Description
On this description in regard to entrepreneurship in cyberspace what do we know.
ISSN 2029-7564 (online)
SOCIALIN?S TECHNOLOGIJOS
SOCIAL TECHNOLOGIES
2011, 1(1), p. 37–48.
Socialinës technologijos/Social Technologies
© Mykolo Romerio universitetas, 2011
© Mykolas Romeris University, 2011
ISSN 2029-7564 (online)https://www.mruni.eu/lt/mokslo_darbai/st/apie_leidini/https://www.mruni.eu/en/mokslo_darbai/st/apie_leidini/index.php
ENTREPRENEURSHIP IN CYBERSPACE:
WHAT DO WE KNOW?
Mindaugas Kiškis
Mykolas Romeris University, Lithuania, [email protected]
Abstract
Purpose – The purpose of the paper is to analyze the speci?c featu he purpose of the paper is to analyze the speci?c feat he purpose of the paper is to analyze the speci?c feat res of
entrepreneurship in cyberspace compared to basic models of entrepreneurship.
Design/methodology/approach – Systemic, teleological, deontological and herme – -
neutic analysis, limited case studies.
Findings – Conclusions are drawn on new qualities of entrepreneurship in
cyberspace and a novel approach needed to study and understand it.
Research limitations/implications – The paper represents work in progress and
surveys a rapidly developing ?eld. Case studies mentioned in the paper are limited with
respect to the scope of the paper and are only instrumental for illustrating different
aspects of entrepreneurship in cyberspace.
Practical implications – The paper presents the theoretical framework for further
study of the entrepreneurship in cyberspace, as well as basic material for classroom use.
Further research of the entrepreneurship in cyberspace as a distinct social phenomenon
is envisaged.
Originality/Value – Over the last two decades ICTs, and especially cyberspace
technologies, have signi?cantly modi?ed the start of new businesses and entrepreneurial
processes. Although not dependent on technological breakthroughs, the cyberspace has
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
38
multiple direct effects on new products and services, which are at the focus of this
article. Direct and indirect effects of cyberspace on the start of the businesses are
analyzed, along with the advanced transformation business models in cyberspace and
novel value creation approach. The paper is among the ?rst studies of entrepreneurship
in cyberspace as a distinct social phenomenon. No similar studies have been undertaken
in the Baltics before, while the US and European management studies have been limited
to speci?c case studies, without presenting a general theoretical framework.
Keywords: entrepreneurship, e-entrepreneurship, cyberspace, social impact of tech-
nology.
Research type: The paper presents conceptual considerations on entrepreneurship
in cyberspace, as well as limited case studies on speci?c entrepreneurial successes ena-
bled by cyberspace.
Introduction
Since the 1973 publication of the now classic paper „Technical entrepreneurship:
what do we know?” by prof. Arnold C. Cooper (1973), a new form of entrepreneurship
has gained increasing recognition. Although prof. Cooper did not discuss technological
entrepreneurship as a discrete phenomenon, he did recognize that the birth of new,
high-technology ventures had both substantial economic impact, as well as speci?c
context. The cyberspace revolution, followed by the electronic social media revolution,
have proven these points de?nitively. Currently, technology-based ?rms dominate the
new startup creation, as well as the creation of socio-economic value. They are also
increasingly differentiating themselves from other businesses in many distinct ways.
New technologies have enabled both new business vehicles and new forms of
businesses, while at the same time have increased the accessibility of launching the
global business venture to anyone with a computer and internet access. Technological
considerations and instruments, especially online instruments are now basically at the
root of every new business venture (Paliulis et al, 2007).
This paper aims at surveying the main features of entrepreneurship in cyberspace,
and its principal features compared to the non-technological entrepreneurial ventures.
The paper seeks to identify the differentiating drivers, as well as the new business
models and value creation offered by cyberspace. These may be especially important for
regional development and overall facilitation of entrepreneurship in current turbulent
economic conditions. Increasingly, cyberspace entrepreneurship looks like the most
accessible form of entrepreneurship for vulnerable social groups, such as the disabled or
the elderly. Considerations for cyberspace entrepreneurship shall also be public policies
enabling the entrepreneurs to take advantage of technology shall be made, along with
the deeper scienti?c inquiry and study thereof.
Social Technologies. 2011, 1(1): 37–48.
39
The article employs the methods of systemic, teleological, deontological and
hermeneutic analysis. Limited case studies are also provided.
1. Main features of entrepreneurship in cyberspace
Modern day entrepreneurs face a very different context from what their peers faced
just ten years ago. The global information ?ows, global networks, interwoven economies,
as well as new information and communication technologies have radically changed the
opportunities available to entrepreneurs, the methods employed for launching business
ventures and the challenges they face (Roberts, 2001).
Especially in the past two decades technological entrepreneurship has become de
facto global (Friedman, 2007). Products and services placed online are immediately
available to users irrespective of their geographical location and time zone. This is well
illustrated by the case of the creators of the ?rst Lithuanian children’s interactive e-book
“„Pelyt? smailyt? ir gelb?tojai“. Launched on Apple iPad platform, the book is a result
of collaboration between two different industries – publisher Realverus and web services
provider Gaumina (VZ, 2011). Within the ?rst month was purchased by customers from
all over the globe, including such countries as Saudi Arabia and Singapore (Baubinas,
2011).
Entrepreneurship in cyberspace generally has two distinct manifestations:
– A – s a technological extension to a non-technological business (e.g. a restaurant
launches an online ordering system for take-away service or a traditional retailer
launches an online shop, e.g. the web venture of the biggest Lithuanian groceries
retailer Maxima: www.e-maxima.lt);
– A – s a technology based business venture, where technology is the vehicle or
enabler of the whole venture (e.g. technology enabled clothing exchange: www.
manodrabuziai.lt, as well as its German: www.kleiderkreisel.de and UK centric: K
www.friendlyfashion.co.uk portals). www.friendlyfashion.co.uk
Information and communication technology (ICT) based businesses and other
technology based business ventures may either depend on new product breakthroughs,
or mostly on providing ‘enabling’ services and products to very many branches of
industry, including their own. They do this by creating new products and services that are
cheaper, more convenient and better than previous products, but which are not expressly
ICT or high-tech products (Duening, 2007). A good example of such non-breakthrough
but better product is electronic and interactive books. Potential for technology adoption
in non-technological businesses is huge and so are the entrepreneurial opportunities.
Moreover, many traditional technologies are swiftly converging with ICTs to produce
completely new products and services, e.g. IP-TV.
Some ICT based products and services, e.g. Facebook (www.facebook.com) –
biggest global social networking website, differentiate themselves in providing a new
experience and an additional way to communicate, rather than something completely
new.
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
40
Cyberspace also offers unrivaled access to information on both sides of the interaction.
Internet is well recognized as almost limitless source of information, accessible for very
small consideration or no charge at all. For consumers it offers possibility to learn about
goods and services and compare different propositions easily form the comfort of their
own home. It also allows consolidation of consumer information, easy sharing of good
and bad experiences, augmenting consumer power for group buys. On the other end of
the interaction, the internet offers very signi?cant possibilities to learn about and from
your customers. This is implemented through interactive elements of the world wide
web. Modern internet browsing technologies, such as cookies, beacons, user browsing
and purchase history, social network disclosures allow target advertising and sales,
tailored to the needs and traits of the speci?c individual (Chaffey et al, 2009). tailored to the needs and traits of the speci?c individual (Chaf tailored to the needs and traits of the speci?c individual (Chaf
At the business end, the cyberspace also eliminated most of the physical limitations,
such as high street locations, warehousing and display spaces, limited business hours
and dependence on the sales staff performance. Early limitations of cyberspace business,
such as limited payments and delivery infrastructures are also mostly irrelevant now,
although some perceptions about the cyber-business (such as insecurity of online
transactions) persist in less technologically receptive societies or due to digital divide.
