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Brief paper around new venture creation resistance, coping and energy anders landberg.
NEW VENTURE CREATION:
RESISTANCE, COPING AND ENERGY
Anders Landberg
Dissertation for the degree of Doctor of Philosophy,
Ph.D, Stockholm School of Economics 2008
© EFI and Anders Landberg 2008
ISBN 978-91-7258-771-7
Keywords: Resistance, entrepreneurship, ventures, venturing, start-up,
process, energy, energetic resources
Printed by:
Elanders, Vällingby 2008
Distributed by:
EFI, the Economic Research Institute
Stockholm School of Economics
P.O.Box 6501, SE-113 83 Stockholm, Sweden
www.hhs.se/efi
To my parents, Gull and Olle Karlsson
Preface
This report is a result of a research project carried out at the
Centre for Entrepreneurship and Business Creation (E) at the Economic
Research Institute at the Stockholm School of Economics.
This volume is submitted as a doctor’s thesis at the Stockholm
School of Economics. The author has been entirely free to conduct and
present his research in his own ways as an expression of his own ideas.
Filip Wijkström
Director of the Economic Research
Institute at the Stockholm School of
Economics
Carin Holmquist
Director of the Centre for
Entrepreneurship and Business
Creation (E)
EFI Mission
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Acknowledgments
Writing a thesis like this one is a one-person job, but having said
that, there are so many people who have supported me and that I have
depended upon to complete it. Actually, I would not even have begun
without the inspiration of some people, and the problems created by
some. This is a tribute to you who have somehow been involved in this
study.
Prof. Carl-Göran Héden inspired me to do this study. In my
previous work at a non-profit organisation, Carl-Göran, his colleague
Tommy Jonsson, and I spent many hours discussing the difficulties in
launching innovative projects and the solutions to those difficulties.
Upon my leaving the non-profit organisation, Carl-Göran suggested that
I should study these difficulties, what we then called bottle-necks in
project development.
Inspired by Carl-Göran I contacted Prof. Carin Holmquist at the
Stockholm School of Economics (SSE), she believed in the potential of my
research idea and accepted me as a doctoral student. Carin has been my
main supervisor since and has supported and encouraged me
throughout my time at SSE. Later, Prof. Björn Axelsson and Prof. Sven-
Erik Sjöstrand also joined as my supervisors. To all three I owe more
than can be expressed. During the final stages, Prof. Leif Lindmark has
also offered valuable comments with clear and succinct solutions to
seemingly difficult passages in my thesis.
Doing a Ph.D. is not all work though, and I am fortunate to have
found new friends at SSE. Frédéric made life as a junior doctoral student
easier. Admittedly he offered some ideas about my research, but most of
all he showed that being a researcher offers ample opportunities to do
yoga, go fly fishing, rock climbing and randonné. Klara brightened
things up with lots of laughter and also helped me with the final layout.
My fellow doctoral students in pKval – Ebba, Svante and Per– were a
source of laughter and above all, glamour. Ebba also read early drafts of
this thesis. Joanne is always a source of compassion and spirit and more
earthly aspects like masterful proof reading.
Surely this thesis would have been much thinner and less
interesting without my colleagues at the Section for Entrepreneurship
and Business Creation at SSE. Ingela and I discussed life and being
doctoral students at many lunches and coffees breaks. She also put a
direct mark on this thesis by reading and commenting both early and
late drafts. Erik’s brilliance at organising and presenting complex data
has been great for my own structuring. My colleagues, past and present,
Kalle, Karin, Anna, Elena, Monica, Johan, Sven, Mikael, Jurgita, Jeanette
and Gunilla all contributed to life as a doctoral student.
Per, Anna and Sofia helped me deal with my empirical material,
and without Mårten, Karin, Bengt and Anna there would not have been
any empirical material. Lena helped me structure the empirical chapter.
The language skills of Ava made it readable. Anders always has ample
fuel to refill my ER.
My parents, Gull and Olle, supported me in this endeavour as in
all the others I have embarked upon in my life. Always with love and
care, and lately also with some concern when my smile became less
frequent than it used to be.
Monica changed my life in an instant, and made me realise the
importance of being a humoristic, empathic, feminist. She may not be the
typical house wife, but managed things beautifully while I was
preoccupied with this study. Most of all, Monica is the real entrepreneur
and my hero! Aston and Sixten, pure joy and energy!
To all of you, and to those not mentioned, with a feeling of
lightness and joy, thank you all!
Stockholm, October 20, 2008
Anders Landberg
Contents
1 PERCEIVED RESISTANCE – AN INTRODUCTION .................................................................. 13
1.1 DELIMITATIONS ....................................................................................................................................................................... 26
1.2 OUTLINE OF THE STUDY ..................................................................................................................................................... 28
2 CREATING NEW VENTURES .......................................................................................................... 31
2.1 RESOURCES – THE NEED TO HAVE THEM ...................................................................................................................... 31
2.1.1 Dependence, control and entrepreneurship .................................................................................... 34
2.2 ENTREPRENEURS’ PERCEPTIONS OF RESISTANCE .................................................................................................... 37
2.2.1 How perceived resistance arise ................................................................................................................ 40
2.2.2 The influence of perceived resistance to venture creation .................................................. 42
2.3 COPING – RESOURCES AND STRATEGIES ...................................................................................................................... 44
2.3.1 Capital – a resource at hand (or not...) ................................................................................................. 46
2.3.2 Coping strategies in action ........................................................................................................................... 52
2.4 A MODEL OF PERCEIVED RESISTANCE ............................................................................................................................. 61
3 RESEARCH DESIGN .......................................................................................................................... 65
3.1 A LONGITUDINAL STUDY OF ENTREPRENEURS’ START-UP ATTEMPTS .............................................................. 67
3.1.1 Choice of unit to study ..................................................................................................................................... 68
3.1.2 Selecting cases ...................................................................................................................................................... 69
3.1.3 Time of study and access to entrepreneurs .................................................................................... 73
3.2 CONDUCTING THE STUDY ................................................................................................................................................... 76
3.2.1 Feedback from entrepreneurs ................................................................................................................... 78
3.3 ANALYSING THE EMPIRICAL MATERIAL .......................................................................................................................... 78
3.4 QUALITY OF THE STUDY ..................................................................................................................................................... 83
4 PERCEIVED RESISTANCE TO NEW VENTURE CREATION – FOUR CASES ............ 85
4.1 BROKERING MOBILE TUNES VIA THE INTERNET ......................................................................................................... 85
4.2 LIVE SOCCER MATCHES VIA LOW BANDWIDTH ........................................................................................................... 93
4.3 COSMETICS, BUT ONLY FOR MEN .................................................................................................................................. 106
4.4 HOW TO CLEAN HORSES ..................................................................................................................................................... 117
5 ANALYSIS OF PERCEIVED RESISTANCE ................................................................................ 127
5.1 EMPIRICAL ANALYSIS .......................................................................................................................................................... 127
5.1.1 Introducing the analysis ................................................................................................................................. 128
5.1.2 Where is resistance perceived? ............................................................................................................... 130
5.1.3 Why potential goal disruptions are perceived as resistance? ........................................... 136
5.1.4 How do entrepreneurs cope with perceived resistance? ...................................................... 138
5.1.5 What are the outcomes of perceived resistance on a venture idea? .......................... 144
5.2 THEORETICAL ANALYSIS .................................................................................................................................................... 147
5.2.1 Where is resistance perceived? ................................................................................................................ 148
5.2.2 Why potential goal disruptions are perceived as resistance? ............................................. 151
5.2.3 How do entrepreneurs cope with perceived resistance? ...................................................... 159
5.2.4 What are the outcomes of perceived resistance on a venture idea? .......................... 166
5.3 A MODEL OF PERCEIVED RESISTANCE .......................................................................................................................... 169
6 A NEW REVELATION OF PERCEIVED RESISTANCE AND COPING ............................. 173
6.1 WHAT WE KNOW ABOUT ENERGETIC RESOURCES .................................................................................................. 177
6.1.1 Appraisal of goal disruptions ...................................................................................................................... 179
6.1.2 Coping with goal disruptions ..................................................................................................................... 180
6.1.3 Reappraising the outcome ........................................................................................................................... 183
6.1.4 Concluding the theoretical overview .................................................................................................... 183
6.2 THE INFLUENCE OF ENERGETIC RESOURCES ON THE MODEL OF PERCEIVED RESISTANCE ...................... 184
6.3 SUMMARISING THE INFLUENCE OF ENERGETIC RESOURCES’ ON PERCEIVED RESISTANCE ...................... 190
7 BRINGING IT ALL TOGETHER ..................................................................................................... 195
7.1 THEORETICAL CONTRIBUTION ...................................................................................................................................... 200
7.2 IMPLICATIONS FOR POLICY AND PRACTICE ................................................................................................................203
7.3 FURTHER RESEARCH.........................................................................................................................................................204
REFERENCES ......................................................................................................................................... 209
APPENDIX A. DECIDING ON DESIGN – A PRE-STUDY ..................................................... 227
APPENDIX B. INTERVIEW GUIDE ............................................................................................... 229
APPENDIX C. EXAMPLE OF VISUALISATION OF A VENTURE CREATION MAP .... 231
APPENDIX D. OVERVIEW OF THE STEPS OF THE EMPIRICAL STUDY .................... 232
APPENDIX E. ALL INSTANCES OF PERCEIVED RESISTANCE....................................... 233
LIST OF FIGURES
FIGURE 1-1: ENTREPRENEURS' CONTEXTUAL ACTS OF COPING IN ADVERSE ENVIRONMENTS ................................... 20
FIGURE 2-1: TWO-STEP LEVERAGE (ADOPTED FROM GARGIULO (1993: 5)) .................................................................... 54
FIGURE 2-2: THEORETICAL MODEL OF PERCEIVED RESISTANCE ......................................................................................... 62
FIGURE 3-1: PACING OF INTERVIEWS AND OBSERVED PERCEIVED RESISTANCE ............................................................. 75
FIGURE 5-1: THEORETICAL MODEL OF PERCEIVED RESISTANCE AS A MAP FOR ANALYSIS ........................................ 128
FIGURE 5-2: CATEGORISATION OF INSTANCES OF PERCEIVED RESISTANCE .................................................................. 132
FIGURE 5-3: COPING STRATEGIES –APPRAISED SIGNIFICANCE AND THE POSSIBILITY TO OVERCOME .................. 164
FIGURE 5-4: MODEL OF PERCEIVED RESISTANCE....................................................................................................................... 171
LIST OF TABLES
TABLE 3-1: OVERVIEW OF STUDIED ENTREPRENEURS ............................................................................................................. 72
TABLE 5-1: SUMMARY OF INSTANCES OF PERCEIVED RESISTANCE .................................................................................... 129
TABLE 5-2: DISTRIBUTION OF INSTANCES OF PERCEIVED RESISTANCE OVER CATEGORIES ..................................... 134
TABLE 5-3: ORIGINS OF PERCEIVED RESISTANCE ..................................................................................................................... 135
TABLE 5-4: TYPES OF COPING STRATEGIES ................................................................................................................................ 143
TABLE 5-5: OUTCOMES OF COPING WITH PERCEIVED RESISTANCE .................................................................................. 146
TABLE 5-6: RESOURCE DEPENDENCE ANALYSIS OF INSTANCES OF PERCEIVED RESISTANCE ................................ 158
TABLE 5-7: FROOMAN’S DIMENSIONS FOR STAKEHOLDER INFLUENCING STRATEGIES (1999) .............................. 159
TABLE 5-8: CLASSIFYING COPING CATEGORIES ........................................................................................................................ 162
TABLE 7-1: JONAS’ RESISTANCE PATTERN 1 – MULTIPLE GOALS ...................................................................................... 233
TABLE 7-2: JONAS’ RESISTANCE PATTERN 2 – CONFLICT WITH EXTERNAL RULES OR BUREAUCRACY ........... 233
TABLE 7-3: JONAS’ RESISTANCE PATTERN 3 – CONFLICT WITH EXTERNAL RULES OR BUREAUCRACY ........... 234
TABLE 7-4: JONAS’ RESISTANCE PATTERN 4 – MULTIPLE GOALS .................................................................................. 234
TABLE 7-5: ERIC’S RESISTANCE PATTERN 1 – KEY STAKEHOLDER BLOCKS OPERATIONS ....................................... 235
TABLE 7-6: ERIC’S RESISTANCE PATTERN 2 – PERCEIVED INADEQUATE ABILITY ...................................................... 235
TABLE 7-7: ERIC’S RESISTANCE PATTERN 3 – EXTERNAL CRITICISM .............................................................................. 236
TABLE 7-8: ERIC’S RESISTANCE PATTERN 4 – MULTIPLE GOALS ..................................................................................... 236
TABLE 7-9: ERIC’S RESISTANCE PATTERN 5 – RESOURCE NEEDS ................................................................................... 237
TABLE 7-10: ERIC’S RESISTANCE PATTERN 6 – KEY STAKEHOLDER BLOCKS OPERATIONS .................................... 237
TABLE 7-11: NINA’S RESISTANCE PATTERN 1 – RESOURCE NEEDS..................................................................................... 238
TABLE 7-12: NINA’S RESISTANCE PATTERN 2 – KEY STAKEHOLDER BLOCKS OPERATIONS ................................... 239
TABLE 7-13: NINA’S RESISTANCE PATTERN 3 – KEY STAKEHOLDER BLOCKS OPERATIONS .................................. 240
TABLE 7-14: NINA’S RESISTANCE PATTERN 4 – CONFLICT WITH STAKEHOLDER ......................................................... 241
TABLE 7-15: NINA’S RESISTANCE PATTERN 5 – CONFLICT WITH STAKEHOLDER ......................................................... 241
TABLE 7-16: NINA’S RESISTANCE PATTERN 6 – PACE .......................................................................................................... 242
TABLE 7-17: SUSANNE’S RESISTANCE PATTERN 1 – PRODUCT DEVELOPMENT ........................................................... 242
TABLE 7-18: SUSANNE’S RESISTANCE PATTERN 2 – PRODUCT DEVELOPMENT ......................................................... 243
TABLE 7-19: SUSANNE’S RESISTANCE PATTERN 3 – CONFLICT WITH RIGID STRUCTURES OR BUREAUCRACY 243
TABLE 7-20: SUSANNE’S RESISTANCE PATTERN 4 – PRESSURE TO PATENT ............................................................. 244
TABLE 7-21: SUSANNE’S RESISTANCE PATTERN 5 – PACE ................................................................................................. 244
13
1 Perceived resistance – an
introduction
This study is about the resistance that entrepreneurs perceive
towards their venture ideas. It looks at how entrepreneurs cope in
adverse environments, how they survive or not against seemingly poor
odds.
Resistance seems ever present if one looks for it. Well known
examples of entrepreneurs and venture ideas that have met with
resistance are abound in media. Most have heard of Håkan Lans, one of
Sweden’s biggest innovators of all time whose inventions, the Mouse
and GPS have cost him millions of dollars in lawyer’s fees and many
years of processing because of lawsuits related to patent rights.
1
Other
less known examples are Swedish firms Ellen and Naty, both of which
entered established segments with large multinational corporations as
market leaders. Their innovative products threatened to upset the
market structure and both of them experienced that competing with
multinational corporations is very difficult if one lacks sufficient means
to counter their actions. This is particularly true for indirect actions of the
market leaders, such as limiting the newcomer’s visibility or access
through resellers, and by challenging their patent rights.
2
1
The story about Håkan Lans and the troubles he has faced can be read in a book
by David Lagercrantz (2006).
2
Founders/owners of both ventures have revealed these problems in personal
interviews – Marlene Sandberg (Naty,http://www.naty.se/) on February 1, 2000,
and with Anna Weiner Jiffer (Ellen,http://www.ellenab.com/) on May 24, 2005.
14
These are high profile cases where ideas have been fiercely
resisted by competitors. However one does not have to go that far to find
problems facing entrepreneurs. By looking at the debate in media about
facilitating the start-up of new ventures one can imagine other types of
resistance opposing all new ventures. This debate focuses on policy
issues such as lowered taxes, support structures and funding, all of
which are deemed critical to entrepreneurs when starting new ventures.
In addition, there are issues related to staffing where the union is a key
stakeholder. This was something that the start-up restaurant Wild’n
Fresh experienced first-hand when it implemented as employee policy
which conflicted with the collective wage agreement supervised by the
union. The restaurant refused to accept the union’s demands which
eventually forced it out of business (Appelgren, 2007).
Yet another level where one can suspect issues preventing the
start-up of new ventures is related to individual entrepreneurs. Various
studies
3
and articles in the daily media (see for example Langlet, 2007)
discuss how entrepreneurs hesitate because they feel unsure of their own
capacity. Entrepreneurs seem request more support and more help to
start – someone to hold their hand – and they want this to be continuous
during the first years of starting up.
Additionally, as entrepreneurs, perhaps by default, enter a
hornet’s nest of competition when attempting to realise a venture idea.
Existing competitors likely dislike new entrants on the market and
suppliers might also be hesitant to new entrants as they could upset a
profitable situation.
What all this implies is that there is a potential waste of resources
with an uneasiness regarding where resources should be directed.
Governments want to facilitate the processes of starting new ventures
3
See for example a customer survey carried out by Jobs and Society in 2007 athttp://www.nyforetagarcentrum.se.
15
and make sure that policies are in place which can guarantee that
invested resources generate maximum effect on growth and
employment. However figures from current research indicate that
policies so far fail to achieve this as more than 40 percent of started new
ventures are terminated within five years (Delmar, Sjöberg, Wennberg, &
Wiklund, 2004b). At an individual level, the hesitation to start means
that society as a whole misses out on attempts at realising opportunities
because the prospects of being an entrepreneur appear too risky. At a
more aggregate level, the question is if it is the “right” 40 percent that
terminates.
On the other hand, one could argue that the fact that individuals
hesitate is a selection mechanism where only those fit to start actually
attempt to do so. From this perspective, policies that help bring forward
more entrepreneurs could help redundant venture ideas that should
never have been attempted. However whichever perspective one takes,
the fact still remains that a large percentage of entrepreneurs never get
past the first one or two years, but it is unclear why and how some
entrepreneurs go through fire to realise their ideas. Such knowledge is
required if we are to implement the right policies for support.
Furthermore it can help individual entrepreneurs to better value
beforehand what they might expect when trying to realise a new idea,
while investors and other support organisations can devise strategies to
help entrepreneurial ventures develop.
This thesis attends to this very issue as it reveals the dynamics
behind entrepreneurs’ perceptions of goal disruptions and their
subsequent coping.
What is entrepreneurship?
This is a study of entrepreneurship, specifically entrepreneurs’
plans and actions to realise their venture ideas. The examples above
indicate that entrepreneurs’ actions can explain the dynamics of venture
creation. Additionally this holds a key to understanding the view I take
16
of entrepreneurship where entrepreneurs’ actions are central. This builds
on Gartner’s idea that entrepreneurs realise entrepreneurial ideas
through the creation of new ventures (Gartner, 1988). Here venture
creation focuses on entrepreneurs’ actions to create their ventures – what
they do to achieve this end (Bird, 1988).
In this sense entrepreneurship starts with entrepreneurs with
ideas and a willingness to act upon those ideas. To act entrepreneurially,
entrepreneurs must be motivated (see for example Delmar, 1996) and
also believe they have the ability (see for example Bandura, 1997)
deemed necessary to be able to realise it. The entrepreneurs we see in
media who are willing to face the trials of venture creation likely fulfil
these requirements. They have the intention (Katz & Gartner, 1988;
Krueger, Reilly, & Carsrud, 2000) to attempt to realise an idea through
the creation of a new venture.
Issues relating to start-up
The primary focus of this study is on the early start-up of new
independent ventures by novice entrepreneurs. “Novice”
4
refers to
entrepreneurs starting their first new ventures. This means that they
have no previous experience of entrepreneurship on which to base their
actions and perceptions of stakeholders. It also means that they have not
established any prior relations with actors in the creation of new
ventures. In addition to, and as a consequence of this, they have no
experience of perceived resistance in an entrepreneurial context.
4
I use a definition from Westhead, Ucbasaran, and Wright: ” Novice
entrepreneurs can be viewed as individuals with no prior minority or majority
business ownership experience either as a business founder, an inheritor, or a
purchaser of an independent business but who currently own a minority or majority
equity stake in an independent business that is either new, purchased, or inherited”
(2005: 394).
17
Most of these entrepreneurs have certain resource constraints in
common. They face an entrepreneurial paradox to “create something
from nothing” (Baker & Nelson, 2005: 329), where they must gain control
over resources they do not own but need in realising their ideas. This
perspective of creating something from nothing in relation to resource
acquisitions has been proposed to be a key issue in much
entrepreneurship research (Baker, Miner, & Eesley, 2003; Baker et al.,
2005) but it is still a largely unknown topic in entrepreneurship research.
Specifically, entrepreneurs’ need for resources open up to
situations where they risk becoming dependent on certain stakeholders,
which are defined extensively as involving any actor influencing the
venture idea
5
. Those stakeholders have access to limited and critical
resources for the realisation of the venture idea. In these situations the
manner in which they cope with situations related to the acquisition of
necessary resources is critical to the survival of their fledgling ventures.
Resource dependence theory takes such a view of asymmetric relations
and the consequences of those (Pfeffer & Salancik, 1978) and offers a
theoretical foundation to approach entrepreneurs’ resource acquisition
challenges
6
. Entrepreneurs have resources of their own to off-set these
needs and asymmetries such as entrepreneurial capabilities (Arthurs &
Busenitz, 2006), motivation (Delmar, 1996), and education and contacts
(Davidsson & Honig, 2003), but it is how they use these which decides
the outcome.
5
Research has identified stakeholders as consisting of shareholders, investors,
employees, customers and the public stakeholder group, i.e. government and
communities that provide infrastructures and markets (Clarkson, 1995). In addition
to this, trade associations and environmental groups have also been identified as
important stakeholders to organisations (Donaldson & Preston, 2000). For an
entrepreneur, important stakeholders are also family, friends and peers (Birley,
1985). This extended definition of stakeholders has been used in the research behind
this paper.
6
I will return to the choice of resource dependence theory as a perspective for
understanding entrepreneurs’ resource acquisitions in more detail in chapter 2.1.
18
How entrepreneurs cope when creating ventures in adverse
environments
The fact that so few start-ups survive is an indication of the
difficult context that entrepreneurs act in. This has been described as
highly unpredictable and filled with rapid change (Lichtenstein, Dooley,
& Lumpkin, 2006) as well as adverse (Baker et al., 2005).
To date much research in entrepreneurship has focused on the
start-up of entrepreneurial ventures, the discovery of opportunities and
the creation of future goods or services (Aldrich, 1999; Carter, Gartner, &
Reynolds, 1996; Katz et al., 1988; Shane & Venkataraman, 2000; Van de
Ven, 1999). However despite the amount of research done on this, very
little has been directed at understanding how entrepreneurs cope in
situations related to the acquisition of resources critical to the realisation
of their new ventures. How they actually do it and what they feel about
it. Filling this gap in our knowledge offers a way to further understand
how entrepreneurs cope and deal with the adverse context within which
they act.
As I will return to in the theoretical framework (see Chapter 2),
earlier research by for example Kouriloff (2000) and Terpstra and Olson
(1993) has tried to explain the issues that entrepreneurs face in this
context by categorising situations which would require entrepreneurial
coping into different types of barriers or problems to venture creation.
These categories convey one aspect of what issues entrepreneurs might
face, but a problem with them is that they view these issues as inherently
bad to venture creation and also see them as objectively given. As a
consequence of this we have a limited understanding of the issues that
entrepreneurs face, which likely also affect our view of their coping with
these issues, as well as the outcomes on their attempts at realising their
venture ideas. In order to approach entrepreneurs’ coping in adverse
situations it is necessary to define what these situations are and such
definitions must go beyond concepts like barriers and problems.
19
More recently, research has begun looking into how
entrepreneurs create their ventures under severe resource constraints
(Baker et al., 2005). This is a major step in the direction of revealing how
entrepreneurs cope, but the perspective taken focuses on resource
acquisitions and sets aside the dynamics of the context. Another
promising new aspect of entrepreneurship with relevance to this study
of perceived resistance is how entrepreneurs cope with role stress,
defined as a state of tension and anxiety whenever a person finds it
difficult to perform an assigned role where the conflict between roles, as
well as the ambiguity of roles influence role stress (Örtqvist, Drnovsek,
& Wincent, 2007).
The phenomenon that I focus on in this study is captured in the
three dimensional contextual model in Figure 1-1
7
. It illustrates how goal
disruptions arise in relation to the three axes: the degree of development
of venture creation ideas, resource acquisitions and time. The degree of
development of venture creation ideas depicts the complexity of the
venture idea as it evolves into a more and more established firm with
routines, borders and resources. As this is formed, issues occur which
become goal disruptions. In addition to this, resources are needed to
develop the venture idea where the types of resources, how much, as
well as how important they are differ over time. Finally time in itself
implies potential goal disruptions for example as certain venture ideas
have a limited window of opportunity within which they must be
launched, or as the entrepreneur only have a limited time to realise the
venture idea because of other obligations. The model implies that
entrepreneurs, as they attempt to realise venture ideas, must
continuously cope with goal disruptions. At any point during the course
of these attempts, the ideas might be terminated if sufficiently severe
goal disruptions are not overcome.
7
The model is depicted in a box-like form, this is only done in order to depict the
three dimensional character. Venture creation is in my mind the opposite to box-like
situations, it is expansive and out-of-the-box thinking.
20
Figure 1-1: Entrepreneurs' contextual acts of coping in adverse environments
Research quiz
With the above in mind we need to build knowledge about the
contexts where it happens and the “it” is how entrepreneurs cope in
situations related to the acquisition of resources that are critical to the
realisation of their new ventures. During start-up, entrepreneurs often
act in a micro context where they as individuals interact with other
individuals and with organisations. These interactions hold a key to
understanding the context of where and how entrepreneurs cope.
First however it is necessary to understand how entrepreneurs
view these interactions. Which of them give rise to situations requiring
coping, and why? By introducing the concept perceived resistance, an
opportunity to address these questions is available. Perception is here
related to the brain’s processing functions where “sensory information is
interpreted in light of existing knowledge, concepts, ideas, and
21
expectations” (Passer et al., 2007: 130). In this way each entrepreneur will
have different unique perceptions of what constitutes a resistance as well
as how to respond to it. In the next chapter I discuss this concept in
detail, eventually arriving at the following definition of perceived
resistance: disruptions
8
, internal or external, that entrepreneurs face and
perceive as working against their efforts at venture creation. Resistance
influences entrepreneurs’ intended planned behaviour of venture
creation. As entrepreneurs attempt to realise their ideas, they perceive
resistance at different instances throughout the process of venture
creation. Resistance then elicits coping responses which demand
attention from entrepreneurs. Taken together this forms a dynamics
which affects the creation process in itself.
Resistance perceived by entrepreneurs is something that poses
potential disruptions to their plans of how to realise their venture ideas
and calls for their attention, thus drawing their focus from their original
planned venture creation activities. That is, when something is somehow
perceived as interfering with the development of the venture, resistance
is perceived. Perceived resistance is in other words specific to an
entrepreneur’s perceptions. Two entrepreneurs could experience the
same event, yet one could perceive it as resistance while the other
perceives nothing potentially goal-disruptive about it.
To put this in a theoretical context, a Schumpetarian view of
creative destruction
9
can be used where, taking a view of the
entrepreneurs, stakeholders that resist their creation efforts are perceived
as opposing the dynamic of venture creation. With this view, old and
8
1a: to break apart: rupture b: to throw into disorder 2: to interrupt the normal course or unity (Merriam-Webster, 2008).
9
The evolutionary process “that incessantly revolutionizes the economic structure
from within, incessantly destroying the old one, incessantly creating a new one”
(Schumpeter 1942: 83).
22
established
10
actors likely have an incentive to keep the status quo of the
old ways, thus making it difficult for new ideas or products to take hold
(Schumpeter, 1942). However the old might not always behave
according to Schumpetarian economics, and the old ways might not even
be a relevant perspective depending on who the stakeholders are. As
entrepreneurs depend on and interact with a broad set of stakeholders
from family and friends to government authorities and venture
capitalists, how can we judge them along the same measure? Which of
those stakeholders represent the “old”? In fact here lies a key issue as it
is not the perceived quality or utility of an idea that makes it a success.
Instead Granovetter proposes that those ideas that survive and become
widely adopted are those with the strongest support, he states: “…ways
of doing things begin for reasons that relate to the various purposes of
the actors involved and to the structures of relations they are embedded
in” (1973). This turns attention back again to Figure 1-1 where
entrepreneurs must navigate and cope with disruptions more in a
Granovettarian way than a Schumpetarian. From a perspective of the
acquisition of resources, stakeholders could have different purposes and
goals in their interactions with entrepreneurs’ venture creation attempts.
Entrepreneurs must thus try to unravel those purposes or at least cope
with their influence on the creation process in order to cope with
disruptions and survive.
With this view it is also apparent that different stakeholders are of
differing importance to a venture at different stages
11
of its development.
As it opens up to situations of dependency, particularly those
stakeholders who are critical have the possibility to influence a new
venture. This possibility means that they can resist, maybe to support or
10
The “old and established” here refers to for example the current industry,
political decision-makers or others who have an interest in upholding the status quo.
11
Although there are different phases in the development of a new venture,
which they are and the order in which they come varies and is unpredictable (Van de
Ven, 1999).
23
maybe to disrupt the venture idea. In the face of such perceived
resistance from stakeholders, entrepreneurs’ responses affect the
outcome of the evolving venture, both whether it survives and regarding
the direction it takes. This is empirically and theoretically important
given that as many as 40 percent of those entrepreneurial initiatives that
are launched fail at some point during the start-up phase (Delmar et al.,
2004b; Ranft & O'Neill, 2001), but we know little of the dynamics
involved in these failures (Aldrich, 1999).
The purpose of this thesis is thus to explore:
• Where and why do novice entrepreneurs perceive resistance to their
venture creation efforts?
• How do novice entrepreneurs cope with perceived resistance?
and to describe:
• Which effects do perceived resistance have on outcomes of venture
creation processes?
Issues of design
As a phenomenon, the purpose of this study was empirically
derived, observed in my previous work as a senior associate for a non-
profit organisation
12
working with innovative projects in multiple
12
The Zero Emissions Research and Initiatives (ZERI), aims at building clusters of
industries where one industry uses the unused output, or waste, of another as inputs
in its own processes. At the same time as this cluster is formed, unwanted by-
products, such as dioxin and other lethal substances are removed. ZERI ventures
were radical and with innovative height, implying that existing production processes
needed to be altered and remodelled. This often gave rise to strong reactions on
behalf of executives within the industry, while venture capitalists and government
officials were unwilling to consider such ventures. From the perspective of the
entrepreneur these reactions were perceived as resisting his or her idea. The
stakeholders on the other hand might have had an interest in keeping a status quo,
keeping existing production processes as they often had sunk costs in those. In the
case of the government decision makers, they could have perceived a risk in
24
cultural settings. Upon leaving the non-profit organisation in 2000, I
discussed at length with Prof. MD. Carl-Göran Hedén
13
about the
problems we had come up against in the projects. Prof. Hedén’s idea was
to study project bottlenecks as a way to explore and build an
understanding of the dynamics of problems met by entrepreneurs. With
this idea in mind I began a literature review of the field of
entrepreneurship research, and my initial interest quickly evolved into
entrepreneurs’ perceived resistance to their ventures.
This phenomenon could be studied at different stages in the
venture creation process, but the focus I have chosen is on the very first
steps of venture creation – from the first moment an entrepreneur
decides to act on an idea. This first stage is relatively limited in time and
sets specific demands on novice entrepreneurs. It is also of key
importance given the high rate of termination among start-ups.
In Reynolds and Miller’s definition of this period as gestation
(1992) they take a perspective of individual entrepreneurs’ actions as it
“depicts many of the factors that affect the efforts of nascent
entrepreneurs to bring their businesses into existence as well as the
length of time involved in their start-up efforts” (Reynolds, Carter,
Gartner, & Greene, 2004: 265). This definition is in line with the
perspective taken in this study and with the specific focus on
entrepreneurs actions it differs from other similar perspectives such as
preorganisation (Katz et al., 1988), start-up (Vesper, 1990), and
organisational emergence (Gartner, 1993).
supporting untested and complex technologies or processes with a high uncertainty
of success. For more information see www.zeri.org.
13
Prof. Hedén, MD, is a member of the Club of Rome, former head of the
UNEP/UNESCO/ICRO Microbiological Resource Center (MIRCEN), professor of
microbiological engineering at the Karolinska Institutet and also Chair of the ZERI
Scientific Advisory Council (1994-1997).
25
These first attempts at venture creation by entrepreneurs have
path dependent implications on later development of their ventures
(Cooper, Gimeno-Gascon, & Woo, 1994). An understanding of gestation
could thus help improve our knowledge of how ventures grow and
develop. Despite this, the gestation of new ventures is an understudied
area of research (Reynolds et al., 2004). In particular the first steps of
gestation are more or less uncharted territory. Gartner puts this
succinctly by stating that “the majority of entrepreneurship scholars
appear to be studying the problems of newer and younger firms” (2004:
207), as opposed to studying emergence of new ventures. This is due to
the difficulty in capturing empirical material from very early points in
venture creation. Identifying conception of an entrepreneurial venture is
complex with the most common first event being the entrepreneur’s
personal commitment. Commitment however follows an earlier and
more elusive activity of speculation whether an idea is viable. A starting
point in this has been said to be the appearance of the “entrepreneurial
gleam in the eye” (Reynolds et al., 1992: 416).
The methodological difficulty of finding and following
entrepreneurs from the instance that “entrepreneurial gleam” appears in
their eyes can probably partly explain certain biases in entrepreneurship
research. First of all, a majority of existing studies of entrepreneurs’ early
start-up attempts are based on retrospective methods. Secondly,
selection biases are problematic as they have retrospectively looked at
successful entrepreneurs thus missing those that were not successful.
These retrospective and selection biases of successful
entrepreneurs must be considered when looking at much of previous
research (Davidsson et al., 2003). Consequently there is a lack of
exploratory studies of entrepreneurs’ initial actions in venture creation.
Instead research has looked at activities which are believed to be of
importance or not for the success of venture creation. Examples of such
activities are legitimacy through business planning (Delmar & Shane,
2003) and patterns of sets of activities (Lichtenstein, Carter, Dooley, &
26
Gartner, 2007). Moreover the focus of these activities and outcomes are
on the later stage of start-up (Carter et al., 1996; Delmar et al., 2003;
Delmar & Shane, 2004a; Gatewood, Shaver, & Gartner, 1995; Van de Ven,
1999), meaning that in the end, unfolding gestation activities in real time
are largely unexplored.
With the lack of exploratory research on entrepreneurs’ gestation
activities there is little empirical research to turn to in order to begin
unravelling how entrepreneurs perceive and respond to resistance. This
is an underlying problem for any research studying gestation and for
this study in particular. The manner in which I dealt with it was to begin
with a pre-study (see Appendix A) parallel with doing an in-depth
theoretical overview. With the learning lessons from the pre-study I set
up four case studies of novice entrepreneurs with innovative ideas that I
was able to follow from an early stage in their creation attempts. The
study followed two interacting tracks which partly overlapped. It began
with a theoretical one where I built a deductive model which served to
deepen my understanding as well as to use as a starting point for the
empirical study, both in gathering material and in the analysis. The
empirical track in turn built an inductively derived model. As the study
progressed, the inductive modes became more and more pronounced as
is shown from chapter 5 and onwards.
1.1 Delimitations
Throughout this thesis I point to specific delimitations I make in
context where they happen, mainly focused on considerations in relation
to theory and research design. In addition to those delimitations that I
make in the text to come, there are some which are appropriate to
present here.
27
Perceptions
Entrepreneurs’ perceptions of resistance from stakeholders to
their new ventures will be studied. Entrepreneurs in this context are seen
as the founders and active managers of new independent ventures. Only
their perceptions of stakeholders’ resistance to their ventures are studied.
Other stakeholders’ perceptions are thus not considered in this study.
Individual differences
As a consequence of focusing on entrepreneurs’ perceptions,
individual differences permeate the study. To try and explain these
differences, individuals’ identities and sense-making (Weick, 1979) could
be used. However it is not within the scope of this study to build a
model of individual entrepreneurs’ differences and the impact of this, or
try to categorise differences and individual characteristics. The aim with
this study is instead to build an understanding of aspects of perceived
resistance – where and why they are perceived and how entrepreneurs
cope with them. It is thus enough to conclude that individual differences
exist and as such offer depth and variation.
Gestation period
This study is built on four case studies of novice entrepreneurs
during their first creation attempts. This places the study within the
gestation period and it is not brought further into what could be for
example a period characterised more by growth.
Goal-setting and planned behaviour
The pre-study indicated among other things that entrepreneurs
set goals and make plans for how to achieve those goals. Furthermore it
pointed towards those goals and plans as sources of, or areas where
perceived resistance could arise. After carrying out the pre-study and
28
writing the research proposal I chose this way of viewing the manner in
which entrepreneurs go about to realise their venture ideas. This implies
that venture creation through a different mode of for example
effectuation, as proposed by Sarasvathy (2001), is not conducive to the
view taken as it implies that entrepreneurs do not plan but instead build
their ventures through a creative process where they constantly adjust
and adapt. As is evident from reading this study, goals and plans are
integral aspects of novice entrepreneurs’ venture creation attempts. Also
when considering that the entrepreneurs studied here are chosen from
business labs and courses on venture creation, the planning aspect and
thus causation becomes further enhanced. This is so as business labs and
such courses rely on business plans and set goals to evaluate and guide
participating ventures.
1.2 Outline of the study
This section concludes Chapter 1, and has provided an
introduction to, as well as an overview of this study. Next, in Chapter 2, I
build the theoretical framework which lays the foundation for the
empirical study. The chapter discusses the issue of resource constraint
and entrepreneurs personal resources and abilities to overcome and cope
with those constraints. A key aspect which influences coping is
entrepreneurs’ perceptions of both the constraint and their possibilities
of successful coping. This is discussed in some detail and integrated into
the conceptualisation of perceived resistance. The chapter is concluded
with a theoretical model.
Chapter 3 presents the research design, including methodological
considerations, gathering of empirical material and the consequent
analysis. Part of the chapter is also dedicated to an evaluation of the
quality of the study.
29
In Chapter 4, the empirical material is introduced through a
presentation of the four cases. These are written in such a way that the
resistance which the entrepreneurs perceive forms a red thread
throughout the cases. This is done in order to highlight perceived
resistance and facilitate an understanding of the process of each case, of
the issues facing the entrepreneurs – their perceptions and responses as
well as their coping attempts. In addition to the cases, Appendix E also
includes all the instances of perceived resistance that were observed in
the study. This serves as a guide to aid the reader gain an overview
while reading the cases, as well as the analysis.
The analysis is described in Chapter 5 which is separated into
three sections. The first is an empirical analysis which uses the
theoretical model as an outline, but which takes the analysis beyond this
to reveal the dynamics of perceived resistance. The second section
returns to the theoretical framework and uses this to discuss the
empirical findings. Finally the third section summarises Chapter 5 into
the inductively derived model of perceived resistance. At a number of
instances throughout this chapter I point to unresolved issues and signs
of deeper aspects influencing the dynamics of perceived resistance.
These issues are the focus of Chapter 6 where an additional concept and
theoretical field is introduced to discuss how entrepreneurs’ energetic
resources moderate the dynamics of perceived resistance. This chapter is
divided into two main sections. The first lays out the theoretical
framework and relies heavily on cognitive theory. The second is a
discussion of the findings from Chapter 5 in light of this new theoretical
framework.
Finally in Chapter 7 I summarise the study and discuss the value
of the findings to practice and theory, as well as opportunities and
suggestions for future research.
30
31
2 Creating new ventures
This chapter builds a theoretical framework of entrepreneurship
focused on issues pertaining to the start-up of new ventures.
Entrepreneurs’ acts or attempts to create new ventures are the
underlying focus. Specific attention is directed towards understanding
the theoretical concerns of where and why entrepreneurs perceive
resistance to their ideas, as well as how they deal with perceived
resistance.
To begin with, the definition of resources, and what they mean to
entrepreneurs are discussed. Next, I take a resource dependence
perspective to discuss the relationship between entrepreneurs’ need for
resources and external actors’ possession of resources. Following this, I
examine entrepreneurs’ perceptions of resistance using cognitive
appraisal theory to discuss how intentions and motivations influence
these perceptions. Finally, I turn to coping strategies where social capital
and social skills are discussed as part of novice entrepreneurs’ resources
to cope with resistance.
The chapter is concluded with a deductively derived theoretical
model of perceived resistance which is then used to analyse empirical
material.
2.1 Resources – the need to have them
Access to resources is commonly characterised as an integral part
of ting up a new venture. From the moment an entrepreneur comes up
with an idea, resources are needed if the idea is to be realised. Exactly
32
what sort of resources that are needed at different moments depends on
aspects such as type of product or service, and the characteristics of the
markets in which venture ideas are positioned. Resources that a firm can
use to devise strategies for efficiency and effectiveness include “all
assets, capabilities, organizational processes, firm attributes, information,
knowledge” (Barney, 1991: 101). In terms of venture creation, Green and
Brown (1997) classify needed resources as follows: physical, human,
social, organisational and financial. This is an applicable classification for
this study and is used when gathering empirical material as well as
when structuring it.
In an entrepreneurial context, there are two sources of resources:
those owned and those controlled by the entrepreneur. Most new
ventures start out with very limited resources of their own and to
survive, entrepreneurs must gain access to external resources which they
do not own but which are needed in the start-up process. Through access
to resources, entrepreneurs can thus control the use of resources they do
not own. Stakeholders are motivated to provide their resources to a new
venture if they believe that it is competent, efficient, effective, worthy,
appropriate, and/or needed (Zimmerman & Zeitz, 2002). Herein lies the
crux of the matter, how to gain control over something which is not in
ones’ possession, particularly if the resource needed is perceived as
critical to the realisation of the idea?
Baker and Nelson propose that a view of resources as objectively
needed is incorrect as firms can use bricolage strategies to make do with
what is at hand (2005). With this they mean that it is not about the
acquisition of resources, but of what is seen and combined into
resources. I agree with their view of resources, but I see it more as a
coping strategy which can be chosen as a generic strategy, or as a
strategy for certain situations depending on the context. In earlier work
on bricolage they state that entrepreneurs choose what they believe to be
the best strategy depending on the situation, whether bricolage or
resource-seeking (Baker, Miner, & Eesley, 2003).
33
The issue of resources as objectively or subjectively needed
furthermore points to the question of which approach to take when
studying access to resources. There is more than one way to approach
this, for example through a Weickian sensemaking perspective (Weick,
1979), by taking a view of dynamic capabilities (Eisenhardt & Martin,
2000) or at a more fundamental level, a resource based view (Penrose,
1959). However, the resource perspective in this study focuses on the
perceived asymmetry of relations and consequent perceptions of
resistance. This means that it is both the need for resources which drives
entrepreneurs to seek them from stakeholders where dependent ties
arise, as well as the risk of misappropriation of resources as a
consequence of dependence that must be satisfied by the theoretical
perspective of choice in this study. Given this, I chose to take a resource
dependence approach such that is proposed by Pfeffer and Salancik
(1978) as it specifically addresses the issue of asymmetry and resource
needs. In addition to resource dependence theory, and as I will discuss in
detail further on, theories on social networks will be used to view how
ties are formed and their characteristics which links into strategies for
coping. This approach to theories, combining resource dependence with
social networks has recently been adopted in entrepreneurship research,
for example in research into tensions that occur at the level of tie
formation. Research has focused on tensions that face entrepreneurial
ventures in need of resources while risking loss of their own resources to
corporate “sharks” (Katila, Rosenberger, & Eisenhardt, 2008) and builds
on a growing amount of research based on resource dependence theory
(see for example: Gulati & Sytch, 2007).
This sets the stage for resource issues facing entrepreneurs during
gestation. Resources can be viewed as both objectively and subjectively
given, it is the perceptions of the entrepreneurs and their coping
strategies that matters to this study. Thus the framework within which
entrepreneurs act is described using a resource dependence perspective.
34
2.1.1 Dependence, control and entrepreneurship
This section discusses resource dependence theory and its
implications to new venture creation, specifically to entrepreneurs’
perceptions of, seeking and gathering critical resources. The resource
dependence argument contains two elements. Firstly, actors are likely to
respond more to those actors in the environment that control critical
resources – this is the issue of external constraint. Secondly, actors
attempt to manage these external dependencies, both to survive, and to
achieve more autonomy from external constraints (Pfeffer, 1982).
Resource dependence theory claims that:
“organisational behaviours become externally influenced
because the focal organisation must attend to the demands of
those in its environment that provide resources necessary and
important for its continued survival… organisations will (and
should) respond more to the demands of those organisations or
groups in the environment that control critical resources”
(Pfeffer, 1982: 193).
This implies that when trying to gain control of external resources
entrepreneurs have a challenge to manage, and must measure the need
for external resources against the risk of losing control over their
ventures.
At the same time as attempting to gauge these factors against each
other, entrepreneurs’ choices are limited to the extent that certain
resources are critical to the survival of their ventures. “It is the fact of the
organisation’s dependence on the environment that makes the external
constraint and control of organisational behaviour both possible and
almost inevitable”
14
(Pfeffer et al., 1978: 43). So when attempting to create
14
The key issue for this study is stakeholders’ possibility to exert constraint and
control, whether it is inevitable or not I leave to Pfeffer and Salancik and others to
debate.
35
new ventures, at some points entrepreneurs are likely to find themselves
in situations where they must consider giving up a certain amount of
control in exchange for resources.
The external constraint imposed by stakeholders in turn leads to
different interdependencies. One such interdependence focuses on
outcome – the results achieved by one actor are interdependent on those
of another actor. Another form of interdependence is connected to
behaviour where the activities of one actor are dependent on the actions
of another actor (Pfeffer et al., 1978). Entrepreneurs do not act in a
vacuum, they relate, more or less interdependently with other actors.
When taking a view of venture creation as presented in Figure 1-1 –
starting with intention and then focusing on surviving long enough, in
the face of disruptions, so that a venture idea can be realised –
understanding the role of interdependence in the relations between
entrepreneur and stakeholder is a key issue.
Entrepreneurs’ level of vulnerability to influence from
stakeholders is governed by their dependence on certain types of
exchanges. Two dimensions of resource exchange affect this dependence:
(1) the relative magnitude of the exchange and (2) the criticality of the
resource to the entrepreneur. The relative magnitude is measured by the
proportion of total inputs, or total outputs accounted for by the
exchange. Entrepreneurs with a focus on fewer markets would thus face
a higher dependence on specific customers than with a focus on multiple
markets. New ventures requiring fewer primary inputs would, in a
similar fashion, be more dependent on suppliers than if they had
multiple inputs. The second dimension, criticality of the resource,
measures the ability of an actor to continue functioning in the absence of
a particular resource or market.
In other words, the problem for an entrepreneurial venture
concerning resources is not that there are critical resources, but the
supply of those very resources. If supply is abundant and stable, the
entrepreneur will have few restrictions and can act without concern for
36
resources, even when in a position of high vulnerability as they can
always find the resource elsewhere. However, when supply is limited,
production instability and survival uncertainty become dilemmas in
building the venture.
“An organisation’s attempts to satisfy the demands of a
given group are a function of its dependence on that group
relative to other groups and the extent to which the demands of
one group conflict with the demands of another. Three factors
are critical in determining the dependence of one organisation
on another. First, there is the importance of the resource, the
extent to which the organisation requires it for continued
operation and survival. The second is the extent to which the
interest group has discretion over the resource allocation and
use. And, third, the extent to which there are few alternatives,
or the extent of control over the resource by the interest group,
is an important factor determining the dependence of the
organisation” (Pfeffer et al., 1978: 45-46).
This refers to situations where resources are limited. In such
situations stakeholders can manipulate resources in two ways: through
discretion over resource allocation, or over resource use (Pfeffer et al.,
1978). The first type is a withholding strategy where a stakeholder does
not provide a firm with the requested resources. The second type is a
usage strategy where a stakeholder continues to provide the requested
resources, but does so with strings attached (Frooman, 1999).
However, relations brought about through dependency situations
are asymmetric and assumed not to be stable. This means that the
entrepreneur as the dependent or less powerful actor has incentives to
undertake actions to address this imbalance (Blau, 1964; Emerson, 1962;
Pfeffer, 1982). In order to do this, entrepreneurs have some leverage as
they are in possession of social, human and organisational resources.
Such intangible resources can in turn be exchanged for more tangible
ones, where the complexity of the resources indicates the ease with
37
which they can be exchanged (Bourdieu, 1986; Brush, Greene, & Hart,
2001; Coleman, 1988).
Entrepreneurs’ need for critical resources and the dependent
situations that this could potentially lead to vis-à-vis their stakeholders
constitute a basic part of the theoretical framework presented here. As
such, resource dependence theory indicates that those relations with
stakeholders in possession of critical resources of limited supply are of
particular interest. These are asymmetric relations, characterised by
greater dependency with lesser possibilities of managing and balancing
the asymmetry. Entrepreneurs may perceive a loss of apparent control in
such relations as potentially goal-disruptive to the planned behaviour
which is a part of venture creation; in the context of this study this is
characterised as perceived resistance from the stakeholder.
The focus of this study is on entrepreneurs’ attempts to build new
ventures; the micro-to-meso transition through the eyes of the
entrepreneur, or the boundary creating activities which builds the new
venture as a separate entity (Aldrich, 1999). One problem with resource
dependence theory is that it studies relationships between organisations,
and thus dependency appears on a meso-level between a venture and its
stakeholders. This study offers a way to bridge the gap between micro
and meso levels and I aim to do this by complementing resource
dependence theory with a view of entrepreneurs’ coping and their use of
social capital and social skills. This also complements resource
dependence theory as it focuses on the dyadic relations of entrepreneur-
stakeholder, thus directing attention to asymmetric resource allocations
and the needs of entrepreneurs.
2.2 Entrepreneurs’ perceptions of resistance
The concept of perceived resistance is new in the field of
entrepreneurship, but it has been used in other fields of research. In
38
particular, resistance to change has been extensively studied, for
example as organisations’ resistance to reversals in the direction of
change in strategy and structure (Miller & Friesen, 1980); how employees
resist change imposed by top management (Powell & Posner, 1978). In
change studies, resistance has been defined as both the intentional acts of
commission (defiance) or omission (Ashforth & Mael, 1998), and as a
certain kind of action or inaction (Brower & Abolafia, 1995). Resistance to
change studies have traditionally characterised resistance as “a reactive
process where agents embedded in power relations actively oppose
initiatives by other agents” (Jermier, Knights, & Nord, 1994: p 9). Other
research has questioned this view of resistance as a generically negative
aspect where employees should be convinced to see the correct thing and
agree to change (Watson, 1982). In the case of employees and managers,
managers will thus see employees as obstacles. This is problematic as
one reason for employees to resist top management is that they want
them to pay attention to critical issues for the organisation to succeed
(Dutton, Ashford, Neill, Hayes, & Wierba, 1997); resistance to change is
thus a proactive tool for the betterment of the whole organisation.
This study focuses on the resistance that entrepreneurs perceive
while attempting to create their new ventures. As such, the concept has
similarities to resistance to change if one, for example, sees a new
venture as change agent in an industry. However, it differs in the sense
that resistance is that which entrepreneurs perceive. To understand this I
turn to cognitive appraisal theory where perceived resistance is related
to hassles, defined as episodes of disrupted goal-directed behaviour
(Lazarus, 1990).
The approach I take also differs from earlier entrepreneurship
research which has used constructs such as obstacles (Macmillan, Block,
& Narasimha, 1986), barriers to market entry (Gartner, Gatewood, &
Shaver, 1991; Kouriloff, 2000; Vesper, 1990), problems (Terpstra et al.,
1993), and challenges (Baum & Locke, 2004).
39
These earlier studies use concepts which reflect their view of what
opposes entrepreneurs’ venture creation efforts. Two of them use
barriers
15
and obstacles
16
which are metaphors for a physical blockage
like a wall. Kouriloff for example define barriers as ”any condition,
external or internal, adverse to creating a new business” (2000: 61), thus
viewing barriers as entirely negative to venture creation and for that
purpose the wall metaphor seems appropriate.
Problems are the opposite of barriers and obstacles in the sense
that the concept is vague and refers to any issue facing a new venture.
Terpstra and Olson ask CEOs about “their firms' most significant
problems at two points in time—during the start-up stage and during a
later growth stage of development” (1993: 8). This potentially captures
broader issues than the concept of barriers but methodologically their
study suffers from retrospective bias as it focuses on what the CEOs
perceived as “the most significant problem” a number of years earlier.
Challenge is in turn related to issues of appraisal and stress,
where eustress
17
leads to a challenge approach. Baum and Locke see
certain characteristics of entrepreneurs’ situations as causing challenging
situations. These situations are “(a) extreme uncertainty (newness of
products, markets, and organizations; lack of information), (b) resource
shortages (financing, knowledge, operating assets, and legitimacy), (c)
surprises, and (d) rapid change” (Baum et al., 2004: 588). The definition
15
“a: something material that blocks or is intended to block passage b : a natural formation or structure that prevents
or hinders movement or action
” (Merriam-Webster, 2008)
16
“from obstare to stand in front of … something that impedes progress or
achievement” (Merriam-Webster, 2008)
17
Selye (1974; 1976) distinguishes between eustress and dystress. He equals stress
with arousal and claims that a certain amount of arousal is good (eustress), while too
much is bad (dystress). Lazarus (1993) goes on to propose that dystress leads to a
threat approach and eustress leads to a challenge approach. Threat is a response
coming from a feeling that not much can be done, while challenge comes from a
feeling that “I can cope with this”.
40
of the concept of challenge and the legacy from stress research shows
that it differs from the other studies in the sense that it does not imply a
negative obstacle. Instead it points to something that needs attention to
deal with. Given this, Baum and Locke’s challenge concept is similar to
perceived resistance. However, there is a crucial difference as the
characteristics of the situation that Baum and Locke discuss is a state
somehow imposed from the outside as opposed to resistance which is
something perceived by the entrepreneur.
In summary, the concepts used in entrepreneurship research
resemble the criticised resistance to change studies in the sense that they
describe a force opposing the entrepreneur as something negative and
external. These concepts embody a negative connotation, except for
Baum and Lockes’ challenge concept. Taking a view of obstacles, barriers
or the like does not capture the complex dynamics of new venture
creation and the forces opposing entrepreneurs. Defined as disruptions,
internal or external, that entrepreneurs face and perceive as working against
their efforts at venture creation, perceived resistance, the concept used in
this study, offers a more encompassing and useful alternative.
2.2.1 How perceived resistance arise
Resistance perceived by entrepreneurs poses potential disruptions
to their goals of how to realise their venture ideas. This calls for their
attention and distracts their focus away from planned venture creation
activities. The type of goal which is of interest here is the task-level goal
which involves immediate goals relating to the performance (Kluger &
DeNisi, 1996) of their ventures. The disrupted goal’s relevance to overall
performance, the degree of incongruence resulted from the disruption,
and the entrepreneur’s personal reasons for pursuing the idea, influences
how the goal disruption is evaluated (Lazarus, 1991). Thus, when
something is perceived as interfering with the development of the
venture, resistance is perceived. However, perceived resistance is not an
41
objective situation or something perceived by others, it is specific to an
entrepreneur’s perceptions. This is important to repeat and emphasise –
two entrepreneurs experience the same event differently – one may
perceive it as resistance while the other may perceive no potential goal
disruption. This is equally relevant whether the disruption is one in the
immediate vicinity of the entrepreneur or an environmental jolt
(Venkataraman & Van de Ven, 1998) concerning an entire industry and
even up to a global scale.
In these situations, stress levels caused by resistance depend on
how an entrepreneur perceives the significance of goal disruptions to his
or her values, beliefs, goal commitments and situational intentions
(Lazarus, 1990, 1999). It has been found that an initial stimulus evokes an
evaluative reflex, that is, a primary appraisal which seems to occur
before a higher order cognitive appraisal takes place. A negative
evaluation is interpreted as a threat (Duckworth, Bargh, Garcia, &
Chaiken, 2002) but as evaluations are individual, the same situation
could be interpreted as a challenge (Lazarus, 1999) depending on
individual factors such as for example self-efficacy (Bandura, 1997),
constructive thinking (Epstein & Meier, 1989), and hardiness (Maddi &
Kobasa, 1984). It could even be interpreted as benign, neutral or
irrelevant.
In an entrepreneurial context, a “threat” implies that something is
about to take place that risks harming an entrepreneur’s venture idea
where the entrepreneur feels less confident in successful coping. A
“challenge” on the other hand is something that the entrepreneur feels
confident to be able to cope with
18
. Whether an event is interpreted as a
threat or a challenge, in both cases it signals that something risks the
achievement of a task-level goal and alerts the entrepreneur that
“something is amiss”.
18
This discussion uses Lazarus’ (1993) descriptions of ”threat” and ”challenge”
and applies them to an entrepreneurial context.
42
2.2.2 The influence of perceived resistance to venture creation
One of the positive outcomes of perceived resistance is, for
example that it forces entrepreneurs to further develop products or
services or look for other sources of support in order to overcome the
perceived resistance. It may also cause entrepreneurs to drop ideas that
are unlikely to ever become successes and in that way free up resources
for other ventures. Negative outcomes on the other hand may be, for
example, the diversion of efforts from planned activities to fire fighting,
eventually leading to a poorer result than expected, or even the
termination of a viable idea. What these two outcomes have in common
is that they depend on entrepreneurs’ perceptions and consequent
coping strategies. The outcome in other words depends on individual
entrepreneurs.
Situations where resistance is perceived are, for example when
relating to stakeholders
19
who may resist a venture due to a positive
intention of wanting to support it or on the other hand due to a negative
intention of wanting to disrupt it (MacMillan, 1983). An example of
resistance with a positive intention is a situation of errors in the
development of an innovation that risk snowballing to crisis proportions
(Van de Ven, 1999). A stakeholder with an interest in seeing a venture
succeed may resist with an aim to influence the entrepreneur’s strategy.
Resistance with a negative intention may be for example situations
where ventures need critical resources, but where stakeholders restrict
access to those very resources. Other examples of negative intentions are
stakeholders that see ventures as competitors, while at the same time
19
The stakeholders of an emerging venture may be positive or negative, thus
wanting to aid or disrupt its realisation, or they could ignore it or be unaware of its
existence or need. Various dynamics influence this process, where information
asymmetry to the benefit of the entrepreneur for example could lead to a careful and
vigilant approach towards the entrepreneur (Amit, Glosten, & Muller, 1990). This
study however exclusively takes the perspective of the entrepreneurs when
examining perceived resistance.
43
acting as gatekeepers of a critical resource or a critical relation.
Restricting access to such resources would be a way of obstructing
venture creation (MacMillan, 1983). On the other hand, acts of
stakeholders that entrepreneurs perceive as resistance do not have to be
intentional. Stakeholders do not even have to be aware of an
entrepreneur’s or venture’s existence for entrepreneurs to perceive them
as resistance.
Resistance may also come from stakeholders with closer relations
to the entrepreneurs. As the focus here is on early start-ups, such
stakeholders could be partners, first employees, or family. In addition to
these stakeholders, there is also the entrepreneur him- or herself within
whom resistance might arise. With this view, perceived resistance does
not necessarily have to come as an unexpected and externally generated
event. Examples of such resistance could be where an entrepreneur
wants to achieve something outside the venture; this would then take
attention away from the venture and the venture creation activities could
become a perceived burden to the entrepreneur, pitting it against other
aspirations. Family and children is one example of this where a desire to
spend time with family could limit available attention for venture
creation. The choice to spend time with family is not where resistance is
perceived, but the consequences of making this choice could lead to
perceptions of resistance in situations where it would not have been
perceived otherwise.
The question of where resistance arises is also likely to be related
to where in time or stage an emerging venture is. The concept of
perceived resistance implies that different stakeholders have different
weight and thus give rise to different levels of perceived resistance. As a
new venture emerges, the importance of different categories of
stakeholders varies over time. Those stakeholders with the most
importance at a certain stage likely also have the greatest potential to
cause perceived resistance.
44
2.3 Coping – resources and strategies
To recapitulate, so far I have discussed how entrepreneurs with
limited resources and no previous experience of venture creation must
gain access to resources outside their control in order to realise their
venture ideas. This leaves them vulnerable to external control from
stakeholders. If access to critical resources is restricted, and those
resources are unavailable elsewhere, then there is a risk that
entrepreneurs perceive it as resistance to their venture creation efforts.
For entrepreneurs with no personal resources, their social capital
may be the only resource they possess themselves (Brush et al., 2001).
Their social skills in effect hold the key to their ability to use their social
capital and cope with the perceived resistance.
This is the topic of this section, how entrepreneurs cope, and
specifically how they cope without any other personal resources than
possibly their social capital and with no previous experience of new
venture creation. The reason why I focus on entrepreneurs without any
previous experience of new venture creation is that existing research
shows that prior experience appears to be a reason why new ventures
succeed (Rotefoss & Kolvereid, 2005).
Coping is a concept which is discussed in literature in relation to,
for example, strategy and entrepreneurial activities, but little has so far
been done to explore how entrepreneurs cope. When coping is studied, it
is relation to failure and entrepreneurs coping with failure (Shepherd,
2003; Singh, Corner, & Pavlovich, 2007). When using the concept of
coping in his study I define it as “cognitive and behavioural efforts to
manage specific external and/or internal demands that are appraised as
taxing or exceeding the resources of the person” (Lazarus & Folkman,
1984: 141). In short, as “the effort to manage psychological stress”
(Lazarus, 1999: 111) where appraisal decides how individuals decide to
cope. Accordingly, people respond differently to events depending on
how the significance of these events is appraised (Lazarus, 1990, 1999).
45
This means that such significant events involve difficult situations which
entrepreneurs perceive as requiring much of their available resources,
maybe even more than they have. Coping refers to their emotions,
thinking or concrete actions to deal with those situations.
Concerning typologies of coping, research is yet to agree upon
one which can be applied to all kinds of stressful events (Folkman &
Moskowitz, 2004). In order to further an understanding of how
entrepreneurs cope it is however beneficial to develop a baseline view of
likely coping strategies. There are two main type of coping, that is
problem-focused and emotion-focused strategies (Folkman et al., 2004).
In addition to this, I concur with the literature on how entrepreneurs rely
on their social capital for support (see for example Davidsson et al., 2003;
Hite & Hesterly, 2001) and thus also include social support as a third key
coping strategy (Passer et al., 2007). Problem-focused coping strategies aim
to deal with the situation itself in order to change it or make it less
stressful. This is done, for example, by taking action to deal with the
stressor, seeking instrumental support, suppressing competing activities,
exercising restraint, and planning. Emotion-focused coping strategies focus
on emotional responses that arise as a consequence of the situation.
Attempts to manage these responses can for example involve
suppression, restraint, acceptance, denial and disengagement, positive
reinterpretations, acceptance, denial, escape-avoidance, wishful thinking,
and controlling feelings. Finally the strategy of seeking social support
involves looking for help and guidance, emotional support, affirmation
of worth, and tangible aid such as the acquisition of financing.
Problem-focused and support seeking strategies are favoured
when there is some way to control the situation (Passer et al., 2007).
Emotion-focused coping however is a favoured strategy when the
likelihood of control is low. This can be explained by turning to the
outcome of coping, where the result of emotion-focused coping is a
change in individuals’ interpretation of circumstances, for example,
46
giving up a sought after goal or the denial of a certain threat (Lazarus,
1999).
Novice entrepreneurs can use different types of capital as a form
of resource in their coping strategies. The following section will examine
these forms of capital before the discussion of coping strategies is
continued in section 2.3.2.
2.3.1 Capital – a resource at hand (or not...)
Specific resources for venture creation were previously
introduced as physical, human, social, organisational and financial
(Greene et al., 1997). A different word for such resources is capital
20
as
introduced by for example Bourdieu (1986) and Coleman (1988). Capital
can take monetary and non-monetary forms, as well as tangible and
intangible forms, with each form carrying different meaning. Bourdieu
(1986) proposed three forms of capital:
• Economic capital – financial resources and assets
• Cultural capital – education and knowledge
• Social capital – the sum of potential resources arising from a
network of relationships.
Coleman described social capital as carrying elusive features due
to its embeddedness in relations. He also expanded on Bourdieu’s
typology, and added physical and human capital.
• Physical capital – completely tangible and in a material form
• Human capital – not as tangible as it is embodied in an individual’s
skills and knowledge. (Coleman, 1988)
20
When using the concept of forms of capital, I see it as a resource or an asset,
social capital is for example a resource which is in line with Bourdieu’s (1986) and
Coleman’s (1988) use of the same.
47
From an entrepreneurial perspective, one could also add the
entrepreneur’s idea as a form of capital, a kind of innovation capital. The
idea is connected to the recognition of an opportunity and the start of the
process of venture creation. When forming an idea and then deciding to
pursue it, entrepreneurs use their capital to obtain other resources,
enabling the establishment of new ventures.
In addition there has even been proposed a specific type of capital
relating to entrepreneurs, namely:
• Entrepreneurial capital, defined as the multiplicative function of
entrepreneurial competence and entrepreneurial commitment
(Truls, 2002). The reasoning behind this multiplicative effect is that
both competence and commitment are necessary components when
creating a new venture. This type of capital involves an individual’s
or a team’s potential for future entrepreneurial behaviour, and is
thus a forward looking predictive construct and not something the
entrepreneurs can use here and now.
All these forms of capital probably work in concert, but for an
entrepreneur attempting to create a new venture, multiple studies show
that social capital is the most critical (see for example Cooper et al., 1994;
Davidsson et al., 2003; Nahapiet & Ghoshal, 1998).
Novice entrepreneurs, who lack experience and have limited
financial assets, are restricted in the available means of dealing with
resistance from external constituents, and are particularly dependent on
using their social capital (Brush et al., 2001). Social capital is used
extensively in the founding of new ventures (Baker et al., 2003; Baker et
al., 2005; Birley, 1985) and forms nexuses of relationships, which
influence the pattern of organisational mortality (Fichman & Levinthal,
1991). An entrepreneur’s skills and objectives play a major role in
deciding the direction of newly founded ventures (Bruderl,
Preisendorfer, & Ziegler, 1992).
48
Although there are studies that question the unambiguously
positive approach to social capital, there is still support for the claim that
social capital increases the probability of new venture survival (Bruderl
& Preisendorfer, 1998). Given that social capital is a resource available to
novice entrepreneurs, and one with positive influence on the venture
creation process, I chose to elaborate a little more on it. Thus in the
following sections I focus on the personal, structural and relational
aspects of social capital and connect it to entrepreneurs’ dependence on
resources. My aim with this is to show how entrepreneurs can use their
social capital as a resource when launching problem-focused and social
support seeking coping strategies.
Social capital as a personal resource
Entrepreneurs who do not have the means to buy needed
resources need to devise alternative strategies in order to gain control of
resources needed for the transformation of an idea into a new venture.
Their primary source of access to resources is their pre-existing
networks, both during and after founding their venture. This implies
that entrepreneurs are dependent "on pre-existing contact networks as
the means at hand" (Baker et al., 2003: 269). These relationships are used
by entrepreneurs to build their ventures and serve several roles, where
for example friends and family initially are important for inner support,
advice and concrete help (Birley, 1985). This importance of
entrepreneurs’ personal networks is reflected in their use of them in
gathering resources (Johannisson, 2000).
As ventures evolve, so do relationships and they take on an
increasingly socio-economic form (Larson, 1992). For entrepreneurial
ventures this means that entrepreneurs’ social embeddedness influences
their ability to draw on social and economic resources (Jack & Anderson,
2002; Uzzi, 1997). How this affects the entrepreneurial process can be
exemplified by two ventures in the Swedish tobacco industry aiming at
similar potential customers (Vikström, 2004). The two entrepreneurs of
49
venture A both had degrees from a Swedish business school. They also
had a few years working experience where they had come in contact
with a number of investors. The entrepreneur of venture B had worked
as a nurse and had no contact with or experience from investor contacts.
As a result, venture A very quickly acquired the venture capital deemed
necessary, while venture B had to rely on personal bank loans. This
initial choice of sourcing of financial capital decided much of the path of
the respective ventures, both of which a couple of years later were in
business, but only one had made a profit from start, venture B. The
entrepreneurs of venture A later sold their shares to one of the world’s
largest tobacco companies which would seem like a rational thing to do
given that they had brought in venture capital. The entrepreneur of
venture B still owns her company.
When looking at entrepreneurs’ social capital, context dependent
issues such as favourable prior beliefs, trust, and goodwill become
important in new ventures’ emergence (Fichman et al., 1991). They aid
emerging ventures to overcome liabilities of newness by helping to
create stable links with stakeholders (Stinchcombe, 1965). However, in
the process of forming links with external stakeholders, it is not
necessarily the most efficient ideas that survive and become widely
adopted, but the ideas that have the strongest support. As Granovetter
(1973) states: “…ways of doing things begin for reasons that relate to the
various purposes of the actors involved and to the structures of relations
they are embedded in”. In the case of the two ventures in the tobacco
industry discussed above, the entrepreneurs who took in venture capital
began with the intention to do so, to grow and to exit. The intention of
venture B’s entrepreneur instead was to create a new brand and build a
company around it that would be hers. Her aim was to grow organically
with some borrowed money which was the only financial capital
available to her.
50
Studying embedded structures and relations – social capital – is
crucial to understand how entrepreneurs acquire resources in the face of
perceived resistance,.
Structural aspects of social capital
Coleman defined social capital as any aspect of social structure
that creates value and facilitates actions of individuals within that social
structure. Just as the creation of physical capital involves changes in
materials so as to facilitate production, and human capital involves
changes in an individual's skills and capabilities, social capital is created
when the relationships among people change in ways that facilitate
instrumental action (Coleman, 1990).
Studies of entrepreneurs in relation to social capital began with
researchers such as Coleman (1988) and Portes and Guarnizo (1991).
Those studies focused on ethnic minority groups more than on
individual entrepreneurs, but they inspired more specific research in the
field of entrepreneurship. Research has since shown that issues such as:
firm survival (Pennings, Lee, & Witteloostuijn, 1998; Uzzi, 1996), firm
performance (Batjargal, 2003), acquisition of resources during start-up
(Brush et al., 2001), creation of new ventures (Davidsson et al., 2003), and
growth (Florin, Lubatkin, & Schulze, 2003), are all positively influenced
by social capital.
In addition to the firm and population level research referred to
above, social capital studies have lately also started to look at individual
entrepreneurs. One example is Bowey (2002) who studied how
entrepreneurs’ social capital is affected by relationships, specifically the
changes in entrepreneurs’ social capital and what affected these changes.
Returning to the basics of social capital, at the core of this concept
lies the idea of its appropriable and convertible qualities. Social capital is
related to the notion that certain social ties, for example friendships, can
be used for various purposes. Friends can for instance offer work advice
51
or financial support. Coleman (1988) calls this concept appropriability,
that actors with multiplex relations
21
can appropriate resources in one
relation for use in another. The second quality of social capital, actually
between all forms of capital, is its convertibility (Bourdieu, 1986) in the
sense that it can be converted into other forms of capital, for example the
more tangible economic capital. There are however differences in the
convertibility between different forms of capital where social capital has
a certain stickiness compared to economic capital, which is more liquid,
as it takes time to convert it into economic capital (Smart, 1993). Further
similarities with other forms of capital are that social capital can function
as a substitute or a complement for other resources. Actors can for
example substitute for a lack of financial resources or complement
existing financial resources.
