Becoming one of the most valuable new venture in the world
A study on how such ventures arise
Final thesis, June 22nd, 2016 Name: Lisa Boschma
Student number: 11092963
Qualification: MSc in Business Administration – Entrepreneurship & Innovation Institution: University of Amsterdam
Supervisor: dr. Ileana Maris – de Bresser Second reader: dr. Wietze van der Aa
Statement of originality
This document is written by Student Lisa Boschma who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Table of contents Abstract ... 5 1. Introduction ... 6 2. Literature review ... 9 2.1 Nature of opportunities ... 9 2.2 Entrepreneurial approaches ... 14 2.3 Theoretical conclusion ... 19 3. Research method ... 22
3.1 Research approach, type, strategy and time dimension ... 22
3.2 Sampling ... 23
3.3 Data collection ... 24
3.4 Data analysis ... 25
3.5 Validity and reliability ... 26
4. Research results ... 29 4.1 Snapchat case ... 29 4.2 Uber case ... 32 4.3 Pinterest case ... 35 4.4 Airbnb case ... 39 4.5 Comparative analysis ... 42 4.5.1 Opportunity nature ... 42 4.5.2 Entrepreneurial ability... 42 4.5.3 Venture development ... 43 4.5.4 Prior knowledge ... 45 4.5.5 Social (network) ... 46 4.5.6 Personality ... 47 5. Discussion... 48 6. Conclusion ... 54 References ... 55 Appendices ... 59
Appendix A – Overview sources used ... 60
Appendix B – Codebook ... 62
Appendix C – Sources Uber ... 69
Appendix D – Sources Pinterest ... 86
Appendix E – Sources Airbnb ... 101
Appendix F – Sources Snapchat ... 125
Table of figures Table 2.1 Aspects exploitation versus exploration ... 14
Table 2.2 Aspects causation versus effectuation ... 18
Table 2.3 Aspects exploitation – causation versus exploration - effectuation ... 19
Table 2.4 Conceptual model ... 20
Table 3.1 Overview of cases selected ... 24
Table 3.2 Overview searched sources ... 25
Figure 5.1 Theoretical contribution ... 51
Table 3.3 Overview sources used ... 60
5 Abstract
How the most valuable new ventures in the world came to existence, is academically limited
supported. It is described that opportunities either are recognized or created, in that regard the
entrepreneurial approaches such as causation and effectuation explain how ventures are developed.
Scholars have established an unelaborated and empirically not well supported link between causation
and opportunity recognition (exploitation), and between effectuation and opportunity creation
(exploration). Secondary data is collected on four most valuable new ventures of the world to examine
the link between the theories and to understand how such ventures came to being. The results reveal
that regardless of the opportunity nature the ventures are explored-effectuated: the entrepreneur uses
its vision and personal interest and the ventures are developed in a flexible way. It is also found that
founders start to use causation over time if they do not know how to create a viable business. Still, the
findings reveal that at first general prior knowledge is enough to recognize or create an opportunity.
Furthermore, this study shows that the network is used to acquire more resources to develop the
venture. Lastly, the personality traits found match with exploration-effectuation which could explain
6 1. Introduction
The idea of Airbnb, founded in 2008, was to provide a sleeping place for people joining a conference
whilst hotels where fully booked. Their initial idea translated into building a platform for people that
can rent the available space in their homes to others. This developed further into a venture that is
today valued at approximately 24 billion dollars (Gallagher, 2015). Another example is Uber, founded
in 2008, with the initial idea to serve people with a taxi on demand and now valued at 62.5 billion
dollars (Effron, 2016; Feloni, 2014). Both Uber and Airbnb are considered as among the most
valuable startups in the world (Austin, Canipe & Slobin, 2015; Kim & Kosoff, 2015; Picchi, 2015). A
quick search reveals that there are many interviews, blogs and news articles which reveal how such
ventures are founded and developed. Yet, it could be interesting to examine the founding and
development of such valuable new ventures academically.
In the academic literature concerning entrepreneurship there is an ongoing debate on how
opportunities originate; they exist already versus they are created (Alvarez, Barney & Anderson,
2013; Shane, 2012). Creating opportunities could be more advantageous (Alvarez et al., 2013). It is
also stated that new ventures are based on an existing opportunity which is further created into a
venture, thus both exploitation and exploration (Shane, 2012; Ardichvili, Cardozo & Ray, 2003).
Therefore, the question remains whether the most valuable new ventures in the world are founded as
existing opportunities that are exploited or created opportunities that are explored. Besides,
high-potential opportunities are in need of further research: “we have not explained much about the process
of identifying and exploiting high-potential opportunities, given their rarity and the emphasis of
researchers on collecting representative data” (Shane, 2012, p. 14). It is unclear if Airbnb or Uber are based on what is regarded as a ‘high-potential opportunity’, but at least the opportunity translated in one of the most valuable new ventures in the world. Thus, examining such ventures can reveal the
underlying nature of an opportunity that turned out to have high potential.
In addition, Alvarez et al. (2013) argue that it is necessary to link the nature of opportunities with the
theory on new ventures. This is supported by Shane (2012), who argues that the theory of opportunity
7 ‘entrepreneurial approaches’ does focus on how new ventures come to existence. In that regard Sarasvathy (2001) does argue that there is a clear link between exploration-effectuation and
exploitation-causation, but it is not discussed or elaborated why this is the case. Also Fisher (2012)
describes in a literature review that opportunity recognition is the starting point of causation without
using any arguments. This indicates that certain entrepreneurial approaches link with certain
opportunity natures, but further academic and empirical support is needed to ground this link.
To conclude, the aim of this study is to examine how the most valuable new ventures of the world are
founded and developed. Therefore, the link between the theory of opportunity natures and theory of
entrepreneurial approaches is theoretically examined and empirically tested in this study. Establishing
a clear link is useful for theory development. Firstly, based on that it can be examined how new
ventures come to existence (opportunity nature) by means of exploitation or exploration, and are
developed into a venture (entrepreneurial approaches) by means of effectuation or causation. Thus,
this link integrates the theory of opportunity natures specifically with new venture creation. Secondly,
the assumptions of other scholars can be tested: that exploitation links with causation and that
exploration links with effectuation. Additionally, this link reveals how high potential ventures come to
existence. Thus, the objectives of this study are as follows:
To examine academically and empirically how the most valuable new ventures of the world arose. To develop the theory on new ventures by linking the theory of entrepreneurial approaches with
the theory of opportunity natures.
These objectives are translated into the following research question and sub-questions:
How did the most valuable new ventures in the world arise?