Irrelevance of the physical location applies to both business and consumer. For
consumers in rural areas the offer is the same as for city consumers. Equally, prime business
may be run from remote and inexpensive areas, rather that maintaining storefronts in the
urban centers. Common misconception among the fresh entrepreneurs is that remotely
located entrepreneurs are severely disadvantaged compared to those inside or near major
urban hubs and markets. While proximity to the urban and knowledge hubs offers some
advantages in terms of leveraging the network effects (Silicon Valley is the best known
example of the location leveraged network effects (Saxenian, 1994)), the cyberspace has
enabled accessibility even from remote and peripheral locations (Thierstein, Wilhelm,
2001).
More informed consumers have enabled whole set of new cyberspace businesses,
such as comparison shopping (e.g. Nextag: www.nextag.com or Bizrate: www.bizrate.
com), group purchases (e.g. Groupon: www.groupon.com). While on the other end,
businesses learning more about the consumers is the basic value proposition of Google
or even Facebook.
2. Differentiating Drivers of Entrepreneurship in Cyberspace
Regardless of the manifestation, the primary force acting on technological
entrepreneurship is the rapid pace of technological change and adoption of the internet
into all spheres of social life. Facebook was overwhelmingly adopted by many new
businesses over the last two years. At the same time it recently exceeded 500 million of
registered users. There are many factors that produce this dynamism, however the most
important are:
– Network effect;
Social Technologies. 2011, 1(1): 37–48.
41
– G – lobalization;
– T – echnologization of social processes;
– Ultra low barriers of entry.
Network effects and their importance to entrepreneurial success were recognized
long before the cyberspace revolution. It is the cyberspace revolution and emerging
technologies, which have ampli?ed the network effects to the new quality level and
even allowed new businesses to capitalize on the cyberspace facilitated network effect
(Lipnack, Stamps 1994).
Network effect from a purely technical standpoint is tantamount to the Metcalfe’s
Law, which refers to telecommunications network and postulates that the value of a
telecommunications network is proportional to the square of the number of users of the
network. In entrepreneurial world the network effect has social and instrumental aspects
to it. Social aspect of the network effect is best explained through the concept of social
capital. Any modern business is part of a complex networked social environment and
depends on the social capital accumulated by the entrepreneur within such environment.
Social capital therefore necessitates and justi?es the importance for an entrepreneur to be
involved and to maintain strong networks. Networks are not self-perpetuating, they need
to be created and nurtured and they are only facilitated (but not created) by technology.
As a minimum the network requires purpose, members, and links. Members and links
are physical, purpose and relationships are intangible. Large part of the entrepreneurial
success lies in the diversity and reach of the available networks. Real value-adding
networks are based on perceptions of potential or actual value-adding contributions to a
network by its human members, i.e. value is becoming social function. Social networks
are also complex, primarily because they are personal, not institutional, i.e. they are
rarely ?xed to a speci?c business venture (Barringer, Ireland, 2009).
Instrumental aspect of the network effect is also expressed through the “strength
of weak ties”. This offers another way to measure the value of an entrepreneurial
network. “Strength of weak ties”, allows taking advantage of not only those to whom
direct connections exist, but also those who are connected to distant members of your
own network. Entire business models based on such networks have been implemented
and are reasonably successful. In most cases it effects itself as the amplifying force
on the dissemination of business information, whether marketing information or other
business related information, or alternatively as a drawing force to use the same tools
(Anderson et al, 2007). Viral marketing owes much to the instrumental aspect of the
network effect and is best proof that it works. Even cyber-pioneers, such as Microsoft
owe much of their success to the instrumental aspect of the network effect. Cyberspace
has an inherent tendency to create technological monopolies. The reason why most
of the world’s computers run Microsoft operating systems is because everyone else
does. Likewise, Facebook is the most popular because that is where all our friends are
(Prahalad, Krishnan, 2008). KK
While network effects are independent from cyberspace, due to global connectivity
and 24/7/365 reach thereof has further ampli?ed the network effect. Such instant, global
and inexpensive spread of the information in many instances created new qualities, such
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
42
as signi?cant technological innovations through increased research transparency or
even new model of innovation based on distributed information contribution (e.g. open
source software). Cyberspace facilitated network effect has spawned new dedicated
technological platforms for professional business networking (such as LinkedIn: www.
linkedin.com or Plaxo: www.plaxo.com). It must also be noted that on the negative side,
the network effect ampli?es the negative or undesirable information as well. Piracy of
digital information is a demonstration of such adversity.
Globalization is another key driver of entrepreneurship in cyberspace. Globalization
plays direct role through international trade, where national businesses must adopt
international market standards and requirements, and indirect role through worker
and working place mobility. Although globalization is a major factor of technological
development and entrepreneurship, it is interesting to note that it was technology that
has enabled the infrastructure for global trade in the ?rst place (Friedman, 2007). The
Internet has enabled the connectivity to the global workforce, as well as e-work and
e-services. New technology-based economy has achieved relatively unimpeded ?ow
of money, talent, capital, and goods across national borders. As it was already noted,
geographical location is increasingly irrelevant for the online economy. The past two
decades have produced enormous changes not only in technology, but also in where the
technical work is performed and who is performing it. The trend of business process
outsourcing is already a history. Now technology is increasingly becoming independent
of geographical locations and swiftly moving to the cloud. Cloud-based technologies
surely offer new entrepreneurial opportunities and creative applications, such as
Google Apps-based third party applications (www.google.com/apps/intl/en/business/
marketplace.html).
Technology is increasingly intruding into most social processes, including very
intimate processes such as dating or healthcare. Such technologization of social processes
is ever increasing and offers many new and unique business opportunities. Electronic
health (e-health) systems are revolutionizing the way in which patients interact with
physicians and vice versa.
Basic features of the cyberspace businesses already lower barriers to entry. However
currently available online commerce platforms, such as Ebay (www.ebay.com),
virtually eliminate them. Most of the current cyberspace giants, such as Google, Skype
or Facebook were launched by students with the only resources being their own intellect
and work. Global success of Lithuanian cyber-champion GetJar (www.getjar.com) is a
proof that neither lack of capital, nor peripheral location deters great opportunities.
3. New Cyber Startup Models
Counter intuitively, following established business models is increasingly of lesser
value for cyber entrepreneurs. For example, Google did not have a business model to
start with, neither did Facebook. This did not deter them from becoming the biggest
advertising platforms. Both Google and Facebook concentrated on making a great
Social Technologies. 2011, 1(1): 37–48.
43
product that would have a huge audience. Both assumed that so long as they have the
former, the revenue would follow. This approach is also changing the whole science of
business valuation.
