneurs with all the strength of will and managerial capacities in the world will not be able to make a dent in the marketplace if they are not able to harness and mobilize considerable resources.

Internet Entrepreneurship Survival Guide

Internet Entrepreneurship Survival Guide

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