Social capital offers a way to identify the value of certain aspects
of social structure to actors as resources which they can use to achieve
their goals. In this sense location is a peculiar and important character
that sets social capital aside from other forms of capital. It is located in
the structure of relations between and among actors
22
, not in the actors
themselves or in physical implementations of production (Coleman,
1988). An actor’s location within this structure of social relations decides
which resources are available. Granovetter also points to location in his
discussion of weak ties, and although not made explicit, location would
be where social capital resides and decides its quality (1973). Burt (1997)
more concretely shows what these weak ties are in his discussion of
structural holes. Like Coleman, he states that social capital is an asset
arising in the location in a structure of exchanges. Those actors who
connect two or more networks with each other can act as brokers. Such
21
Relations where actors are linked in more than one context, such as work,
neighbourhood, family etc. (Gluckman 1967).
22
Coleman defines ”actors” as both corporate actors and individuals (1988).
52
brokerage positions between networks are embedded with enhanced
assets of social capital.
Relational aspects of social capital
Where the structural aspects of social capital set the stage, the
relational aspects point to where activities happen. As such the relational
dimension is of particular interest when studying perceived resistance as
it describes personal relationships developed between people through a
history of interactions (Granovetter, 1993). The relational aspect is also
where an entrepreneur realises the potential value of social capital,
decided by the structural aspects. To realise this value entrepreneurs use
their social skills which I return to when discussing coping strategies in
the next section.
In the next section I integrate social capital as a part of coping
strategies and discuss where and how entrepreneurs cope.
2.3.2 Coping strategies in action
In situations of limited supply of resources entrepreneurs become
dependent on stakeholders who are in control of resources. Faced with
such asymmetric relationships, entrepreneurs seem to be at the mercy of
key stakeholders, particularly if perceived as resisting their ventures.
However, they are not entirely without leverage as they are in
possession of social capital which can be exchanged for more tangible
resources.
This concluding section of the theoretical framework focuses on
entrepreneurs’ coping strategies where they use what resources they
have or can muster. It is structured according to the three coping
strategies: (1) problem-focused, and (2) emotion-focused, as well as (3)
social support seeking.
53
From the perspective of novice entrepreneurs, social capital is
related to social support and problem-focused strategies, while emotion-
focused strategies instead focus on entrepreneurs’ emotional responses
arising as a consequence of a situation which they are unable to
overcome.
Problem-focused coping strategies
Problem-focused coping aims to deal with the situation itself in
order to change it or make it less stressful. This can be a difficult strategy
for novice entrepreneurs if their ventures lack both reputation and track-
record, which would be the case when started by entrepreneurs with no
previous experience of entrepreneurship. Their ventures may well be
regarded as risky investments by resource providers. One problem-
focused strategy that entrepreneurs can adopt to deal with this is to act
as if they are trustworthy in order to gain access to the required resources
(Starr & MacMillan, 1990). When acting as if, “an entrepreneur must
engineer consent, using powers of persuasion and influence to overcome
the scepticism and resistance of guardians of the status quo” (Dees &
Starr, 1992: 96). In this way, entrepreneurs can begin to manage
dependency relationships with critical stakeholders. An example of such
a strategy is resource co-optation
23
through social contracting, where
entrepreneurs use a social support focused strategy by activating social
capital built through a network of associations to acquire necessary
resources (Starr et al., 1990).
When attempting to manage dependence and asymmetric
relationships, actors can choose direct or more indirect strategies. An
example of a direct approach is when an actor A, being dependent on B,
develops a co-optive tie with B. This can be done through deference,
where B receives deference and status, and in turn provides A with the
23
According to Merriam-Webster, to absorb, assimilate, take over or appropriate
(Merriam-Webster, 2008).
54
needed resources (Blau, 1964). However, in an entrepreneurial context
for new venture creation, a deference strategy is less likely as ventures
being founded by novice entrepreneurs most likely have little status to
offer a stakeholder. The indirect approach, or the two-step strategy,
involves a third actor, C. Actor B is dependent on C while A is
dependent on B, so A builds a co-optive relationship with C, thus
indirectly affecting the relationship with B (see Figure 2-1). This two-step
strategy has been shown to be utilised in relationships characterised by
hostility. Instead of trying to manage the hostile actor directly, a third
actor is involved (Gargiulo, 1993).
Figure 2-1: Two-step leverage (adopted from Gargiulo (1993: 5))
Aiming at achieving an exchange from social to economic assets,
entrepreneurs utilise the appropriable and convertible characteristics of
social capital (Larson, 1992). Appropriability and convertibility of social
capital is what entrepreneurs can use to develop both direct and indirect
strategies to deal with dependence, particularly in the face of perceived
resistance.
55
However, in order to appropriate and convert their social capital
into necessary resources, entrepreneurs need to be viewed as credible. To
do this, potential stakeholders will want to see that the entrepreneurs
acts in acceptable manners when they develop their venture ides,
following the norms in the industry (Deephouse, 1996). This is
problematic because organisations that innovate or have unique
strategies, as in Schumpeter’s definition of entrepreneurship
24
(1942),
have difficulties showing that they should be favourably evaluated.
Stakeholders are more likely to view such ventures as unacceptable
(Meyer & Rowan, 1977). The manner in which entrepreneurs use the
relational aspect of social capital is therefore critical also with regards to
credibility, which is required to overcome liabilities of newness. Lately
studies have shown that what entrepreneurs do is more important than
who they are or the market they are in when they attempt to build
credibility (Tornikoski & Newbert, 2007).
Bricolage as a coping strategy
Bricolage has been proposed as a new view of entrepreneurial
coping (Baker et al., 2003; Baker et al., 2005), and is of particular interest
from the point of view of start-ups. Bricolage is an example of problem-
focused coping and is defined as “making do by applying combinations
of the resources at hand to new problems and opportunities” (Baker et
al., 2005: 333). This implies that entrepreneurs who use a bricolage
strategy have a bias towards action instead of waiting to see what will
happen and whether a solution can be found.
In one sense, bricolage is close to a generic entrepreneurial
strategy as it means to “disregard the limitations of commonly accepted
definitions of material inputs, practises, and definitions and standards,
24
Schumpeter defines entrepreneurship as: 1: Introduction of a new good. 2:
Introduction of a new method of production. 3: Opening of a new market. 4:
Conquest of a new source of supply of raw materials or half-manufactured goods. 5:
Carrying out of a new organisation of any industry. (Schumpeter, 1942)
56
insisting instead on trying out solutions, observing and dealing with the
results” (Baker et al., 2005: 334).
The strategies that Baker and Nelson observed related to the
domains of:
• Physical inputs – discarded, worn or forgotten materials are
converted into valuable inputs of some sort.
• Labour inputs – available and “free” potential labour such as
hangers-on or customers are used for specific value creating tasks.
• Skills input – amateur or self-taught skills which are usually not
applied in venture creation are applied in new ways.
• Customer/markets – new products or markets are created by
offering otherwise unavailable products or services to customers
(for example housing to homeless).
• Institutional and regulatory environment – create a context to get
away with something which ordinarily is not allowed by
disregarding standards or laws, by not seeing them as constraining.
Network bricolage connects social capital and bricolage, and is
defined as the “dependence on pre-existing contact networks as the
means at hand” (Baker et al., 2003: 265). Baker, Miner and Eesley found
that personal and professional networks most often constituted the
means at hand which entrepreneurs use to create something new (2003).
Johannission and Olaison further extend this by introducing social
bricolage, which they see as a spontaneous collective action in response
to an emergency that draws on “the same networking that is produced
by and produces social capital” (2007: 72)
Bricolage is an out-of-the-box strategy that looks beyond
limitations in resources which in itself is very interesting from an
entrepreneurial perspective. However, one problem with the concept
and its use in understanding entrepreneurs’ coping strategies is that the
key work by Baker and Nelson (2005), with some exceptions only discuss
engineering problems at for example motorcycle repair shops. The
57
authors do not empirically take the concept beyond the shop floor,
although they continuously refer to entrepreneurial ventures. Despite its
lack of cases of entrepreneurial start-ups dealing with issues of perceived
resistance, conceptually the idea of bricolage is in line with the view of
entrepreneurship and the theoretical framework that I take.
Emotion-focused coping strategies
Emotion-focused coping focuses on emotional responses arising
as a consequence of a situation. To date, however, there are few
examples of emotion-focused coping strategies in an entrepreneurial
context. Singh, Corner, and Pavlovich (2007) found in their research on
entrepreneurial failure that such strategies were used by entrepreneurs
in relation to psychological aspects of venture failure. In that context, the
coping strategies were of a type that the authors claim would be
considered as reality-distorting and self-deceiving by researchers in the
field of coping. Emotions have lately become a topic of interest to
researchers of entrepreneurship as can be seen for example in Brundin’s
(2002) study of emotions in relation to radical change, and Cardon et al’s
(2005) study of emotions and entrepreneurial behaviour with a focus on
the issue of passion.
Social support seeking coping strategies
The final coping strategy, seeking social support involves looking
for help and guidance, emotional support, affirmation of worth, and
tangible aid such as the acquisition of financing. Fichman and Levinthal
(1991) propose that inter-organisational relationships are an initial asset
or endowment that can buffer firms from selection pressures posed by
stakeholders. This is thus the strategy that most directly links with social
capital, although, as I have already pointed out, social capital can also
constitute a resource in problem-focused coping; its’ use differs however
between the two coping strategies. In social support seeking strategies,
58
social capital is the key asset which enables entrepreneurs to choose this
strategy, and it is what they use to cope with and overcome disruptions.
A stakeholder’s location within this structure of social relations in
turn decides which resources are available. However, social capital is
problematic from an empirical point of view as it is difficult to both
measure and to estimate its value before it is used; part of this problem
resides in structures and relationships between actors. Conscious acts are
needed and different actors have different skills in accessing social
capital. The skills (or competence
25
) component of social capital thus
decides the structural and relational value of social capital, as well as
influences structures and relationships formed. In line with this, Baron
and Markman propose that social skills are necessary for financial
success (Baron & Markman, 2003).
Social competence is defined by Baron and Brush as “the extent to
which they [entrepreneurs] possess and employ discrete social skills that
enhance their ability to interact effectively with others (e.g., venture
capitalists, potential partners, employees, customers)” (1999: 1). They go
on to describe the specific social skills based on earlier research as: (1)
social perception – accuracy in perceiving others (e.g., their traits,
intentions, motives), (2) impression management – a wide range of
techniques for inducing positive reactions in others, (3) expressiveness –
the ability to express one’s emotions and feelings clearly, and so to
generate enthusiasm in others, (4) persuasiveness – the ability to change
others’ views or behaviour in face-to-face encounters, and (5) social
adaptability – the ability to adapt to, or feel comfortable in, a wide range
of social situations.
Baron and Brush (1999) state that the most important of these
skills is social adaptability, which they say may be a consequence of their
25
Merriam-Webster gives exactly the same meaning to skills and competence
(Merriam-Webster, 2008), and I use the two words interchangeably.
59
study including mainly entrepreneurs at a very early stage of venture
creation. The implications for this thesis focusing on early stages, is that
social competence is indeed a component that must be included in order
to use social capital as a theory to study individual entrepreneurs. Thus
entrepreneurs need social competence in order to use social support
seeking strategies, as well as problem-focused strategies in their attempts
to overcome perceived resistance.
Much research on social capital is built on the implicit assumption
that individual and collective actors are driven by instrumental
motivations (Adler & Kwon, 2002). This has led to a view of actors as
individuals or groups cultivating and exploiting social capital to reach
certain goals (De Graaf & Flap, 1988; Lin, Ensel, & Vaughn, 1981;
Marsden & Hurlbert, 1988). Some caution is required when viewing
social capital as an asset pursued in a calculative fashion as it is not
necessarily an obvious asset, one that can easily be identified
beforehand. It might instead be more of a by-product from pursuing
other ends (Burt, 2000). This insight can also be drawn from the ability to
quantify return on investment of capital. Compared with other forms of
capital, social capital is not quantifiable, meaning that future return on
investments in social capital is highly uncertain (Fernandez, Castilla, &
Moore, 2000). An uncertain future return on investment implies that it is
difficult to use social capital in a calculative manner. However,
entrepreneurs invest in social capital based on an expectation of a future
flow of benefits. These future benefits guide the development of social
capital, but the reciprocating aspect is uncertain, and when called upon
is interpreted in different ways by different actors (Bowey, 2002). In
respect to the reciprocating aspect, social capital can instead be
60
motivated by other commitments such as norms of generalized
reciprocity
26
.
Social capital has been proposed to bring benefits and potential
risks. On the positive side to individuals and organizations are issues
such as access to broader sources of information as well as improved
quality, relevance and timeliness of information (Burt, 1992; Granovetter,
1973), and the possibility of inter-firm exchange of detailed information
enabled by social embeddedness (Uzzi, 1997). Structural holes and the
bridging possibilities they bring to entrepreneurs provide influential
benefits (Burt, 1992). The risky side actually brings potential for
entrepreneurial advantage assuming that one places entrepreneurs
opposite to established and highly embedded markets and industries.
Uzzi points to the risky results of overembedded relationships when he
states “feelings of obligation and friendship may be so great between
transactors that a firm becomes a ‘relief organization’ for the other firms
in the network” (1997: 59). Of course, the positive sides of information,
influence and solidarity, discussed above, can also be reversed. Such a
reversal could lead to a risk of domination and power games that would
hamper collaboration at the cost of potentially missed opportunities,
thus turning a coping attempt through social support seeking into
greater perceived resistance.
Entrepreneurs’ responses to perceived resistance, activating their
social capital to manage the venture-stakeholder relationship could
backfire, pointing to the complexity of social capital. This happens as
entrepreneurs attempt to balance asymmetric relationships by way of
their social capital, which risk causing social liabilities in relation to other
stakeholders. Balancing one relationship could cause new asymmetric
ones (Gargiulo & Benassi, 1999; Portes & Sensenbrenner, 1993). Further
26
Putnam explains generalized reciprocity as “ ‘I’ll do this for you now, knowing
that somewhere down the road you’ll do something for me’” (Putnam, Leonardi &
Nanetti, 1993: 182-183).
61
risks of investing heavily in relationships are that their values are
sensitive to changes in the network. The defection of one actor can lead
to a loss of assets, as more than one must commit to build it. The value of
a social asset is in the relationship itself, not in any one actor (Adler et al.,
2002).
A key issue when discussing social capital, whether as a problem-
focused or social support seeking coping strategy is the importance of
social competence. This is a factor that enables entrepreneurs to access
the potential of social capital. In addition this connects to Truls’
proposed concept of entrepreneurial capital discussed earlier, where
entrepreneurial competence is a key component (2002).
These examinations of copings strategies constitute the final
section of the theoretical framework which is next concluded into a
theoretical model.
2.4 A model of perceived resistance
To conclude this chapter, I use the topics covered to build a
theoretical model of perceived resistance (see Figure 2-2). The purpose of
this theoretical model is to begin unravelling the path from
entrepreneurs’ venture ideas and towards their goal realisations while
facing goal disruptions (see Figure 1-1). This model of perceived
resistance will be used as a tool, both in gathering empirical material and
structuring the initial empirical analysis. Its linear qualities serve the
purpose of facilitating the initial perspective of perceived resistance in a
simplified format.
The model begins with a goal disruptive process or event where
entrepreneurs’ goals and ideas of how to realise new venture ideas are
somehow disrupted. Such disruptions are influenced by aspects of
resource dependence and the entrepreneurs’ means and abilities to
62
acquire the resources believed to be needed. Goal disruptions are also
influenced by external actors’ demands on the entrepreneurs.
Next the entrepreneurs appraise the goal disruptions; their
perceived impact on the realisation of their venture ideas influence
whether they are perceived as resistance or not. Aspects affecting appraisal
are how dependent the entrepreneurs are on certain stakeholders and
how easy or difficult coping appears to be. Appraisal of a goal disruption
as perceived resistance or not thus influences coping as appraisal both
takes into consideration and impacts how the entrepreneurs see their
possibilities of overcoming the goal disruptions.
Figure 2-2: Theoretical model of perceived resistance
Coping requires resources, either creating them in a bricolage
fashion, or controlling them in a more traditional way by gaining access.
The entrepreneurs’ view of the seriousness of the disruption furthermore
influences the coping strategy they choose. Novice entrepreneurs’ social
capital plays a key role in coping, particularly if they lack ready access to
other resources which limits their possibilities of choosing coping
strategies.
There is an ongoing interplay between entrepreneurs’ appraisal of
their possibilities to cope successfully and their perceived means for
coping. Linking these is their self-efficacy. Coping in turn is linked with
its own outcome, how successful or not the entrepreneur is in coping with
the disruption. This is continuously appraised and reappraised until the
63
perceived resistance is overcome or not. From a process perspective of
venture creation, overcoming means surviving, while being unable to
overcome a disruption then risks the termination of venture creation
efforts.
The model captures the influence of perceived resistance, if a goal
disruption is not appraised as serious to the realisation of a venture idea,
it will likely not be perceived as resistance. In such instances, an
entrepreneur does not even have to deem it necessary to cope with. If
coping is attempted to deal with the disruption, this type of coping has
low priority and is not liable to affect the overall venture creation
attempts by the entrepreneur. This is very different compared to a
disruption that is perceived as resistance where overcoming it is critical
to the actualisation of the venture idea.
This concludes the theoretical framework, but I will return to this
model again in the analysis of the empirical material.
64
65
3 Research design
Previous research has taken a perspective of external shocks to
venture creation when studying problems, obstacles and such (see
previous chapter). This generates objective problems for entrepreneurs
to deal with. However, focusing on perceived resistance is a new way of
studying venture creation which addresses subjective aspects and takes
an internal view from the perspective of individual entrepreneurs. Thus
when perceived resistance occurs, why and how it influences the
entrepreneurial process has previously been largely unknown. Because
of this I decided to carry out a pre-study
27
to explore themes of interest
which could guide me in building a theoretical framework as well as
which methodological issues I needed to consider when studying
resistance.
All case studies were mostly retrospective and this fact turned out
to be the most important lesson from the pre-study. The three pre-study
cases all indicated that the entrepreneurs did experience resistance, but
due to the time which had passed between the instances they described
and the interviews, they could not specify what had happened or
elaborate on their perceptions.
This difficulty is not new, Schein (1985) for example discusses
how interpretations posed, acts executed and results deemed sufficient
then fade into the past and becoming taken-for-granted aspects of the
present. If the results from interpretations and actions within a venture
are deemed sufficient in the eyes of the entrepreneurs, then their causes,
27
The pre-study was based on three cases which are described in detail in
Appendix A.
66
the situations around would become taken-for-granted aspects of the
present. If this was the case with the ventures studied, then the method
of choice would have difficulties revealing indications of the phenomena
that I was looking for. Moreover it has been shown that perceived
problems risk being remembered in a distorted manner. When this
occurs, what did happen is remembered as having been viewed as more
likely than it actually was (Fischhoff & Beyth, 1975). Thus
methodological design is of crucial importance in respect to the
phenomenon of study, and to be able to study perceived resistance, a
longitudinal approach appears to be of particular importance.
Another critical issue to consider, when attempting to study the
phenomenon at hand, is how it unfolds or appears. The process of new
venture creation can be described through punctuated equilibrium.
Processes of organisational formation evolve through long periods of
stability or convergence and are then punctuated by short and intense
periods of metamorphosis (Gersick, 1991; Miller et al., 1980; Romanelli &
Tushman, 1994). The unpredictability of when these periods of
punctuated equilibrium occur poses a methodological problem when
trying to study them. A broader net is needed to capture these instances,
but the question is how broad it needs to be.
With these three converging issues in mind – (1) perceived
resistance being a phenomenon not previously studied, (2) the pre-
study’s revelation about retrospective methodological problems, and (3)
the implications of venture creation as a process of punctuated
equilibrium – a method of study could be outlined. First and foremost,
these issues indicate that there is a great degree of uncertainty
concerning this kind of study, and with that in mind, methods need to be
developed such that they from the start address the quality of the study.
The key point here is to ensure that what is meant to be studied is
actually studied, and that the empirical phenomenon is explored without
adding issues not observed (Maxwell, 1996).
67
3.1 A longitudinal study of entrepreneurs’ start-up
attempts
In order to study perceived resistance – a phenomenon which has
not been empirically studied before and where it is unclear how it
influences the entrepreneurial process – both the pre-study and previous
research (Perren & Ram, 2004; Van de Ven & Engleman, 2004) show that
an approach which enables the capturing of events as they unfold – the
process itself – is required.
With this in mind I chose case studies as they enable an
understanding of the dynamics present in a single setting (Eisenhardt,
1989; Perren et al., 2004) and thus allow the study and interpretation of
the relation between entrepreneur and stakeholder as well as the specific
perceptions and goals of the entrepreneur. Case studies furthermore
offer the opportunity to both compare patterns within and between cases
which is important when exploring a new concept such as perceived
resistance. In addition, they enable the capturing of instances of interest
in the evolving venture as they happen, minimising the chain of people
interpreting events that happened in the past (Perren et al., 2004; Yin,
1994). Within the setting of the case studies I use a critical incident
technique (Flanagan, 1954) where incidents are built for each perceived
resistance. This also attends to Schein’s taken-for-granted aspects of the
present (1985).
The need for a longitudinal study has an additional advantage as
it can give access to material otherwise difficult to obtain and directly
related to the consequences of perceived resistance like failed
entrepreneurial ventures and the process leading up to the decision to
fold (Katz et al., 1988). Furthermore there has long been a call for more
event-driven studies to build explanations of the dynamics of
entrepreneurial activities (Aldrich, 2001; Van de Ven et al., 2004). So by
choosing such an approach, not only is it the most suitable given the
68
phenomenon of study, methodologically it also contributes to the field of
entrepreneurship.
More specifically and as will be presented in more detail below,
an explorative approach is chosen so that the studied entrepreneurs’
freely expressed views can be observed (Holme, Nilsson, & Solvang,
1991). This is practically carried out through a number of case studies of
how novice entrepreneurs perceive and meet resistance from
stakeholders to their ventures from the gestation period (Reynolds et al.,
2004) and over time. This method implies that a substantial amount of
empirical data is gathered for each case in order to build an overview
and understanding of the process. Having such empirical data also offers
the possibility to address the third purpose of this study which is of a
descriptive character.
3.1.1 Choice of unit to study
Given the purpose of this study which focuses on entrepreneurs’
perceptions of resistance, the most obvious unit of study is the
individual entrepreneur. In addition to this, venture creation can be seen
as a transition from micro- to meso-level, from an entrepreneur’s idea to
a venture. In this transition, the entrepreneur is the initiator and most
often the actor at the centre deciding much of the development of the
venture. This is particularly evident at an early stage, from the time an
entrepreneur comes up with an idea and until he or she registers a
company or generates a first sale, the period of interest in this study and
which will be discussed in the next section.
Furthermore, we can describe the outcome of venture creation –
the new ventures and innovations created by entrepreneurial activity in
society – but not how this outcome is created (Aldrich, 1999; Reynolds et
al., 2004), the choice of unit of study is also a contribution in itself. The
entrepreneurs and the processes they initiate and are a part of constitute
69
an important source in building our understanding of how ventures are
created.
One could argue that the venture idea should be the unit of study
as it embodies the source of the evolving venture and the focus of
enacted goal disruptions from stakeholders. However, as the focus of
this study is on perceived resistance, the entrepreneurs are the units
perceiving. The venture idea instead becomes a guide to the length of
time for the study.
3.1.2 Selecting cases
As new venture creation follows a pattern of punctuated
equilibrium, case selection needs to be geared towards maximising the
possibility of observing perceptions of resistance during the period of
observation. The characteristics of selected cases should then be at the
extreme (Pettigrew, 1990), in the sense that I wanted entrepreneurs with
the greatest likelihood of perceiving and facing resistance. I hoped to
find this where entrepreneurs’ need for coping with resistance was
expected to be high while their means of coping was poor, and the
potential social dramas around coping and resistance was high. This
selection strategy might be criticised as “selecting extreme cases on the
dependent variable [which] leads the analyst to focus on cases that, in
predictable ways, produce biased estimates of causal effects” (Collier &
Mahoney, 1996: 59). On the contrary, and in line with Pettigrew’s
argument this is a strength as such cases can be used to highlight the
issue of perceived resistance. Thus a method of purposeful sampling
(Patton, 1990) was used, guided by certain criteria for choosing cases
(Merriam, 1994).
70
In order to find cases which could fulfil the characteristics I
identified for the increased possibility of observing perceived resistance I
searched for:
• Novice entrepreneurs.
28
• Entrepreneurs with no personal financial means.
• Entrepreneurs who were still very early in their venture creation
process.
29
My reasoning behind this was that a new venture by a novice
entrepreneur according to the selection criteria was likely to at least
initially face more challenges by stakeholders than one by a seasoned
entrepreneur. This is also agreed upon by Shepherd et al who propose
that the management team’s novelty increases the mortality risk of a new
venture (2000). The chosen gestation period in itself is also interesting as
it is an understudied period in the entrepreneurial process.
As a complement to the three criteria above, I also based selection
on the would-be entrepreneurs’ intentions. Only those with clear
intentions to realise their ideas were selected to make sure that they
would actually make efforts to overcome resistance (Gatewood et al.,
1995).
In addition to finding cases at the extreme which were based on
the background of the entrepreneur and timing of the entrepreneurial
process, focus was also on the nature of the venture ideas. Radical
ventures with innovative height and the potential of generating new
markets or changing existing ones were especially interesting to study
due to their liabilities of newness (Stinchcombe, 1965). This is so because
they challenge existing structures and should thus face a stronger risk of
28
Entrepreneurs with no previous experience of entrepreneurship.
29
By early I mean that selection was made prior attempting to: register a firm, get
funding, register patents, hire staff or generate sales – in other words during
gestation (Reynolds et al., 2004).
71
opposition and resistance from stakeholders. With this in mind I selected
ventures based on their:
• Technology – a radical one would be a new and unused technology.
• Marketing – a radical strategy would be creating new markets, or
challenging old ones from within.
Finding ventures that fulfilled the technology or marketing
characteristics was the first difficulty. The second was to find
entrepreneurs very early in the venture creation process. As Reynolds
Carter et al point out, “the primary problem in attempting a study of
individuals who are starting businesses is in finding these individuals
while they are actually involved in business start-up activities” (2004:
264). Others have also noted the methodological difficulty in finding
ventures as early as possible in their start-up phase (Stevenson & Jarillo,
1990). Kim, Aldrich et al claim that per annum there are only 4-6 percent
of the adult population who become nascent entrepreneurs (2003). I
agree with this claimed methodological difficulty and consequently
spent some time searching for entrepreneurs according to my criteria.
My choice of channels for finding potential cases eventually
turned out to be university incubators, or business labs. To facilitate
access to the entrepreneurs, I only chose those in Stockholm and
approached the university business labs of the Stockholm University, the
Royal Institute of Technology, and the Stockholm School of Economics.
In addition I also contacted a business lab and business accelerator
separate from the universities owned by the City of Stockholm, a
university and large corporations.
To find cases I contacted the business lab directors at different
times during winter and spring 2004 and presented my research project.
They all responded positively to my project and suggested in total 25
entrepreneurs who had recently began with their venture ideas. Using
the selection criteria I narrowed this down to three entrepreneurs. I
contacted them and they were all willing to participate. One of the three
72
was quickly abandoned though. This decision was made after three
interviews and due to access difficulties associated with finding
interview times, combined with unwillingness on behalf of the
entrepreneur to freely share information with the researcher.
In addition to the business lab approach, in the winter of 2004, a
presentation was made to a group of 20 novice entrepreneurs
participating in a start-up course at the business lab/accelerator. In this
way, two more entrepreneurs who matched the criteria were included in
the study.
Table 3-1: Overview of studied entrepreneurs
Case Idea Product or
service
Conception
of idea
30
Study
began
Ended Gender Number of
interviews
Jonas Internet Service 2003?06 2004?02 2005?03 Male 7
Eric Soccer Service 2003?01 2004?01 2005?06 Male 11
Nina Cosmetics Service 2004?01 2004?06 2005?03 Female 6
Susanne Horses Product 2003?10 2004?03 2005?03 Female 7
Looking at the cases, all are novice entrepreneurs, and none have
any personal financial means to invest in developing the idea.
Furthermore, they are all at an early stage in their creation attempts.
Their new venture ideas are:
• Jonas takes an existing service and builds a platform to share and
capitalise on that, by doing so, existing markets are expanded.
• Eric uses existing technology in a radical new way, thus redefining
existing markets and creating new uses of existing products;
• Nina combines multiple existing services into one shape, aiming at
making the existing services obsolete while capturing their markets;
30
This is the time when the entrepreneurs came up with their ideas and took
actions on them.
73
• Susanne develops a new product for an existing market with the
aim to make existing ones redundant.
Qualitatively following a sample of entrepreneurs from such an
early stage in the venture creation process as my selected cases is
uncommon in entrepreneurship research, but it is also a high risk given
the high rate of failures at early stages of venture creation (Delmar et al.,
2004b). With this in mind there is always a risk that the cases followed
terminate during the course of study. For the purpose of this study
however, this risk posed no problem, rather an opportunity as a
termination could be related to the dynamics of perceived resistance.
3.1.3 Time of study and access to entrepreneurs
The next critical issue to consider was the length of time to follow
each case. As pointed out, selection was partly based on the earliness of
development of the idea. Given that an entrepreneur has just began the
development of an idea, how long should he or she be followed to be
able to study instances of perceived resistance? Earlier research has
found it likely that the time it takes to either reach a point of termination
or a first sale is around 12-18 months (Carter et al., 1996). This time frame
is also hinted at in the Global Entrepreneurship Monitor
31
where most of
the new firms studied reached the point where a decision was made to
go ahead or to terminate the venture within 7-14 months from start. An
issue which influences this time-factor is what type of venture idea and
which industry that is referred to, specifically the complexity of a
venture idea. There are for example differences between a venture idea
directed at internet service and one aiming at developing a new medical
substance. The venture ideas chosen here had a comparatively low
complexity and thus my aim was to follow each case 12-18 months,
31
GEM 2000 report, and discussion with one of the authors, Frédéric Delmar,
Professor at EM-Lyon, France.
74
depending on their development. From the perspective of a longitudinal
study, 12 months might seem like a short time, but as pointed out, in the
life of a new venture it is a considerable time (Gersick, 1994).
In addition to be able to capture instances of perceived resistance
there were also practical considerations to bear in mind – asking an
entrepreneur to participate in a study for an indefinite time seemed like a
poor strategy when trying to convince them to take part.
The longitudinal approach I took was a direct consequence of the
pre-study which indicated that this was necessary in order to catch
instances of perceived resistance as they happened. Thus, in order to be
as close as possible to the events as they happened and with enough
space between interviews for disruptive events to actually occur, each
entrepreneur was interviewed every six to eight weeks.
Before the case studies began, and to delimit the study, I set up a
number of criteria to guide when the gathering of data would end. The
four criteria were:
• when the ideas were developed to the point where sales began
• if the venture creation attempts were cancelled
• if progress stopped and effort appeared low
• or if I felt that an empirical saturation of data was attained.
The actual decision to stop gathering data supported the notion
that one year is a considerable length of time at the start of a new
venture. When I left the entrepreneurs, three of them had decided to
abandon their creation attempts, and one had launched the idea to
customers. The actual time spent with the four entrepreneurs varied, 11
months with Jonas, 17 months with Eric, 6 months with Nina and 12
months with Susanne. As depicted in Figure 3-1, the time following each
entrepreneur was sufficient to capture a number of instances of
perceived resistance, as well as seeing them through either termination
or launch. In retrospect one can thus conclude that the estimates
75
discussed above concerning time until termination or first sale were
accurate.
Figure 3-1: Pacing of interviews and observed perceived resistance
32
32
The labels in Figure 3-1 indicate: J1, E1, N1, S1 and so forth – instances of
perceived resistance and their times of unfolding (for complete descriptions see
Appendix E), J:I1, E:I1 and so forth – face-to-face interviews, JI6t – phone interview, T
– termination, L – launch.
76
With the extended period of time interacting with the
entrepreneurs under study, managing the interviewer-interviewee
interaction was important. I wanted to keep a detached approach while
at the same time being present. In retrospect it is evident that despite
being aware of this issue, a study of this magnitude likely affects the
studied and thus also affects the outcome of the interviews. To
metaphorically use the Heisenberg effect, this would mean that a
researcher interacts with the object of study, thus altering the nature of
what is being studied (Vinten, 1994). On the other hand, the flip side of
this would then be the Hawthorne effect, stating that a known research
focus on for example work activity may lead to higher levels of work
productivity (Reynolds et al., 2004). Thus, I concur with what is a
concern in most social science research – that the relation
interviewer/interviewee influences what is being studied. The extent of
this influence and its implications are however difficult to judge. To deal
with this I made an effort to be as rigorous as possible in both design and
description of study. This approach is aimed to offer the reader a chance
to judge the work for what it is.
3.2 Conducting the study
Each case began with a longer interview of 1½-2½ hours with
each entrepreneur. During this interview, focus was on the idea itself,
how it worked, the aim with it, how it started and when, and critical
experiences thus far. This first interview gave a process description up
until the time of the interview and served as a springboard for the
following interviews and the forming of an understanding of the case.
During the interview, I encouraged the entrepreneurs to elaborate and
describe their processes thoroughly. The questions focused primarily on
interactions with stakeholders, from family, to friends, partners and
others.
77
After the first interview the subsequent interviews lasted between
50 minutes and 2 hours and as mentioned earlier, occurred every six to
eight weeks except for a more extended break over summer. Their aim
was to understand the nature of relationships, deemed necessary in
order to understand social and organisational behaviour, embedded in
the relationships (Granovetter, 1985). To understand the novice
entrepreneurs’ perceptions of and responses to resistance, the focus of
the interviews needed to be posited in a broader perspective of
relationship-building. It has been shown that entrepreneurs start from
informal networks of friends, peers and associates, and from that
generate more formal relations (Birley, 1985; Larson & Starr, 1993).
Following how this evolved revealed critical stakeholders, critical
incidents and how those unfolded concerning issues such as trust,
reliance and credibility. As is evident from Figure 3-1, some of the
observed instances occurred before the first interview. These were
described by the entrepreneurs during the first interview, and in
addition to this the entrepreneurs spontaneously returned to them in
subsequent interviews. With the open-ended structure of the interviews,
it was the entrepreneurs’ repeated concern about those instances that led
me to include them in the list of observed instances of resistance.
The interview foci was thematic and directed at how the
entrepreneurs built their ventures and the role of their relationships in
this, who the critical stakeholders were, how those stakeholders’
responses to their ventures were perceived, how they perceived the
development of their ventures, how they viewed their own choices and
what their own actions were in the face of perceived resistance (see
Appendix B).
After each interview I summarised it into an abstract covering the
main issues discussed. At the following interview this helped in
reminding the interviewee about “where we were last time”, and to
make sure that issues covered and discussed earlier were followed up.
78
The interviews were recorded and transcribed in their entirety resulting
in approximately 600 A4 pages.
In addition to interviews I also suggested to the entrepreneurs
that I would like to do participant observation as well as interviews with
some key stakeholders. Originally the entrepreneurs were positive to
this, but as their work unfolded they became more hesitant to having
someone with them during sensitive meetings with key stakeholders.
Similarly they were hesitant about having someone talk to key
stakeholders about issues concerning their creation attempts as they took
place. The entrepreneurs being at very early stages and lacking previous
experience of entrepreneurship were concerned about disturbing their
relationships with stakeholders through the involvement of me as a
researcher. This was not taken as distrust in me as a researcher, as trust
was expressed in the openness they showed during interviews. I instead
interpreted it as an expression of uncertainty about how their venture
ideas were being realised and that bringing me as an observer could be
an additional risk to this realisation.
3.2.1 Feedback from entrepreneurs
The completed cases were sent to each entrepreneur for
comments. The aim with this procedure was to help assure that my
interpretation of the material was something that the entrepreneurs
could agree with (Guba & Lincoln, 1989). None of the entrepreneurs
required any changes to be made to the cases.
3.3 Analysing the empirical material
In the analysis of the empirical material I used both within-case
and across-case methods (Miles & Huberman, 1994). To improve the
means of analysing the large amount of empirical data comprising this
79
study I saw it as key issues to be rigorous as well as to be able to easily
work with the data. The software NVIVO
33
, which is specifically
developed to explore and analyse qualitative data, offered the means I
sought. Through NVIVO one can code data by building nodes for certain
themes, events or actors. These nodes can then be used to explore
patterns and build models. They can also be given specific attributes
which can in turn be used to explore other dimensions and connections
within the data. As I describe in this section, these tools for coding,
sorting and analysing were a key part of this study.
The analysis of the empirical material began as I started the
interviews. After each interview I made notes of what could be potential
instances of perceived resistance and aspects related to it (see Appendix
D for an overview of how the empirical study evolved). The theoretical
model served to deepen my understanding of the phenomenon, as an
outline for the analysis and a starting point when approaching the
empirical material. With the early theoretical focus, the study began in a
deductive fashion. As it progressed however it became more and more
inductive as I gathered empirical material and began the analysis.
Eventually this resulted in the inductively derived model of perceived
resistance that is presented in section 5.3.
After transcribing each interview I imported it into NVIVO,
keeping separate files for each entrepreneur to separate the cases and the
coded nodes. Simultaneously as I gathered the empirical material I
studied the transcribed interviews and developed codes to tag themes
and statements of interest. Codes were a reflection of both the themes
used in the interviews, and of the patterns that emerged during the
course of the study. The codes I developed in this way were:
• All stakeholders
33
For more information about NVIVO, seehttp://www.qsrinternational.com
80
• Deliberations about the development of the firm, like funding and
growth
• Issues regarding patenting
• Discussions specifically concerning the venture idea, like market
potential and business plan
• Entrepreneurial circumstances/characteristics, like beliefs in self or
about others or feelings about being an entrepreneur
• Perceived resistance
The first four are the theme-based codes, while the last two are the
pattern-based codes. The manner in which this is done in NVIVO is that
all passages in the transcribed text discussing for example a certain
supplier of an entrepreneur is marked and in that way made into a node
with the name of that supplier. Thus it is possible to open that specific
node and have all the information about that supplier gathered in one
place.
Coding the material was an iterative process and I went over the
material several times adding new nodes. In some instances this lead to
certain passages having more than five nodes overlapping such as
multiple stakeholders, different entrepreneurial circumstances and/or
characteristics, and perceived resistance.
Next I focused on each of the nodes I had created, specifically the
stakeholder nodes and their relationship with the entrepreneurs. I used
Frooman’s dimensions of relationships (1999) to characterise them and
give attributes to each. This revealed the entrepreneurs’ degree of
dependency on each stakeholder.
To make sense of the coded material, I did what Miles and
Huberman call displaying the data (1994) by sorting it according to three
questions: (1) what were the key events and decisions in each case; (2)
how and (3) why did they come about. In addition to this method of
making sense of the material I also contextualised the data in graphic
form in order to increase understanding of the material as a whole. The
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way I did this was to build maps and matrixes which helped me grasp
the big picture and how things related in the cases (Maxwell, 1996) (see
Appendix C for an example of a venture creation map of one of the
cases).
When the empirical gathering was finished and all transcribed
interviews were coded I returned to the node for perceived resistance in
each case which consisted of passages of transcribed interviews
concerning resistance in one way another. This node made little sense as
a whole as it contained all the material of perceived resistance in each
case. I now recoded it in order to separate it into individual instances of
perceived resistance. One tool for sorting the resistance nodes was the
attributes for stakeholder nodes that I earlier created. This helped me
understand how the dependency of the entrepreneurs influenced their
perceptions of the situations. Other tools I used were the maps and
matrixes I had built. In this way 55 preliminary instances of perceived
resistance from all four cases were found.
With all these nodes for perceived resistance I now compared all
of them where I again returned to the attributes of nodes contained
within as well as which nodes that they were contained within. I sorted
them and categorised them accordingly in order to reveal patterns
between them. I also merged some earlier nodes into one, and removed
some that I had earlier created. What I ended up with were stepwise lists
of how each instance played out (see Appendix E).
Next I began sorting the instances into patterns, narrowing the
node labels to reflect patterns. To gain an overview of the cases I then
built longitudinal models displaying the resistance nodes.
At this stage I could write drafts of the cases as they are presented
in the next chapter. These drafts were sent to the entrepreneurs for
feedback and then rewritten. By using the written cases and the
resistance nodes I now visualised each instance of perceived resistance
using the theoretical model (see Appendix E).
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Finally with all of this material in place I could move from an
overview mode of studying the data through the case descriptions and
the venture creation maps, to a detailed one of every single step in each
instance of perceived resistance, and for each step I could also easily
access the underlying data through the nodes. Using these parts that I
developed with the aid of NVIVO I could analyse the empirical material.
The analysis took the resistance patterns and viewed them from the
different perspectives offered by the theoretical model. To exemplify,
when taking the perspective of why a potentially goal disruptive event
or process is perceived as resistance, I put all the instances of perceived
resistance from all the cases next to each other and sorted them into
groups of ever larger categories until I could not take it any further. Next
I focused on the key aspects of the categories I had sorted the instances
into, specifically what they meant, and what dynamic that was involved
in creating them. This formed the basis for the analysis presented in
section 5.1.3.
During the work with the empirical material and the analysis I
also wrote a number of papers to develop my analysis in writing and
also share and receive feedback from other researchers. The first was a
conference paper accepted for the Babson Kaufmann Conference in 2005
which presented and discussed the concept of perceived resistance
34
. The
second was a conference paper presented at the Academy of
Management in Philadelphia, 2007, which discussed the implications of
energetic resources in new venture creation (Landberg, 2007), and the
third was a book chapter outlining perceived resistance and the
importance of taking entrepreneurs’ energetic resources into account
(Landberg, Forthcoming).
34
Unfortunately I could not participate and present my paper at the conference
due to personal reasons.
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3.4 Quality of the study
Given the research design, the quality of the study is the final
piece to consider. Primarily, the issues of importance for quality are to
ensure that what is meant to study is actually studied, and that the
empirical phenomenon is explored without adding issues not observed.
Three main types of understanding influence this: description,
interpretation, and theory (Maxwell, 1996).
In order to ensure a representative description of the empirical
material I recorded all the interviews, and then transcribed them all.
To attend to the issue of interpretation – that the study takes
account of the perspective of the people studied, and the meanings they
attach to what they say – I focused on a number of things. We all have
our own views and thoughts about the empirical context which we
study. All through the study I made an effort to be aware of my own
frame of view, tried to be attentive to the entrepreneurs’ meanings, and
to make sure to ask open-ended questions. Another strategy that helps in
this sense, and which I have used has been to discuss findings with the
observed entrepreneurs. I did this by asking for feedback on both data
and conclusions from the people I study (as suggested by Guba et al.,
1989).
Understanding a phenomenon is at the core of doing qualitative
research. A key issue in developing this understanding is ensuring that
discrepant data is taken into account and that alternative explanations
are considered. When working with data, it is easy to become blind to
these issues. This is also closely related to the issue of validity, which in
qualitative research is used to refer to “the correctness or credibility of a
description, conclusion, explanation, interpretation, or other sort of
account.” (Maxwell, 1996). The manner in which I have dealt with this
has been to write conference papers presenting preliminary data and
analyses in order to get feedback on the issues Maxwell points out. I also
continuously asked colleagues at the Stockholm School of Economics for
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feedback on methods, models, concepts, theories and analyses. In
addition I presented my findings in teaching situations to undergraduate
students at the Stockholm School of Economics and in seminars to
entrepreneurs and actors somehow involved in supporting the start-up
process. This helped me question and develop my own view of the data,
and to stay open to alternative explanations.
A guiding principle in the process of carrying out this research
has been to focus on the performative criteria. With this the text itself is
not the focus, instead it is the readers’ responses to whether they deem
the work as being useful, and primarily edifying. A text perceived as
edifying is one that helps to take us out of our old selves and aid us in
becoming new beings (Czarniawska, 1998). From the perspective of my
research I interpret this in a way that I provide an account that is deemed
useful and edifying – that the contributions of this study bring our
understanding of the start-up process forward in a way that readers find
useful.
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4 Perceived resistance to new venture
creation – four cases
These are the four cases written into stories that follow the
instances of perceived resistance of each. Specific effort has been put in
towards making them complete in the sense that they offer the reader a
basis to judge the analysis and conclusions made from them. As a
reading guide, Figure 3-1 offers a time-line which depicts the observed
instances of perceived resistance as they occur and come to a conclusion.
In addition, Appendix E contains a set of tables of all these instances of
perceived resistance.
4.1 Brokering mobile tunes via the Internet
Jonas is a lecturer at a technical college in Stockholm, in many of
his courses, students carry out assignments of varying length and
difficulty. As a part of what his department could offer students, he
nurtures an idea where students can develop their own venture ideas as
a part of course assignments. In the middle of 2003 Jonas comes up with
an idea of his own – a service which would offer anyone with a mobile
phone to produce and sell ring signals for mobile phones over the
Internet.
Before thinking about how to start his venture idea in any more
detail, he talks to a colleague who is an expert at programming Java
which is the language of choice for the application. The reason for this is
that Jonas wants to have an indication to whether the idea is at all
possible to realise. The colleague is impressed with the idea and even
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comes with some thoughts about how to realise the idea into a concrete
service.
The opportunity to launch the idea comes in the autumn of 2003
when a group of five students are interested to work on the idea as a part
of their course assignments. Before actually beginning to work with the
students though, Jonas talks to the head of the department to make sure
that it does not violate department policy. The response is positive, even
to the point where entrepreneurial initiatives are encouraged within the
department and as parts of courses. Discussions at department level are
initiated to try and set some sort of framework for how such initiatives
can be encouraged and supported.
For Jonas the set up works perfectly as he acts as the tutor and
teacher for the project at the same time as he is the lead person in the
venture idea. This way he feels that he can legitimately spend a number
of work hours per week on the venture idea, it is even expected of him to
do so and he is paid for it.
During autumn Jonas also participates in a start-up course where
he develops a business plan and learns the basic first steps of starting a
venture. He manages to combine this with his work so that he does not
have to spend any less time with his family. At the same time the
students begin developing the service, but the time they spend on it
depends on the amount of hours allocated towards the assignment per
week. During autumn this allocation is low so work is directed at
developing basic paper work so that programming can begin in spring.
In addition to preparing for programming, Jonas also carries out a
technical overview of the idea to see whether it is patentable or not. This
is not positive from his perspective as there are already a number of
patent applications in areas overlapping with his idea. But although it
might not be patentable, the market in Sweden is not restricted to them
and they can continue developing the service as they had planned.
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The development runs smoothly, but slowly, and Jonas does not
feel that he can put any more time into it than he already does.
A case of structure
In spring the student begin programming and by the time that the
course assignment ends in March 2004 they present a prototype of the
service. This is well ahead of plan as they originally aimed at having a
completed prototype by autumn 2004. As the course ends and the
students present their assignments, their involvement in the venture idea
is discussed and all of them want to continue as they believe in the
viability of the idea.
Unfortunately as soon as the course assignment ends, Jonas loses
the computer that has been allocated to the students as it was only theirs
to use during the course. He talks to the university’s lawyers to see if
they can continue using them despite the course ending, but they
respond that “it is obvious, you cannot do that”. Jonas is offered the
possibility to formulate the problem in a letter and hand it to the lawyers
to look at. He hesitates whether it is any point though as they explained
to him that it is an issue of government institutions and the possibility of
running commercial activity. Giving up his attempts to keep the
equipment, they now have nowhere to sit and no computer to work on.
Trying to find a solution Jonas talks to pre-incubators at his school
and also the organisation responsible for the start-up course that he
participated in, but none of them can offer any help. This is not
completely in vain though as the school’s pre-incubator supplies a
business coach to the two students involved in the venture through their
thesis.
To continue working Jonas manages to find a room at his
institution where they can bring computers from home to work from.
Jonas is not satisfied with this though as it limits their work not having
proper equipment. Instead he contacts computer distributors to try and
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get sponsoring. To improve the credibility of the venture idea Jonas
stresses that the pre-incubator of the school supports it and that they
have a business coach appointed from there. After some searching he
manages to work out a deal where they borrow computers over a period
of two months.
35
Having everything in place they decide to run live tests and ask
the people who take care of the institution’s IT environment to help them
set it up. Contrary to doing so, they respond that “no, you can’t run
commercially from here, you can’t do that”. As long as it was a student
project without a specific domain name, they had no objections, but as
soon as that ended and it became a wholly commercial project still on the
school’s premises they reacted.
In order to deal with this, Jonas again contacts the university’s
lawyers. To his relief they have no objections to using the university’s
server to run commercial web sites. They say “it sounds okay” and
promises to get back to him when they have looked in to it in more
detail. Jonas says that as long as they do not get back to him, he
continues with the site as if everything is fine.
The key issue in order to continue using the university’s premises
and server is that the students programming the service still do so within
the framework of a course. To fulfil this, the student and Jonas agree that
he should wait with giving them their final grades for the course until
the service is ready to go public.
Wanting to keep costs at a minimum, Jonas looks for mobile
phone operators that can be used for the SMS pay service that they need.
The problem is that they all have high starting costs, and that cost would
become their largest cost and entirely impossible for the venture to bear
during beta testing. Thus, again it seems impossible for them to even
35
When the two months are up Jonas manages to extend their borrowing over
summer after which he himself buys a server.
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begin testing. Jonas has no other way than using an operator and so he
tries to negotiate a deal to do away with the fixed cost. One operator is
indeed willing to make a deal, but in return for removing the fixed cost
they demand 50 percent of the income of sold ring signals. Jonas has no
other option and agrees to their terms.
Finally in May 2004 everything is in place to be able to start beta
tests of the prototype.
Reaching out, or not
In spring 2004 as the students work on the prototype, Jonas begins
looking for people who can test it and finds them in students who study
digital media. At the same time he thinks about marketing, which
channels to market the service through. The ideal places for this are large
chat sites but he is unsure of how to best get in contact with them. To
begin somewhere he talks to the business advisor of the students
involved in the venture. Luckily he has connections with the largest
Swedish chat site and Jonas asks for his help to contact them.
However as they talk about it contacting the chat site, Jonas
begins to worry that the possibility of marketing might be off-set by the
risk that such a large actor steals his idea. Together with his
programmers, Jonas has spent a considerable amount of time developing
the service, but for a large actor with vast resources such a feat is small if
it really wants to copy it. With this in mind Jonas rethinks his strategy
and decides not to approach them for fear of losing his idea, at least not
at this moment.
Instead of contacting the chat site, Jonas is now a little worried
that if the idea makes waves, someone with resources could copy and
steal it. He tries to figure out how he should relate to this threat, but
cannot see anything he can do at this moment, so he lets it go for now.
Finding beta testers is a more pressing issue at this stage but Jonas
has difficulties finding them. The only contacts he is able to make are
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with the digital media students and with a class of high school students
making digital music. However only two actually log on and upload
music before the summer begins. Jonas says that the low number of beta
testers is an issue of focus that has had a low priority until now, and that
this will change by autumn.
Time – a critical resource in short supply
Until the end of spring 2004 Jonas puts in approximately half a
day per week at work developing the idea. This is the time allocated for
working with the student project within which he has included his
venture. However this possibility ends by summer and in autumn he
will also partly be on paternity leave. In spring he says about the time
and effort he puts in now and will be able to put in by autumn that “I try
not to think about it. It will be difficult. Somehow it would be good if I failed,
but of course I will continue working on it with the aim of succeeding, in some
way I have to go for it”.
As autumn comes, it turns out as he fears. He now only spends
one day per week at work and the rest at home on paternity leave. Under
these circumstances he puts in “maybe one hour per week” on his venture.
He even sees the day he spends at work every week as a rest-day
compared with being at home with his child.
Even though he is not able to put in much time into the venture,
he does not feel stressed. His stress levels even drop compared with
spring as there is less immediate work that needs to be done with the
project. The service is up and running and “can sit idly for a long time
without problems”. He is not worried about the actual service as it is
developed to a point where it works.
At the same time as his available time has decreased, the project
has entered a new phase and he begins reaching out to people to find
users who can test the service, it is “the big thing now that we should put a
lot of effort into, recruiting testers”. To do this successfully he again feels
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that he should spend more time on it than he does. He tries to squeeze in
time where he can, but with his family and work situation he does not
see that he has much leeway at all. Jonas prioritises his family before the
venture, and as he has little time at work he must use it to fulfil his
commitments. Towards the end of September he says that “I will contact
high school classes [to find beta testers], but the question is when. Not this week.
The question is if it will be next week or the week after.” So beta testers remain
few, some from outside the venture team and some from within the
team. Jonas is not overly concerned with this and believes that they can
still develop a robust platform.
When autumn turns into winter the venture enters another stage
with a focus on marketing the service and getting users to notice it. For
this he sees a number of tasks that he must carry out, and so his stress
levels again increase. Jonas can only put in the same amount of time that
he did earlier in autumn and he feels that it is not enough. He worries
about the pace at which things are running, he feels it is too slow “it is
about time and opportunity, time is an article in short supply”.
Finding a market
Within the confines of his available time Jonas markets the service
the best he can. In November 2004 he says that “most things concerning the
venture depend on me right now. It is what I do that... it is about marketing this
service and it has come about slower than usual.” The high school approach
he initially chose turns out to be too slow. Instead he finds a web site for
music groups without a record label, a site where they market
themselves.
He sees this as a new opportunity where they can sell their own
songs through his service. The problem now is that he is only allowed to
sell ring signals 30-45 seconds long because of legal rights. With this
restriction he cannot seize this opportunity, to sell entire songs, so to find
out about the situation he contacts the organisation responsible for music
rights. They say that the difference between songs and ring signals is
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about to be removed, making it possible for them to shift their strategy to
also include songs.
There are hundreds of bands registered on the site and he contacts
as many as possible, but time restricts how fast he can work and how
many he can all and get feedback from.
Jonas feels that they must have enough songs on the site to attract
potential buyers – they must reach a critical mass. This however is not
the case at the moment as they only have one band that has uploaded
songs, but it is something he works towards.
Returning to the issue of time Jonas says that “the problem is time. I
have the energy and the motivation. The problem is that it competes with other
projects that I am involved in. But it feels like I can handle it through focused
and temporary efforts.”
Abandoning the old business model
After a few months the list of people who upload music increases
and with this Jonas and his team realises that their original business
model will never work. The reason for this is that it depends on
downloading the music to mobile phones. The downloading cost of a 4
MB song ends up being eight times as high as the cost of purchasing the
song. The seller of the song and the venture make approximately a
quarter each of what is paid for the song. Thus the only winners are the
mobile phone operators.
The music uploaded on the site consists mostly of complete songs
by the bands that Jonas contacted. Those bands are interested in
marketing and distributing their songs. With this in mind, Jonas decides
to abandon the idea of downloading ring signals and instead focus on
selling music that uses the Internet to download to computers. In this
way, paying for downloaded music also becomes easier as there is no
longer any need to go through a mobile phone operator.
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This also means that the service must be reprogrammed and
tested towards the new goal. Meanwhile the students who earlier
worked at the prototype as a part of their course assignments now either
take other courses or have graduated and work full-time. Earlier Jonas
was the bottleneck regarding time, now it is both him and the
programmers, no one has time and everything has to be done in the
evenings or weekends. Jonas says that “everyone are interested [in
developing the service], but no one has any time.”
Jonas ponders pushing the programmers to quickly develop the
new prototype, but he worries that if he does they might pull out. He
cannot do the job himself and they are moving into other projects or jobs,
so even though the new path forward with the new strategy is
promising, the pace of development risks being too slow. The bands that
have already uploaded their music on the site want to see some
development and if nothing happens, the will likely give up and go
somewhere else.
What is the outcome?
Jonas does not put in any more effort into his venture idea, and as
the students graduate and leave the school, no one is left to work on it.
4.2 Live soccer matches via low bandwidth
The idea and opportunities to realise it
Being an ardent soccer fan, Eric is annoyed each time he misses a
match with his favourite team, especially if he is away from a TV. He
begins thinking about if this could somehow be dealt with, if one could
watch soccer games live on low bandwidth cell phones. In the spring of
2003 he becomes unemployed and decides to use his time to try and
realize his idea, so he starts developing a service broadcasting real
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movements of the ball while simulating players’ movements using low
bandwidth.
Before losing his job, Eric worked as a project manager and not
being employed anymore makes him realise how much of his identity is
influenced by what he does. He feels uncomfortable for not having a job,
not contributing and not being appreciated for his skills. So his new
venture is something he fills this with, something he can “talk about at
parties”. He wants to do something productive and his venture is that
which gives him meaning.
At the same time, family is important to Eric. “I like to picture
myself as a modern and equality minded family man. I want to see myself as
taking responsibility at home, being equal with my wife and taking
responsibility for the children. Knowing which pants belong to Philip and which
belong to Peter.”
With his first child, he had a job to go to and structured hours,
which meant that when he was home he could be with his son. Now that
he is home working on realising his venture idea, his situation is
different. Being home and unemployed, he and his wife decide that their
youngest son should be home with him. This however conflicts with his
focus on his idea. The stress he feels from being unemployed and the
pressure he puts on himself to develop his idea means that he focuses
less on his son and more on his project. This in turn confuses his self-
image of being an equal at home and caring for his children.
Taking the next step
His first steps are to develop the service, sitting at home and
spending long hours of programming. However he feels that he needs to
know what other people think about his idea, is it something soccer fans
would want. In order to do a market survey he contacts some friends
who run a website where fans can follow their teams in soccer and ice
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hockey. They agree to help him and in early autumn 2003 he does a
market survey which is distributed through a questionnaire on their site.
The questionnaire indicates that his idea is a service that many
fans would want to have access to. Spurred on by the strong support Eric
continues to work on the programming to build his idea as he envisions
it to work. The questionnaire also attracts two people who want to join
him in his endeavours. One of them, Martin, engages in the idea on
equal terms with Eric who comes to see him as a partner, albeit not an
equal as Eric feels that he still has the final word in decisions. To show
good faith Eric promises him a share in the venture when they register
the firm. The other person has studied computer programming, and as
Eric wants to focus on other things than only programming he is taken in
as the lead programmer.
Eric has a background in engineering and project management
and is comfortable with the technical parts of developing the idea. When
it comes to issues like financing, business plan and such he is less
confident. To learn more of how to realise his venture idea he signs up
for a start-up course which runs from the autumn of 2003 until the
beginning of 2004. Martin also joins him as a co-participant on the
course.
Taking the course, Eric hears again and again that a business plan
is something one must have. During the course, all participants write one
and as an examination they are expected to do a presentation of their
venture ideas with the business plan as the basis. The problem is that
when sitting down to write one, Eric cannot gather the information he
thinks he must have. He does not feel that he has the skills needed to
write one, to do a market analysis and such. He begins pondering if he
should have a business person involved in the venture who can take care
of things like this.
During the start-up course participants are also encouraged to
sign up for a business plan competition. As all participants in the
competition receive feedback, Eric thinks that it would be a good idea to
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take the opportunity and participate. He wants suggestions for
improvement on his idea and his business plan, and he also hopes for the
off chance of finding funding for the development of the idea. Thus he
decides to participate in the competition starting at the beginning of
2004.
Entering a competition means that he opens up to criticism, but
this does not worry him, on the contrary he sees it as a necessity to
develop the idea. The criticism that he has earlier received never angered
or offended him, but by participating in the business plan competition he
experiences a different kind of criticism. The feedback he receives in the
business plan competition is the opposite of being constructive. The
members of the jury who evaluates his venture idea come with
comments such as “this will never work!” and “how do you think you can
compete with television, I do not understand this, you have got it wrong”. Eric
is deeply disappointed and regrets participating in the competition. He
does not think that the people who evaluated his idea even read his
business plan. Instead of talking out of knowledge of the market, they
seem to talk from some gut feeling. In this way he perceives the feedback
he receives as “totally destructive”.
Summing up his participation he describes the business plan
competition as having the effect of “pouring cold water over entrepreneurs
on fire”. He never got any suggestions for improvement, only comments
like “this is really bad”. In order to keep himself motivated and his spirits
up concerning his venture idea, he directs his anger at the organisers.
New venture versus employment
When he became unemployed, Eric immediately began applying
for new jobs, but as the economy was in the middle of a recession at that
time, finding a job turned out to be a difficult feat. Thus his new venture
received more and more of his attention. As autumn comes Eric feels that
he should quit sending out applications and instead focus entirely on his
idea. His feelings are “chaotic” and he is unsure of what to do. He
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ponders his options saying “I give up looking for jobs and try to live on this
[his venture idea]”.
His wife reacts to this with nervousness and tells him that “you
have to contribute to the household; you have to have a salary”. Eric takes this
as her scepticism to his venture idea. When he gets carried away and
wants to realise it at all costs, she doubts it. Eric tries to convince her that
the venture has the potential to offer a solid financial situation, but she is
still sceptical.
Thus Eric feels that he must have a paying job in order to
contribute to his family, as the solid base. So he continues applying for
jobs and eventually lands one in October 2003. His wife is still unsure of
his intentions and continuously expresses her worry that “you won’t quit
your job, will you!” Eric reflects on this, that she accepted it as long as it
did not interfere with the family situation and that it all changed when
he began voicing that he would like to drop everything else and only
work on his venture idea.
Even though he was hesitant to continue applying for jobs, when
gets a new job he is “ridiculously grateful” to his new employer and says
that getting the job is one of the greatest kicks of his life as he again feels
a certain level of self-worth. He even feels in some kind of debt to his
employer for hiring him at a time when he was vulnerable. He has what
he calls irrational feelings towards his employer – he is so thankful to
them for being kind to him that he can endure many problems and still
be happy. And so he does as his employer forbids employees to have job
on the side, or their own companies, and even wants that in the contract.
Eric agrees to this restriction, but he does not abide to it. In the end it is
his venture idea which makes his heart pound and that which he wants
to put effort into.
So in order to work on his venture he sneaks away to meetings
and to the start-up course. However when he sneaks away he still feels
guilty towards his employer and his colleagues. He explains his view of
his employment in relation to his venture by saying that working on this
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venture “feels like being unfaithful… employment is the stable relationship,
that which one build upon, the accepted, while the venture is a fleet footed
mistress whom you sneak around with”.
New venture versus family
From the start of his venture creation attempts, Eric feels an inner
conflict between time spent with his family and time focused on the
venture. Initially it is his youngest son who is at home with him when he
is unemployed who he feels does not get the same attention as his first
son’s early years.
Eric views his venture idea in relation to his family as “the battle
for the venture against those we share our lives with”. With the venture idea
as his life project, the battle arises as his wife’s life project is their family.
He thinks that in her dream world, Eric can let go of the idea and instead
focus on her project. He says that she thinks his idea is fun, but also
equally difficult and inconvenient for her and their life together. When
he is unemployed and begins his creation attempts, this is no big issue.
But as his wife’s concern with his thoughts about not looking for a job
showed, it becomes an issue when his creation attempts infringes on
what Eric believes is her vision for the family.
Describing himself as a responsible father and an equal with his
wife he is torn regarding this. He “likes” her vision also, but cannot give
up on his idea. Time is an important aspect to Eric, and something that
he has plenty of as long as he is unemployed. As soon as he lands his
new job in the autumn of 2003, everything changes. Eric now feels that
time is not sufficient to fulfil his commitments to employment, venture
and family.
Eric squeezes in time towards his venture where he can. Getting
the new job, his wife wants to support him in by picking their sons up
from kindergarten so that he could show his commitment to work.
Instead of spending time at work, he uses this time to attend the start-up
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course. When the course ends his wife tells him that “now that this start-
up course is finished maybe you could pick up the boys from kindergarten
sometimes. We did say when you started working last autumn that you
wouldn’t pick up the boys so that you could show that you work well. But in
actuality you have left early to go to the start-up course. So actually you have
been able to pick them up all along. Now you will start picking them up.” In
other instances she points out that he spends too much time in front of
his computer at night, working on his venture while the boys watch
television. Eric wants to have a relationship built on equality, and this
gives him a bad conscience. He ponders what to do and considers
limiting the time he spends at his idea.
Later in spring 2004 he and his wife decide to renovate their
house in the suburbs of Stockholm. This new project takes a further toll
on his venture creation efforts, both time- and money-wise. He says that
it would be “difficult if the renovation project would be pitted against his
venture”. Then he could never motivate why he would take of his money
and put it into the venture which his wife does not believe in, instead of
putting it towards renovating their house.
At this time Eric expresses that “I cannot put in less time in this [the
venture] and still keep some kind of control and initiative. I would rather only
work with this, that is for certain, but I get less and less time for it. The demands
from my job and my family increase all the time, especially my job.”
The needs of the venture
Eric thinks that in order to develop the idea to where he wants it
to go, he needs funding. The key issue for funding is programming
where he needs both programmers and hardware. However he is
hesitant to bringing in investors at all. He compares bringing in investors
with bringing in his wife into the project. With investors he risks losing
absolute control over the development of his idea. With his wife he
would take what he calls “soft risks” if he were to ask her to put time into
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the venture. This risk arises as he puts himself in debt to her. Such a debt
would alter the equality of their relationship.
36
Hesitant or not, Eric decides to talk to some people and see what
his chances are to acquire funding. At the beginning of 2004 he makes
contact with people in the venture capital industry, using already
established contacts with leads into the industry. At his first meeting he
ends up in a discussion of the requirements he has to consider before
approaching a venture capitalist. He is told that he must have a solid
business plan which includes among other things a market survey.
The requirements for venture capital are more than he believes he
can live up to. Eric ceases his plans to look for external investors and
instead decides to fund his venture on his own through loans from
family, friends and possibly banks.
There are some people close to Eric with means that could be
invested in his idea, but he wants to wait as long as possible before
asking them. As they have just started renovating their house which they
have borrowed money towards, taking an additional loan from banks to
fund his venture idea feels like a closed door also.
As an unsolved issue, funding continues to be a problem. Eric
says in spring 2004, ”I ponder it all the time ’darn, should I go to the
government funding agency or something and try to get funding’”. The thing
that stops him from this is what calls his lack of competence, drive and
ability concerning funding issues. When he forces himself to work with
the business plan he states that he does not “have the stamina to sit down
and write the business plan. In the best of scenarios I get stuck in front of a
spreadsheet in Excel, counting millions in expected turnover, and the hours pass
without getting a second closer to... well finishing the business plan.”
36
He describes their relationship as really good and he does not want to risk an
alteration of this kind. He extends this soft risk to all his friends.
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When he talks about funding and the need for a business plan
Eric begins talking in staccato “it is hard to do a marketing analysis for the
venture… in a business plan it must show that we have a clear grasp of the
situation… that we have checked what the market wants… there should not be
any question marks… it should be like fill in the blanks and give us the money…
but our plan… it is like lame… a little bit lie ‘this is nice’”. He leaves the
issue of a business plan as an unresolved issue and instead works with
the little saved capital he has.
Eric prefers to work with people with whom he has no previous
history. The main reason for this is that he worries that if he works with
his friends, he risks the relationships. Risking relationships is something
that he worries about; he fears that if he involves his friends, things
could go wrong. His fears open up to pressures to separate his friends
and primarily family from his venture development attempts. As his
wife is a patent engineer with many years in the industry and he in need
of a patent engineer this makes him pause. She refers a friend of hers to
him and he talks to this person, but does not involve him any deeper as
he feels that it might affect his relationship with his wife.
Beta testing
After giving up plans on attracting external funding, the main foci
during spring are to develop the service and to gain access to soccer
games in order to run live tests. So far Eric has not registered any type of
firm, but in order to be able to pay the programmer he is forced to
register a non-limited company where he can use his private means to
pay him. The computer programmer is now a key person to the
development of the venture idea and Eric also promises him a share in
the future limited company given that he completes his tasks according
to schedule.
To gain access to soccer games and run tests, Eric finds the firm
that distributes broadcasting rights on the Swedish market through a
series of people starting with a long time friend. At the first meeting with
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the director of this firm, the executives of two large cable and satellite
pay-TV providers are also present. Eric assumes that they are there as he
could be a potential competitor to them and the broadcasting firm relies
on them for profit, they are in other words there to protect their interests.
The meeting turns out to Eric’s advantage and again his affiliation with
his friends’ internet site is an important aspect to show that he means
business and is trustworthy. The meeting results in him getting what he
wants, a promise to run tests during the full season of the Swedish
Premier League. However, when he receives written confirmation it is
only the first half of the league that is confirmed. Not to risk upsetting
anyone and maybe loose the permission completely Eric accepts this,
thinking that it will be easy to prolong it into the second half.
They start testing, and all three of them, Eric, Martin and the
programmer engage in the work. There are some glitches but they work
them out, and Eric is happy to see that it works as he had envisioned.
Towards May 2004 he begins making plans for how to market the
service, seeing beyond Sweden and thinking about the big European
teams. In Sweden he thinks that the association responsible for soccer is
likely to be a key actor, but so far he has not been in contact with them.
At this time when he begins to see how and when the idea can be
realised, all changes in an instant when Eric at the end of May 2004
receives an email from the director of the firm responsible for
broadcasting rights. The email is a forward of a mail he received from
the lawyer at the association of Swedish soccer and it basically orders the
broadcasting firm to terminate Eric’s rights to test his service at the
Swedish Premier League games, effective immediately. Eric “feels like a
bucket of cold water poured over my head”. He assumes that the reason for
termination is his affiliation with the Internet site owned by his friends
which until then had been a key for credibility, advice and contacts. The
site cooperates with foreign Internet betting firms aspiring to enter the
Swedish market which is controlled by a Swedish monopoly, which in
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turn is the soccer association’s largest sponsor. He never connected this
before, but now in retrospect says that it is all clear.
As soon as he receives the email Eric calls the lawyer to ask why.
The lawyer seems prepared for his call, expecting it. Eric finds out that
his assumption of why it happened is correct. He asks “we [referring to his
affiliation with the Internet site owned by his friends] have a very informal
partnership, there is no ownership and no money involved, we can get rid of this
burden today. Am I right if I say that if we do this we can get back to you in the
future?” and the lawyer responds “I think you should get back to us in
autumn. We encourage this kind of projects.” Eric is willing to give up his
connection with his friends “it is worth to break completely with the Internet
site; we can do that and still stay friends”.
Eric is happy that he made the phone call, if he had not done so he
thinks he could have terminated the project as it would have been futile
without a chance to test and develop the service. The phone call instead
turns it to something positive, he sees a new opening, “you have to stand
up and speak and not take a ‘no’ for an answer, even a ‘no’ can be turned into a
yes in some other direction”. Now this could be a door into the soccer
association.
Earlier during spring Eric has had problems motivating himself to
continue and he puts the blame for this towards not being forced to work
directly with programming anymore. This is both good and bad, the
computer programmer is much better at what he does than himself, but
he misses the long nights programming when he felt that he “did
something”. However when they are blocked from testing their service on
the Swedish Premier League, he again feels that his enthusiasm for the
venture soars. He has something important to do. The problem is that as
his enthusiasm goes up, so does his workload and then he immediately
feels the conflict when trying to make enough time for the venture in
pockets in his other commitments.
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A new start
Without the opportunity to run tests Eric focuses on the interface
of the service, to make it as visually appealing as possible, and on
removing glitches in the code. He does this work with his programmer,
but the programmer now has a job and less and less time to spend at
developing the venture idea.