Although not a result of the cyberspace age per se, the concept of lean startup
is largely enabled by cyberspace technology. Cyberspace enables setting up an online
venture with minimal or even zero cost. Existing global technological business platforms,
such as Ebay, Amazon, or more specialized – such as Etsy (www.etsy.com) for arts
and crafts sales enable setting up the electronic stores in minutes and virtually at no
?xed cost (and especially no sunk cost). Overheads for running this business largely
amount to Internet access expense. Existing online tools such as Google Apps, Google
marketing tools (Adsense and Adwords) also offer very affordable marketing solutions
for emerging business. Equally, unsuccessful startups are able to fail fast, without
producing signi?cant socio-economic burden on the entrepreneur and enabling him/
her to reset and restart with another startup. Such lean cyber-startup model had been
put at the heart of many student entrepreneurship initiatives, such as Startup Weekend
(startupweekend.org) or 3 Day Startup (3DS) (www.3dstartup.org).
Minimal investment both reduces risks, allows swift adaptation or even winding
up of the venture in case it is not successful. A further evolution of this is the passive
startup model, which suggests setting up product or service websites and mounting pre-
sence online, without having the actual product or service ready. This approach enables
market gauging and customer response research, which are crucial prior to launching an
actual product. In case passive startup means fail to generate market interest it is assu-
med that the product or service is not marketable, while in case of market interest, the
entrepreneur swiftly follows with the actual product or service.
Both the lean startup and passive startup models offer signi?cant economic bene?ts,
especially in terms of risk minimization, ef?cient use of limited resources and delivery
of products and services, which ?ll an actual market demand.
Yet another business model is provided by emerging virtual spaces. Virtual goods
can be bought and sold in virtual markets (such as World of Warcraft or Second Life),
but can make real money for entrepreneurs in the real life (Vitzthum, 2009). Such virtual
virtues have challenged many aspects of the traditional business establishment from bu-
siness ethics to taxation. They also enable virtual startups and virtual business models,
which have no analogues in the real world (e.g. virtual blacksmith selling magical wea-
ponry), but are rather based on fantasy opportunities.
4. New Models for Cyber Startup Valuation and New
Entrepreneurial Strategies
The latest wave of cyber-entrepreneurs-billionaires has also been riding a wave of
rather novel approach to enterprise valuation. While traditionally reliant on discounted
cash ?ow and other ?nance methods, the cyber-entrepreneurs have largely discarded
them. Instead, the valuations of new cyber-ventures are based on the strategic valuation
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
44
of user base or audience and the disruption potential that the venture bears to the
incumbents (Hering, Olbrich, 2006).
This approach is the least mathematical of the techniques for determining valuation,
nevertheless the one most often used. It basically relies on yet another manifestation
of the network effect. It can be illustrated through a rather straightforward technique
that relies on identifying a key metric within an industry, and on identifying industry
comparables that have had a de?nitive valuation because of being acquired or having
executed a recent equity sale. In the cyberspace the most common key metric is “active
members” or audience (Mero, 2007). Facebook sold equity to Microsoft in 2007, where
Microsoft purchased a 1.6% equity stake in Facebook for 240 million USD. Simple
arithmetic calculates that that places the value of Facebook at 15 billion USD in 2007
(Stone, 2007).
The number of active members that Facebook had at the time of this valuation was
50 million. This can be used to determine the relative cash value of each member. In
other words, the 15 billion USD valuation places the value of each member at 300 USD.
Companies in similar industries can now use the same multiple (i.e., 300 USD per active
member) to develop a reasonable valuation. It is noteworthy that free cash ?ow of the
Facebook in 2007 was negative.
Valuations may vary depending on which comparable a venture chooses to use in
generating the value of each active member. In general, owners of a venture will want
to choose the comparable that gives them the greatest value, while potential investors
will argue for the comparable that gives the venture the least current value. Since, there
is no such thing as an “absolute” or “true” venture value, especially for ventures where
all the money is yet to be earned, it all depends on the argument that can be made for the
speci?c metric and comparable baseline for calculating valuation.
In January 2011 Facebook raised 1.5 billion USD in a Goldman Sachs-led ?nancing
round, which valued the company at 50 billion USD. In addition to Goldman Sachs’
450 million USD investment, venture capital ?rms Digital Sky Technologies put up 50
million USD and other investors contributed another 1 billion USD to purchase stake in
the company. This Facebook valuation is about 25 times its 2010 revenue. The company
had revenue of 1.2 billion USD and the pro?t of 355 million USD in the ?rst three
quarters of 2010, up from 777 million USD in 2009. The pro?t of slightly more than
200 million USD was recorded for all of 2009. Already several weeks after the above
1.5 billion ?nancing round, which based Facebook at a 50 billion USD valuation in
January 2010, secondary exchange SharesPost Inc. has valued Facebook at 82.9 billion
USD through Facebook equity sales closed through it, i.e. the valuation has jumped by
more than 40 percent since mid-December 2010. Valuation of the Facebook is soaring
as the markets and advertisers pay for the attention of the Facebook user base, which
exceeded 500 million people. Advertising spending on Facebook is expected to more
than double to 4.05 billion USD in 2011 (Bloomberg, 2011). Facebook’s estimated
worth is still dwarfed by Google, the world’s biggest cyberspace company, which is
worth 192 billion USD.
Social Technologies. 2011, 1(1): 37–48.
45
SharesPost, a marketplace for private company shares, bases value on such criteria
as transactions, research estimates and venture-funding rounds. Facebook and other
Web 2.5 ventures, gather resources from users themselves in order to build a community
based strategic value. Once the user base is built, only then the entrepreneurs try to
determine how to develop a pro?table business model. This is especially true for Twitter,
operator of mini-blogging platform, which has no revenue whatsoever, nevertheless is
strategically valued at few billions USD.
Overall, not generating free cash ?ow, but generating strategic value from
membership explosion or from proximity, or even intimacy with the users are primary
criteria for valuation of cyber ventures. This is major contrast to non-cyberspace
ventures, where free cash ?ow remains the prevailing valuation method. Availability of
private capital and alternative valuation, also signi?cantly reduces or at least postpones
the desirability of the IPOs for the cyber technology ventures (Yoon-Jun, 2008; Rozens,
2009).
Conclusions
ICTs have changed business in many ways. Over the last two decades ICTs, and
especially cyberspace technologies, have also signi?cantly modi?ed the start of new
businesses and entrepreneurial processes.
Although not dependent on technological breakthroughs, the cyberspace has multiple
direct effects on new products and services. These are: independence from physical
factors, new ways for human communication, unrivaled access to information, and
lowering of entry barriers. Indirectly the cyberspace has launched the self-perpetuation
of globalization, ampli?ed network effects and intruded into most social processes.
The cyberspace ventures are now increasingly differentiating in their business models
and value creation approach. Cyberspace has facilitated the lean approach to startups,
also enabled passive and virtual startups. Moreover, cyber-startups are increasingly
generating value from their strategic relationships with their users and even directly
allow users to in?uence value of the venture.
Analysis of the key features and aspects of the cyberspace entrepreneurship
conclusively suggests that it is substantially different from the basic entrepreneurship
premises and even from the technological entrepreneurship in non-cyberspace related
?elds, therefore deserves separate scienti?c inquiry. It is also appropriate to design
specialized courses on entrepreneurship in cyberspace into the university curriculum.
Further studies of the speci?c cyberspace entrepreneurial phenomena identi?ed in
this paper will be necessary for fully understanding them and accelerating the adoption
of the cyberspace entrepreneurship, as well as for designing speci?c public policies for
dealing with and facilitating the cyberspace entrepreneurship.
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
46
Literature
Anderson J.C., Kumar N., Narus KK J.A.
Value merchants: demonstrating and
documenting superior value in business
markets. Cambridge, MA: Harvard
Business School Press, 2007.
Andriole S.J. Mining for digital gold:
technology due diligence for CIOs.