1. What are the aspects of opportunity exploration and exploitation?
2. What are the aspects of entrepreneurial approaches?
3. How do the entrepreneurial approaches link with the opportunity natures?
4. What aspects of opportunity natures and entrepreneurial approaches are found in the most
8 5. What does a case comparison reveal about the opportunity natures and entrepreneurial
approaches of the most valuable new ventures of the world?
Conducting this study is valuable, because other scholars have combined theories before without
explanation or empirical support. Therefore, in this study the aspects of each theory are first
elaborated separately which is used to discuss the possible links. In addition, empirical evidence is
used to examine which theories hold in each most valuable new venture of the world. Thus, this study
develops the link between theories from the literature and empirical evidence. The outcome of this
study therefore contributes to the theory of founding and developing new ventures. This could serve
as a guide for entrepreneurs to start and develop their own ventures. Moreover, schools may use this
to teach their students on entrepreneurship.
The following chapter is the literature review in which the aspects of opportunity exploitation versus
exploration and causation versus effectuation are discussed. The literature review concludes with a
discussion on the link between opportunity natures and entrepreneurial approaches. The next chapter
is about the research methodology: the approach, sampling, data collection, data analysis and the
validity and reliability. Due to several reasons it is difficult to interview the founders of the most
valuable new ventures of the world (e.g. location, access to venture, agenda of founders et cetera).
Therefore, it is chosen to use secondary data which is further explained in the research methodology
chapter. In chapter four the results of the study are described with an emphasis on opportunity natures
and entrepreneurial approaches that became apparent in each case. Furthermore, the cases are also
compared based on the aspects of the opportunity natures and entrepreneurial approaches. The last
chapters of this thesis are the discussion which is about the research results and implications, and the
9 2. Literature review
In the first two sections of this review the aspects of opportunity natures and those of entrepreneurial
approaches are discussed. Based on that, in the conclusion it is argued how the opportunity natures
link with the entrepreneurial approaches by comparing the aspects of both.
2.1 Nature of opportunities
Scholars such as Alvarez et al. (2013) and Shane (2012), distinguish between different types of
opportunities. In this study the focus is on an opportunity that ultimately becomes a new venture.
Alvarez et al. (2013) wrote a literature review on the distinct processes of general opportunities,
namely the opportunity discovery - about recognizing opportunities and the creation process - about
created opportunities. They concluded that such a process view on entrepreneurship makes it clear
how opportunities are really formed, instead of relying on a “superman-like entrepreneur with
extraordinary vision” (Alvarez et al., 2013, p. 313). The study of Alvarez et al. (2013) is used as a starting point for this section, because various aspects are discussed and it is one of the more recent
articles on opportunity exploitation and exploration.
Before discussing various aspects that belong to exploitation and exploration, first a general
description of both natures would be helpful. Generally, exploitation is explained by Alvarez et al.
(2013) as opportunities created by the market, recognized by entrepreneurs and exploited.
Opportunities in that case come from existing markets or industries, thus opportunities are recognized
and exploited (Alvarez et al., 2013). Vaghely and Julien (2010) in their literature review call this
phenomenon endogenous: existing within a certain framework. Exploration is generally explained by
Alvarez et al. (2013) as entrepreneurs creating opportunities by action, thus exploring. This is more
regarded as: “iterative, inductive, and intuitive decision making” (Alvarez et al., 2013, p. 311). In that case it is argued that opportunities do not exist beforehand, thus an opportunity exists because an
entrepreneur creates (explores) it (Alvarez et al., 2013). Opportunity exploration is about creating new
knowledge and eventually new markets (Alvarez et al., 2013). This is supported by Vaghely and
Julien (2010), who describe exploration as exogenous: the opportunity does not exist within a certain
10 Exploitation of opportunities
Opportunity exploitation depends on the entrepreneur: is he able to spot it? In this case both existing
market and industry knowledge, and experience make it possible to anticipate on the outcome of the
opportunity and to reduce the risk (Alvarez et al., 2013; Vaghely & Julien, 2010). Since the market
exists, data can be collected on customers or competitors in order to find shortcomings (Alvarez et al.,
2013). Ardichvili et al. (2003) also propose with their literature review that prior knowledge on
markets, customers and unfulfilled needs contributes to the chance of successfully recognizing an
opportunity. This is supported by the literature review of Baron (2006) too: prior knowledge on
markets and industries helps to recognize opportunities. Baron (2006) further argues that opportunities
may not be recognized in an instance, instead this depends on the entrepreneur’s ability to establish
links between information found on trends, industries and customers et cetera. Therefore, prior
knowledge is needed to spot opportunities and the ability to spot opportunities depends on linking the
right knowledge (Baron, 2006).
Moreover, Shane (2000) found empirical evidence that entrepreneurs in the 3D printing industry all
had relevant work experience or an educational background and knew something about either the
market, industry or customer problems. However, it remains unclear why some entrepreneurs are able
to recognize the opportunity by using their relevant prior knowledge, while others are not. Moreover,
results from the 3D printing industry may not apply to other industries (Shane, 2000). Still, as
described support is found that the ability to spot opportunities and prior knowledge are important for
exploitation. Furthermore, it is supported by various scholars that the required prior knowledge is
extracted from existing markets, industries or customer problems.
In addition, it is proposed that social aspects also play a role in opportunity exploitation. Some years
ago it was proposed in the literature study of Ardichvili et al. (2003) that many social contacts
contribute to the chance of successfully recognizing opportunities. In another literature study it is
concluded that collaboration and a social network are essential in opportunity exploitation by means
of financial and human resources (Klein, 2008). Therefore, it can be argued that social interaction
11 Exploration of opportunities
In contrast, the process of exploring opportunities starts with the individual entrepreneur and his
viewpoints, resources and competences (Alvarez, et al., 2013; Vaghely & Julien, 2010). As Klein
(2008) in his literature study argues: the actions of entrepreneurs are biased by their perceptions.
Furthermore, Cornelissen (2013) puts a real emphasis on the vision of entrepreneurs based on
studying the autobiographies of Van Gogh and Steve Jobs: vision influences what is created. Another
example highlights the influence of Steve Jobs his personal interests for developing the iPod: “it also came about because of Steve Job’s fanatic love for music” (Cornelissen, 2013, p. 706). In addition to
the individual entrepreneur it is also important to learn from mistakes made by means of
‘trial-and-error’ in opportunity exploration (Alvarez et al., 2013). The importance of trial-and-error is also supported by the empirical research of Vaghely & Julien (2010) in small and medium sized ventures
in various sectors and with the empirical study of Sanz-Velasco (2006) in 20 Swedish mobile internet
ventures. Moreover, the research of Cornelissen (2013) reveals that Van Gogh and Steve Jobs also
failed a few times before becoming successful. This indicates that learning by doing does exist in
practice and is not limited to literature reviews or specific sectors. It is further regarded that there is an
offer focus at first which switches later to the customer (Sanz-Velasco, 2006). Alvarez et al. (2013)
elaborate on this point by stating that in a later stage customer feedback may be helpful for product
improvements. It can be concluded that the entrepreneur is able to explore an opportunity based on: a
vision, personal interests, learning by doing and being more product focused at first.