By late autumn they have a service without glitches and
developed to a level where Eric feels that he can show it to the soccer
association. Thus he contacts them again and manages to set up a
meeting. At the meeting he brings his programmer with him and can
show a beta version of the service which has been greatly improved since
the live tests in spring. The representatives from the soccer association
express that they like what they see and ask Eric what he needs. He is
now again ready to run tests, and is invited to do so at an international
match with the Swedish national team at the beginning of 2005. Leaving
the meeting Eric is relieved and happy to again see a future for his idea.
The beginning of the end
However he never makes it for the test run, instead he refocuses
on an old topic, patenting the idea. Patenting was originally his partner’s
responsibility to work with, but without a word he disappeared from the
picture in the early autumn of 2004. As summer approaches Eric
gradually gives up on the idea, or rather other things take over his
attention. The reason why he decided to register the patent is unclear,
subscribing it loosely to a wish to leave something behind from all the
effort he put into realising the idea.
In Eric’s case, he tried to be innovative in the way he approached
the market, but as it was governed by a monopolistic structure his
attempts to circumvent the main actor were thwarted. Eventually he had
to deal directly with that actor. Before doing so he expressed worries
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about it being bureaucratically rigid and difficult to work with, however
the organisation turned out to be open and supportive.
This meant that the Internet site of his friends which was
instrumental in the start of his venture turned into a liability. As he
began realising his venture idea and worked through his friends, he had
no way of knowing of this potential problem looming in the future. As
events unfolded though, the entire basis of his idea risked falling apart
because of affiliations within the industry he targeted and also between
actors in his industry and actors in the betting industry.
Family, employment and a choice of effort
Eric submits to his situation saying that he realises that it will
probably not change, on the contrary it will just continue with more
things to do. More things subscribing to his time do indeed occur and in
the autumn of 2004 he works hard for a soccer club which he is an ardent
supporter to and which is in need of help. Now his venture “feels like… it
feels like it is in the balance. It could easily just disappear if we lose focus as so
many other things happen right now”.
He continues to commit himself to his venture, but in the Spring
of 2005 while focusing attention on the patent he comments on his
situation that “now we have another child coming [their third] and it… then it
is even more important with, well… each time one puts a nail in one’s beautiful
and panoramic, but still one’s coffin, each time one do things like having a child,
taking out a mortgage on the house or buying another car, one limits oneself.”
To Eric, the structural demands from the different parts of his life
conflict and he has problems with up-keeping his goals for each and all
of the parts. His venture idea is pushed further and further down the list
in view of the attention he puts on it.
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Partner and workload
In the autumn of 2004 Eric starts complaining about the amount
of work that his partner David puts into the venture, or rather the lack of
work. When David got involved one year earlier Eric made him an equal
partner. Now he begins thinking about what to do if David does not
deliver.
He ponders having a talk with him about it, but he has not talked
to him for a long time. Simultaneously when he did talk to him, David
said that he wanted to have fun with the venture and he wanted to work
hard on getting the patent organised.
As time goes by David does not put in the effort he promised with
the patent, instead Eric is forced to take care of it himself. They still
hardly speak, but Eric does not contact him to discuss the issue. Eric is
annoyed with himself for not doing this, and with David for being
evasive, he is also worried about the implications for the venture.
David’s lack of contribution is a source of confusion to Eric as he
does not understand why he is so aloof. This affects Eric by diverting his
attention at the relational issues instead of at the realisation of the
venture idea.
What is the outcome?
Eric gradually ceases his venture creation attempts and finally
terminates all efforts by the summer of 2005.
4.3 Cosmetics, but only for men
Nina begins thinking about her venture idea in the winter of 2004.
The idea comes to her when she writes her Master’s thesis in Business
Administration about beauty products for men. Prior to her business
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degree she studied to be a make-up artist, so her interest in and
knowledge about the cosmetics industry is already well grounded.
During the course of her thesis work, she realises that the
cosmetics industry in Sweden is almost exclusively focused on women,
while men are only catered for as a sub-group of cosmetics for women.
She reads a text by a professor in economic history about the cosmetics
industry’s development in the 20
th
century which discusses how the
industry and media together created a demand for the products. Prior to
this, the market for cosmetics was very limited but as demand was
created it grew rapidly. It dawns on her that male only cosmetics could
offer similar potential today as history shows for the female cosmetics.
She realises that male-only cosmetics stores exists solely as small
web based ones. The opportunity she sees is to open a male-only
cosmetics store in the form of a physical location as well as a web based
one.
The problem is that she has never thought about starting a
venture of her own before, and she does not know how to do it. A while
earlier, in the autumn of 2003 a friend of hers had talked about a
university incubator that she had visited. Nina thought that this might
be an avenue to start and get some initial support. She contacts the
incubator and is quickly accepted to sit there for a period of six months,
starting in December 2003.
With the aim of simultaneously setting up a store in Stockholm
and on the web, Nina takes her first steps by doing a survey on the
Internet to try to find out the interest in her idea. While doing the survey,
she also writes a business plan and begins thinking about where to find
funding, primarily for the physical store which she aims at setting up at
a central location in Stockholm city. She uses the Internet to do the
survey, some friends with websites market it and she complements this
by spreading word trough discussion forums. The survey indicates that
there is a lot of interest in her idea, and together with discussions on the
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Internet forums this helps her to further develop the concept. These
positive responses bolster her determination to continue with the idea.
One step towards communicating and testing her idea is to
participate in a business plan competition where her venture idea is
celebrated as one of the most interesting ones.
Funding the store
Nina needs funding to achieve her goals but the problem she says
is that “well as long as you have money, if you have started a venture and
begun generating income you can borrow any sum you want”. She has no
personal fortune and her venture has not yet started generating an
income. As she does not have any mortageable assets either she feels that
her means of acquiring funding are limited. One option is to borrow
from family or friends but none has much extra to invest. She considers
asking her parents who could borrow on their house, but she is hesitant
to involve them.
In addition to funding the store and the web shop she needs to
survive while starting her venture, she needs money to pay rent and
food. To get some money while still being able to focus fully on her
venture idea she enrols in a course at the university, this way she can
live off her study loan. Living on a shoestring and working long hours in
order to both get enough study points to ensure continued funding, and
to develop her venture, she focuses her attention at finding external
capital to realise her idea.
As the sources for capital are limited given her situation she
considers venture capital. However she does not see it as a viable option
because of the consequences of bringing in venture capitalists. She says
that she would rather “own 80 percent of a SEK20 million company than 20
percent of an SEK80 million company”.
With this in mind, borrowing money seems like the only
possibility, and the only place where she believes she can borrow what
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she needs is from banks. In spring 2004 when she finally finds the store
location she has been looking for with an available lease, funding
becomes the critical issue for the venture idea. So despite her perceptions
of banks being unwilling to lend her what she needs, she contacts one of
Sweden’s major banks to book a meeting.
She meets with a man at the bank for 5-10 minutes where he asks
her brief questions about her venture idea. He takes her business plan
which he promises to read and then return to her to discuss funding
options. The meeting was a disappointment to her, she feels
37
that the
attitude of the person she met was diminishing and that his lack of
interest and professionalism showed incompetence, “the guy I talked to at
the first bank was rather young and I did not feel much trust in his capabilities
as he did not seem to know very much”. This is her first meeting with
someone who shows disinterest in her idea and she is annoyed as she
has so much to show how good the idea is through her business plan, the
market survey and comments from the business plan competition.
When the man at the bank eventually calls her back, it is to say
that the bank can not lend her any money, actually that the bank does
not extend any loans at all to start-ups. Instead he proposes that her
boyfriend who has a steady income takes a personal loan to cover the
needs of the venture. This proposal angers Nina, what does her
boyfriends’ credit worthiness have to do with her venture idea. She also
wonders if her being a woman influences the response. All in all, the
bank’s response confirms her perception of unprofessionalism and she
turns to another bank for funding.
At the new bank she meets with two female bankers and receives
a completely different reception to, and evaluation of her idea. The
meeting with them lasts 45 minutes and in addition to hearing her idea
out, they discuss different loan alternatives and their impacts on her
37
The word “feel” is frequently used as a synonym throughout the case
descriptions for instances where the entrepreneurs perceived resistance.
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firm. In the end however they too express that they cannot lend her what
she needs as her venture is untested and she has no mortageable assets
of her own. They do offer a potential solution though. They explain that
if she can get funding from a government agency
38
offering seed capital
to start-ups they would be able to lend her half of what she needs. They
can do this as the government agency would then share in the risk and
also make a risk evaluation of their own. This also means that if her
application with the government agency is rejected, the bank will be
forced to do the same.
Nina thus contacts the government agency to apply for funding.
As the banks rely on the government agency’s judgement of the viability
of the idea, it is critical for Nina to realise her strategy. She is appointed a
handling officer whom she meets to discuss her project and her needs.
Meeting her handling officer Nina gradually forms the impression that
the ideas that are supported are more traditional ones with less of an
entrepreneurial approach which she fears is an indicator that her
application will be rejected. Despite this feeling she perseveres and tries
to work with her handling officer to convince her of the business model.
Her situation is precarious as she needs the support of the agency in
order to get loans from the banks. However her initial hesitation with the
handling officer’s ability to judge her venture idea is deepened for each
point of contact that they have. She describes her as “a lady in her 50s who
does not even live in Stockholm and who does not have any idea about what it
looks like here [in Stockholm]”.
After applying for funding both from the agency and the bank
Nina waits. She expects a response first from the agency as that will
decide the bank’s evaluation. The phone call she gets is not from the
agency though, but from the bank who tells her that the loan application
38
Company controlled by the government with a goal to stimulate new
businesses and enable more innovators to reach the market with their products or
services.
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has been rejected because the agency turned her down. Nina is taken
aback and hit hard by the verdict, her whole strategy and way forward is
destroyed.
Ending the phone call she drops what she is doing and walks
away to be alone and think. She is angry, disappointed and frustrated
with being rejected and most of all by finding out from the bank and not
from the agency directly. She feels that her handling officer should have
called her first and given her a chance to respond instead of ignoring her
and calling the bank. Nina considers giving up, her motivation is at zero
and she feels helpless, wondering how she will be able to start without
money.
Feeling despair she calls her best friends, who have followed her
start-up attempts at a distance, and talks to them about her frustration
and about giving up. They console her and say that she must continue
with her idea and that it is great no matter what those people at the
agency and the bank think. This lifts her spirits and as the day ends she
again feels confident that she will find a way to realise her idea
regardless of not getting the money she applied for, she says “if one route
is closed off, one has to find another instead”.
The day after the phone call Nina calls her handling officer to ask
why her application was rejected. She says that she believes in her idea,
but that her strategy of having a high profile store in an expensive
location is not the way to start and that was the reason for rejecting her
application. This response infuriates Nina, and she wonders how the
handling officer can question her idea at such a fundamental level
without talking to her about it before deciding on the loan. Nina is not
able to make the handling officer reconsider the decision so she also asks
her contacts to try and convince her, but at no avail and the decision is
final.
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Shifting strategies
Realising that she cannot carry on as she had originally planned,
and with no way to circumvent the problem of funding Nina begins to
rethink her business model. She sits down with her boyfriend to think
things through. They discuss temporarily postponing the physical store
and instead focus on the web shop only. After thinking about this for
some time she decides on this new strategy. This requires much less
funding and a way for Nina to build credibility in the sense that she can
show that her idea is feasible, and with that return to investors.
Thus by summer of 2004, with a new strategy she begins
approaching suppliers. The market for male cosmetics products has one
main supplier whose brands in 2004 has approximately 80 percent
market share. Next comes a few brands with a large share of what is left.
However there are many newcomers entering. As a consequence of this
Nina feels that it is important to have the major brands, both for
generating sales and to signal to others that her web shop is “real”.
Initially she bases her focus on this analysis and decides to go for the
main brands.
The established and the new
Meeting with the marketing director of the company, Nina
describes her venture idea and that she wants to sell their products.
Although being a potential client to the distributor Nina somehow feels
inferior and as if she is begging them to sell her their products. She also
perceives their response as conveying superiority when they question
why she should be allowed to sell their products with her current
business model [web shop only (author’s note)]. They claim that they do
not sell their products via the web, but that they are only sold in stores.
Nina on the other hand knows that this is not so as one can already buy
their products through web shops, albeit not Swedish ones. Instead they
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go on to tell her that this is the way they have done business since they
started and it is something they will not change.
She tries to persuade them to sell her their products but they
maintain that their policy prevents them from selling to a web shop. She
argues that she will shortly have a physical store and that stores already
exist on the web selling their products. However they still refuse to sell
to her. Their response frustrates her, before she began contacting
potential suppliers she thought they would be happy if someone wanted
to buy their products, now she sees that that is not the case.
Refusing to give up Nina contacts mid-sized suppliers but many
of those are also hesitant to sell her their products. The most annoying
thing she experiences is suppliers who do not even bother to get back to
her after she has tried to make contact and left several messages. She
does not understand why they are not interested in selling her their
products or even talking to her. This takes a toll on her motivation to
work on her venture idea and thoughts of giving up arise.
To deal with her thoughts of giving up and anger with suppliers –
“bureaucrats who refuse to cooperate” – she has a few friends and especially
a person who is in a similar situation as she, starting up a new venture.
With her she talks about the feeling of uncertainty and thoughts of
giving up and they support each other. She once more has to reconsider
her strategy. She decides to turn to smaller suppliers, even suppliers in
start-up situations similar to her own. What she thought would be easy,
buying her shop’s range of products turned out to be an arduous task.
Eventually, five months later in the autumn of 2004 and despite the
biggest actors’ resistance she has a range of products large enough to be
able to open her store.
Issues of design
In the autumn of 2004 Nina begins developing her web shop and
signs up a small web design firm to do the job. With an education as a
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make-up artist Nina feels confident in her ability as far as design and
colours go, and takes an active role in the development of the website.
Her wish to be a part of the process however creates tensions with
the designers. Their view of how to work, they say, is to have total
freedom to do the design as they want. This way Nina feels that she
constantly argues with the designers to push her ideas through. Shortly
into the project the design firm demands that she must pay more for
their services because they do things that were not included in the
original agreement. Nina is rather angry with how they handle things
and tells them that she agrees to pay more but that things then have to be
done her way, otherwise the deal is off. To her surprise the designers
agree to her demands.
Now things settle down but after a while she again feels
frustrated about how they relate. The design of the website is nearing
finalisation but Nina does not agree with the colours used in the site. She
tells this to the designers and asks them to choose a different colour
which she also suggests. They refuse and express their irritation with her
demands which they feel infringes on their artistic freedom. They claim
that they have done web design for many years and know better than
her, that she should trust in their experience.
Nina gets “a little irritated” and asks some people she knows who
are involved in design for a second opinion on the designers’ choice of
colours versus her choice. Their responses strengthen her belief in her
own choice of colours as the best one, so she sends an email to the
designers demanding that they choose her colours. The designers
respond by saying that she is the client and they will do as she says but
that they think it is impropriate to involve others in this.
During this work with the web shop, Nina worries about the
uncertainty she feels towards opening it. Not knowing how it will work
out is hard. At the same time she invests a lot of time and money into the
venture. Some days she says she feels like, ”yuk, I just want to end
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everything, just give it up”, but then on other days she feels like this is the
only thing she wants to do. Those good days she instead ponders how to
make sure that she will survive long enough to be able to launch her idea
where one idea is to take weekend jobs to make money which she needs
in order to continue.
Being seen
After some delay caused by the dealings with the web designers,
the web shop finally opens in the winter of 2004. At the beginning of
2005 Nina arranges a meeting with media to promote the site and her
business concept. In order to get as big an impact as possible she brings
in a professional event organiser with premises at a prime location in the
centre of Stockholm. Despite her efforts she feels that her press release is
largely ignored by most of the larger magazines and papers.
To media she and her venture idea is a minor issue, but despite
this she is able to get some articles written about her web shop. She
believes that part of this success is subscribed to her strategy of using an
established event organiser. This media coverage in turn eventually
helps her gain more interest and more articles.
About the same time, at the beginning of 2005, Nina stumbles
over a newspaper article about a competitor whom she was previously
largely unaware of. It says things about the competitor’s strategy which
makes her wonder where the competitor got the market information
from. The competitor opened their store before Nina opened hers, and as
she had her survey done one year earlier she suspects that they got hold
of it and quickly implemented it in order to be ahead of her.
Even though she suspects that they copied her, Nina is not overly
worried as she believes that her store is the best. What annoys her
though is that they beat her to it, opening their store before her and thus
became the first store with her concept in Sweden.
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Chores of starting up
From the very start, Nina works hard at realising her venture
idea. In order to save money she uses her home both as an office and a
warehouse. When the web shop opens up, her boyfriend questions
whether her venture is a real job. He does not think that there is so much
to do, just taking care of orders and that is it. Nina believes that he has
that attitude as a consequence of having an employment and place to go
and work, something that he deems as important. She knows her own
situation, and that time is not enough and is irritated with him for not
being aware of her situation. He makes demands on her to spend time
with him when she feels she must work, and she considers keeping a
diary of how her days look like so he can see and understand.
In spring 2005 when the web shop has been up and running for a
few months she is beginning to feel that she is stretched out over too
many activities. So far she has kept much of administration and also
issues concerning design on her own shoulders, but she is beginning to
feel that she should have outsourced some things. At the same time she
says that she wants to have control of design issues, and the best way she
sees is if she does the job herself.
Some issues of design she does outsource but they turn out to be a
source of frustration as they are not done in the way she wants. A
consequence of this is that she is even more hesitant to outsource and
feels that she can do things better than specialists, although it would take
her six hours to do an advertisement which would take an advertisement
firm two hours.
In this manner Nina perceives that the grind of just keeping her
venture operational is a constant battle and blocks her need to work with
strategic and future oriented issues. She especially experiences the
seriousness of this as her venture is new and fragile and without further
work on these pressing issues she worries that it will be less likely to
succeed in the longer run.
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In addition to this multitude of chores, supplier mistakes eat up
more of the time she needs to spend on developing her venture. She
desperately needs slack, but there is less and less available. As soon as
something does not work or run as planned her time is eaten up. One
example of this is delivery problems from one of her suppliers. When her
customers order through her web shop and she does not have enough in
stock to cover the order, then it is critical that her suppliers can deliver
the correct item on time. In one instant this did not work and she had do
spend a considerable amount of time trying to communicate with a
customer while sorting out the delivery from her supplier. At the end of
the day she is the one who has to give her customer a discount as
compensation but she in turn gets no compensation from her supplier.
What is the outcome?
Nina realises her venture idea and launches the web shop. This
becomes highly successful and she is elected as one of the most
influential business women in Sweden. Eventually she also opens up
additional stores, all at a prime locations in Stockholm.
4.4 How to clean horses
A passion
Susanne loves her horse, but one of its greatest joys is to roll itself
in the mud. Each time this happens she has a lot of work to clean it. She
figures that there has to be a better way to clean horses than what is
offered by the available items on the market.
Her father is a hobby inventor and there are many inventors in
her family and among the friends of her family with a number of patents
among them. Susanne also describes herself as inventive, saying that “I
have always had a lot of ideas”. Together with her father she ponders the
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problem of cleaning horses and in the autumn of 2003 she comes up with
an idea to make a special type of brush. About the same time the pre-
incubator at the business school where she studies announces a venture
idea competition. She signs up for the competition, wins, and moves in
to the pre-incubator where she begins developing her idea.
As she moves into the pre-incubator she puts her attention
towards the product. She finds what she believes to be a perfect design
engineer with experience from product development through her father.
Together with him she builds her first prototype but the design engineer
turns out to be a disappointment and the prototype a complete failure.
As the first prototype does not become what she had hoped she
afterwards says that “it was not thought through enough, it was not the
correct solution and we also made some mistakes, we should have done the
review in media of similar products first and taken it a bit slower.” Parallel to
building the prototype with the design engineer, Susanne and her father
begin developing their own prototype as soon as they start to doubt the
viability of what the designer does. The functionality of this prototype
however turns out to be dangerous as it rotates in a way that risks
injuring the horses.
At the end of 2003 she registers a limited company and writes up
a business plan which she also competes with in a business plan
competition. As 2004 begins she carries out a review in the media of
similar products while talking to potential producers in order to map the
market structure. The review reveals no similar products.
Simultaneously and to keep the pace she conducts a market survey
where she interviews more than 100 people, both users and producers in
the horse industry. The survey indicates that there is a demand for her
product.
Bolstered by the positive news she develops the second prototype
in wood together with her father at his job where they have access to
certain tools they need. They attempt to solve the initial problems with
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the rotation of the prototype through a safety latch. Working on the
prototype, other people at her father’s work also join in and help.
However it turns out that wood is not a good material to work with, so
through her boyfriend she tries to develop a prototype in metal with the
help of a garage, this also is a dead end.
While working on building the prototype herself, Susanne puts a
lot of effort into finding someone who can build the brush. She talks to
everyone she knows with the aim to find someone relatively close by
with an expertise in plastics which she feels is the best material.
Eventually in late spring 2004 another person in the pre-incubator tells
her of a person in the suburbs of Stockholm who might be the right
person. She talks to the producer and feels that he is a perfect match for
what she has been looking for. To her it is important to be able to interact
closely with the producer while building the prototype. The extra cost of
having a producer in Sweden is something she gladly accepts in return
for being able to easily discuss the process with him, something which
she feels would have been much more difficult with a producer in for
example China.
Happy to have found someone who can both develop and
eventually produce the brush she signs an agreement with him to
develop the next prototype based on what she and her father have built
in spring. The producer immediately comes up with an idea for how to
do the safety latch that she and her father worked on, and with that she
hands over the prototype development.
As this all unfolds she meets few people who question the
viability of her idea. Some do, like a jury person of the business plan
competition who at a social event expresses doubt in her idea by
questioning whether it is at all feasible to produce and sell. Susanne’s
responds to such critique with attack, and enlists the juryperson’s friend
to express how wrong he is to doubt her. She does not take critique of
her idea home with her to improve or change her product. Instead her
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experience is that it is based on ignorance of the potential and the design
of the product.
Underlying expectations and functional contacts
Susanne knows of the trials and tribulations of developing a new
product through her family. Thinking about the time it takes to develop
her product she says ”I am really fond of my idea and it sort of feels like a
fantastic market which suits me very well, but it would actually have been better
if someone else had done the inventing part so that I could have done the
entrepreneurship part, but...”. She wants to leap past the development
stage as quickly as possible to the point where she has a finished
product, “I want to be an entrepreneur, not an inventor. Entrepreneurship is
the fun thing”.
She wants quick results and adopts a strategy to find key people
who can help her, either as mediators of other contacts or as concrete
help with specific questions. With this strategy she quickly builds a
network of more than 100 more or less active contacts. She focuses her
networking on issues she needs help with like funding, support on
issues of licensing, office space and a product development. When
looking for people Susanne actively and openly focuses on exchange of
utility and barters with contacts, offering a potential lead in return for
another. She wants results and it is only those contacts that have the
potential to aid her in realising the venture idea that she includes in her
network.
One in a line of such contacts for example leads to an opportunity
to test the brush together with an agricultural university. The university
has a research project on horses where they have a set date in 2004 where
the brush could be tested and surveyed under laboratory conditions.
Susanne is thrilled at this possibility and agrees to participate given that
she can have the brush ready in time.
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At the same as she has an instrumental approach to building her
network, she also feels that most of the stakeholders she interacts with
have some kind of interest in her. That interest in turn is what decides
how much they are willing to invest in her, whether it is work, money,
contacts or something else. She exemplifies with the industrial designer
who wants to see that she is professional and that the time he invests is
likely to lead to something only if she shows herself to be professional
enough to bring it to the market. Regarding the producer she believes
that he feels a social responsibility to bring good products forward and is
benevolent to ideas like hers.
Despite her focus on speed of development and working on many
fronts at the same time, there is a limit to what she can influence which
she realises when trying to bring in funding.
Capital needs
Susanne feels that she needs to hand in the patent before she can
start talking to potential users and licensees which is the next step in the
venture development. She also needs it to be able to present her business
plan in competitions which is a way to make money to sustain herself in
the short run – “I cannot say anything until I have handed in the darn patent”.
To do this she needs money as patent engineers are costly and she does
not have that kind of money herself.
In March she estimates that she needs SEK2 million to develop
and launch her product. She looks for sources offering the potential to
get money without reciprocal demands to give up equity or pay interest.
Borrowing will be a necessity and in addition she hopes to bring in some
money through business plan competitions that she participates in, by
applying for all the stipends she can find and eventually through
venture capital.
Her best option for borrowing is from a government run funding
agency and she hands in an application at the end of March 2004. She
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makes it clear to them that she needs a decision and money at the very
latest by June 10 as she will participate in a big business plan
competition which starts then and that she of course want to get going
with patenting and product development as soon as possible.
To Susanne the government run funding agency is the most
important stakeholder at this point in spring 2004. She talks to them
regularly and keeps them up to date with the development of the brush,
saying that “it is really important that they are positive to the idea and to me.”
Still she hears nothing from them and even though she calls
people she knows within the organisation basically every day towards
the end, they do not respond in time. She believes they will approve her
application when they look at it and is frustrated that they do not
prioritise it more given her urgent need.
Trying to explain why they do not process her application faster
she categorises them as bureaucrats with certain routines that seem next
to impossible to change and that they probably want a certain number of
applications to process each time.
Until she receives a decision on her application, she feels
prevented from continuing with the development of the venture idea
and she worries that it might not happen until after summer.
When she realises that it could take too long to get a response to
her loan application she applies from another funding agency with a mix
of government money and venture capital. However she is hesitant to do
so, both as it takes time and effort to write the application and as the loan
conditions are less favourable compared with the other source. This time
she receives a fast response with an approval but the terms for the loan
are too hard so she decides to keep it as a backup while waiting for the
first lender to make a decision.
Susanne dislikes waiting so she focuses her time on the only thing
she sees that she can do, working with the producer on developing the
prototype of the brush. She feels that she must understand everything
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about the plastics used herself, she wants to know why certain qualities
are needed and how for example temperature variations and high levels
of ammonia affect the material used. So while waiting for money
towards patenting, she has something to do. Still if she does not get any
responses regarding funding before summer she thinks that she will
work on her other project instead and let the brush wait.
Summer comes and with no money to pay the producer she has to
put that work on hold. With no money she is also forced to turn down
the offer from the university to test the brush as it will not be completed
in time.
Summer goes and there is still no response from the first lender.
This is much too slow for her planned activities so she feels forced to
change strategy and schedule for how to develop her product. Actually it
becomes a key to a major shift in direction of her venture creation
activities.
Time, slack and a new strategy
Although the change in strategy and focus, directing it towards
the licensing idea is definite in September 2004, the shift can be traced
back to spring the same year.
Going back in time again to early spring 2004, Susanne’s time
spent on developing the brush varies between weeks, sometime it is far
more than full time and sometime it is more of a part time job. In times of
low intensity she begins looking for other opportunities where she can
fulfil her entrepreneurial dream. In late spring such an opportunity
arises.
In April 2004 she meets with Richard who is in charge of a
university pre-incubator and something of an expert in licensing issues.
Susanne’s reason for meeting him is that she feels stuck and unsure what
to do, there are so many things to do and serious technical problems
with the prototype at the same time. Everything is slow and much
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harder than she had expected, she says she suddenly realised that “well,
if it takes four years until the product is out in the market is it… is there and
point to it from a business point of view?”.
Richard gives her an understanding of what she can expect when
developing a completely new product and which her alternatives are.
This opens her eyes to licensing and the requirements for licensing a
product, and acts as a watershed in how she views her product and what
she really wants to do. It connects with her desire to be an entrepreneur
more than an inventor and gets her thinking how to do it, how to
become an entrepreneur and skip the inventing step. After the meeting
she starts looking at how to license the brush, trying that as a business
model. The problem is that she cannot describe her product to any
licensees until she has a patent.
Somewhat later in spring Jack enters the pre-incubator where she
is at since the end of 2003. He has an idea to develop a venture
specialised in licensing inventions ready for the market. With Susanne’s
experience from her brush and her talks to Richard, she decides to join
forces with Jack who is happy to have a partner. Parallel with the brush
she now spends time on the licensing venture also where her network
expands and becomes a key component in how they find innovations
and how they work on developing and licence them.
Then when she is blocked from working on the brush from
summer because of the stalling lender she focuses all her attention on the
licensing idea. The brush is included in the portfolio of innovations that
she and Jack work on.
In September she finally receives the response she has been
waiting for since June from the funding agency and they extend her
credit as she had hoped and expected. She takes the loan and again
activates the development of the brush. Now there is a difference from
before however as it is now one of many in the expanding portfolio of
their licensing venture.
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With the money she has been waiting for she aims to build the
prototype and patent the brush within two months. Yet again she is
disappointed as the technical difficulties she has had from the beginning
persist.
Fading effort
Her view when getting the funding is to do the final tests, patent
it and work on it parallel with the other portfolio projects. The producer
who was put on hold before summer is again asked to continue with the
brush and he now works more or less without Susanne’s active
involvement as she has other pressing issues to tend to with the licensing
idea.
As time goes he is unable to solve the problems with their original
idea and instead introduces a new solution, but it turns out to be costly,
too costly for the budget Susanne has set up. Her involvement grows
lesser and lesser and she relies more and more on the producer to work
on the project on his own, but as she says “he has other projects that are
more fun so I have to be happy if he works anything at all with my brush”.
With the technical problems and the failure to participate in the
study by the agricultural university Susanne hesitates whether the brush
actually belongs in the product portfolio of their licensing venture. If
someone else would have come to them with the idea she says that she is
“uncertain whether they would have taken it on board”, if so then only at a
later stage. The university study would have been a key component for
them to see it as a viable product. If that would have shown that it does
not work, then the whole idea of the brush would fall.
At this point the brush is so far down on their list of portfolio
products that she hesitates to even count it.
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What is the outcome?
Susanne never moves the brush up on her list of priorities. Instead
she focuses whole heartedly on her licensing idea.
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5 Analysis of perceived resistance
Now I turn to the analysis where I address the purpose of this
study, to explore:
• Where and why do novice entrepreneurs perceive resistance to their
venture creation efforts?
• How do novice entrepreneurs cope with perceived resistance?
and to describe:
• Which effects do perceived resistance have on outcomes of venture
creation processes?
This chapter is divided into three sections. In the first I use the
empirical data to analyse the research questions. In order to structure
this section, the theoretical model forms an outline. In the second section,
the theoretical framework is further used to discuss the empirical
analysis. Finally in the third section I conclude the analysis by proposing
an inductive model of perceived resistance.
5.1 Empirical analysis
The deductively derived model from the theoretical framework is
used to analyse perceived resistance through the empirical material.
After an introduction to the analysis in section 5.1.1, the model forms the
outline of this section and a starting point to the inductive analysis. Thus
sections 5.1.2 (1) and 5.1.3 (2) address the first purpose of this study – to
explore where and why do novice entrepreneurs perceive resistance to their
venture creation efforts – by discussing (1) where potential resistance could
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arise, what the origin of it could be, as well as (2) why resistance is
perceived. Section 5.1.3 (3) turns to the second purpose – to explore how
do novice entrepreneurs cope with perceived resistance – where I argue how
entrepreneurs cope with perceived resistance in section 5.1.3 (3). Finally
in section 5.1.5 (4) I focus on the third purpose – to describe which effects
do perceived resistance have on outcomes of venture creation processes – and
discuss the implications of the above on the evolving venture itself.
Figure 5-1: Theoretical model of perceived resistance as a map for analysis
5.1.1 Introducing the analysis
Comparing the four entrepreneurs, they and their ventures have
more differences than similarities. Two are male and two are female, one
has a product, the others a service, two are married with children and a
house while two have a significant other that they live with, two are
around 25 and two are around 35. Despite this, there are overlaps in the
instances of perceived resistance that I observed. What varies is their
individual appraisal of goal disruptions where the level of severity
decides whether it is perceived as a resistance or not. This issue of
variation is however a question outside the scope of this study as it
relates to the question of whether an entrepreneur will perceive
resistance in a particular instance or not.
39
39
As I stated in the delimitations to this study, I explore instances of
entrepreneurs’ perceptions of resistance, not differences between individuals’
perceptions or whether an entrepreneur is likely to perceive resistance or not.
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Throughout this analysis I refer to the resistance patterns
described in Appendix E. In order to facilitate for the reader, Table 5-1
summarises all instances of perceived resistance.
Table 5-1: Summary of instances of perceived resistance
J1 Jonas’ time available to focus on his venture idea is insufficient in relation to its
needs
J2 Access to computers for programming through the university is lost
J3 Access to university servers is restricted
J4 The core business model is deemed as unfeasible
E1 Eric’s key stakeholder for the development of his service terminates his testing
E2 A business plan is required to gain access to funding
E3 Jury members in business plan competition gives destructive criticism
E4 The process of applying for a job takes attention away from venture idea
E5 Lack of funding limits development of programming
E6 Partner does not fulfil his responsibilities
N1 Nina lacks the funding she needs to acquire her store
N2 Handling officer at government funding agency is unsupportive
N3 Suppliers do not want to supply the needed goods
N4 Conflicts with web designers
N5 Family questions work with venture idea
N6 Multitasking and poor performance of outsourced work
S1 Susanne has difficulties with product development
S2 Not interested in product development and lack of funding to outsource
S3 Handling time by government funding agency on loan application is too long
S4 Patent is needed for sales to begin, but funding is lacking to patent
S5 Pace of development is slow and other projects requires attention
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Furthermore, tables are used extensively to summarise
observations of which resistance patterns that are involved in different
issues. From those tables I pick a few resistance patterns to describe my
reasoning and exemplify from the cases. Choosing a few examples is
done in order to facilitate the readability of the text and highlight issues,
and should not be seen as way to prioritise between cases and resistance
patterns.
5.1.2 Where is resistance perceived?
Earlier in the theoretical overview I discussed previous research
that has looked at problems, obstacles, barriers and challenges that
entrepreneurs face. A number of lists of such issues have been created
which taken together cover most of the process of new venture creation.
What they indicate is basically that difficulties could arise anywhere and
anytime.
The instances of perceived resistance observed in this study also
generate a list (see the resistance patterns described in Appendix E),
which shows a number of situations where it arises. However I want to
point out that this is an exploratory study of perceived resistance such
that this list is what was revealed in this study. These listed instances
serve to develop categories and discuss the dynamics of perceived
resistance. They are not a complete set of potential instances that
entrepreneurs face. Furthermore they are not the end product of this
study, but instead the condensed empirical material upon which I build
my analysis.
In many aspects these instances overlap with examples from
previous research which could be taken as an argument that instances of
perceived resistance have been observed in previous research. However
it has never been categorised as such but merely put into more objective
categories such as barriers or obstacles. The focus of this study is what
entrepreneurs perceive as resistance which makes it entirely subjective to
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each individual entrepreneur. Previous studies have started with an
obstacle and then asked individuals whether that obstacle was an issue
or not (see section 2.2 for an in depth discussion of this), this study has
explored where resistance has been perceived, thus allowing the
entrepreneurs to decide from the start what the issues are. As will
become evident while reading this chapter, viewing perceived resistance
as subjective to each individual opens up to a broader range of issues
that what has been included through more objective issues like obstacles.
Overall, although the frequency of perceived resistance varies
between the four cases, all of them show the existence of at least some
instances of perceived resistance, either as discrete events or processes.
Whether these instances are discrete events or processes, they correlate
with Lazarus’ episodes of disrupted goal-directed behaviour (1990) that I
discussed in the theoretical framework.
Naturally resistance is perceived in relation to venture creation
activities, but there are also situations outside specific venture creation
activities where resistance is perceived. In such instances, issues affecting
entrepreneurs’ lives have spill-over effects on their venture creation
activities and resistance is perceived in the interface of those. For
example Eric’s wife’s scepticism about his venture idea (E4)
40
influences
his work towards realising his venture idea. Jonas’ prioritisation of his
family directly limits his time available to work on his venture idea (J1).
The questioning attitude of her boyfriend makes Nina feel that she needs
to show him how much she works, diverting her focus from building her
venture (N5). Those are examples where demands from, or in relation to
the entrepreneurs’ families cause them to perceive resistance.
Taking a view of all the observed instances of perceived
resistance, they fall within three broader categories (see Figure 5-2). The
40
All through the analysis I will refer to the instances of perceived resistance
which are described as resistance patterns in Appendix E where E stands for Eric, J
for Jonas, N for Nina and S for Susanne.
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first category refers to entrepreneurs’ dyadic interactions with individuals
that have some kind of stake in the venture. Nina’s arguments with the
web developers (N4) and Eric’s partner who does not live up to their
agreement (E6) are two examples.
The second category includes meetings with depersonalised
gatekeepers such as certain rules and regulations or government linked
organisations that offer help to entrepreneurs, but with strings attached.
Susanne’s attempts to speed up her loan application with the
government lending institution to get the loan she needs to realise her
venture is one example (S3), another is when Jonas’ access to computers
for the student programmers is cut by the university as the student’s
course where they needed them ends (J2).
Figure 5-2: Categorisation of instances of perceived resistance
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The third and final category of where resistance is perceived
refers to entrepreneurs’ beliefs of what is required in order to realise their
ventures. Susanne does not think that innovation is any fun, what she
wants to do is to be an entrepreneur (S1). She furthermore believes that
she needs a patent before she can take the next steps and begin selling
her products, but to patent she needs money which is difficult and she
begins doubting whether she should continue focusing on the product
idea (S4). Jonas worries about insufficient time to put into the venture
idea (J1), and fears putting pressure on the programmers to quickly
complete the service (J4). These beliefs are entrepreneurs’ subjective
convictions of their situations. They are based on their appraisals and
non-related to external relationships, although they could still have an
impact on those.
These three categories are not mutually exclusive but in some
cases instead overlap each other. On the border between entrepreneurial
beliefs and depersonalised gatekeepers is for example Eric’s belief that
he needs a business plan while being unsure of who might need it and
what it should look like (E2, E5). Between entrepreneurial beliefs and
dyadic interaction is Nina’s meeting with a large supplier that she feels
has bureaucracy-like rules of interaction with potential customers which
excludes her venture idea (N3). Nina can also exemplify the border
between dyadic interaction and depersonalised gatekeeper with her
handling officer who refused her loan (N2).
To complement the figure of the categories, Table 5-2 shows the
distribution of each entrepreneur’s instances of perceived resistance
between the three categories
41
. The table shows that all of Nina’s
perceived resistances are set within dyadic interaction and some
bordering to the other two categories. Eric’s are distributed equally
between all three, while Susanne’s and Jonas’ look somewhat different.
41
Note that the instances that span more than one category are counted more
than once.
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Neither Susanne nor Jonas perceives any resistance within the category
of dyadic interaction. To both of them, their beliefs are a source of
perceived resistance, as well as depersonalised gatekeepers. Why dyadic
interaction is non-existing could in Susanne’s case be explained by her
use of a large network of relationships which makes her less dependent
on specific individuals, and also the speed by which she moves to a new
venture idea. Jonas’ venture idea is placed in an academic context with
specific rules and regulations built for academia. He thus faces more
depersonalised gatekeepers than dyadic ones. In addition to this his pace
of venture creation is less intense than the other three entrepreneurs of
this study which could indicate that he does not push so hard and thus
does not have much dyadic interaction.
Table 5-2: Distribution of instances of perceived resistance over categories
Perceived resistance \ Case Nina Eric Susanne Jonas
Entrepreneurial beliefs 3 3 4 2
Dyadic interaction 6 3 0 0
Depersonalised gatekeepers 3 3 1 2
Another issue which needs to be taken into account when looking
at where resistance is perceived is its origin. This origin of the disruption
can be traced to before the occurrence of the perceived resistance itself.
In each of the instances it comes as a surprise to the entrepreneurs when
they perceive resistance. When studying the cases in retrospect however,
it is possible to trace the origin of each instance to an event, a
decision/action or a frame of mind which leads to the discrete event or
process that is perceived as a resistance (see Table 5-3)
42
.
42
Again note that the instances that span more than one category are counted
more than once.
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The origin as exemplified in the cases is important from the
perspective of understanding the venture creation process. The cases
show that much of the perceived resistance seems to arise from issues
internal to entrepreneurs’ start-up attempts. In this respect, perceived
resistance is mostly a consequence of the entrepreneurs’ own
involvement in and perceptions of the actual venture creation process. It
is not so much dependent on the acts of external stakeholders, although
it appears to be so at first impression. When the soccer association stops
Eric’s testing for example, he perceives that as a resistance from that
stakeholder, but the origin is his decision to use his friends at the website
that initially promoted him. His affiliation with that Internet site was the
reason behind the soccer association’s decision (E1). Another example of
this is Susanne’s impatience with the process of innovation and product
development. She wants quick results and her brush to reach the market.
When this does not happen she becomes less and less inclined to put in
the effort to work on her product (S5).
Table 5-3: Origins of perceived resistance
Categories \ Origin Event Decision/Action Frame of mind
Entrepreneurial beliefs 2 10 3
Dyadic interaction 3 8 0
Depersonalised gatekeepers 2 6 1
This is not to say that external stakeholders lack importance, on
the contrary. In the theoretical framework I discussed that entrepreneurs
are more likely to perceive resistance from actors in control of critical
resources. Restricted access to such resources is likely perceived as goal
disruptive in relation to goals of high relevance. Pfeffer and Salancik
would say that this is likely to occur when supply is limited, production
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instable and survival uncertain (1978). I will discuss this aspect of
resource dependence in more detail further on.
5.1.3 Why potential goal disruptions are perceived as resistance?
When looking at where resistance is perceived I earlier showed
that it falls within three categories, dyadic interactions, depersonalised
gatekeepers and entrepreneurs’ beliefs. At a basic level, why resistance is
perceived in relation to these categories does not differ between them
though. There are two common themes in all of the instances: significance
of a goal disruption to the venture idea and uncertainty of outcome of coping.
First of all, resistance is perceived when the entrepreneurs feel
that something poses a threat to the realisation of their venture ideas.
This means that it is subjective to each individual entrepreneur and the
degree of perceived resistance depends on how critical they believe
something to be to the realisation of their venture ideas. The degree of
incongruence resulting from the disruption and their personal reasons
for pursuing their ideas influences how a goal-disruptive event is
perceived.
To describe how significance affects the entrepreneurs’ creation
attempts and consequent perceptions of resistance I use some examples
from all four cases. As I stated above though, significance is an element
of all observed instances of perceived resistance which can be seen by
studying the resistance patterns in Appendix E. Susanne for example
depicts how commitment is lowered because of a difference in
expectation of what venture creation is about and her experienced
actuality of it. In her case this means that she perceives the resistance as
severe which confirms her view that such a mode of venture creation is
not what she wants (S1, S2, S3, S5). Nina is burdened by operational
tasks and has difficulties keeping up the pace she wants (N6). Jonas
perceives a conflict with bureaucracy when his access to necessary
computer equipment and server is severed because the student
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programmers no longer work on the venture idea as a part of a course,
without this he can no longer continue developing his venture idea (J2,
J3). Eric’s testing of his service at Premier League matches is abruptly
ceased by the soccer association, forcing him to halt his development
(E1).
However, significance is not a sufficient requirement on its own
for entrepreneurs to perceive resistance. The second theme mentioned
above is also required, namely entrepreneurs’ uncertainty about their
ability to cope successfully in order to overcome resistance. This is not
necessarily related to their actual coping and the outcome of that, but it
is their notion of whether they will be successful or not.
In order to describe the entrepreneurs’ uncertainty of coping
outcome I use a few instances of perceived resistance to exemplify. In the
same manner as with the examples of significance, the extent of
uncertainty as a factor in all instances can be seen in Appendix E. For
example, when Nina’s loan application is rejected she is first gripped by
despair as she sees no other way to realise her venture idea, no other
way to get funding or launch. She recovers and can handle the situation
again, but only after a while. To Nina the severity of the resistance was
so intense that she suffered both physically and mentally (N2).
Developing her product, Susanne has problems with the prototype to a
point where she begins looking for alternative venture ideas, she lacks
funding and contacts to solve her problems and sees lesser and lesser
solutions (S1, S2). Jonas prioritises his family and work highly, giving
him less time do put into developing his venture. He feels that in order
to succeed, he should put in more time, but does not see he can do that
(I1). From the beginning of his venture creation efforts Eric struggles
with his business plan. He tries time after time to write it, but does not
feel that he has the necessary skills to do it (E2).
Understanding why resistance is perceived through the
interaction of significance and uncertainty of outcome of coping also
reveals how entrepreneurs meet goal disruptions without perceiving
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resistance and how this affects their venture creation efforts. Susanne for
example needs funding to realise her idea, particularly to patent it which
she feels is a requirement before she can begin contacting potential
producers, resellers and such. Thus she goes about coping with this by
applying for funding from a government funding agency. All is well
until she realises that she will not get her loan application approved in
time to achieve her goals, which she had expected. Now, when coping
outcome is not certain anymore, she begins perceiving resistance from
the funding agency for not approving her application (S3, S4). This
shows how entrepreneurs can shift from a coping mode of no perceived
resistance into one where resistance is perceived when their coping
attempts fail.
5.1.4 How do entrepreneurs cope with perceived resistance?
So far, the analysis has looked at where as well as why resistance
is perceived. In this section the focus of attention is turned to how
entrepreneurs cope with perceived resistance.
The entrepreneurs use a multitude of coping strategies which are
chosen based on certain characteristics. In the following, I discuss this,
particularly the relationship between appraised significance, the
possibility to overcome a resistance, and the chosen coping strategy.
The entrepreneurs’ chosen way to cope varies depending on how
they appraise the significance of the resistance and their chances of
successfully overcoming it. In the previous section I showed that when
entrepreneurs appraise the significance of a goal disruption as high, they
are more likely to perceive it as resistance. The problem here is that the
more relevant it is to the venture, the more important it is to overcome,
and when this is paired with an uncertainty of how to overcome it, it
becomes a source of distress.
The entrepreneurs in this study use five types of coping, which I
label accommodating, bold, output, network and ostrich coping (see
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Table 5-4). In the following I describe these in detail with examples from
the cases and with the intention to convey my choice of labels. Firstly,
accommodating
43
coping is used in relation with stakeholders and means
that they accommodate to the demands of a stakeholder. The
entrepreneurs do this by giving in to resistance and thus limit their
creation activities. Early in his start-up activities Eric for example
contemplates focusing entirely on his venture idea, thus stopping his
search for an employment. This worries his wife who states that he must
contribute financially to the household. He tries to convince her that his
venture has the potential to offer a solid financial base for them but she is
not convinced. Eric sees no choice but to give up his ideas about focusing
all his effort towards his venture idea and instead continues looking for a
job (E4). This pleading with stakeholders to change their opinion of
course of action is also exemplified by Jonas’ loss of computers. When
this happens, he contacts the university lawyers and asks them to change
the rules and continue lending his team computers. Jonas’ pleading with
the lawyers is at no avail though as they refuse to change their decision
(J2). The final observed strategy that the entrepreneurs use to
accommodate stakeholders is to try to fulfil the demands of a
stakeholder. Having his testing halted by the soccer association Eric talks
to their lawyer about what he can do to again gain access to soccer
matches for testing. He is told that he should get back to them in autumn
to set up a meeting to show his venture idea. With this opening Eric
works on developing the service to a state where he can show it to them
and at the meeting succeeds to get a new chance at testing (E1).
43
Transitive verb 1: to make fit, suitable, or congruous 2: to bring into agreement
or concord : reconcile 3: to provide with something desired, needed, or suited (as a
helpful service, a loan, or lodgings) 4 a: to make room for b: to hold without
crowding or inconvenience 5: to give consideration to : allow for . Intransitive verb: to adapt oneself; also : to
undergo visual accommodation (Merriam-Webster, 2008).
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The second type is what I call bold
44
coping where the
entrepreneurs use coping strategies that for example redefine
relationships, create new resources and change strategies for how they
are to develop their ventures. This means that they challenge rules and
develop innovative solutions to cope, in a sense fearless and the opposite
of accommodating coping. Here follows the observed ways in which
they apply bold coping. Jonas for example uses a strategy where he
bypasses the IT-department at his university in his attempt to continue
having access to university servers for the development of his service.
His aim is to find someone higher in the hierarchy who can verify that he
can continue using the servers. He is successful in this as the university
lawyers have no objections to this (J3). Putting pressure on a stakeholder
is something that Nina is able to do when her web designers do not work
the way she pays them to do. Although they claim their artistic freedom,
she uses her power as customer to force them to do as she wishes (N4). A
radical form of bold coping is to change strategy. When Nina fails to
borrow the money she needs to open her store and her web shop, she
decides to initially only focus on a web shop (N2), and when Jonas
realises that his business model with downloading music to a mobile
phone does not work because the cost of downloading is much higher
than the price for the song, he decides to shift away from mobile phones
and instead download via the Internet to computers (J4). Another radical
form of bold coping is when entrepreneurs attempt to find or create
complementary resources in new ways. Feeling stuck and unsure of
what to do with her brush, Susanne uses her network to find solutions to
both the prototype issue and how to sell and market it. She eventually
talks to someone who is an expert on licensing and a new horizon opens
to her which offers new ways of selling and also new possibilities to
44
1 a: fearless before danger : intrepid b: showing or requiring a fearless daring
spirit 2: impudent, presumptuous3obsolete : assured, confident 4: sheer, steep 5: adventurous, free 6: standing out prominently 7: being or
set in boldface (Merriam-Webster, 2008).
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develop her venture (S5). When Jonas’ access to computers for
programming is severed by the university, and when he has exhausted
his options to try and change the university’s decision he ponders how
he could gain access to computers without any money. Brainstorming
with student programmers they decide to look for sponsoring and after
contacting computer companies and discussing conditions he
successfully strikes a sponsoring agreement (J2).
Output coping is the third type where the entrepreneurs attempt
to cope by working harder or outsourcing part of their operations, all
aiming at for example increasing pace and the amount of resources
working with the venture idea in order to overcome a resistance. The
possibly first available such strategy is to work harder which is what
Nina does with her operations as she opens her web shop. From the start
of her venture creation attempt she does basically all tasks, whether it is
administration or design. As her web shop opens, her available time
decreases when she starts working with orders, logistics and deliveries
also. Her desire for full control is a contributing reason that she decides
to do as many tasks as possible herself and the only way to achieve this
is to work even harder than she did before the shop opened (N6).
Susanne is in a similar situation when she launches her venture, with no
resources, a problematic prototype and chore of other tasks to do she
increases her effort to try to do it all herself (S1). At some point though,
working harder is not feasible as a coping strategy which Nina finally
experiences with her shop and she feels forced to outsource some tasks
to manage. However this turns out to be yet another source of frustration
to her as the job is not carried out the way she want it be (N6).
The fourth type, network coping is where entrepreneurs use
friends and family to overcome a resistance. All of the entrepreneurs use
this type of coping. Susanne for example has a deliberate strategy to
continuously use her network to develop her venture and uses this in a
focused way to solve her problems with the prototype (S2). Nina also
uses her friends for advice in her argument with the web designers. Her
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friends strengthen her in her decision and help her stand firm in her
view of how the website shall look like (N4).
The fifth and final type is ostrich
45
coping which in a sense is a
non-coping strategy. Here entrepreneurs avoid taking the consequences
of perceived resistance or externalise it, thus the likeness with the ostrich
that burrows its head in the sand. Jonas has difficulties accepting the
consequences of perceived resistance as his time spent developing his
venture becomes limited because of prioritising other aspects of his life.
Although he is aware that his time is too limited to achieve that aspires
to, and that his venture might fail because of it, he does nothing to try to
alleviate this (J1). When Susanne is unable to get funding in time to
realise her planned activities for her venture idea, she instead puts her
mind to a completely new project (S5).
As I discussed earlier, there is a relationship between coping
strategies, the resistances’ relevance to the venture and the
entrepreneurs’ beliefs in whether they can overcome the resistance or
not. The entrepreneurs choose strategies based on the relevance and
ability to overcome it. Ostrich types of coping are strategies where their
belief in successfully overcoming a resistance is low, but the relevance
can vary. Bold types are characterised by a stronger belief in successful
coping with a lower or varying relevance. Accommodating types on the
other hand come into play when the relevance of the resistance is high
and the belief in successful coping varies. Output types have lower
relevance and higher belief in successful coping while network types
have varying levels in both relevance and belief in successful coping.
45
I use this in its adjective meaning, “[from the belief that the ostrich when
pursued hides its head in the sand and believes itself to be unseen] : one who
attempts to avoid danger or difficulty by refusing to face it” (Merriam-Webster, 2008)
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Table 5-4: Types of coping strategies
Accommodating coping
Pleads with stakeholder E1, E3, E4, J2, N2, N3, S3
Works to fulfil demands of stakeholder E1, E2, N1, S4
Bold coping
Bypasses stakeholder to one with more power J3
Puts pressure on stakeholder N4
Changes strategy E6, J4, N2
Finds/creates complementary resource J2, N3, S3, S5
Output coping
Works harder N5, N6, S1
Outsources work N6
Network coping
Uses friends and family E5, J2, N1, N2, N4, S1, S2
Ostrich coping
Avoids taking consequences of perceived
resistance
E5, E6, J1, S5
To conclude, the strategies that the entrepreneurs choose are
highly dependent on context and individuals where a perceived
resistance’s significance to a venture idea as well as entrepreneurs’
ability to overcome decides their coping strategies. Previously I have
pointed towards the pattern between where resistance is perceived and
why. In this section I have discussed how the reasons why entrepreneurs
perceive resistance influences which coping strategy they decide upon.
Next I turn to the outcomes of perceived resistance on entrepreneurs’
venture ideas.
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5.1.5 What are the outcomes of perceived resistance on a venture
idea?
There are two alternative outcomes from coping with perceived
resistance, resistance is either overcome or not (see Table 5-5). However
in between those two are shades of grey. In addition to this grey scale is
also the dependence on perspective taken. If it is strictly the present
venture idea which is the focus, then it is easier to distinguish what is
overcome and not. If the perspective is that of the entrepreneur and the
development of new ventures it becomes more difficult as the boundary
blurs between the current venture idea and subsequent ones which may
come out of the current one. Susanne’s venture creation process is an
example of this where she almost from the start, at least from when her
difficulties with prototype development began, looked for alternative
venture ideas that would be more conducive to her own view of what
entrepreneurship should involve.
Yet this study is delimited to the original ventures of the
entrepreneurs and does not take the interest or analysis further into new
venture ideas that the entrepreneurs embark upon. Given this, the result
of overcoming resistance has two subcategories, to temporarily
overcome resistance and to overcome resistance but with restrictions.
Resistance not overcome also has two subcategories, when entrepreneurs
give in to the resistance and decrease their venture creation efforts and
the above mentioned creation of and focus on a completely new venture
idea. The only obvious pattern between coping strategies and outcome is
that none of the strategies that used the ostrich type leads to an
overcome resistance.
Nina’s argument with the web designers is an example of
overcome resistance. She uses bold coping to put pressure on the
designers and demand that they do it her way, disregarding their artistic
freedom. After some discussions and back and fro with the web shop she
stands firm and they finally deliver a solution that she is satisfied with
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(N4). Jonas faces two resistances in succession which are related to access
to computer equipment that is necessary in order to develop his idea.
Both are overcome by using bold coping strategies, but one is only
temporary while the other has restrictions. Losing the students’
computers he manages to convince a computer company to sponsor
them with computers, but for a limited time only (J2). Next when his
access to internet servers is cut by the university’s IT-department he
manages to overcome this by enlisting the support of the university’s
lawyers. The lawyers however add the restriction that the servers can
only be used within the framework of a course that the student
programmers participate in (J3).
Turning to resistance not overcome, Eric’s partnership with David
is an example. As he started up, Eric took David on board and made him
partner while David took certain responsibilities on his plate. When Eric
feels that David shirks his responsibilities he plans to talk to him about
this, but his coping is of the ostrich type and it never happens. Time goes
by and after not having spoken to David for many months, Eric plans to
take care of David’s responsibilities himself. This does not happen either
as his commitment is lost and he gives up on the idea completely (E6).
Jonas can exemplify the outcome where the entrepreneur gives in to the
resistance and limits his or her venture creation efforts. He has a limited
time to put into his venture idea, and knows that time will become even
more limited as he is about to go on paternity leave. He does not
consider changing his time allocation between family, work and his
venture idea, and his venture thus receives less and less time and effort
from him (J1). Finally Susanne is an example of how the current venture
idea is deserted in favour for a new one. She has difficulties with her
prototype and needs money to develop it. The government funding
agency however takes a very long time handling her application, too
long for her as she begins looking for other venture ideas. By the time
her application is approved, she has already given up the idea and
refocused on another (S3).
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That perceived resistance is not overcome does not necessarily
imply that an entrepreneur gives up. He or she could do so as some of
the instances indicate (see for example E6 and S3 above), but it could also
have other meanings. In a number of observed instances the
entrepreneurs loop back once, twice or more to try new approaches to
their coping (see for example J2, J4, E1, E4, N2, N4, S1 and S3). Yet
another observed outcome is when an entrepreneur decides that what
was initially perceived as a significant resistance actually is not that
significant and can be more or less ignored. Jonas displays this when he
first worries that his time will not be enough as he goes on paternity
leave, but as soon as he does he plays down the need for his time and
instead claims that although development is slow he can still handle it
(J1). This outcome is connected to the ostrich coping strategy which
means that it is easier for an entrepreneur to ignore it than try to deal
with it, despite its significance to the venture idea.
Table 5-5: Outcomes of coping with perceived resistance
Resistance is overcome E1, N4, N5, N6
Temporarily J2
With restrictions J3, N3
Resistance is not overcome E2, E3, E5, E6, N1, N2, S1
Gives in and decreases venture creation efforts E11, E4, J1
New venture idea J4, S2, S4, S3, S5
What I so far have discussed are the outcomes of the individual
instances of perceived resistance. In addition to those, something
happens between them, something influences entrepreneurs’
commitments and appraisal of new instances of perceived resistance
before they happen. Eric for example meets a multitude of resistance
from various stakeholders and also from within himself, but his
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commitment is always strong. As he finally gets his big break and the
soccer association agrees to let him test his service at a national soccer
match, he fails to set it up for no particular reason and says that he does
not understand why himself. A few months later he realises that he has
given up on the idea. Nina on the other takes each instance of resistance
at a time. Although her initial strategy fails and she is forced to
completely rethink her business model, she never falters and is able to
realise her venture idea.
Each one of these examples individually hints at what influences
the process of venture creation. Eric discusses his own energy and how
important it is to his ability to achieve what he sets out to do. Nina
shows in her coping how she uses friends to help her overcome moments
when she doubts her own abilities and ponders giving up. Here is an
aspect that affects coping both in each instance as well as over multiple
instances – the entrepreneurs’ energy. I leave this for now, but will
return to it later on.
This concludes the empirical analysis of perceived resistance. In
the next section I build on the empirical analysis and add a theoretical
lens to it.
5.2 Theoretical analysis
This section is the second step in the analysis where I use the
theoretical framework to discuss the empirical findings. As in the
empirical analysis the theoretical model is used as an outline.
Section 5.2.1 discusses where potential resistance is perceived,
section 5.2.2 why resistance is perceived, and together they address this
study’s first purpose – to explore where and why do novice entrepreneurs
perceive resistance to their venture creation efforts. Section 5.2.3 focuses on
how entrepreneurs cope with perceived resistance, which correlates with
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the second purpose – to explore how do novice entrepreneurs cope with
perceived resistance. The final section, 5.2.4, elaborates on the outcome of
perceived resistance on the venture idea, and thus concerns the third
purpose – to describe which effects do perceived resistance have on outcomes
of venture creation processes.
5.2.1 Where is resistance perceived?
Entrepreneurs’ vulnerability to influence and in effect the risk of
perceived resistance is influenced by their dependence on certain
exchanges of resources. Resource dependence theory states that
particularly two dimensions are important, relative magnitude of the
exchange and the criticality of the resource (see for example Pfeffer,
1982). Looking at the cases, Eric being barred from testing by the soccer
association is an example where both the relative magnitude and the
criticality are high and indeed he perceived this as a major resistance
(E1). The market leader that Nina wants as a supplier is another example
where both dimensions are high (N3). This section mainly uses resource
dependence theory to analyse where resistance is perceived, as well as to
discuss the empirical findings from a theoretical point of view.
The empirical material indicated that entrepreneurs’ entire life
situation is critical to the creation of ventures. If a resource dependence
perspective is focused on the venture creation process only, the impact of
an entrepreneur’s whole life situation is difficult to use as a way to
analyse where resistance occurs. However when viewing entrepreneurs’
entire lives as a part of their venture creation efforts, the picture changes
and taking a resource dependence perspective becomes a key issue in
order to further the analysis. Jonas’ prioritisations that put his family and
his employment before his new venture idea, for example, indicate that
his whole life situation is a critical resource which acts as a
complementary resource to his creation efforts (J1). Jonas needs these
resources, his family and his employment, in order to be able to work on
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his venture. This means that they are highly critical to him and the
potential absence of them, or even minimising them in relation to his
venture idea could have a devastating effect on his venture. The same
line of reasoning can be applied to both Eric’s and Nina’s circumstances.
The issue of entrepreneurs’ whole life situations as an integrated aspect
of their venture creation attempts is an understudied aspect in
entrepreneurship literature and something I will return to more in the
next chapter.
In the previous section I categorised three areas where resistance
occurs, namely in dyadic interactions, with depersonalised gatekeepers
and in the beliefs of the entrepreneurs. Where resistance is perceived in
dyadic interactions it is a matter of asymmetric relationships which are
characterised by greater dependency on behalf of the entrepreneurs.
They also perceive lesser possibilities of managing and balancing the
asymmetry. With a loss of apparent control, entrepreneurs perceive the
asymmetry as potentially goal-disruptive to the planned behaviour
towards venture creation. Eric for example relies on his partner David to
take responsibility for and fulfil his obligations, but he fails to do so with
difficult implications for Eric who then spends considerable effort
pondering how to handle his relationship with David (E6). When Nina
brings in web designers to build her web shop, their unwillingness to
consider her views of design and a tight dead line initially puts her at
their mercy (N4).
The category of depersonalised gatekeepers is similar to dyadic
interactions in the sense of asymmetry. Here it is not the asymmetry in
meetings with individuals though, but in meetings with structures,
bureaucracies or companies. Jonas meets this when his access to servers
and computers is severed (J2, J3), Susanne when she applies for a loan
from the government lending agency (S3), and Eric when the soccer
association halts his testing (E1).
In both dyadic interactions and depersonalised gatekeepers, an
asymmetry between stakeholders and entrepreneurs is not in itself a
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sufficient condition for resistance to be perceived. The resource targeted
in the exchange must also be critical to the entrepreneur and/or the
relative magnitude of it must be sufficiently high. This is illustrated by
the examples of Eric (E1) and Nina (N3) given at the beginning of this
section. Furthermore the character of the venture idea influences how
dependent it risks becoming on certain stakeholders. If the focus is
limited and only a few stakeholders can supply the needed resource, the
risk of perceived resistance is higher than with many potential suppliers.
A number of aspects relating to the venture idea and also to the
entrepreneur come into play here. When Nina tries to buy products for
example (N3), the more established suppliers are the ones resisting the
most, while newer ones are more likely to support her creation efforts.
This can be viewed from a legitimacy perspective where the established
are used to more established customers who behave in a predictable
fashion while the less established actors are more similar to Nina’s own
venture and thus view her as more legitimate (Delmar et al., 2004a;
Zimmerman et al., 2002).
Resource dependence theory as a way to theoretically analyse
where resistance occurs has, as I have shown, a good fit with the
categories dyadic interactions and depersonalised gatekeepers. The final
category, entrepreneurial beliefs however is where resistance arise as a
consequence of the entrepreneurs’ own thoughts and beliefs thus
appearing to make resource dependence a far-fetched theory to use. This
is not necessarily so as it is, in part at least, in the eye of the beholder that
a goal disruptive event is perceived. If entrepreneurs believe that they
need a resource or that they must conform to expectations in their
surroundings, this becomes a source of resistance with resource
dependence characteristics. Resource dependence theory moreover
discusses interdependencies where results achieved by one actor are
interdependent on those of another actor or where the activities of one
actor are dependent on the actions by another actor (Pfeffer et al., 1978).
If an observer from the outside would view the situation, it might appear
as a non-issue, but to the entrepreneur it is not. Jonas’ belief that he
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needs to put in a certain amount of time, while at the same time
prioritising other issues higher than the venture idea, and in addition
knowing that it will get worse in the future (J1) is a matter of critical
resources with a high relative magnitude to the venture idea. The same
goes for the other instances under the entrepreneurial beliefs category.
Concluding this discussion of where resistance is perceived I turn
to a specific area, namely entrepreneurs’ families. From a theoretical
point of view this is particularly interesting as it is the flip-side of what
entrepreneurship literature so far has described as a key positive aspect
in the start-up of new ventures. Family is a central support base for
entrepreneurs from a social capital or social assets point of view (Birley,
1985; Greve & Salaff, 2003; Renzulli, Aldrich, & Moody, 2000). This study
however shows that resistance is perceived as particularly acute if those
closest to the entrepreneurs, their families and friends, question and
doubt their venture ideas. As such, family can be both a blessing and a
curse to entrepreneurs attempting to realise a venture idea
5.2.2 Why potential goal disruptions are perceived as resistance?
According to theory, an underlying reason why goal disruptions
are perceived as resistance could be found in how entrepreneurs
perceive their significance to their goal commitments and situational
intentions (see Lazarus, 1990; Lazarus, 1999). This decides their stress-
levels which is a key issue for how they cope. It also explains the
subjective aspect of perceived resistance where two entrepreneurs can
perceive similar goal disruptions in completely different ways, one as
resistance and the other as a minor issue.
In the empirical analysis, I showed that significance is a focal
issue of goal disruptive events, and only when entrepreneurs perceive
that an event has a significant influence on their evolving ventures will
they perceive it as resistance. Significance is also a concept similar or
identical to the resource dependence dimensions of relative magnitude
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and criticality, with the difference that significance more strongly
indicates that is a subjective measure.
Significance however is a consequence of entrepreneurs’ appraisal
of the origins to, and category of resistance. Appraisal takes into
consideration the potential consequences of failing to cope successfully
with the situation and secondly how psychological meaning of the
consequences are related to the entrepreneurs’ basic beliefs of themselves
and the world (Passer et al., 2007). Hence, if an entrepreneur views
succeeding in the entrepreneurial endeavour as important for feelings of
self-worth, meeting resistance can then affect self-worth if coping seems
difficult. Susanne’s feelings that being only an innovator is not what she
wants, and that it is different from being the entrepreneur she strives for,
means that all that is related to product development becomes a source
of perceived resistance to her. With that content of realising her brush,
the actual work of realising it becomes a source of resistance (S1, S2). At
the beginning, the venture is a source of self-worth to Eric and he cannot
allow himself to fail. Thus, the more difficult it becomes, the more effort
he puts in. This has a snowball effect on the resistance he perceives as it
affects his relationship with his family and his own view of himself (E4).
A related issue that is put forth as affecting appraisal is the
entrepreneurs’ views of their abilities to cope with the resistance – the
lower their beliefs in successful coping, the higher the perceived
resistance (see Folkman, Lazarus, Dunkelschetter, Delongis, & Gruen,
1986; Lazarus, 1999; Lazarus et al., 1984 about appraisal stress and
coping). In the previous empirical analysis, this uncertainty of coping
outcome was revealed to be the second factor next to significance that
influence whether entrepreneurs perceive resistance or not. The
empirical material furthermore shows that this is affected by self-efficacy
(Bandura, 1997) and constructive thinking (Epstein et al., 1989). In the
case of self-efficacy, Eric’s low confidence in his ability to write a
business plan first of all prevents him from writing one and secondly
means that he is unable to acquire funding for his venture idea (E2, E5).
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Susanne on the other hand believes that she has all the skills she needs to
realise her idea, either herself or in her network. Despite this she
perceives a number of instances of perceived resistance, indicating that
high self-efficacy does not insulate an entrepreneur from resistance.
Constructive thinking is something that Nina displays as she perceives
multiple instances of perceived resistance which she is forced to cope
with in order to realise her idea. When her loan application is rejected
she is able to rethink her strategy and continue despite bleak prospects of
successful coping (N2). Additionally she faces a set of resistances of
similar significance and is able to overcome them all (N3, N4). These
examples from Nina are counter indicative of how a lower belief in
successful coping leads to a higher level of perceived resistance as these
aspects of her outlook on the resistance allows her to believe in
successful coping. That is, the lack of these aspects would lead an
entrepreneur to perceive an instance of resistance as more significant.
Returning to the issue of how entrepreneurs perceive the
significance of goal disruptions. First of all, their situational intentions
link in with the intentions behind their venture ideas, which is a topic of
some interest in entrepreneurship research (see for example Bird, 1988;
Katz et al., 1988). The important thing here is that they intend to create a
venture and commit to do what it takes to do so. With such an overall
goal, their situational intentions reflect this and thus carry a high
commitment and also a desire to achieve the set goals. The cases reveal
the role of intentions in how entrepreneurs perceive goal disruptive
events. Nina’s intentions are set at realising her venture – meaning in the
long run a store location and a web shop – and she enters each situation
with the same intentions. Thus her frustration and anger intensifies
when things do not happen as she had planned (N1, N2, N3, N4).
Similarly Susanne also has a high level of situational intentions, and
although she does not respond with anger as Nina, her frustration at the
slow pace and setbacks is instead manifested by her impatience and
search for something meaningful to do (S3, S4, S5). Jonas on the other
hand, despite perceiving resistance is mostly unperturbed by it, going
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about in a manner that “it will be alright”. This could be an indication that
his situational intentions are not high enough for him to become stressed
enough to take action that would put his venture idea higher on his list
of priorities (J1, J4). The cases thus indicate that higher situational
intentions increase the likelihood of perceiving resistance from goal
disruptive events.
Secondly, and along a similar argument follows the influence of
entrepreneurs’ goal commitments. The empirical study shows that a
disrupted goal of significance has to be dealt with, while committing to
such a disrupted goal increases stress and possibly also the perception of
resistance. In addition, goals sometimes conflict with each other, a
motivational conflict. As one gets closer to a goal, the avoidance or
approach tendencies get stronger. Avoidance grows quickest so the
drawbacks that from the start only partly repelled a person grows in
strength the nearer one gets (Passer et al., 2007). Eric’s testing at the
national soccer match (E1), Jonas’ time input (J1) and Susanne’s
disinterest in being an innovator (S2) are all examples of this.
Of special interest here are entrepreneurs’ life goals as they
influence both perceptions of resistance and the consequent coping. Life
goals put entrepreneurs’ intentions and commitments to their ventures
to test. Multiple life goals either make entrepreneurs more vulnerable to
external influence or pressure or more susceptible to perceiving personal
goal conflicts. All of the studied entrepreneurs have the intentions to
realise their ideas and an initial commitment to do so. However when
they are forced to weigh commitments to different life goals under
pressure from goal disruptive events, in some cases they choose to lower
their priorities in relation to their venture creation attempts in favour of
other life goals. This is partly related to their personal reasons for
pursuing their ideas (Lazarus, 1991) as well as the critical resources that
highly prioritised parts of their lives are to them.
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Thus in the same fashion as goal commitment and situational
intentions, the number of life goals and the importance ascribed to their
non-venture life goals increase the likelihood of perceiving resistance
from goal disruptive events. As mentioned earlier though, through goal
setting and commitment, life goals have an indirect effect on perceived
resistance. This effect can be influential which can be seen in the cases of
Jonas and Eric, where it was strong enough to be a key contributor to the
termination of their venture ideas. I will return to life goals in more
detail further on in Chapter 6.