Commun AIS 2007;2007(20):371–81.
Barringer B.R., Ireland D. Entrepreneurship:
Successfully Launching New Ventures
(3rd Edition). Prentice Hall, 2009.
Baubinas K. Antroji lietuviška e-knyga
vaikams pasirodys po m?nesio.
Prieiga internetu:http://mokslas.del?.
lt/technology/antroji-lietuviska-e-
knyga-vaikams-pasirodys-po-menesio.
d?id=44688507 (prisijungta 2011-05-
01).
Bloomberg: Facebook’s Value Tops
Amazon, Trails Only Google on Web;http://www.bloomberg.com/news/2011-
01-28/facebook-s-82-9-billion-value-
tops-amazon-com-trails-only-google-
on-web.html;
Chaffey D., Ellis-Chadwick F., Mayer R.,
Johnston K. Internet marketing: strategy,
implementation and practice. Prentice
Hall, 2009.
Cooper A. (Ed.), Alvarez S. (Ed.), Carrera
A. (Ed.), Mesquita L. (Ed.), Vassolo R.
(Ed.). Entrepreneurial Strategies: New
Technologies in Emerging Markets
(Strategic Management Society). Wiley-
Blackwell, 2006.
Cooper A.C. Technical entrepreneurship:
what do we know? R&D Management.
Volume 3, Issue 2, pages 59–64, February
1973;
Duening T.N., Hisrich R.A, Lechter M.A.
Technology Entrepreneurship: Creating,
Capturing, and Protecting Value. New
York: Academic Press, 2009.
Friedman T.L. The world is ?at: a brief
history of the 21st century. Picador
Publishing; 2007.
Hering T., Olbrich M. Valuation of startup
Internet companies. International
Journal of Technology Management,
2006;33(4):409–19.
Išleista lietuviška knyga “iPad” kompiuteriui.
Verslo žinios. Prieiga internetu: http://
vz.lt/rss/straipsnis/2011/04/15/Isleista_
lietuviska_knyga_iPad_kompiuteriui2
(prisijungta 2011-05-01);
Lipnack J., Stamps J. The Age of the
Network: Organizing Principles for
the 21st Century (Essex Junction, VT:
Omneo, 1994).
Mero J. People are his bottom line. Fortune
2007;155(7):30.
Paliulis N., Pabedinskait? A., Šaulinskas L.
Elektroninis verslas: raida ir modeliai.
VGTU, 2007;
Prahalad C.K, Krishnan M.S. KK The new age
of innovation: driving co-created value
through global networks. New York:
McGraw-Hill; 2008;
Roberts E. Entrepreneurs in High
Technology: Lessons from MIT and
Beyond. Oxford University Press, 2001.
Rozens A. IPO drought to linger into
2010. Investment Dealers’ Digest 2009;
75(3):6–8.
Sampson G. Electronic Business. BCS,
2008;
Saxenian A. Regional Advantage: Culture
and Competition in Silicon Valley
and Route 128 (Cambridge: Harvard
University Press, 1994).
Stone B. Microsoft buys stake in Facebook.
NY Times 2007;October 25.
Thierstein A., Wilhelm B. Incubator,
Technology, and Innovations Centres
in Switzerland: Features and Policy
Implications. Entrepreneurship &
Social Technologies. 2011, 1(1): 37–48.
47
VERSLUMAS ELEKTRONINËJE ERDVËJE:
KÀ KK MES ÞINOME?
Mindaugas Kiškis
Mykolas Romeris University, Lithuania, [email protected]
Santrauka. Prof. Arnoldas C. Cooperis 1973 m. paskelbë klasika laikomà straipsná
„Techninis verslumas: kà mes þinome?“, kuris ið esmës pradëjo mokslines naujos specifinës
verslumo temos studijas. Kaip ir techninio verslumo atveju, verslumas elektroninëje erdvëje
turi daug iðskirtiniø bruoþø, jo reikðmë ir svoris nacionalinëje ekonomikoje sparèiai auga,
o jo kontekstas ir raiðkos formos yra specifinës. Elektroninës erdvës technologijø ir vëlesnis
Web 2.0 arba socialiniø technologijø tinkle proverþis verslumà elektroninëje erdvëje galu-
tinai átvirtino kaip savarankiðkà platesnio verslumo reiðkinio kategorijà. Ðiuo metu verslai,
susijæ su tinklo technologijomis, dominuoja tarp naujai kuriamø technologiniø verslø, taip
pat skiriasi nuo tradicinio verslo.
Naujos technologijos atvërë kelius tiek naujoms verslo formoms, tiek visiðkai naujoms
verslo ðakoms. Technologijos taip pat gerokai padidino galimybes kiekvienam, turinèiam
kompiuterá ir prieigà prie interneto, pradëti globalø verslà. Technologiniai instrumentai ir
tinklo galimybës yra prieinamos ir panaudojamos net ir visiðkai tradicinëse verslo srityse,
tokiose, kaip, pavyzdþiui, þemës ûkis.
Straipsnyje analizuojamos pagrindinës verslumo elektroninëje erdvëje savybës ir skir-
tumai, palyginti su tradicine verslumo samprata. Mokslinëje literatûroje verslumas nagri-
nëjamas atsietai nuo technologijø ir konteksto, o tai, autoriaus nuomone, neleidþia atskleisti
verslumo elektroninëje erdvëje ypatumø. Straipsnyje analizuojami verslumo elektroninë-
je erdvëje diferencijuojantys skirtumai, specifiniai elektroninio verslumo modeliai ir vertës
grandinës. Akcentuojama, kad verslumas elektroninëje erdvëje yra prieinamiausia verslumo
forma, ypaè tinkama socialiai atskirtoms visuomenës grupëms. Verslumas elektroninëje er-
dvëje realizuojamas daug lengviau nei fizinëje erdvëje, kadangi itin sumaþinami ekonomi-
niai áëjimo á rinkà trukdþiai, sukuriama rinka niðiniams, namudiniams ir pan. produktams
ir paslaugoms.
Regional Development 13 (2001): 315-
331.
Vitzthum S.; Kathuria A., Konsynski B.
Real Commerce in Virtual Worlds.
(2009). ICIS 2009 Proceedings. Paper
22. Prieiga internetu:http://aisel.aisnet.
org/icis2009/22 (prisijungta 2011-05-01).
Willoughby K.W. How do entrepreneurial
technology ?rms really get ?nanced,
and what difference does it make? Int J
Innov Technol Manage 2008;5(1):1–28.
Yoon-Jun L. Strategy of startups for IPO timing
across high technology industries. Applied
Economics Letters, 2008. 15(11):869–77.
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
48
Straipsnyje iðanalizuota specifika verslumà elektroninëje erdvëje leidþia iðskirti ir iden-
tifikuoti kaip specifiná reiðkiná ir savarankiðkà mokslinës analizës ir studijø objektà. Siekiant
iki galo suvokti ðá reiðkiná ir jo potencialà bûtini tolesni tyrimai. Be to, maþose ir atvirose
ekonomikose kaip Lietuva verslumas elektroninëje erdvëje turëtø bûti ávertintas kaip vie-
ðosios verslumo skatinimo politikos prioritetinë sritis, siekiant maksimizuoti jo potencialà
visuomenëje ir tarp tradiciniø verslø.
Raktaþodþiai: verslumas, e.verslumas, elektroninë erdvë, technologijø socialiniai
aspektai.
doc_445113668.pdf
On this description in regard to entrepreneurship in cyberspace what do we know.