To reduce risk in exploration Alvarez et al. (2013) propose by referring to Sarasvathy (2001) that the
focus is on acceptable loss instead of the total cost. However, in doing so Alvarez et al. (2013)
directly links exploration with effectuation without further argumentation and references. The links
between the nature of opportunities and entrepreneurial approaches are argued in section 2.3 of this
thesis. Therefore, the aspect of acceptable loss is not considered as an aspect of exploration yet.
Exploration and exploitation of opportunities: common factors
As elaborated earlier in this section, it can be argued that prior knowledge plays a role in opportunity
12 as well. It is good to have a mix of divers and specific knowledge in one team: too much of specific
knowledge could blind sight entrepreneurs, whilst the use of diverse knowledge can be helpful to
innovate (Alvarez et al., 2013).
Based on an empirical study on the founders and managing directors of 20 Swedish customer internet
ventures it was found that even though prior knowledge does play a role in both processes, also
opportunism has a role in exploration and exploitation. Individuals were able to find or create an
opportunity without having much relevant experience (Sanz-Velasco, 2006). However, this
conclusion is derived from an industry in which many changes occurred at the time of the study
(Sanz-Velasco, 2006). Opportunism could be only in affect when major changes happen in an
industry, but this is rejected by Shane (2000) based on a case study of firms in 3D printing. Shane
(2000) proposed that it is not easy to spot opportunities in time of technological change, and that
opportunity recognition is enhanced by prior knowledge. Another study revealed also that prior
experience has the advantage of identifying innovative opportunities, but that opportunities can be
identified also with little prior knowledge (Shepherd & DeTienne, 2005). This study was held under
MBA students whom were told to find a problem and to propose solutions for that (Shepherd &
DeTienne, 2005), thus maybe these students could not identify opportunities without having the task
to do so. Still, it can be concluded that opportunities can be identified or created with little prior
knowledge (Sanz-Velasco, 2006; Shepherd & DeTienne, 2005).
Some years earlier it was proposed, based on a literature study, that the ability of entrepreneurs to spot
an opportunity is equally important for opportunity recognition and development (Ardichvili et al.,
2003). The assumption of these scholars is based on the perspective that new ventures are mainly
developed and partly recognized: “some development activity may occur before an opportunity is perceived (recognized) by others not involved in the initial development” (Ardichvili et al., 2003, p.
113). This proposition is supported by the literature review of Shane (2012): new ventures may be
based on opportunities that exist already, but these are explored. According to Alvarez et al. (2013)
13 individual recognizing someone’s opportunity and constituting a venture. Therefore, the whole opportunity is available in the market or industry apart from the venture.
Even though Alvarez et al. (2013) did not focus their study specifically on new ventures, their
viewpoint is supported by others. For example the literature review of Davidsson (2015) reveals that:
the opportunity could either be developed by the creation of a venture (exploration) or the opportunity
is the starting point of creating the venture (exploitation). Furthermore, Ramoglou and Zyglidopoulus
(2015) also argue that new ventures could be the result of an entrepreneur capable of exploiting an
existing opportunity. Therefore, it is not necessarily true that ventures are created by only exploration
or both exploration and exploitation as proposed by Ardichvili et al. (2003) and Shane (2012). Thus,
spotting an opportunity does not necessarily apply to the founding of all ventures.
Furthermore, Vaghely and Julien (2010) found in small and medium sized enterprises that social
interaction is important for information processing in both exploitation and exploration. It is regarded
that for decision making it is important to socially interact with providers of information and those
that have information on the organization and environment. This also indicates that extra resources are
helpful in opportunity exploration and exploitation. However, the findings of Vaghely and Julien
(2010) are based on a mix of various indicators such as ‘success stories’ and ‘handling market
complaints’ to identify if individuals processed information more exploitative or explorative. Thus, social interaction could be also an outcome over all five indicators whilst it only applies to either
exploitation or exploration. Still, as argued in this paragraph support is found that the social aspect
applies to both exploitation (Ardichvili et al., 2003; Klein, 2008) and exploration (Alvarez et al.,
2013) by means of getting the right resources.
Theoretical insights obtained
Different aspects are discussed for exploitation and exploration. To conclude the theoretical insights
on exploitation and exploration are summarized in Table 2.1. The aspects highlighted in the table
14 Furthermore, one of the aims of this research is to examine if the most valuable new ventures in the
world are a case of exploitation or exploration, because empirical evidence is limited as revealed in
this paragraph too. It is possible that the empirical research of this study shows that the most valuable
new ventures are founded on both exploitation and exploration, but it could also be just exploration.
Therefore, exploration and exploitation are regarded as distinct until empirical research proves
otherwise. The aspects listed in Table 2.1 are used to empirically examine whether the aspects of
exploitation and exploration played a role in starting the most valuable new ventures of the world. In
the empirical research the focus is first on the nature of opportunities: is it a recognized or a created
opportunity? Furthermore, empirical evidence is sought on the ability to spot and to create
opportunities. Lastly, the social network and prior knowledge of entrepreneurs are examined.
Table 2.1 Aspects exploitation versus exploration
Exploitation aspects Exploration aspects *Opportunities exist already and can be recognized from
an existing market.
*Ability to spot opportunities (based on prior knowledge generated from existing markets or industries and customer problems).
*Prior knowledge
*Social networks (getting more resources).
*Opportunities do not exist and are created (taking action and creating new knowledge and markets).
*Ability to create opportunities: vision, personal interests, learning by doing, offer focused (incorporate customer feedback in later stage).
*Prior knowledge
*Social networks (getting more resources).
Even though there are clear differences between exploitation and exploration, it is unclear how these
aspects are used in new ventures. For example: how can the development of created opportunities into
new ventures be examined? Also the social aspect and prior knowledge seem similar for both natures.
Thus, it is important to further extent or elaborate on the aspects listed in Table 2.1. A more detailed
framework can be established based on the entrepreneurial approaches which specifically look at new
venture development and are discussed in the next paragraph.