The resource perspective of perceived resistance
So far I have discussed how entrepreneurs’ goal commitment and
situational intentions influence how they perceive the significance of a
goal disruptive event on their ventures. Together with their life goals
these aspects represent the issues that entrepreneurs bring with them
into the situation. There is more to it though as context and
circumstances also influence how entrepreneurs perceive goal disruptive
events or processes.
During the starting up of a new venture, some resources are likely
to be more critical than others. Eric needs access to soccer games to test
his service (E1), Jonas needs computer equipment to develop his service
(J2), Nina needs high market share products in her inventory (N3), and
Susanne needs funding (S3). They are all denied access to those resources
and embedded in those denials are goal disruptive events which they
perceive as resistance. The dynamics of this dependence of critical
resources and subsequent denial to accessing them fits with what is
described through resource dependence theory (Pfeffer et al., 1978) and
thus directly links with where resistance arises as discussed in the
previous section.
Here I use this to further deepen the analysis of perceived
resistance by looking at four instances of perceived resistance with
specific focus on the symmetry or asymmetry of relationships to
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understand why resistance is perceived. I use the instances above from
each case and apply Frooman’s dimensions for stakeholder influencing
strategies to study them (1999). The choice of instances, one from each
case, is made to illustrate the result of the analysis on each case, the
instances within each case are selected at random.
The overview of the four instances of perceived resistance in
Table 5-6 shows for each one how asymmetries in relationships can
cause entrepreneurs to perceive resistance. Eric meets a monopolistic
stakeholder. Jonas faces university bureaucracy, Nina a very established
supplier with a majority market share and Susanne the bureaucracy of a
government funding agency. In all four instances the entrepreneurs have
few means to deal directly with the stakeholders and all four
entrepreneurs are in dire need of the resources controlled by the
stakeholders.
There are some differences between the four instances. Eric seems
to score highest in his dependence on the soccer association’s benevolent
attitude to his venture idea for him to succeed. Indeed the development
of his venture idea is also completely stopped when the soccer
association decides to cease his ability to test it. There is little else he can
do than to talk to them.
Jonas must deal with a university bureaucracy built to handle
research and teaching, not new venture creation. The bureaucracy does
not accommodate the needs of his venture idea and he is forced to find a
new solution where he does not upset the university’s rules but at the
same time acquires the equipment he needs. Although the university
controls the resource within the context where his venture exists, and
while it is critical to his venture idea’s realisation, there are other means
for him to gain control over it.
Nina faces an absolute market leader with what she feels
antiquated views of how to market and sell their products. Her business
model does not fit the supplier’s requirements and she is not allowed to
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sell their products. The problem is that the brands of the supplier have
an almost complete market share so she worries about her own sales
volumes without those particular brands in her shop. Despite this worry
she turns to mid-sized suppliers but many of those are also hesitant to
distribute their products to her. In order to build her inventory she
eventually turns to start-up brands that are more than happy to work
with her.
Finally Susanne who needs funding relatively quickly to both
develop her prototype and to patent her product in order to begin
talking about it with external stakeholders, like potential resellers.
External funding is her only way to be able to do this, and there is only
one lending agency where she believes she can get a loan at this stage.
However this agency is government run and very slow, too slow for
Susanne’s liking, but there are no viable alternatives so she is forced to
wait.
What this analysis of the resource perspective of perceived
resistance indicates is that the issue of external constraint places
entrepreneurs in situations where they perceive resistance. In addition to
this, the relative magnitude and criticality increase entrepreneurs’
predicaments. However I also want to point out that the issue of supply
is a key resource aspect which decides whether entrepreneurs can
overcome restrictions or not, since.
The supply aspect is also where the ingenuity of an entrepreneur
in finding ways to circumvent or overcome access restrictions to
resources comes to play, which I discuss in depth in the next section.
Previous entrepreneurial experience could help entrepreneurs become
more mentally prepared for supply issues and the need for unorthodox
thinking in order to overcome restrictions posed by stakeholders. If this
is so it could indicate that seasoned entrepreneurs perceive less
resistance and instead subscribe what novice entrepreneurs perceive as
resistance to the process of venture creation, ie. something inherent to
the process itself.
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Table 5-6: Resource dependence analysis of instances of perceived resistance
Eric (E1) Jonas (J2) Nina (N3) Susanne (S3)
External
constraint
46
Actor has full
control of a
resource Eric
needs
University
system limits
available
computers but
does not have
absolute control
Supplier is the
absolute market
leader. When Nina
contacts them,
their products are
a necessity to sell
to her target niche
There are a number of
potential ways to
acquire funding but
Susanne sees few that
would lend her at the
stage she is at
Relative
magnitude
Involves all
resources
All resources
needed for
development
Nina feels that the
products of the
market leader are
a guarantee to
generate sales
Funding would cover her
immediate needs for
patenting and product
development
Criticality Eric sees no
other way to
continue
without access
to soccer
matches to
test his service
Jonas must have
computers
There are other
suppliers but their
brands are small
and relatively
untested on the
Swedish market
Susanne tries to develop
the product through the
new producer, but he
needs pay. The patent is
also necessary before
she feels that she can
talk about her product
to external stakeholders
Limited
supply
No other
supply
available
There are other
means available
and Jonas
manages to
acquire
computers
through a
sponsor
She contacts mid?
sized suppliers but
they are also
hesitant, so she
contacts start?up
brands in similar
positions as she
The stakeholder she
depends on for funding
is too slow, so she turns
to another but that one
has poorer conditions
which she does not want
to accept.
Discretion
over
resource
allocation
Strategy used
by stakeholder
Strategy used by
stakeholder
Strategy used by
stakeholder
?
Discretion
over
resource
use
? ? ? The effect of the
stakeholder’s actions is
perceived by Susanne as
this type of strategy
46
Each of Frooman’s (1999) dimensions are described in Table 5-7.
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Table 5-7: Frooman’s dimensions for stakeholder influencing strategies (1999)
External constraint Actors are likely to respond more to those actors in the
environment that control critical resources
Relative magnitude The proportion of total inputs, or total outputs
accounted for by the exchange
Criticality Measures the ability of an actor to continue
functioning in the absence of a particular resource or
market
Limited supply When supply is limited, production instability and
survival uncertainty arise as dilemmas in building the
venture
Discretion over resource allocation A withholding strategy where a stakeholder does not
provide a firm with the requested resources
Discretion over resource use A usage strategy where a stakeholder continues to
provide the requested resources, but does so with
strings attached
However, and as I initially discussed, the reasons why
entrepreneurs perceive resistance are subjective. Although this resource
dependence analysis seems to be easily applicable when attempting to
analyse why they perceive resistance, different entrepreneurs appraise
goal disruptions in different ways. Nina for example displays
constructive thinking and hardiness in a way that lets her believe she can
overcome seemingly impossible resistance, and this certainly affects the
influence the potential outcome of a resource dependence analysis. It is
thus vital to weigh in multiple aspects affecting entrepreneurs’ appraisal
of goal disruptions in order to understand why they perceive them as
resistance.
5.2.3 How do entrepreneurs cope with perceived resistance?
The analysis, applying the theoretical framework to the empirical
findings has hitherto looked at potential sources of resistance, the goal-
disruptive events or processes, and also why these are perceived as
resistance. Now the discussion focuses on entrepreneurs’ coping
strategies.
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Earlier I showed that entrepreneurs differ in how they appraise
the significance of a perceived resistance to their venture ideas, which is
also in line with Lazarus appraisal theory (Lazarus, 1990, 1991). A key
aspect of this theory is that the appraised significance influences how
they respond or cope. As stress is a central aspect connected to situations
of perceived resistance, appraisal theory furthermore states that coping
is “the effort to manage psychological stress” (Lazarus, 1990: 111).
In addition to this, I have shown that dependency situations and
asymmetric relationships influence where resistance arises. Moreover,
theory claims that such relationships are unstable and change over time,
indicating that it is in the interest of entrepreneurs as the dependent part
to try to address the imbalance (Blau, 1964; Emerson, 1962; Pfeffer, 1982).
Entrepreneurs may use their social, human and organisational resources
as leverage when attempting to achieve this. The empirical material
shows that the entrepreneurs do attempt to change the balance of
asymmetric relationships. A difference in how they do this, compared
with theory is that their whole life situation is taken into consideration.
With this perspective their own selves become a tool to leverage some
asymmetries, for example when Eric negotiates with his wife (E4).
Another difference can be ascribed to the newness of their ventures as
they do not use any organisational resources, they do not even consider
any that could be used. Instead they use their social and human
resources to a large extent. Similar findings have been made in research
into networks where entrepreneurs use those to simultaneously operate
both pro-actively and re-actively while handling both dependence and
independence (Johannisson, 1988), and relating to nascent entrepreneurs’
use of social capital to construct their resource base for venture creation
(Brush et al., 2001).
Furthermore in the theoretical framework I discussed that coping,
from the perspective of entrepreneurs’ perceived resistance represents
their emotions, thinking or concrete actions to deal with this. There is an
overlap here between entrepreneurs’ emotions and why they perceive a
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goal disruption as resistance to their coping. Nina for example reacts
emotionally to the rejection of her loan application from the government
lending agency which drives her coping where there is anger in her
attempts to overcome the resistance (N2). However her coping is not
focused on emotions, although it could be fuelled by them, but is instead
directed as overcoming the concrete resistance. As far as their thinking
and concrete actions to deal with resistance, thinking is an integral part
in all coping, but concrete actions are not as I showed in the empirical
analysis with the ostrich strategy.
There are three coping strategies available to entrepreneurs: (1)
problem-focused, (2) emotion-focused and (3) social support seeking
(Passer et al., 2007). These relate to the different types of coping
strategies derived from the empirical material (see Table 5-4). The three
active types of coping used by the entrepreneurs, accommodating, bold
and output coping are all problem-focused strategies. They focus directly
at the perceived resistance in an attempt to overcome it or make its
implications less severe to the evolving venture idea. Eric’s discussions
with the soccer association to give him a chance is a case of persuasion
(Dees et al., 1992) which is in line with accommodating coping. In some
cases bold coping is of a bricolage type where the entrepreneurs aspire to
adopt an out-of-the-box approach that looks past resource limitations
(see discussion in the theoretical framework about the concept of
network bricolage proposed by Baker et al., 2005), and in some cases it is
about taking an extended risk in order to cope. Susanne’s relationships
with her stakeholders where she aims at gaining knowledge and funding
which she needs for product development is a case of acting as if she was
trustworthy and with the required structure (Starr et al., 1990) which also
falls within the category of bold coping. Output coping is directly linked
to action, either the entrepreneurs themselves work harder or they add
effort to their creation activities by outsourcing.
A social support seeking strategy is naturally the network type
where the entrepreneurs use their social capital and reach out to friends,
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family or other contacts they can access in an attempt to elicit support,
resources and such to deal with the resistance. Nina’s attempt to make
her handling officer change her mind and support her application is for
example a case of co-optation by using others for persuasion (Gargiulo,
1993; Starr et al., 1990).
Finally the ostrich type of coping is to a large extent an emotion-
focused strategy where the entrepreneurs attend more to their feelings
about the resistance they perceive than actually trying to overcome it, in
effect the opposite of a problem-focused approach. People with high
internal strategies commonly do not chose this type of strategy
(Ingledew, Hardy, & Cooper, 1997), but instead vie for a more
constructive thinking (Katz & Epstein, 1991) displayed in the problem-
focused approaches.
Table 5-8: Classifying coping categories
Empirical\Theoretical Problem?
focused
Emotion?focused Social support seeking
Accommodating E1, E2, E3, E4, J2,
N1, N2, N3, S3,
S4
Bold E6, J2, J3, J4, N2,
N3, N4, S3, S5
Output N5, N6, S1
Network E5, J2, N1, N2, N4, S1, S2
Ostrich E5, E6, J1, S5
The empirical material furthermore concurs with what theory
says about efficiency, that problem-focused and support seeking
strategies are favoured choices when there is some way to control the
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situation (see Passer et al., 2007). Susanne can exemplify this when her
loan application takes too long given her goals. She then focuses on
motivating the government lending agency to speed up the process, and
when this does not work she looks elsewhere for funding, all the while
she fully believes that she will get the money she applied for (S3). The
result of emotion-focused coping on the other hand, is a change in
individuals’ interpretation of circumstances, for example giving up a
sought after goal or the denial of a certain threat (Lazarus, 1999). The
entrepreneurs vouch for emotion-focused coping strategies when the
likelihood of control is low. Jonas for example does not see that his time
will be enough once he begins his paternity leave, and he can do nothing
to change his priorities. The only option to him is to further disengage
from the venture idea and take an escape-avoidance stance to it (J1).
The chosen strategy to cope varies depending on how the
entrepreneurs appraise the significance of the resistance and the
uncertainty of coping outcome. In the empirical analysis I showed that
when entrepreneurs appraise the significance of a goal disruptive event
or process as high at the same time as feeling uncertain about the
outcome of coping, they seem more likely to perceive it as resistance.
These two form a framework within which it is possible to depict the
most likely coping strategy (see Figure 5-3).
The figure shows the relationship between chosen coping strategy
and how entrepreneurs perceive the resistance. The higher the
uncertainty of successful coping and the higher the significance of the
goal disruption to the development of their venture ideas, the more
likely it is that they adopt the ostrich emotion-focused strategy.
Conversely the lower the uncertainty of successful coping and the lower
the significance, the more likely it is that they will vie for the output
problem-focused strategy. These two thus appear to be opposing
strategies where ostrich coping is chosen as a consequence of failure to
find a coping strategy that can overcome the resistance and the
entrepreneur instead attends to his or her feelings about this. Output
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coping is a work-harder strategy where such effort is seen as the
necessary input to overcome the resistance.
When the significance of the perceived resistance and the
uncertainty of successful coping are in between low and high,
entrepreneurs seem to choose either a bold or a network strategy. It
appears that in this situation, entrepreneurs are relatively more certain of
overcoming a goal disruption than when they choose ostrich coping, but
they still have to be inventive in order to do so. An accommodating
coping strategy differs somewhat from network and bold as it is
favoured when the significance is higher than in the case of the other two
strategies. Here the entrepreneurs have more to lose as the resistance is
more significance and thus appear more vary of meeting the demands
posed in order to overcome the resistance instead of being inventive.
Figure 5-3: Coping strategies –appraised significance and
the possibility to overcome
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The result depicted in the figure is also strengthened by late
research into role expectations where a study of 183 Slovenian
entrepreneurs showed that structural role definitions and/or reactive
role behaviour to stakeholders have a positive influence of new venture
performance. Furthermore the connection between reactive role
behaviour and new venture performance is affected by role stress and in
a similar manner as this study finds, the authors state that role stress
“depends on the level of challenge of stakeholders’ expectations that an
entrepreneur experiences” (Örtqvist et al., 2007: 299). Assuming that this
level of challenge influences entrepreneurs uncertainty of successfully
overcoming perceived resistance, role stress influences which coping
strategies entrepreneurs decide to use.
With all this said, there are some curious issues in relation to how
entrepreneurs cope. I mentioned this earlier also when concluding the
section in the empirical analysis about the outcome of perceived
resistance on a venture idea. Something seems to influence how much
effort entrepreneurs put in and how long they endure, something which
is not captured within the model. Eric for example diligently strives to
realise his idea, and when he finally gets his break and strikes an
agreement with the soccer association to test his service at a national
soccer match, he fails to do so and shortly after terminates his venture
idea (E1). What happens there, why does he not take the final steps
towards completing his idea? How does Nina again and again overcome
seemingly impossible resistance? And why is Susanne’s persistence so
low while her intentions are so high? This is the topic of the next chapter
which explores a deeper dimension of perceived resistance, and how
entrepreneurs endure in adverse environments while trying to realise
their venture ideas.
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5.2.4 What are the outcomes of perceived resistance on a venture
idea?
In the introduction I quoted Granovetter who states that it is not
necessarily the best ideas that survive but those that gain the greatest
support (Granovetter, 1973). Judging the best ideas is outside the scope
of this study, but the need to gain the best support is in line with what is
revealed in the empirical material. It is not enough for an entrepreneur to
have a good idea, or believe to have one – it is the realisation of it that is
crucial. Gaining support is, as has been discussed above, a key feature of
coping. Thus all of the previous steps in the model of perceived
resistance naturally influence the outcome, whether it is overcome or
not.
In the empirical analysis I came to the conclusion that there are
two general outcomes – overcome or not overcome. What happens here
is that entrepreneurs reappraise the original perceived resistance and the
effect that their coping has had on it. When reappraising the situation,
two aspects are important. The first is the discrepancy between task goal
and actual situation, in other words, the effect of the applied effort or
coping strategy. The second is the rate of progress in terms of
discrepancy reduction, for an entrepreneur this means how fast a
disruption is overcome and if it is overcome. Research has shown that
positive or negative mood is directly affected by this progress (Carver &
Scheier, 1990).
Thus when reappraising, the entrepreneurs not only judge the
status of the resistance they perceived, the process of reappraising also
influences how they feel about their coping and their entire venture idea.
There is anguish in these as can be seen for example in Susanne’s feelings
in response to the government run funding agency’s extended handling
time to her loan application (S3) or in Nina’s strife to buy products from
the market leader where she is baffled by their disinterest in selling to
her (N3).
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In the case of a perceived resistance that is not overcome there is a
loop back to coping until the entrepreneur either gives up, or has
overcome the resistance in some way. In addition to this there is also the
situation where the original resistance is reappraised and deemed as no
resistance anymore. This could be because it is emotionally too difficult
to deal with the prospect of failing to overcome it, and thus a result of an
ostrich emotion-focused coping strategy. Jonas’ issue with time spent
towards developing his venture is one such example. Initially he worries
that time is not enough to realise his venture idea. He is unable to change
this fact and instead lowers his goals with the venture idea which
removes his perceptions of resistance in that area (J1).
If an entrepreneur does not perceive a goal disruption as
resistance, but fails to cope, he or she will loop back from not
overcoming it to perceiving it as resistance. This is caused by
reappraising the goal disruption when it is not overcome (see the
examples from S3 and S4).
The cases furthermore indicate that the time from perceived
resistance to termination of a venture idea is relatively extended. Eric’s
movement from highly motivated and focused on realising his idea to
the point where he admits that he has deserted is a gradual shift from
July/August 2004 until May 2005. The strategies he adopts during this
period are both related and unrelated to those observed in failure studies
where they are mainly emotion-focused (Singh et al., 2007), and the
psychological aspects underlying coping are characterised by issues such
as grief, guilt and depression (Shepherd, 2003; Singh et al., 2007). As
discussed above, the entrepreneurs might act emotionally and out of
psychological aspects like grief and anguish, but this is not to say that
such strategies are the dominant choices. During the final year of his
venture idea, Eric for example displays an on-off behaviour where he
acts, then steps back and largely ignores his venture idea, then acts again
and so on with more and more emphasis on the non-action.
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When comparing Nina with the others, and taking a view of the
outcome, there are definite differences between them. Nina continuously
takes a more problem- or social support seeking focus than the others
and she has a higher rate of overcome resistances. It appears that she is
able to keep a positive undertone in her venture creation while the others
are over time unable to shift from a negative and resistance enhancing to
a positive movement. Each cycle of coping with resistance, whether
overcoming it or not, implies an accumulation of experience on behalf of
the entrepreneurs. Previous research has revealed that entrepreneurial
experience is the strongest indicator as to whether a venture idea reaches
certain creation milestones with business founding as the highest one
(Rotefoss et al., 2005). This study concurs with this, with particular
emphasis on within-venture experience.
However Nina is the only of the four who benefits from this
experience, the others seem to become weighed down by their increasing
experience. The difference between Nina and the others is that she
succeeds in her coping, while the others have greater difficulties and
doubt in the abilities to successfully overcome perceived resistance. In
this respect, positive experience strengthens perceptions and coping in a
positive manner, while negative has the opposite effect. Recently there
has been an increased interest in self-efficacy from an entrepreneurial
perspective which offers a theoretical explanation to this aspect of the
experience loop. Entrepreneurial self-efficacy, specifically in relation to
skills concerning networking, uncertainty management, and product
development as well as procurement and allocation of critical resources,
influences how entrepreneurs view their opportunities of launching their
new ventures (Kickul & D'Intino, 2005). Thus the outcomes of coping
with perceived resistance, entrepreneurs’ cognition and perceived
abilities interact in forming their experiences which influence their
current and future appraisal of goal disruptions and consequent coping
strategies.
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The negative and positive effect of experience also relates to
emotions. Overcoming resistance is likely to have a positive influence on
entrepreneurs’ emotions through decreased stress while the opposite is
also likely. Previous research has interesting implications here as it for
example indicates that failure leads to a “realistic view of what starting a
business is like” (Singh et al., 2007: 342). Thus a realistic view according
to Singh et al is a lowered expectation of success or in other words, one
with a more resistance focus. Indeed Singh et al’s result was revealed in
this study as Eric, Jonas and Susanne gradually perceived more and
more resistance which became more and more difficult to overcome.
This emotional aspect of perceived resistance also links in to the next
chapter which will focus on entrepreneurs energetic resources.
5.3 A model of perceived resistance
This analysis began with the theoretical model as a guide to
follow (see Figure 5-1), but as has been discussed throughout, that model
is not able to capture that which has been revealed in the analysis.
Instead here I present and discuss an inductively derived model of
perceived resistance (see Figure 5-4).
The model begins with a goal disruption facing the realisation of a
venture idea. This disruption is appraised by the entrepreneur on the
basis of its significance to the venture idea and the degree of uncertainty
of coping outcome. These two aspects work in concert and the higher
they are, the more likely it is that the disruption will be perceived as a
resistance. Furthermore, the more uncertain the entrepreneur is of
coping outcome when the disruption is significant, the higher up on the
coping scale the strategy to deal with it will be.
Next the entrepreneur attempts to cope by using the chosen
coping strategy, and when this effort is completed, its’ affect on the
disruption is reappraised. Either the disruption is overcome, or it is not.
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If it is not overcome, a new attempt at overcoming it is launched, and
this continues until either it is overcome, or coping attempts are
abandoned. At some point however, the entrepreneur’s self-confidence is
affected if these loops continue, and/or coping takes longer time than
what was initially expected. When this happens, the choice of strategies
is shifted upwards on the scale and they become more emotion-focused,
thus further decreasing the possibility of overcoming the disruption.
In addition to the developmental steps described above there are
also experience loops which feeds back to appraisal from both of the
results not overcome and overcome. These loops bring experience from
attempting to overcome a goal disruption, whether successful or not.
When a perceived resistance is not overcome and coping continues, an
entrepreneur’s appraisal of goal disruptions is thus also influenced by
his or her experience of the process. This aids in fine-tuning and
improving coping strategies, but through lowered self-confidence and
motivation it also deteriorates the entrepreneur’s possibilities of
overcoming the disruption. The more loops from coping, through
reappraisal, to not overcome and back to coping, the longer it takes to
overcome the perceived resistance and thus the more affected are self-
confidence and motivation. This upper half of the model thus represents
a loop which over time negatively influences entrepreneurs’ perceptions
of resistance and their subsequent coping attempts. The results over time
are more emotional-focused coping strategies which in turn further
decreases entrepreneurs’ possibilities of overcoming resistance, and also
lead to a higher probability of the next goal disruption being perceived
as resistance.
171
Figure 5-4: Model of perceived resistance
When facing a goal disruption, coping is required even when no
resistance is perceived. This type of coping differs from coping with
perceived resistance as stress levels are lower, and either factors of the
disruption’s significance to the venture idea, or entrepreneurs’
uncertainty of overcoming the resistance, or both are non-existent. With
this in mind, coping strategies focus on the lower part of the coping
strategy scale and given that the disruption is overcome emphasises the
lower half of the model.
172
173
6 A new revelation of perceived
resistance and coping
Entrepreneurs continuously face goal disruptions in their
attempts to realise their ideas, which should be evident from the
empirical material presented. Depending on how they perceive these
disruptions, one way or another they have to cope with them, and how
they do this will eventually decide the fate of their venture ideas.
By looking only at the individual instances of perceived
resistance, the model presented in the previous chapter can be used to
describe the process. When expanding the view and looking at the entire
start-up process however, something else seems to influence how
entrepreneurs perceive and respond to individual instances of perceived
resistance.
In the cases, Eric comes up with his idea while he is unemployed
and begins developing it. Through a number of instances of resistance he
continues with a firm belief that it is an idea with much potential. He
even fights for it in relation to his family. Then his efforts are halted by
the monopoly actor in Swedish soccer, but he still continues to cope and
work on solutions. Eventually he negotiates an agreement with the
soccer association and can begin testing again, authorised by the
association. But instead of launching his new test series, he lets the idea
lay fallow and a few months later admits that he is no longer pursuing it.
There is no single instance of resistance that forces Eric to
abandon his idea, instead he receives positive feedback. So why does he
let go of it? By looking at his venture creation attempts over time,
focusing on cycles that span multiple instances of perceived resistance
174
there is a build-up of strain and a continuous stress and a pressure to
manage his life situation. The effort he exerts in all aspects of his life
eventually takes its toll. Not even a big win from the agreement with the
soccer association inspires him to continue.
I have already hinted at what it is that either lifts the
entrepreneurs’ spirits or leads to a decision to terminate – it is a matter of
entrepreneurs’ energy. In daily talk people often refer to the importance
of drive and energy when trying to explain what is needed of an
entrepreneur
47
. How the two concepts differ in meaning is unclear as
they are used in media as one. However turning to theory, drive can be
likened to motivation which has been extensively studied in
entrepreneurship research (see for example Delmar, 1996; Raphael,
Kenneth, Charlene, & John, 2001). Energy on the other hand, has thus far
been largely ignored and except for directing attention at individual
entrepreneurs’ levels of energy (Bird, 1992), little help is found in existing
theory
48
. Research has instead focused on matters such as passion and
perseverance. It has for example been proposed that start-up survival
and success is enhanced if entrepreneurs dislike giving in and
passionately hold on to their goals (Cardon et al., 2005) or that they have
the tenacity or perseverance to overcome obstacles (Baum et al., 2004).
Passion has been put forth as a driver that entrepreneurs use
when facing uncertainty and resource shortages (Timmons, 1999) and it
has even been said that it is “perhaps the most observed phenomenon of
the entrepreneurial process” (Smilor, 1997: 342). However passion or
47
This was found in a survey of Swedish media: magazines, newspapers and the
Internet.
48
There are very few references to energy in entrepreneurship research. The two
that I have found relate it to social energy in maintaining strong or weak ties
(Podolny & Baron, 1997) which is a different definition from the one used here and in
the psychology research referred to, and to the energy level of entrepreneurs which is
used to point to individual differences (Bird, 1992). Bird’s use of energy is close to the
one used here, however she never extends her discussion of the concept in any detail.
175
perseverance does not explain how or why entrepreneurs endure and
continue to cope like Nina or drop their efforts like Eric, Susanne and
Jonas. All four of them are passionate about their ideas and all of them
display perseverance, yet they differ in how they cope over time when
facing consecutive instances of perceived resistance. This puzzling issue
was something that I noticed in the early interviews with both Eric and
Nina. Eric mentions how energy is something that is important to him in
the very first interview: “it was destructive to look for a job. It took a lot of
energy and it was difficult to call on, evoking the power to sell, what you need in
order to find a job. Calling people and be challenging and enjoyable and present
oneself as a good person. To do it again and again with negative results, in the
first place you doubt in it yourself. You think after all that you are lying. I mean
before I was unemployed I could say that I can do this, this and that. Lots of
technology and programming and everything, and after half a year so I
wondered, can I tie my shoelaces… and it is very destructive for your self-
esteem, at least for me anyway. And therefore, it was with increasing energy
that I had to bring forth this power to sell which is required when you want to
become employed, and the energy took ... made it so that I could not focus on my
idea.”
Nina on the other hand discusses how she uses friends to inspire
her and give her energy to continue, especially when she faces what she
perceives as strong resistance. As a consequence of these revelations I
included energy as a topic of interest to explore all through the gathering
of empirical material in all four cases.
Four types of energy have been proposed, relating to humans:
physical, cognitive, emotional, and spiritual (Loehr & Schwartz, 2001;
Schwartz, 2007). The energy, or rather energetic resources (ER) that I
refer to throughout this chapter is defined in the field of cognitive
psychology as the energy available in individuals to deal with stress and
effort to cope (Gaillard, 2001; Hockey, 1997; Hockey, Gaillard, & Coles,
1986). Current psychological research has among other aspects found
that ER intensify negative emotions and fatigue as a result of goal-
disruptive events (Zohar, Tzischinski, & Epstein, 2003). As such the
176
concept of ER offers an avenue to deepen our understanding of how
entrepreneurs endure over time, realise their venture ideas and cope in
adverse environments where they face multiple and consecutive
instances of perceived resistance. Thus all four types of energy come into
play, but I delimit this study to focus primarily on the cognitive and
emotional aspects of ER.
How can we understand the dynamics of ER? To begin with, one
can see that when everything runs well and there are no disruptions or
stress involved, ER is a non-issue to the entrepreneur. As soon as
conditions become less favourable though, ER are likely to become
important. In a theoretical scenario, if behaviour cannot proceed as
planned, additional effort must be invested by the individual in mental
problem solving and decision-making. This additional effort begins to
tax on the amount of energy available to the entrepreneur and, if
demand for energy is greater than its supply, this risks becoming a
reason for termination. What is intriguing and complicating here is that
it is not only an entrepreneur’s coping efforts that tax on ER, but also
that which happens to him or her in a wider perspective. In other words
both mental effort and stress
49
will influence how rapidly ER are being
depleted
50
.
To explore this, I start with an overview of what existing theory
says about ER which is necessary in order to understand how it
influences entrepreneurs during the start-up of new ventures. The
overview primarily focuses on the concept of ER in relation to cognitive
49
Selye (1974; 1976) distinguishes between eustress and dystress. He equals stress
with arousal and claims that a certain amount of arousal is good (eustress), while too
much is bad (dystress). This implies that a deviation from an optimal level of arousal
is negative to an individual. The problem however is to define an optimal level of
arousal. With the approach taken in this chapter it is the dystress that is studied, that
which requires effort and taxing of energetic resources.
50
This paragraph was written using Kahneman’s (1973) capacity model of
attention as a basis for developing an entrepreneurial scenario involving energy.
177
appraisal theory (Folkman et al., 1986; Lazarus, 1999; Lazarus, 2001)
behavioural economics (Schonpflug, 1986b, 1986a; Schonpflug &
Battman, 1988) and specific studies of ER (see for example Gaillard, 2001;
Hockey, 1997; Hockey et al., 1986; Wright & Brehm, 1989). With the
theoretical understanding of ER in place, the empirical material will be
used to discuss the implications of ER on the model of perceived
resistance. The purpose of this discussion is to address the questions
raised in the previous analysis which was concluded with the model of
perceived resistance (see Chapter 5.3).
6.1 What we know about Energetic Resources
The idea of energy as a limited resource influencing behaviour
has existed for a number of years (Duffy, 1962; Freeman, 1948).
Explorations of its behavioural and physiological aspects began with
studies such as that by Pribram and McGuiness (1975) who studied how
the coordination of arousal
51
and activation constitutes a demanding
activity requiring energy and converging on the hippocampus. Lately
researchers have began looking into how the ER construct in terms of
efforts such as activation, arousal, stress, fatigue and resources can be
added to models of behaviour (Hockey et al., 1986).
Regarding the applicability of ER, it has been proposed that it
provides a framework for amongst other things fatigue, individual
differences in adjustment and coping, specifically with regards to work
related demands (Hockey, 1997). The use of ER has been proposed to be
“a generic term encompassing all mechanisms that energise and regulate
the organism and directly or indirectly influence psychological
processing” (Gaillard, 2001: 625). To understand the characteristics of ER
51
“to rouse or stimulate to action or to physiological readiness for activity”
(Merriam-Webster, 2008).
178
one can examine why they are applied and the results of application. ER
are activated in an effort to protect performance under stress and the
result is behavioural and physiological costs (Hockey, 1997). This effort
to protect performance is difficult to maintain (Kahneman, 1973) because
conflicts likely crop up between the emotional goals of maintaining
personal well-being and desired affective states (Hockey, 1997).
An underlying concept when studying ER and adopting Hockey’s
perspective (1997) is emotions. Stress, emotions and coping have been
suggested to have a part-whole relationship with emotions as the
superior conceptual unit (Lazarus, 1999). As will be discussed further on
in this chapter, emotions or the risk of emotions influences how ER
develop and how entrepreneurs cope. What influences emotions in turn
is the person-environment relationship (Lazarus, 1993).
The manner in which ER are discussed in this study follows the
model of perceived resistance previously developed (see Figure 5-4). It
starts with a stimulus which in the model is the instance of resistance.
This event or process is appraised in two steps where a disruptive event
could be evaluated as threatening or challenging (Lazarus, 1999).
Appraisal then leads to an activation response which is regulated
according to available ER. Depending on how the situation is appraised,
regarding available resources, various coping strategies are applied.
These strategies are moderated by issues such as effort, motivation, and
context-dependent factors. The result of coping with perceived resistance
causes a reappraisal which affects arousal and ER mobilisation in the
sense that it is increased, sustained or decreased. Depending on the ER
available to mobilise, performance risks being degraded if the outcome
of coping strategies is not positively appraised. In the sections 6.1.1 to
6.1.4, the role of ER in the model of perceived resistance is discussed in
more detail, forming a framework to analyse the implications of ER in
the analysis of the empirical material.
179
6.1.1 Appraisal of goal disruptions
Cognitive appraisal theory states that emotions arise from
individual’s appraisal of events based on their relevance to the
individual. Appraisal specifically affects emotions, through a loss of vital
ER (Lazarus, 2001). This is problematic as such a loss of resources needed
to pursue a goal will become a threat to the achievement of that goal and
result in negative emotion. The intensity of emotional reaction is further
moderated by the desirability of the goal and the effect of environmental
change on the estimated probability of achieving it on time (Lazarus,
1990, 1999).
There are two types of appraisal, primary and secondary, which
happen simultaneously and are part of the same process, but with
different foci (Lazarus, 1999). Primary appraisal relates to the process of
evaluating whether an event is worthy attention and mobilisation of ER.
It sets a frame of reference for how an entrepreneur perceives a
resistance.
Secondary appraisal relates to the options an individual has for
coping – what can be done about a stressful situation appraised as a
threat or a challenge. Emotions play a part in this and entrepreneurs base
their secondary appraisal on blame or credit for the disruptive event,
coping potential and future expectations (Lazarus, 1999). ER come into
play when entrepreneurs face goal disruptions and thus blame is likely
to be the first choice. Coping potential is whether an entrepreneur
believes that a goal disruption can be successfully overcome or not, and
where future expectations have negative or positive outcomes.
The amount of available energy when facing an affective event
also influences appraisal through both an emotional reaction and fatigue.
Energy available is influenced both by the amount and the character of
workload immediately before the event. With an already decreased level,
negative emotions will be stronger than with a higher level of initial
energy (Zohar et al., 2003). In addition the incremental loss of resources
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also plays a role as cognitive appraisal proposes that a lesser possibility
of successful coping poses an even larger threat (Hobfoll, 2001; Lazarus,
1991).
6.1.2 Coping with goal disruptions
To understand the process in which ER become critical, two states
of being can exemplify the dynamics involved. Our normal state is one
where our ER are balanced with the activities we do and want to do.
Mechanisms continuously regulate our body so that it is in an optimal
state, energy-wise, to perform tasks and process information. This
optimal state is a necessity for us to efficiently process, as well as
determine, the available capacity to perform a certain task. Under these
normal state conditions, we do not need to worry about regulating ER
and adapting. It is only in states when individuals experience stress,
fatigue and strong emotions that ER become an issue in need of
regulation and direction in order to uphold selected performance goals.
To entrepreneurs, such states arise when behaviour is disrupted and
cannot proceed as planned.
Regulating input of energetic resources
Behavioural economics states that individuals are forced to invest
additional resources in mental problem solving and decision making
when behaviour is disrupted and cannot proceed as planned. ER are
limited, quickly consumed and require far more time to replenish than to
consume, therefore the effort invested into problem solving and decision
making must be regulated. This implies that individuals must engage in
coping based on a process aimed at gaining the most from costs invested
in challenging situations. (Schonpflug, 1986b, 1986a; Schonpflug et al.,
1988)
Management of ER when facing and coping with goal disruptions
thus becomes critical and is done by mobilising mental effort, which is
181
actively used by individuals to maintain performance stability in
demanding situations. In other words, increasing task goal commitment
will decrease the relevance of other personal (Hockey, 1997).
As energy is a limited and critical resource for self-regulated
action, depleting it most likely leads to negative emotions (Hobfoll,
2001). This also relates to energy expenditure and recovery balance in
stressful situations which influences the intensity of emotional reactions
(Schonpflug, 1986b; Schonpflug et al., 1988).
Coping strategies and moderating variables
Coping is “cognitive and behavioural efforts to manage specific
external and/or internal demands that are appraised as taxing or
exceeding the resources of the person” (Lazarus et al., 1984: 141), or “the
effort to manage psychological stress” (Lazarus, 1999: 111) where
appraisal decides how individuals cope.
The entrepreneurs in this study use three general coping
strategies: problem-focused, emotion-focused and social support
seeking. In addition to this, other research has shown that people can,
when facing issues perceived as potentially goal-disruptive, exert mental
effort to mobilise extra energy in order to maintain performance at a
certain level, a “try harder” approach (Gaillard, 2001). This approach can
only be maintained for a limited amount of time as it brings with it high
physiological and psychological costs. Examples of situations
demanding mental effort are: sleep loss or fatigue which leads to a non-
optimal energetic state; emotions that continuously demand attention
and thus upset the energetic state; an attention challenging task through
varying input-output relations or strong demands on working memory;
a complex task context forcing the division of attention between different
tasks; or a learning situation involving the acquisition of new skills.
An emotion-focused strategy is used when a person does not
believe that the stressful condition can be changed and aims at
182
decreasing the experience of negative emotions (Lazarus, 1999).
Strategies involved are for example suppression, restraint, seeking
emotional support, acceptance, denial and disengagement. The result of
emotion-focused coping is a change in individuals’ interpretation of
circumstances, for example giving up a sought after goal or the denial of
a certain threat (Lazarus, 1999). Resorting to an emotion-focused strategy
is risky as intense emotions take “control precedence”, meaning that they
continuously require attention, which in turn decrease the available
capacity for task relevant information processing and action (Gaillard,
2001).
This points to the importance of regulating ER, especially under
time pressure or threatening situations, in order to uphold an efficient
task performance. This is difficult though as it is costly and risks
conflicting with personal goals, for example well-being or having a
positive approach to other people. Availability of ER on demand is a
critical emotional factor as affective events require effort investments to
cope with the disruptions (Zohar et al., 2003).
As stress and negative emotions arise, coping becomes a dual
process where individuals cope with emotions in relation to internal
aspects of the self, at the same time as they cope with stress and
emotions in relation to the social self, roles and relations (Martinovski &
Marsella, 2005). When stress and negative emotions take precedence,
fatigue is the result. Fatigue can be characterised as the mind and body’s
response to the reduction of ER, resulting from carrying out mental tasks
where there is a risk of performance failure in relation to task goals. It is
affected both by the work that has been done and is being done, as well
as work that will have to be done in the future – expectations of what is
to come (Gaillard, 2001).
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6.1.3 Reappraising the outcome
When reappraising a goal disruption after a coping effort, two
issues are important. The first is the discrepancy between task goal and
actual situation, in other words the effect of the applied effort or coping
strategy. The second is the rate of progress in terms of discrepancy
reduction, in this study this means how fast a disruption is overcome
and if it is overcome. Research has shown that positive or negative mood
is directly affected by this rate of progress (Carver et al., 1990). Even a
change in the rate of progress influences mood, meaning that goal
disruptions likely result in negative mood as they have a negative impact
on the rate of progress towards a focal goal (Zohar, 1999).
So if a goal disruption is overcome after exerting effort in order to
cope, an entrepreneur’s venture creation efforts continue, but ER are
diminished. Entrepreneurs are thus more sensitive to new goal
disruptions after recently having overcome one. ER available are
decreased leaving less leeway for attention to multiple tasks. To deal
with this problem, rest might be needed which requires time.
If a goal disruption is not overcome, the process of appraisal-
coping-reappraisal will again take place, but this time with even less ER
at hand. Hence ER is further taxed when the cost of continued coping
outweighs the benefit of overcoming and when coping itself becomes a
source of stress (Schonpflug et al., 1988).
6.1.4 Concluding the theoretical overview
In this theoretical overview of ER it has been argued that
perceived resistance brings ER into focus. As elaborated upon in section
5.2, goal disruptions force entrepreneurs to appraise their efforts, the
significance to their plans and their abilities to cope and overcome the
goal disruption. In the stress that arises as a result, their ER are depleted
when they attempt to cope. The consequence to their venture creation
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efforts is that their planned or intended actions are delayed as they have
to turn their attention towards coping with the resistance.
Gradually as ER are diminished, even more effort is required to
pursue goals. This becomes problematic as ER are limited, quickly
consumed, slow to replenish, and need regular replenishment. Moreover
the actual lowered level of ER in itself leads to additionally taxed levels.
Entrepreneurs hence risk ending up in a potentially negative spiral that
could lead to the final demise of a start-up attempt.
6.2 The influence of energetic resources on the model of
perceived resistance
During the study, all four entrepreneurs faced the problem of
diminishing ER and they responded to this in diverse ways which had
implications for the prospects of their venture ideas. ER actually bring
some of the instances of perceived resistance together in the sense that
diminished ER lead to additional instances of perceived resistance. This
section looks at this by bringing together the empirical findings of the
role of ER in an entrepreneurial context with a theoretical framework for
ER.
As I discussed in the analysis of perceived resistance in Chapter 5,
the manner in which entrepreneurs perceive resistance impacts the entire
process of venture creation. Interpreting resistance as a threat brings
negative stress, more likely to incapacitate action and generate negative
emotions, while interpreting it as a challenge has the opposite effect
(Lazarus, 1993). When examining the cases from an ER perspective it is
possible to see how ER influences the process of venture creation and in
effect moderates the model of perceived resistance.
In the four cases, ER initially becomes an issue during perceptions
of resistance and consequent coping. Jonas for example adopts an
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emotion-focused coping strategy in relation to the time needed to
achieve his goals; he believes he will face resistance as a consequence
and indeed he does. To cope he hopes to fail so that there will be no
problems, a little like closing his eyes and it will disappear. He takes no
active initiatives but waits and hopes that it will somehow solve itself
(J1). Jonas sees these problems coming and attempts to regulate his ER
by decreasing his efforts and thus also lowers his aspirations for the
venture idea.
When coping efforts are made, an important stage in the influence
of ER is reached, the point where negative emotions arise or are kept at
bay. Eric depicts what happens when emotions take “control
precedence” as Gaillard (2001) has pointed out. He believes that it is
important to fulfil one’s obligations to others and he places high
demands on himself. This eventually puts him in a situation where he
has three major aspects in his life to live up to, his private and
professional spheres as well as his venture idea. As long as his venture
idea works smoothly without incidents everything is fine, but when
disruptions arise, he feels that his life gets complicated. On top of that,
there are problems at work, and at home they begin a major project
renovating their house. Initially he attempts to cope with all aspects, but
over time his ER are reduced and eventually his problem-focused
strategy for coping turns into an emotion-focused one. Now other
aspects of his life take precedence and eventually the venture idea itself
becomes a resistance to fulfilling his other life goals. As fewer ER are
available, his appraisal of new disruptions is also affected. Eric is able to
cope for shorter periods of time, investing heavily in extra effort. But
over time he is forced to regulate his ER to cope with other aspects of his
life. This validates ER as a limited resource that needs regulation and
replenishment, and in Eric’s case it means decreasing the overall goals in
his life (see Eric’s full list of instances of perceived resistance in
Appendix E, Table 7-5 through Table 7-9).
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Additionally this shows that ER spans multiple instances of
perceived resistance which is consistent with previous research of work-
related performance episodes where affective states influencing
performance spans multiple episodes (Beal, Weiss, Barros, &
MacDermid, 2005). It furthermore depicts how issues with no direct
connection to perceived resistance, through ER affect entrepreneurs’
perceptions of resistance. These issues are the deliberate choices that
entrepreneurs make in relation to other aspects of life. An example of
this is Jonas’ choice to go on paternity leave which limits his ability to
channel ER towards his venture idea.
Nina responds differently to similar situations as Eric faces. She
regulates her ER by focusing more effort on coping and by implicitly
decreasing her attention to other aspects of her life (N2, N5, N6). At the
same time as she actively regulates her use of ER she uses strategies to
energise herself (N2, N3, N4). Through this she avoids the emotional
consequence of depleted ER.
This indicates that it is important for entrepreneurs to have ER
available on demand as argued in the theoretical framework (Zohar et
al., 2003). Increasing levels of stress and decreasing levels of ER go hand
in hand, and negative emotions arise as an effect of this. In such
situations, theory and empirical findings indicate that overcoming
perceived resistance becomes difficult as other aspects of an
entrepreneurs’ life take over as more important to channel existing and
decreased ER towards.
As I have pointed out in a number of instances throughout this
study, the cases show that entrepreneurs’ entire life situations come to
play in how they evaluate and cope with a certain goal disruption. This
issue of life goals and how entrepreneurs’ entire life situations influence
their venture creation attempts is an understudied area in
entrepreneurship research. Some research has focused on the life
187
experiences or life issues
52
of entrepreneurs, their past, and how those
shape entrepreneurial strategies (Kisfalvi, 2002). However this research
does not take entrepreneurs’ current life situations into consideration,
only their past. Lately there has also been a call to use the work-family
interface to address business owners' actual experiences and challenges.
To argue their case, the authors point to how male and female
entrepreneurs differ in the work-family interface concerning experiences
and coping strategies and how this can be used to explain the
performance differential between the two sexes (Jennings & McDougald,
2007). Jennings et al also propose that there is a call “for a reframing of
the literature, encouraging researchers to analyze the activities of
entrepreneurs within the context of their whole lives” (2007: 747).
However when reviewing the literature, this is not so much a call
concerning entrepreneurs’ whole life, but relating to more specific issues
such as the support from family during start-up (Dyer & Handler, 1994),
how family resources, roles, norms and attitudes influence the venture
creation process (Aldrich & Cliff, 2003). Although family is one aspect of
entrepreneurs’ whole lives, it concerns interesting issues which relate to
the findings of this study. Previous research for example proposes that
family goals and values influence strategic decisions and that sources of
conflict might arise from within the family which influences
organisations (Dyer, 2003), and that female small business owners
experience significant conflicts between work and home roles (Stoner,
Hartman, & Arora, 1990) while valuing personal life orientations higher
than their male counterparts (DeMartino & Barbato, 2003; DeMartino,
Barbato, & Jacques, 2006). The issue of life goals revealed in this study
moves beyond the family as primary interest as it focuses on how
mobilising mental effort to maintain performance stability in demanding
situations incurs costs to entrepreneurs’ lives. The more severe the
52
“The thorny issues that are the legacies of developmental stages in which an
individual experienced frustration and in which his or her coping abilities were
severely tested” (Kisfalvi, 2002: 493).
188
resistance, the more effort is needed and the greater the costs. Eric for
example states again and again that his relationship with his wife is
characterised by equality, and that he takes responsibility for his sons
and his home.
53
He chooses to make commitments which compete for
attention with his venture idea, much like those made by Jonas in
relation to his work and family (J1). With a view of the importance of
such responsibilities, they are likely to generate conflicting demands
with other goals in times of decreasing ER, which is exactly what
happens and what eventually leads to Eric’s decision to abandon his
venture creation efforts and brings Jonas’ fading of efforts to a standstill.
Another aspect of decreasing ER and the need for exerting mental
effort is the increase in moodiness and fatigue. Jonas keeps his mood in
check but grows gradually more and more tired of coping with
disruptions and balancing his life (J1); this is also the case of Eric who
experiences a similar development. Susanne on the other hand becomes
irritated and less and less interested in her venture idea (S2, S4, S5).
Increasing moodiness and fatigue is a result and a signal of
decreased ER and also indicates that negative side-effects to an
entrepreneur’s start-up attempts risk occurring. As Jonas’ and Eric’s
weariness grow, they have to invest more and more effort into coping,
and the cases show how they finally have no more energy to continue
this negative spiral. This in turn makes them feel even more stressed
with more pressure to be all that they want to be at home, at work and
with their venture ideas. Ultimately this begins to influence their
perceptions of the resistance they meet. As they appraise their situations
as becoming more and more difficult to handle, what they earlier
perceived as disruptions possible to overcome, turn into something
impossible. Eric for example fails to do the tests at the national soccer
53
These aspects come from Eric’s deliberate choices in areas of his life outside the
venture idea. They influence perceived resistance indirectly through ER as discussed
here and thus have no resistance pattern to refer to.
189
match, something he originally even saw as desirable, even necessary for
his venture idea (E1). This feeds back into the system and additionally
increases stress levels and emotional reactions. In a similar manner
Susanne is stuck in a negative spiral where she views her venture idea
and what is required to realise it as something she is not so interested in
doing, while she also needs additional funding. This affects her mood as
she perceives resistance.
Over and above entrepreneurs’ entire life situations, the negative
side-effects show the importance of regulating emotions, especially
under time pressure or threatening situations in order to uphold task
performance as a key issue. As stress and effort to cope are involved here
and both tax on ER, regulation requires minimising goals and deciding
which are important to uphold as well as active strategies to recover and
refill energy.
Nina exemplifies how successful regulation of ER and an
energising approach helps her to avoid many of the negative side-effects.
What she has to do is to try harder and increase the amount of effort she
puts into realising her idea. As she overcomes resistances, she prevents
negative spirals that risk increased stress and perceptions of resistance.
Instead her self-regulation, energising and successful coping puts her on
a positive spiral towards further increased ER and higher self-
confidence. Research has confirmed this effect where positive emotions
in the present have been found to generate enhanced emotional well-
being in the future (Fredrickson & Joiner, 2002). This strengthens the
importance of focusing on self-regulation and energising when coping
with perceived resistance as strategies to sustain positive emotions.
190
6.3 Summarising the influence of energetic resources’ on
perceived resistance
ER act as a moderator to the model of perceived resistance. To
begin with, the initial level of ER when an entrepreneur faces a goal
disruption, which could potentially be perceived as a resistance,
influences the actual perception. Lowered ER increases the sensitivity to
disruptions and increases the risk of perception of resistance, whereas
where ER levels are complete, no resistance would be perceived.
Furthermore, if an entrepreneur perceives a resistance, this in itself is
likely to negatively affect ER levels due to the stress that comes from this
perception.
As entrepreneurs attempt to cope with an instance of resistance,
they further tax their ER levels through the effort they exert. There are
ways to refill these stores, which Nina’s case illustrates when she uses
her friends as sources of energy in times of need. Entrepreneurs’ social
assets have an important role in energising through emotional support
primarily from friends in times of hardship. The importance of
emotional support from friends has long been discussed in
entrepreneurship research (see for example Bird, 1989; Jianwen &
Harold, 2005; Nelson, 1989), but the use of emotional support as an
energising strategy is new and thus further directs attention to its
importance for the survival of emerging new ventures. In addition to
this, an awareness of the need for regulation of ER and the monitoring of
this process seems to enable entrepreneurs to move to and stay on a
positive spiral.
The outcome of coping is in effect the entrepreneurs’ appraisal of
the status of their venture idea in relation to the resistance they perceive.
If they manage to overcome it, it strengthens their ER but this does not
necessarily mean that ER levels are restored. Eric exemplifies this when
he does not test his venture idea at the national soccer match after
overcoming the resistance perceived from the soccer association. In
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many of the instances of perceived resistance the entrepreneurs loop
from outcome to coping once or multiple times. The longer and the more
effort it takes to overcome an instance of resistance that is of key
importance to their venture idea, the more stress it creates and the more
it drains their ER.
ER levels are decreased by stress which arises as a consequence of
perceived resistance. The impact this has on entrepreneurs’ venture
creation attempts connects to their life goals. When ER levels drop,
entrepreneurs have to consider which goals to uphold and which to drop
or lower and as the cases show they all make different choices in relation
to their overall life goals. Furthermore the empirical material indicates
that entrepreneurs’ commitment, coping skills, and cognitive control
are
related to the initial amounts of available ER; these factors also moderate
the speed with which ER is decreased when facing goal disruptions. The
importance of commitment, coping skills, and cognitive control
has also
been pointed out in earlier research on executives’ abilities to handle
stress without becoming ill (Kobasa, 1979). The observations from this
study indicate in a similar vein that these concepts offer entrepreneurs
the possibility to handle more stress without depleting their ER.
This also connects to the experience loop in the model of
perceived resistance which indicates how entrepreneurs, over time and
as a consequence of coping with perceived resistance, can either enhance
their possibilities of overcoming resistance, or risk ending up in a
negative spiral (see section 5.2.4). Nina’s successful coping and
energising strategies enabled her to move towards the lower half of the
model of perceived resistance. This was a consequence of increased
abilities and a strengthened self-efficacy, as discussed in Chapter 5).
From an ER perspective, increased abilities and self-efficacy buffer
against decreased ER as stress levels from goal disruptions are likely
lowered.
In addition to the direct connection with perceived resistance, ER
also influences entrepreneurs’ perceptions of and abilities to cope with
192
resistance from “the outside”. This study concludes that entrepreneurs’
entire life situations need to be included in order to understand their
venture creation efforts. When entrepreneurs’ activities outside venture
creation are disrupted, an effort to cope is required which causes stress.
As a result, ER are diminished which forces goal prioritisation and thus
indirectly affects their start-up attempts.
Additionally, this offers an explanation for new venture survival
or not as there appears to be a proportion between the ER put into a
venture and ER required by a venture to survive. Apparently individuals
put in different amounts of effort into the realisation of their venture
ideas. This effort can be approximated by calculating the percentage of
total time used for all life goals that is spent on their venture ideas. The
greater the percentage, the more venture creation effort their ER need to
cater to in order to achieve the venture creation goal, and the more
sensitive entrepreneurs will be to goal disruptions that affect non-
venture life goals. Comparing Nina and Jonas, Nina invests nearly all her
time in her venture creation attempts, while Jonas invests a very limited
amount. Nina maintains a steady pace and overcomes a number of
instances of resistances while sustaining her ER levels so that her coping
efforts are not negatively influenced. Jonas, on the other hand, has
difficulties keeping a sufficient pace to ensure progress, and also suffers
from decreasing levels of ER, particularly in relation to other life goals.
The issue of proportion of ER input in relation to the requirement
of the venture idea furthermore connects to the world of sports. Athletes
must invest a substantial amount of ER to reach their goals if they aspire
to reach world class. However an amateur whose goal is to play and
have fun does not at all have the same demand for ER and can thus
allow him- or herself to have a number of other life goals in parallel.
Aspirations and requirements for ER expenditure are equally significant
for entrepreneurs and, as exemplified by Jonas and Susanne, result in a
significant difference in outcome.
193
The world of sports has more contributions to make because
research in that field has identified athletes’ lives as a whole as a key
factor in order to understand their stress levels and need for recovery
(Kenttä & Svensson, 2008). In the case of athletes it has been observed
that sustained effort to cope and perform, with consequent lower
priority to other important life goals, eventually leads to an insufficient
recovery. This, in turn, undermines focused effort directed towards a
specific goal (Lundqvist, 2006). It is important to emphasise that
increased effort without sufficient recovery leads to fatigue and
subsequently to a need to rest in order to refill ER. An increased effort
thus requires additional attention to recovery, which includes rest and
activities that generate positive emotions (Kenttä et al., 2008).
By adding ER to the model of perceived resistance it is possible to
gain both a deeper understanding of the process, as well as to connect
individual instances of perceived resistance.
194
195
7 Bringing it all together
The very first paragraph of this thesis began by stating that this
study is about “the resistance that entrepreneurs perceive towards their
venture ideas... how entrepreneurs cope in adverse environments, how they
survive or not against seemingly poor odds”. The four cases focusing on
Jonas, Eric, Nina and Susanne have illustrated how entrepreneurs
perceive and cope with resistance. These cases have also depicted how
the contexts in which entrepreneurs act may be adverse, but also how the
entrepreneurs themselves are involved in creating those contexts.
In the introduction, examples of how entrepreneurs are portrayed
in the media were given. One issue is related to entrepreneurs’ requests
for support, someone to hold on to and who can guide them in their first
steps. In at least three of the cases this was a relevant issue. At the same
time, when the entrepreneurs realised that no one would be there for
them in the way they wanted, they attempted to cope with problems
themselves. This is perhaps the spirit of entrepreneurship, which this
study illustrates, that is as an entrepreneur you have to do it yourself,
and the manner in which this is approached and achieved directly
influences the venture creation process. I will return to the policy
implications of this in section 7.2, and focus here on the purpose of this
study.
How entrepreneurs perceive and deal with resistance is an
important aspect of the venture creation process, and yet it is hereto
unknown. This study offers the potential to deepen our understanding of
venture creation as a whole, and thus the aim of this study, to explore:
• Where and why do novice entrepreneurs perceive resistance to their
venture creation efforts?
196
• How do novice entrepreneurs cope with perceived resistance?
and to describe:
• Which effects do perceived resistance have on outcomes of venture
creation processes?
In theory this appeared to be a relatively straight forward topic
with a simple model. In practice however, the empirical study however
revealed a different picture. A linear step-by-step model can be used to
describe the process and the steps of venture creation when perceiving
and coping with resistance, but it fails to make visible the underlying
dynamics that influence the process as a whole. The results of this study
show that entrepreneurs’ energetic resources are a key aspect of these
underlying dynamics, and thus should be included when creating a
model. Furthermore, when contemplating the creation of a model of
perceived resistance, entrepreneurs’ contexts illustrated by the
contextual model (see Figure 1-1) also needs to be considered.
The analysis concludes by building a model of perceived
resistance (see Figure 5-4), which embodies the result of exploring and
describing the dynamics of perceived resistance, that is, fulfilling the
purpose of this study. It proposes that perceived resistance arises as a
consequence of goal disruptions within three categories: dyadic
interactions between entrepreneurs and stakeholders, relationships with
depersonalised gatekeepers like government authorities, and the beliefs
of the entrepreneurs. These categories are influenced by the origin of the
goal disruption. The origin of the goal disruption refers to three contexts:
events like a stakeholder deciding to block an action, decisions or actions
where entrepreneurs’ own behaviour causes it as the building of certain
relationships that seems appropriate but eventually turns out to be a
liability, and finally entrepreneurs’ frame of mind which directly affects
their perceptions.
Entrepreneurs chose to cope with perceived resistance by using
strategies that depend on their view of the significance of the resistance
197
to the venture idea and to their perceived ability to successfully cope
with the resistance (see Figure 5-3). The lower the significance and the
higher their perceived coping abilities are, the more likely it is that they
chose a problem-focused coping strategy. Such a strategy can be
accommodating in the sense that the entrepreneur tries to meet the
demands placed on them, bold through bricolage or other innovative
means, or output focused where an effort is invested to “work through”
the resistance either on their own accord of the entrepreneur or by
outsourcing tasks. On the opposite end of the scale, in the case of high
significance and lower perceived coping abilities, an emotion-focused
coping strategy is likely. This is a strategy which focuses on the
entrepreneurs’ feelings in relation to the resistance, instead of actually
trying to overcome the resistance they deal with their feelings of
(probably) not overcoming it. The observed emotion-focused strategy is
an ostrich strategy where entrepreneurs figuratively stick their heads in
sand, in that they are unwilling or unable to deal with the practical
consequences of the resistance and instead focus on minimising the pain
from not being able to overcome the perceived resistance. In between the
problem-focused and emotion-focused strategies are social support
seeking strategies, where entrepreneurs perceive their own abilities to
overcome a resistance as poor, but where they instead use their social
network to complement those abilities.
These coping strategies are continuously appraised in relation to
the perceived resistance, whether it is overcome or not. The manner in
which progress in coping with perceived resistance is appraised takes
into consideration both the status of the resistance as well as the time it
has taken to cope and is likely to take until resistance is overcome. At
any point, coping can be deserted if possibilities to overcome it are
deemed to be futile, but until then there is a continuous loop from
resistance appraised as still existing and back to coping. Why
entrepreneurs give up coping can be a result of having tried all they can
think of at no avail, but it can also be a matter of lacking in ER.
198
As I stated earlier, the model cannot be understood by adopting a
rational and simple cause and effect approach. The empirical study
revealed that something more than what is captured in the model
seemed to influence perceptions of resistance, applied coping strategies,
as well as the entrepreneurs’ persistence in coping. This “something
more” is proposed to be entrepreneurs’ ER. The way in which ER
influence the model of perceived resistance can be described as a positive
or negative moderator of the different stages, all depending on the
current level of available ER in relation to the effort needed to cope. With
optimal levels of ER, the model is initially unaffected by ER, but the
stress involved in perceiving resistance immediately begins to diminish
ER. Thus ER always affect the model of perceived resistance.
The lower the levels of ER, the more resistance entrepreneurs are
likely to perceive, and this resistance will also be perceived as more
significant than with an optimal level of ER. When entrepreneurs have
low levels of ER, they view their ability to cope with resistance as poor.
As a consequence, lower levels of ER increase both the likelihood of
entrepreneurs resorting to emotion-focused coping strategies as well as
the risk of failing to overcome resistance.
To complicate matters, ER levels are unique to each individual
and can be refilled and regulated. This was evident when the four
entrepreneurs in the empirical material were compared. Nina actively
regulated her ER, refilling them in times of need, which helped her
maintain her effort and apply problem-focused or social support seeking
strategies. The three others were more at the mercy of ER and they used
emotion-focused strategies more extensively. They also gradually lost ER
over time which eventually influenced the termination of their ventures.
This study has also explored the effect that perceived resistance
has on the venture creation process. There are four specific issues that
appear to be important, issues which also happen to be more or less
researched in the field of entrepreneurship. They are the influence of
family resistance towards venture creation, how entrepreneurs’ life goals
199
affect the prospects of dealing with resistance, the importance of
entrepreneurs’ selves to the venture creation process and how this interacts
with external context and stimuli, and the positive/negative spirals
observed where entrepreneurs’ ER levels affect their abilities to cope
which in turn, through appraisal and reappraisal, affects ER levels.
Much previous research has shown that family and friends are
key supporters for entrepreneurs in their start-up endeavours (see for
example Greve et al., 2003; Renzulli et al., 2000). The current study shows
however that examining both support and resistance on the part of family
and friends is important. This study reveals that such resistance is
exceptionally difficult for entrepreneurs to deal with, possibly as those
stakeholders are emotionally close and coping thus becomes more
difficult.
The life goals of entrepreneurs is one of the most central aspects
affecting how entrepreneurs cope with perceived resistance, and
whether they manage to realise their ventures or not in adverse
environments. When entrepreneurs perceive resistance and try to cope
with it, they are simultaneously forced to pit their venture idea against
all their other life goals. This comes as a consequence of having to
allocate ER to cope with perceived resistance, and ER are limited
resources. In effect, what entrepreneurs must do is to re-evaluate their
goals, their desire to reach them and then choose which goals are the
most important. This study has illustrated what happens when goals
related to family have higher importance than the venture idea. In those
circumstances, the venture idea is down-prioritised and then likely to
suffer when resistance is perceived.
Entrepreneurs, for good and bad, bring their feelings with them
into the venture creation process. This is especially evident when taking
an ER perspective as this directly governs the feelings and emotions of
entrepreneurs. Examining a start-up process without taking
entrepreneurs’ feelings into consideration is likely to miss out valuable
200
aspects that can help interpret what happens and why, specifically in
relation to decisions made and activities chosen.
Finally, the positive and negative spirals of venture creation
efforts that were observed underline the importance of taking the aspects
discussed so far into consideration when approaching venture creation
processes. These aspects and the model including ER hold a key to
where an entrepreneur carries a venture idea, but can only be
understood by considering all aspects put forth here. Breaking it down
into smaller parts on which to focus may simplify analysis but as I have
shown throughout this thesis, lessens the possibility of correctly
assessing the situation.
Using knowledge created by this study, we can attend to policies
that support in the right places and individual entrepreneurs can better
value beforehand what they can expect when trying to realise a new
idea.
This concludes the summary of the study and I now turn to the
theoretical and empirical contributions as well as to the need for further
research.
7.1 Theoretical contribution
Few studies have followed novice entrepreneurs’ venture creation
attempts over time, one exception is Mosey and Wright’s study on the
relationship between novice entrepreneurs and social networks, where
novices were compared with nascent and habitual entrepreneurs (2007).
By longitudinally following four novice entrepreneurs in real time from
the start of their ideas, this study adds to our knowledge of how novice
entrepreneurs go about realising their venture ideas. This study also
addresses the issue of gestation of new ventures which is an
understudied area of research (Reynolds et al., 2004). Furthermore, the
201
method in itself – longitudinal exploration of how entrepreneurs create
their ventures – is a contribution to the field of entrepreneurship where
such methods are in demand (Aldrich, 1999; Reynolds et al., 2004).
Studies of entrepreneurs tend to describe them (most often a “he”)
as risk-takers and success-driven individuals (Kodithuwakku & Rosa,
2002; Mitton, 1989; Stewart, Watson, Carland, & Carland, 1999). In this
context there is little room for perceived resistance in the relationships
between entrepreneur and stakeholder. However, as I have discussed,
the issue of resistance depends on what one looks for in a study. To date,
much research within entrepreneurship has focused on success factors in
one or the other way contributing to for example growth (Wiklund,
Davidsson, & Delmar, 2001). The concept of perceived resistance
develops our understanding of the dynamics behind both termination
and survival in venture creation. This is crucial in forming a complete
picture of the start-up process, which is lacking in entrepreneurship
research (Katz et al., 1988). Furthermore by using a perspective of
resource dependence (Pfeffer et al., 1978) when longitudinally exploring
the concept of perceived resistance this study identified the tensions
between goal commitment and stress as a consequence of entrepreneurs’
attempts to acquire critical resources.
An increasing number of researchers are looking at the
importance of social capital in the creation of new ventures (Batjargal,
2003; Brush et al., 2001; Davidsson et al., 2003; Florin et al., 2003).
However, current research mostly focuses on finding and testing factors
that may contribute to the success of new ventures. Few studies aim to
understand how entrepreneurs use their social capital in developing
their ventures, with some exceptions (see for example Bowey, 2002). This
study addresses this issue by revealing entrepreneurs’ social support
seeking strategies as central to their coping efforts when facing goal
disruptions. Their social capital forms the basis for their social support
seeking strategies, and this is particularly important when they lack
other resources. In addition to the support aspect, perceived resistance
202
also reveals the opposite, namely family and friends who oppose an
entrepreneur’s attempts at creating a new venture. The study found that
this type of perceived resistance as particularly important.
Studies of interorganisational relations have primarily looked at
structural aspects, for example the number of external relationships a
young firm has is important (Dollinger & Golden, 1992; Jarillo, 1988).
Simultaneously, the coping strategies of new entrepreneurial firms have
been proposed as being of critical importance in the field of
entrepreneurship (Alvarez & Barney, 2001; Venkataraman, Van de Ven,
Buckeye, & Hudson, 1990). Lately, the approach of measuring the
number of external relationships in order to explain entrepreneurial
outcome has been questioned. Findings instead propose that the key
issue is the manner in which relations with critical stakeholders are
managed (Yli-Renko, Sapienza, & Hay, 2001) – i.e. entrepreneurial
coping strategies. However, in-depth studies of entrepreneurs’ responses
to relationships characterised by resource dependence are lacking.
Studies have focused on finding the implications of dependence to the
venture, not how entrepreneurs cope with this dependence (Eisenhardt
& Schoonhoven, 1996; Larson, 1992; Yli-Renko et al., 2001). In this study
this gap is illuminated by studying entrepreneurial coping strategies in
dependence relationships with stakeholders. This focuses on how
entrepreneurs manage their relationships with stakeholders, also
including a broader range such as family and friends, and moves beyond
this to how the entrepreneurs’ selves influence their perceptions and
behaviours.
For entrepreneurship research in general, the study shows that a
consequence of bringing in ER is that the world outside start-up
activities needs to be taken into consideration. The study points to direct
links between entrepreneurs’ whole life situation and their perceptions
and responses to goal disruptions pertaining to their creation attempts.
This means that it extends the call of bringing the whole life situation of
entrepreneurs into the picture when carrying out entrepreneurship
203
research from family only (Jennings et al., 2007), to actually include all
life goals of entrepreneurs. By bringing in life goals when studying
entrepreneurs also connects to current research in management where
researchers take a life perspective in order to further an understanding of
leadership (Pirie, Forthcoming).
The moderating aspect of ER in itself also contributes to the
understanding of entrepreneurs by the use of cognitive psychology, in
itself an emerging and active field in entrepreneurship research (see for
example Baron, 2008; Busenitz & Arthurs, 2007; Krueger, 2003). In
addition to the moderating aspect, ER thus contributes to theory by
extending the scope and impact of cognitive psychology on
entrepreneurship research.
7.2 Implications for policy and practice
This study and others
54
, show how entrepreneurs face a great
number of potential goal disruptions. Perceptions of these goal
disruptions vary depending on the individual. The model developed in
this study facilitates the understanding of this process.
There are three groups in particular that can benefit from this
study: entrepreneurs, those supporting entrepreneurs and policy
makers.
It is likely to be futile to prepare for specific issues that arise when
attempting to realise a venture idea as there is no way of knowing
exactly what will happen. However, understanding the process of
perceiving and coping with resistance and the issues influencing and
moderating that process can better prepare entrepreneurs for goal
disruptions. When also adding the dimension of ER to the picture,
54
I discussed these earlier in the theoretical framework, see page 25.
204
entrepreneurs have a tool to understand and explain the process.
Moreover they have a way to deal with it. By sustaining ER levels, the
probability of perceiving resistance is decreased and entrepreneurs’
abilities to overcome resistance is improved.
In the same manner, understanding the process enables those
with the intention to support entrepreneurs to direct measured support
that can aid entrepreneurs in realising their venture ideas. Even policy
makers can make use of this knowledge when forging policies which
encourage entrepreneurial initiatives, because supporting entrepreneurs
to overcome perceived resistance at start-up helps decrease individuals’
hesitation to start. This in turn facilitates that invested resources generate
a better effect on growth and employment.
As a general implication, this study indicates the importance to
entrepreneurs to move towards and stay in the lower half of the model
of perceived resistance (see Figure 5-4), as well as continuously
moderating and refilling their ER. While in the lower half, entrepreneurs
appraise their abilities to successfully cope with goal disruptions as high
thus limiting stress and the taxing effect it has on their ER. Attaining this
enhances the survival of new venture ideas through maintained ER
levels and the possibility of entrepreneurs to attend to building their
venture ideas instead of being forced to continuously cope with goal
disruptions.
7.3 Further research
The manner in which life goals influence the entrepreneurs of this
study contradicts studies of microenterprises which have found that
when there is a higher demand for attention from both business and
family, the needs of the family does not get more consideration than the
needs of the business (Miller, Winter, Fitzgerald, & Paul, 2000). However
this is slightly off subject as the entrepreneurs studied in this thesis do
205
not compare with microenterprises. Instead it would be more interesting
to look at research of work and family in the field of entrepreneurship.
Unfortunately this interface is understudied in entrepreneurship
research. Lately there has been a call to include it as a way to for example
explain why there is a difference in performance between firms run by
women and firms run by men (Jennings et al., 2007), and where family is
proposed to be an important embedded issue in the entrepreneurial
process (Aldrich et al., 2003). From the perspective of this study, what
would be particularly interesting would be to focus on entrepreneurs’
goal setting in all life goals, thus moving beyond the limits of the family
only, and how this influences their perceptions of resistance and
subsequent coping.