ISSN 2029-7564 (online)
SOCIALIN?S TECHNOLOGIJOS
SOCIAL TECHNOLOGIES
2011, 1(1), p. 37–48.
Socialinës technologijos/Social Technologies
© Mykolo Romerio universitetas, 2011
© Mykolas Romeris University, 2011
ISSN 2029-7564 (online)https://www.mruni.eu/lt/mokslo_darbai/st/apie_leidini/https://www.mruni.eu/en/mokslo_darbai/st/apie_leidini/index.php
ENTREPRENEURSHIP IN CYBERSPACE:
WHAT DO WE KNOW?
Mindaugas Kiškis
Mykolas Romeris University, Lithuania, [email protected]
Abstract
Purpose – The purpose of the paper is to analyze the speci?c featu he purpose of the paper is to analyze the speci?c feat he purpose of the paper is to analyze the speci?c feat res of
entrepreneurship in cyberspace compared to basic models of entrepreneurship.
Design/methodology/approach – Systemic, teleological, deontological and herme – -
neutic analysis, limited case studies.
Findings – Conclusions are drawn on new qualities of entrepreneurship in
cyberspace and a novel approach needed to study and understand it.
Research limitations/implications – The paper represents work in progress and
surveys a rapidly developing ?eld. Case studies mentioned in the paper are limited with
respect to the scope of the paper and are only instrumental for illustrating different
aspects of entrepreneurship in cyberspace.
Practical implications – The paper presents the theoretical framework for further
study of the entrepreneurship in cyberspace, as well as basic material for classroom use.
Further research of the entrepreneurship in cyberspace as a distinct social phenomenon
is envisaged.
Originality/Value – Over the last two decades ICTs, and especially cyberspace
technologies, have signi?cantly modi?ed the start of new businesses and entrepreneurial
processes. Although not dependent on technological breakthroughs, the cyberspace has
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
38
multiple direct effects on new products and services, which are at the focus of this
article. Direct and indirect effects of cyberspace on the start of the businesses are
analyzed, along with the advanced transformation business models in cyberspace and
novel value creation approach. The paper is among the ?rst studies of entrepreneurship
in cyberspace as a distinct social phenomenon. No similar studies have been undertaken
in the Baltics before, while the US and European management studies have been limited
to speci?c case studies, without presenting a general theoretical framework.
Keywords: entrepreneurship, e-entrepreneurship, cyberspace, social impact of tech-
nology.
Research type: The paper presents conceptual considerations on entrepreneurship
in cyberspace, as well as limited case studies on speci?c entrepreneurial successes ena-
bled by cyberspace.
Introduction
Since the 1973 publication of the now classic paper „Technical entrepreneurship:
what do we know?” by prof. Arnold C. Cooper (1973), a new form of entrepreneurship
has gained increasing recognition. Although prof. Cooper did not discuss technological
entrepreneurship as a discrete phenomenon, he did recognize that the birth of new,
high-technology ventures had both substantial economic impact, as well as speci?c
context. The cyberspace revolution, followed by the electronic social media revolution,
have proven these points de?nitively. Currently, technology-based ?rms dominate the
new startup creation, as well as the creation of socio-economic value. They are also
increasingly differentiating themselves from other businesses in many distinct ways.
New technologies have enabled both new business vehicles and new forms of
businesses, while at the same time have increased the accessibility of launching the
global business venture to anyone with a computer and internet access. Technological
considerations and instruments, especially online instruments are now basically at the
root of every new business venture (Paliulis et al, 2007).
This paper aims at surveying the main features of entrepreneurship in cyberspace,
and its principal features compared to the non-technological entrepreneurial ventures.
The paper seeks to identify the differentiating drivers, as well as the new business
models and value creation offered by cyberspace. These may be especially important for
regional development and overall facilitation of entrepreneurship in current turbulent
economic conditions. Increasingly, cyberspace entrepreneurship looks like the most
accessible form of entrepreneurship for vulnerable social groups, such as the disabled or
the elderly. Considerations for cyberspace entrepreneurship shall also be public policies
enabling the entrepreneurs to take advantage of technology shall be made, along with
the deeper scienti?c inquiry and study thereof.
Social Technologies. 2011, 1(1): 37–48.
39
The article employs the methods of systemic, teleological, deontological and
hermeneutic analysis. Limited case studies are also provided.
1. Main features of entrepreneurship in cyberspace
Modern day entrepreneurs face a very different context from what their peers faced
just ten years ago. The global information ?ows, global networks, interwoven economies,
as well as new information and communication technologies have radically changed the
opportunities available to entrepreneurs, the methods employed for launching business
ventures and the challenges they face (Roberts, 2001).
Especially in the past two decades technological entrepreneurship has become de
facto global (Friedman, 2007). Products and services placed online are immediately
available to users irrespective of their geographical location and time zone. This is well
illustrated by the case of the creators of the ?rst Lithuanian children’s interactive e-book
“„Pelyt? smailyt? ir gelb?tojai“. Launched on Apple iPad platform, the book is a result
of collaboration between two different industries – publisher Realverus and web services
provider Gaumina (VZ, 2011). Within the ?rst month was purchased by customers from
all over the globe, including such countries as Saudi Arabia and Singapore (Baubinas,
2011).
Entrepreneurship in cyberspace generally has two distinct manifestations:
– A – s a technological extension to a non-technological business (e.g. a restaurant
launches an online ordering system for take-away service or a traditional retailer
launches an online shop, e.g. the web venture of the biggest Lithuanian groceries
retailer Maxima: www.e-maxima.lt);
– A – s a technology based business venture, where technology is the vehicle or
enabler of the whole venture (e.g. technology enabled clothing exchange: www.
manodrabuziai.lt, as well as its German: www.kleiderkreisel.de and UK centric: K
www.friendlyfashion.co.uk portals). www.friendlyfashion.co.uk
Information and communication technology (ICT) based businesses and other
technology based business ventures may either depend on new product breakthroughs,
or mostly on providing ‘enabling’ services and products to very many branches of
industry, including their own. They do this by creating new products and services that are
cheaper, more convenient and better than previous products, but which are not expressly
ICT or high-tech products (Duening, 2007). A good example of such non-breakthrough
but better product is electronic and interactive books. Potential for technology adoption
in non-technological businesses is huge and so are the entrepreneurial opportunities.
Moreover, many traditional technologies are swiftly converging with ICTs to produce
completely new products and services, e.g. IP-TV.
Some ICT based products and services, e.g. Facebook (www.facebook.com) –
biggest global social networking website, differentiate themselves in providing a new
experience and an additional way to communicate, rather than something completely
new.
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
40
Cyberspace also offers unrivaled access to information on both sides of the interaction.
Internet is well recognized as almost limitless source of information, accessible for very
small consideration or no charge at all. For consumers it offers possibility to learn about
goods and services and compare different propositions easily form the comfort of their
own home. It also allows consolidation of consumer information, easy sharing of good
and bad experiences, augmenting consumer power for group buys. On the other end of
the interaction, the internet offers very signi?cant possibilities to learn about and from
your customers. This is implemented through interactive elements of the world wide
web. Modern internet browsing technologies, such as cookies, beacons, user browsing
and purchase history, social network disclosures allow target advertising and sales,
tailored to the needs and traits of the speci?c individual (Chaffey et al, 2009). tailored to the needs and traits of the speci?c individual (Chaf tailored to the needs and traits of the speci?c individual (Chaf
At the business end, the cyberspace also eliminated most of the physical limitations,
such as high street locations, warehousing and display spaces, limited business hours
and dependence on the sales staff performance. Early limitations of cyberspace business,
such as limited payments and delivery infrastructures are also mostly irrelevant now,
although some perceptions about the cyber-business (such as insecurity of online
transactions) persist in less technologically receptive societies or due to digital divide.