2.2 Entrepreneurial approaches
Support for opportunity recognition can be found in the theory of causation. Sarasvathy (2001) and
15 The same holds for Sarasvathy (2001) arguing that effectuation shows a link with exploration. Thus,
in this section the aspects of effectuation and causation are discussed which in the next paragraph can
be compared with the aspects of opportunity natures.
Causation
Sarasvathy (2001) used thought experiments to establish that causation is starting from the existing
market: a restaurant could be started by analyzing the market and customers to find a valuable
opportunity. Therefore, it is argued that causation relies on planning and analysis: competitive
analysis, market research and planning ahead for the future (Sarasvathy, 2001; Fisher, 2012).
Chandler, DeTienne, McKelvie and Mumford (2011) support that causation is about marketing
planning: the market is segmented and targeted; and marketing strategies are created. This is further
detailed by the thought experiment of Sarasvathy (2001): the end goal to open a restaurant is further
shaped in terms of a menu or the decoration that does appeal to the market segment and the customer
needs. In addition, Fisher (2012) for example found that ventures in case of causation use business
planning: write business plans, do scenario mapping and estimate the financials for the future.
Chandler et al. (2011) support this by mentioning production plans, objectives and competition
analysis. Furthermore, financial planning is supported by means of projecting the expected return
(Sarasvathy, 2001; Fisher, 2012). Therefore, it is about pursuing an idea by making use of analysis
and by selecting the means to achieve the end goal (Sarasvathy, 2001; Fisher, 2012). This also
indicates the aspect ‘prediction’ as argued by Sarasvathy (2001), because planning and analysis are
used to project the future.
Lastly, the knowledge of an entrepreneur is considered as essential (Sarasvathy, 2001). However, this
aspect is not discussed in the literature review nor incorporated in the empirical research of Fisher
(2012) and Chandler et al. (2011). Overall, it can be concluded that causation is about using business
planning, marketing planning and selecting the means to pursue the end goal. Therefore, the future
16 Effectuation
The main starting point of effectuation is the entrepreneur and its resources: “who they are, what they know” (Sarasvathy, 2001, p. 249). Even though it is about what the entrepreneurs know, effectuation
is also described as not being about the use of: “preexisting knowledge, such as expertise in a
particular new technology” (Sarasvathy, 2001, p. 252). This makes it questionable what role prior knowledge plays in effectuation. Also personal characteristics are described as influencing the
creation process. However, it is not described what personality traits make a difference in
effectuation. Lastly, the vision of an entrepreneur is considered as important to create an opportunity
by means of imagination and aspiration (Sarasvathy, 2001). Chandler et al. (2011) support that a
vision is important, still this vision should not be treated as one definite end goal to pursue.
Effectuation is further explained as experimenting and learning by doing: to deal with failures and
learn to improve are more important than trying not to fail at all (Sarasvathy, 2001). Chandler et al.
(2011) conducted interviews and surveys to identify what entrepreneurs indicated as important for
effectuation and found that experimentation is a valid construct. The result of their research is that
experimentation can be measured by asking if various products and business models where used, if
multiple approaches for business models were tried, and if the outcome was imagined or totally
different than expected (Chandler et al., 2011). In addition, the measurement ‘flexibility’ validated by
Chandler et al. (2011) also indicates that it is not a planned process: stay flexible, grow the business
through arising opportunities and use the resources available. This fits with effectuation as explained
by Sarasvathy (2001): there is no clear end goal, but instead the focus is on the available resources
and experimentation. Therefore, effectuation can be regarded as a flexible process.
Moreover, support is found in the results of Fisher (2012): long term plans, market segmentation and
marketing plans are not made in ventures that mainly apply effectuation and not causation. In
accordance with that is the thought experiment of Sarasvathy (2001): a restaurant is opened and after
that the first users set the target market from which insights are used to develop the product.
Therefore, effectuation is about being product focused at first. It is also found that project planning
17 intermixed (Fisher, 2012). However, Fisher (2012) did not consider that maybe project planning does
happen in effectuation and is a new insight for theory building. Project planning would fit with the
other aspects of effectuation, because trying another approach could be planned for example or maybe
deadlines are set to evaluate an experiment. It is at least not about long term future plans, because
these would not fit with having a flexibility approach.
In addition, it is argued that the principle “affordable loss or acceptable risk” (Sarasvathy, 2001, p.
251) applies in the case of effectuation. The empirical results of Fisher (2012) show that there is a
weaker link with this principle for ventures that apply causation. Chandler et al. (2011) also found
empirical support that effectuation is about using the resources available and not taking such a
financial risk that damages the venture or that someone wants to take. In accordance with effectuation
as being about experimentation and not having a clear end goal, it can be concluded that effectuation
is not focused on future planning. This is in accordance with the initial product focus, because the
market, marketing and future planning are initially not paid attention to. Still, project planning may
apply to effectuation as argued before.
Causation and effectuation: common aspects
A similarity between effectuation and causation is found by Chandler et al. (2011), who argue that the
social aspect in general applies to both causation and effectuation. This argument is based on
explorative interviews with entrepreneurs to identify constructs which later on where tested in a
survey conducted under entrepreneurs. According to Sarasvathy (2001) the social aspect of
effectuation is about establishing partnerships and arranging pre-commitments, but Chandler et al.
(2011) found that the same yields for causation. Therefore, Chandler et al. (2011) think that for
causation the social aspect is used to get the necessary resources for implementation. Also Fisher
(2012) asserts that in causation the resources are gathered to achieve the end goal. Yet, these specific
statements about the use of the social aspect are not empirically supported or based on academic
literature. Fisher (2012) also concludes that partners can give valuable feedback and spread a good
word for the business, but that limited resources do enhance creativity better. These statements are
18 derived from the empirical evidence (Fisher, 2012). Even though there is an indication that both
effectuation and causation incorporate partnerships and arrange pre-commitments, it remains unclear
what the difference is for effectuation and causation in regard to this social aspect. At least, the social
aspect is important for both causation and effectuation. The aim of this research is to link the theory of
opportunity natures and entrepreneurial approaches, and therefore both effectuation and causation are
regarded as distinct. Finally, Sarasvathy (2001) discussed prior knowledge as important for both
causation and effectuation as mentioned earlier. However, this is not elaborated nor supported by
other scholars.
Theoretical insights obtained
The various aspects for effectuation and causation that are discussed and supported throughout this
section are summarized in Table 2.2. In this study, empirical evidence is sought to find out what
entrepreneurial approach is applied in developing the world’s most valuable new ventures. The data
analysis is focused on planned venture development and its aspects for causation. For effectuation the
data analysis is focused on: the ability of the entrepreneur and on flexible venture development by
means of the aspects indicated in Table 2.2. Lastly, the social aspect and prior knowledge are lacking
a clear definition or are limited supported by other scholars. These aspects are still used to examine
what role they played in the venture development. It is also unclear why personality matters in
effectuation, thus it is examined which traits appear in each case.