The study furthermore suggests that research is needed into the
implications of entrepreneurs’ perceptions of disruptions as a threat or a
challenge and the implications this has on the model of entrepreneurs’
ER and venture creation. The contribution of such research could help
further explain why owners make certain choices in respect to their
ventures (Gimeno, Folta et al. 1997; McGrath 1999), and the development
of new ventures over time, particularly in the early phases (Bruderl and
Schussler 1990; Fichman and Levinthal 1991). ER could thus aid in
bridging our knowledge gap between seeing the results of
entrepreneurial activity and understanding how new businesses come
into existence (Reynolds et al., 2004). In addition to this, the study
indicates that future research should explore the influence of ER on
entrepreneurs’ decisions to cease creation attempts.
The empirical data of this study is based on novice entrepreneurs,
but in the analysis and conclusion, experience is discussed as an issue
which appears to influence entrepreneurs’ perceptions of and coping
with resistance. This indicates that a study including serial entrepreneurs
would further our understanding of perceived resistance. Moreover,
studies of mental workload indicate that such comparison could be
important as mental workload acts as a go-between between task
206
difficulty, skill-level of the individual and observed performance
(Moray, 1979). It thus seems to support previous studies of
entrepreneurs pointing to experience as a key factor to success (Baron &
Markman, 2000; Bruderl et al., 1992; Shepherd et al., 2000; Wennberg,
Forthcoming). According to this, and compared with novice
entrepreneurs, entrepreneurs with previous experience can potentially
deal with relatively more difficult tasks without adversely affecting
performance. When using the concept of ER this conclusion becomes less
certain as this study shows. As individuals during limited periods of
time can “try harder” by incurring additional costs to ER in order to
maintain performance levels (Hockey et al., 1986). However this study
also points to experience as an issue with positive effects on ER. Future
research should explore this and untangle the dynamics of ER and its
effects on novice versus serial entrepreneurs in relation to perceived
resistance.
This study also reveals how ER levels and entrepreneurs’ abilities
to refill their ER moderates their perceptions of resistance and their
subsequent coping. Given this, further research into entrepreneurs’
levels of ER would be beneficial. Specifically comparing differences
between entrepreneurs, the speed at which they are depleted in
comparable situations and the manner in which they are refilled should
be the foci. This would also contribute to our understanding of
entrepreneurial persistence which so far has been addressed through
constructs such as passion (Cardon et al., 2005) and perseverance (Baum
et al., 2004).
Most of the research drawn upon when developing the ER
construct has primarily used subjective reports of affective states to
measure effort. Much of this research has carried out cross-sectional
analyses of demand and outcome variables or experiments. Although
research methods differ considerably, it has been shown that results
produced from laboratory studies do not differ from those generated
from field studies and the findings from one can thus be used in another
207
(Locke, 1986). Furthermore and in order to develop and explore theory,
concepts, and dynamics of ER further, there has been a call for
longitudinal studies (Hockey, 1997). Examples of such studies now exist
with longitudinal surveys (see for example Zohar et al., 2003), but more
is needed. The further research proposed here would thus also
contribute methodologically when employed as a development from this
explorative study.
208
209
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Appendix A.
Deciding on design – a pre-study
Previous research has taken of a perspective of external shocks to
venture creation which generates objective problems for entrepreneurs
to deal with (see page 40). Through its subjective aspects taking a view
from the entrepreneurs, perceived resistance is a new way of studying
venture creation which makes earlier research difficult to reconcile with.
Thus when perceived resistance occurs, why and how it influences the
entrepreneurial process is largely unknown. Because of this I decided to
carry out a pre-study to explore themes of interest which could guide me
in building a theoretical framework as well as which methodological
issues I needed to consider when studying resistance.
The pre-study was based on three cases:
Case 1: Two novice entrepreneurs who had just started a venture together were
interviewed twice, in Autumn 2001 and in Autumn 2003.
Case 2: An entrepreneur who had previously started a venture which had failed
was interviewed in Autumn 2003.
In both case 1 and 2, the interviews focused on the process of starting their
venture, relationships with stakeholders during this process, and the
entrepreneurs’ feelings and thoughts throughout.
Case 3: The start up of a venture was followed in Spring 2002, primarily through
written material, e?mails sent over a period of 1 ½ years and meeting notes.
The venture
55
was started by novice entrepreneurs in 1999/2000, and I was given
access to the e?mail correspondence of one of five co?founders from December
1999 to April 2001. The data contained more than 11.000 e?mails and covered
the start?up phase, as well as all meeting notes from the same period. In
combination with this, two of the founders were interviewed at two occasions.
The e?mails were analysed in a fashion akin to a longitudinal study in order to
simulate as closely as possible a study in real time. This meant that the e?mails
were browsed beginning from December 1999. During this browsing a log was
55
The venture [name omitted by author] was a game development studio. At the
time of the study it had nine employees, three game titles, and four customers in
Europe.
228
kept of names of stakeholders, keywords and expressions, I also deleted e?mails
which I perceived as being unrelated to the venture, narrowing the amount to
little over 9000. Parallel to browsing the e?mails I also read the meeting notes as
they took place in time. Next all the material was imported into NVIVO. In NVIVO
I created nodes based on occurrences of stakeholders and added them under the
case nodes venture capital companies; customers (actual and potential);
partners; entrepreneurs; and their personal networks. These nodes I then
searched using the keywords and expressions from my log.
Although attempting to study at least the third case over time, the case
studies were mostly retrospective. This fact turned out to be the most
important lesson from the pre-study. All cases indicated that the
entrepreneurs did experience resistance, but due to the time which had
passed between the instances they described and the interviews, they
could not specify what had happened or elaborate on their perceptions.
229
Appendix B.
Interview guide
Each interview contained three main themes of questions directed at:
• Venture creation strategy
- how the entrepreneurs built their ventures
• Relationships
- the role of their relations
- who the critical stakeholders were
- how those stakeholders’ responses to their ventures were
perceived
• Perceptions and choices
- how they perceived the development of their ventures
- how they viewed their own choices
- what their own actions were in the face of perceived
resistance
The structure of each interview in turn followed three parts:
retrospective, issues of concern and future goals. Specifically which
question each part contained depended on the issues that came up. As a
general guide, each part focused on:
Part 1: Retrospective
Which stakeholders have been the most important ones since the last
interview?
Why have they been important?
How do the actions taken connect with the goals expressed during the
previous interview?
230
What has happened outside the venture creation attempts? Family,
friends, work etc.
Part 2: Issues of concern
The retrospective part thus revealed critical stakeholders, critical
incidents and how those unfolded concerning issues such as trust,
reliance and credibility.
This in turn generated new questions like:
How does the entrepreneur feel about the process of realising the
venture idea?
How do the issues found in the retrospective part interact with each
other?
Part 3: Future goals
What are the main goals that the entrepreneur plan to achieve until next
interview?
Are there any potential difficulties that might arise? Why?
231
Appendix C.
Example of visualisation of a venture
creation map
232
Appendix D.
Overview of the steps of the empirical
study
Pre?study phase
Empirical problem
Reading of theory to appraise the theoretical viability of the empirical
problem
Test cases
Construct criteria to guide selection of cases
Construct criteria to guide the manner and time of data collection
Construct themes as interview guides
Real life phase
Interviews
Notes of observation and ideas for potential perceived resistance
Pre?analysis phase
Transcription
NVIVO phase
Create projects in NVIVO, one for each case
Code into nodes
Add attributes for each stakeholder node
Recode each case’s resistance nodes with a focus on earlier coded
nodes within those
Resistance nodes are separated into instances of perceived
resistance, each generating a new node
Each resistance node is analysed with a focus on nodes contained
within and those nodes’ attributes
Between case comparison of resistance nodes – focus on identifying
similar patterns
Sort instances of perceived resistance into resistance patterns, based
on between case comparison
Build longitudinal visual models for each case of resistance nodes
On paper phase
Write cases stories for each case based on the instances of perceived
resistance
Entrepreneurs read and respond to written case stories
Visualise each resistance pattern through the theoretical model of
perceived resistance
Compare resistance patterns and build categories of instances of
perceived resistance
Study phase
Write analysis into study – iterative process back to NVIVO analysis
and on paper analysis
BCERK conference
paper
AOM conference
paper
Book chapter
233
Appendix E.
All instances of perceived resistance
Table 7-1: Jonas’ resistance pattern 1 – Multiple goals
Item Date Actions or events
J1A 2004?02 Jonas has limited time to put into his new venture as he is occupied by
employment and family
J1B 2004?05 He is worried that time will not be enough when he goes on paternity
leave in autumn. He even thinks it would be good if he fails
J1C 2004?09 Time becomes as limited as he feared
J1D 2004?09 Because the development of the service is finished, it does not matter to
product development that he puts in less time
J1E 2004?11 The project enters a new phase and he begins marketing it, now his
available time is again restricting pace of development
J1F 2004?11 Time with his family and towards his employment is still prioritised above
his venture idea
J1G 2004?11 Even though it is slow, Jonas still feels that he can handle development
through focused and temporary efforts
J1H 2005?03 The students complete their courses and the venture idea becomes
something that they work with in their spare time
J1I 2005?03 The speed of development of the venture idea drops further
Table 7-2: Jonas’ resistance pattern 2 – Conflict with external rules or
bureaucracy
Item Date Actions or events
J2A 2004?01 Jonas loses the computer that had been allocated to the student projects
when the course ends
J2B 2004?01 Development of the venture idea cannot continue without computers
J2C 2004?01 He tries to convince the university’s lawyers, but they refuse to change
the rules
J2D 2004?02 He tries to get help from the university’s pre?incubator and the start?up
course he participated in, but they offer no help
J2E 2004?02 Eventually he finds a room they can use at his institution, but they still
need to get their own computers
J2F 2004?03 To find computers Jonas contacts a computer company to ask for
sponsoring
J2G 2004?04 After some time the computer company agrees to sponsor them for two
months
234
Table 7-3: Jonas’ resistance pattern 3 – Conflict with external rules or
bureaucracy
Item Date Actions or events
J3A 2004?04 When they have completed the development of the service, they ask the
people responsible for the institution’s IT environment to help them set it
up
J3B 2004?04 They are refused to run commercial activities on the institution’s servers
J3C 2004?04 Development of the venture idea cannot continue without access to
servers
J3D 2004?04 Jonas contacts the university’s lawyers who have no objections to using
the servers commercially
J3E 2004?04 The only requirement for using the servers is that it is within the
framework of a course assignment
Table 7-4: Jonas’ resistance pattern 4 – Multiple goals
Item Date Actions or events
J4A 20004?
12
The cost of downloading a 4 MB song charged by the mobile service
provider is eight times as high as the cost for the song itself
J4B 2005?03 After a few months of marketing the service Jonas realises that the current
business model is not feasible given the high cost of downloading
J4C 2005?03 Jonas decides to abandon the old idea and instead sell music
downloadable via the Internet to computers
J4D 2005?03 The service must be reprogrammed
J4E 2005?03 With the new strategy, the student programmers’ time again becomes a
bottleneck. None of them have any time to spare and can only work
during the weekends
J4F 2005?03 Jonas and the students start reprogramming the service
J4G 2005?03 The bands that have uploaded songs want to see some development fast,
otherwise they might desert it and instead sell their songs through other
services
J4H 2005?03 Jonas worries that the programmers might abandon the project if he
pushes too hard
235
Table 7-5: Eric’s resistance pattern 1 – Key stakeholder blocks operations
Item Date Actions or events
E1A 2004?05 Testing at Swedish Premier League games is terminated by the association
of Swedish soccer.
E1B 2004?05 Eric feels like “a bucket of cold water” has been poured over his head and
the development of his venture idea is halted
E1C 2004?05 He assumes that the reason for the termination is his affiliation with the
Internet site owned by his friends
E1D 2004?05 He calls the lawyer at the association to talk about why this has happened
and what can be done about it
E1E 2004?05 The lawyer confirms his suspicions about the Internet site being the
reason and tells him to get back again in autumn
E1F 2004?05 Eric feels motivated and hopeful that he will secure continued testing at
the meeting in autumn
E1G 2004?10 The service has been improved and a user interface has been set up, with
this Eric contacts the association and a meeting is arranged
E1H 2004?10 The meeting is a success and Eric is offered to run tests at a match with
the Swedish national team at the beginning of 2005
E1I 2005?02 After the meeting Eric never manages to organise his team to run tests at
the match, instead he focuses on the patenting issue
Table 7-6: Eric’s resistance pattern 2 – Perceived inadequate ability
Item Date Actions or events
E2A 2003?12 Eric must write a business plan within the framework of the start?up
course and also needs it to get external funding
E2B 2004?01 He does not feel that he has the skills necessary to write a business plan
E2C 2004?01 He starts thinking about bringing in a person with business know?how
E2D 2004?01 He tries to force himself to work on the business plan but only gets stuck
in Excel charts counting millions
E2E 2004?03 Eric cannot find a solution to how to produce a business plan
E2F 2004?03 Without a business plan he is forced to make do with the personal means
he has
236
Table 7-7: Eric’s resistance pattern 3 – External criticism
Item Date Actions or events
E3A 2004?02 Eric wants suggestions for improvement and participates in a business
plan competition for that purpose
E3B 2004?02 He receives what he describes as destructive criticism from the members
of the jury
E3C 2004?02 He is very disappointed with the reception he gets, says that it is like
“pouring cold water over entrepreneurs fire”
E3D 2004?02 He directs his anger at the organisers to ventilate it and to boost his belief
in himself
E3E 2004?02 Eric is disillusioned regarding people who supposedly have know?how of
the start?up process
Table 7-8: Eric’s resistance pattern 4 – Multiple goals
Item Date Actions or events
E4A 2003?09 Eric contemplates stopping his job application efforts and focus entirely
on his venture idea
E4B 2003?09 His wife states that he has to contribute to the household, that he has to
have a salary
E4C 2003?09 He interprets his wife’s views as scepticism towards his venture idea
E4D 2003?09 He tries to convince his wife that his venture has the potential to offer a
solid financial base for them
E4E 2003?09 She doubts the viability of it and wants him to get a job
E4F 2003?10 Eric feels that he must have a paying job to contribute and continues
applying for jobs
E4G 2003?10 He finds a job
E4H 2003?12 His wife worries that he might quit his job to focus on his venture and
wants to make sure that he wont
237
Table 7-9: Eric’s resistance pattern 5 – Resource needs
Item Date Actions or events
E5A 2004?01 In order to develop his idea, Eric believes that he needs funding,
particularly to hire programmers
E5B 2004?01 He is hesitant to bring in investors as he fears that he would then loose
absolute control of his venture idea
E5C 2004?02 He decides to talk to some people he knows in the venture capital
industry to see what his chances are of acquiring funding
E5D 2004?02 He finds out that he must have a business plan with amongst other things
a solid market survey
E5E 2004?02 Eric does not feel that he can produce what is required so he stops looking
for venture capital
E5F 2004?02 Borrowing from banks is a possibility, but he is hesitant as they have taken
a mortgage on their house to renovate it and therefore doubts that banks
would extend more credit to him
E5G 2004?02 He ponders borrowing from friends and family, but wants to wait as long
as possible with that, seeing it as a last option
E5H 2004?04 Eric says “I ponder it [funding] all the ‘darn time, should I go to the
government funding agency or something and try and get funding”
E5I 2004?04 He feels that he lacks in competence, drive and ability concerning funding
issues and is unable to solve it
Table 7-10: Eric’s resistance pattern 6 – Key stakeholder blocks operations
Item Date Actions or events
E6A 2003?10 David joins in the venture idea and Eric makes him an equal partner
E6B 2004?08 Eric talks to David who says that he wants to feel that his work with the
venture is fun, and that he wanted to work hard at getting the patent
organised
E6C 2004?10 Eric is displeased with the lack of work with the venture idea on David’s
part
E6D 2004?10 Eric has not talked to him for a long time and considers talking to him,
asking him to make a better effort with his areas of responsibility
E6E 2004?12 Time goes and Eric does not talk to David
E6F 2005?01 He starts organising the patent himself
E6G 2005?02 He is annoyed with himself for not talking to David, and worried about the
consequences for the venture idea
E6H 2005?05 Eric says that he has given up on the venture idea and that his last efforts
at sorting out the patent probably came out of a wish to leave something
behind of all the efforts he has put into the idea
238
Table 7-11: Nina’s resistance pattern 1 – Resource needs
Item Date Actions or events
N1A 2004?03 Nina finds the store location she wants, but lacks in funding to acquire it
N1B 2004?03 She feels that “well as long as you have money, if you have started a
venture and begun generating income you can borrow any sum you
want”. Without any personal fortune or mortgageable assets, and her
venture still untested she sees her means of acquiring funding as limited
N1C 2004?03 She considers borrowing from family or friends but none has much extra
to invest
N1D 2004?03 Venture capital is no option because of the consequences to her venture
idea. She says that she would rather “own 80 percent of a SEK20 million
company than 20 percent of an SEK80 million company”
N1E 2004?03 Decides to try and borrow money from banks
N1F 2004?05 First bank is a disappointment, the bank person gave an unprofessional
impression and they reject her application unless her boyfriend, who has a
steady income applies
N1G 2004?05 Second bank more trustworthy but still rejects her application.
Recommends that she talks to a government funding agency
239
Table 7-12: Nina’s resistance pattern 2 – Key stakeholder blocks operations
Item Date Actions or events
N2A 2004?03 Nina needs to receive funding from a government funding agency in order
to also have her loan application from the bank approved. The funding is
necessary to rent her store and realise her venture idea
N2B 2004?03 She forms the opinion that the government funding agency tends to
support ideas that are more traditional with less of an entrepreneurial
approach and fears that this indicates that her application will be rejected
N2C 2004?04 She tries to work with her handling officer to convince her of the business
model
N2D 2004?04 Her initial hesitation with the handling officer’s ability to judge her
venture idea is deepened for each point of contact that they have. She
describes her as “a lady in her 50s who does not even live in Stockholm
and who does not have any idea about what it looks like here [in
Stockholm]”
N2E 2004?05 The bank informs her that the loan application has been rejected because
the government funding agency turned her down
N2F 2004?05 Nina is angry, disappointed and frustrated with being rejected and most of
all by finding out from the bank and not from the agency directly
N2G 2004?05 She considers giving up, wondering how she will be able to start without
money
N2H 2004?05 She calls her best friends for emotional support
N2I 2004?05 The day after talking to the bank, Nina calls her handling officer to ask
why her application was rejected
N2J 2004?05 She fails to make the handling officer reconsider the decision and asks her
contacts to try and convince her, but the decision is final
N2K 2004?05 She rethinks her business model
240
Table 7-13: Nina’s resistance pattern 3 – Key stakeholder blocks operations
Item Date Actions or events
N3A 2004?09 Nina wants to have products from the market leader in her store
N3B 2004?10 She meets with the marketing director of the company, but they do not
want to sell to a web shop
N3C 2004?10 She feels inferior when meeting the company, and as if she is begging
them to sell her their products. She also perceives their response as
conveying superiority when they question why she should be allowed to
sell their products
N3D 2004?10 She tries to persuade them to sell her their products but they maintain
that their policy prevents them from selling to a web shop
N3E 2004?10 She argues that she will shortly have a physical store and that stores
already exist on the web selling their products
N3F 2004?10 Nina contacts mid?sized suppliers but many of those are also hesitant to
sell her their products
N3G 2004?10 The most annoying thing she experiences are suppliers who do not even
bother to get back to her after she has tried to make contact and left
several messages
N3H 2004?10 Her motivation to work on her venture idea suffers from the set?backs
and thoughts of giving up arise
N3I 2004?10 Talks to a friend who is in a similar situation as she – starting up a new
venture – and they support each other
N3J 2004?10 She reconsiders her strategy
N3K 2004?10 Decides to turn to smaller suppliers, even suppliers in start?up situations
similar to her own
N3L 2004?11 Manages to buy a range of products large enough to be able to open her
store
241
Table 7-14: Nina’s resistance pattern 4 – Conflict with stakeholder
Item Date Actions or events
N4A 2004?07 Nina begins developing her web shop and signs up a small web design firm
to do the job. Her wish to be a part of the process creates tensions with
the designers who say they want total freedom to do the design as they
want
N4B 2004?08 She feels like she constantly argues with the designers to push her ideas
through
N4C 2004?09 The design firm demands that she must pay more for their services
because they do things that were not included in the original agreement
N4D 2004?09 She agrees to pay more but that things then have to be done her way. The
designers agree to her demands
N4E 2004?10 Things settle down but after a while she again feels frustrated about how
they relate
N4F 2004?10 As the web site is nearing finalisation Nina has an argument with the
designers about the colours used
N4G 2004?10 She suggests a different colour, they refuse and express their irritation
with her demands which they feel infringes on their artistic freedom
N4H 2004?10 Nina asks some people she knows who are involved in design for a second
opinion on choice of colours. They agree with her
N4I 2004?10 She demands that her choice of colours is used
N4J 2004?11 The designers express annoyance about her demands, but do as she says
Table 7-15: Nina’s resistance pattern 5 – Conflict with stakeholder
Item Date Actions or events
N5A 2005?01 Her boyfriend questions whether her venture is a real job. He does not
think that there is so much to do, and wants her to spend more time with
him
N5B 2005?01 Nina believes that he has that attitude as a consequence of having an
employment and place to go and work, something that he deems as
important. Her own time is not enough with all the work she has and she
is irritated with him for not appreciating her situation
N5C 2005?01 She feels she must work more, and considers keeping a diary of how her
days look like so he can see and understand
242
Table 7-16: Nina’s resistance pattern 6 – Pace
Item Date Actions or events
N6A 2005?01 Nina has kept much of administration and also issues concerning design
on her own shoulders. Now she is beginning to feel like she is stretched
out over too many activities and that she should have outsourced some
things
N6B 2005?01 She perceives that the grind of just keeping her venture operational is a
constant battle and blocks her need to work with strategic and future
oriented issues.
N6C 2005?01 She wants to have control of design issues, and the best way she sees is if
she does the job herself
N6D 2005?02 Some issues of design are outsourced
N6E 2005?02 Outsourcing turns out to be a source of frustration as it is not done in the
way she wants, thus she is even more hesitant to outsource and feels that
she can do things better than specialists
N6F 2005?03 Supplier mistakes eat up more of the time she needs to spend on
developing her venture
N6G 2005?03 As soon as something does not work or run as planned her time is eaten
up
Table 7-17: Susanne’s resistance pattern 1 – Product development
Item Date Actions or events
S1A 2003?11 Problems developing the prototype
S1B 2003?11 Does not think innovation is any fun
S1C 2003?11 Enlists a friend of her father to build the prototype
S1D 2004?02 Friend of father not as competent as she had expected
S1E 2004?03 Media review of similar products
S1F 2004?04 Susanne and her father develop their own prototype
S1G 2004?04 Fails to construct a safe product
S1H 2004?04 Finds a producer working in plastics
S1I 2004?05 New producer solves basic problems with brush
S1J 2004?05 Susanne drops her direct involvement in developing the prototype
S1K 2004?06 Producer stops working on prototype when no money is paid
243
Table 7-18: Susanne’s resistance pattern 2 – Product development
Item Date Actions or events
S2A 2003?11 Problems developing the prototype
S2B 2003?11 Wants to be an entrepreneur, not an inventor
S2C 2004?02 Tries to solve the prototype issue quickly be searching through a network
of more than 100 points of contact
S2D 2004?05 Happens upon licensing through one contact and sees it as a way towards
being an entrepreneur instead of an inventor
S2E 2004?05 Need to patent before the brush can be licensed, and need money to
patent
S2F 2004?05 Problems with prototype persist
S2G 2004?06 Decision on her loan application does not come through in time for when
she need patent to present her innovation
S2H 2004?07 Susanne’s attention is turned towards a new licensing project
Table 7-19: Susanne’s resistance pattern 3 – Conflict with rigid structures or
bureaucracy
Item Date Actions or events
S3A 2004?03 Susanne needs money to develop her prototype and patent it
S3B 2004?03 Applies for a loan from a government run funding agency, but after a
couple of months there is still no response to her application
S3C 2004?05 She fears that her plan of action might fail if she does not get the funding
in time
S3D 2004?05 She calls the handling officer to try and speed up the application process
S3E 2004?06 Views the government run funding agency as slow bureaucrats
S3F 2004?06 Until the loan is approved she cannot continue developing the prototype
S3G 2004?06 Worries that loan will not be approved until after summer
S3H 2004?06 Applies for a loan from another agency with poorer conditions
S3I 2004?06 Dislikes sitting idle and waiting, tries to work with the producer to develop
the prototype
S3J 2004?08 Summer goes and no response to her application
S3K 2004?08 She now refocuses her venture creation activities on the licensing project
instead
S3L 2004?09 Application is approved, but the brush is now only a low prioritised
product in a portfolio owned by her new licensing project
244
Table 7-20: Susanne’s resistance pattern 4 – Pressure to patent
Item Date Actions or events
S4A 2004?01 Susanne feels that she must have a patent
S4B 2004?01 Without a patent she cannot start talking about her product to potential
stakeholders as she is afraid that they might steal her idea
S4C 2004?03 To patent she must have funding and thus applies through a government
run funding agency
S4D 2004?05 Funding process is too slow for her liking
S4E 2004?08 The project is more or less abandoned because she finds more promising
ideas to work on while waiting for funding
Table 7-21: Susanne’s resistance pattern 5 – Pace
Item Date Actions or events
S5A 2004?01 Susanne believes that the product will take years to bring to the market
S5B 2004?01 She is impatient and feels that the pace of development is too slow and
that it is more difficult than she had expected
S5C 2004?03 Feeling stuck and unsure of what to do Susanne finds out about licensing
as a way to develop the product
S5D 2004?03 Susanne join forces with Jack in setting up a new project focusing on
licensing a portfolio of products for inventors
S5E 2004?06 When lack of funding prevents her to keep the pace up on developing her
brush she spends more and more time on the licensing project
S5F 2004?11 Without much success in prototype development Susanne questions
whether the brush even belongs in the licensing projects product portfolio
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doc_553145195.pdf
Brief paper around new venture creation resistance, coping and energy anders landberg.
NEW VENTURE CREATION:
RESISTANCE, COPING AND ENERGY
Anders Landberg
Dissertation for the degree of Doctor of Philosophy,
Ph.D, Stockholm School of Economics 2008
© EFI and Anders Landberg 2008
ISBN 978-91-7258-771-7
Keywords: Resistance, entrepreneurship, ventures, venturing, start-up,
process, energy, energetic resources
Printed by:
Elanders, Vällingby 2008
Distributed by:
EFI, the Economic Research Institute
Stockholm School of Economics
P.O.Box 6501, SE-113 83 Stockholm, Sweden
www.hhs.se/efi
To my parents, Gull and Olle Karlsson
Preface
This report is a result of a research project carried out at the
Centre for Entrepreneurship and Business Creation (E) at the Economic
Research Institute at the Stockholm School of Economics.
This volume is submitted as a doctor’s thesis at the Stockholm
School of Economics. The author has been entirely free to conduct and
present his research in his own ways as an expression of his own ideas.
Filip Wijkström
Director of the Economic Research
Institute at the Stockholm School of
Economics
Carin Holmquist
Director of the Centre for
Entrepreneurship and Business
Creation (E)
EFI Mission
EFI, the Economic Research Institute at the Stockholm School of Economics, is a scientific institution
that works independently of economic, political and sectional interests. It conducts theoretical and
empirical research in the management and economic sciences, including selected related disciplines.
The Institute encourages and assists in the publication and distribution of its research findings and is
also involved in the doctoral education at the Stockholm School of Economics. At EFI, the researchers
select their projects based on the need for theoretical or practical development of a research domain,
on their methodological interests, and on the generality of a problem.
Research Organization
The research activities at the Institute are organized into 20 Research Centres.
Centre Directors are professors at the Stockholm School of Economics.
EFI Research Centre: Centre Director:
Management and Organisation (A) Sven-Erik Sjöstrand
Centre for Entrepreneurship and Business Creation (E) Carin Holmquist
Public Management (F) Nils Brunsson
Information Management (I) Mats Lundeberg
Centre for People and Organization (PMO) Andreas Werr
Centre for Innovation and Operations Management (T) Pär Åhlström
Centre for Media and Economic Psychology (P) Guje Sevón
Centre for Consumer Marketing (CCM) Magnus Söderlund
Centre for Information and Communication Research (CIC) Per Andersson
Marketing, Distribution and Industrial Dynamics (D) Björn Axelsson
Centre for Strategy and Competitiveness (CSC) Örjan Sölvell
Accounting and Managerial Finance (B) Johnny Lind
Centre for Financial Analysis and Managerial Economics in Kenth Skogsvik
Accounting (BFAC)
Finance (FI) Clas Bergström
Centre for Health Economics (CHE) Magnus Johannesson
International Economics and Geography (IEG) Mats Lundahl
Economics (S) Paul Segerstrom
Economic Statistics (ES) Anders Westlund
Centre for Business Law (RV) Johnny Herre
Centre for Tax Law (SR) Bertil Wiman
Chair of the Board: Professor Carin Holmquist
Director: Associate Professor Filip Wijkström
Address
EFI, Box 6501, SE-113 83 Stockholm, Sweden • Website: www.hhs.se/efi/
Telephone: +46(0)8-736 90 00 • Fax: +46(0)8-31 62 70 • E-mail [email protected]
Acknowledgments
Writing a thesis like this one is a one-person job, but having said
that, there are so many people who have supported me and that I have
depended upon to complete it. Actually, I would not even have begun
without the inspiration of some people, and the problems created by
some. This is a tribute to you who have somehow been involved in this
study.
Prof. Carl-Göran Héden inspired me to do this study. In my
previous work at a non-profit organisation, Carl-Göran, his colleague
Tommy Jonsson, and I spent many hours discussing the difficulties in
launching innovative projects and the solutions to those difficulties.
Upon my leaving the non-profit organisation, Carl-Göran suggested that
I should study these difficulties, what we then called bottle-necks in
project development.
Inspired by Carl-Göran I contacted Prof. Carin Holmquist at the
Stockholm School of Economics (SSE), she believed in the potential of my
research idea and accepted me as a doctoral student. Carin has been my
main supervisor since and has supported and encouraged me
throughout my time at SSE. Later, Prof. Björn Axelsson and Prof. Sven-
Erik Sjöstrand also joined as my supervisors. To all three I owe more
than can be expressed. During the final stages, Prof. Leif Lindmark has
also offered valuable comments with clear and succinct solutions to
seemingly difficult passages in my thesis.
Doing a Ph.D. is not all work though, and I am fortunate to have
found new friends at SSE. Frédéric made life as a junior doctoral student
easier. Admittedly he offered some ideas about my research, but most of
all he showed that being a researcher offers ample opportunities to do
yoga, go fly fishing, rock climbing and randonné. Klara brightened
things up with lots of laughter and also helped me with the final layout.
My fellow doctoral students in pKval – Ebba, Svante and Per– were a
source of laughter and above all, glamour. Ebba also read early drafts of
this thesis. Joanne is always a source of compassion and spirit and more
earthly aspects like masterful proof reading.
Surely this thesis would have been much thinner and less
interesting without my colleagues at the Section for Entrepreneurship
and Business Creation at SSE. Ingela and I discussed life and being
doctoral students at many lunches and coffees breaks. She also put a
direct mark on this thesis by reading and commenting both early and
late drafts. Erik’s brilliance at organising and presenting complex data
has been great for my own structuring. My colleagues, past and present,
Kalle, Karin, Anna, Elena, Monica, Johan, Sven, Mikael, Jurgita, Jeanette
and Gunilla all contributed to life as a doctoral student.
Per, Anna and Sofia helped me deal with my empirical material,
and without Mårten, Karin, Bengt and Anna there would not have been
any empirical material. Lena helped me structure the empirical chapter.
The language skills of Ava made it readable. Anders always has ample
fuel to refill my ER.
My parents, Gull and Olle, supported me in this endeavour as in
all the others I have embarked upon in my life. Always with love and
care, and lately also with some concern when my smile became less
frequent than it used to be.
Monica changed my life in an instant, and made me realise the
importance of being a humoristic, empathic, feminist. She may not be the
typical house wife, but managed things beautifully while I was
preoccupied with this study. Most of all, Monica is the real entrepreneur
and my hero! Aston and Sixten, pure joy and energy!
To all of you, and to those not mentioned, with a feeling of
lightness and joy, thank you all!
Stockholm, October 20, 2008
Anders Landberg
Contents
1 PERCEIVED RESISTANCE – AN INTRODUCTION .................................................................. 13
1.1 DELIMITATIONS ....................................................................................................................................................................... 26
1.2 OUTLINE OF THE STUDY ..................................................................................................................................................... 28
2 CREATING NEW VENTURES .......................................................................................................... 31
2.1 RESOURCES – THE NEED TO HAVE THEM ...................................................................................................................... 31
2.1.1 Dependence, control and entrepreneurship .................................................................................... 34
2.2 ENTREPRENEURS’ PERCEPTIONS OF RESISTANCE .................................................................................................... 37
2.2.1 How perceived resistance arise ................................................................................................................ 40
2.2.2 The influence of perceived resistance to venture creation .................................................. 42
2.3 COPING – RESOURCES AND STRATEGIES ...................................................................................................................... 44
2.3.1 Capital – a resource at hand (or not...) ................................................................................................. 46
2.3.2 Coping strategies in action ........................................................................................................................... 52
2.4 A MODEL OF PERCEIVED RESISTANCE ............................................................................................................................. 61
3 RESEARCH DESIGN .......................................................................................................................... 65
3.1 A LONGITUDINAL STUDY OF ENTREPRENEURS’ START-UP ATTEMPTS .............................................................. 67
3.1.1 Choice of unit to study ..................................................................................................................................... 68
3.1.2 Selecting cases ...................................................................................................................................................... 69
3.1.3 Time of study and access to entrepreneurs .................................................................................... 73
3.2 CONDUCTING THE STUDY ................................................................................................................................................... 76
3.2.1 Feedback from entrepreneurs ................................................................................................................... 78
3.3 ANALYSING THE EMPIRICAL MATERIAL .......................................................................................................................... 78
3.4 QUALITY OF THE STUDY ..................................................................................................................................................... 83
4 PERCEIVED RESISTANCE TO NEW VENTURE CREATION – FOUR CASES ............ 85
4.1 BROKERING MOBILE TUNES VIA THE INTERNET ......................................................................................................... 85
4.2 LIVE SOCCER MATCHES VIA LOW BANDWIDTH ........................................................................................................... 93
4.3 COSMETICS, BUT ONLY FOR MEN .................................................................................................................................. 106
4.4 HOW TO CLEAN HORSES ..................................................................................................................................................... 117
5 ANALYSIS OF PERCEIVED RESISTANCE ................................................................................ 127
5.1 EMPIRICAL ANALYSIS .......................................................................................................................................................... 127
5.1.1 Introducing the analysis ................................................................................................................................. 128
5.1.2 Where is resistance perceived? ............................................................................................................... 130
5.1.3 Why potential goal disruptions are perceived as resistance? ........................................... 136
5.1.4 How do entrepreneurs cope with perceived resistance? ...................................................... 138
5.1.5 What are the outcomes of perceived resistance on a venture idea? .......................... 144
5.2 THEORETICAL ANALYSIS .................................................................................................................................................... 147
5.2.1 Where is resistance perceived? ................................................................................................................ 148
5.2.2 Why potential goal disruptions are perceived as resistance? ............................................. 151
5.2.3 How do entrepreneurs cope with perceived resistance? ...................................................... 159
5.2.4 What are the outcomes of perceived resistance on a venture idea? .......................... 166
5.3 A MODEL OF PERCEIVED RESISTANCE .......................................................................................................................... 169
6 A NEW REVELATION OF PERCEIVED RESISTANCE AND COPING ............................. 173
6.1 WHAT WE KNOW ABOUT ENERGETIC RESOURCES .................................................................................................. 177
6.1.1 Appraisal of goal disruptions ...................................................................................................................... 179
6.1.2 Coping with goal disruptions ..................................................................................................................... 180
6.1.3 Reappraising the outcome ........................................................................................................................... 183
6.1.4 Concluding the theoretical overview .................................................................................................... 183
6.2 THE INFLUENCE OF ENERGETIC RESOURCES ON THE MODEL OF PERCEIVED RESISTANCE ...................... 184
6.3 SUMMARISING THE INFLUENCE OF ENERGETIC RESOURCES’ ON PERCEIVED RESISTANCE ...................... 190
7 BRINGING IT ALL TOGETHER ..................................................................................................... 195
7.1 THEORETICAL CONTRIBUTION ...................................................................................................................................... 200
7.2 IMPLICATIONS FOR POLICY AND PRACTICE ................................................................................................................203
7.3 FURTHER RESEARCH.........................................................................................................................................................204
REFERENCES ......................................................................................................................................... 209
APPENDIX A. DECIDING ON DESIGN – A PRE-STUDY ..................................................... 227
APPENDIX B. INTERVIEW GUIDE ............................................................................................... 229
APPENDIX C. EXAMPLE OF VISUALISATION OF A VENTURE CREATION MAP .... 231
APPENDIX D. OVERVIEW OF THE STEPS OF THE EMPIRICAL STUDY .................... 232
APPENDIX E. ALL INSTANCES OF PERCEIVED RESISTANCE....................................... 233
LIST OF FIGURES
FIGURE 1-1: ENTREPRENEURS' CONTEXTUAL ACTS OF COPING IN ADVERSE ENVIRONMENTS ................................... 20
FIGURE 2-1: TWO-STEP LEVERAGE (ADOPTED FROM GARGIULO (1993: 5)) .................................................................... 54
FIGURE 2-2: THEORETICAL MODEL OF PERCEIVED RESISTANCE ......................................................................................... 62
FIGURE 3-1: PACING OF INTERVIEWS AND OBSERVED PERCEIVED RESISTANCE ............................................................. 75
FIGURE 5-1: THEORETICAL MODEL OF PERCEIVED RESISTANCE AS A MAP FOR ANALYSIS ........................................ 128
FIGURE 5-2: CATEGORISATION OF INSTANCES OF PERCEIVED RESISTANCE .................................................................. 132
FIGURE 5-3: COPING STRATEGIES –APPRAISED SIGNIFICANCE AND THE POSSIBILITY TO OVERCOME .................. 164
FIGURE 5-4: MODEL OF PERCEIVED RESISTANCE....................................................................................................................... 171
LIST OF TABLES
TABLE 3-1: OVERVIEW OF STUDIED ENTREPRENEURS ............................................................................................................. 72
TABLE 5-1: SUMMARY OF INSTANCES OF PERCEIVED RESISTANCE .................................................................................... 129
TABLE 5-2: DISTRIBUTION OF INSTANCES OF PERCEIVED RESISTANCE OVER CATEGORIES ..................................... 134
TABLE 5-3: ORIGINS OF PERCEIVED RESISTANCE ..................................................................................................................... 135
TABLE 5-4: TYPES OF COPING STRATEGIES ................................................................................................................................ 143
TABLE 5-5: OUTCOMES OF COPING WITH PERCEIVED RESISTANCE .................................................................................. 146
TABLE 5-6: RESOURCE DEPENDENCE ANALYSIS OF INSTANCES OF PERCEIVED RESISTANCE ................................ 158
TABLE 5-7: FROOMAN’S DIMENSIONS FOR STAKEHOLDER INFLUENCING STRATEGIES (1999) .............................. 159
TABLE 5-8: CLASSIFYING COPING CATEGORIES ........................................................................................................................ 162
TABLE 7-1: JONAS’ RESISTANCE PATTERN 1 – MULTIPLE GOALS ...................................................................................... 233
TABLE 7-2: JONAS’ RESISTANCE PATTERN 2 – CONFLICT WITH EXTERNAL RULES OR BUREAUCRACY ........... 233
TABLE 7-3: JONAS’ RESISTANCE PATTERN 3 – CONFLICT WITH EXTERNAL RULES OR BUREAUCRACY ........... 234
TABLE 7-4: JONAS’ RESISTANCE PATTERN 4 – MULTIPLE GOALS .................................................................................. 234
TABLE 7-5: ERIC’S RESISTANCE PATTERN 1 – KEY STAKEHOLDER BLOCKS OPERATIONS ....................................... 235
TABLE 7-6: ERIC’S RESISTANCE PATTERN 2 – PERCEIVED INADEQUATE ABILITY ...................................................... 235
TABLE 7-7: ERIC’S RESISTANCE PATTERN 3 – EXTERNAL CRITICISM .............................................................................. 236
TABLE 7-8: ERIC’S RESISTANCE PATTERN 4 – MULTIPLE GOALS ..................................................................................... 236
TABLE 7-9: ERIC’S RESISTANCE PATTERN 5 – RESOURCE NEEDS ................................................................................... 237
TABLE 7-10: ERIC’S RESISTANCE PATTERN 6 – KEY STAKEHOLDER BLOCKS OPERATIONS .................................... 237
TABLE 7-11: NINA’S RESISTANCE PATTERN 1 – RESOURCE NEEDS..................................................................................... 238
TABLE 7-12: NINA’S RESISTANCE PATTERN 2 – KEY STAKEHOLDER BLOCKS OPERATIONS ................................... 239
TABLE 7-13: NINA’S RESISTANCE PATTERN 3 – KEY STAKEHOLDER BLOCKS OPERATIONS .................................. 240
TABLE 7-14: NINA’S RESISTANCE PATTERN 4 – CONFLICT WITH STAKEHOLDER ......................................................... 241
TABLE 7-15: NINA’S RESISTANCE PATTERN 5 – CONFLICT WITH STAKEHOLDER ......................................................... 241
TABLE 7-16: NINA’S RESISTANCE PATTERN 6 – PACE .......................................................................................................... 242
TABLE 7-17: SUSANNE’S RESISTANCE PATTERN 1 – PRODUCT DEVELOPMENT ........................................................... 242
TABLE 7-18: SUSANNE’S RESISTANCE PATTERN 2 – PRODUCT DEVELOPMENT ......................................................... 243
TABLE 7-19: SUSANNE’S RESISTANCE PATTERN 3 – CONFLICT WITH RIGID STRUCTURES OR BUREAUCRACY 243
TABLE 7-20: SUSANNE’S RESISTANCE PATTERN 4 – PRESSURE TO PATENT ............................................................. 244
TABLE 7-21: SUSANNE’S RESISTANCE PATTERN 5 – PACE ................................................................................................. 244
13
1 Perceived resistance – an
introduction
This study is about the resistance that entrepreneurs perceive
towards their venture ideas. It looks at how entrepreneurs cope in
adverse environments, how they survive or not against seemingly poor
odds.
Resistance seems ever present if one looks for it. Well known
examples of entrepreneurs and venture ideas that have met with
resistance are abound in media. Most have heard of Håkan Lans, one of
Sweden’s biggest innovators of all time whose inventions, the Mouse
and GPS have cost him millions of dollars in lawyer’s fees and many
years of processing because of lawsuits related to patent rights.
1
Other
less known examples are Swedish firms Ellen and Naty, both of which
entered established segments with large multinational corporations as
market leaders. Their innovative products threatened to upset the
market structure and both of them experienced that competing with
multinational corporations is very difficult if one lacks sufficient means
to counter their actions. This is particularly true for indirect actions of the
market leaders, such as limiting the newcomer’s visibility or access
through resellers, and by challenging their patent rights.
2
1
The story about Håkan Lans and the troubles he has faced can be read in a book
by David Lagercrantz (2006).
2
Founders/owners of both ventures have revealed these problems in personal
interviews – Marlene Sandberg (Naty,http://www.naty.se/) on February 1, 2000,
and with Anna Weiner Jiffer (Ellen,http://www.ellenab.com/) on May 24, 2005.
14
These are high profile cases where ideas have been fiercely
resisted by competitors. However one does not have to go that far to find
problems facing entrepreneurs. By looking at the debate in media about
facilitating the start-up of new ventures one can imagine other types of
resistance opposing all new ventures. This debate focuses on policy
issues such as lowered taxes, support structures and funding, all of
which are deemed critical to entrepreneurs when starting new ventures.
In addition, there are issues related to staffing where the union is a key
stakeholder. This was something that the start-up restaurant Wild’n
Fresh experienced first-hand when it implemented as employee policy
which conflicted with the collective wage agreement supervised by the
union. The restaurant refused to accept the union’s demands which
eventually forced it out of business (Appelgren, 2007).
Yet another level where one can suspect issues preventing the
start-up of new ventures is related to individual entrepreneurs. Various
studies
3
and articles in the daily media (see for example Langlet, 2007)
discuss how entrepreneurs hesitate because they feel unsure of their own
capacity. Entrepreneurs seem request more support and more help to
start – someone to hold their hand – and they want this to be continuous
during the first years of starting up.
Additionally, as entrepreneurs, perhaps by default, enter a
hornet’s nest of competition when attempting to realise a venture idea.
Existing competitors likely dislike new entrants on the market and
suppliers might also be hesitant to new entrants as they could upset a
profitable situation.
What all this implies is that there is a potential waste of resources
with an uneasiness regarding where resources should be directed.
Governments want to facilitate the processes of starting new ventures
3
See for example a customer survey carried out by Jobs and Society in 2007 athttp://www.nyforetagarcentrum.se.
15
and make sure that policies are in place which can guarantee that
invested resources generate maximum effect on growth and
employment. However figures from current research indicate that
policies so far fail to achieve this as more than 40 percent of started new
ventures are terminated within five years (Delmar, Sjöberg, Wennberg, &
Wiklund, 2004b). At an individual level, the hesitation to start means
that society as a whole misses out on attempts at realising opportunities
because the prospects of being an entrepreneur appear too risky. At a
more aggregate level, the question is if it is the “right” 40 percent that
terminates.
On the other hand, one could argue that the fact that individuals
hesitate is a selection mechanism where only those fit to start actually
attempt to do so. From this perspective, policies that help bring forward
more entrepreneurs could help redundant venture ideas that should
never have been attempted. However whichever perspective one takes,
the fact still remains that a large percentage of entrepreneurs never get
past the first one or two years, but it is unclear why and how some
entrepreneurs go through fire to realise their ideas. Such knowledge is
required if we are to implement the right policies for support.
Furthermore it can help individual entrepreneurs to better value
beforehand what they might expect when trying to realise a new idea,
while investors and other support organisations can devise strategies to
help entrepreneurial ventures develop.
This thesis attends to this very issue as it reveals the dynamics
behind entrepreneurs’ perceptions of goal disruptions and their
subsequent coping.
What is entrepreneurship?
This is a study of entrepreneurship, specifically entrepreneurs’
plans and actions to realise their venture ideas. The examples above
indicate that entrepreneurs’ actions can explain the dynamics of venture
creation. Additionally this holds a key to understanding the view I take
16
of entrepreneurship where entrepreneurs’ actions are central. This builds
on Gartner’s idea that entrepreneurs realise entrepreneurial ideas
through the creation of new ventures (Gartner, 1988). Here venture
creation focuses on entrepreneurs’ actions to create their ventures – what
they do to achieve this end (Bird, 1988).
In this sense entrepreneurship starts with entrepreneurs with
ideas and a willingness to act upon those ideas. To act entrepreneurially,
entrepreneurs must be motivated (see for example Delmar, 1996) and
also believe they have the ability (see for example Bandura, 1997)
deemed necessary to be able to realise it. The entrepreneurs we see in
media who are willing to face the trials of venture creation likely fulfil
these requirements. They have the intention (Katz & Gartner, 1988;
Krueger, Reilly, & Carsrud, 2000) to attempt to realise an idea through
the creation of a new venture.
Issues relating to start-up
The primary focus of this study is on the early start-up of new
independent ventures by novice entrepreneurs. “Novice”
4
refers to
entrepreneurs starting their first new ventures. This means that they
have no previous experience of entrepreneurship on which to base their
actions and perceptions of stakeholders. It also means that they have not
established any prior relations with actors in the creation of new
ventures. In addition to, and as a consequence of this, they have no
experience of perceived resistance in an entrepreneurial context.
4
I use a definition from Westhead, Ucbasaran, and Wright: ” Novice
entrepreneurs can be viewed as individuals with no prior minority or majority
business ownership experience either as a business founder, an inheritor, or a
purchaser of an independent business but who currently own a minority or majority
equity stake in an independent business that is either new, purchased, or inherited”
(2005: 394).
17
Most of these entrepreneurs have certain resource constraints in
common. They face an entrepreneurial paradox to “create something
from nothing” (Baker & Nelson, 2005: 329), where they must gain control
over resources they do not own but need in realising their ideas. This
perspective of creating something from nothing in relation to resource
acquisitions has been proposed to be a key issue in much
entrepreneurship research (Baker, Miner, & Eesley, 2003; Baker et al.,
2005) but it is still a largely unknown topic in entrepreneurship research.
Specifically, entrepreneurs’ need for resources open up to
situations where they risk becoming dependent on certain stakeholders,
which are defined extensively as involving any actor influencing the
venture idea
5
. Those stakeholders have access to limited and critical
resources for the realisation of the venture idea. In these situations the
manner in which they cope with situations related to the acquisition of
necessary resources is critical to the survival of their fledgling ventures.
Resource dependence theory takes such a view of asymmetric relations
and the consequences of those (Pfeffer & Salancik, 1978) and offers a
theoretical foundation to approach entrepreneurs’ resource acquisition
challenges
6
. Entrepreneurs have resources of their own to off-set these
needs and asymmetries such as entrepreneurial capabilities (Arthurs &
Busenitz, 2006), motivation (Delmar, 1996), and education and contacts
(Davidsson & Honig, 2003), but it is how they use these which decides
the outcome.
5
Research has identified stakeholders as consisting of shareholders, investors,
employees, customers and the public stakeholder group, i.e. government and
communities that provide infrastructures and markets (Clarkson, 1995). In addition
to this, trade associations and environmental groups have also been identified as
important stakeholders to organisations (Donaldson & Preston, 2000). For an
entrepreneur, important stakeholders are also family, friends and peers (Birley,
1985). This extended definition of stakeholders has been used in the research behind
this paper.
6
I will return to the choice of resource dependence theory as a perspective for
understanding entrepreneurs’ resource acquisitions in more detail in chapter 2.1.
18
How entrepreneurs cope when creating ventures in adverse
environments
The fact that so few start-ups survive is an indication of the
difficult context that entrepreneurs act in. This has been described as
highly unpredictable and filled with rapid change (Lichtenstein, Dooley,
& Lumpkin, 2006) as well as adverse (Baker et al., 2005).
To date much research in entrepreneurship has focused on the
start-up of entrepreneurial ventures, the discovery of opportunities and
the creation of future goods or services (Aldrich, 1999; Carter, Gartner, &
Reynolds, 1996; Katz et al., 1988; Shane & Venkataraman, 2000; Van de
Ven, 1999). However despite the amount of research done on this, very
little has been directed at understanding how entrepreneurs cope in
situations related to the acquisition of resources critical to the realisation
of their new ventures. How they actually do it and what they feel about
it. Filling this gap in our knowledge offers a way to further understand
how entrepreneurs cope and deal with the adverse context within which
they act.
As I will return to in the theoretical framework (see Chapter 2),
earlier research by for example Kouriloff (2000) and Terpstra and Olson
(1993) has tried to explain the issues that entrepreneurs face in this
context by categorising situations which would require entrepreneurial
coping into different types of barriers or problems to venture creation.
These categories convey one aspect of what issues entrepreneurs might
face, but a problem with them is that they view these issues as inherently
bad to venture creation and also see them as objectively given. As a
consequence of this we have a limited understanding of the issues that
entrepreneurs face, which likely also affect our view of their coping with
these issues, as well as the outcomes on their attempts at realising their
venture ideas. In order to approach entrepreneurs’ coping in adverse
situations it is necessary to define what these situations are and such
definitions must go beyond concepts like barriers and problems.
19
More recently, research has begun looking into how
entrepreneurs create their ventures under severe resource constraints
(Baker et al., 2005). This is a major step in the direction of revealing how
entrepreneurs cope, but the perspective taken focuses on resource
acquisitions and sets aside the dynamics of the context. Another
promising new aspect of entrepreneurship with relevance to this study
of perceived resistance is how entrepreneurs cope with role stress,
defined as a state of tension and anxiety whenever a person finds it
difficult to perform an assigned role where the conflict between roles, as
well as the ambiguity of roles influence role stress (Örtqvist, Drnovsek,
& Wincent, 2007).
The phenomenon that I focus on in this study is captured in the
three dimensional contextual model in Figure 1-1
7
. It illustrates how goal
disruptions arise in relation to the three axes: the degree of development
of venture creation ideas, resource acquisitions and time. The degree of
development of venture creation ideas depicts the complexity of the
venture idea as it evolves into a more and more established firm with
routines, borders and resources. As this is formed, issues occur which
become goal disruptions. In addition to this, resources are needed to
develop the venture idea where the types of resources, how much, as
well as how important they are differ over time. Finally time in itself
implies potential goal disruptions for example as certain venture ideas
have a limited window of opportunity within which they must be
launched, or as the entrepreneur only have a limited time to realise the
venture idea because of other obligations. The model implies that
entrepreneurs, as they attempt to realise venture ideas, must
continuously cope with goal disruptions. At any point during the course
of these attempts, the ideas might be terminated if sufficiently severe
goal disruptions are not overcome.
7
The model is depicted in a box-like form, this is only done in order to depict the
three dimensional character. Venture creation is in my mind the opposite to box-like
situations, it is expansive and out-of-the-box thinking.
20
Figure 1-1: Entrepreneurs' contextual acts of coping in adverse environments
Research quiz
With the above in mind we need to build knowledge about the
contexts where it happens and the “it” is how entrepreneurs cope in
situations related to the acquisition of resources that are critical to the
realisation of their new ventures. During start-up, entrepreneurs often
act in a micro context where they as individuals interact with other
individuals and with organisations. These interactions hold a key to
understanding the context of where and how entrepreneurs cope.
First however it is necessary to understand how entrepreneurs
view these interactions. Which of them give rise to situations requiring
coping, and why? By introducing the concept perceived resistance, an
opportunity to address these questions is available. Perception is here
related to the brain’s processing functions where “sensory information is
interpreted in light of existing knowledge, concepts, ideas, and
21
expectations” (Passer et al., 2007: 130). In this way each entrepreneur will
have different unique perceptions of what constitutes a resistance as well
as how to respond to it. In the next chapter I discuss this concept in
detail, eventually arriving at the following definition of perceived
resistance: disruptions
8
, internal or external, that entrepreneurs face and
perceive as working against their efforts at venture creation. Resistance
influences entrepreneurs’ intended planned behaviour of venture
creation. As entrepreneurs attempt to realise their ideas, they perceive
resistance at different instances throughout the process of venture
creation. Resistance then elicits coping responses which demand
attention from entrepreneurs. Taken together this forms a dynamics
which affects the creation process in itself.
Resistance perceived by entrepreneurs is something that poses
potential disruptions to their plans of how to realise their venture ideas
and calls for their attention, thus drawing their focus from their original
planned venture creation activities. That is, when something is somehow
perceived as interfering with the development of the venture, resistance
is perceived. Perceived resistance is in other words specific to an
entrepreneur’s perceptions. Two entrepreneurs could experience the
same event, yet one could perceive it as resistance while the other
perceives nothing potentially goal-disruptive about it.
To put this in a theoretical context, a Schumpetarian view of
creative destruction
9
can be used where, taking a view of the
entrepreneurs, stakeholders that resist their creation efforts are perceived
as opposing the dynamic of venture creation. With this view, old and
8
1a: to break apart: rupture b: to throw into disorder 2: to interrupt the normal course or unity (Merriam-Webster, 2008).
9
The evolutionary process “that incessantly revolutionizes the economic structure
from within, incessantly destroying the old one, incessantly creating a new one”
(Schumpeter 1942: 83).
22
established
10
actors likely have an incentive to keep the status quo of the
old ways, thus making it difficult for new ideas or products to take hold
(Schumpeter, 1942). However the old might not always behave
according to Schumpetarian economics, and the old ways might not even
be a relevant perspective depending on who the stakeholders are. As
entrepreneurs depend on and interact with a broad set of stakeholders
from family and friends to government authorities and venture
capitalists, how can we judge them along the same measure? Which of
those stakeholders represent the “old”? In fact here lies a key issue as it
is not the perceived quality or utility of an idea that makes it a success.
Instead Granovetter proposes that those ideas that survive and become
widely adopted are those with the strongest support, he states: “…ways
of doing things begin for reasons that relate to the various purposes of
the actors involved and to the structures of relations they are embedded
in” (1973). This turns attention back again to Figure 1-1 where
entrepreneurs must navigate and cope with disruptions more in a
Granovettarian way than a Schumpetarian. From a perspective of the
acquisition of resources, stakeholders could have different purposes and
goals in their interactions with entrepreneurs’ venture creation attempts.
Entrepreneurs must thus try to unravel those purposes or at least cope
with their influence on the creation process in order to cope with
disruptions and survive.
With this view it is also apparent that different stakeholders are of
differing importance to a venture at different stages
11
of its development.
As it opens up to situations of dependency, particularly those
stakeholders who are critical have the possibility to influence a new
venture. This possibility means that they can resist, maybe to support or
10
The “old and established” here refers to for example the current industry,
political decision-makers or others who have an interest in upholding the status quo.
11
Although there are different phases in the development of a new venture,
which they are and the order in which they come varies and is unpredictable (Van de
Ven, 1999).
23
maybe to disrupt the venture idea. In the face of such perceived
resistance from stakeholders, entrepreneurs’ responses affect the
outcome of the evolving venture, both whether it survives and regarding
the direction it takes. This is empirically and theoretically important
given that as many as 40 percent of those entrepreneurial initiatives that
are launched fail at some point during the start-up phase (Delmar et al.,
2004b; Ranft & O'Neill, 2001), but we know little of the dynamics
involved in these failures (Aldrich, 1999).
The purpose of this thesis is thus to explore:
• Where and why do novice entrepreneurs perceive resistance to their
venture creation efforts?
• How do novice entrepreneurs cope with perceived resistance?
and to describe:
• Which effects do perceived resistance have on outcomes of venture
creation processes?
Issues of design
As a phenomenon, the purpose of this study was empirically
derived, observed in my previous work as a senior associate for a non-
profit organisation
12
working with innovative projects in multiple
12
The Zero Emissions Research and Initiatives (ZERI), aims at building clusters of
industries where one industry uses the unused output, or waste, of another as inputs
in its own processes. At the same time as this cluster is formed, unwanted by-
products, such as dioxin and other lethal substances are removed. ZERI ventures
were radical and with innovative height, implying that existing production processes
needed to be altered and remodelled. This often gave rise to strong reactions on
behalf of executives within the industry, while venture capitalists and government
officials were unwilling to consider such ventures. From the perspective of the
entrepreneur these reactions were perceived as resisting his or her idea. The
stakeholders on the other hand might have had an interest in keeping a status quo,
keeping existing production processes as they often had sunk costs in those. In the
case of the government decision makers, they could have perceived a risk in
24
cultural settings. Upon leaving the non-profit organisation in 2000, I
discussed at length with Prof. MD. Carl-Göran Hedén
13
about the
problems we had come up against in the projects. Prof. Hedén’s idea was
to study project bottlenecks as a way to explore and build an
understanding of the dynamics of problems met by entrepreneurs. With
this idea in mind I began a literature review of the field of
entrepreneurship research, and my initial interest quickly evolved into
entrepreneurs’ perceived resistance to their ventures.
This phenomenon could be studied at different stages in the
venture creation process, but the focus I have chosen is on the very first
steps of venture creation – from the first moment an entrepreneur
decides to act on an idea. This first stage is relatively limited in time and
sets specific demands on novice entrepreneurs. It is also of key
importance given the high rate of termination among start-ups.
In Reynolds and Miller’s definition of this period as gestation
(1992) they take a perspective of individual entrepreneurs’ actions as it
“depicts many of the factors that affect the efforts of nascent
entrepreneurs to bring their businesses into existence as well as the
length of time involved in their start-up efforts” (Reynolds, Carter,
Gartner, & Greene, 2004: 265). This definition is in line with the
perspective taken in this study and with the specific focus on
entrepreneurs actions it differs from other similar perspectives such as
preorganisation (Katz et al., 1988), start-up (Vesper, 1990), and
organisational emergence (Gartner, 1993).
supporting untested and complex technologies or processes with a high uncertainty
of success. For more information see www.zeri.org.
13
Prof. Hedén, MD, is a member of the Club of Rome, former head of the
UNEP/UNESCO/ICRO Microbiological Resource Center (MIRCEN), professor of
microbiological engineering at the Karolinska Institutet and also Chair of the ZERI
Scientific Advisory Council (1994-1997).
25
These first attempts at venture creation by entrepreneurs have
path dependent implications on later development of their ventures
(Cooper, Gimeno-Gascon, & Woo, 1994). An understanding of gestation
could thus help improve our knowledge of how ventures grow and
develop. Despite this, the gestation of new ventures is an understudied
area of research (Reynolds et al., 2004). In particular the first steps of
gestation are more or less uncharted territory. Gartner puts this
succinctly by stating that “the majority of entrepreneurship scholars
appear to be studying the problems of newer and younger firms” (2004:
207), as opposed to studying emergence of new ventures. This is due to
the difficulty in capturing empirical material from very early points in
venture creation. Identifying conception of an entrepreneurial venture is
complex with the most common first event being the entrepreneur’s
personal commitment. Commitment however follows an earlier and
more elusive activity of speculation whether an idea is viable. A starting
point in this has been said to be the appearance of the “entrepreneurial
gleam in the eye” (Reynolds et al., 1992: 416).
The methodological difficulty of finding and following
entrepreneurs from the instance that “entrepreneurial gleam” appears in
their eyes can probably partly explain certain biases in entrepreneurship
research. First of all, a majority of existing studies of entrepreneurs’ early
start-up attempts are based on retrospective methods. Secondly,
selection biases are problematic as they have retrospectively looked at
successful entrepreneurs thus missing those that were not successful.
These retrospective and selection biases of successful
entrepreneurs must be considered when looking at much of previous
research (Davidsson et al., 2003). Consequently there is a lack of
exploratory studies of entrepreneurs’ initial actions in venture creation.
Instead research has looked at activities which are believed to be of
importance or not for the success of venture creation. Examples of such
activities are legitimacy through business planning (Delmar & Shane,
2003) and patterns of sets of activities (Lichtenstein, Carter, Dooley, &
26
Gartner, 2007). Moreover the focus of these activities and outcomes are
on the later stage of start-up (Carter et al., 1996; Delmar et al., 2003;
Delmar & Shane, 2004a; Gatewood, Shaver, & Gartner, 1995; Van de Ven,
1999), meaning that in the end, unfolding gestation activities in real time
are largely unexplored.
With the lack of exploratory research on entrepreneurs’ gestation
activities there is little empirical research to turn to in order to begin
unravelling how entrepreneurs perceive and respond to resistance. This
is an underlying problem for any research studying gestation and for
this study in particular. The manner in which I dealt with it was to begin
with a pre-study (see Appendix A) parallel with doing an in-depth
theoretical overview. With the learning lessons from the pre-study I set
up four case studies of novice entrepreneurs with innovative ideas that I
was able to follow from an early stage in their creation attempts. The
study followed two interacting tracks which partly overlapped. It began
with a theoretical one where I built a deductive model which served to
deepen my understanding as well as to use as a starting point for the
empirical study, both in gathering material and in the analysis. The
empirical track in turn built an inductively derived model. As the study
progressed, the inductive modes became more and more pronounced as
is shown from chapter 5 and onwards.
1.1 Delimitations
Throughout this thesis I point to specific delimitations I make in
context where they happen, mainly focused on considerations in relation
to theory and research design. In addition to those delimitations that I
make in the text to come, there are some which are appropriate to
present here.
27
Perceptions
Entrepreneurs’ perceptions of resistance from stakeholders to
their new ventures will be studied. Entrepreneurs in this context are seen
as the founders and active managers of new independent ventures. Only
their perceptions of stakeholders’ resistance to their ventures are studied.
Other stakeholders’ perceptions are thus not considered in this study.
Individual differences
As a consequence of focusing on entrepreneurs’ perceptions,
individual differences permeate the study. To try and explain these
differences, individuals’ identities and sense-making (Weick, 1979) could
be used. However it is not within the scope of this study to build a
model of individual entrepreneurs’ differences and the impact of this, or
try to categorise differences and individual characteristics. The aim with
this study is instead to build an understanding of aspects of perceived
resistance – where and why they are perceived and how entrepreneurs
cope with them. It is thus enough to conclude that individual differences
exist and as such offer depth and variation.
Gestation period
This study is built on four case studies of novice entrepreneurs
during their first creation attempts. This places the study within the
gestation period and it is not brought further into what could be for
example a period characterised more by growth.
Goal-setting and planned behaviour
The pre-study indicated among other things that entrepreneurs
set goals and make plans for how to achieve those goals. Furthermore it
pointed towards those goals and plans as sources of, or areas where
perceived resistance could arise. After carrying out the pre-study and
28
writing the research proposal I chose this way of viewing the manner in
which entrepreneurs go about to realise their venture ideas. This implies
that venture creation through a different mode of for example
effectuation, as proposed by Sarasvathy (2001), is not conducive to the
view taken as it implies that entrepreneurs do not plan but instead build
their ventures through a creative process where they constantly adjust
and adapt. As is evident from reading this study, goals and plans are
integral aspects of novice entrepreneurs’ venture creation attempts. Also
when considering that the entrepreneurs studied here are chosen from
business labs and courses on venture creation, the planning aspect and
thus causation becomes further enhanced. This is so as business labs and
such courses rely on business plans and set goals to evaluate and guide
participating ventures.
1.2 Outline of the study
This section concludes Chapter 1, and has provided an
introduction to, as well as an overview of this study. Next, in Chapter 2, I
build the theoretical framework which lays the foundation for the
empirical study. The chapter discusses the issue of resource constraint
and entrepreneurs personal resources and abilities to overcome and cope
with those constraints. A key aspect which influences coping is
entrepreneurs’ perceptions of both the constraint and their possibilities
of successful coping. This is discussed in some detail and integrated into
the conceptualisation of perceived resistance. The chapter is concluded
with a theoretical model.
Chapter 3 presents the research design, including methodological
considerations, gathering of empirical material and the consequent
analysis. Part of the chapter is also dedicated to an evaluation of the
quality of the study.
29
In Chapter 4, the empirical material is introduced through a
presentation of the four cases. These are written in such a way that the
resistance which the entrepreneurs perceive forms a red thread
throughout the cases. This is done in order to highlight perceived
resistance and facilitate an understanding of the process of each case, of
the issues facing the entrepreneurs – their perceptions and responses as
well as their coping attempts. In addition to the cases, Appendix E also
includes all the instances of perceived resistance that were observed in
the study. This serves as a guide to aid the reader gain an overview
while reading the cases, as well as the analysis.
The analysis is described in Chapter 5 which is separated into
three sections. The first is an empirical analysis which uses the
theoretical model as an outline, but which takes the analysis beyond this
to reveal the dynamics of perceived resistance. The second section
returns to the theoretical framework and uses this to discuss the
empirical findings. Finally the third section summarises Chapter 5 into
the inductively derived model of perceived resistance. At a number of
instances throughout this chapter I point to unresolved issues and signs
of deeper aspects influencing the dynamics of perceived resistance.
These issues are the focus of Chapter 6 where an additional concept and
theoretical field is introduced to discuss how entrepreneurs’ energetic
resources moderate the dynamics of perceived resistance. This chapter is
divided into two main sections. The first lays out the theoretical
framework and relies heavily on cognitive theory. The second is a
discussion of the findings from Chapter 5 in light of this new theoretical
framework.
Finally in Chapter 7 I summarise the study and discuss the value
of the findings to practice and theory, as well as opportunities and
suggestions for future research.
30
31
2 Creating new ventures
This chapter builds a theoretical framework of entrepreneurship
focused on issues pertaining to the start-up of new ventures.
Entrepreneurs’ acts or attempts to create new ventures are the
underlying focus. Specific attention is directed towards understanding
the theoretical concerns of where and why entrepreneurs perceive
resistance to their ideas, as well as how they deal with perceived
resistance.
To begin with, the definition of resources, and what they mean to
entrepreneurs are discussed. Next, I take a resource dependence
perspective to discuss the relationship between entrepreneurs’ need for
resources and external actors’ possession of resources. Following this, I
examine entrepreneurs’ perceptions of resistance using cognitive
appraisal theory to discuss how intentions and motivations influence
these perceptions. Finally, I turn to coping strategies where social capital
and social skills are discussed as part of novice entrepreneurs’ resources
to cope with resistance.
The chapter is concluded with a deductively derived theoretical
model of perceived resistance which is then used to analyse empirical
material.
2.1 Resources – the need to have them
Access to resources is commonly characterised as an integral part
of ting up a new venture. From the moment an entrepreneur comes up
with an idea, resources are needed if the idea is to be realised. Exactly
32
what sort of resources that are needed at different moments depends on
aspects such as type of product or service, and the characteristics of the
markets in which venture ideas are positioned. Resources that a firm can
use to devise strategies for efficiency and effectiveness include “all
assets, capabilities, organizational processes, firm attributes, information,
knowledge” (Barney, 1991: 101). In terms of venture creation, Green and
Brown (1997) classify needed resources as follows: physical, human,
social, organisational and financial. This is an applicable classification for
this study and is used when gathering empirical material as well as
when structuring it.
In an entrepreneurial context, there are two sources of resources:
those owned and those controlled by the entrepreneur. Most new
ventures start out with very limited resources of their own and to
survive, entrepreneurs must gain access to external resources which they
do not own but which are needed in the start-up process. Through access
to resources, entrepreneurs can thus control the use of resources they do
not own. Stakeholders are motivated to provide their resources to a new
venture if they believe that it is competent, efficient, effective, worthy,
appropriate, and/or needed (Zimmerman & Zeitz, 2002). Herein lies the
crux of the matter, how to gain control over something which is not in
ones’ possession, particularly if the resource needed is perceived as
critical to the realisation of the idea?
Baker and Nelson propose that a view of resources as objectively
needed is incorrect as firms can use bricolage strategies to make do with
what is at hand (2005). With this they mean that it is not about the
acquisition of resources, but of what is seen and combined into
resources. I agree with their view of resources, but I see it more as a
coping strategy which can be chosen as a generic strategy, or as a
strategy for certain situations depending on the context. In earlier work
on bricolage they state that entrepreneurs choose what they believe to be
the best strategy depending on the situation, whether bricolage or
resource-seeking (Baker, Miner, & Eesley, 2003).
33
The issue of resources as objectively or subjectively needed
furthermore points to the question of which approach to take when
studying access to resources. There is more than one way to approach
this, for example through a Weickian sensemaking perspective (Weick,
1979), by taking a view of dynamic capabilities (Eisenhardt & Martin,
2000) or at a more fundamental level, a resource based view (Penrose,
1959). However, the resource perspective in this study focuses on the
perceived asymmetry of relations and consequent perceptions of
resistance. This means that it is both the need for resources which drives
entrepreneurs to seek them from stakeholders where dependent ties
arise, as well as the risk of misappropriation of resources as a
consequence of dependence that must be satisfied by the theoretical
perspective of choice in this study. Given this, I chose to take a resource
dependence approach such that is proposed by Pfeffer and Salancik
(1978) as it specifically addresses the issue of asymmetry and resource
needs. In addition to resource dependence theory, and as I will discuss in
detail further on, theories on social networks will be used to view how
ties are formed and their characteristics which links into strategies for
coping. This approach to theories, combining resource dependence with
social networks has recently been adopted in entrepreneurship research,
for example in research into tensions that occur at the level of tie
formation. Research has focused on tensions that face entrepreneurial
ventures in need of resources while risking loss of their own resources to
corporate “sharks” (Katila, Rosenberger, & Eisenhardt, 2008) and builds
on a growing amount of research based on resource dependence theory
(see for example: Gulati & Sytch, 2007).