Irrelevance of the physical location applies to both business and consumer. For
consumers in rural areas the offer is the same as for city consumers. Equally, prime business
may be run from remote and inexpensive areas, rather that maintaining storefronts in the
urban centers. Common misconception among the fresh entrepreneurs is that remotely
located entrepreneurs are severely disadvantaged compared to those inside or near major
urban hubs and markets. While proximity to the urban and knowledge hubs offers some
advantages in terms of leveraging the network effects (Silicon Valley is the best known
example of the location leveraged network effects (Saxenian, 1994)), the cyberspace has
enabled accessibility even from remote and peripheral locations (Thierstein, Wilhelm,
2001).
More informed consumers have enabled whole set of new cyberspace businesses,
such as comparison shopping (e.g. Nextag: www.nextag.com or Bizrate: www.bizrate.
com), group purchases (e.g. Groupon: www.groupon.com). While on the other end,
businesses learning more about the consumers is the basic value proposition of Google
or even Facebook.
2. Differentiating Drivers of Entrepreneurship in Cyberspace
Regardless of the manifestation, the primary force acting on technological
entrepreneurship is the rapid pace of technological change and adoption of the internet
into all spheres of social life. Facebook was overwhelmingly adopted by many new
businesses over the last two years. At the same time it recently exceeded 500 million of
registered users. There are many factors that produce this dynamism, however the most
important are:
– Network effect;
Social Technologies. 2011, 1(1): 37–48.
41
– G – lobalization;
– T – echnologization of social processes;
– Ultra low barriers of entry.
Network effects and their importance to entrepreneurial success were recognized
long before the cyberspace revolution. It is the cyberspace revolution and emerging
technologies, which have ampli?ed the network effects to the new quality level and
even allowed new businesses to capitalize on the cyberspace facilitated network effect
(Lipnack, Stamps 1994).
Network effect from a purely technical standpoint is tantamount to the Metcalfe’s
Law, which refers to telecommunications network and postulates that the value of a
telecommunications network is proportional to the square of the number of users of the
network. In entrepreneurial world the network effect has social and instrumental aspects
to it. Social aspect of the network effect is best explained through the concept of social
capital. Any modern business is part of a complex networked social environment and
depends on the social capital accumulated by the entrepreneur within such environment.
Social capital therefore necessitates and justi?es the importance for an entrepreneur to be
involved and to maintain strong networks. Networks are not self-perpetuating, they need
to be created and nurtured and they are only facilitated (but not created) by technology.
As a minimum the network requires purpose, members, and links. Members and links
are physical, purpose and relationships are intangible. Large part of the entrepreneurial
success lies in the diversity and reach of the available networks. Real value-adding
networks are based on perceptions of potential or actual value-adding contributions to a
network by its human members, i.e. value is becoming social function. Social networks
are also complex, primarily because they are personal, not institutional, i.e. they are
rarely ?xed to a speci?c business venture (Barringer, Ireland, 2009).
Instrumental aspect of the network effect is also expressed through the “strength
of weak ties”. This offers another way to measure the value of an entrepreneurial
network. “Strength of weak ties”, allows taking advantage of not only those to whom
direct connections exist, but also those who are connected to distant members of your
own network. Entire business models based on such networks have been implemented
and are reasonably successful. In most cases it effects itself as the amplifying force
on the dissemination of business information, whether marketing information or other
business related information, or alternatively as a drawing force to use the same tools
(Anderson et al, 2007). Viral marketing owes much to the instrumental aspect of the
network effect and is best proof that it works. Even cyber-pioneers, such as Microsoft
owe much of their success to the instrumental aspect of the network effect. Cyberspace
has an inherent tendency to create technological monopolies. The reason why most
of the world’s computers run Microsoft operating systems is because everyone else
does. Likewise, Facebook is the most popular because that is where all our friends are
(Prahalad, Krishnan, 2008). KK
While network effects are independent from cyberspace, due to global connectivity
and 24/7/365 reach thereof has further ampli?ed the network effect. Such instant, global
and inexpensive spread of the information in many instances created new qualities, such
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
42
as signi?cant technological innovations through increased research transparency or
even new model of innovation based on distributed information contribution (e.g. open
source software). Cyberspace facilitated network effect has spawned new dedicated
technological platforms for professional business networking (such as LinkedIn: www.
linkedin.com or Plaxo: www.plaxo.com). It must also be noted that on the negative side,
the network effect ampli?es the negative or undesirable information as well. Piracy of
digital information is a demonstration of such adversity.
Globalization is another key driver of entrepreneurship in cyberspace. Globalization
plays direct role through international trade, where national businesses must adopt
international market standards and requirements, and indirect role through worker
and working place mobility. Although globalization is a major factor of technological
development and entrepreneurship, it is interesting to note that it was technology that
has enabled the infrastructure for global trade in the ?rst place (Friedman, 2007). The
Internet has enabled the connectivity to the global workforce, as well as e-work and
e-services. New technology-based economy has achieved relatively unimpeded ?ow
of money, talent, capital, and goods across national borders. As it was already noted,
geographical location is increasingly irrelevant for the online economy. The past two
decades have produced enormous changes not only in technology, but also in where the
technical work is performed and who is performing it. The trend of business process
outsourcing is already a history. Now technology is increasingly becoming independent
of geographical locations and swiftly moving to the cloud. Cloud-based technologies
surely offer new entrepreneurial opportunities and creative applications, such as
Google Apps-based third party applications (www.google.com/apps/intl/en/business/
marketplace.html).
Technology is increasingly intruding into most social processes, including very
intimate processes such as dating or healthcare. Such technologization of social processes
is ever increasing and offers many new and unique business opportunities. Electronic
health (e-health) systems are revolutionizing the way in which patients interact with
physicians and vice versa.
Basic features of the cyberspace businesses already lower barriers to entry. However
currently available online commerce platforms, such as Ebay (www.ebay.com),
virtually eliminate them. Most of the current cyberspace giants, such as Google, Skype
or Facebook were launched by students with the only resources being their own intellect
and work. Global success of Lithuanian cyber-champion GetJar (www.getjar.com) is a
proof that neither lack of capital, nor peripheral location deters great opportunities.
3. New Cyber Startup Models
Counter intuitively, following established business models is increasingly of lesser
value for cyber entrepreneurs. For example, Google did not have a business model to
start with, neither did Facebook. This did not deter them from becoming the biggest
advertising platforms. Both Google and Facebook concentrated on making a great
Social Technologies. 2011, 1(1): 37–48.
43
product that would have a huge audience. Both assumed that so long as they have the
former, the revenue would follow. This approach is also changing the whole science of
business valuation.
Although not a result of the cyberspace age per se, the concept of lean startup
is largely enabled by cyberspace technology. Cyberspace enables setting up an online
venture with minimal or even zero cost. Existing global technological business platforms,
such as Ebay, Amazon, or more specialized – such as Etsy (www.etsy.com) for arts
and crafts sales enable setting up the electronic stores in minutes and virtually at no
?xed cost (and especially no sunk cost). Overheads for running this business largely
amount to Internet access expense. Existing online tools such as Google Apps, Google
marketing tools (Adsense and Adwords) also offer very affordable marketing solutions
for emerging business. Equally, unsuccessful startups are able to fail fast, without
producing signi?cant socio-economic burden on the entrepreneur and enabling him/
her to reset and restart with another startup. Such lean cyber-startup model had been
put at the heart of many student entrepreneurship initiatives, such as Startup Weekend
(startupweekend.org) or 3 Day Startup (3DS) (www.3dstartup.org).