Table 2.2 Aspects causation versus effectuation
Causation Effectuation
*Planned venture development: business planning (business plan, scenario mapping, financials – project returns, analyze competition), market planning (market segmentation & market research), select means (pursue the initial opportunity by selecting the means that will fulfill the end goal).
*Social (partnerships arranging pre-commitments). *Prior knowledge
*Ability individual entrepreneur (personality, vision). *Flexible venture development: experimenting & learning by doing, no clear end goal, use available resources, use arising opportunities, balancing risk, product focus first (initially no long term, market segmentation, market research and marketing planning).
*Social (partnerships arranging pre-commitments). *Prior knowledge
19 2.3 Theoretical conclusion
The findings of section 2.1 on opportunity natures and section 2.2 are merged together into Table 2.3.
Taken together it can be theoretically concluded that exploitation links with causation and that
exploration shows a connection with effectuation. Therefore, the aspects of both theories can be used
as constructs to examine empirically how the most valuable new ventures of the world arose. The link
between the theories is further elaborated in this theoretical conclusion.
Table 2.3 Aspects exploitation – causation versus exploration - effectuation
Exploitation aspects Exploration aspects *Opportunities exist already and can be recognized from an
existing market.
*Ability to spot opportunities (based on prior knowledge generated from existing markets or industries and customer problems).
*Prior knowledge
*Social networks (getting more resources).
*Opportunities do not exist and are created (taking action and creating new knowledge and markets).
*Ability to create opportunities: vision, personal interests, learning by doing, offer focused (incorporate customer feedback in later stage).
*Prior knowledge
*Social networks (getting more resources).
Causation Effectuation
*Planned venture development: business planning (business plan, scenario mapping, financials - project returns, analyze competition), market planning (market segmentation & market research), select means (pursue the initial opportunity by selecting the means that will fulfill the end goal).
*Social (partnerships arranging pre-commitments). *Prior knowledge
*Ability individual entrepreneur (personality, vision). *Flexible venture development: experimenting & learning by doing, no clear end goal, use available resources, use arising opportunities, balancing risk, product focus first (initially no long term, market segmentation, market research and marketing planning).
*Social (partnerships arranging pre-commitments). *Prior knowledge
Exploitation and causation link on various points. For example planned venture development fits with
exploitation as in ‘prior knowledge generated from existing markets or industries and customer problems’. Furthermore, the ‘opportunities exist’ of exploitation could link with causation as in ‘pursue the initial opportunity’. There are also clear links between exploration and effectuation. For example the abilities of the individual entrepreneur are important in both theories: vision even
overlaps. Also ‘learning by doing’ is similar, and ‘opportunities are created’ is in line with a flexible
20 first’. This indicates that both effectuation and exploration are not concerned about the customer initially, but focus more on the product as argued. Table 2.4 contains the conceptual model which
integrates the theories and is used in this study to examine the empirical evidence.
Table 2.4 Conceptual model
Aspects Exploitation - Causation Exploration - Effectuation Nature of opportunity Opportunities exist already and can be
recognized from an existing market.
Opportunities are created (taking action and creating new knowledge and markets). Entrepreneurial ability Prior knowledge generated from existing markets
or industries and customer problems.
Vision, personal interests and personality.
Venture development Planned: business planning (business plan, scenario mapping, financials - project returns, analyze competition), market planning (market segmentation, market research), select means (pursue the initial opportunity by selecting the means that will fulfill the end goal).
Flexible: experimenting & learning by doing, no clear end goal, use available resources, use arising opportunities, balancing risk, product focus first (initially no long term, market segmentation, market research and marketing planning).
Prior knowledge Unspecified Unspecified Social (network) Getting more resources, partnerships arranging
pre-commitments.
Getting more resources, partnerships arranging pre-commitments.
In this study the first aim is to find out which entrepreneurial approaches and opportunity natures the
entrepreneurs used to start and develop the most valuable new ventures of the world. Secondly,
empirical evidence is sought for the link between the entrepreneurial approaches and opportunity
natures as displayed in Table 2.4. Thus, the focus is on the way the entrepreneur(s) got about the
opportunity and used entrepreneurial approaches to start and develop such a valuable venture.
In addition to Table 2.4, it is found that prior knowledge may not apply in the case of effectuation
(Sarasvathy, 2001), whilst it is also highlighted that “what they know” Sarasvathy (2001, p. 249) as entrepreneurs is important. As argued in section 2.1, prior knowledge does apply in the case of
opportunity exploration which is however not elaborated in the literature. Alvarez et al. (2013) argued
that diverse knowledge is more important than specific knowledge, because specific knowledge blind
sights entrepreneurs for opportunities (Alvarez et al., 2013). Therefore, this could imply that
knowledge in a technology could be too specific, whilst what entrepreneurs know in general is more
21 exploration and exploitation which was hard to find in section 2.1: exploitation and causation could
rely more on market and industry specific knowledge (Sarasvathy, 2001) and diverse knowledge may
fit better with effectuation and exploration. It can be at least theoretically concluded that prior
knowledge does play a role in both opportunity natures and entrepreneurial approaches. In this study,
it is empirically examined what kind of prior knowledge applies in starting and developing the most
valuable new ventures of the world.
The social aspect mentioned in Table 2.3 and 2.4 applies to both exploitation-causation and
exploration-effectuation. Still, there is no clear difference. For exploitation and exploration it is
already argued that the social aspect is used to get the necessary resources. For causation and
effectuation the main purpose of the social aspect is argued as establishing partnerships and arranging
pre-commitments. As argued in section 2.2 there is an indication that the social aspect is used in
another way: causation using partnerships to get necessary resources for implementation plans
(Fisher, 2012); and effectuation using partnerships that contribute to the establishment of the venture
(Sarasvathy, 2001). However, it cannot be asserted that this it true due to a lack of empirical evidence.
It is at least theoretically supported that the social aspect is relevant for both opportunity natures and
entrepreneurial approaches. Therefore, the kind of social networks that were apparent in the most
valuable new ventures in the world are empirically examined in this study.
Lastly, as indicated before the personality aspect under the entrepreneurial ability of effectuation and
exploration is not elaborated in the current literature. Thus, in this study, data is collected to examine
what role personality traits played in starting and developing the most valuable new ventures of the
22 3. Research method
In this chapter the research method is described. First, the approach, type, strategy and time dimension
are discussed. Furthermore, the data collection method is elaborated in section 3.3 and in section 3.4 it
is described how the data is analyzed. Lastly, the validity and reliability of this research are discussed.
