Entrepreneurship Theory & Digital Innovation
Lecture 1
02 Basics: Entrepreneurship & Opportunities
Entrepreneurship (our definition)
Discovery and exploitation of lucrative opportunities
Opportunities:
Goods, services, processes can be introduced and sold at greater [value] than their
cost of production
Opportunities are objective (identification process subjective!)
People hold different beliefs about value of opportunities
Heterogeneity (e.g., specific capabilities) allows some individuals and not others to
act on certain opportunities
Basics II
Entrepreneurship does not require (but can include) the creation of new organizations
It depends on who discovers and who exploits opportunities (do not need to be the same)
Entrepreneurial opportunities often introduced by new firms
Large established firms with …
Failure to recognize a new technology
Failure to give it “full speed”
Failure to balance the “mainstream” and the “new stream”
03 Entrepreneurship: traditional vs. digital view
Traditional entrepreneurship view assumes stable and fixed boundaries around an (uncertain)
opportunity, with success defined by the execution of a well-defined business plan.
o Examples: Local bakery, Craft brewery, Starbucks, The Burger Company, Tony’s Choco
lonely
Digital view:
Fluid less bounded entrepreneurial processes and outcomes
Less predefined and more distributed entrepreneurial agency
Keep in mind: use of digital technologies (e.g., e-commerce of own physical product) as such
not defining digital
entrepreneurship
,04 The impact of digital technology on entrepreneurship
Digital technology & entrepreneurship: general
Defining digital eship: digital technologies play a central role in the venture (more than digital
transformation of business!)
o Examples: cloud computing, social media, 3D printing, data analytics
Digital technology affects entrepreneurship via 3 essential elements namely digital artefacts,
platforms and infrastructure
Digital technology & entrepreneurship: artifacts
Digital artifact:
A digital component, application or media content that is part of a new product (or service)
and offers specific functionality or value to end-user
Decoupling of information from its physical form or device
o Examples: Apps that run on smart watch, Home appliances (“Smart XY”)
Power of generativity: = “a technology’s overall capacity to produce unprompted change
driven by large, varied, and uncoordinated audiences” (Zittrain, 2006, p. 1980)
Generativity of digital artifacts refers to …
1) Reprogrammability:
enabling separation of the functional logic of the device from the physical embodiment that
executes it
o Examples: Digital archives (->video and music streaming), data analytics (-> social
media, navigation systems)
2) Recombinability:
ability to associate with and build on other digital artifacts
o Examples: Drone industry
Digital technology & entrepreneurship: platforms
Digital platform:
A shared, common set of services and architecture that serves to host complementary
offerings, including digital artifacts
o Example: Apple’s iOS platform and Google’s Android platform
Potential for new ventures to deepen specialization while offsetting production, marketing,
and distribution capabilities
Power of generativity holds as well
Generativity in the context of platforms
,refers to the capability of digital platforms to allow for a recombination of elements and for assembly,
extension, and redistribution of functionality
This means …
Individual components are not product-specific and each platform layer may be associated
with a different functional design hierarchy
o Example: Google Maps
Digital technology & entrepreneurship: infrastructure
Digital infrastructure:
Digital technology tools and systems that offer communication, collaboration, and/or
computing capabilities to support innovation and entrepreneurship (e.g., cloud computing,
data analytics, online communities, social media, 3D printing, digital makerspaces, etc.)
Crowdsourcing and crowdfunding schemes
Allows cost-effectively constructing and testing novel concept
Digital technology & entrepreneurship: Finally
Digital technology affects entrepreneurship via artefacts, platforms, and infrastructure
This impact implies less bounded entrepreneurial processes and outcomes as well as less
predefined and more distributed entrepreneurial agency
Artifacts and platforms serve as part of new venture idea (outcome); digital infrastructure as
external enabler (supporting process).
Shifting boundaries of entrepreneurship
05 Digital technology and the (new) boundaries of entrepreneurship
Less bounded entrepreneurial outcomes
Traditional model:
Fixed and discrete set of boundaries for the new product or service idea that (=outcome)
underlie a (pre-defined) entrepreneurial opportunity
Digital model:
Less bounded outcomes:
Scope, features, and value of product/service offerings continue to evolve even after the idea
has been enacted (e.g., modifying the digital analytic components in cars)
Most digital product designs remain somewhat incomplete and in a state of flux ->
continuous evolution of value proposition rather than executing a predefined opportunity (as
described in a business plan
Time (e.g., digital infrastructures like 3D printing speed up implementation and
experimentation!)