This sets the stage for resource issues facing entrepreneurs during
gestation. Resources can be viewed as both objectively and subjectively
given, it is the perceptions of the entrepreneurs and their coping
strategies that matters to this study. Thus the framework within which
entrepreneurs act is described using a resource dependence perspective.
34
2.1.1 Dependence, control and entrepreneurship
This section discusses resource dependence theory and its
implications to new venture creation, specifically to entrepreneurs’
perceptions of, seeking and gathering critical resources. The resource
dependence argument contains two elements. Firstly, actors are likely to
respond more to those actors in the environment that control critical
resources – this is the issue of external constraint. Secondly, actors
attempt to manage these external dependencies, both to survive, and to
achieve more autonomy from external constraints (Pfeffer, 1982).
Resource dependence theory claims that:
“organisational behaviours become externally influenced
because the focal organisation must attend to the demands of
those in its environment that provide resources necessary and
important for its continued survival… organisations will (and
should) respond more to the demands of those organisations or
groups in the environment that control critical resources”
(Pfeffer, 1982: 193).
This implies that when trying to gain control of external resources
entrepreneurs have a challenge to manage, and must measure the need
for external resources against the risk of losing control over their
ventures.
At the same time as attempting to gauge these factors against each
other, entrepreneurs’ choices are limited to the extent that certain
resources are critical to the survival of their ventures. “It is the fact of the
organisation’s dependence on the environment that makes the external
constraint and control of organisational behaviour both possible and
almost inevitable”
14
(Pfeffer et al., 1978: 43). So when attempting to create
14
The key issue for this study is stakeholders’ possibility to exert constraint and
control, whether it is inevitable or not I leave to Pfeffer and Salancik and others to
debate.
35
new ventures, at some points entrepreneurs are likely to find themselves
in situations where they must consider giving up a certain amount of
control in exchange for resources.
The external constraint imposed by stakeholders in turn leads to
different interdependencies. One such interdependence focuses on
outcome – the results achieved by one actor are interdependent on those
of another actor. Another form of interdependence is connected to
behaviour where the activities of one actor are dependent on the actions
of another actor (Pfeffer et al., 1978). Entrepreneurs do not act in a
vacuum, they relate, more or less interdependently with other actors.
When taking a view of venture creation as presented in Figure 1-1 –
starting with intention and then focusing on surviving long enough, in
the face of disruptions, so that a venture idea can be realised –
understanding the role of interdependence in the relations between
entrepreneur and stakeholder is a key issue.
Entrepreneurs’ level of vulnerability to influence from
stakeholders is governed by their dependence on certain types of
exchanges. Two dimensions of resource exchange affect this dependence:
(1) the relative magnitude of the exchange and (2) the criticality of the
resource to the entrepreneur. The relative magnitude is measured by the
proportion of total inputs, or total outputs accounted for by the
exchange. Entrepreneurs with a focus on fewer markets would thus face
a higher dependence on specific customers than with a focus on multiple
markets. New ventures requiring fewer primary inputs would, in a
similar fashion, be more dependent on suppliers than if they had
multiple inputs. The second dimension, criticality of the resource,
measures the ability of an actor to continue functioning in the absence of
a particular resource or market.
In other words, the problem for an entrepreneurial venture
concerning resources is not that there are critical resources, but the
supply of those very resources. If supply is abundant and stable, the
entrepreneur will have few restrictions and can act without concern for
36
resources, even when in a position of high vulnerability as they can
always find the resource elsewhere. However, when supply is limited,
production instability and survival uncertainty become dilemmas in
building the venture.
“An organisation’s attempts to satisfy the demands of a
given group are a function of its dependence on that group
relative to other groups and the extent to which the demands of
one group conflict with the demands of another. Three factors
are critical in determining the dependence of one organisation
on another. First, there is the importance of the resource, the
extent to which the organisation requires it for continued
operation and survival. The second is the extent to which the
interest group has discretion over the resource allocation and
use. And, third, the extent to which there are few alternatives,
or the extent of control over the resource by the interest group,
is an important factor determining the dependence of the
organisation” (Pfeffer et al., 1978: 45-46).
This refers to situations where resources are limited. In such
situations stakeholders can manipulate resources in two ways: through
discretion over resource allocation, or over resource use (Pfeffer et al.,
1978). The first type is a withholding strategy where a stakeholder does
not provide a firm with the requested resources. The second type is a
usage strategy where a stakeholder continues to provide the requested
resources, but does so with strings attached (Frooman, 1999).
However, relations brought about through dependency situations
are asymmetric and assumed not to be stable. This means that the
entrepreneur as the dependent or less powerful actor has incentives to
undertake actions to address this imbalance (Blau, 1964; Emerson, 1962;
Pfeffer, 1982). In order to do this, entrepreneurs have some leverage as
they are in possession of social, human and organisational resources.
Such intangible resources can in turn be exchanged for more tangible
ones, where the complexity of the resources indicates the ease with
37
which they can be exchanged (Bourdieu, 1986; Brush, Greene, & Hart,
2001; Coleman, 1988).
Entrepreneurs’ need for critical resources and the dependent
situations that this could potentially lead to vis-à-vis their stakeholders
constitute a basic part of the theoretical framework presented here. As
such, resource dependence theory indicates that those relations with
stakeholders in possession of critical resources of limited supply are of
particular interest. These are asymmetric relations, characterised by
greater dependency with lesser possibilities of managing and balancing
the asymmetry. Entrepreneurs may perceive a loss of apparent control in
such relations as potentially goal-disruptive to the planned behaviour
which is a part of venture creation; in the context of this study this is
characterised as perceived resistance from the stakeholder.
The focus of this study is on entrepreneurs’ attempts to build new
ventures; the micro-to-meso transition through the eyes of the
entrepreneur, or the boundary creating activities which builds the new
venture as a separate entity (Aldrich, 1999). One problem with resource
dependence theory is that it studies relationships between organisations,
and thus dependency appears on a meso-level between a venture and its
stakeholders. This study offers a way to bridge the gap between micro
and meso levels and I aim to do this by complementing resource
dependence theory with a view of entrepreneurs’ coping and their use of
social capital and social skills. This also complements resource
dependence theory as it focuses on the dyadic relations of entrepreneur-
stakeholder, thus directing attention to asymmetric resource allocations
and the needs of entrepreneurs.
2.2 Entrepreneurs’ perceptions of resistance
The concept of perceived resistance is new in the field of
entrepreneurship, but it has been used in other fields of research. In
38
particular, resistance to change has been extensively studied, for
example as organisations’ resistance to reversals in the direction of
change in strategy and structure (Miller & Friesen, 1980); how employees
resist change imposed by top management (Powell & Posner, 1978). In
change studies, resistance has been defined as both the intentional acts of
commission (defiance) or omission (Ashforth & Mael, 1998), and as a
certain kind of action or inaction (Brower & Abolafia, 1995). Resistance to
change studies have traditionally characterised resistance as “a reactive
process where agents embedded in power relations actively oppose
initiatives by other agents” (Jermier, Knights, & Nord, 1994: p 9). Other
research has questioned this view of resistance as a generically negative
aspect where employees should be convinced to see the correct thing and
agree to change (Watson, 1982). In the case of employees and managers,
managers will thus see employees as obstacles. This is problematic as
one reason for employees to resist top management is that they want
them to pay attention to critical issues for the organisation to succeed
(Dutton, Ashford, Neill, Hayes, & Wierba, 1997); resistance to change is
thus a proactive tool for the betterment of the whole organisation.
This study focuses on the resistance that entrepreneurs perceive
while attempting to create their new ventures. As such, the concept has
similarities to resistance to change if one, for example, sees a new
venture as change agent in an industry. However, it differs in the sense
that resistance is that which entrepreneurs perceive. To understand this I
turn to cognitive appraisal theory where perceived resistance is related
to hassles, defined as episodes of disrupted goal-directed behaviour
(Lazarus, 1990).
The approach I take also differs from earlier entrepreneurship
research which has used constructs such as obstacles (Macmillan, Block,
& Narasimha, 1986), barriers to market entry (Gartner, Gatewood, &
Shaver, 1991; Kouriloff, 2000; Vesper, 1990), problems (Terpstra et al.,
1993), and challenges (Baum & Locke, 2004).
39
These earlier studies use concepts which reflect their view of what
opposes entrepreneurs’ venture creation efforts. Two of them use
barriers
15
and obstacles
16
which are metaphors for a physical blockage
like a wall. Kouriloff for example define barriers as ”any condition,
external or internal, adverse to creating a new business” (2000: 61), thus
viewing barriers as entirely negative to venture creation and for that
purpose the wall metaphor seems appropriate.
Problems are the opposite of barriers and obstacles in the sense
that the concept is vague and refers to any issue facing a new venture.
Terpstra and Olson ask CEOs about “their firms' most significant
problems at two points in time—during the start-up stage and during a
later growth stage of development” (1993: 8). This potentially captures
broader issues than the concept of barriers but methodologically their
study suffers from retrospective bias as it focuses on what the CEOs
perceived as “the most significant problem” a number of years earlier.
Challenge is in turn related to issues of appraisal and stress,
where eustress
17
leads to a challenge approach. Baum and Locke see
certain characteristics of entrepreneurs’ situations as causing challenging
situations. These situations are “(a) extreme uncertainty (newness of
products, markets, and organizations; lack of information), (b) resource
shortages (financing, knowledge, operating assets, and legitimacy), (c)
surprises, and (d) rapid change” (Baum et al., 2004: 588). The definition
15
“a: something material that blocks or is intended to block passage b : a natural formation or structure that prevents
or hinders movement or action
” (Merriam-Webster, 2008)
16
“from obstare to stand in front of … something that impedes progress or
achievement” (Merriam-Webster, 2008)
17
Selye (1974; 1976) distinguishes between eustress and dystress. He equals stress
with arousal and claims that a certain amount of arousal is good (eustress), while too
much is bad (dystress). Lazarus (1993) goes on to propose that dystress leads to a
threat approach and eustress leads to a challenge approach. Threat is a response
coming from a feeling that not much can be done, while challenge comes from a
feeling that “I can cope with this”.
40
of the concept of challenge and the legacy from stress research shows
that it differs from the other studies in the sense that it does not imply a
negative obstacle. Instead it points to something that needs attention to
deal with. Given this, Baum and Locke’s challenge concept is similar to
perceived resistance. However, there is a crucial difference as the
characteristics of the situation that Baum and Locke discuss is a state
somehow imposed from the outside as opposed to resistance which is
something perceived by the entrepreneur.
In summary, the concepts used in entrepreneurship research
resemble the criticised resistance to change studies in the sense that they
describe a force opposing the entrepreneur as something negative and
external. These concepts embody a negative connotation, except for
Baum and Lockes’ challenge concept. Taking a view of obstacles, barriers
or the like does not capture the complex dynamics of new venture
creation and the forces opposing entrepreneurs. Defined as disruptions,
internal or external, that entrepreneurs face and perceive as working against
their efforts at venture creation, perceived resistance, the concept used in
this study, offers a more encompassing and useful alternative.
2.2.1 How perceived resistance arise
Resistance perceived by entrepreneurs poses potential disruptions
to their goals of how to realise their venture ideas. This calls for their
attention and distracts their focus away from planned venture creation
activities. The type of goal which is of interest here is the task-level goal
which involves immediate goals relating to the performance (Kluger &
DeNisi, 1996) of their ventures. The disrupted goal’s relevance to overall
performance, the degree of incongruence resulted from the disruption,
and the entrepreneur’s personal reasons for pursuing the idea, influences
how the goal disruption is evaluated (Lazarus, 1991). Thus, when
something is perceived as interfering with the development of the
venture, resistance is perceived. However, perceived resistance is not an
41
objective situation or something perceived by others, it is specific to an
entrepreneur’s perceptions. This is important to repeat and emphasise –
two entrepreneurs experience the same event differently – one may
perceive it as resistance while the other may perceive no potential goal
disruption. This is equally relevant whether the disruption is one in the
immediate vicinity of the entrepreneur or an environmental jolt
(Venkataraman & Van de Ven, 1998) concerning an entire industry and
even up to a global scale.
In these situations, stress levels caused by resistance depend on
how an entrepreneur perceives the significance of goal disruptions to his
or her values, beliefs, goal commitments and situational intentions
(Lazarus, 1990, 1999). It has been found that an initial stimulus evokes an
evaluative reflex, that is, a primary appraisal which seems to occur
before a higher order cognitive appraisal takes place. A negative
evaluation is interpreted as a threat (Duckworth, Bargh, Garcia, &
Chaiken, 2002) but as evaluations are individual, the same situation
could be interpreted as a challenge (Lazarus, 1999) depending on
individual factors such as for example self-efficacy (Bandura, 1997),
constructive thinking (Epstein & Meier, 1989), and hardiness (Maddi &
Kobasa, 1984). It could even be interpreted as benign, neutral or
irrelevant.
In an entrepreneurial context, a “threat” implies that something is
about to take place that risks harming an entrepreneur’s venture idea
where the entrepreneur feels less confident in successful coping. A
“challenge” on the other hand is something that the entrepreneur feels
confident to be able to cope with
18
. Whether an event is interpreted as a
threat or a challenge, in both cases it signals that something risks the
achievement of a task-level goal and alerts the entrepreneur that
“something is amiss”.
18
This discussion uses Lazarus’ (1993) descriptions of ”threat” and ”challenge”
and applies them to an entrepreneurial context.
42
2.2.2 The influence of perceived resistance to venture creation
One of the positive outcomes of perceived resistance is, for
example that it forces entrepreneurs to further develop products or
services or look for other sources of support in order to overcome the
perceived resistance. It may also cause entrepreneurs to drop ideas that
are unlikely to ever become successes and in that way free up resources
for other ventures. Negative outcomes on the other hand may be, for
example, the diversion of efforts from planned activities to fire fighting,
eventually leading to a poorer result than expected, or even the
termination of a viable idea. What these two outcomes have in common
is that they depend on entrepreneurs’ perceptions and consequent
coping strategies. The outcome in other words depends on individual
entrepreneurs.
Situations where resistance is perceived are, for example when
relating to stakeholders
19
who may resist a venture due to a positive
intention of wanting to support it or on the other hand due to a negative
intention of wanting to disrupt it (MacMillan, 1983). An example of
resistance with a positive intention is a situation of errors in the
development of an innovation that risk snowballing to crisis proportions
(Van de Ven, 1999). A stakeholder with an interest in seeing a venture
succeed may resist with an aim to influence the entrepreneur’s strategy.
Resistance with a negative intention may be for example situations
where ventures need critical resources, but where stakeholders restrict
access to those very resources. Other examples of negative intentions are
stakeholders that see ventures as competitors, while at the same time
19
The stakeholders of an emerging venture may be positive or negative, thus
wanting to aid or disrupt its realisation, or they could ignore it or be unaware of its
existence or need. Various dynamics influence this process, where information
asymmetry to the benefit of the entrepreneur for example could lead to a careful and
vigilant approach towards the entrepreneur (Amit, Glosten, & Muller, 1990). This
study however exclusively takes the perspective of the entrepreneurs when
examining perceived resistance.
43
acting as gatekeepers of a critical resource or a critical relation.
Restricting access to such resources would be a way of obstructing
venture creation (MacMillan, 1983). On the other hand, acts of
stakeholders that entrepreneurs perceive as resistance do not have to be
intentional. Stakeholders do not even have to be aware of an
entrepreneur’s or venture’s existence for entrepreneurs to perceive them
as resistance.
Resistance may also come from stakeholders with closer relations
to the entrepreneurs. As the focus here is on early start-ups, such
stakeholders could be partners, first employees, or family. In addition to
these stakeholders, there is also the entrepreneur him- or herself within
whom resistance might arise. With this view, perceived resistance does
not necessarily have to come as an unexpected and externally generated
event. Examples of such resistance could be where an entrepreneur
wants to achieve something outside the venture; this would then take
attention away from the venture and the venture creation activities could
become a perceived burden to the entrepreneur, pitting it against other
aspirations. Family and children is one example of this where a desire to
spend time with family could limit available attention for venture
creation. The choice to spend time with family is not where resistance is
perceived, but the consequences of making this choice could lead to
perceptions of resistance in situations where it would not have been
perceived otherwise.
The question of where resistance arises is also likely to be related
to where in time or stage an emerging venture is. The concept of
perceived resistance implies that different stakeholders have different
weight and thus give rise to different levels of perceived resistance. As a
new venture emerges, the importance of different categories of
stakeholders varies over time. Those stakeholders with the most
importance at a certain stage likely also have the greatest potential to
cause perceived resistance.
44
2.3 Coping – resources and strategies
To recapitulate, so far I have discussed how entrepreneurs with
limited resources and no previous experience of venture creation must
gain access to resources outside their control in order to realise their
venture ideas. This leaves them vulnerable to external control from
stakeholders. If access to critical resources is restricted, and those
resources are unavailable elsewhere, then there is a risk that
entrepreneurs perceive it as resistance to their venture creation efforts.
For entrepreneurs with no personal resources, their social capital
may be the only resource they possess themselves (Brush et al., 2001).
Their social skills in effect hold the key to their ability to use their social
capital and cope with the perceived resistance.
This is the topic of this section, how entrepreneurs cope, and
specifically how they cope without any other personal resources than
possibly their social capital and with no previous experience of new
venture creation. The reason why I focus on entrepreneurs without any
previous experience of new venture creation is that existing research
shows that prior experience appears to be a reason why new ventures
succeed (Rotefoss & Kolvereid, 2005).
Coping is a concept which is discussed in literature in relation to,
for example, strategy and entrepreneurial activities, but little has so far
been done to explore how entrepreneurs cope. When coping is studied, it
is relation to failure and entrepreneurs coping with failure (Shepherd,
2003; Singh, Corner, & Pavlovich, 2007). When using the concept of
coping in his study I define it as “cognitive and behavioural efforts to
manage specific external and/or internal demands that are appraised as
taxing or exceeding the resources of the person” (Lazarus & Folkman,
1984: 141). In short, as “the effort to manage psychological stress”
(Lazarus, 1999: 111) where appraisal decides how individuals decide to
cope. Accordingly, people respond differently to events depending on
how the significance of these events is appraised (Lazarus, 1990, 1999).
45
This means that such significant events involve difficult situations which
entrepreneurs perceive as requiring much of their available resources,
maybe even more than they have. Coping refers to their emotions,
thinking or concrete actions to deal with those situations.
Concerning typologies of coping, research is yet to agree upon
one which can be applied to all kinds of stressful events (Folkman &
Moskowitz, 2004). In order to further an understanding of how
entrepreneurs cope it is however beneficial to develop a baseline view of
likely coping strategies. There are two main type of coping, that is
problem-focused and emotion-focused strategies (Folkman et al., 2004).
In addition to this, I concur with the literature on how entrepreneurs rely
on their social capital for support (see for example Davidsson et al., 2003;
Hite & Hesterly, 2001) and thus also include social support as a third key
coping strategy (Passer et al., 2007). Problem-focused coping strategies aim
to deal with the situation itself in order to change it or make it less
stressful. This is done, for example, by taking action to deal with the
stressor, seeking instrumental support, suppressing competing activities,
exercising restraint, and planning. Emotion-focused coping strategies focus
on emotional responses that arise as a consequence of the situation.
Attempts to manage these responses can for example involve
suppression, restraint, acceptance, denial and disengagement, positive
reinterpretations, acceptance, denial, escape-avoidance, wishful thinking,
and controlling feelings. Finally the strategy of seeking social support
involves looking for help and guidance, emotional support, affirmation
of worth, and tangible aid such as the acquisition of financing.
Problem-focused and support seeking strategies are favoured
when there is some way to control the situation (Passer et al., 2007).
Emotion-focused coping however is a favoured strategy when the
likelihood of control is low. This can be explained by turning to the
outcome of coping, where the result of emotion-focused coping is a
change in individuals’ interpretation of circumstances, for example,
46
giving up a sought after goal or the denial of a certain threat (Lazarus,
1999).
Novice entrepreneurs can use different types of capital as a form
of resource in their coping strategies. The following section will examine
these forms of capital before the discussion of coping strategies is
continued in section 2.3.2.
2.3.1 Capital – a resource at hand (or not...)
Specific resources for venture creation were previously
introduced as physical, human, social, organisational and financial
(Greene et al., 1997). A different word for such resources is capital
20
as
introduced by for example Bourdieu (1986) and Coleman (1988). Capital
can take monetary and non-monetary forms, as well as tangible and
intangible forms, with each form carrying different meaning. Bourdieu
(1986) proposed three forms of capital:
• Economic capital – financial resources and assets
• Cultural capital – education and knowledge
• Social capital – the sum of potential resources arising from a
network of relationships.
Coleman described social capital as carrying elusive features due
to its embeddedness in relations. He also expanded on Bourdieu’s
typology, and added physical and human capital.
• Physical capital – completely tangible and in a material form
• Human capital – not as tangible as it is embodied in an individual’s
skills and knowledge. (Coleman, 1988)
20
When using the concept of forms of capital, I see it as a resource or an asset,
social capital is for example a resource which is in line with Bourdieu’s (1986) and
Coleman’s (1988) use of the same.
47
From an entrepreneurial perspective, one could also add the
entrepreneur’s idea as a form of capital, a kind of innovation capital. The
idea is connected to the recognition of an opportunity and the start of the
process of venture creation. When forming an idea and then deciding to
pursue it, entrepreneurs use their capital to obtain other resources,
enabling the establishment of new ventures.
In addition there has even been proposed a specific type of capital
relating to entrepreneurs, namely:
• Entrepreneurial capital, defined as the multiplicative function of
entrepreneurial competence and entrepreneurial commitment
(Truls, 2002). The reasoning behind this multiplicative effect is that
both competence and commitment are necessary components when
creating a new venture. This type of capital involves an individual’s
or a team’s potential for future entrepreneurial behaviour, and is
thus a forward looking predictive construct and not something the
entrepreneurs can use here and now.
All these forms of capital probably work in concert, but for an
entrepreneur attempting to create a new venture, multiple studies show
that social capital is the most critical (see for example Cooper et al., 1994;
Davidsson et al., 2003; Nahapiet & Ghoshal, 1998).
Novice entrepreneurs, who lack experience and have limited
financial assets, are restricted in the available means of dealing with
resistance from external constituents, and are particularly dependent on
using their social capital (Brush et al., 2001). Social capital is used
extensively in the founding of new ventures (Baker et al., 2003; Baker et
al., 2005; Birley, 1985) and forms nexuses of relationships, which
influence the pattern of organisational mortality (Fichman & Levinthal,
1991). An entrepreneur’s skills and objectives play a major role in
deciding the direction of newly founded ventures (Bruderl,
Preisendorfer, & Ziegler, 1992).
48
Although there are studies that question the unambiguously
positive approach to social capital, there is still support for the claim that
social capital increases the probability of new venture survival (Bruderl
& Preisendorfer, 1998). Given that social capital is a resource available to
novice entrepreneurs, and one with positive influence on the venture
creation process, I chose to elaborate a little more on it. Thus in the
following sections I focus on the personal, structural and relational
aspects of social capital and connect it to entrepreneurs’ dependence on
resources. My aim with this is to show how entrepreneurs can use their
social capital as a resource when launching problem-focused and social
support seeking coping strategies.
Social capital as a personal resource
Entrepreneurs who do not have the means to buy needed
resources need to devise alternative strategies in order to gain control of
resources needed for the transformation of an idea into a new venture.
Their primary source of access to resources is their pre-existing
networks, both during and after founding their venture. This implies
that entrepreneurs are dependent "on pre-existing contact networks as
the means at hand" (Baker et al., 2003: 269). These relationships are used
by entrepreneurs to build their ventures and serve several roles, where
for example friends and family initially are important for inner support,
advice and concrete help (Birley, 1985). This importance of
entrepreneurs’ personal networks is reflected in their use of them in
gathering resources (Johannisson, 2000).
As ventures evolve, so do relationships and they take on an
increasingly socio-economic form (Larson, 1992). For entrepreneurial
ventures this means that entrepreneurs’ social embeddedness influences
their ability to draw on social and economic resources (Jack & Anderson,
2002; Uzzi, 1997). How this affects the entrepreneurial process can be
exemplified by two ventures in the Swedish tobacco industry aiming at
similar potential customers (Vikström, 2004). The two entrepreneurs of
49
venture A both had degrees from a Swedish business school. They also
had a few years working experience where they had come in contact
with a number of investors. The entrepreneur of venture B had worked
as a nurse and had no contact with or experience from investor contacts.
As a result, venture A very quickly acquired the venture capital deemed
necessary, while venture B had to rely on personal bank loans. This
initial choice of sourcing of financial capital decided much of the path of
the respective ventures, both of which a couple of years later were in
business, but only one had made a profit from start, venture B. The
entrepreneurs of venture A later sold their shares to one of the world’s
largest tobacco companies which would seem like a rational thing to do
given that they had brought in venture capital. The entrepreneur of
venture B still owns her company.
When looking at entrepreneurs’ social capital, context dependent
issues such as favourable prior beliefs, trust, and goodwill become
important in new ventures’ emergence (Fichman et al., 1991). They aid
emerging ventures to overcome liabilities of newness by helping to
create stable links with stakeholders (Stinchcombe, 1965). However, in
the process of forming links with external stakeholders, it is not
necessarily the most efficient ideas that survive and become widely
adopted, but the ideas that have the strongest support. As Granovetter
(1973) states: “…ways of doing things begin for reasons that relate to the
various purposes of the actors involved and to the structures of relations
they are embedded in”. In the case of the two ventures in the tobacco
industry discussed above, the entrepreneurs who took in venture capital
began with the intention to do so, to grow and to exit. The intention of
venture B’s entrepreneur instead was to create a new brand and build a
company around it that would be hers. Her aim was to grow organically
with some borrowed money which was the only financial capital
available to her.
50
Studying embedded structures and relations – social capital – is
crucial to understand how entrepreneurs acquire resources in the face of
perceived resistance,.
Structural aspects of social capital
Coleman defined social capital as any aspect of social structure
that creates value and facilitates actions of individuals within that social
structure. Just as the creation of physical capital involves changes in
materials so as to facilitate production, and human capital involves
changes in an individual's skills and capabilities, social capital is created
when the relationships among people change in ways that facilitate
instrumental action (Coleman, 1990).
Studies of entrepreneurs in relation to social capital began with
researchers such as Coleman (1988) and Portes and Guarnizo (1991).
Those studies focused on ethnic minority groups more than on
individual entrepreneurs, but they inspired more specific research in the
field of entrepreneurship. Research has since shown that issues such as:
firm survival (Pennings, Lee, & Witteloostuijn, 1998; Uzzi, 1996), firm
performance (Batjargal, 2003), acquisition of resources during start-up
(Brush et al., 2001), creation of new ventures (Davidsson et al., 2003), and
growth (Florin, Lubatkin, & Schulze, 2003), are all positively influenced
by social capital.
In addition to the firm and population level research referred to
above, social capital studies have lately also started to look at individual
entrepreneurs. One example is Bowey (2002) who studied how
entrepreneurs’ social capital is affected by relationships, specifically the
changes in entrepreneurs’ social capital and what affected these changes.
Returning to the basics of social capital, at the core of this concept
lies the idea of its appropriable and convertible qualities. Social capital is
related to the notion that certain social ties, for example friendships, can
be used for various purposes. Friends can for instance offer work advice
51
or financial support. Coleman (1988) calls this concept appropriability,
that actors with multiplex relations
21
can appropriate resources in one
relation for use in another. The second quality of social capital, actually
between all forms of capital, is its convertibility (Bourdieu, 1986) in the
sense that it can be converted into other forms of capital, for example the
more tangible economic capital. There are however differences in the
convertibility between different forms of capital where social capital has
a certain stickiness compared to economic capital, which is more liquid,
as it takes time to convert it into economic capital (Smart, 1993). Further
similarities with other forms of capital are that social capital can function
as a substitute or a complement for other resources. Actors can for
example substitute for a lack of financial resources or complement
existing financial resources.
Social capital offers a way to identify the value of certain aspects
of social structure to actors as resources which they can use to achieve
their goals. In this sense location is a peculiar and important character
that sets social capital aside from other forms of capital. It is located in
the structure of relations between and among actors
22
, not in the actors
themselves or in physical implementations of production (Coleman,
1988). An actor’s location within this structure of social relations decides
which resources are available. Granovetter also points to location in his
discussion of weak ties, and although not made explicit, location would
be where social capital resides and decides its quality (1973). Burt (1997)
more concretely shows what these weak ties are in his discussion of
structural holes. Like Coleman, he states that social capital is an asset
arising in the location in a structure of exchanges. Those actors who
connect two or more networks with each other can act as brokers. Such
21
Relations where actors are linked in more than one context, such as work,
neighbourhood, family etc. (Gluckman 1967).
22
Coleman defines ”actors” as both corporate actors and individuals (1988).
52
brokerage positions between networks are embedded with enhanced
assets of social capital.
Relational aspects of social capital
Where the structural aspects of social capital set the stage, the
relational aspects point to where activities happen. As such the relational
dimension is of particular interest when studying perceived resistance as
it describes personal relationships developed between people through a
history of interactions (Granovetter, 1993). The relational aspect is also
where an entrepreneur realises the potential value of social capital,
decided by the structural aspects. To realise this value entrepreneurs use
their social skills which I return to when discussing coping strategies in
the next section.
In the next section I integrate social capital as a part of coping
strategies and discuss where and how entrepreneurs cope.
2.3.2 Coping strategies in action
In situations of limited supply of resources entrepreneurs become
dependent on stakeholders who are in control of resources. Faced with
such asymmetric relationships, entrepreneurs seem to be at the mercy of
key stakeholders, particularly if perceived as resisting their ventures.
However, they are not entirely without leverage as they are in
possession of social capital which can be exchanged for more tangible
resources.
This concluding section of the theoretical framework focuses on
entrepreneurs’ coping strategies where they use what resources they
have or can muster. It is structured according to the three coping
strategies: (1) problem-focused, and (2) emotion-focused, as well as (3)
social support seeking.
53
From the perspective of novice entrepreneurs, social capital is
related to social support and problem-focused strategies, while emotion-
focused strategies instead focus on entrepreneurs’ emotional responses
arising as a consequence of a situation which they are unable to
overcome.
Problem-focused coping strategies
Problem-focused coping aims to deal with the situation itself in
order to change it or make it less stressful. This can be a difficult strategy
for novice entrepreneurs if their ventures lack both reputation and track-
record, which would be the case when started by entrepreneurs with no
previous experience of entrepreneurship. Their ventures may well be
regarded as risky investments by resource providers. One problem-
focused strategy that entrepreneurs can adopt to deal with this is to act
as if they are trustworthy in order to gain access to the required resources
(Starr & MacMillan, 1990). When acting as if, “an entrepreneur must
engineer consent, using powers of persuasion and influence to overcome
the scepticism and resistance of guardians of the status quo” (Dees &
Starr, 1992: 96). In this way, entrepreneurs can begin to manage
dependency relationships with critical stakeholders. An example of such
a strategy is resource co-optation
23
through social contracting, where
entrepreneurs use a social support focused strategy by activating social
capital built through a network of associations to acquire necessary
resources (Starr et al., 1990).
When attempting to manage dependence and asymmetric
relationships, actors can choose direct or more indirect strategies. An
example of a direct approach is when an actor A, being dependent on B,
develops a co-optive tie with B. This can be done through deference,
where B receives deference and status, and in turn provides A with the
23
According to Merriam-Webster, to absorb, assimilate, take over or appropriate
(Merriam-Webster, 2008).
54
needed resources (Blau, 1964). However, in an entrepreneurial context
for new venture creation, a deference strategy is less likely as ventures
being founded by novice entrepreneurs most likely have little status to
offer a stakeholder. The indirect approach, or the two-step strategy,
involves a third actor, C. Actor B is dependent on C while A is
dependent on B, so A builds a co-optive relationship with C, thus
indirectly affecting the relationship with B (see Figure 2-1). This two-step
strategy has been shown to be utilised in relationships characterised by
hostility. Instead of trying to manage the hostile actor directly, a third
actor is involved (Gargiulo, 1993).
Figure 2-1: Two-step leverage (adopted from Gargiulo (1993: 5))
Aiming at achieving an exchange from social to economic assets,
entrepreneurs utilise the appropriable and convertible characteristics of
social capital (Larson, 1992). Appropriability and convertibility of social
capital is what entrepreneurs can use to develop both direct and indirect
strategies to deal with dependence, particularly in the face of perceived
resistance.
55
However, in order to appropriate and convert their social capital
into necessary resources, entrepreneurs need to be viewed as credible. To
do this, potential stakeholders will want to see that the entrepreneurs
acts in acceptable manners when they develop their venture ides,
following the norms in the industry (Deephouse, 1996). This is
problematic because organisations that innovate or have unique
strategies, as in Schumpeter’s definition of entrepreneurship
24
(1942),
have difficulties showing that they should be favourably evaluated.
Stakeholders are more likely to view such ventures as unacceptable
(Meyer & Rowan, 1977). The manner in which entrepreneurs use the
relational aspect of social capital is therefore critical also with regards to
credibility, which is required to overcome liabilities of newness. Lately
studies have shown that what entrepreneurs do is more important than
who they are or the market they are in when they attempt to build
credibility (Tornikoski & Newbert, 2007).
Bricolage as a coping strategy
Bricolage has been proposed as a new view of entrepreneurial
coping (Baker et al., 2003; Baker et al., 2005), and is of particular interest
from the point of view of start-ups. Bricolage is an example of problem-
focused coping and is defined as “making do by applying combinations
of the resources at hand to new problems and opportunities” (Baker et
al., 2005: 333). This implies that entrepreneurs who use a bricolage
strategy have a bias towards action instead of waiting to see what will
happen and whether a solution can be found.
In one sense, bricolage is close to a generic entrepreneurial
strategy as it means to “disregard the limitations of commonly accepted
definitions of material inputs, practises, and definitions and standards,
24
Schumpeter defines entrepreneurship as: 1: Introduction of a new good. 2:
Introduction of a new method of production. 3: Opening of a new market. 4:
Conquest of a new source of supply of raw materials or half-manufactured goods. 5:
Carrying out of a new organisation of any industry. (Schumpeter, 1942)
56
insisting instead on trying out solutions, observing and dealing with the
results” (Baker et al., 2005: 334).
The strategies that Baker and Nelson observed related to the
domains of:
• Physical inputs – discarded, worn or forgotten materials are
converted into valuable inputs of some sort.
• Labour inputs – available and “free” potential labour such as
hangers-on or customers are used for specific value creating tasks.
• Skills input – amateur or self-taught skills which are usually not
applied in venture creation are applied in new ways.
• Customer/markets – new products or markets are created by
offering otherwise unavailable products or services to customers
(for example housing to homeless).
• Institutional and regulatory environment – create a context to get
away with something which ordinarily is not allowed by
disregarding standards or laws, by not seeing them as constraining.
Network bricolage connects social capital and bricolage, and is
defined as the “dependence on pre-existing contact networks as the
means at hand” (Baker et al., 2003: 265). Baker, Miner and Eesley found
that personal and professional networks most often constituted the
means at hand which entrepreneurs use to create something new (2003).
Johannission and Olaison further extend this by introducing social
bricolage, which they see as a spontaneous collective action in response
to an emergency that draws on “the same networking that is produced
by and produces social capital” (2007: 72)
Bricolage is an out-of-the-box strategy that looks beyond
limitations in resources which in itself is very interesting from an
entrepreneurial perspective. However, one problem with the concept
and its use in understanding entrepreneurs’ coping strategies is that the
key work by Baker and Nelson (2005), with some exceptions only discuss
engineering problems at for example motorcycle repair shops. The
57
authors do not empirically take the concept beyond the shop floor,
although they continuously refer to entrepreneurial ventures. Despite its
lack of cases of entrepreneurial start-ups dealing with issues of perceived
resistance, conceptually the idea of bricolage is in line with the view of
entrepreneurship and the theoretical framework that I take.
Emotion-focused coping strategies
Emotion-focused coping focuses on emotional responses arising
as a consequence of a situation. To date, however, there are few
examples of emotion-focused coping strategies in an entrepreneurial
context. Singh, Corner, and Pavlovich (2007) found in their research on
entrepreneurial failure that such strategies were used by entrepreneurs
in relation to psychological aspects of venture failure. In that context, the
coping strategies were of a type that the authors claim would be
considered as reality-distorting and self-deceiving by researchers in the
field of coping. Emotions have lately become a topic of interest to
researchers of entrepreneurship as can be seen for example in Brundin’s
(2002) study of emotions in relation to radical change, and Cardon et al’s
(2005) study of emotions and entrepreneurial behaviour with a focus on
the issue of passion.
Social support seeking coping strategies
The final coping strategy, seeking social support involves looking
for help and guidance, emotional support, affirmation of worth, and
tangible aid such as the acquisition of financing. Fichman and Levinthal
(1991) propose that inter-organisational relationships are an initial asset
or endowment that can buffer firms from selection pressures posed by
stakeholders. This is thus the strategy that most directly links with social
capital, although, as I have already pointed out, social capital can also
constitute a resource in problem-focused coping; its’ use differs however
between the two coping strategies. In social support seeking strategies,
58
social capital is the key asset which enables entrepreneurs to choose this
strategy, and it is what they use to cope with and overcome disruptions.
A stakeholder’s location within this structure of social relations in
turn decides which resources are available. However, social capital is
problematic from an empirical point of view as it is difficult to both
measure and to estimate its value before it is used; part of this problem
resides in structures and relationships between actors. Conscious acts are
needed and different actors have different skills in accessing social
capital. The skills (or competence
25
) component of social capital thus
decides the structural and relational value of social capital, as well as
influences structures and relationships formed. In line with this, Baron
and Markman propose that social skills are necessary for financial
success (Baron & Markman, 2003).
Social competence is defined by Baron and Brush as “the extent to
which they [entrepreneurs] possess and employ discrete social skills that
enhance their ability to interact effectively with others (e.g., venture
capitalists, potential partners, employees, customers)” (1999: 1). They go
on to describe the specific social skills based on earlier research as: (1)
social perception – accuracy in perceiving others (e.g., their traits,
intentions, motives), (2) impression management – a wide range of
techniques for inducing positive reactions in others, (3) expressiveness –
the ability to express one’s emotions and feelings clearly, and so to
generate enthusiasm in others, (4) persuasiveness – the ability to change
others’ views or behaviour in face-to-face encounters, and (5) social
adaptability – the ability to adapt to, or feel comfortable in, a wide range
of social situations.
Baron and Brush (1999) state that the most important of these
skills is social adaptability, which they say may be a consequence of their
25
Merriam-Webster gives exactly the same meaning to skills and competence
(Merriam-Webster, 2008), and I use the two words interchangeably.
59
study including mainly entrepreneurs at a very early stage of venture
creation. The implications for this thesis focusing on early stages, is that
social competence is indeed a component that must be included in order
to use social capital as a theory to study individual entrepreneurs. Thus
entrepreneurs need social competence in order to use social support
seeking strategies, as well as problem-focused strategies in their attempts
to overcome perceived resistance.
Much research on social capital is built on the implicit assumption
that individual and collective actors are driven by instrumental
motivations (Adler & Kwon, 2002). This has led to a view of actors as
individuals or groups cultivating and exploiting social capital to reach
certain goals (De Graaf & Flap, 1988; Lin, Ensel, & Vaughn, 1981;
Marsden & Hurlbert, 1988). Some caution is required when viewing
social capital as an asset pursued in a calculative fashion as it is not
necessarily an obvious asset, one that can easily be identified
beforehand. It might instead be more of a by-product from pursuing
other ends (Burt, 2000). This insight can also be drawn from the ability to
quantify return on investment of capital. Compared with other forms of
capital, social capital is not quantifiable, meaning that future return on
investments in social capital is highly uncertain (Fernandez, Castilla, &
Moore, 2000). An uncertain future return on investment implies that it is
difficult to use social capital in a calculative manner. However,
entrepreneurs invest in social capital based on an expectation of a future
flow of benefits. These future benefits guide the development of social
capital, but the reciprocating aspect is uncertain, and when called upon
is interpreted in different ways by different actors (Bowey, 2002). In
respect to the reciprocating aspect, social capital can instead be
60
motivated by other commitments such as norms of generalized
reciprocity
26
.
Social capital has been proposed to bring benefits and potential
risks. On the positive side to individuals and organizations are issues
such as access to broader sources of information as well as improved
quality, relevance and timeliness of information (Burt, 1992; Granovetter,
1973), and the possibility of inter-firm exchange of detailed information
enabled by social embeddedness (Uzzi, 1997). Structural holes and the
bridging possibilities they bring to entrepreneurs provide influential
benefits (Burt, 1992). The risky side actually brings potential for
entrepreneurial advantage assuming that one places entrepreneurs
opposite to established and highly embedded markets and industries.
Uzzi points to the risky results of overembedded relationships when he
states “feelings of obligation and friendship may be so great between
transactors that a firm becomes a ‘relief organization’ for the other firms
in the network” (1997: 59). Of course, the positive sides of information,
influence and solidarity, discussed above, can also be reversed. Such a
reversal could lead to a risk of domination and power games that would
hamper collaboration at the cost of potentially missed opportunities,
thus turning a coping attempt through social support seeking into
greater perceived resistance.
Entrepreneurs’ responses to perceived resistance, activating their
social capital to manage the venture-stakeholder relationship could
backfire, pointing to the complexity of social capital. This happens as
entrepreneurs attempt to balance asymmetric relationships by way of
their social capital, which risk causing social liabilities in relation to other
stakeholders. Balancing one relationship could cause new asymmetric
ones (Gargiulo & Benassi, 1999; Portes & Sensenbrenner, 1993). Further
26
Putnam explains generalized reciprocity as “ ‘I’ll do this for you now, knowing
that somewhere down the road you’ll do something for me’” (Putnam, Leonardi &
Nanetti, 1993: 182-183).
61
risks of investing heavily in relationships are that their values are
sensitive to changes in the network. The defection of one actor can lead
to a loss of assets, as more than one must commit to build it. The value of
a social asset is in the relationship itself, not in any one actor (Adler et al.,
2002).
A key issue when discussing social capital, whether as a problem-
focused or social support seeking coping strategy is the importance of
social competence. This is a factor that enables entrepreneurs to access
the potential of social capital. In addition this connects to Truls’
proposed concept of entrepreneurial capital discussed earlier, where
entrepreneurial competence is a key component (2002).
These examinations of copings strategies constitute the final
section of the theoretical framework which is next concluded into a
theoretical model.
2.4 A model of perceived resistance
To conclude this chapter, I use the topics covered to build a
theoretical model of perceived resistance (see Figure 2-2). The purpose of
this theoretical model is to begin unravelling the path from
entrepreneurs’ venture ideas and towards their goal realisations while
facing goal disruptions (see Figure 1-1). This model of perceived
resistance will be used as a tool, both in gathering empirical material and
structuring the initial empirical analysis. Its linear qualities serve the
purpose of facilitating the initial perspective of perceived resistance in a
simplified format.
The model begins with a goal disruptive process or event where
entrepreneurs’ goals and ideas of how to realise new venture ideas are
somehow disrupted. Such disruptions are influenced by aspects of
resource dependence and the entrepreneurs’ means and abilities to
62
acquire the resources believed to be needed. Goal disruptions are also
influenced by external actors’ demands on the entrepreneurs.
Next the entrepreneurs appraise the goal disruptions; their
perceived impact on the realisation of their venture ideas influence
whether they are perceived as resistance or not. Aspects affecting appraisal
are how dependent the entrepreneurs are on certain stakeholders and
how easy or difficult coping appears to be. Appraisal of a goal disruption
as perceived resistance or not thus influences coping as appraisal both
takes into consideration and impacts how the entrepreneurs see their
possibilities of overcoming the goal disruptions.
Figure 2-2: Theoretical model of perceived resistance
Coping requires resources, either creating them in a bricolage
fashion, or controlling them in a more traditional way by gaining access.
The entrepreneurs’ view of the seriousness of the disruption furthermore
influences the coping strategy they choose. Novice entrepreneurs’ social
capital plays a key role in coping, particularly if they lack ready access to
other resources which limits their possibilities of choosing coping
strategies.
There is an ongoing interplay between entrepreneurs’ appraisal of
their possibilities to cope successfully and their perceived means for
coping. Linking these is their self-efficacy. Coping in turn is linked with
its own outcome, how successful or not the entrepreneur is in coping with
the disruption. This is continuously appraised and reappraised until the
63
perceived resistance is overcome or not. From a process perspective of
venture creation, overcoming means surviving, while being unable to
overcome a disruption then risks the termination of venture creation
efforts.
The model captures the influence of perceived resistance, if a goal
disruption is not appraised as serious to the realisation of a venture idea,
it will likely not be perceived as resistance. In such instances, an
entrepreneur does not even have to deem it necessary to cope with. If
coping is attempted to deal with the disruption, this type of coping has
low priority and is not liable to affect the overall venture creation
attempts by the entrepreneur. This is very different compared to a
disruption that is perceived as resistance where overcoming it is critical
to the actualisation of the venture idea.
This concludes the theoretical framework, but I will return to this
model again in the analysis of the empirical material.
64
65
3 Research design
Previous research has taken a perspective of external shocks to
venture creation when studying problems, obstacles and such (see
previous chapter). This generates objective problems for entrepreneurs
to deal with. However, focusing on perceived resistance is a new way of
studying venture creation which addresses subjective aspects and takes
an internal view from the perspective of individual entrepreneurs. Thus
when perceived resistance occurs, why and how it influences the
entrepreneurial process has previously been largely unknown. Because
of this I decided to carry out a pre-study
27
to explore themes of interest
which could guide me in building a theoretical framework as well as
which methodological issues I needed to consider when studying
resistance.
All case studies were mostly retrospective and this fact turned out
to be the most important lesson from the pre-study. The three pre-study
cases all indicated that the entrepreneurs did experience resistance, but
due to the time which had passed between the instances they described
and the interviews, they could not specify what had happened or
elaborate on their perceptions.
This difficulty is not new, Schein (1985) for example discusses
how interpretations posed, acts executed and results deemed sufficient
then fade into the past and becoming taken-for-granted aspects of the
present. If the results from interpretations and actions within a venture
are deemed sufficient in the eyes of the entrepreneurs, then their causes,
27
The pre-study was based on three cases which are described in detail in
Appendix A.
66
the situations around would become taken-for-granted aspects of the
present. If this was the case with the ventures studied, then the method
of choice would have difficulties revealing indications of the phenomena
that I was looking for. Moreover it has been shown that perceived
problems risk being remembered in a distorted manner. When this
occurs, what did happen is remembered as having been viewed as more
likely than it actually was (Fischhoff & Beyth, 1975). Thus
methodological design is of crucial importance in respect to the
phenomenon of study, and to be able to study perceived resistance, a
longitudinal approach appears to be of particular importance.
Another critical issue to consider, when attempting to study the
phenomenon at hand, is how it unfolds or appears. The process of new
venture creation can be described through punctuated equilibrium.
Processes of organisational formation evolve through long periods of
stability or convergence and are then punctuated by short and intense
periods of metamorphosis (Gersick, 1991; Miller et al., 1980; Romanelli &
Tushman, 1994). The unpredictability of when these periods of
punctuated equilibrium occur poses a methodological problem when
trying to study them. A broader net is needed to capture these instances,
but the question is how broad it needs to be.
With these three converging issues in mind – (1) perceived
resistance being a phenomenon not previously studied, (2) the pre-
study’s revelation about retrospective methodological problems, and (3)
the implications of venture creation as a process of punctuated
equilibrium – a method of study could be outlined. First and foremost,
these issues indicate that there is a great degree of uncertainty
concerning this kind of study, and with that in mind, methods need to be
developed such that they from the start address the quality of the study.
The key point here is to ensure that what is meant to be studied is
actually studied, and that the empirical phenomenon is explored without
adding issues not observed (Maxwell, 1996).
67
3.1 A longitudinal study of entrepreneurs’ start-up
attempts
In order to study perceived resistance – a phenomenon which has
not been empirically studied before and where it is unclear how it
influences the entrepreneurial process – both the pre-study and previous
research (Perren & Ram, 2004; Van de Ven & Engleman, 2004) show that
an approach which enables the capturing of events as they unfold – the
process itself – is required.
With this in mind I chose case studies as they enable an
understanding of the dynamics present in a single setting (Eisenhardt,
1989; Perren et al., 2004) and thus allow the study and interpretation of
the relation between entrepreneur and stakeholder as well as the specific
perceptions and goals of the entrepreneur. Case studies furthermore
offer the opportunity to both compare patterns within and between cases
which is important when exploring a new concept such as perceived
resistance. In addition, they enable the capturing of instances of interest
in the evolving venture as they happen, minimising the chain of people
interpreting events that happened in the past (Perren et al., 2004; Yin,
1994). Within the setting of the case studies I use a critical incident
technique (Flanagan, 1954) where incidents are built for each perceived
resistance. This also attends to Schein’s taken-for-granted aspects of the
present (1985).
The need for a longitudinal study has an additional advantage as
it can give access to material otherwise difficult to obtain and directly
related to the consequences of perceived resistance like failed
entrepreneurial ventures and the process leading up to the decision to
fold (Katz et al., 1988). Furthermore there has long been a call for more
event-driven studies to build explanations of the dynamics of
entrepreneurial activities (Aldrich, 2001; Van de Ven et al., 2004). So by
choosing such an approach, not only is it the most suitable given the
68
phenomenon of study, methodologically it also contributes to the field of
entrepreneurship.
More specifically and as will be presented in more detail below,
an explorative approach is chosen so that the studied entrepreneurs’
freely expressed views can be observed (Holme, Nilsson, & Solvang,
1991). This is practically carried out through a number of case studies of
how novice entrepreneurs perceive and meet resistance from
stakeholders to their ventures from the gestation period (Reynolds et al.,
2004) and over time. This method implies that a substantial amount of
empirical data is gathered for each case in order to build an overview
and understanding of the process. Having such empirical data also offers
the possibility to address the third purpose of this study which is of a
descriptive character.
3.1.1 Choice of unit to study
Given the purpose of this study which focuses on entrepreneurs’
perceptions of resistance, the most obvious unit of study is the
individual entrepreneur. In addition to this, venture creation can be seen
as a transition from micro- to meso-level, from an entrepreneur’s idea to
a venture. In this transition, the entrepreneur is the initiator and most
often the actor at the centre deciding much of the development of the
venture. This is particularly evident at an early stage, from the time an
entrepreneur comes up with an idea and until he or she registers a
company or generates a first sale, the period of interest in this study and
which will be discussed in the next section.
Furthermore, we can describe the outcome of venture creation –
the new ventures and innovations created by entrepreneurial activity in
society – but not how this outcome is created (Aldrich, 1999; Reynolds et
al., 2004), the choice of unit of study is also a contribution in itself. The
entrepreneurs and the processes they initiate and are a part of constitute
69
an important source in building our understanding of how ventures are
created.
One could argue that the venture idea should be the unit of study
as it embodies the source of the evolving venture and the focus of
enacted goal disruptions from stakeholders. However, as the focus of
this study is on perceived resistance, the entrepreneurs are the units
perceiving. The venture idea instead becomes a guide to the length of
time for the study.
3.1.2 Selecting cases
As new venture creation follows a pattern of punctuated
equilibrium, case selection needs to be geared towards maximising the
possibility of observing perceptions of resistance during the period of
observation. The characteristics of selected cases should then be at the
extreme (Pettigrew, 1990), in the sense that I wanted entrepreneurs with
the greatest likelihood of perceiving and facing resistance. I hoped to
find this where entrepreneurs’ need for coping with resistance was
expected to be high while their means of coping was poor, and the
potential social dramas around coping and resistance was high. This
selection strategy might be criticised as “selecting extreme cases on the
dependent variable [which] leads the analyst to focus on cases that, in
predictable ways, produce biased estimates of causal effects” (Collier &
Mahoney, 1996: 59). On the contrary, and in line with Pettigrew’s
argument this is a strength as such cases can be used to highlight the
issue of perceived resistance. Thus a method of purposeful sampling
(Patton, 1990) was used, guided by certain criteria for choosing cases
(Merriam, 1994).
70
In order to find cases which could fulfil the characteristics I
identified for the increased possibility of observing perceived resistance I
searched for:
• Novice entrepreneurs.
28
• Entrepreneurs with no personal financial means.
• Entrepreneurs who were still very early in their venture creation
process.
29
My reasoning behind this was that a new venture by a novice
entrepreneur according to the selection criteria was likely to at least
initially face more challenges by stakeholders than one by a seasoned
entrepreneur. This is also agreed upon by Shepherd et al who propose
that the management team’s novelty increases the mortality risk of a new
venture (2000). The chosen gestation period in itself is also interesting as
it is an understudied period in the entrepreneurial process.
As a complement to the three criteria above, I also based selection
on the would-be entrepreneurs’ intentions. Only those with clear
intentions to realise their ideas were selected to make sure that they
would actually make efforts to overcome resistance (Gatewood et al.,
1995).
In addition to finding cases at the extreme which were based on
the background of the entrepreneur and timing of the entrepreneurial
process, focus was also on the nature of the venture ideas. Radical
ventures with innovative height and the potential of generating new
markets or changing existing ones were especially interesting to study
due to their liabilities of newness (Stinchcombe, 1965). This is so because
they challenge existing structures and should thus face a stronger risk of
28
Entrepreneurs with no previous experience of entrepreneurship.
29
By early I mean that selection was made prior attempting to: register a firm, get
funding, register patents, hire staff or generate sales – in other words during
gestation (Reynolds et al., 2004).
71
opposition and resistance from stakeholders. With this in mind I selected
ventures based on their:
• Technology – a radical one would be a new and unused technology.
• Marketing – a radical strategy would be creating new markets, or
challenging old ones from within.
Finding ventures that fulfilled the technology or marketing
characteristics was the first difficulty. The second was to find
entrepreneurs very early in the venture creation process. As Reynolds
Carter et al point out, “the primary problem in attempting a study of
individuals who are starting businesses is in finding these individuals
while they are actually involved in business start-up activities” (2004:
264). Others have also noted the methodological difficulty in finding
ventures as early as possible in their start-up phase (Stevenson & Jarillo,
1990). Kim, Aldrich et al claim that per annum there are only 4-6 percent
of the adult population who become nascent entrepreneurs (2003). I
agree with this claimed methodological difficulty and consequently
spent some time searching for entrepreneurs according to my criteria.
My choice of channels for finding potential cases eventually
turned out to be university incubators, or business labs. To facilitate
access to the entrepreneurs, I only chose those in Stockholm and
approached the university business labs of the Stockholm University, the
Royal Institute of Technology, and the Stockholm School of Economics.
In addition I also contacted a business lab and business accelerator
separate from the universities owned by the City of Stockholm, a
university and large corporations.
To find cases I contacted the business lab directors at different
times during winter and spring 2004 and presented my research project.
They all responded positively to my project and suggested in total 25
entrepreneurs who had recently began with their venture ideas. Using
the selection criteria I narrowed this down to three entrepreneurs. I
contacted them and they were all willing to participate. One of the three
72
was quickly abandoned though. This decision was made after three
interviews and due to access difficulties associated with finding
interview times, combined with unwillingness on behalf of the
entrepreneur to freely share information with the researcher.
In addition to the business lab approach, in the winter of 2004, a
presentation was made to a group of 20 novice entrepreneurs
participating in a start-up course at the business lab/accelerator. In this
way, two more entrepreneurs who matched the criteria were included in
the study.
Table 3-1: Overview of studied entrepreneurs
Case Idea Product or
service
Conception
of idea
30
Study
began
Ended Gender Number of
interviews
Jonas Internet Service 2003?06 2004?02 2005?03 Male 7
Eric Soccer Service 2003?01 2004?01 2005?06 Male 11
Nina Cosmetics Service 2004?01 2004?06 2005?03 Female 6
Susanne Horses Product 2003?10 2004?03 2005?03 Female 7
Looking at the cases, all are novice entrepreneurs, and none have
any personal financial means to invest in developing the idea.
Furthermore, they are all at an early stage in their creation attempts.
Their new venture ideas are:
• Jonas takes an existing service and builds a platform to share and
capitalise on that, by doing so, existing markets are expanded.
• Eric uses existing technology in a radical new way, thus redefining
existing markets and creating new uses of existing products;
• Nina combines multiple existing services into one shape, aiming at
making the existing services obsolete while capturing their markets;
30
This is the time when the entrepreneurs came up with their ideas and took
actions on them.
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• Susanne develops a new product for an existing market with the
aim to make existing ones redundant.
Qualitatively following a sample of entrepreneurs from such an
early stage in the venture creation process as my selected cases is
uncommon in entrepreneurship research, but it is also a high risk given
the high rate of failures at early stages of venture creation (Delmar et al.,
2004b). With this in mind there is always a risk that the cases followed
terminate during the course of study. For the purpose of this study
however, this risk posed no problem, rather an opportunity as a
termination could be related to the dynamics of perceived resistance.
3.1.3 Time of study and access to entrepreneurs
The next critical issue to consider was the length of time to follow
each case. As pointed out, selection was partly based on the earliness of
development of the idea. Given that an entrepreneur has just began the
development of an idea, how long should he or she be followed to be
able to study instances of perceived resistance? Earlier research has
found it likely that the time it takes to either reach a point of termination
or a first sale is around 12-18 months (Carter et al., 1996). This time frame
is also hinted at in the Global Entrepreneurship Monitor
31
where most of
the new firms studied reached the point where a decision was made to
go ahead or to terminate the venture within 7-14 months from start. An
issue which influences this time-factor is what type of venture idea and
which industry that is referred to, specifically the complexity of a
venture idea. There are for example differences between a venture idea
directed at internet service and one aiming at developing a new medical
substance. The venture ideas chosen here had a comparatively low
complexity and thus my aim was to follow each case 12-18 months,
31
GEM 2000 report, and discussion with one of the authors, Frédéric Delmar,
Professor at EM-Lyon, France.
74
depending on their development. From the perspective of a longitudinal
study, 12 months might seem like a short time, but as pointed out, in the
life of a new venture it is a considerable time (Gersick, 1994).
In addition to be able to capture instances of perceived resistance
there were also practical considerations to bear in mind – asking an
entrepreneur to participate in a study for an indefinite time seemed like a
poor strategy when trying to convince them to take part.
The longitudinal approach I took was a direct consequence of the
pre-study which indicated that this was necessary in order to catch
instances of perceived resistance as they happened. Thus, in order to be
as close as possible to the events as they happened and with enough
space between interviews for disruptive events to actually occur, each
entrepreneur was interviewed every six to eight weeks.
Before the case studies began, and to delimit the study, I set up a
number of criteria to guide when the gathering of data would end. The
four criteria were:
• when the ideas were developed to the point where sales began
• if the venture creation attempts were cancelled
• if progress stopped and effort appeared low
• or if I felt that an empirical saturation of data was attained.
The actual decision to stop gathering data supported the notion
that one year is a considerable length of time at the start of a new
venture. When I left the entrepreneurs, three of them had decided to
abandon their creation attempts, and one had launched the idea to
customers. The actual time spent with the four entrepreneurs varied, 11
months with Jonas, 17 months with Eric, 6 months with Nina and 12
months with Susanne. As depicted in Figure 3-1, the time following each
entrepreneur was sufficient to capture a number of instances of
perceived resistance, as well as seeing them through either termination
or launch. In retrospect one can thus conclude that the estimates
75
discussed above concerning time until termination or first sale were
accurate.
Figure 3-1: Pacing of interviews and observed perceived resistance
32
32
The labels in Figure 3-1 indicate: J1, E1, N1, S1 and so forth – instances of
perceived resistance and their times of unfolding (for complete descriptions see
Appendix E), J:I1, E:I1 and so forth – face-to-face interviews, JI6t – phone interview, T
– termination, L – launch.
76
With the extended period of time interacting with the
entrepreneurs under study, managing the interviewer-interviewee
interaction was important. I wanted to keep a detached approach while
at the same time being present. In retrospect it is evident that despite
being aware of this issue, a study of this magnitude likely affects the
studied and thus also affects the outcome of the interviews. To
metaphorically use the Heisenberg effect, this would mean that a
researcher interacts with the object of study, thus altering the nature of
what is being studied (Vinten, 1994). On the other hand, the flip side of
this would then be the Hawthorne effect, stating that a known research
focus on for example work activity may lead to higher levels of work
productivity (Reynolds et al., 2004). Thus, I concur with what is a
concern in most social science research – that the relation
interviewer/interviewee influences what is being studied. The extent of
this influence and its implications are however difficult to judge. To deal
with this I made an effort to be as rigorous as possible in both design and
description of study. This approach is aimed to offer the reader a chance
to judge the work for what it is.
3.2 Conducting the study
Each case began with a longer interview of 1½-2½ hours with
each entrepreneur. During this interview, focus was on the idea itself,
how it worked, the aim with it, how it started and when, and critical
experiences thus far. This first interview gave a process description up
until the time of the interview and served as a springboard for the
following interviews and the forming of an understanding of the case.
During the interview, I encouraged the entrepreneurs to elaborate and
describe their processes thoroughly. The questions focused primarily on
interactions with stakeholders, from family, to friends, partners and
others.
77
After the first interview the subsequent interviews lasted between
50 minutes and 2 hours and as mentioned earlier, occurred every six to
eight weeks except for a more extended break over summer. Their aim
was to understand the nature of relationships, deemed necessary in
order to understand social and organisational behaviour, embedded in
the relationships (Granovetter, 1985). To understand the novice
entrepreneurs’ perceptions of and responses to resistance, the focus of
the interviews needed to be posited in a broader perspective of
relationship-building. It has been shown that entrepreneurs start from
informal networks of friends, peers and associates, and from that
generate more formal relations (Birley, 1985; Larson & Starr, 1993).
Following how this evolved revealed critical stakeholders, critical
incidents and how those unfolded concerning issues such as trust,
reliance and credibility. As is evident from Figure 3-1, some of the
observed instances occurred before the first interview. These were
described by the entrepreneurs during the first interview, and in
addition to this the entrepreneurs spontaneously returned to them in
subsequent interviews. With the open-ended structure of the interviews,
it was the entrepreneurs’ repeated concern about those instances that led
me to include them in the list of observed instances of resistance.
The interview foci was thematic and directed at how the
entrepreneurs built their ventures and the role of their relationships in
this, who the critical stakeholders were, how those stakeholders’
responses to their ventures were perceived, how they perceived the
development of their ventures, how they viewed their own choices and
what their own actions were in the face of perceived resistance (see
Appendix B).
After each interview I summarised it into an abstract covering the
main issues discussed. At the following interview this helped in
reminding the interviewee about “where we were last time”, and to
make sure that issues covered and discussed earlier were followed up.
78
The interviews were recorded and transcribed in their entirety resulting
in approximately 600 A4 pages.
In addition to interviews I also suggested to the entrepreneurs
that I would like to do participant observation as well as interviews with
some key stakeholders. Originally the entrepreneurs were positive to
this, but as their work unfolded they became more hesitant to having
someone with them during sensitive meetings with key stakeholders.
Similarly they were hesitant about having someone talk to key
stakeholders about issues concerning their creation attempts as they took
place. The entrepreneurs being at very early stages and lacking previous
experience of entrepreneurship were concerned about disturbing their
relationships with stakeholders through the involvement of me as a
researcher. This was not taken as distrust in me as a researcher, as trust
was expressed in the openness they showed during interviews. I instead
interpreted it as an expression of uncertainty about how their venture
ideas were being realised and that bringing me as an observer could be
an additional risk to this realisation.
3.2.1 Feedback from entrepreneurs
The completed cases were sent to each entrepreneur for
comments. The aim with this procedure was to help assure that my
interpretation of the material was something that the entrepreneurs
could agree with (Guba & Lincoln, 1989). None of the entrepreneurs
required any changes to be made to the cases.
3.3 Analysing the empirical material
In the analysis of the empirical material I used both within-case
and across-case methods (Miles & Huberman, 1994). To improve the
means of analysing the large amount of empirical data comprising this
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study I saw it as key issues to be rigorous as well as to be able to easily
work with the data. The software NVIVO
33
, which is specifically
developed to explore and analyse qualitative data, offered the means I
sought. Through NVIVO one can code data by building nodes for certain
themes, events or actors. These nodes can then be used to explore
patterns and build models. They can also be given specific attributes
which can in turn be used to explore other dimensions and connections
within the data. As I describe in this section, these tools for coding,
sorting and analysing were a key part of this study.
The analysis of the empirical material began as I started the
interviews. After each interview I made notes of what could be potential
instances of perceived resistance and aspects related to it (see Appendix
D for an overview of how the empirical study evolved). The theoretical
model served to deepen my understanding of the phenomenon, as an
outline for the analysis and a starting point when approaching the
empirical material. With the early theoretical focus, the study began in a
deductive fashion. As it progressed however it became more and more
inductive as I gathered empirical material and began the analysis.
Eventually this resulted in the inductively derived model of perceived
resistance that is presented in section 5.3.
After transcribing each interview I imported it into NVIVO,
keeping separate files for each entrepreneur to separate the cases and the
coded nodes. Simultaneously as I gathered the empirical material I
studied the transcribed interviews and developed codes to tag themes
and statements of interest. Codes were a reflection of both the themes
used in the interviews, and of the patterns that emerged during the
course of the study. The codes I developed in this way were:
• All stakeholders
33
For more information about NVIVO, seehttp://www.qsrinternational.com
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• Deliberations about the development of the firm, like funding and
growth
• Issues regarding patenting
• Discussions specifically concerning the venture idea, like market
potential and business plan
• Entrepreneurial circumstances/characteristics, like beliefs in self or
about others or feelings about being an entrepreneur
• Perceived resistance
The first four are the theme-based codes, while the last two are the
pattern-based codes. The manner in which this is done in NVIVO is that
all passages in the transcribed text discussing for example a certain
supplier of an entrepreneur is marked and in that way made into a node
with the name of that supplier. Thus it is possible to open that specific
node and have all the information about that supplier gathered in one
place.
Coding the material was an iterative process and I went over the
material several times adding new nodes. In some instances this lead to
certain passages having more than five nodes overlapping such as
multiple stakeholders, different entrepreneurial circumstances and/or
characteristics, and perceived resistance.
Next I focused on each of the nodes I had created, specifically the
stakeholder nodes and their relationship with the entrepreneurs. I used
Frooman’s dimensions of relationships (1999) to characterise them and
give attributes to each. This revealed the entrepreneurs’ degree of
dependency on each stakeholder.
To make sense of the coded material, I did what Miles and
Huberman call displaying the data (1994) by sorting it according to three
questions: (1) what were the key events and decisions in each case; (2)
how and (3) why did they come about. In addition to this method of
making sense of the material I also contextualised the data in graphic
form in order to increase understanding of the material as a whole. The
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way I did this was to build maps and matrixes which helped me grasp
the big picture and how things related in the cases (Maxwell, 1996) (see
Appendix C for an example of a venture creation map of one of the
cases).
When the empirical gathering was finished and all transcribed
interviews were coded I returned to the node for perceived resistance in
each case which consisted of passages of transcribed interviews
concerning resistance in one way another. This node made little sense as
a whole as it contained all the material of perceived resistance in each
case. I now recoded it in order to separate it into individual instances of
perceived resistance. One tool for sorting the resistance nodes was the
attributes for stakeholder nodes that I earlier created. This helped me
understand how the dependency of the entrepreneurs influenced their
perceptions of the situations. Other tools I used were the maps and
matrixes I had built. In this way 55 preliminary instances of perceived
resistance from all four cases were found.
With all these nodes for perceived resistance I now compared all
of them where I again returned to the attributes of nodes contained
within as well as which nodes that they were contained within. I sorted
them and categorised them accordingly in order to reveal patterns
between them. I also merged some earlier nodes into one, and removed
some that I had earlier created. What I ended up with were stepwise lists
of how each instance played out (see Appendix E).
Next I began sorting the instances into patterns, narrowing the
node labels to reflect patterns. To gain an overview of the cases I then
built longitudinal models displaying the resistance nodes.
At this stage I could write drafts of the cases as they are presented
in the next chapter. These drafts were sent to the entrepreneurs for
feedback and then rewritten. By using the written cases and the
resistance nodes I now visualised each instance of perceived resistance
using the theoretical model (see Appendix E).
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Finally with all of this material in place I could move from an
overview mode of studying the data through the case descriptions and
the venture creation maps, to a detailed one of every single step in each
instance of perceived resistance, and for each step I could also easily
access the underlying data through the nodes. Using these parts that I
developed with the aid of NVIVO I could analyse the empirical material.
The analysis took the resistance patterns and viewed them from the
different perspectives offered by the theoretical model. To exemplify,
when taking the perspective of why a potentially goal disruptive event
or process is perceived as resistance, I put all the instances of perceived
resistance from all the cases next to each other and sorted them into
groups of ever larger categories until I could not take it any further. Next
I focused on the key aspects of the categories I had sorted the instances
into, specifically what they meant, and what dynamic that was involved
in creating them. This formed the basis for the analysis presented in
section 5.1.3.
During the work with the empirical material and the analysis I
also wrote a number of papers to develop my analysis in writing and
also share and receive feedback from other researchers. The first was a
conference paper accepted for the Babson Kaufmann Conference in 2005
which presented and discussed the concept of perceived resistance
34
. The
second was a conference paper presented at the Academy of
Management in Philadelphia, 2007, which discussed the implications of
energetic resources in new venture creation (Landberg, 2007), and the
third was a book chapter outlining perceived resistance and the
importance of taking entrepreneurs’ energetic resources into account
(Landberg, Forthcoming).
34
Unfortunately I could not participate and present my paper at the conference
due to personal reasons.
83
3.4 Quality of the study
Given the research design, the quality of the study is the final
piece to consider. Primarily, the issues of importance for quality are to
ensure that what is meant to study is actually studied, and that the
empirical phenomenon is explored without adding issues not observed.
Three main types of understanding influence this: description,
interpretation, and theory (Maxwell, 1996).
In order to ensure a representative description of the empirical
material I recorded all the interviews, and then transcribed them all.
To attend to the issue of interpretation – that the study takes
account of the perspective of the people studied, and the meanings they
attach to what they say – I focused on a number of things. We all have
our own views and thoughts about the empirical context which we
study. All through the study I made an effort to be aware of my own
frame of view, tried to be attentive to the entrepreneurs’ meanings, and
to make sure to ask open-ended questions. Another strategy that helps in
this sense, and which I have used has been to discuss findings with the
observed entrepreneurs. I did this by asking for feedback on both data
and conclusions from the people I study (as suggested by Guba et al.,
1989).
Understanding a phenomenon is at the core of doing qualitative
research. A key issue in developing this understanding is ensuring that
discrepant data is taken into account and that alternative explanations
are considered. When working with data, it is easy to become blind to
these issues. This is also closely related to the issue of validity, which in
qualitative research is used to refer to “the correctness or credibility of a
description, conclusion, explanation, interpretation, or other sort of
account.” (Maxwell, 1996). The manner in which I have dealt with this
has been to write conference papers presenting preliminary data and
analyses in order to get feedback on the issues Maxwell points out. I also
continuously asked colleagues at the Stockholm School of Economics for
84
feedback on methods, models, concepts, theories and analyses. In
addition I presented my findings in teaching situations to undergraduate
students at the Stockholm School of Economics and in seminars to
entrepreneurs and actors somehow involved in supporting the start-up
process. This helped me question and develop my own view of the data,
and to stay open to alternative explanations.