3.1 Research approach, type, strategy and time dimension
The aims of this study are to academically and empirically find support on how the most valuable new
ventures came to existence and to develop the theory on new ventures by linking opportunity natures
with entrepreneurial approaches. Empirical evidence on the link between the theories of opportunity
natures and entrepreneurial approaches is limited. Also assumptions are made on how new ventures
arise in the opportunity nature theory as explained in the introduction, whilst the opportunity natures
are generally applicable to any opportunity and not specifically to venture opportunities. Thus, there is
a need to further develop the theory on how new ventures come to existence. The aspects highlighted
in Table 2.4 (literature review) are used as constructs to examine this and therefore this study is
deductive (Saunders, Lewis, Thornhill, Booij & Verckens, 2011). However, the following constructs
appeared to overlap across the theories and - or were not well elaborated: prior knowledge, personality
and social (network). Thus, these constructs are further developed based on the data collected which
also makes this study inductive. Besides, an exploratory type of study is chosen, because the focus is
on getting new insights and to get a better understanding on how the most valuable new ventures of
the world came to existence (Saunders et al., 2011).
In this case it is studied how ventures arose, thus the ventures do exist already and it is about
examining what happened in the past instead of following the ventures from the initial start.
Therefore, activities or events that made a difference may not be reported or paid attention to in
secondary data. Still, it is possible to find out how the ventures were founded and developed. The
development over time indicates that this study is longitudinal (Saunders et al., 2011).
Furthermore, case study research is used which is suitable to build theories (Eisenhardt, 1989) and for
23 exploratory type of this study. Case study research is also focused on events in a real-life context that
happen uncontrolled (Yin, 2014; Saunders et al., 2011) which fits with examining how new ventures
come to existence. This case study is holistic, because the focus is on the venture as unit of analysis
(Yin, 2014; Saunders et al., 2011). Furthermore, a multiple case study is used by means of focusing
on different ventures that are considered as the most valuable in the world (Yin, 2014; Saunders et al.,
2011). A multiple case study makes it possible to generalize over theory, because one venture can
indicate a finding which might be different for another venture (Yin, 2014). Thus, theory can be
developed by examining multiple cases which are further detailed in the next section.
3.2 Sampling
In order to study the cases thoroughly it is important to use a small sample of approximately five
cases (Gerring, 2007: Yin, 2014). For theory building cases should be selected that contribute to
extending or challenging the theory (Eisenhardt, 1989), thus cases are often selected because of a
specific purpose (Saunders et al., 2011). Therefore, purposive sampling is also used in this study.
The unit of analysis under study is a new venture which is considered as the most valuable in the
world. These new ventures are ranked by their value by Austin et al. (2015) and Kim and Kosoff
(2015). The valuation of these ventures is used to select those with the highest value. Also ventures
older than ten years are not selected, because this would create a gap of a few years with other new
ventures. Of the first highest valued new ventures of the world, three cases appeared to have things in
common which were not shared by the fourth one. For example the three cases where all founded in
the United States and did not have a tangible product. It could be of influence that one venture was
founded outside of the United States: other culture, government regulations et cetera. Furthermore, the
outlier also has a phone as a product which is tangible. Therefore, it is decided to focus on a more
homogenous sample which can be studied in depth and makes it possible to identify even small
variations (Saunders et al., 2011). Based on the criteria discussed, four cases could be selected from
Austin et al. (2015) and Kim and Kosoff (2015). Table 3.1 contains an overview of the cases that are
24 Table 3.1 Overview of cases selected
Venture Uber Airbnb Snapchat Pinterest Value1 $51 billion $25.5 billion $16 billion $11 billion
Equity funding2 $7.4 billion $2.3 billion $1.3 billion $1.3 billion
Founded3 2008 2008 2011 2008
Founders3 Travis Kalanick
Garrett Camp Joe Gebbia Brian Chesky Nathan Blecharzyk Evan Spiegel Bobby Murphy Ben Silbermann Evan Sharp Paul Sciarra Business3 Platform for
taxi services Platform to rent sleeping places Photo sharing app Photo sharing network Sector3 Transport Travel Mobile Social Media
Founded in3 US, New York US, California US, California US, California 1(Kim & Kosoff, 2015; Austin et al., 2015) 2(Austin et al., 2015)
3(Uber–www.uber.com, Airbnb–www.airbnb.nl, Snapchat–www.snapchat.com, Pinterest–www.pinterest.com)
3.3 Data collection
In order to get information on the most valuable new ventures of the world, secondary data is used.
Firstly, it is difficult to get in contact with the founders of such ventures. Secondly, there are already a
number of interviews and articles available that are about the founding and development of these
ventures. This makes it suitable to use secondary data (Saunders et al., 2011). The data obtained is
also available publicly which limits ethical issues and accessibility problems (Saunders et al., 2011).
Firstly, specific sources were chosen to search for data as indicated in Table 3.2 on the next page.
Data was found by using the following search words: ‘specific venture name’ history, ‘specific venture name’ founding, ‘specific name of an entrepreneur’. For each venture the LinkedIn profiles of the two or three cofounders were used, except for the LinkedIn of Bobby Murphy, cofounder of
Snapchat, which was inaccessible. Additionally, four to five other sources were collected for each
venture. Two sources for each venture were chosen for analysis, because most constructs of the
theoretical framework were apparent in these sources. The omitted sources discussed the same
founding and developing story, but were less elaborated as the selected ones. Furthermore, for each
venture one source is chosen that describes the first years of starting the venture and one that is from a
few years after the launch describing specific venture developments. The sources used per case are
listed in Table 3.3, Appendix A. In accordance with Yin (2014) and Saunders et al. (2011) the
following aspects are also detailed in Table 3.3: the relevance, source, purpose, research method and
25 Table 3.2 Overview searched sources
Sources Business magazines Youtube.com LinkedIn Venture website Type Articles Fortune
Articles Forbes
Articles Business Insider Articles Bloomberg
Interviews with or presentation of founders
Resume founders Blog Text
Owner Time.inc (Fortune)
Forbes Media LLC (Forbes) Axel Springer SE (Business Insider) Bloomberg (Bloomberg)
Depends Founders Ventures
There are articles of business magazines and presentations of founders used that address the founding
and development of the ventures under study, thus touch upon the constructs established. LinkedIn
profiles are used to examine the prior knowledge of the entrepreneurs. Therefore, these sources are
regarded as relevant. The interviews conducted by business magazines are summarized in articles,
thus the method used and questions asked are not always transparent. In addition, the articles can be
influenced by the perspectives or objectives of the owners or writers. For example most magazines are
owned by another party which may have certain interests that bias the information. In addition, a
LinkedIn profile may not contain all experience and knowledge of a founder and the founding story
on the venture website may be more of a selling story. The interviews and presentations on YouTube
can be conducted or held for a specific purpose. For example a presentation could be given to increase
sales or to educate students. At least, these are not summarized or processed yet which leaves less
room for biased objectives or perspectives (Saunders et al., 2011). In order to ensure the objectivity
and validity of the data, multiple evidence and sources are used to triangulate a finding (Saunders et
al., 2011; Yin, 2014), as evidenced in Table 3.3, Appendix A.