Better scalability (i.e., ability to rapidly enhance capabilities and performance at low cost) due
to digital infrastructures such as cloud computing and mobile networking
o Example: Airbnb, Amazon (from books to everything
, Less Predefinition in Entrepreneurial Agency
Traditional model:
Focus on predefined founder (or set of founders) who drives entrepreneurial idea (individual-
opportunity nexus)
Digital model:
Dynamic and often unexpected collection of actors with diverse goals and motives engage in
the entrepreneurial initiative.
o Example: digital platforms (e.g., SugarCRM, Open SYNC, etc.); digital infrastructure
(e.g., crowdsourcing and crowdfunding system
06 Take-away points
Less Bounded Processes and Outcomes: Digital technologies have disrupted traditional
boundaries. Entrepreneurial outcomes and processes are no longer rigidly defined.
Digitization allows for intentionally incomplete outcomes, where product features, scope, and
value continue to evolve even after market introduction.
Shift in Entrepreneurial Agency: The locus of entrepreneurial agency becomes less
predefined. Entrepreneurs now operate in a dynamic environment where spatial and
temporal boundaries of activities are more flexible. Digital technologies empower
entrepreneurs to navigate uncertainty with greater adaptability
Digital Entrepreneurship: Toward a Digital Technology Perspective of Entrepreneurship Satish
Nambisan (2017)
What is Nambisan actually trying to argue?
- Digital technologies fundamentally change entrepreneurship, so traditional entrepreneurship
theories are no longer sufficient on their own.
Everything in the paper revolves around two major claims.
Claim 1: Entrepreneurial outcomes and processes are less bounded
Traditionally:
Products had clear boundaries.
The entrepreneurial process had clear phases.
A business plan described a relatively fixed opportunity.
Digital technologies change this.
Because digital products are:
Reprogrammable
Recombinable
Open
they can continuously evolve after launch.
Lecture 1
02 Basics: Entrepreneurship & Opportunities
Entrepreneurship (our definition)
Discovery and exploitation of lucrative opportunities
Opportunities:
Goods, services, processes can be introduced and sold at greater [value] than their
cost of production
Opportunities are objective (identification process subjective!)
People hold different beliefs about value of opportunities
Heterogeneity (e.g., specific capabilities) allows some individuals and not others to
act on certain opportunities
Basics II
Entrepreneurship does not require (but can include) the creation of new organizations
It depends on who discovers and who exploits opportunities (do not need to be the same)
Entrepreneurial opportunities often introduced by new firms
Large established firms with …
Failure to recognize a new technology
Failure to give it “full speed”
Failure to balance the “mainstream” and the “new stream”
03 Entrepreneurship: traditional vs. digital view
Traditional entrepreneurship view assumes stable and fixed boundaries around an (uncertain)
opportunity, with success defined by the execution of a well-defined business plan.
o Examples: Local bakery, Craft brewery, Starbucks, The Burger Company, Tony’s Choco
lonely
Digital view:
Fluid less bounded entrepreneurial processes and outcomes
Less predefined and more distributed entrepreneurial agency
Keep in mind: use of digital technologies (e.g., e-commerce of own physical product) as such
not defining digital
entrepreneurship
,04 The impact of digital technology on entrepreneurship
Digital technology & entrepreneurship: general
Defining digital eship: digital technologies play a central role in the venture (more than digital
transformation of business!)