A guiding principle in the process of carrying out this research
has been to focus on the performative criteria. With this the text itself is
not the focus, instead it is the readers’ responses to whether they deem
the work as being useful, and primarily edifying. A text perceived as
edifying is one that helps to take us out of our old selves and aid us in
becoming new beings (Czarniawska, 1998). From the perspective of my
research I interpret this in a way that I provide an account that is deemed
useful and edifying – that the contributions of this study bring our
understanding of the start-up process forward in a way that readers find
useful.
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4 Perceived resistance to new venture
creation – four cases
These are the four cases written into stories that follow the
instances of perceived resistance of each. Specific effort has been put in
towards making them complete in the sense that they offer the reader a
basis to judge the analysis and conclusions made from them. As a
reading guide, Figure 3-1 offers a time-line which depicts the observed
instances of perceived resistance as they occur and come to a conclusion.
In addition, Appendix E contains a set of tables of all these instances of
perceived resistance.
4.1 Brokering mobile tunes via the Internet
Jonas is a lecturer at a technical college in Stockholm, in many of
his courses, students carry out assignments of varying length and
difficulty. As a part of what his department could offer students, he
nurtures an idea where students can develop their own venture ideas as
a part of course assignments. In the middle of 2003 Jonas comes up with
an idea of his own – a service which would offer anyone with a mobile
phone to produce and sell ring signals for mobile phones over the
Internet.
Before thinking about how to start his venture idea in any more
detail, he talks to a colleague who is an expert at programming Java
which is the language of choice for the application. The reason for this is
that Jonas wants to have an indication to whether the idea is at all
possible to realise. The colleague is impressed with the idea and even
86
comes with some thoughts about how to realise the idea into a concrete
service.
The opportunity to launch the idea comes in the autumn of 2003
when a group of five students are interested to work on the idea as a part
of their course assignments. Before actually beginning to work with the
students though, Jonas talks to the head of the department to make sure
that it does not violate department policy. The response is positive, even
to the point where entrepreneurial initiatives are encouraged within the
department and as parts of courses. Discussions at department level are
initiated to try and set some sort of framework for how such initiatives
can be encouraged and supported.
For Jonas the set up works perfectly as he acts as the tutor and
teacher for the project at the same time as he is the lead person in the
venture idea. This way he feels that he can legitimately spend a number
of work hours per week on the venture idea, it is even expected of him to
do so and he is paid for it.
During autumn Jonas also participates in a start-up course where
he develops a business plan and learns the basic first steps of starting a
venture. He manages to combine this with his work so that he does not
have to spend any less time with his family. At the same time the
students begin developing the service, but the time they spend on it
depends on the amount of hours allocated towards the assignment per
week. During autumn this allocation is low so work is directed at
developing basic paper work so that programming can begin in spring.
In addition to preparing for programming, Jonas also carries out a
technical overview of the idea to see whether it is patentable or not. This
is not positive from his perspective as there are already a number of
patent applications in areas overlapping with his idea. But although it
might not be patentable, the market in Sweden is not restricted to them
and they can continue developing the service as they had planned.
87
The development runs smoothly, but slowly, and Jonas does not
feel that he can put any more time into it than he already does.
A case of structure
In spring the student begin programming and by the time that the
course assignment ends in March 2004 they present a prototype of the
service. This is well ahead of plan as they originally aimed at having a
completed prototype by autumn 2004. As the course ends and the
students present their assignments, their involvement in the venture idea
is discussed and all of them want to continue as they believe in the
viability of the idea.
Unfortunately as soon as the course assignment ends, Jonas loses
the computer that has been allocated to the students as it was only theirs
to use during the course. He talks to the university’s lawyers to see if
they can continue using them despite the course ending, but they
respond that “it is obvious, you cannot do that”. Jonas is offered the
possibility to formulate the problem in a letter and hand it to the lawyers
to look at. He hesitates whether it is any point though as they explained
to him that it is an issue of government institutions and the possibility of
running commercial activity. Giving up his attempts to keep the
equipment, they now have nowhere to sit and no computer to work on.
Trying to find a solution Jonas talks to pre-incubators at his school
and also the organisation responsible for the start-up course that he
participated in, but none of them can offer any help. This is not
completely in vain though as the school’s pre-incubator supplies a
business coach to the two students involved in the venture through their
thesis.
To continue working Jonas manages to find a room at his
institution where they can bring computers from home to work from.
Jonas is not satisfied with this though as it limits their work not having
proper equipment. Instead he contacts computer distributors to try and
88
get sponsoring. To improve the credibility of the venture idea Jonas
stresses that the pre-incubator of the school supports it and that they
have a business coach appointed from there. After some searching he
manages to work out a deal where they borrow computers over a period
of two months.
35
Having everything in place they decide to run live tests and ask
the people who take care of the institution’s IT environment to help them
set it up. Contrary to doing so, they respond that “no, you can’t run
commercially from here, you can’t do that”. As long as it was a student
project without a specific domain name, they had no objections, but as
soon as that ended and it became a wholly commercial project still on the
school’s premises they reacted.
In order to deal with this, Jonas again contacts the university’s
lawyers. To his relief they have no objections to using the university’s
server to run commercial web sites. They say “it sounds okay” and
promises to get back to him when they have looked in to it in more
detail. Jonas says that as long as they do not get back to him, he
continues with the site as if everything is fine.
The key issue in order to continue using the university’s premises
and server is that the students programming the service still do so within
the framework of a course. To fulfil this, the student and Jonas agree that
he should wait with giving them their final grades for the course until
the service is ready to go public.
Wanting to keep costs at a minimum, Jonas looks for mobile
phone operators that can be used for the SMS pay service that they need.
The problem is that they all have high starting costs, and that cost would
become their largest cost and entirely impossible for the venture to bear
during beta testing. Thus, again it seems impossible for them to even
35
When the two months are up Jonas manages to extend their borrowing over
summer after which he himself buys a server.
89
begin testing. Jonas has no other way than using an operator and so he
tries to negotiate a deal to do away with the fixed cost. One operator is
indeed willing to make a deal, but in return for removing the fixed cost
they demand 50 percent of the income of sold ring signals. Jonas has no
other option and agrees to their terms.
Finally in May 2004 everything is in place to be able to start beta
tests of the prototype.
Reaching out, or not
In spring 2004 as the students work on the prototype, Jonas begins
looking for people who can test it and finds them in students who study
digital media. At the same time he thinks about marketing, which
channels to market the service through. The ideal places for this are large
chat sites but he is unsure of how to best get in contact with them. To
begin somewhere he talks to the business advisor of the students
involved in the venture. Luckily he has connections with the largest
Swedish chat site and Jonas asks for his help to contact them.
However as they talk about it contacting the chat site, Jonas
begins to worry that the possibility of marketing might be off-set by the
risk that such a large actor steals his idea. Together with his
programmers, Jonas has spent a considerable amount of time developing
the service, but for a large actor with vast resources such a feat is small if
it really wants to copy it. With this in mind Jonas rethinks his strategy
and decides not to approach them for fear of losing his idea, at least not
at this moment.
Instead of contacting the chat site, Jonas is now a little worried
that if the idea makes waves, someone with resources could copy and
steal it. He tries to figure out how he should relate to this threat, but
cannot see anything he can do at this moment, so he lets it go for now.
Finding beta testers is a more pressing issue at this stage but Jonas
has difficulties finding them. The only contacts he is able to make are
90
with the digital media students and with a class of high school students
making digital music. However only two actually log on and upload
music before the summer begins. Jonas says that the low number of beta
testers is an issue of focus that has had a low priority until now, and that
this will change by autumn.
Time – a critical resource in short supply
Until the end of spring 2004 Jonas puts in approximately half a
day per week at work developing the idea. This is the time allocated for
working with the student project within which he has included his
venture. However this possibility ends by summer and in autumn he
will also partly be on paternity leave. In spring he says about the time
and effort he puts in now and will be able to put in by autumn that “I try
not to think about it. It will be difficult. Somehow it would be good if I failed,
but of course I will continue working on it with the aim of succeeding, in some
way I have to go for it”.
As autumn comes, it turns out as he fears. He now only spends
one day per week at work and the rest at home on paternity leave. Under
these circumstances he puts in “maybe one hour per week” on his venture.
He even sees the day he spends at work every week as a rest-day
compared with being at home with his child.
Even though he is not able to put in much time into the venture,
he does not feel stressed. His stress levels even drop compared with
spring as there is less immediate work that needs to be done with the
project. The service is up and running and “can sit idly for a long time
without problems”. He is not worried about the actual service as it is
developed to a point where it works.
At the same time as his available time has decreased, the project
has entered a new phase and he begins reaching out to people to find
users who can test the service, it is “the big thing now that we should put a
lot of effort into, recruiting testers”. To do this successfully he again feels
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that he should spend more time on it than he does. He tries to squeeze in
time where he can, but with his family and work situation he does not
see that he has much leeway at all. Jonas prioritises his family before the
venture, and as he has little time at work he must use it to fulfil his
commitments. Towards the end of September he says that “I will contact
high school classes [to find beta testers], but the question is when. Not this week.
The question is if it will be next week or the week after.” So beta testers remain
few, some from outside the venture team and some from within the
team. Jonas is not overly concerned with this and believes that they can
still develop a robust platform.
When autumn turns into winter the venture enters another stage
with a focus on marketing the service and getting users to notice it. For
this he sees a number of tasks that he must carry out, and so his stress
levels again increase. Jonas can only put in the same amount of time that
he did earlier in autumn and he feels that it is not enough. He worries
about the pace at which things are running, he feels it is too slow “it is
about time and opportunity, time is an article in short supply”.
Finding a market
Within the confines of his available time Jonas markets the service
the best he can. In November 2004 he says that “most things concerning the
venture depend on me right now. It is what I do that... it is about marketing this
service and it has come about slower than usual.” The high school approach
he initially chose turns out to be too slow. Instead he finds a web site for
music groups without a record label, a site where they market
themselves.
He sees this as a new opportunity where they can sell their own
songs through his service. The problem now is that he is only allowed to
sell ring signals 30-45 seconds long because of legal rights. With this
restriction he cannot seize this opportunity, to sell entire songs, so to find
out about the situation he contacts the organisation responsible for music
rights. They say that the difference between songs and ring signals is
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about to be removed, making it possible for them to shift their strategy to
also include songs.
There are hundreds of bands registered on the site and he contacts
as many as possible, but time restricts how fast he can work and how
many he can all and get feedback from.
Jonas feels that they must have enough songs on the site to attract
potential buyers – they must reach a critical mass. This however is not
the case at the moment as they only have one band that has uploaded
songs, but it is something he works towards.
Returning to the issue of time Jonas says that “the problem is time. I
have the energy and the motivation. The problem is that it competes with other
projects that I am involved in. But it feels like I can handle it through focused
and temporary efforts.”
Abandoning the old business model
After a few months the list of people who upload music increases
and with this Jonas and his team realises that their original business
model will never work. The reason for this is that it depends on
downloading the music to mobile phones. The downloading cost of a 4
MB song ends up being eight times as high as the cost of purchasing the
song. The seller of the song and the venture make approximately a
quarter each of what is paid for the song. Thus the only winners are the
mobile phone operators.
The music uploaded on the site consists mostly of complete songs
by the bands that Jonas contacted. Those bands are interested in
marketing and distributing their songs. With this in mind, Jonas decides
to abandon the idea of downloading ring signals and instead focus on
selling music that uses the Internet to download to computers. In this
way, paying for downloaded music also becomes easier as there is no
longer any need to go through a mobile phone operator.
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This also means that the service must be reprogrammed and
tested towards the new goal. Meanwhile the students who earlier
worked at the prototype as a part of their course assignments now either
take other courses or have graduated and work full-time. Earlier Jonas
was the bottleneck regarding time, now it is both him and the
programmers, no one has time and everything has to be done in the
evenings or weekends. Jonas says that “everyone are interested [in
developing the service], but no one has any time.”
Jonas ponders pushing the programmers to quickly develop the
new prototype, but he worries that if he does they might pull out. He
cannot do the job himself and they are moving into other projects or jobs,
so even though the new path forward with the new strategy is
promising, the pace of development risks being too slow. The bands that
have already uploaded their music on the site want to see some
development and if nothing happens, the will likely give up and go
somewhere else.
What is the outcome?
Jonas does not put in any more effort into his venture idea, and as
the students graduate and leave the school, no one is left to work on it.
4.2 Live soccer matches via low bandwidth
The idea and opportunities to realise it
Being an ardent soccer fan, Eric is annoyed each time he misses a
match with his favourite team, especially if he is away from a TV. He
begins thinking about if this could somehow be dealt with, if one could
watch soccer games live on low bandwidth cell phones. In the spring of
2003 he becomes unemployed and decides to use his time to try and
realize his idea, so he starts developing a service broadcasting real
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movements of the ball while simulating players’ movements using low
bandwidth.
Before losing his job, Eric worked as a project manager and not
being employed anymore makes him realise how much of his identity is
influenced by what he does. He feels uncomfortable for not having a job,
not contributing and not being appreciated for his skills. So his new
venture is something he fills this with, something he can “talk about at
parties”. He wants to do something productive and his venture is that
which gives him meaning.
At the same time, family is important to Eric. “I like to picture
myself as a modern and equality minded family man. I want to see myself as
taking responsibility at home, being equal with my wife and taking
responsibility for the children. Knowing which pants belong to Philip and which
belong to Peter.”
With his first child, he had a job to go to and structured hours,
which meant that when he was home he could be with his son. Now that
he is home working on realising his venture idea, his situation is
different. Being home and unemployed, he and his wife decide that their
youngest son should be home with him. This however conflicts with his
focus on his idea. The stress he feels from being unemployed and the
pressure he puts on himself to develop his idea means that he focuses
less on his son and more on his project. This in turn confuses his self-
image of being an equal at home and caring for his children.
Taking the next step
His first steps are to develop the service, sitting at home and
spending long hours of programming. However he feels that he needs to
know what other people think about his idea, is it something soccer fans
would want. In order to do a market survey he contacts some friends
who run a website where fans can follow their teams in soccer and ice
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hockey. They agree to help him and in early autumn 2003 he does a
market survey which is distributed through a questionnaire on their site.
The questionnaire indicates that his idea is a service that many
fans would want to have access to. Spurred on by the strong support Eric
continues to work on the programming to build his idea as he envisions
it to work. The questionnaire also attracts two people who want to join
him in his endeavours. One of them, Martin, engages in the idea on
equal terms with Eric who comes to see him as a partner, albeit not an
equal as Eric feels that he still has the final word in decisions. To show
good faith Eric promises him a share in the venture when they register
the firm. The other person has studied computer programming, and as
Eric wants to focus on other things than only programming he is taken in
as the lead programmer.
Eric has a background in engineering and project management
and is comfortable with the technical parts of developing the idea. When
it comes to issues like financing, business plan and such he is less
confident. To learn more of how to realise his venture idea he signs up
for a start-up course which runs from the autumn of 2003 until the
beginning of 2004. Martin also joins him as a co-participant on the
course.
Taking the course, Eric hears again and again that a business plan
is something one must have. During the course, all participants write one
and as an examination they are expected to do a presentation of their
venture ideas with the business plan as the basis. The problem is that
when sitting down to write one, Eric cannot gather the information he
thinks he must have. He does not feel that he has the skills needed to
write one, to do a market analysis and such. He begins pondering if he
should have a business person involved in the venture who can take care
of things like this.
During the start-up course participants are also encouraged to
sign up for a business plan competition. As all participants in the
competition receive feedback, Eric thinks that it would be a good idea to
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take the opportunity and participate. He wants suggestions for
improvement on his idea and his business plan, and he also hopes for the
off chance of finding funding for the development of the idea. Thus he
decides to participate in the competition starting at the beginning of
2004.
Entering a competition means that he opens up to criticism, but
this does not worry him, on the contrary he sees it as a necessity to
develop the idea. The criticism that he has earlier received never angered
or offended him, but by participating in the business plan competition he
experiences a different kind of criticism. The feedback he receives in the
business plan competition is the opposite of being constructive. The
members of the jury who evaluates his venture idea come with
comments such as “this will never work!” and “how do you think you can
compete with television, I do not understand this, you have got it wrong”. Eric
is deeply disappointed and regrets participating in the competition. He
does not think that the people who evaluated his idea even read his
business plan. Instead of talking out of knowledge of the market, they
seem to talk from some gut feeling. In this way he perceives the feedback
he receives as “totally destructive”.
Summing up his participation he describes the business plan
competition as having the effect of “pouring cold water over entrepreneurs
on fire”. He never got any suggestions for improvement, only comments
like “this is really bad”. In order to keep himself motivated and his spirits
up concerning his venture idea, he directs his anger at the organisers.
New venture versus employment
When he became unemployed, Eric immediately began applying
for new jobs, but as the economy was in the middle of a recession at that
time, finding a job turned out to be a difficult feat. Thus his new venture
received more and more of his attention. As autumn comes Eric feels that
he should quit sending out applications and instead focus entirely on his
idea. His feelings are “chaotic” and he is unsure of what to do. He
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ponders his options saying “I give up looking for jobs and try to live on this
[his venture idea]”.
His wife reacts to this with nervousness and tells him that “you
have to contribute to the household; you have to have a salary”. Eric takes this
as her scepticism to his venture idea. When he gets carried away and
wants to realise it at all costs, she doubts it. Eric tries to convince her that
the venture has the potential to offer a solid financial situation, but she is
still sceptical.
Thus Eric feels that he must have a paying job in order to
contribute to his family, as the solid base. So he continues applying for
jobs and eventually lands one in October 2003. His wife is still unsure of
his intentions and continuously expresses her worry that “you won’t quit
your job, will you!” Eric reflects on this, that she accepted it as long as it
did not interfere with the family situation and that it all changed when
he began voicing that he would like to drop everything else and only
work on his venture idea.
Even though he was hesitant to continue applying for jobs, when
gets a new job he is “ridiculously grateful” to his new employer and says
that getting the job is one of the greatest kicks of his life as he again feels
a certain level of self-worth. He even feels in some kind of debt to his
employer for hiring him at a time when he was vulnerable. He has what
he calls irrational feelings towards his employer – he is so thankful to
them for being kind to him that he can endure many problems and still
be happy. And so he does as his employer forbids employees to have job
on the side, or their own companies, and even wants that in the contract.
Eric agrees to this restriction, but he does not abide to it. In the end it is
his venture idea which makes his heart pound and that which he wants
to put effort into.
So in order to work on his venture he sneaks away to meetings
and to the start-up course. However when he sneaks away he still feels
guilty towards his employer and his colleagues. He explains his view of
his employment in relation to his venture by saying that working on this
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venture “feels like being unfaithful… employment is the stable relationship,
that which one build upon, the accepted, while the venture is a fleet footed
mistress whom you sneak around with”.
New venture versus family
From the start of his venture creation attempts, Eric feels an inner
conflict between time spent with his family and time focused on the
venture. Initially it is his youngest son who is at home with him when he
is unemployed who he feels does not get the same attention as his first
son’s early years.
Eric views his venture idea in relation to his family as “the battle
for the venture against those we share our lives with”. With the venture idea
as his life project, the battle arises as his wife’s life project is their family.
He thinks that in her dream world, Eric can let go of the idea and instead
focus on her project. He says that she thinks his idea is fun, but also
equally difficult and inconvenient for her and their life together. When
he is unemployed and begins his creation attempts, this is no big issue.
But as his wife’s concern with his thoughts about not looking for a job
showed, it becomes an issue when his creation attempts infringes on
what Eric believes is her vision for the family.
Describing himself as a responsible father and an equal with his
wife he is torn regarding this. He “likes” her vision also, but cannot give
up on his idea. Time is an important aspect to Eric, and something that
he has plenty of as long as he is unemployed. As soon as he lands his
new job in the autumn of 2003, everything changes. Eric now feels that
time is not sufficient to fulfil his commitments to employment, venture
and family.
Eric squeezes in time towards his venture where he can. Getting
the new job, his wife wants to support him in by picking their sons up
from kindergarten so that he could show his commitment to work.
Instead of spending time at work, he uses this time to attend the start-up
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course. When the course ends his wife tells him that “now that this start-
up course is finished maybe you could pick up the boys from kindergarten
sometimes. We did say when you started working last autumn that you
wouldn’t pick up the boys so that you could show that you work well. But in
actuality you have left early to go to the start-up course. So actually you have
been able to pick them up all along. Now you will start picking them up.” In
other instances she points out that he spends too much time in front of
his computer at night, working on his venture while the boys watch
television. Eric wants to have a relationship built on equality, and this
gives him a bad conscience. He ponders what to do and considers
limiting the time he spends at his idea.
Later in spring 2004 he and his wife decide to renovate their
house in the suburbs of Stockholm. This new project takes a further toll
on his venture creation efforts, both time- and money-wise. He says that
it would be “difficult if the renovation project would be pitted against his
venture”. Then he could never motivate why he would take of his money
and put it into the venture which his wife does not believe in, instead of
putting it towards renovating their house.
At this time Eric expresses that “I cannot put in less time in this [the
venture] and still keep some kind of control and initiative. I would rather only
work with this, that is for certain, but I get less and less time for it. The demands
from my job and my family increase all the time, especially my job.”
The needs of the venture
Eric thinks that in order to develop the idea to where he wants it
to go, he needs funding. The key issue for funding is programming
where he needs both programmers and hardware. However he is
hesitant to bringing in investors at all. He compares bringing in investors
with bringing in his wife into the project. With investors he risks losing
absolute control over the development of his idea. With his wife he
would take what he calls “soft risks” if he were to ask her to put time into
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the venture. This risk arises as he puts himself in debt to her. Such a debt
would alter the equality of their relationship.
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Hesitant or not, Eric decides to talk to some people and see what
his chances are to acquire funding. At the beginning of 2004 he makes
contact with people in the venture capital industry, using already
established contacts with leads into the industry. At his first meeting he
ends up in a discussion of the requirements he has to consider before
approaching a venture capitalist. He is told that he must have a solid
business plan which includes among other things a market survey.
The requirements for venture capital are more than he believes he
can live up to. Eric ceases his plans to look for external investors and
instead decides to fund his venture on his own through loans from
family, friends and possibly banks.
There are some people close to Eric with means that could be
invested in his idea, but he wants to wait as long as possible before
asking them. As they have just started renovating their house which they
have borrowed money towards, taking an additional loan from banks to
fund his venture idea feels like a closed door also.
As an unsolved issue, funding continues to be a problem. Eric
says in spring 2004, ”I ponder it all the time ’darn, should I go to the
government funding agency or something and try to get funding’”. The thing
that stops him from this is what calls his lack of competence, drive and
ability concerning funding issues. When he forces himself to work with
the business plan he states that he does not “have the stamina to sit down
and write the business plan. In the best of scenarios I get stuck in front of a
spreadsheet in Excel, counting millions in expected turnover, and the hours pass
without getting a second closer to... well finishing the business plan.”
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He describes their relationship as really good and he does not want to risk an
alteration of this kind. He extends this soft risk to all his friends.
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When he talks about funding and the need for a business plan
Eric begins talking in staccato “it is hard to do a marketing analysis for the
venture… in a business plan it must show that we have a clear grasp of the
situation… that we have checked what the market wants… there should not be
any question marks… it should be like fill in the blanks and give us the money…
but our plan… it is like lame… a little bit lie ‘this is nice’”. He leaves the
issue of a business plan as an unresolved issue and instead works with
the little saved capital he has.
Eric prefers to work with people with whom he has no previous
history. The main reason for this is that he worries that if he works with
his friends, he risks the relationships. Risking relationships is something
that he worries about; he fears that if he involves his friends, things
could go wrong. His fears open up to pressures to separate his friends
and primarily family from his venture development attempts. As his
wife is a patent engineer with many years in the industry and he in need
of a patent engineer this makes him pause. She refers a friend of hers to
him and he talks to this person, but does not involve him any deeper as
he feels that it might affect his relationship with his wife.
Beta testing
After giving up plans on attracting external funding, the main foci
during spring are to develop the service and to gain access to soccer
games in order to run live tests. So far Eric has not registered any type of
firm, but in order to be able to pay the programmer he is forced to
register a non-limited company where he can use his private means to
pay him. The computer programmer is now a key person to the
development of the venture idea and Eric also promises him a share in
the future limited company given that he completes his tasks according
to schedule.
To gain access to soccer games and run tests, Eric finds the firm
that distributes broadcasting rights on the Swedish market through a
series of people starting with a long time friend. At the first meeting with
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the director of this firm, the executives of two large cable and satellite
pay-TV providers are also present. Eric assumes that they are there as he
could be a potential competitor to them and the broadcasting firm relies
on them for profit, they are in other words there to protect their interests.
The meeting turns out to Eric’s advantage and again his affiliation with
his friends’ internet site is an important aspect to show that he means
business and is trustworthy. The meeting results in him getting what he
wants, a promise to run tests during the full season of the Swedish
Premier League. However, when he receives written confirmation it is
only the first half of the league that is confirmed. Not to risk upsetting
anyone and maybe loose the permission completely Eric accepts this,
thinking that it will be easy to prolong it into the second half.
They start testing, and all three of them, Eric, Martin and the
programmer engage in the work. There are some glitches but they work
them out, and Eric is happy to see that it works as he had envisioned.
Towards May 2004 he begins making plans for how to market the
service, seeing beyond Sweden and thinking about the big European
teams. In Sweden he thinks that the association responsible for soccer is
likely to be a key actor, but so far he has not been in contact with them.
At this time when he begins to see how and when the idea can be
realised, all changes in an instant when Eric at the end of May 2004
receives an email from the director of the firm responsible for
broadcasting rights. The email is a forward of a mail he received from
the lawyer at the association of Swedish soccer and it basically orders the
broadcasting firm to terminate Eric’s rights to test his service at the
Swedish Premier League games, effective immediately. Eric “feels like a
bucket of cold water poured over my head”. He assumes that the reason for
termination is his affiliation with the Internet site owned by his friends
which until then had been a key for credibility, advice and contacts. The
site cooperates with foreign Internet betting firms aspiring to enter the
Swedish market which is controlled by a Swedish monopoly, which in
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turn is the soccer association’s largest sponsor. He never connected this
before, but now in retrospect says that it is all clear.
As soon as he receives the email Eric calls the lawyer to ask why.
The lawyer seems prepared for his call, expecting it. Eric finds out that
his assumption of why it happened is correct. He asks “we [referring to his
affiliation with the Internet site owned by his friends] have a very informal
partnership, there is no ownership and no money involved, we can get rid of this
burden today. Am I right if I say that if we do this we can get back to you in the
future?” and the lawyer responds “I think you should get back to us in
autumn. We encourage this kind of projects.” Eric is willing to give up his
connection with his friends “it is worth to break completely with the Internet
site; we can do that and still stay friends”.
Eric is happy that he made the phone call, if he had not done so he
thinks he could have terminated the project as it would have been futile
without a chance to test and develop the service. The phone call instead
turns it to something positive, he sees a new opening, “you have to stand
up and speak and not take a ‘no’ for an answer, even a ‘no’ can be turned into a
yes in some other direction”. Now this could be a door into the soccer
association.
Earlier during spring Eric has had problems motivating himself to
continue and he puts the blame for this towards not being forced to work
directly with programming anymore. This is both good and bad, the
computer programmer is much better at what he does than himself, but
he misses the long nights programming when he felt that he “did
something”. However when they are blocked from testing their service on
the Swedish Premier League, he again feels that his enthusiasm for the
venture soars. He has something important to do. The problem is that as
his enthusiasm goes up, so does his workload and then he immediately
feels the conflict when trying to make enough time for the venture in
pockets in his other commitments.
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A new start
Without the opportunity to run tests Eric focuses on the interface
of the service, to make it as visually appealing as possible, and on
removing glitches in the code. He does this work with his programmer,
but the programmer now has a job and less and less time to spend at
developing the venture idea.
By late autumn they have a service without glitches and
developed to a level where Eric feels that he can show it to the soccer
association. Thus he contacts them again and manages to set up a
meeting. At the meeting he brings his programmer with him and can
show a beta version of the service which has been greatly improved since
the live tests in spring. The representatives from the soccer association
express that they like what they see and ask Eric what he needs. He is
now again ready to run tests, and is invited to do so at an international
match with the Swedish national team at the beginning of 2005. Leaving
the meeting Eric is relieved and happy to again see a future for his idea.
The beginning of the end
However he never makes it for the test run, instead he refocuses
on an old topic, patenting the idea. Patenting was originally his partner’s
responsibility to work with, but without a word he disappeared from the
picture in the early autumn of 2004. As summer approaches Eric
gradually gives up on the idea, or rather other things take over his
attention. The reason why he decided to register the patent is unclear,
subscribing it loosely to a wish to leave something behind from all the
effort he put into realising the idea.
In Eric’s case, he tried to be innovative in the way he approached
the market, but as it was governed by a monopolistic structure his
attempts to circumvent the main actor were thwarted. Eventually he had
to deal directly with that actor. Before doing so he expressed worries
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about it being bureaucratically rigid and difficult to work with, however
the organisation turned out to be open and supportive.
This meant that the Internet site of his friends which was
instrumental in the start of his venture turned into a liability. As he
began realising his venture idea and worked through his friends, he had
no way of knowing of this potential problem looming in the future. As
events unfolded though, the entire basis of his idea risked falling apart
because of affiliations within the industry he targeted and also between
actors in his industry and actors in the betting industry.
Family, employment and a choice of effort
Eric submits to his situation saying that he realises that it will
probably not change, on the contrary it will just continue with more
things to do. More things subscribing to his time do indeed occur and in
the autumn of 2004 he works hard for a soccer club which he is an ardent
supporter to and which is in need of help. Now his venture “feels like… it
feels like it is in the balance. It could easily just disappear if we lose focus as so
many other things happen right now”.
He continues to commit himself to his venture, but in the Spring
of 2005 while focusing attention on the patent he comments on his
situation that “now we have another child coming [their third] and it… then it
is even more important with, well… each time one puts a nail in one’s beautiful
and panoramic, but still one’s coffin, each time one do things like having a child,
taking out a mortgage on the house or buying another car, one limits oneself.”
To Eric, the structural demands from the different parts of his life
conflict and he has problems with up-keeping his goals for each and all
of the parts. His venture idea is pushed further and further down the list
in view of the attention he puts on it.
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Partner and workload
In the autumn of 2004 Eric starts complaining about the amount
of work that his partner David puts into the venture, or rather the lack of
work. When David got involved one year earlier Eric made him an equal
partner. Now he begins thinking about what to do if David does not
deliver.
He ponders having a talk with him about it, but he has not talked
to him for a long time. Simultaneously when he did talk to him, David
said that he wanted to have fun with the venture and he wanted to work
hard on getting the patent organised.
As time goes by David does not put in the effort he promised with
the patent, instead Eric is forced to take care of it himself. They still
hardly speak, but Eric does not contact him to discuss the issue. Eric is
annoyed with himself for not doing this, and with David for being
evasive, he is also worried about the implications for the venture.
David’s lack of contribution is a source of confusion to Eric as he
does not understand why he is so aloof. This affects Eric by diverting his
attention at the relational issues instead of at the realisation of the
venture idea.
What is the outcome?
Eric gradually ceases his venture creation attempts and finally
terminates all efforts by the summer of 2005.
4.3 Cosmetics, but only for men
Nina begins thinking about her venture idea in the winter of 2004.
The idea comes to her when she writes her Master’s thesis in Business
Administration about beauty products for men. Prior to her business
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degree she studied to be a make-up artist, so her interest in and
knowledge about the cosmetics industry is already well grounded.
During the course of her thesis work, she realises that the
cosmetics industry in Sweden is almost exclusively focused on women,
while men are only catered for as a sub-group of cosmetics for women.
She reads a text by a professor in economic history about the cosmetics
industry’s development in the 20
th
century which discusses how the
industry and media together created a demand for the products. Prior to
this, the market for cosmetics was very limited but as demand was
created it grew rapidly. It dawns on her that male only cosmetics could
offer similar potential today as history shows for the female cosmetics.
She realises that male-only cosmetics stores exists solely as small
web based ones. The opportunity she sees is to open a male-only
cosmetics store in the form of a physical location as well as a web based
one.
The problem is that she has never thought about starting a
venture of her own before, and she does not know how to do it. A while
earlier, in the autumn of 2003 a friend of hers had talked about a
university incubator that she had visited. Nina thought that this might
be an avenue to start and get some initial support. She contacts the
incubator and is quickly accepted to sit there for a period of six months,
starting in December 2003.
With the aim of simultaneously setting up a store in Stockholm
and on the web, Nina takes her first steps by doing a survey on the
Internet to try to find out the interest in her idea. While doing the survey,
she also writes a business plan and begins thinking about where to find
funding, primarily for the physical store which she aims at setting up at
a central location in Stockholm city. She uses the Internet to do the
survey, some friends with websites market it and she complements this
by spreading word trough discussion forums. The survey indicates that
there is a lot of interest in her idea, and together with discussions on the
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Internet forums this helps her to further develop the concept. These
positive responses bolster her determination to continue with the idea.
One step towards communicating and testing her idea is to
participate in a business plan competition where her venture idea is
celebrated as one of the most interesting ones.
Funding the store
Nina needs funding to achieve her goals but the problem she says
is that “well as long as you have money, if you have started a venture and
begun generating income you can borrow any sum you want”. She has no
personal fortune and her venture has not yet started generating an
income. As she does not have any mortageable assets either she feels that
her means of acquiring funding are limited. One option is to borrow
from family or friends but none has much extra to invest. She considers
asking her parents who could borrow on their house, but she is hesitant
to involve them.
In addition to funding the store and the web shop she needs to
survive while starting her venture, she needs money to pay rent and
food. To get some money while still being able to focus fully on her
venture idea she enrols in a course at the university, this way she can
live off her study loan. Living on a shoestring and working long hours in
order to both get enough study points to ensure continued funding, and
to develop her venture, she focuses her attention at finding external
capital to realise her idea.
As the sources for capital are limited given her situation she
considers venture capital. However she does not see it as a viable option
because of the consequences of bringing in venture capitalists. She says
that she would rather “own 80 percent of a SEK20 million company than 20
percent of an SEK80 million company”.
With this in mind, borrowing money seems like the only
possibility, and the only place where she believes she can borrow what
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she needs is from banks. In spring 2004 when she finally finds the store
location she has been looking for with an available lease, funding
becomes the critical issue for the venture idea. So despite her perceptions
of banks being unwilling to lend her what she needs, she contacts one of
Sweden’s major banks to book a meeting.
She meets with a man at the bank for 5-10 minutes where he asks
her brief questions about her venture idea. He takes her business plan
which he promises to read and then return to her to discuss funding
options. The meeting was a disappointment to her, she feels
37
that the
attitude of the person she met was diminishing and that his lack of
interest and professionalism showed incompetence, “the guy I talked to at
the first bank was rather young and I did not feel much trust in his capabilities
as he did not seem to know very much”. This is her first meeting with
someone who shows disinterest in her idea and she is annoyed as she
has so much to show how good the idea is through her business plan, the
market survey and comments from the business plan competition.
When the man at the bank eventually calls her back, it is to say
that the bank can not lend her any money, actually that the bank does
not extend any loans at all to start-ups. Instead he proposes that her
boyfriend who has a steady income takes a personal loan to cover the
needs of the venture. This proposal angers Nina, what does her
boyfriends’ credit worthiness have to do with her venture idea. She also
wonders if her being a woman influences the response. All in all, the
bank’s response confirms her perception of unprofessionalism and she
turns to another bank for funding.
At the new bank she meets with two female bankers and receives
a completely different reception to, and evaluation of her idea. The
meeting with them lasts 45 minutes and in addition to hearing her idea
out, they discuss different loan alternatives and their impacts on her
37
The word “feel” is frequently used as a synonym throughout the case
descriptions for instances where the entrepreneurs perceived resistance.
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firm. In the end however they too express that they cannot lend her what
she needs as her venture is untested and she has no mortageable assets
of her own. They do offer a potential solution though. They explain that
if she can get funding from a government agency
38
offering seed capital
to start-ups they would be able to lend her half of what she needs. They
can do this as the government agency would then share in the risk and
also make a risk evaluation of their own. This also means that if her
application with the government agency is rejected, the bank will be
forced to do the same.
Nina thus contacts the government agency to apply for funding.
As the banks rely on the government agency’s judgement of the viability
of the idea, it is critical for Nina to realise her strategy. She is appointed a
handling officer whom she meets to discuss her project and her needs.
Meeting her handling officer Nina gradually forms the impression that
the ideas that are supported are more traditional ones with less of an
entrepreneurial approach which she fears is an indicator that her
application will be rejected. Despite this feeling she perseveres and tries
to work with her handling officer to convince her of the business model.
Her situation is precarious as she needs the support of the agency in
order to get loans from the banks. However her initial hesitation with the
handling officer’s ability to judge her venture idea is deepened for each
point of contact that they have. She describes her as “a lady in her 50s who
does not even live in Stockholm and who does not have any idea about what it
looks like here [in Stockholm]”.
After applying for funding both from the agency and the bank
Nina waits. She expects a response first from the agency as that will
decide the bank’s evaluation. The phone call she gets is not from the
agency though, but from the bank who tells her that the loan application
38
Company controlled by the government with a goal to stimulate new
businesses and enable more innovators to reach the market with their products or
services.
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has been rejected because the agency turned her down. Nina is taken
aback and hit hard by the verdict, her whole strategy and way forward is
destroyed.
Ending the phone call she drops what she is doing and walks
away to be alone and think. She is angry, disappointed and frustrated
with being rejected and most of all by finding out from the bank and not
from the agency directly. She feels that her handling officer should have
called her first and given her a chance to respond instead of ignoring her
and calling the bank. Nina considers giving up, her motivation is at zero
and she feels helpless, wondering how she will be able to start without
money.
Feeling despair she calls her best friends, who have followed her
start-up attempts at a distance, and talks to them about her frustration
and about giving up. They console her and say that she must continue
with her idea and that it is great no matter what those people at the
agency and the bank think. This lifts her spirits and as the day ends she
again feels confident that she will find a way to realise her idea
regardless of not getting the money she applied for, she says “if one route
is closed off, one has to find another instead”.
The day after the phone call Nina calls her handling officer to ask
why her application was rejected. She says that she believes in her idea,
but that her strategy of having a high profile store in an expensive
location is not the way to start and that was the reason for rejecting her
application. This response infuriates Nina, and she wonders how the
handling officer can question her idea at such a fundamental level
without talking to her about it before deciding on the loan. Nina is not
able to make the handling officer reconsider the decision so she also asks
her contacts to try and convince her, but at no avail and the decision is
final.
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Shifting strategies
Realising that she cannot carry on as she had originally planned,
and with no way to circumvent the problem of funding Nina begins to
rethink her business model. She sits down with her boyfriend to think
things through. They discuss temporarily postponing the physical store
and instead focus on the web shop only. After thinking about this for
some time she decides on this new strategy. This requires much less
funding and a way for Nina to build credibility in the sense that she can
show that her idea is feasible, and with that return to investors.
Thus by summer of 2004, with a new strategy she begins
approaching suppliers. The market for male cosmetics products has one
main supplier whose brands in 2004 has approximately 80 percent
market share. Next comes a few brands with a large share of what is left.
However there are many newcomers entering. As a consequence of this
Nina feels that it is important to have the major brands, both for
generating sales and to signal to others that her web shop is “real”.
Initially she bases her focus on this analysis and decides to go for the
main brands.
The established and the new
Meeting with the marketing director of the company, Nina
describes her venture idea and that she wants to sell their products.
Although being a potential client to the distributor Nina somehow feels
inferior and as if she is begging them to sell her their products. She also
perceives their response as conveying superiority when they question
why she should be allowed to sell their products with her current
business model [web shop only (author’s note)]. They claim that they do
not sell their products via the web, but that they are only sold in stores.
Nina on the other hand knows that this is not so as one can already buy
their products through web shops, albeit not Swedish ones. Instead they
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go on to tell her that this is the way they have done business since they
started and it is something they will not change.
She tries to persuade them to sell her their products but they
maintain that their policy prevents them from selling to a web shop. She
argues that she will shortly have a physical store and that stores already
exist on the web selling their products. However they still refuse to sell
to her. Their response frustrates her, before she began contacting
potential suppliers she thought they would be happy if someone wanted
to buy their products, now she sees that that is not the case.
Refusing to give up Nina contacts mid-sized suppliers but many
of those are also hesitant to sell her their products. The most annoying
thing she experiences is suppliers who do not even bother to get back to
her after she has tried to make contact and left several messages. She
does not understand why they are not interested in selling her their
products or even talking to her. This takes a toll on her motivation to
work on her venture idea and thoughts of giving up arise.
To deal with her thoughts of giving up and anger with suppliers –
“bureaucrats who refuse to cooperate” – she has a few friends and especially
a person who is in a similar situation as she, starting up a new venture.
With her she talks about the feeling of uncertainty and thoughts of
giving up and they support each other. She once more has to reconsider
her strategy. She decides to turn to smaller suppliers, even suppliers in
start-up situations similar to her own. What she thought would be easy,
buying her shop’s range of products turned out to be an arduous task.
Eventually, five months later in the autumn of 2004 and despite the
biggest actors’ resistance she has a range of products large enough to be
able to open her store.
Issues of design
In the autumn of 2004 Nina begins developing her web shop and
signs up a small web design firm to do the job. With an education as a
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make-up artist Nina feels confident in her ability as far as design and
colours go, and takes an active role in the development of the website.
Her wish to be a part of the process however creates tensions with
the designers. Their view of how to work, they say, is to have total
freedom to do the design as they want. This way Nina feels that she
constantly argues with the designers to push her ideas through. Shortly
into the project the design firm demands that she must pay more for
their services because they do things that were not included in the
original agreement. Nina is rather angry with how they handle things
and tells them that she agrees to pay more but that things then have to be
done her way, otherwise the deal is off. To her surprise the designers
agree to her demands.
Now things settle down but after a while she again feels
frustrated about how they relate. The design of the website is nearing
finalisation but Nina does not agree with the colours used in the site. She
tells this to the designers and asks them to choose a different colour
which she also suggests. They refuse and express their irritation with her
demands which they feel infringes on their artistic freedom. They claim
that they have done web design for many years and know better than
her, that she should trust in their experience.
Nina gets “a little irritated” and asks some people she knows who
are involved in design for a second opinion on the designers’ choice of
colours versus her choice. Their responses strengthen her belief in her
own choice of colours as the best one, so she sends an email to the
designers demanding that they choose her colours. The designers
respond by saying that she is the client and they will do as she says but
that they think it is impropriate to involve others in this.
During this work with the web shop, Nina worries about the
uncertainty she feels towards opening it. Not knowing how it will work
out is hard. At the same time she invests a lot of time and money into the
venture. Some days she says she feels like, ”yuk, I just want to end
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everything, just give it up”, but then on other days she feels like this is the
only thing she wants to do. Those good days she instead ponders how to
make sure that she will survive long enough to be able to launch her idea
where one idea is to take weekend jobs to make money which she needs
in order to continue.
Being seen
After some delay caused by the dealings with the web designers,
the web shop finally opens in the winter of 2004. At the beginning of
2005 Nina arranges a meeting with media to promote the site and her
business concept. In order to get as big an impact as possible she brings
in a professional event organiser with premises at a prime location in the
centre of Stockholm. Despite her efforts she feels that her press release is
largely ignored by most of the larger magazines and papers.
To media she and her venture idea is a minor issue, but despite
this she is able to get some articles written about her web shop. She
believes that part of this success is subscribed to her strategy of using an
established event organiser. This media coverage in turn eventually
helps her gain more interest and more articles.
About the same time, at the beginning of 2005, Nina stumbles
over a newspaper article about a competitor whom she was previously
largely unaware of. It says things about the competitor’s strategy which
makes her wonder where the competitor got the market information
from. The competitor opened their store before Nina opened hers, and as
she had her survey done one year earlier she suspects that they got hold
of it and quickly implemented it in order to be ahead of her.
Even though she suspects that they copied her, Nina is not overly
worried as she believes that her store is the best. What annoys her
though is that they beat her to it, opening their store before her and thus
became the first store with her concept in Sweden.
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Chores of starting up
From the very start, Nina works hard at realising her venture
idea. In order to save money she uses her home both as an office and a
warehouse. When the web shop opens up, her boyfriend questions
whether her venture is a real job. He does not think that there is so much
to do, just taking care of orders and that is it. Nina believes that he has
that attitude as a consequence of having an employment and place to go
and work, something that he deems as important. She knows her own
situation, and that time is not enough and is irritated with him for not
being aware of her situation. He makes demands on her to spend time
with him when she feels she must work, and she considers keeping a
diary of how her days look like so he can see and understand.
In spring 2005 when the web shop has been up and running for a
few months she is beginning to feel that she is stretched out over too
many activities. So far she has kept much of administration and also
issues concerning design on her own shoulders, but she is beginning to
feel that she should have outsourced some things. At the same time she
says that she wants to have control of design issues, and the best way she
sees is if she does the job herself.
Some issues of design she does outsource but they turn out to be a
source of frustration as they are not done in the way she wants. A
consequence of this is that she is even more hesitant to outsource and
feels that she can do things better than specialists, although it would take
her six hours to do an advertisement which would take an advertisement
firm two hours.
In this manner Nina perceives that the grind of just keeping her
venture operational is a constant battle and blocks her need to work with
strategic and future oriented issues. She especially experiences the
seriousness of this as her venture is new and fragile and without further
work on these pressing issues she worries that it will be less likely to
succeed in the longer run.
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In addition to this multitude of chores, supplier mistakes eat up
more of the time she needs to spend on developing her venture. She
desperately needs slack, but there is less and less available. As soon as
something does not work or run as planned her time is eaten up. One
example of this is delivery problems from one of her suppliers. When her
customers order through her web shop and she does not have enough in
stock to cover the order, then it is critical that her suppliers can deliver
the correct item on time. In one instant this did not work and she had do
spend a considerable amount of time trying to communicate with a
customer while sorting out the delivery from her supplier. At the end of
the day she is the one who has to give her customer a discount as
compensation but she in turn gets no compensation from her supplier.
What is the outcome?
Nina realises her venture idea and launches the web shop. This
becomes highly successful and she is elected as one of the most
influential business women in Sweden. Eventually she also opens up
additional stores, all at a prime locations in Stockholm.
4.4 How to clean horses
A passion
Susanne loves her horse, but one of its greatest joys is to roll itself
in the mud. Each time this happens she has a lot of work to clean it. She
figures that there has to be a better way to clean horses than what is
offered by the available items on the market.
Her father is a hobby inventor and there are many inventors in
her family and among the friends of her family with a number of patents
among them. Susanne also describes herself as inventive, saying that “I
have always had a lot of ideas”. Together with her father she ponders the
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problem of cleaning horses and in the autumn of 2003 she comes up with
an idea to make a special type of brush. About the same time the pre-
incubator at the business school where she studies announces a venture
idea competition. She signs up for the competition, wins, and moves in
to the pre-incubator where she begins developing her idea.
As she moves into the pre-incubator she puts her attention
towards the product. She finds what she believes to be a perfect design
engineer with experience from product development through her father.
Together with him she builds her first prototype but the design engineer
turns out to be a disappointment and the prototype a complete failure.
As the first prototype does not become what she had hoped she
afterwards says that “it was not thought through enough, it was not the
correct solution and we also made some mistakes, we should have done the
review in media of similar products first and taken it a bit slower.” Parallel to
building the prototype with the design engineer, Susanne and her father
begin developing their own prototype as soon as they start to doubt the
viability of what the designer does. The functionality of this prototype
however turns out to be dangerous as it rotates in a way that risks
injuring the horses.
At the end of 2003 she registers a limited company and writes up
a business plan which she also competes with in a business plan
competition. As 2004 begins she carries out a review in the media of
similar products while talking to potential producers in order to map the
market structure. The review reveals no similar products.
Simultaneously and to keep the pace she conducts a market survey
where she interviews more than 100 people, both users and producers in
the horse industry. The survey indicates that there is a demand for her
product.
Bolstered by the positive news she develops the second prototype
in wood together with her father at his job where they have access to
certain tools they need. They attempt to solve the initial problems with
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the rotation of the prototype through a safety latch. Working on the
prototype, other people at her father’s work also join in and help.
However it turns out that wood is not a good material to work with, so
through her boyfriend she tries to develop a prototype in metal with the
help of a garage, this also is a dead end.
While working on building the prototype herself, Susanne puts a
lot of effort into finding someone who can build the brush. She talks to
everyone she knows with the aim to find someone relatively close by
with an expertise in plastics which she feels is the best material.
Eventually in late spring 2004 another person in the pre-incubator tells
her of a person in the suburbs of Stockholm who might be the right
person. She talks to the producer and feels that he is a perfect match for
what she has been looking for. To her it is important to be able to interact
closely with the producer while building the prototype. The extra cost of
having a producer in Sweden is something she gladly accepts in return
for being able to easily discuss the process with him, something which
she feels would have been much more difficult with a producer in for
example China.
Happy to have found someone who can both develop and
eventually produce the brush she signs an agreement with him to
develop the next prototype based on what she and her father have built
in spring. The producer immediately comes up with an idea for how to
do the safety latch that she and her father worked on, and with that she
hands over the prototype development.
As this all unfolds she meets few people who question the
viability of her idea. Some do, like a jury person of the business plan
competition who at a social event expresses doubt in her idea by
questioning whether it is at all feasible to produce and sell. Susanne’s
responds to such critique with attack, and enlists the juryperson’s friend
to express how wrong he is to doubt her. She does not take critique of
her idea home with her to improve or change her product. Instead her
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experience is that it is based on ignorance of the potential and the design
of the product.
Underlying expectations and functional contacts
Susanne knows of the trials and tribulations of developing a new
product through her family. Thinking about the time it takes to develop
her product she says ”I am really fond of my idea and it sort of feels like a
fantastic market which suits me very well, but it would actually have been better
if someone else had done the inventing part so that I could have done the
entrepreneurship part, but...”. She wants to leap past the development
stage as quickly as possible to the point where she has a finished
product, “I want to be an entrepreneur, not an inventor. Entrepreneurship is
the fun thing”.
She wants quick results and adopts a strategy to find key people
who can help her, either as mediators of other contacts or as concrete
help with specific questions. With this strategy she quickly builds a
network of more than 100 more or less active contacts. She focuses her
networking on issues she needs help with like funding, support on
issues of licensing, office space and a product development. When
looking for people Susanne actively and openly focuses on exchange of
utility and barters with contacts, offering a potential lead in return for
another. She wants results and it is only those contacts that have the
potential to aid her in realising the venture idea that she includes in her
network.
One in a line of such contacts for example leads to an opportunity
to test the brush together with an agricultural university. The university
has a research project on horses where they have a set date in 2004 where
the brush could be tested and surveyed under laboratory conditions.
Susanne is thrilled at this possibility and agrees to participate given that
she can have the brush ready in time.
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At the same as she has an instrumental approach to building her
network, she also feels that most of the stakeholders she interacts with
have some kind of interest in her. That interest in turn is what decides
how much they are willing to invest in her, whether it is work, money,
contacts or something else. She exemplifies with the industrial designer
who wants to see that she is professional and that the time he invests is
likely to lead to something only if she shows herself to be professional
enough to bring it to the market. Regarding the producer she believes
that he feels a social responsibility to bring good products forward and is
benevolent to ideas like hers.
Despite her focus on speed of development and working on many
fronts at the same time, there is a limit to what she can influence which
she realises when trying to bring in funding.
Capital needs
Susanne feels that she needs to hand in the patent before she can
start talking to potential users and licensees which is the next step in the
venture development. She also needs it to be able to present her business
plan in competitions which is a way to make money to sustain herself in
the short run – “I cannot say anything until I have handed in the darn patent”.
To do this she needs money as patent engineers are costly and she does
not have that kind of money herself.
In March she estimates that she needs SEK2 million to develop
and launch her product. She looks for sources offering the potential to
get money without reciprocal demands to give up equity or pay interest.
Borrowing will be a necessity and in addition she hopes to bring in some
money through business plan competitions that she participates in, by
applying for all the stipends she can find and eventually through
venture capital.
Her best option for borrowing is from a government run funding
agency and she hands in an application at the end of March 2004. She
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makes it clear to them that she needs a decision and money at the very
latest by June 10 as she will participate in a big business plan
competition which starts then and that she of course want to get going
with patenting and product development as soon as possible.
To Susanne the government run funding agency is the most
important stakeholder at this point in spring 2004. She talks to them
regularly and keeps them up to date with the development of the brush,
saying that “it is really important that they are positive to the idea and to me.”
Still she hears nothing from them and even though she calls
people she knows within the organisation basically every day towards
the end, they do not respond in time. She believes they will approve her
application when they look at it and is frustrated that they do not
prioritise it more given her urgent need.
Trying to explain why they do not process her application faster
she categorises them as bureaucrats with certain routines that seem next
to impossible to change and that they probably want a certain number of
applications to process each time.
Until she receives a decision on her application, she feels
prevented from continuing with the development of the venture idea
and she worries that it might not happen until after summer.
When she realises that it could take too long to get a response to
her loan application she applies from another funding agency with a mix
of government money and venture capital. However she is hesitant to do
so, both as it takes time and effort to write the application and as the loan
conditions are less favourable compared with the other source. This time
she receives a fast response with an approval but the terms for the loan
are too hard so she decides to keep it as a backup while waiting for the
first lender to make a decision.
Susanne dislikes waiting so she focuses her time on the only thing
she sees that she can do, working with the producer on developing the
prototype of the brush. She feels that she must understand everything
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about the plastics used herself, she wants to know why certain qualities
are needed and how for example temperature variations and high levels
of ammonia affect the material used. So while waiting for money
towards patenting, she has something to do. Still if she does not get any
responses regarding funding before summer she thinks that she will
work on her other project instead and let the brush wait.
Summer comes and with no money to pay the producer she has to
put that work on hold. With no money she is also forced to turn down
the offer from the university to test the brush as it will not be completed
in time.
Summer goes and there is still no response from the first lender.
This is much too slow for her planned activities so she feels forced to
change strategy and schedule for how to develop her product. Actually it
becomes a key to a major shift in direction of her venture creation
activities.
Time, slack and a new strategy
Although the change in strategy and focus, directing it towards
the licensing idea is definite in September 2004, the shift can be traced
back to spring the same year.
Going back in time again to early spring 2004, Susanne’s time
spent on developing the brush varies between weeks, sometime it is far
more than full time and sometime it is more of a part time job. In times of
low intensity she begins looking for other opportunities where she can
fulfil her entrepreneurial dream. In late spring such an opportunity
arises.
In April 2004 she meets with Richard who is in charge of a
university pre-incubator and something of an expert in licensing issues.
Susanne’s reason for meeting him is that she feels stuck and unsure what
to do, there are so many things to do and serious technical problems
with the prototype at the same time. Everything is slow and much
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harder than she had expected, she says she suddenly realised that “well,
if it takes four years until the product is out in the market is it… is there and
point to it from a business point of view?”.
Richard gives her an understanding of what she can expect when
developing a completely new product and which her alternatives are.
This opens her eyes to licensing and the requirements for licensing a
product, and acts as a watershed in how she views her product and what
she really wants to do. It connects with her desire to be an entrepreneur
more than an inventor and gets her thinking how to do it, how to
become an entrepreneur and skip the inventing step. After the meeting
she starts looking at how to license the brush, trying that as a business
model. The problem is that she cannot describe her product to any
licensees until she has a patent.
Somewhat later in spring Jack enters the pre-incubator where she
is at since the end of 2003. He has an idea to develop a venture
specialised in licensing inventions ready for the market. With Susanne’s
experience from her brush and her talks to Richard, she decides to join
forces with Jack who is happy to have a partner. Parallel with the brush
she now spends time on the licensing venture also where her network
expands and becomes a key component in how they find innovations
and how they work on developing and licence them.
Then when she is blocked from working on the brush from
summer because of the stalling lender she focuses all her attention on the
licensing idea. The brush is included in the portfolio of innovations that
she and Jack work on.
In September she finally receives the response she has been
waiting for since June from the funding agency and they extend her
credit as she had hoped and expected. She takes the loan and again
activates the development of the brush. Now there is a difference from
before however as it is now one of many in the expanding portfolio of
their licensing venture.
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With the money she has been waiting for she aims to build the
prototype and patent the brush within two months. Yet again she is
disappointed as the technical difficulties she has had from the beginning
persist.
Fading effort
Her view when getting the funding is to do the final tests, patent
it and work on it parallel with the other portfolio projects. The producer
who was put on hold before summer is again asked to continue with the
brush and he now works more or less without Susanne’s active
involvement as she has other pressing issues to tend to with the licensing
idea.
As time goes he is unable to solve the problems with their original
idea and instead introduces a new solution, but it turns out to be costly,
too costly for the budget Susanne has set up. Her involvement grows
lesser and lesser and she relies more and more on the producer to work
on the project on his own, but as she says “he has other projects that are
more fun so I have to be happy if he works anything at all with my brush”.
With the technical problems and the failure to participate in the
study by the agricultural university Susanne hesitates whether the brush
actually belongs in the product portfolio of their licensing venture. If
someone else would have come to them with the idea she says that she is
“uncertain whether they would have taken it on board”, if so then only at a
later stage. The university study would have been a key component for
them to see it as a viable product. If that would have shown that it does
not work, then the whole idea of the brush would fall.
At this point the brush is so far down on their list of portfolio
products that she hesitates to even count it.
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What is the outcome?
Susanne never moves the brush up on her list of priorities. Instead
she focuses whole heartedly on her licensing idea.
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5 Analysis of perceived resistance
Now I turn to the analysis where I address the purpose of this
study, to explore:
• Where and why do novice entrepreneurs perceive resistance to their
venture creation efforts?
• How do novice entrepreneurs cope with perceived resistance?
and to describe:
• Which effects do perceived resistance have on outcomes of venture
creation processes?
This chapter is divided into three sections. In the first I use the
empirical data to analyse the research questions. In order to structure
this section, the theoretical model forms an outline. In the second section,
the theoretical framework is further used to discuss the empirical
analysis. Finally in the third section I conclude the analysis by proposing
an inductive model of perceived resistance.
5.1 Empirical analysis
The deductively derived model from the theoretical framework is
used to analyse perceived resistance through the empirical material.
After an introduction to the analysis in section 5.1.1, the model forms the
outline of this section and a starting point to the inductive analysis. Thus
sections 5.1.2 (1) and 5.1.3 (2) address the first purpose of this study – to
explore where and why do novice entrepreneurs perceive resistance to their
venture creation efforts – by discussing (1) where potential resistance could
128
arise, what the origin of it could be, as well as (2) why resistance is
perceived. Section 5.1.3 (3) turns to the second purpose – to explore how
do novice entrepreneurs cope with perceived resistance – where I argue how
entrepreneurs cope with perceived resistance in section 5.1.3 (3). Finally
in section 5.1.5 (4) I focus on the third purpose – to describe which effects
do perceived resistance have on outcomes of venture creation processes – and
discuss the implications of the above on the evolving venture itself.
Figure 5-1: Theoretical model of perceived resistance as a map for analysis
5.1.1 Introducing the analysis
Comparing the four entrepreneurs, they and their ventures have
more differences than similarities. Two are male and two are female, one
has a product, the others a service, two are married with children and a
house while two have a significant other that they live with, two are
around 25 and two are around 35. Despite this, there are overlaps in the
instances of perceived resistance that I observed. What varies is their
individual appraisal of goal disruptions where the level of severity
decides whether it is perceived as a resistance or not. This issue of
variation is however a question outside the scope of this study as it
relates to the question of whether an entrepreneur will perceive
resistance in a particular instance or not.
39
39
As I stated in the delimitations to this study, I explore instances of
entrepreneurs’ perceptions of resistance, not differences between individuals’
perceptions or whether an entrepreneur is likely to perceive resistance or not.
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Throughout this analysis I refer to the resistance patterns
described in Appendix E. In order to facilitate for the reader, Table 5-1
summarises all instances of perceived resistance.
Table 5-1: Summary of instances of perceived resistance
J1 Jonas’ time available to focus on his venture idea is insufficient in relation to its
needs
J2 Access to computers for programming through the university is lost
J3 Access to university servers is restricted
J4 The core business model is deemed as unfeasible
E1 Eric’s key stakeholder for the development of his service terminates his testing
E2 A business plan is required to gain access to funding
E3 Jury members in business plan competition gives destructive criticism
E4 The process of applying for a job takes attention away from venture idea
E5 Lack of funding limits development of programming
E6 Partner does not fulfil his responsibilities
N1 Nina lacks the funding she needs to acquire her store
N2 Handling officer at government funding agency is unsupportive
N3 Suppliers do not want to supply the needed goods
N4 Conflicts with web designers
N5 Family questions work with venture idea
N6 Multitasking and poor performance of outsourced work
S1 Susanne has difficulties with product development
S2 Not interested in product development and lack of funding to outsource
S3 Handling time by government funding agency on loan application is too long
S4 Patent is needed for sales to begin, but funding is lacking to patent
S5 Pace of development is slow and other projects requires attention
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Furthermore, tables are used extensively to summarise
observations of which resistance patterns that are involved in different
issues. From those tables I pick a few resistance patterns to describe my
reasoning and exemplify from the cases. Choosing a few examples is
done in order to facilitate the readability of the text and highlight issues,
and should not be seen as way to prioritise between cases and resistance
patterns.
5.1.2 Where is resistance perceived?
Earlier in the theoretical overview I discussed previous research
that has looked at problems, obstacles, barriers and challenges that
entrepreneurs face. A number of lists of such issues have been created
which taken together cover most of the process of new venture creation.
What they indicate is basically that difficulties could arise anywhere and
anytime.
The instances of perceived resistance observed in this study also
generate a list (see the resistance patterns described in Appendix E),
which shows a number of situations where it arises. However I want to
point out that this is an exploratory study of perceived resistance such
that this list is what was revealed in this study. These listed instances
serve to develop categories and discuss the dynamics of perceived
resistance. They are not a complete set of potential instances that
entrepreneurs face. Furthermore they are not the end product of this
study, but instead the condensed empirical material upon which I build
my analysis.
In many aspects these instances overlap with examples from
previous research which could be taken as an argument that instances of
perceived resistance have been observed in previous research. However
it has never been categorised as such but merely put into more objective
categories such as barriers or obstacles. The focus of this study is what
entrepreneurs perceive as resistance which makes it entirely subjective to
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each individual entrepreneur. Previous studies have started with an
obstacle and then asked individuals whether that obstacle was an issue
or not (see section 2.2 for an in depth discussion of this), this study has
explored where resistance has been perceived, thus allowing the
entrepreneurs to decide from the start what the issues are. As will
become evident while reading this chapter, viewing perceived resistance
as subjective to each individual opens up to a broader range of issues
that what has been included through more objective issues like obstacles.
Overall, although the frequency of perceived resistance varies
between the four cases, all of them show the existence of at least some
instances of perceived resistance, either as discrete events or processes.
Whether these instances are discrete events or processes, they correlate
with Lazarus’ episodes of disrupted goal-directed behaviour (1990) that I
discussed in the theoretical framework.
Naturally resistance is perceived in relation to venture creation
activities, but there are also situations outside specific venture creation
activities where resistance is perceived. In such instances, issues affecting
entrepreneurs’ lives have spill-over effects on their venture creation
activities and resistance is perceived in the interface of those. For
example Eric’s wife’s scepticism about his venture idea (E4)
40
influences
his work towards realising his venture idea. Jonas’ prioritisation of his
family directly limits his time available to work on his venture idea (J1).
The questioning attitude of her boyfriend makes Nina feel that she needs
to show him how much she works, diverting her focus from building her
venture (N5). Those are examples where demands from, or in relation to
the entrepreneurs’ families cause them to perceive resistance.
Taking a view of all the observed instances of perceived
resistance, they fall within three broader categories (see Figure 5-2). The
40
All through the analysis I will refer to the instances of perceived resistance
which are described as resistance patterns in Appendix E where E stands for Eric, J
for Jonas, N for Nina and S for Susanne.
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first category refers to entrepreneurs’ dyadic interactions with individuals
that have some kind of stake in the venture. Nina’s arguments with the
web developers (N4) and Eric’s partner who does not live up to their
agreement (E6) are two examples.
The second category includes meetings with depersonalised
gatekeepers such as certain rules and regulations or government linked
organisations that offer help to entrepreneurs, but with strings attached.
Susanne’s attempts to speed up her loan application with the
government lending institution to get the loan she needs to realise her
venture is one example (S3), another is when Jonas’ access to computers
for the student programmers is cut by the university as the student’s
course where they needed them ends (J2).
Figure 5-2: Categorisation of instances of perceived resistance
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The third and final category of where resistance is perceived
refers to entrepreneurs’ beliefs of what is required in order to realise their
ventures. Susanne does not think that innovation is any fun, what she
wants to do is to be an entrepreneur (S1). She furthermore believes that
she needs a patent before she can take the next steps and begin selling
her products, but to patent she needs money which is difficult and she
begins doubting whether she should continue focusing on the product
idea (S4). Jonas worries about insufficient time to put into the venture
idea (J1), and fears putting pressure on the programmers to quickly
complete the service (J4). These beliefs are entrepreneurs’ subjective
convictions of their situations. They are based on their appraisals and
non-related to external relationships, although they could still have an
impact on those.
These three categories are not mutually exclusive but in some
cases instead overlap each other. On the border between entrepreneurial
beliefs and depersonalised gatekeepers is for example Eric’s belief that
he needs a business plan while being unsure of who might need it and
what it should look like (E2, E5). Between entrepreneurial beliefs and
dyadic interaction is Nina’s meeting with a large supplier that she feels
has bureaucracy-like rules of interaction with potential customers which
excludes her venture idea (N3). Nina can also exemplify the border
between dyadic interaction and depersonalised gatekeeper with her
handling officer who refused her loan (N2).
To complement the figure of the categories, Table 5-2 shows the
distribution of each entrepreneur’s instances of perceived resistance
between the three categories
41
. The table shows that all of Nina’s
perceived resistances are set within dyadic interaction and some
bordering to the other two categories. Eric’s are distributed equally
between all three, while Susanne’s and Jonas’ look somewhat different.
41
Note that the instances that span more than one category are counted more
than once.
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Neither Susanne nor Jonas perceives any resistance within the category
of dyadic interaction. To both of them, their beliefs are a source of
perceived resistance, as well as depersonalised gatekeepers. Why dyadic
interaction is non-existing could in Susanne’s case be explained by her
use of a large network of relationships which makes her less dependent
on specific individuals, and also the speed by which she moves to a new
venture idea. Jonas’ venture idea is placed in an academic context with
specific rules and regulations built for academia. He thus faces more
depersonalised gatekeepers than dyadic ones. In addition to this his pace
of venture creation is less intense than the other three entrepreneurs of
this study which could indicate that he does not push so hard and thus
does not have much dyadic interaction.
Table 5-2: Distribution of instances of perceived resistance over categories
Perceived resistance \ Case Nina Eric Susanne Jonas
Entrepreneurial beliefs 3 3 4 2
Dyadic interaction 6 3 0 0
Depersonalised gatekeepers 3 3 1 2
Another issue which needs to be taken into account when looking
at where resistance is perceived is its origin. This origin of the disruption
can be traced to before the occurrence of the perceived resistance itself.
In each of the instances it comes as a surprise to the entrepreneurs when
they perceive resistance. When studying the cases in retrospect however,
it is possible to trace the origin of each instance to an event, a
decision/action or a frame of mind which leads to the discrete event or
process that is perceived as a resistance (see Table 5-3)
42
.
42
Again note that the instances that span more than one category are counted
more than once.
135
The origin as exemplified in the cases is important from the
perspective of understanding the venture creation process. The cases
show that much of the perceived resistance seems to arise from issues
internal to entrepreneurs’ start-up attempts. In this respect, perceived
resistance is mostly a consequence of the entrepreneurs’ own
involvement in and perceptions of the actual venture creation process. It
is not so much dependent on the acts of external stakeholders, although
it appears to be so at first impression. When the soccer association stops
Eric’s testing for example, he perceives that as a resistance from that
stakeholder, but the origin is his decision to use his friends at the website
that initially promoted him. His affiliation with that Internet site was the
reason behind the soccer association’s decision (E1). Another example of
this is Susanne’s impatience with the process of innovation and product
development. She wants quick results and her brush to reach the market.
When this does not happen she becomes less and less inclined to put in
the effort to work on her product (S5).
Table 5-3: Origins of perceived resistance
Categories \ Origin Event Decision/Action Frame of mind
Entrepreneurial beliefs 2 10 3
Dyadic interaction 3 8 0
Depersonalised gatekeepers 2 6 1
This is not to say that external stakeholders lack importance, on
the contrary. In the theoretical framework I discussed that entrepreneurs
are more likely to perceive resistance from actors in control of critical
resources. Restricted access to such resources is likely perceived as goal
disruptive in relation to goals of high relevance. Pfeffer and Salancik
would say that this is likely to occur when supply is limited, production
136
instable and survival uncertain (1978). I will discuss this aspect of
resource dependence in more detail further on.
5.1.3 Why potential goal disruptions are perceived as resistance?
When looking at where resistance is perceived I earlier showed
that it falls within three categories, dyadic interactions, depersonalised
gatekeepers and entrepreneurs’ beliefs. At a basic level, why resistance is
perceived in relation to these categories does not differ between them
though. There are two common themes in all of the instances: significance
of a goal disruption to the venture idea and uncertainty of outcome of coping.
First of all, resistance is perceived when the entrepreneurs feel
that something poses a threat to the realisation of their venture ideas.
This means that it is subjective to each individual entrepreneur and the
degree of perceived resistance depends on how critical they believe
something to be to the realisation of their venture ideas. The degree of
incongruence resulting from the disruption and their personal reasons
for pursuing their ideas influences how a goal-disruptive event is
perceived.
To describe how significance affects the entrepreneurs’ creation
attempts and consequent perceptions of resistance I use some examples
from all four cases. As I stated above though, significance is an element
of all observed instances of perceived resistance which can be seen by
studying the resistance patterns in Appendix E. Susanne for example
depicts how commitment is lowered because of a difference in
expectation of what venture creation is about and her experienced
actuality of it. In her case this means that she perceives the resistance as
severe which confirms her view that such a mode of venture creation is
not what she wants (S1, S2, S3, S5). Nina is burdened by operational
tasks and has difficulties keeping up the pace she wants (N6). Jonas
perceives a conflict with bureaucracy when his access to necessary
computer equipment and server is severed because the student
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programmers no longer work on the venture idea as a part of a course,
without this he can no longer continue developing his venture idea (J2,
J3). Eric’s testing of his service at Premier League matches is abruptly
ceased by the soccer association, forcing him to halt his development
(E1).
However, significance is not a sufficient requirement on its own
for entrepreneurs to perceive resistance. The second theme mentioned
above is also required, namely entrepreneurs’ uncertainty about their
ability to cope successfully in order to overcome resistance. This is not
necessarily related to their actual coping and the outcome of that, but it
is their notion of whether they will be successful or not.
In order to describe the entrepreneurs’ uncertainty of coping
outcome I use a few instances of perceived resistance to exemplify. In the
same manner as with the examples of significance, the extent of
uncertainty as a factor in all instances can be seen in Appendix E. For
example, when Nina’s loan application is rejected she is first gripped by
despair as she sees no other way to realise her venture idea, no other
way to get funding or launch. She recovers and can handle the situation
again, but only after a while. To Nina the severity of the resistance was
so intense that she suffered both physically and mentally (N2).