Minimal investment both reduces risks, allows swift adaptation or even winding
up of the venture in case it is not successful. A further evolution of this is the passive
startup model, which suggests setting up product or service websites and mounting pre-
sence online, without having the actual product or service ready. This approach enables
market gauging and customer response research, which are crucial prior to launching an
actual product. In case passive startup means fail to generate market interest it is assu-
med that the product or service is not marketable, while in case of market interest, the
entrepreneur swiftly follows with the actual product or service.
Both the lean startup and passive startup models offer signi?cant economic bene?ts,
especially in terms of risk minimization, ef?cient use of limited resources and delivery
of products and services, which ?ll an actual market demand.
Yet another business model is provided by emerging virtual spaces. Virtual goods
can be bought and sold in virtual markets (such as World of Warcraft or Second Life),
but can make real money for entrepreneurs in the real life (Vitzthum, 2009). Such virtual
virtues have challenged many aspects of the traditional business establishment from bu-
siness ethics to taxation. They also enable virtual startups and virtual business models,
which have no analogues in the real world (e.g. virtual blacksmith selling magical wea-
ponry), but are rather based on fantasy opportunities.
4. New Models for Cyber Startup Valuation and New
Entrepreneurial Strategies
The latest wave of cyber-entrepreneurs-billionaires has also been riding a wave of
rather novel approach to enterprise valuation. While traditionally reliant on discounted
cash ?ow and other ?nance methods, the cyber-entrepreneurs have largely discarded
them. Instead, the valuations of new cyber-ventures are based on the strategic valuation
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
44
of user base or audience and the disruption potential that the venture bears to the
incumbents (Hering, Olbrich, 2006).
This approach is the least mathematical of the techniques for determining valuation,
nevertheless the one most often used. It basically relies on yet another manifestation
of the network effect. It can be illustrated through a rather straightforward technique
that relies on identifying a key metric within an industry, and on identifying industry
comparables that have had a de?nitive valuation because of being acquired or having
executed a recent equity sale. In the cyberspace the most common key metric is “active
members” or audience (Mero, 2007). Facebook sold equity to Microsoft in 2007, where
Microsoft purchased a 1.6% equity stake in Facebook for 240 million USD. Simple
arithmetic calculates that that places the value of Facebook at 15 billion USD in 2007
(Stone, 2007).
The number of active members that Facebook had at the time of this valuation was
50 million. This can be used to determine the relative cash value of each member. In
other words, the 15 billion USD valuation places the value of each member at 300 USD.
Companies in similar industries can now use the same multiple (i.e., 300 USD per active
member) to develop a reasonable valuation. It is noteworthy that free cash ?ow of the
Facebook in 2007 was negative.
Valuations may vary depending on which comparable a venture chooses to use in
generating the value of each active member. In general, owners of a venture will want
to choose the comparable that gives them the greatest value, while potential investors
will argue for the comparable that gives the venture the least current value. Since, there
is no such thing as an “absolute” or “true” venture value, especially for ventures where
all the money is yet to be earned, it all depends on the argument that can be made for the
speci?c metric and comparable baseline for calculating valuation.
In January 2011 Facebook raised 1.5 billion USD in a Goldman Sachs-led ?nancing
round, which valued the company at 50 billion USD. In addition to Goldman Sachs’
450 million USD investment, venture capital ?rms Digital Sky Technologies put up 50
million USD and other investors contributed another 1 billion USD to purchase stake in
the company. This Facebook valuation is about 25 times its 2010 revenue. The company
had revenue of 1.2 billion USD and the pro?t of 355 million USD in the ?rst three
quarters of 2010, up from 777 million USD in 2009. The pro?t of slightly more than
200 million USD was recorded for all of 2009. Already several weeks after the above
1.5 billion ?nancing round, which based Facebook at a 50 billion USD valuation in
January 2010, secondary exchange SharesPost Inc. has valued Facebook at 82.9 billion
USD through Facebook equity sales closed through it, i.e. the valuation has jumped by
more than 40 percent since mid-December 2010. Valuation of the Facebook is soaring
as the markets and advertisers pay for the attention of the Facebook user base, which
exceeded 500 million people. Advertising spending on Facebook is expected to more
than double to 4.05 billion USD in 2011 (Bloomberg, 2011). Facebook’s estimated
worth is still dwarfed by Google, the world’s biggest cyberspace company, which is
worth 192 billion USD.
Social Technologies. 2011, 1(1): 37–48.
45
SharesPost, a marketplace for private company shares, bases value on such criteria
as transactions, research estimates and venture-funding rounds. Facebook and other
Web 2.5 ventures, gather resources from users themselves in order to build a community
based strategic value. Once the user base is built, only then the entrepreneurs try to
determine how to develop a pro?table business model. This is especially true for Twitter,
operator of mini-blogging platform, which has no revenue whatsoever, nevertheless is
strategically valued at few billions USD.
Overall, not generating free cash ?ow, but generating strategic value from
membership explosion or from proximity, or even intimacy with the users are primary
criteria for valuation of cyber ventures. This is major contrast to non-cyberspace
ventures, where free cash ?ow remains the prevailing valuation method. Availability of
private capital and alternative valuation, also signi?cantly reduces or at least postpones
the desirability of the IPOs for the cyber technology ventures (Yoon-Jun, 2008; Rozens,
2009).
Conclusions
ICTs have changed business in many ways. Over the last two decades ICTs, and
especially cyberspace technologies, have also signi?cantly modi?ed the start of new
businesses and entrepreneurial processes.
Although not dependent on technological breakthroughs, the cyberspace has multiple
direct effects on new products and services. These are: independence from physical
factors, new ways for human communication, unrivaled access to information, and
lowering of entry barriers. Indirectly the cyberspace has launched the self-perpetuation
of globalization, ampli?ed network effects and intruded into most social processes.
The cyberspace ventures are now increasingly differentiating in their business models
and value creation approach. Cyberspace has facilitated the lean approach to startups,
also enabled passive and virtual startups. Moreover, cyber-startups are increasingly
generating value from their strategic relationships with their users and even directly
allow users to in?uence value of the venture.
Analysis of the key features and aspects of the cyberspace entrepreneurship
conclusively suggests that it is substantially different from the basic entrepreneurship
premises and even from the technological entrepreneurship in non-cyberspace related
?elds, therefore deserves separate scienti?c inquiry. It is also appropriate to design
specialized courses on entrepreneurship in cyberspace into the university curriculum.
Further studies of the speci?c cyberspace entrepreneurial phenomena identi?ed in
this paper will be necessary for fully understanding them and accelerating the adoption
of the cyberspace entrepreneurship, as well as for designing speci?c public policies for
dealing with and facilitating the cyberspace entrepreneurship.
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
46
Literature
Anderson J.C., Kumar N., Narus KK J.A.
Value merchants: demonstrating and
documenting superior value in business
markets. Cambridge, MA: Harvard
Business School Press, 2007.
Andriole S.J. Mining for digital gold:
technology due diligence for CIOs.
Commun AIS 2007;2007(20):371–81.