3.4 Data analysis
In order to build theories it is important to start with collecting and analyzing data at the same time
(Eisenhardt, 1989). The researcher should not be limited by things that seem important, because new
insights can be used as aspects for data analysis (Eisenhardt, 1989). Furthermore, this also reveals if
enough secondary data is gathered to answer the research questions. Therefore, open data coding is
already started in the data collection phase. The data collected is first open coded; this means that text
26 market demand, business planning, vision, product focus first and education. The next step is to axial
code the data which is used to cluster and structure the open codes (Boeije, 2010). Examples of axial
codes are: existing opportunity nature, entrepreneurial ability and prior knowledge. Finally, selective
coding is applied to develop theories and assumptions (Boeije, 2010). The selective codes are used to
indicate if the data is about exploitation-causation or exploration-effectuation, or if it was about a
construct that was common across the theories. In order to keep the coding process transparent a
codebook is used which is displayed in Table 3.4, Appendix B.
Firstly, a within-case analysis was conducted which is focused on describing the cases separately.
This further enhances the process of comparing the cases eventually and makes it possible to generate
more case specific insights (Eisenhardt, 1989). Each case is summarized separately by describing
what constructs where found in relation to the data (Yin, 2014; Eisenhardt, 1989). In this study for
example ‘product focus first’ and ‘vision’ are constructs that can be used to examine the cases on.
Secondly, the findings of the cases are compared in a cross-case analysis with a focus on differences
and similarities regarding the concepts which can reveal new unanticipated insights. A case
comparison also makes it possible to examine the insights found further (Eisenhardt, 1989; Yin,
2014). These within-case and cross-case analysis are used to examine how the ventures arose. From
this analysis it is argued how the most valuable new ventures came to existence which could be linked
with either exploitation-causation or exploration-effectuation or a mixture thereof.
3.5 Validity and reliability
It is important that similar conclusions can be reached if the same study is repeated, because this
contributes to the reliability of the research (Yin, 2014). The reliability is enhanced by providing a
clear link between the theory and the findings, and to provide an oversight on the data analysis
process (Yin, 2014: Saunders et al., 2011). Firstly, the main constructs used to examine the data are
derived from the literature review. This makes it possible to link the eventual findings and conclusion
with the theory. Secondly, a database and codebook are used to keep an oversight and also make the
data analysis transparent. The codebook explains the coding process and thus it is clarified how the
27 cases, to analyzing individual cases and eventually comparing cases. The within-case and cross-case
analyses are used to make transparent how theory is developed from empirical research, which
enhances the reliability of this research (Eisenhardt, 1989). A limitation of this study is that observer
error cannot be avoided, because with the use of secondary data the data collection method cannot be
controlled (Saunders et al., 2011). Furthermore, the findings cannot be verified with the ventures due
to the reliance on secondary data which results in observer bias (Saunders et al., 2011).
Furthermore, it is important to clearly show how constructs are built for construct validity (Yin,
2014). Construct validity is important by means of setting up the right measurements for data
collection (Yin, 2014; Eisenhardt, 1989). In the literature review the aspects of opportunity natures
and entrepreneurial approaches are based on a triangulation of academic articles which reduces biased
perceptions and contributes to the construct validity (Eisenhardt, 1989). The cases of this study are
also built upon different data sources: business magazines, videos and LinkedIn profiles. Therefore,
the constructs are measured multiple times and can also be triangulated. This strengthens the construct
validity too (Yin, 2014) Moreover, the aspects of opportunity natures and entrepreneurial approaches
were first elaborated separately before examining any links. The aspects found under each section are
summarized in tables and then transformed into the theoretical framework. Thus, it can be traced back
how the constructs are built from the literature review which is important for the construct validity
(Eisenhardt, 1989; Yin, 2014).
The internal validity is weakened when there are unrepresentative cases under study that not fit the
sample (Saunders et al., 2011). For this study the cases where selected based on certain criteria,
therefore this enhances the internal validity. Moreover, the data used is secondary and is thus already
available. Therefore, it is possible to conduct a longitudinal study which strengthens the internal
validity (Saunders et al., 2011). However, the data collection method cannot be controlled in this case
which is a limitation (Saunders et al., 2011). For example it could be that the there is a personal
relation between an interviewer and the respondent. In addition, maybe the writer of the article was
28 supporting each construct is triangulated to avoid such biases and to strengthen the internal validity
(Saunders et al., 2011).
In order to generalize over the theory, attention should be paid to the external validity (Yin, 2014).
Single cases should be studied based on the theory and it is important to compare and contrast the
multiple cases (Yin, 2014). In this study the constructs are built upon the literature review in which
the theories of opportunity natures and entrepreneurial approaches are discussed. These constructs are
used to examine the founding and development of the cases separately. Furthermore, the cases are
also compared and contrasted as described in section 3.4. Based on that, a theory can be generalized
about the founding and development of the most valuable new ventures in the world by means of
29 4. Research results
In this chapter the first section contains the results of the within-case analysis. In section 4.5 the
results of the cross-case analysis are described by comparing each construct that appeared to be
relevant for the cases.
4.1 Snapchat case
In this paragraph the empirical evidence found in the Snapchat case is described. The cofounders of
Snapchat are Evan Spiegel and Bobby Murphy which are further mentioned by using their first name.
Nature of opportunity: existing or created
Initially investors were not interested (Colao, 2014, p. 2): “many wondered why anyone would want
to send a disappearing photo”. Others also did not expect that Snapchat would be big (Stone & Frier, 2015). After the launch in July 2011 it also appeared that nobody wanted the product, therefore both
cofounders started to focus on other things than Snapchat. In the fall of 2011 the user base of
Snapchat suddenly increased, because students found out that the app was not banned by schools yet
and there were some privacy issues such as unwanted disposal of personal content (Colao, 2014).