o Examples: cloud computing, social media, 3D printing, data analytics
Digital technology affects entrepreneurship via 3 essential elements namely digital artefacts,
platforms and infrastructure
Digital technology & entrepreneurship: artifacts
Digital artifact:
A digital component, application or media content that is part of a new product (or service)
and offers specific functionality or value to end-user
Decoupling of information from its physical form or device
o Examples: Apps that run on smart watch, Home appliances (“Smart XY”)
Power of generativity: = “a technology’s overall capacity to produce unprompted change
driven by large, varied, and uncoordinated audiences” (Zittrain, 2006, p. 1980)
Generativity of digital artifacts refers to …
1) Reprogrammability:
enabling separation of the functional logic of the device from the physical embodiment that
executes it
o Examples: Digital archives (->video and music streaming), data analytics (-> social
media, navigation systems)
2) Recombinability:
ability to associate with and build on other digital artifacts
o Examples: Drone industry
Digital technology & entrepreneurship: platforms
Digital platform:
A shared, common set of services and architecture that serves to host complementary
offerings, including digital artifacts
o Example: Apple’s iOS platform and Google’s Android platform
Potential for new ventures to deepen specialization while offsetting production, marketing,
and distribution capabilities
Power of generativity holds as well
Generativity in the context of platforms
,refers to the capability of digital platforms to allow for a recombination of elements and for assembly,
extension, and redistribution of functionality
This means …
Individual components are not product-specific and each platform layer may be associated
with a different functional design hierarchy
o Example: Google Maps
Digital technology & entrepreneurship: infrastructure
Digital infrastructure:
Digital technology tools and systems that offer communication, collaboration, and/or
computing capabilities to support innovation and entrepreneurship (e.g., cloud computing,
data analytics, online communities, social media, 3D printing, digital makerspaces, etc.)
Crowdsourcing and crowdfunding schemes
Allows cost-effectively constructing and testing novel concept
Digital technology & entrepreneurship: Finally
Digital technology affects entrepreneurship via artefacts, platforms, and infrastructure
This impact implies less bounded entrepreneurial processes and outcomes as well as less
predefined and more distributed entrepreneurial agency
Artifacts and platforms serve as part of new venture idea (outcome); digital infrastructure as
external enabler (supporting process).
Shifting boundaries of entrepreneurship
05 Digital technology and the (new) boundaries of entrepreneurship
Less bounded entrepreneurial outcomes
Traditional model:
Fixed and discrete set of boundaries for the new product or service idea that (=outcome)
underlie a (pre-defined) entrepreneurial opportunity
Digital model:
Less bounded outcomes:
Scope, features, and value of product/service offerings continue to evolve even after the idea
has been enacted (e.g., modifying the digital analytic components in cars)
Most digital product designs remain somewhat incomplete and in a state of flux ->
continuous evolution of value proposition rather than executing a predefined opportunity (as
described in a business plan
Time (e.g., digital infrastructures like 3D printing speed up implementation and
experimentation!)
Better scalability (i.e., ability to rapidly enhance capabilities and performance at low cost) due
to digital infrastructures such as cloud computing and mobile networking
o Example: Airbnb, Amazon (from books to everything
, Less Predefinition in Entrepreneurial Agency
Traditional model:
Focus on predefined founder (or set of founders) who drives entrepreneurial idea (individual-
opportunity nexus)
Digital model:
Dynamic and often unexpected collection of actors with diverse goals and motives engage in
the entrepreneurial initiative.
o Example: digital platforms (e.g., SugarCRM, Open SYNC, etc.); digital infrastructure
(e.g., crowdsourcing and crowdfunding system
06 Take-away points
Less Bounded Processes and Outcomes: Digital technologies have disrupted traditional
boundaries. Entrepreneurial outcomes and processes are no longer rigidly defined.
Digitization allows for intentionally incomplete outcomes, where product features, scope, and
value continue to evolve even after market introduction.
Shift in Entrepreneurial Agency: The locus of entrepreneurial agency becomes less
predefined. Entrepreneurs now operate in a dynamic environment where spatial and
temporal boundaries of activities are more flexible. Digital technologies empower
entrepreneurs to navigate uncertainty with greater adaptability
Digital Entrepreneurship: Toward a Digital Technology Perspective of Entrepreneurship Satish
Nambisan (2017)
What is Nambisan actually trying to argue?
- Digital technologies fundamentally change entrepreneurship, so traditional entrepreneurship
theories are no longer sufficient on their own.
Everything in the paper revolves around two major claims.
Claim 1: Entrepreneurial outcomes and processes are less bounded
Traditionally:
Products had clear boundaries.
The entrepreneurial process had clear phases.
A business plan described a relatively fixed opportunity.
Digital technologies change this.
Because digital products are:
Reprogrammable
Recombinable
Open
they can continuously evolve after launch.