Barringer B.R., Ireland D. Entrepreneurship:
Successfully Launching New Ventures
(3rd Edition). Prentice Hall, 2009.
Baubinas K. Antroji lietuviška e-knyga
vaikams pasirodys po m?nesio.
Prieiga internetu:http://mokslas.del?.
lt/technology/antroji-lietuviska-e-
knyga-vaikams-pasirodys-po-menesio.
d?id=44688507 (prisijungta 2011-05-
01).
Bloomberg: Facebook’s Value Tops
Amazon, Trails Only Google on Web;http://www.bloomberg.com/news/2011-
01-28/facebook-s-82-9-billion-value-
tops-amazon-com-trails-only-google-
on-web.html;
Chaffey D., Ellis-Chadwick F., Mayer R.,
Johnston K. Internet marketing: strategy,
implementation and practice. Prentice
Hall, 2009.
Cooper A. (Ed.), Alvarez S. (Ed.), Carrera
A. (Ed.), Mesquita L. (Ed.), Vassolo R.
(Ed.). Entrepreneurial Strategies: New
Technologies in Emerging Markets
(Strategic Management Society). Wiley-
Blackwell, 2006.
Cooper A.C. Technical entrepreneurship:
what do we know? R&D Management.
Volume 3, Issue 2, pages 59–64, February
1973;
Duening T.N., Hisrich R.A, Lechter M.A.
Technology Entrepreneurship: Creating,
Capturing, and Protecting Value. New
York: Academic Press, 2009.
Friedman T.L. The world is ?at: a brief
history of the 21st century. Picador
Publishing; 2007.
Hering T., Olbrich M. Valuation of startup
Internet companies. International
Journal of Technology Management,
2006;33(4):409–19.
Išleista lietuviška knyga “iPad” kompiuteriui.
Verslo žinios. Prieiga internetu: http://
vz.lt/rss/straipsnis/2011/04/15/Isleista_
lietuviska_knyga_iPad_kompiuteriui2
(prisijungta 2011-05-01);
Lipnack J., Stamps J. The Age of the
Network: Organizing Principles for
the 21st Century (Essex Junction, VT:
Omneo, 1994).
Mero J. People are his bottom line. Fortune
2007;155(7):30.
Paliulis N., Pabedinskait? A., Šaulinskas L.
Elektroninis verslas: raida ir modeliai.
VGTU, 2007;
Prahalad C.K, Krishnan M.S. KK The new age
of innovation: driving co-created value
through global networks. New York:
McGraw-Hill; 2008;
Roberts E. Entrepreneurs in High
Technology: Lessons from MIT and
Beyond. Oxford University Press, 2001.
Rozens A. IPO drought to linger into
2010. Investment Dealers’ Digest 2009;
75(3):6–8.
Sampson G. Electronic Business. BCS,
2008;
Saxenian A. Regional Advantage: Culture
and Competition in Silicon Valley
and Route 128 (Cambridge: Harvard
University Press, 1994).
Stone B. Microsoft buys stake in Facebook.
NY Times 2007;October 25.
Thierstein A., Wilhelm B. Incubator,
Technology, and Innovations Centres
in Switzerland: Features and Policy
Implications. Entrepreneurship &
Social Technologies. 2011, 1(1): 37–48.
47
VERSLUMAS ELEKTRONINËJE ERDVËJE:
KÀ KK MES ÞINOME?
Mindaugas Kiškis
Mykolas Romeris University, Lithuania, [email protected]
Santrauka. Prof. Arnoldas C. Cooperis 1973 m. paskelbë klasika laikomà straipsná
„Techninis verslumas: kà mes þinome?“, kuris ið esmës pradëjo mokslines naujos specifinës
verslumo temos studijas. Kaip ir techninio verslumo atveju, verslumas elektroninëje erdvëje
turi daug iðskirtiniø bruoþø, jo reikðmë ir svoris nacionalinëje ekonomikoje sparèiai auga,
o jo kontekstas ir raiðkos formos yra specifinës. Elektroninës erdvës technologijø ir vëlesnis
Web 2.0 arba socialiniø technologijø tinkle proverþis verslumà elektroninëje erdvëje galu-
tinai átvirtino kaip savarankiðkà platesnio verslumo reiðkinio kategorijà. Ðiuo metu verslai,
susijæ su tinklo technologijomis, dominuoja tarp naujai kuriamø technologiniø verslø, taip
pat skiriasi nuo tradicinio verslo.
Naujos technologijos atvërë kelius tiek naujoms verslo formoms, tiek visiðkai naujoms
verslo ðakoms. Technologijos taip pat gerokai padidino galimybes kiekvienam, turinèiam
kompiuterá ir prieigà prie interneto, pradëti globalø verslà. Technologiniai instrumentai ir
tinklo galimybës yra prieinamos ir panaudojamos net ir visiðkai tradicinëse verslo srityse,
tokiose, kaip, pavyzdþiui, þemës ûkis.
Straipsnyje analizuojamos pagrindinës verslumo elektroninëje erdvëje savybës ir skir-
tumai, palyginti su tradicine verslumo samprata. Mokslinëje literatûroje verslumas nagri-
nëjamas atsietai nuo technologijø ir konteksto, o tai, autoriaus nuomone, neleidþia atskleisti
verslumo elektroninëje erdvëje ypatumø. Straipsnyje analizuojami verslumo elektroninë-
je erdvëje diferencijuojantys skirtumai, specifiniai elektroninio verslumo modeliai ir vertës
grandinës. Akcentuojama, kad verslumas elektroninëje erdvëje yra prieinamiausia verslumo
forma, ypaè tinkama socialiai atskirtoms visuomenës grupëms. Verslumas elektroninëje er-
dvëje realizuojamas daug lengviau nei fizinëje erdvëje, kadangi itin sumaþinami ekonomi-
niai áëjimo á rinkà trukdþiai, sukuriama rinka niðiniams, namudiniams ir pan. produktams
ir paslaugoms.
Regional Development 13 (2001): 315-
331.
Vitzthum S.; Kathuria A., Konsynski B.
Real Commerce in Virtual Worlds.
(2009). ICIS 2009 Proceedings. Paper
22. Prieiga internetu:http://aisel.aisnet.
org/icis2009/22 (prisijungta 2011-05-01).
Willoughby K.W. How do entrepreneurial
technology ?rms really get ?nanced,
and what difference does it make? Int J
Innov Technol Manage 2008;5(1):1–28.
Yoon-Jun L. Strategy of startups for IPO timing
across high technology industries. Applied
Economics Letters, 2008. 15(11):869–77.
Mindaugas Kiðkis. Entrepreneurship in Cyberspace: What Do We Know?
48
Straipsnyje iðanalizuota specifika verslumà elektroninëje erdvëje leidþia iðskirti ir iden-
tifikuoti kaip specifiná reiðkiná ir savarankiðkà mokslinës analizës ir studijø objektà. Siekiant
iki galo suvokti ðá reiðkiná ir jo potencialà bûtini tolesni tyrimai. Be to, maþose ir atvirose
ekonomikose kaip Lietuva verslumas elektroninëje erdvëje turëtø bûti ávertintas kaip vie-
ðosios verslumo skatinimo politikos prioritetinë sritis, siekiant maksimizuoti jo potencialà
visuomenëje ir tarp tradiciniø verslø.
Raktaþodþiai: verslumas, e.verslumas, elektroninë erdvë, technologijø socialiniai
aspektai.
doc_445113668.pdf