Thus, Snapchat created its own market over time. Furthermore, the industry is also created in which
competitors entered later on (Colao, 2014, p. 3): “an entire sub-industry … temporary, social media
has emerged behind it”. There was no evidence found for Snapchat being an existing opportunity. Even though also no evidence was found for creating new knowledge, Snapchat can be regarded as a
created opportunity, supporting exploration-effectuation, by creating its market and industry.
Entrepreneurial ability: vision & personal interest
Evan continues to have a vision on Snapchat and the industry. For example Evan mentions (Stone &
Frier, 2015, p. 1): “young users are not well served by other for-profit social networks”. Later on the
founder also had a perspective on advertising (Stone & Frier, 2015, p. 1): “Evan views advertising as
a product, while most Internet Founders view advertising as the necessary evil”. This view has been
confirmed by Evan during the interviews he gave. In addition, the initial Snapchat idea is based on a
30 Reggie shared this problem with Evan, and together with Bobby they started Snapchat (Colao, 2014).
It was also argued as important to: “find something important to you … that you love” (Stone & Frier, 2015, p. 1). Furthermore, in his youth Evan build a computer and did photoshop experiments which
indicate an interest in technology. Thus, it mainly started out with the personal interest and a vision
that was more based on an opinion than knowledge about the industry or market. Therefore, support is
found for exploration and effectuation.
Venture development: planned or flexible
After the launch in 2011 Snapchat was (Colao, 2014, p. 2): “a technically competent product that virtually no one wanted”. Snapchat was about meaningful features, instead of focusing on popular things like competitors did. Furthermore, the market created itself after some time as mentioned
earlier in the paragraph above (Colao, 2014). The advertisers were also required to adjust their
advertisements to make them workable on Snapchat (Stone & Frier, 2015). Finally, Evan responded to
people who criticized Snapchat as difficult to use (Stone & Frier, 2015, p. 1): “I get that it looks
different, it looks different because it’s something new”. It further appeared that most engineers worked on product innovation. Thus, over the years the focus remained on the product and not on
market planning which indicates that Snapchat is explored and effectuated.
Even though there are some hints of business planning in the Snapchat case, it appears that these plans
are not definite and therefore Snapchat remains flexible. According to Colao (2014) Snapchat would
focus on a buy-in option, but it appeared in the interview of Stone and Frier (2015) that the focus
switched to advertising. Furthermore, when Snapchat became more popular the founders invested
family money and savings to keep the network up and running. Besides, Snapchat did not generate or
plan for any revenue and others were skeptical about the revenue prospect (Colao, 2014). Thus,
Snapchat remains flexible, supporting effectuation and exploration, by not sticking to business plans,
using resources available instead of selecting them and having no long term end goal.
It is further revealed that the founders learned from previous experiences: they learned that it is
31 (Colao, 2014) and there were also experiments with brand pages and advertisements before
integrating these completely into the product (Stone and Frier, 2015). Thus, support is found for
learning by doing and experimentation which are part of exploration and effectuation.
Still, there do appear some hints of causation over the years. It appears that Snapchat analyzes
competition and uses this to differentiate the products (Colao, 2014, p. 3): “It’ll make sense in a
Snapchat way”. This is further supported by the evidence that Snapchat has a differentiated offering from that of Facebook. Furthermore, three years after launching Snapchat, Evan looked at various
Chinese competitor apps that have a buy-in option. He used this as inspiration for a Snapchat buy-in
option (Colao, 2014). Thus, over the years the founders started to use business planning.
Prior knowledge
Bobby did a major in mathematics and computational science (Colao, 2014), and Evan studied
product design (Spiegel, n.d.; Colao, 2014). Furthermore, Evan has work experience related to
technology and software development (Spiegel, n.d.), and Bobby worked as a coder (Colao, 2014). In
addition, in his youth Evan already failed with launching a social network and together the founders
were unsuccessful with a former online software website (Coloa, 2014). Skills are not well elaborated
in the Snapchat case: it is only mentioned that in his youth Evan did technology related activities and
photoshopping which do related to the Snapchat app (Colao, 2014; Spiegel, n.d.). In regard to awards
and recognition, Evan was recognized by professionals as an undergrad (Colao, 2014) and won a
design related award (Spiegel, n.d.).
Social (networks)
Reggie, who came up with the Snapchat idea, knew Evan already before. Moreover, Bobby and Evan
are former housemates and already tried to create things together (Colao, 2014). Evan also used his
network to recruit the first employees (Colao, 2014). In regard to investors, there are at least two
investor mentioned. Additionally, little evidence is found on advice givers. At least it is revealed that
the Snapchat founders had a Sony CEO as board member who gave them advice, and Evan read
32 Personality
Colao (2014, p. 1) describes Evan as an opinionated non-conformist. Evan is a direct, serious and
modest person that thinks independently and follows his own beliefs, but who is also open for
discussions and thoughts of others (Stone and Frier, 2015). Moreover, he can also be regarded as an
idea generator: “I literally just invented this in my head” (Stone & Frier, 2015, p. 1). There are also a few phrases that reveal that Evan is an inconsistent boss (Stone & Frier, 2015). Lastly, the only
personality trait described of Bobby, is that he is never upset (Colao, 2014).
4.2 Uber case
In this paragraph it is described what empirical evidence is found in the Uber case. The cofounders of
Uber are Travis Kalanick and Garrett Camp which are further referred to by their first name.
Nature of opportunity: existing or created
Uber can be regarded as a created opportunity. The following citation reveals that there was not a
market demand at the launch yet (Y Combinator, 2012a, min 8:38): “people thought we were crazy:
limos in San Francisco what?”. Others also did not expect Uber to be a success (Lashinsky, 2015). Furthermore, Uber transformed the taxi industry which caused resistance on one hand and on the
other hand made new competitors enter that wanted to defeat Uber (Y Combinator, 2012a). Lastly, it
is not found that any new knowledge was created. Still, it is supported that Uber created its demand
and industry after launching which supports effectuation and exploration.
Entrepreneurial ability: vision & personal interest
Additionally, Uber is created based on a vision which is repeatedly mentioned (Y Combinator, 2012a,
min 4:28): “I wanna push a button and get a ride … and let’s make it a classy ride”. The founders initially saw Uber as enhancing their personal lifestyle which expanded to providing a better
transportation experience: the traditional taxi industry was odd and boring according to Travis (Y
Combinator, 2012a). Furthermore, at the fifth year anniversary Travis envisioned Uber to help cities
have safer roads, less congestion and being economically valuable for them (Lashinsky, 2015). Thus,
