Measuring Entrepreneurship in Extreme Uncertainty: Startup Orientation
This is a BAP Start-Up Project (SUP) with project code 17N02SUP1
Entrepreneurship as a discipline has recently been emerging both in academia and business world. Established firms are now looking for ways to become more entrepreneurial. In the literature, Entrepreneurial Orientation (EO) perspective tries to explain the entrepreneurial behavior of firms. However, the definition of entrepreneurial behavior is also changing with the start-up culture fueled by the availability of new technological tools to everyone enabling new firms to come up with new business models. So, we believe entrepreneurship literature needs new models to explain the emerging behaviors of firms and startups. Existing models and frameworks try to explain the phenomenon as if entrepreneurial behavior is an exception; however, business environment is rapidly becoming turbulent, complex and uncertain, to which startup way of thinking and managing seems to be a prominent path for long-lived companies to stay relevant. This is also referred as disruptive innovation, which destroys existing industries and recreates them under new terms and structures as we see in the cases of Uber, Airbnb and Facebook.
In this study, our main aim is to understand the startup way of doing business, then to explain why firms need to embrace this mindset and how they can measure and employ such practices. In order to do that, we first work on to understand startups’ motivations, processes, culture, customer-orientation, and key initiatives, which are not necessarily the same as established companies. Traditionally, companies exist to maximize returns and profits; however, in the uncertainty context, startups exist to explore markets. Eric Ries (2011) defines startup as a team launching a new product under conditions of extreme uncertainty and a vehicle for testing hypotheses about the foundations of its very own entity. Then, we would like to come up with a new scale, which we name as Startup Orientation (SO). We argue firms of all sizes and industries can adopt an SO perspective where Entrepreneurial Orientation (EO) and Market Orientation (MO) fail to capture the emerging dynamics of the business ecosystem.