Developing her product, Susanne has problems with the prototype to a
point where she begins looking for alternative venture ideas, she lacks
funding and contacts to solve her problems and sees lesser and lesser
solutions (S1, S2). Jonas prioritises his family and work highly, giving
him less time do put into developing his venture. He feels that in order
to succeed, he should put in more time, but does not see he can do that
(I1). From the beginning of his venture creation efforts Eric struggles
with his business plan. He tries time after time to write it, but does not
feel that he has the necessary skills to do it (E2).
Understanding why resistance is perceived through the
interaction of significance and uncertainty of outcome of coping also
reveals how entrepreneurs meet goal disruptions without perceiving
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resistance and how this affects their venture creation efforts. Susanne for
example needs funding to realise her idea, particularly to patent it which
she feels is a requirement before she can begin contacting potential
producers, resellers and such. Thus she goes about coping with this by
applying for funding from a government funding agency. All is well
until she realises that she will not get her loan application approved in
time to achieve her goals, which she had expected. Now, when coping
outcome is not certain anymore, she begins perceiving resistance from
the funding agency for not approving her application (S3, S4). This
shows how entrepreneurs can shift from a coping mode of no perceived
resistance into one where resistance is perceived when their coping
attempts fail.
5.1.4 How do entrepreneurs cope with perceived resistance?
So far, the analysis has looked at where as well as why resistance
is perceived. In this section the focus of attention is turned to how
entrepreneurs cope with perceived resistance.
The entrepreneurs use a multitude of coping strategies which are
chosen based on certain characteristics. In the following, I discuss this,
particularly the relationship between appraised significance, the
possibility to overcome a resistance, and the chosen coping strategy.
The entrepreneurs’ chosen way to cope varies depending on how
they appraise the significance of the resistance and their chances of
successfully overcoming it. In the previous section I showed that when
entrepreneurs appraise the significance of a goal disruption as high, they
are more likely to perceive it as resistance. The problem here is that the
more relevant it is to the venture, the more important it is to overcome,
and when this is paired with an uncertainty of how to overcome it, it
becomes a source of distress.
The entrepreneurs in this study use five types of coping, which I
label accommodating, bold, output, network and ostrich coping (see
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Table 5-4). In the following I describe these in detail with examples from
the cases and with the intention to convey my choice of labels. Firstly,
accommodating
43
coping is used in relation with stakeholders and means
that they accommodate to the demands of a stakeholder. The
entrepreneurs do this by giving in to resistance and thus limit their
creation activities. Early in his start-up activities Eric for example
contemplates focusing entirely on his venture idea, thus stopping his
search for an employment. This worries his wife who states that he must
contribute financially to the household. He tries to convince her that his
venture has the potential to offer a solid financial base for them but she is
not convinced. Eric sees no choice but to give up his ideas about focusing
all his effort towards his venture idea and instead continues looking for a
job (E4). This pleading with stakeholders to change their opinion of
course of action is also exemplified by Jonas’ loss of computers. When
this happens, he contacts the university lawyers and asks them to change
the rules and continue lending his team computers. Jonas’ pleading with
the lawyers is at no avail though as they refuse to change their decision
(J2). The final observed strategy that the entrepreneurs use to
accommodate stakeholders is to try to fulfil the demands of a
stakeholder. Having his testing halted by the soccer association Eric talks
to their lawyer about what he can do to again gain access to soccer
matches for testing. He is told that he should get back to them in autumn
to set up a meeting to show his venture idea. With this opening Eric
works on developing the service to a state where he can show it to them
and at the meeting succeeds to get a new chance at testing (E1).
43
Transitive verb 1: to make fit, suitable, or congruous 2: to bring into agreement
or concord : reconcile 3: to provide with something desired, needed, or suited (as a
helpful service, a loan, or lodgings) 4 a: to make room for b: to hold without
crowding or inconvenience 5: to give consideration to : allow for . Intransitive verb: to adapt oneself; also : to
undergo visual accommodation (Merriam-Webster, 2008).
140
The second type is what I call bold
44
coping where the
entrepreneurs use coping strategies that for example redefine
relationships, create new resources and change strategies for how they
are to develop their ventures. This means that they challenge rules and
develop innovative solutions to cope, in a sense fearless and the opposite
of accommodating coping. Here follows the observed ways in which
they apply bold coping. Jonas for example uses a strategy where he
bypasses the IT-department at his university in his attempt to continue
having access to university servers for the development of his service.
His aim is to find someone higher in the hierarchy who can verify that he
can continue using the servers. He is successful in this as the university
lawyers have no objections to this (J3). Putting pressure on a stakeholder
is something that Nina is able to do when her web designers do not work
the way she pays them to do. Although they claim their artistic freedom,
she uses her power as customer to force them to do as she wishes (N4). A
radical form of bold coping is to change strategy. When Nina fails to
borrow the money she needs to open her store and her web shop, she
decides to initially only focus on a web shop (N2), and when Jonas
realises that his business model with downloading music to a mobile
phone does not work because the cost of downloading is much higher
than the price for the song, he decides to shift away from mobile phones
and instead download via the Internet to computers (J4). Another radical
form of bold coping is when entrepreneurs attempt to find or create
complementary resources in new ways. Feeling stuck and unsure of
what to do with her brush, Susanne uses her network to find solutions to
both the prototype issue and how to sell and market it. She eventually
talks to someone who is an expert on licensing and a new horizon opens
to her which offers new ways of selling and also new possibilities to
44
1 a: fearless before danger : intrepid b: showing or requiring a fearless daring
spirit 2: impudent, presumptuous3obsolete : assured, confident 4: sheer, steep 5: adventurous, free 6: standing out prominently 7: being or
set in boldface (Merriam-Webster, 2008).
141
develop her venture (S5). When Jonas’ access to computers for
programming is severed by the university, and when he has exhausted
his options to try and change the university’s decision he ponders how
he could gain access to computers without any money. Brainstorming
with student programmers they decide to look for sponsoring and after
contacting computer companies and discussing conditions he
successfully strikes a sponsoring agreement (J2).
Output coping is the third type where the entrepreneurs attempt
to cope by working harder or outsourcing part of their operations, all
aiming at for example increasing pace and the amount of resources
working with the venture idea in order to overcome a resistance. The
possibly first available such strategy is to work harder which is what
Nina does with her operations as she opens her web shop. From the start
of her venture creation attempt she does basically all tasks, whether it is
administration or design. As her web shop opens, her available time
decreases when she starts working with orders, logistics and deliveries
also. Her desire for full control is a contributing reason that she decides
to do as many tasks as possible herself and the only way to achieve this
is to work even harder than she did before the shop opened (N6).
Susanne is in a similar situation when she launches her venture, with no
resources, a problematic prototype and chore of other tasks to do she
increases her effort to try to do it all herself (S1). At some point though,
working harder is not feasible as a coping strategy which Nina finally
experiences with her shop and she feels forced to outsource some tasks
to manage. However this turns out to be yet another source of frustration
to her as the job is not carried out the way she want it be (N6).
The fourth type, network coping is where entrepreneurs use
friends and family to overcome a resistance. All of the entrepreneurs use
this type of coping. Susanne for example has a deliberate strategy to
continuously use her network to develop her venture and uses this in a
focused way to solve her problems with the prototype (S2). Nina also
uses her friends for advice in her argument with the web designers. Her
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friends strengthen her in her decision and help her stand firm in her
view of how the website shall look like (N4).
The fifth and final type is ostrich
45
coping which in a sense is a
non-coping strategy. Here entrepreneurs avoid taking the consequences
of perceived resistance or externalise it, thus the likeness with the ostrich
that burrows its head in the sand. Jonas has difficulties accepting the
consequences of perceived resistance as his time spent developing his
venture becomes limited because of prioritising other aspects of his life.
Although he is aware that his time is too limited to achieve that aspires
to, and that his venture might fail because of it, he does nothing to try to
alleviate this (J1). When Susanne is unable to get funding in time to
realise her planned activities for her venture idea, she instead puts her
mind to a completely new project (S5).
As I discussed earlier, there is a relationship between coping
strategies, the resistances’ relevance to the venture and the
entrepreneurs’ beliefs in whether they can overcome the resistance or
not. The entrepreneurs choose strategies based on the relevance and
ability to overcome it. Ostrich types of coping are strategies where their
belief in successfully overcoming a resistance is low, but the relevance
can vary. Bold types are characterised by a stronger belief in successful
coping with a lower or varying relevance. Accommodating types on the
other hand come into play when the relevance of the resistance is high
and the belief in successful coping varies. Output types have lower
relevance and higher belief in successful coping while network types
have varying levels in both relevance and belief in successful coping.
45
I use this in its adjective meaning, “[from the belief that the ostrich when
pursued hides its head in the sand and believes itself to be unseen] : one who
attempts to avoid danger or difficulty by refusing to face it” (Merriam-Webster, 2008)
143
Table 5-4: Types of coping strategies
Accommodating coping
Pleads with stakeholder E1, E3, E4, J2, N2, N3, S3
Works to fulfil demands of stakeholder E1, E2, N1, S4
Bold coping
Bypasses stakeholder to one with more power J3
Puts pressure on stakeholder N4
Changes strategy E6, J4, N2
Finds/creates complementary resource J2, N3, S3, S5
Output coping
Works harder N5, N6, S1
Outsources work N6
Network coping
Uses friends and family E5, J2, N1, N2, N4, S1, S2
Ostrich coping
Avoids taking consequences of perceived
resistance
E5, E6, J1, S5
To conclude, the strategies that the entrepreneurs choose are
highly dependent on context and individuals where a perceived
resistance’s significance to a venture idea as well as entrepreneurs’
ability to overcome decides their coping strategies. Previously I have
pointed towards the pattern between where resistance is perceived and
why. In this section I have discussed how the reasons why entrepreneurs
perceive resistance influences which coping strategy they decide upon.
Next I turn to the outcomes of perceived resistance on entrepreneurs’
venture ideas.
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5.1.5 What are the outcomes of perceived resistance on a venture
idea?
There are two alternative outcomes from coping with perceived
resistance, resistance is either overcome or not (see Table 5-5). However
in between those two are shades of grey. In addition to this grey scale is
also the dependence on perspective taken. If it is strictly the present
venture idea which is the focus, then it is easier to distinguish what is
overcome and not. If the perspective is that of the entrepreneur and the
development of new ventures it becomes more difficult as the boundary
blurs between the current venture idea and subsequent ones which may
come out of the current one. Susanne’s venture creation process is an
example of this where she almost from the start, at least from when her
difficulties with prototype development began, looked for alternative
venture ideas that would be more conducive to her own view of what
entrepreneurship should involve.
Yet this study is delimited to the original ventures of the
entrepreneurs and does not take the interest or analysis further into new
venture ideas that the entrepreneurs embark upon. Given this, the result
of overcoming resistance has two subcategories, to temporarily
overcome resistance and to overcome resistance but with restrictions.
Resistance not overcome also has two subcategories, when entrepreneurs
give in to the resistance and decrease their venture creation efforts and
the above mentioned creation of and focus on a completely new venture
idea. The only obvious pattern between coping strategies and outcome is
that none of the strategies that used the ostrich type leads to an
overcome resistance.
Nina’s argument with the web designers is an example of
overcome resistance. She uses bold coping to put pressure on the
designers and demand that they do it her way, disregarding their artistic
freedom. After some discussions and back and fro with the web shop she
stands firm and they finally deliver a solution that she is satisfied with
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(N4). Jonas faces two resistances in succession which are related to access
to computer equipment that is necessary in order to develop his idea.
Both are overcome by using bold coping strategies, but one is only
temporary while the other has restrictions. Losing the students’
computers he manages to convince a computer company to sponsor
them with computers, but for a limited time only (J2). Next when his
access to internet servers is cut by the university’s IT-department he
manages to overcome this by enlisting the support of the university’s
lawyers. The lawyers however add the restriction that the servers can
only be used within the framework of a course that the student
programmers participate in (J3).
Turning to resistance not overcome, Eric’s partnership with David
is an example. As he started up, Eric took David on board and made him
partner while David took certain responsibilities on his plate. When Eric
feels that David shirks his responsibilities he plans to talk to him about
this, but his coping is of the ostrich type and it never happens. Time goes
by and after not having spoken to David for many months, Eric plans to
take care of David’s responsibilities himself. This does not happen either
as his commitment is lost and he gives up on the idea completely (E6).
Jonas can exemplify the outcome where the entrepreneur gives in to the
resistance and limits his or her venture creation efforts. He has a limited
time to put into his venture idea, and knows that time will become even
more limited as he is about to go on paternity leave. He does not
consider changing his time allocation between family, work and his
venture idea, and his venture thus receives less and less time and effort
from him (J1). Finally Susanne is an example of how the current venture
idea is deserted in favour for a new one. She has difficulties with her
prototype and needs money to develop it. The government funding
agency however takes a very long time handling her application, too
long for her as she begins looking for other venture ideas. By the time
her application is approved, she has already given up the idea and
refocused on another (S3).
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That perceived resistance is not overcome does not necessarily
imply that an entrepreneur gives up. He or she could do so as some of
the instances indicate (see for example E6 and S3 above), but it could also
have other meanings. In a number of observed instances the
entrepreneurs loop back once, twice or more to try new approaches to
their coping (see for example J2, J4, E1, E4, N2, N4, S1 and S3). Yet
another observed outcome is when an entrepreneur decides that what
was initially perceived as a significant resistance actually is not that
significant and can be more or less ignored. Jonas displays this when he
first worries that his time will not be enough as he goes on paternity
leave, but as soon as he does he plays down the need for his time and
instead claims that although development is slow he can still handle it
(J1). This outcome is connected to the ostrich coping strategy which
means that it is easier for an entrepreneur to ignore it than try to deal
with it, despite its significance to the venture idea.
Table 5-5: Outcomes of coping with perceived resistance
Resistance is overcome E1, N4, N5, N6
Temporarily J2
With restrictions J3, N3
Resistance is not overcome E2, E3, E5, E6, N1, N2, S1
Gives in and decreases venture creation efforts E11, E4, J1
New venture idea J4, S2, S4, S3, S5
What I so far have discussed are the outcomes of the individual
instances of perceived resistance. In addition to those, something
happens between them, something influences entrepreneurs’
commitments and appraisal of new instances of perceived resistance
before they happen. Eric for example meets a multitude of resistance
from various stakeholders and also from within himself, but his
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commitment is always strong. As he finally gets his big break and the
soccer association agrees to let him test his service at a national soccer
match, he fails to set it up for no particular reason and says that he does
not understand why himself. A few months later he realises that he has
given up on the idea. Nina on the other takes each instance of resistance
at a time. Although her initial strategy fails and she is forced to
completely rethink her business model, she never falters and is able to
realise her venture idea.
Each one of these examples individually hints at what influences
the process of venture creation. Eric discusses his own energy and how
important it is to his ability to achieve what he sets out to do. Nina
shows in her coping how she uses friends to help her overcome moments
when she doubts her own abilities and ponders giving up. Here is an
aspect that affects coping both in each instance as well as over multiple
instances – the entrepreneurs’ energy. I leave this for now, but will
return to it later on.
This concludes the empirical analysis of perceived resistance. In
the next section I build on the empirical analysis and add a theoretical
lens to it.
5.2 Theoretical analysis
This section is the second step in the analysis where I use the
theoretical framework to discuss the empirical findings. As in the
empirical analysis the theoretical model is used as an outline.
Section 5.2.1 discusses where potential resistance is perceived,
section 5.2.2 why resistance is perceived, and together they address this
study’s first purpose – to explore where and why do novice entrepreneurs
perceive resistance to their venture creation efforts. Section 5.2.3 focuses on
how entrepreneurs cope with perceived resistance, which correlates with
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the second purpose – to explore how do novice entrepreneurs cope with
perceived resistance. The final section, 5.2.4, elaborates on the outcome of
perceived resistance on the venture idea, and thus concerns the third
purpose – to describe which effects do perceived resistance have on outcomes
of venture creation processes.
5.2.1 Where is resistance perceived?
Entrepreneurs’ vulnerability to influence and in effect the risk of
perceived resistance is influenced by their dependence on certain
exchanges of resources. Resource dependence theory states that
particularly two dimensions are important, relative magnitude of the
exchange and the criticality of the resource (see for example Pfeffer,
1982). Looking at the cases, Eric being barred from testing by the soccer
association is an example where both the relative magnitude and the
criticality are high and indeed he perceived this as a major resistance
(E1). The market leader that Nina wants as a supplier is another example
where both dimensions are high (N3). This section mainly uses resource
dependence theory to analyse where resistance is perceived, as well as to
discuss the empirical findings from a theoretical point of view.
The empirical material indicated that entrepreneurs’ entire life
situation is critical to the creation of ventures. If a resource dependence
perspective is focused on the venture creation process only, the impact of
an entrepreneur’s whole life situation is difficult to use as a way to
analyse where resistance occurs. However when viewing entrepreneurs’
entire lives as a part of their venture creation efforts, the picture changes
and taking a resource dependence perspective becomes a key issue in
order to further the analysis. Jonas’ prioritisations that put his family and
his employment before his new venture idea, for example, indicate that
his whole life situation is a critical resource which acts as a
complementary resource to his creation efforts (J1). Jonas needs these
resources, his family and his employment, in order to be able to work on
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his venture. This means that they are highly critical to him and the
potential absence of them, or even minimising them in relation to his
venture idea could have a devastating effect on his venture. The same
line of reasoning can be applied to both Eric’s and Nina’s circumstances.
The issue of entrepreneurs’ whole life situations as an integrated aspect
of their venture creation attempts is an understudied aspect in
entrepreneurship literature and something I will return to more in the
next chapter.
In the previous section I categorised three areas where resistance
occurs, namely in dyadic interactions, with depersonalised gatekeepers
and in the beliefs of the entrepreneurs. Where resistance is perceived in
dyadic interactions it is a matter of asymmetric relationships which are
characterised by greater dependency on behalf of the entrepreneurs.
They also perceive lesser possibilities of managing and balancing the
asymmetry. With a loss of apparent control, entrepreneurs perceive the
asymmetry as potentially goal-disruptive to the planned behaviour
towards venture creation. Eric for example relies on his partner David to
take responsibility for and fulfil his obligations, but he fails to do so with
difficult implications for Eric who then spends considerable effort
pondering how to handle his relationship with David (E6). When Nina
brings in web designers to build her web shop, their unwillingness to
consider her views of design and a tight dead line initially puts her at
their mercy (N4).
The category of depersonalised gatekeepers is similar to dyadic
interactions in the sense of asymmetry. Here it is not the asymmetry in
meetings with individuals though, but in meetings with structures,
bureaucracies or companies. Jonas meets this when his access to servers
and computers is severed (J2, J3), Susanne when she applies for a loan
from the government lending agency (S3), and Eric when the soccer
association halts his testing (E1).
In both dyadic interactions and depersonalised gatekeepers, an
asymmetry between stakeholders and entrepreneurs is not in itself a
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sufficient condition for resistance to be perceived. The resource targeted
in the exchange must also be critical to the entrepreneur and/or the
relative magnitude of it must be sufficiently high. This is illustrated by
the examples of Eric (E1) and Nina (N3) given at the beginning of this
section. Furthermore the character of the venture idea influences how
dependent it risks becoming on certain stakeholders. If the focus is
limited and only a few stakeholders can supply the needed resource, the
risk of perceived resistance is higher than with many potential suppliers.
A number of aspects relating to the venture idea and also to the
entrepreneur come into play here. When Nina tries to buy products for
example (N3), the more established suppliers are the ones resisting the
most, while newer ones are more likely to support her creation efforts.
This can be viewed from a legitimacy perspective where the established
are used to more established customers who behave in a predictable
fashion while the less established actors are more similar to Nina’s own
venture and thus view her as more legitimate (Delmar et al., 2004a;
Zimmerman et al., 2002).
Resource dependence theory as a way to theoretically analyse
where resistance occurs has, as I have shown, a good fit with the
categories dyadic interactions and depersonalised gatekeepers. The final
category, entrepreneurial beliefs however is where resistance arise as a
consequence of the entrepreneurs’ own thoughts and beliefs thus
appearing to make resource dependence a far-fetched theory to use. This
is not necessarily so as it is, in part at least, in the eye of the beholder that
a goal disruptive event is perceived. If entrepreneurs believe that they
need a resource or that they must conform to expectations in their
surroundings, this becomes a source of resistance with resource
dependence characteristics. Resource dependence theory moreover
discusses interdependencies where results achieved by one actor are
interdependent on those of another actor or where the activities of one
actor are dependent on the actions by another actor (Pfeffer et al., 1978).
If an observer from the outside would view the situation, it might appear
as a non-issue, but to the entrepreneur it is not. Jonas’ belief that he
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needs to put in a certain amount of time, while at the same time
prioritising other issues higher than the venture idea, and in addition
knowing that it will get worse in the future (J1) is a matter of critical
resources with a high relative magnitude to the venture idea. The same
goes for the other instances under the entrepreneurial beliefs category.
Concluding this discussion of where resistance is perceived I turn
to a specific area, namely entrepreneurs’ families. From a theoretical
point of view this is particularly interesting as it is the flip-side of what
entrepreneurship literature so far has described as a key positive aspect
in the start-up of new ventures. Family is a central support base for
entrepreneurs from a social capital or social assets point of view (Birley,
1985; Greve & Salaff, 2003; Renzulli, Aldrich, & Moody, 2000). This study
however shows that resistance is perceived as particularly acute if those
closest to the entrepreneurs, their families and friends, question and
doubt their venture ideas. As such, family can be both a blessing and a
curse to entrepreneurs attempting to realise a venture idea
5.2.2 Why potential goal disruptions are perceived as resistance?
According to theory, an underlying reason why goal disruptions
are perceived as resistance could be found in how entrepreneurs
perceive their significance to their goal commitments and situational
intentions (see Lazarus, 1990; Lazarus, 1999). This decides their stress-
levels which is a key issue for how they cope. It also explains the
subjective aspect of perceived resistance where two entrepreneurs can
perceive similar goal disruptions in completely different ways, one as
resistance and the other as a minor issue.
In the empirical analysis, I showed that significance is a focal
issue of goal disruptive events, and only when entrepreneurs perceive
that an event has a significant influence on their evolving ventures will
they perceive it as resistance. Significance is also a concept similar or
identical to the resource dependence dimensions of relative magnitude
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and criticality, with the difference that significance more strongly
indicates that is a subjective measure.
Significance however is a consequence of entrepreneurs’ appraisal
of the origins to, and category of resistance. Appraisal takes into
consideration the potential consequences of failing to cope successfully
with the situation and secondly how psychological meaning of the
consequences are related to the entrepreneurs’ basic beliefs of themselves
and the world (Passer et al., 2007). Hence, if an entrepreneur views
succeeding in the entrepreneurial endeavour as important for feelings of
self-worth, meeting resistance can then affect self-worth if coping seems
difficult. Susanne’s feelings that being only an innovator is not what she
wants, and that it is different from being the entrepreneur she strives for,
means that all that is related to product development becomes a source
of perceived resistance to her. With that content of realising her brush,
the actual work of realising it becomes a source of resistance (S1, S2). At
the beginning, the venture is a source of self-worth to Eric and he cannot
allow himself to fail. Thus, the more difficult it becomes, the more effort
he puts in. This has a snowball effect on the resistance he perceives as it
affects his relationship with his family and his own view of himself (E4).
A related issue that is put forth as affecting appraisal is the
entrepreneurs’ views of their abilities to cope with the resistance – the
lower their beliefs in successful coping, the higher the perceived
resistance (see Folkman, Lazarus, Dunkelschetter, Delongis, & Gruen,
1986; Lazarus, 1999; Lazarus et al., 1984 about appraisal stress and
coping). In the previous empirical analysis, this uncertainty of coping
outcome was revealed to be the second factor next to significance that
influence whether entrepreneurs perceive resistance or not. The
empirical material furthermore shows that this is affected by self-efficacy
(Bandura, 1997) and constructive thinking (Epstein et al., 1989). In the
case of self-efficacy, Eric’s low confidence in his ability to write a
business plan first of all prevents him from writing one and secondly
means that he is unable to acquire funding for his venture idea (E2, E5).
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Susanne on the other hand believes that she has all the skills she needs to
realise her idea, either herself or in her network. Despite this she
perceives a number of instances of perceived resistance, indicating that
high self-efficacy does not insulate an entrepreneur from resistance.
Constructive thinking is something that Nina displays as she perceives
multiple instances of perceived resistance which she is forced to cope
with in order to realise her idea. When her loan application is rejected
she is able to rethink her strategy and continue despite bleak prospects of
successful coping (N2). Additionally she faces a set of resistances of
similar significance and is able to overcome them all (N3, N4). These
examples from Nina are counter indicative of how a lower belief in
successful coping leads to a higher level of perceived resistance as these
aspects of her outlook on the resistance allows her to believe in
successful coping. That is, the lack of these aspects would lead an
entrepreneur to perceive an instance of resistance as more significant.
Returning to the issue of how entrepreneurs perceive the
significance of goal disruptions. First of all, their situational intentions
link in with the intentions behind their venture ideas, which is a topic of
some interest in entrepreneurship research (see for example Bird, 1988;
Katz et al., 1988). The important thing here is that they intend to create a
venture and commit to do what it takes to do so. With such an overall
goal, their situational intentions reflect this and thus carry a high
commitment and also a desire to achieve the set goals. The cases reveal
the role of intentions in how entrepreneurs perceive goal disruptive
events. Nina’s intentions are set at realising her venture – meaning in the
long run a store location and a web shop – and she enters each situation
with the same intentions. Thus her frustration and anger intensifies
when things do not happen as she had planned (N1, N2, N3, N4).
Similarly Susanne also has a high level of situational intentions, and
although she does not respond with anger as Nina, her frustration at the
slow pace and setbacks is instead manifested by her impatience and
search for something meaningful to do (S3, S4, S5). Jonas on the other
hand, despite perceiving resistance is mostly unperturbed by it, going
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about in a manner that “it will be alright”. This could be an indication that
his situational intentions are not high enough for him to become stressed
enough to take action that would put his venture idea higher on his list
of priorities (J1, J4). The cases thus indicate that higher situational
intentions increase the likelihood of perceiving resistance from goal
disruptive events.
Secondly, and along a similar argument follows the influence of
entrepreneurs’ goal commitments. The empirical study shows that a
disrupted goal of significance has to be dealt with, while committing to
such a disrupted goal increases stress and possibly also the perception of
resistance. In addition, goals sometimes conflict with each other, a
motivational conflict. As one gets closer to a goal, the avoidance or
approach tendencies get stronger. Avoidance grows quickest so the
drawbacks that from the start only partly repelled a person grows in
strength the nearer one gets (Passer et al., 2007). Eric’s testing at the
national soccer match (E1), Jonas’ time input (J1) and Susanne’s
disinterest in being an innovator (S2) are all examples of this.
Of special interest here are entrepreneurs’ life goals as they
influence both perceptions of resistance and the consequent coping. Life
goals put entrepreneurs’ intentions and commitments to their ventures
to test. Multiple life goals either make entrepreneurs more vulnerable to
external influence or pressure or more susceptible to perceiving personal
goal conflicts. All of the studied entrepreneurs have the intentions to
realise their ideas and an initial commitment to do so. However when
they are forced to weigh commitments to different life goals under
pressure from goal disruptive events, in some cases they choose to lower
their priorities in relation to their venture creation attempts in favour of
other life goals. This is partly related to their personal reasons for
pursuing their ideas (Lazarus, 1991) as well as the critical resources that
highly prioritised parts of their lives are to them.
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Thus in the same fashion as goal commitment and situational
intentions, the number of life goals and the importance ascribed to their
non-venture life goals increase the likelihood of perceiving resistance
from goal disruptive events. As mentioned earlier though, through goal
setting and commitment, life goals have an indirect effect on perceived
resistance. This effect can be influential which can be seen in the cases of
Jonas and Eric, where it was strong enough to be a key contributor to the
termination of their venture ideas. I will return to life goals in more
detail further on in Chapter 6.
The resource perspective of perceived resistance
So far I have discussed how entrepreneurs’ goal commitment and
situational intentions influence how they perceive the significance of a
goal disruptive event on their ventures. Together with their life goals
these aspects represent the issues that entrepreneurs bring with them
into the situation. There is more to it though as context and
circumstances also influence how entrepreneurs perceive goal disruptive
events or processes.
During the starting up of a new venture, some resources are likely
to be more critical than others. Eric needs access to soccer games to test
his service (E1), Jonas needs computer equipment to develop his service
(J2), Nina needs high market share products in her inventory (N3), and
Susanne needs funding (S3). They are all denied access to those resources
and embedded in those denials are goal disruptive events which they
perceive as resistance. The dynamics of this dependence of critical
resources and subsequent denial to accessing them fits with what is
described through resource dependence theory (Pfeffer et al., 1978) and
thus directly links with where resistance arises as discussed in the
previous section.
Here I use this to further deepen the analysis of perceived
resistance by looking at four instances of perceived resistance with
specific focus on the symmetry or asymmetry of relationships to
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understand why resistance is perceived. I use the instances above from
each case and apply Frooman’s dimensions for stakeholder influencing
strategies to study them (1999). The choice of instances, one from each
case, is made to illustrate the result of the analysis on each case, the
instances within each case are selected at random.
The overview of the four instances of perceived resistance in
Table 5-6 shows for each one how asymmetries in relationships can
cause entrepreneurs to perceive resistance. Eric meets a monopolistic
stakeholder. Jonas faces university bureaucracy, Nina a very established
supplier with a majority market share and Susanne the bureaucracy of a
government funding agency. In all four instances the entrepreneurs have
few means to deal directly with the stakeholders and all four
entrepreneurs are in dire need of the resources controlled by the
stakeholders.
There are some differences between the four instances. Eric seems
to score highest in his dependence on the soccer association’s benevolent
attitude to his venture idea for him to succeed. Indeed the development
of his venture idea is also completely stopped when the soccer
association decides to cease his ability to test it. There is little else he can
do than to talk to them.
Jonas must deal with a university bureaucracy built to handle
research and teaching, not new venture creation. The bureaucracy does
not accommodate the needs of his venture idea and he is forced to find a
new solution where he does not upset the university’s rules but at the
same time acquires the equipment he needs. Although the university
controls the resource within the context where his venture exists, and
while it is critical to his venture idea’s realisation, there are other means
for him to gain control over it.
Nina faces an absolute market leader with what she feels
antiquated views of how to market and sell their products. Her business
model does not fit the supplier’s requirements and she is not allowed to
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sell their products. The problem is that the brands of the supplier have
an almost complete market share so she worries about her own sales
volumes without those particular brands in her shop. Despite this worry
she turns to mid-sized suppliers but many of those are also hesitant to
distribute their products to her. In order to build her inventory she
eventually turns to start-up brands that are more than happy to work
with her.
Finally Susanne who needs funding relatively quickly to both
develop her prototype and to patent her product in order to begin
talking about it with external stakeholders, like potential resellers.
External funding is her only way to be able to do this, and there is only
one lending agency where she believes she can get a loan at this stage.
However this agency is government run and very slow, too slow for
Susanne’s liking, but there are no viable alternatives so she is forced to
wait.
What this analysis of the resource perspective of perceived
resistance indicates is that the issue of external constraint places
entrepreneurs in situations where they perceive resistance. In addition to
this, the relative magnitude and criticality increase entrepreneurs’
predicaments. However I also want to point out that the issue of supply
is a key resource aspect which decides whether entrepreneurs can
overcome restrictions or not, since.
The supply aspect is also where the ingenuity of an entrepreneur
in finding ways to circumvent or overcome access restrictions to
resources comes to play, which I discuss in depth in the next section.
Previous entrepreneurial experience could help entrepreneurs become
more mentally prepared for supply issues and the need for unorthodox
thinking in order to overcome restrictions posed by stakeholders. If this
is so it could indicate that seasoned entrepreneurs perceive less
resistance and instead subscribe what novice entrepreneurs perceive as
resistance to the process of venture creation, ie. something inherent to
the process itself.
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Table 5-6: Resource dependence analysis of instances of perceived resistance
Eric (E1) Jonas (J2) Nina (N3) Susanne (S3)
External
constraint
46
Actor has full
control of a
resource Eric
needs
University
system limits
available
computers but
does not have
absolute control
Supplier is the
absolute market
leader. When Nina
contacts them,
their products are
a necessity to sell
to her target niche
There are a number of
potential ways to
acquire funding but
Susanne sees few that
would lend her at the
stage she is at
Relative
magnitude
Involves all
resources
All resources
needed for
development
Nina feels that the
products of the
market leader are
a guarantee to
generate sales
Funding would cover her
immediate needs for
patenting and product
development
Criticality Eric sees no
other way to
continue
without access
to soccer
matches to
test his service
Jonas must have
computers
There are other
suppliers but their
brands are small
and relatively
untested on the
Swedish market
Susanne tries to develop
the product through the
new producer, but he
needs pay. The patent is
also necessary before
she feels that she can
talk about her product
to external stakeholders
Limited
supply
No other
supply
available
There are other
means available
and Jonas
manages to
acquire
computers
through a
sponsor
She contacts mid?
sized suppliers but
they are also
hesitant, so she
contacts start?up
brands in similar
positions as she
The stakeholder she
depends on for funding
is too slow, so she turns
to another but that one
has poorer conditions
which she does not want
to accept.
Discretion
over
resource
allocation
Strategy used
by stakeholder
Strategy used by
stakeholder
Strategy used by
stakeholder
?
Discretion
over
resource
use
? ? ? The effect of the
stakeholder’s actions is
perceived by Susanne as
this type of strategy
46
Each of Frooman’s (1999) dimensions are described in Table 5-7.
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Table 5-7: Frooman’s dimensions for stakeholder influencing strategies (1999)
External constraint Actors are likely to respond more to those actors in the
environment that control critical resources
Relative magnitude The proportion of total inputs, or total outputs
accounted for by the exchange
Criticality Measures the ability of an actor to continue
functioning in the absence of a particular resource or
market
Limited supply When supply is limited, production instability and
survival uncertainty arise as dilemmas in building the
venture
Discretion over resource allocation A withholding strategy where a stakeholder does not
provide a firm with the requested resources
Discretion over resource use A usage strategy where a stakeholder continues to
provide the requested resources, but does so with
strings attached
However, and as I initially discussed, the reasons why
entrepreneurs perceive resistance are subjective. Although this resource
dependence analysis seems to be easily applicable when attempting to
analyse why they perceive resistance, different entrepreneurs appraise
goal disruptions in different ways. Nina for example displays
constructive thinking and hardiness in a way that lets her believe she can
overcome seemingly impossible resistance, and this certainly affects the
influence the potential outcome of a resource dependence analysis. It is
thus vital to weigh in multiple aspects affecting entrepreneurs’ appraisal
of goal disruptions in order to understand why they perceive them as
resistance.
5.2.3 How do entrepreneurs cope with perceived resistance?
The analysis, applying the theoretical framework to the empirical
findings has hitherto looked at potential sources of resistance, the goal-
disruptive events or processes, and also why these are perceived as
resistance. Now the discussion focuses on entrepreneurs’ coping
strategies.
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Earlier I showed that entrepreneurs differ in how they appraise
the significance of a perceived resistance to their venture ideas, which is
also in line with Lazarus appraisal theory (Lazarus, 1990, 1991). A key
aspect of this theory is that the appraised significance influences how
they respond or cope. As stress is a central aspect connected to situations
of perceived resistance, appraisal theory furthermore states that coping
is “the effort to manage psychological stress” (Lazarus, 1990: 111).
In addition to this, I have shown that dependency situations and
asymmetric relationships influence where resistance arises. Moreover,
theory claims that such relationships are unstable and change over time,
indicating that it is in the interest of entrepreneurs as the dependent part
to try to address the imbalance (Blau, 1964; Emerson, 1962; Pfeffer, 1982).
Entrepreneurs may use their social, human and organisational resources
as leverage when attempting to achieve this. The empirical material
shows that the entrepreneurs do attempt to change the balance of
asymmetric relationships. A difference in how they do this, compared
with theory is that their whole life situation is taken into consideration.
With this perspective their own selves become a tool to leverage some
asymmetries, for example when Eric negotiates with his wife (E4).
Another difference can be ascribed to the newness of their ventures as
they do not use any organisational resources, they do not even consider
any that could be used. Instead they use their social and human
resources to a large extent. Similar findings have been made in research
into networks where entrepreneurs use those to simultaneously operate
both pro-actively and re-actively while handling both dependence and
independence (Johannisson, 1988), and relating to nascent entrepreneurs’
use of social capital to construct their resource base for venture creation
(Brush et al., 2001).
Furthermore in the theoretical framework I discussed that coping,
from the perspective of entrepreneurs’ perceived resistance represents
their emotions, thinking or concrete actions to deal with this. There is an
overlap here between entrepreneurs’ emotions and why they perceive a
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goal disruption as resistance to their coping. Nina for example reacts
emotionally to the rejection of her loan application from the government
lending agency which drives her coping where there is anger in her
attempts to overcome the resistance (N2). However her coping is not
focused on emotions, although it could be fuelled by them, but is instead
directed as overcoming the concrete resistance. As far as their thinking
and concrete actions to deal with resistance, thinking is an integral part
in all coping, but concrete actions are not as I showed in the empirical
analysis with the ostrich strategy.
There are three coping strategies available to entrepreneurs: (1)
problem-focused, (2) emotion-focused and (3) social support seeking
(Passer et al., 2007). These relate to the different types of coping
strategies derived from the empirical material (see Table 5-4). The three
active types of coping used by the entrepreneurs, accommodating, bold
and output coping are all problem-focused strategies. They focus directly
at the perceived resistance in an attempt to overcome it or make its
implications less severe to the evolving venture idea. Eric’s discussions
with the soccer association to give him a chance is a case of persuasion
(Dees et al., 1992) which is in line with accommodating coping. In some
cases bold coping is of a bricolage type where the entrepreneurs aspire to
adopt an out-of-the-box approach that looks past resource limitations
(see discussion in the theoretical framework about the concept of
network bricolage proposed by Baker et al., 2005), and in some cases it is
about taking an extended risk in order to cope. Susanne’s relationships
with her stakeholders where she aims at gaining knowledge and funding
which she needs for product development is a case of acting as if she was
trustworthy and with the required structure (Starr et al., 1990) which also
falls within the category of bold coping. Output coping is directly linked
to action, either the entrepreneurs themselves work harder or they add
effort to their creation activities by outsourcing.
A social support seeking strategy is naturally the network type
where the entrepreneurs use their social capital and reach out to friends,
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family or other contacts they can access in an attempt to elicit support,
resources and such to deal with the resistance. Nina’s attempt to make
her handling officer change her mind and support her application is for
example a case of co-optation by using others for persuasion (Gargiulo,
1993; Starr et al., 1990).
Finally the ostrich type of coping is to a large extent an emotion-
focused strategy where the entrepreneurs attend more to their feelings
about the resistance they perceive than actually trying to overcome it, in
effect the opposite of a problem-focused approach. People with high
internal strategies commonly do not chose this type of strategy
(Ingledew, Hardy, & Cooper, 1997), but instead vie for a more
constructive thinking (Katz & Epstein, 1991) displayed in the problem-
focused approaches.
Table 5-8: Classifying coping categories
Empirical\Theoretical Problem?
focused
Emotion?focused Social support seeking
Accommodating E1, E2, E3, E4, J2,
N1, N2, N3, S3,
S4
Bold E6, J2, J3, J4, N2,
N3, N4, S3, S5
Output N5, N6, S1
Network E5, J2, N1, N2, N4, S1, S2
Ostrich E5, E6, J1, S5
The empirical material furthermore concurs with what theory
says about efficiency, that problem-focused and support seeking
strategies are favoured choices when there is some way to control the
163
situation (see Passer et al., 2007). Susanne can exemplify this when her
loan application takes too long given her goals. She then focuses on
motivating the government lending agency to speed up the process, and
when this does not work she looks elsewhere for funding, all the while
she fully believes that she will get the money she applied for (S3). The
result of emotion-focused coping on the other hand, is a change in
individuals’ interpretation of circumstances, for example giving up a
sought after goal or the denial of a certain threat (Lazarus, 1999). The
entrepreneurs vouch for emotion-focused coping strategies when the
likelihood of control is low. Jonas for example does not see that his time
will be enough once he begins his paternity leave, and he can do nothing
to change his priorities. The only option to him is to further disengage
from the venture idea and take an escape-avoidance stance to it (J1).
The chosen strategy to cope varies depending on how the
entrepreneurs appraise the significance of the resistance and the
uncertainty of coping outcome. In the empirical analysis I showed that
when entrepreneurs appraise the significance of a goal disruptive event
or process as high at the same time as feeling uncertain about the
outcome of coping, they seem more likely to perceive it as resistance.
These two form a framework within which it is possible to depict the
most likely coping strategy (see Figure 5-3).
The figure shows the relationship between chosen coping strategy
and how entrepreneurs perceive the resistance. The higher the
uncertainty of successful coping and the higher the significance of the
goal disruption to the development of their venture ideas, the more
likely it is that they adopt the ostrich emotion-focused strategy.
Conversely the lower the uncertainty of successful coping and the lower
the significance, the more likely it is that they will vie for the output
problem-focused strategy. These two thus appear to be opposing
strategies where ostrich coping is chosen as a consequence of failure to
find a coping strategy that can overcome the resistance and the
entrepreneur instead attends to his or her feelings about this. Output
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coping is a work-harder strategy where such effort is seen as the
necessary input to overcome the resistance.
When the significance of the perceived resistance and the
uncertainty of successful coping are in between low and high,
entrepreneurs seem to choose either a bold or a network strategy. It
appears that in this situation, entrepreneurs are relatively more certain of
overcoming a goal disruption than when they choose ostrich coping, but
they still have to be inventive in order to do so. An accommodating
coping strategy differs somewhat from network and bold as it is
favoured when the significance is higher than in the case of the other two
strategies. Here the entrepreneurs have more to lose as the resistance is
more significance and thus appear more vary of meeting the demands
posed in order to overcome the resistance instead of being inventive.
Figure 5-3: Coping strategies –appraised significance and
the possibility to overcome
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The result depicted in the figure is also strengthened by late
research into role expectations where a study of 183 Slovenian
entrepreneurs showed that structural role definitions and/or reactive
role behaviour to stakeholders have a positive influence of new venture
performance. Furthermore the connection between reactive role
behaviour and new venture performance is affected by role stress and in
a similar manner as this study finds, the authors state that role stress
“depends on the level of challenge of stakeholders’ expectations that an
entrepreneur experiences” (Örtqvist et al., 2007: 299). Assuming that this
level of challenge influences entrepreneurs uncertainty of successfully
overcoming perceived resistance, role stress influences which coping
strategies entrepreneurs decide to use.
With all this said, there are some curious issues in relation to how
entrepreneurs cope. I mentioned this earlier also when concluding the
section in the empirical analysis about the outcome of perceived
resistance on a venture idea. Something seems to influence how much
effort entrepreneurs put in and how long they endure, something which
is not captured within the model. Eric for example diligently strives to
realise his idea, and when he finally gets his break and strikes an
agreement with the soccer association to test his service at a national
soccer match, he fails to do so and shortly after terminates his venture
idea (E1). What happens there, why does he not take the final steps
towards completing his idea? How does Nina again and again overcome
seemingly impossible resistance? And why is Susanne’s persistence so
low while her intentions are so high? This is the topic of the next chapter
which explores a deeper dimension of perceived resistance, and how
entrepreneurs endure in adverse environments while trying to realise
their venture ideas.
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5.2.4 What are the outcomes of perceived resistance on a venture
idea?
In the introduction I quoted Granovetter who states that it is not
necessarily the best ideas that survive but those that gain the greatest
support (Granovetter, 1973). Judging the best ideas is outside the scope
of this study, but the need to gain the best support is in line with what is
revealed in the empirical material. It is not enough for an entrepreneur to
have a good idea, or believe to have one – it is the realisation of it that is
crucial. Gaining support is, as has been discussed above, a key feature of
coping. Thus all of the previous steps in the model of perceived
resistance naturally influence the outcome, whether it is overcome or
not.
In the empirical analysis I came to the conclusion that there are
two general outcomes – overcome or not overcome. What happens here
is that entrepreneurs reappraise the original perceived resistance and the
effect that their coping has had on it. When reappraising the situation,
two aspects are important. The first is the discrepancy between task goal
and actual situation, in other words, the effect of the applied effort or
coping strategy. The second is the rate of progress in terms of
discrepancy reduction, for an entrepreneur this means how fast a
disruption is overcome and if it is overcome. Research has shown that
positive or negative mood is directly affected by this progress (Carver &
Scheier, 1990).
Thus when reappraising, the entrepreneurs not only judge the
status of the resistance they perceived, the process of reappraising also
influences how they feel about their coping and their entire venture idea.
There is anguish in these as can be seen for example in Susanne’s feelings
in response to the government run funding agency’s extended handling
time to her loan application (S3) or in Nina’s strife to buy products from
the market leader where she is baffled by their disinterest in selling to
her (N3).
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In the case of a perceived resistance that is not overcome there is a
loop back to coping until the entrepreneur either gives up, or has
overcome the resistance in some way. In addition to this there is also the
situation where the original resistance is reappraised and deemed as no
resistance anymore. This could be because it is emotionally too difficult
to deal with the prospect of failing to overcome it, and thus a result of an
ostrich emotion-focused coping strategy. Jonas’ issue with time spent
towards developing his venture is one such example. Initially he worries
that time is not enough to realise his venture idea. He is unable to change
this fact and instead lowers his goals with the venture idea which
removes his perceptions of resistance in that area (J1).
If an entrepreneur does not perceive a goal disruption as
resistance, but fails to cope, he or she will loop back from not
overcoming it to perceiving it as resistance. This is caused by
reappraising the goal disruption when it is not overcome (see the
examples from S3 and S4).
The cases furthermore indicate that the time from perceived
resistance to termination of a venture idea is relatively extended. Eric’s
movement from highly motivated and focused on realising his idea to
the point where he admits that he has deserted is a gradual shift from
July/August 2004 until May 2005. The strategies he adopts during this
period are both related and unrelated to those observed in failure studies
where they are mainly emotion-focused (Singh et al., 2007), and the
psychological aspects underlying coping are characterised by issues such
as grief, guilt and depression (Shepherd, 2003; Singh et al., 2007). As
discussed above, the entrepreneurs might act emotionally and out of
psychological aspects like grief and anguish, but this is not to say that
such strategies are the dominant choices. During the final year of his
venture idea, Eric for example displays an on-off behaviour where he
acts, then steps back and largely ignores his venture idea, then acts again
and so on with more and more emphasis on the non-action.
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When comparing Nina with the others, and taking a view of the
outcome, there are definite differences between them. Nina continuously
takes a more problem- or social support seeking focus than the others
and she has a higher rate of overcome resistances. It appears that she is
able to keep a positive undertone in her venture creation while the others
are over time unable to shift from a negative and resistance enhancing to
a positive movement. Each cycle of coping with resistance, whether
overcoming it or not, implies an accumulation of experience on behalf of
the entrepreneurs. Previous research has revealed that entrepreneurial
experience is the strongest indicator as to whether a venture idea reaches
certain creation milestones with business founding as the highest one
(Rotefoss et al., 2005). This study concurs with this, with particular
emphasis on within-venture experience.
However Nina is the only of the four who benefits from this
experience, the others seem to become weighed down by their increasing
experience. The difference between Nina and the others is that she
succeeds in her coping, while the others have greater difficulties and
doubt in the abilities to successfully overcome perceived resistance. In
this respect, positive experience strengthens perceptions and coping in a
positive manner, while negative has the opposite effect. Recently there
has been an increased interest in self-efficacy from an entrepreneurial
perspective which offers a theoretical explanation to this aspect of the
experience loop. Entrepreneurial self-efficacy, specifically in relation to
skills concerning networking, uncertainty management, and product
development as well as procurement and allocation of critical resources,
influences how entrepreneurs view their opportunities of launching their
new ventures (Kickul & D'Intino, 2005). Thus the outcomes of coping
with perceived resistance, entrepreneurs’ cognition and perceived
abilities interact in forming their experiences which influence their
current and future appraisal of goal disruptions and consequent coping
strategies.
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The negative and positive effect of experience also relates to
emotions. Overcoming resistance is likely to have a positive influence on
entrepreneurs’ emotions through decreased stress while the opposite is
also likely. Previous research has interesting implications here as it for
example indicates that failure leads to a “realistic view of what starting a
business is like” (Singh et al., 2007: 342). Thus a realistic view according
to Singh et al is a lowered expectation of success or in other words, one
with a more resistance focus. Indeed Singh et al’s result was revealed in
this study as Eric, Jonas and Susanne gradually perceived more and
more resistance which became more and more difficult to overcome.
This emotional aspect of perceived resistance also links in to the next
chapter which will focus on entrepreneurs energetic resources.
5.3 A model of perceived resistance
This analysis began with the theoretical model as a guide to
follow (see Figure 5-1), but as has been discussed throughout, that model
is not able to capture that which has been revealed in the analysis.
Instead here I present and discuss an inductively derived model of
perceived resistance (see Figure 5-4).
The model begins with a goal disruption facing the realisation of a
venture idea. This disruption is appraised by the entrepreneur on the
basis of its significance to the venture idea and the degree of uncertainty
of coping outcome. These two aspects work in concert and the higher
they are, the more likely it is that the disruption will be perceived as a
resistance. Furthermore, the more uncertain the entrepreneur is of
coping outcome when the disruption is significant, the higher up on the
coping scale the strategy to deal with it will be.
Next the entrepreneur attempts to cope by using the chosen
coping strategy, and when this effort is completed, its’ affect on the
disruption is reappraised. Either the disruption is overcome, or it is not.
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If it is not overcome, a new attempt at overcoming it is launched, and
this continues until either it is overcome, or coping attempts are
abandoned. At some point however, the entrepreneur’s self-confidence is
affected if these loops continue, and/or coping takes longer time than
what was initially expected. When this happens, the choice of strategies
is shifted upwards on the scale and they become more emotion-focused,
thus further decreasing the possibility of overcoming the disruption.
In addition to the developmental steps described above there are
also experience loops which feeds back to appraisal from both of the
results not overcome and overcome. These loops bring experience from
attempting to overcome a goal disruption, whether successful or not.
When a perceived resistance is not overcome and coping continues, an
entrepreneur’s appraisal of goal disruptions is thus also influenced by
his or her experience of the process. This aids in fine-tuning and
improving coping strategies, but through lowered self-confidence and
motivation it also deteriorates the entrepreneur’s possibilities of
overcoming the disruption. The more loops from coping, through
reappraisal, to not overcome and back to coping, the longer it takes to
overcome the perceived resistance and thus the more affected are self-
confidence and motivation. This upper half of the model thus represents
a loop which over time negatively influences entrepreneurs’ perceptions
of resistance and their subsequent coping attempts. The results over time
are more emotional-focused coping strategies which in turn further
decreases entrepreneurs’ possibilities of overcoming resistance, and also
lead to a higher probability of the next goal disruption being perceived
as resistance.
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Figure 5-4: Model of perceived resistance
When facing a goal disruption, coping is required even when no
resistance is perceived. This type of coping differs from coping with
perceived resistance as stress levels are lower, and either factors of the
disruption’s significance to the venture idea, or entrepreneurs’
uncertainty of overcoming the resistance, or both are non-existent. With
this in mind, coping strategies focus on the lower part of the coping
strategy scale and given that the disruption is overcome emphasises the
lower half of the model.
172
173
6 A new revelation of perceived
resistance and coping
Entrepreneurs continuously face goal disruptions in their
attempts to realise their ideas, which should be evident from the
empirical material presented. Depending on how they perceive these
disruptions, one way or another they have to cope with them, and how
they do this will eventually decide the fate of their venture ideas.
By looking only at the individual instances of perceived
resistance, the model presented in the previous chapter can be used to
describe the process. When expanding the view and looking at the entire
start-up process however, something else seems to influence how
entrepreneurs perceive and respond to individual instances of perceived
resistance.
In the cases, Eric comes up with his idea while he is unemployed
and begins developing it. Through a number of instances of resistance he
continues with a firm belief that it is an idea with much potential. He
even fights for it in relation to his family. Then his efforts are halted by
the monopoly actor in Swedish soccer, but he still continues to cope and
work on solutions. Eventually he negotiates an agreement with the
soccer association and can begin testing again, authorised by the
association. But instead of launching his new test series, he lets the idea
lay fallow and a few months later admits that he is no longer pursuing it.
There is no single instance of resistance that forces Eric to
abandon his idea, instead he receives positive feedback. So why does he
let go of it? By looking at his venture creation attempts over time,
focusing on cycles that span multiple instances of perceived resistance
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there is a build-up of strain and a continuous stress and a pressure to
manage his life situation. The effort he exerts in all aspects of his life
eventually takes its toll. Not even a big win from the agreement with the
soccer association inspires him to continue.
I have already hinted at what it is that either lifts the
entrepreneurs’ spirits or leads to a decision to terminate – it is a matter of
entrepreneurs’ energy. In daily talk people often refer to the importance
of drive and energy when trying to explain what is needed of an
entrepreneur
47
. How the two concepts differ in meaning is unclear as
they are used in media as one. However turning to theory, drive can be
likened to motivation which has been extensively studied in
entrepreneurship research (see for example Delmar, 1996; Raphael,
Kenneth, Charlene, & John, 2001). Energy on the other hand, has thus far
been largely ignored and except for directing attention at individual
entrepreneurs’ levels of energy (Bird, 1992), little help is found in existing
theory
48
. Research has instead focused on matters such as passion and
perseverance. It has for example been proposed that start-up survival
and success is enhanced if entrepreneurs dislike giving in and
passionately hold on to their goals (Cardon et al., 2005) or that they have
the tenacity or perseverance to overcome obstacles (Baum et al., 2004).
Passion has been put forth as a driver that entrepreneurs use
when facing uncertainty and resource shortages (Timmons, 1999) and it
has even been said that it is “perhaps the most observed phenomenon of
the entrepreneurial process” (Smilor, 1997: 342). However passion or
47
This was found in a survey of Swedish media: magazines, newspapers and the
Internet.
48
There are very few references to energy in entrepreneurship research. The two
that I have found relate it to social energy in maintaining strong or weak ties
(Podolny & Baron, 1997) which is a different definition from the one used here and in
the psychology research referred to, and to the energy level of entrepreneurs which is
used to point to individual differences (Bird, 1992). Bird’s use of energy is close to the
one used here, however she never extends her discussion of the concept in any detail.
175
perseverance does not explain how or why entrepreneurs endure and
continue to cope like Nina or drop their efforts like Eric, Susanne and
Jonas. All four of them are passionate about their ideas and all of them
display perseverance, yet they differ in how they cope over time when
facing consecutive instances of perceived resistance. This puzzling issue
was something that I noticed in the early interviews with both Eric and
Nina. Eric mentions how energy is something that is important to him in
the very first interview: “it was destructive to look for a job. It took a lot of
energy and it was difficult to call on, evoking the power to sell, what you need in
order to find a job. Calling people and be challenging and enjoyable and present
oneself as a good person. To do it again and again with negative results, in the
first place you doubt in it yourself. You think after all that you are lying. I mean
before I was unemployed I could say that I can do this, this and that. Lots of
technology and programming and everything, and after half a year so I
wondered, can I tie my shoelaces… and it is very destructive for your self-
esteem, at least for me anyway. And therefore, it was with increasing energy
that I had to bring forth this power to sell which is required when you want to
become employed, and the energy took ... made it so that I could not focus on my
idea.”
Nina on the other hand discusses how she uses friends to inspire
her and give her energy to continue, especially when she faces what she
perceives as strong resistance. As a consequence of these revelations I
included energy as a topic of interest to explore all through the gathering
of empirical material in all four cases.
Four types of energy have been proposed, relating to humans:
physical, cognitive, emotional, and spiritual (Loehr & Schwartz, 2001;
Schwartz, 2007). The energy, or rather energetic resources (ER) that I
refer to throughout this chapter is defined in the field of cognitive
psychology as the energy available in individuals to deal with stress and
effort to cope (Gaillard, 2001; Hockey, 1997; Hockey, Gaillard, & Coles,
1986). Current psychological research has among other aspects found
that ER intensify negative emotions and fatigue as a result of goal-
disruptive events (Zohar, Tzischinski, & Epstein, 2003). As such the
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concept of ER offers an avenue to deepen our understanding of how
entrepreneurs endure over time, realise their venture ideas and cope in
adverse environments where they face multiple and consecutive
instances of perceived resistance. Thus all four types of energy come into
play, but I delimit this study to focus primarily on the cognitive and
emotional aspects of ER.
How can we understand the dynamics of ER? To begin with, one
can see that when everything runs well and there are no disruptions or
stress involved, ER is a non-issue to the entrepreneur. As soon as
conditions become less favourable though, ER are likely to become
important. In a theoretical scenario, if behaviour cannot proceed as
planned, additional effort must be invested by the individual in mental
problem solving and decision-making. This additional effort begins to
tax on the amount of energy available to the entrepreneur and, if
demand for energy is greater than its supply, this risks becoming a
reason for termination. What is intriguing and complicating here is that
it is not only an entrepreneur’s coping efforts that tax on ER, but also
that which happens to him or her in a wider perspective. In other words
both mental effort and stress
49
will influence how rapidly ER are being
depleted
50
.
To explore this, I start with an overview of what existing theory
says about ER which is necessary in order to understand how it
influences entrepreneurs during the start-up of new ventures. The
overview primarily focuses on the concept of ER in relation to cognitive
49
Selye (1974; 1976) distinguishes between eustress and dystress. He equals stress
with arousal and claims that a certain amount of arousal is good (eustress), while too
much is bad (dystress). This implies that a deviation from an optimal level of arousal
is negative to an individual. The problem however is to define an optimal level of
arousal. With the approach taken in this chapter it is the dystress that is studied, that
which requires effort and taxing of energetic resources.
50
This paragraph was written using Kahneman’s (1973) capacity model of
attention as a basis for developing an entrepreneurial scenario involving energy.
177
appraisal theory (Folkman et al., 1986; Lazarus, 1999; Lazarus, 2001)
behavioural economics (Schonpflug, 1986b, 1986a; Schonpflug &
Battman, 1988) and specific studies of ER (see for example Gaillard, 2001;
Hockey, 1997; Hockey et al., 1986; Wright & Brehm, 1989). With the
theoretical understanding of ER in place, the empirical material will be
used to discuss the implications of ER on the model of perceived
resistance. The purpose of this discussion is to address the questions
raised in the previous analysis which was concluded with the model of
perceived resistance (see Chapter 5.3).
6.1 What we know about Energetic Resources
The idea of energy as a limited resource influencing behaviour
has existed for a number of years (Duffy, 1962; Freeman, 1948).
Explorations of its behavioural and physiological aspects began with
studies such as that by Pribram and McGuiness (1975) who studied how
the coordination of arousal
51
and activation constitutes a demanding
activity requiring energy and converging on the hippocampus. Lately
researchers have began looking into how the ER construct in terms of
efforts such as activation, arousal, stress, fatigue and resources can be
added to models of behaviour (Hockey et al., 1986).
Regarding the applicability of ER, it has been proposed that it
provides a framework for amongst other things fatigue, individual
differences in adjustment and coping, specifically with regards to work
related demands (Hockey, 1997). The use of ER has been proposed to be
“a generic term encompassing all mechanisms that energise and regulate
the organism and directly or indirectly influence psychological
processing” (Gaillard, 2001: 625). To understand the characteristics of ER
51
“to rouse or stimulate to action or to physiological readiness for activity”
(Merriam-Webster, 2008).
178
one can examine why they are applied and the results of application. ER
are activated in an effort to protect performance under stress and the
result is behavioural and physiological costs (Hockey, 1997). This effort
to protect performance is difficult to maintain (Kahneman, 1973) because
conflicts likely crop up between the emotional goals of maintaining
personal well-being and desired affective states (Hockey, 1997).
An underlying concept when studying ER and adopting Hockey’s
perspective (1997) is emotions. Stress, emotions and coping have been
suggested to have a part-whole relationship with emotions as the
superior conceptual unit (Lazarus, 1999). As will be discussed further on
in this chapter, emotions or the risk of emotions influences how ER
develop and how entrepreneurs cope. What influences emotions in turn
is the person-environment relationship (Lazarus, 1993).
The manner in which ER are discussed in this study follows the
model of perceived resistance previously developed (see Figure 5-4). It
starts with a stimulus which in the model is the instance of resistance.
This event or process is appraised in two steps where a disruptive event
could be evaluated as threatening or challenging (Lazarus, 1999).
Appraisal then leads to an activation response which is regulated
according to available ER. Depending on how the situation is appraised,
regarding available resources, various coping strategies are applied.
These strategies are moderated by issues such as effort, motivation, and
context-dependent factors. The result of coping with perceived resistance
causes a reappraisal which affects arousal and ER mobilisation in the
sense that it is increased, sustained or decreased. Depending on the ER
available to mobilise, performance risks being degraded if the outcome
of coping strategies is not positively appraised. In the sections 6.1.1 to
6.1.4, the role of ER in the model of perceived resistance is discussed in
more detail, forming a framework to analyse the implications of ER in
the analysis of the empirical material.
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6.1.1 Appraisal of goal disruptions
Cognitive appraisal theory states that emotions arise from
individual’s appraisal of events based on their relevance to the
individual. Appraisal specifically affects emotions, through a loss of vital
ER (Lazarus, 2001). This is problematic as such a loss of resources needed
to pursue a goal will become a threat to the achievement of that goal and
result in negative emotion. The intensity of emotional reaction is further
moderated by the desirability of the goal and the effect of environmental
change on the estimated probability of achieving it on time (Lazarus,
1990, 1999).
There are two types of appraisal, primary and secondary, which
happen simultaneously and are part of the same process, but with
different foci (Lazarus, 1999). Primary appraisal relates to the process of
evaluating whether an event is worthy attention and mobilisation of ER.
It sets a frame of reference for how an entrepreneur perceives a
resistance.
Secondary appraisal relates to the options an individual has for
coping – what can be done about a stressful situation appraised as a
threat or a challenge. Emotions play a part in this and entrepreneurs base
their secondary appraisal on blame or credit for the disruptive event,
coping potential and future expectations (Lazarus, 1999). ER come into
play when entrepreneurs face goal disruptions and thus blame is likely
to be the first choice. Coping potential is whether an entrepreneur
believes that a goal disruption can be successfully overcome or not, and
where future expectations have negative or positive outcomes.
The amount of available energy when facing an affective event
also influences appraisal through both an emotional reaction and fatigue.
Energy available is influenced both by the amount and the character of
workload immediately before the event. With an already decreased level,
negative emotions will be stronger than with a higher level of initial
energy (Zohar et al., 2003). In addition the incremental loss of resources
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also plays a role as cognitive appraisal proposes that a lesser possibility
of successful coping poses an even larger threat (Hobfoll, 2001; Lazarus,
1991).
6.1.2 Coping with goal disruptions
To understand the process in which ER become critical, two states
of being can exemplify the dynamics involved. Our normal state is one
where our ER are balanced with the activities we do and want to do.
Mechanisms continuously regulate our body so that it is in an optimal
state, energy-wise, to perform tasks and process information. This
optimal state is a necessity for us to efficiently process, as well as
determine, the available capacity to perform a certain task. Under these
normal state conditions, we do not need to worry about regulating ER
and adapting. It is only in states when individuals experience stress,
fatigue and strong emotions that ER become an issue in need of
regulation and direction in order to uphold selected performance goals.
To entrepreneurs, such states arise when behaviour is disrupted and
cannot proceed as planned.
Regulating input of energetic resources
Behavioural economics states that individuals are forced to invest
additional resources in mental problem solving and decision making
when behaviour is disrupted and cannot proceed as planned. ER are
limited, quickly consumed and require far more time to replenish than to
consume, therefore the effort invested into problem solving and decision
making must be regulated. This implies that individuals must engage in
coping based on a process aimed at gaining the most from costs invested
in challenging situations. (Schonpflug, 1986b, 1986a; Schonpflug et al.,
1988)
Management of ER when facing and coping with goal disruptions
thus becomes critical and is done by mobilising mental effort, which is
181
actively used by individuals to maintain performance stability in
demanding situations. In other words, increasing task goal commitment
will decrease the relevance of other personal (Hockey, 1997).
As energy is a limited and critical resource for self-regulated
action, depleting it most likely leads to negative emotions (Hobfoll,
2001). This also relates to energy expenditure and recovery balance in
stressful situations which influences the intensity of emotional reactions
(Schonpflug, 1986b; Schonpflug et al., 1988).
Coping strategies and moderating variables
Coping is “cognitive and behavioural efforts to manage specific
external and/or internal demands that are appraised as taxing or
exceeding the resources of the person” (Lazarus et al., 1984: 141), or “the
effort to manage psychological stress” (Lazarus, 1999: 111) where
appraisal decides how individuals cope.
The entrepreneurs in this study use three general coping
strategies: problem-focused, emotion-focused and social support
seeking. In addition to this, other research has shown that people can,
when facing issues perceived as potentially goal-disruptive, exert mental
effort to mobilise extra energy in order to maintain performance at a
certain level, a “try harder” approach (Gaillard, 2001). This approach can
only be maintained for a limited amount of time as it brings with it high
physiological and psychological costs. Examples of situations
demanding mental effort are: sleep loss or fatigue which leads to a non-
optimal energetic state; emotions that continuously demand attention
and thus upset the energetic state; an attention challenging task through
varying input-output relations or strong demands on working memory;
a complex task context forcing the division of attention between different
tasks; or a learning situation involving the acquisition of new skills.
An emotion-focused strategy is used when a person does not
believe that the stressful condition can be changed and aims at
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decreasing the experience of negative emotions (Lazarus, 1999).
Strategies involved are for example suppression, restraint, seeking
emotional support, acceptance, denial and disengagement. The result of
emotion-focused coping is a change in individuals’ interpretation of
circumstances, for example giving up a sought after goal or the denial of
a certain threat (Lazarus, 1999). Resorting to an emotion-focused strategy
is risky as intense emotions take “control precedence”, meaning that they
continuously require attention, which in turn decrease the available
capacity for task relevant information processing and action (Gaillard,
2001).
This points to the importance of regulating ER, especially under
time pressure or threatening situations, in order to uphold an efficient
task performance. This is difficult though as it is costly and risks
conflicting with personal goals, for example well-being or having a
positive approach to other people. Availability of ER on demand is a
critical emotional factor as affective events require effort investments to
cope with the disruptions (Zohar et al., 2003).
As stress and negative emotions arise, coping becomes a dual
process where individuals cope with emotions in relation to internal
aspects of the self, at the same time as they cope with stress and
emotions in relation to the social self, roles and relations (Martinovski &
Marsella, 2005). When stress and negative emotions take precedence,
fatigue is the result. Fatigue can be characterised as the mind and body’s
response to the reduction of ER, resulting from carrying out mental tasks
where there is a risk of performance failure in relation to task goals. It is
affected both by the work that has been done and is being done, as well
as work that will have to be done in the future – expectations of what is
to come (Gaillard, 2001).
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6.1.3 Reappraising the outcome
When reappraising a goal disruption after a coping effort, two
issues are important. The first is the discrepancy between task goal and
actual situation, in other words the effect of the applied effort or coping
strategy. The second is the rate of progress in terms of discrepancy
reduction, in this study this means how fast a disruption is overcome
and if it is overcome. Research has shown that positive or negative mood
is directly affected by this rate of progress (Carver et al., 1990). Even a
change in the rate of progress influences mood, meaning that goal
disruptions likely result in negative mood as they have a negative impact
on the rate of progress towards a focal goal (Zohar, 1999).
So if a goal disruption is overcome after exerting effort in order to
cope, an entrepreneur’s venture creation efforts continue, but ER are
diminished. Entrepreneurs are thus more sensitive to new goal
disruptions after recently having overcome one. ER available are
decreased leaving less leeway for attention to multiple tasks. To deal
with this problem, rest might be needed which requires time.
If a goal disruption is not overcome, the process of appraisal-
coping-reappraisal will again take place, but this time with even less ER
at hand. Hence ER is further taxed when the cost of continued coping
outweighs the benefit of overcoming and when coping itself becomes a
source of stress (Schonpflug et al., 1988).
6.1.4 Concluding the theoretical overview
In this theoretical overview of ER it has been argued that
perceived resistance brings ER into focus. As elaborated upon in section
5.2, goal disruptions force entrepreneurs to appraise their efforts, the
significance to their plans and their abilities to cope and overcome the
goal disruption. In the stress that arises as a result, their ER are depleted
when they attempt to cope. The consequence to their venture creation
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efforts is that their planned or intended actions are delayed as they have
to turn their attention towards coping with the resistance.
Gradually as ER are diminished, even more effort is required to
pursue goals. This becomes problematic as ER are limited, quickly
consumed, slow to replenish, and need regular replenishment. Moreover
the actual lowered level of ER in itself leads to additionally taxed levels.
Entrepreneurs hence risk ending up in a potentially negative spiral that
could lead to the final demise of a start-up attempt.
6.2 The influence of energetic resources on the model of
perceived resistance
During the study, all four entrepreneurs faced the problem of
diminishing ER and they responded to this in diverse ways which had
implications for the prospects of their venture ideas. ER actually bring
some of the instances of perceived resistance together in the sense that
diminished ER lead to additional instances of perceived resistance. This
section looks at this by bringing together the empirical findings of the
role of ER in an entrepreneurial context with a theoretical framework for
ER.
As I discussed in the analysis of perceived resistance in Chapter 5,
the manner in which entrepreneurs perceive resistance impacts the entire
process of venture creation. Interpreting resistance as a threat brings
negative stress, more likely to incapacitate action and generate negative
emotions, while interpreting it as a challenge has the opposite effect
(Lazarus, 1993). When examining the cases from an ER perspective it is
possible to see how ER influences the process of venture creation and in
effect moderates the model of perceived resistance.
In the four cases, ER initially becomes an issue during perceptions
of resistance and consequent coping. Jonas for example adopts an
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emotion-focused coping strategy in relation to the time needed to
achieve his goals; he believes he will face resistance as a consequence
and indeed he does. To cope he hopes to fail so that there will be no
problems, a little like closing his eyes and it will disappear. He takes no
active initiatives but waits and hopes that it will somehow solve itself
(J1). Jonas sees these problems coming and attempts to regulate his ER
by decreasing his efforts and thus also lowers his aspirations for the
venture idea.
When coping efforts are made, an important stage in the influence
of ER is reached, the point where negative emotions arise or are kept at
bay. Eric depicts what happens when emotions take “control
precedence” as Gaillard (2001) has pointed out. He believes that it is
important to fulfil one’s obligations to others and he places high
demands on himself. This eventually puts him in a situation where he
has three major aspects in his life to live up to, his private and
professional spheres as well as his venture idea. As long as his venture
idea works smoothly without incidents everything is fine, but when
disruptions arise, he feels that his life gets complicated. On top of that,
there are problems at work, and at home they begin a major project
renovating their house. Initially he attempts to cope with all aspects, but
over time his ER are reduced and eventually his problem-focused
strategy for coping turns into an emotion-focused one. Now other
aspects of his life take precedence and eventually the venture idea itself
becomes a resistance to fulfilling his other life goals. As fewer ER are
available, his appraisal of new disruptions is also affected. Eric is able to
cope for shorter periods of time, investing heavily in extra effort. But
over time he is forced to regulate his ER to cope with other aspects of his
life. This validates ER as a limited resource that needs regulation and
replenishment, and in Eric’s case it means decreasing the overall goals in
his life (see Eric’s full list of instances of perceived resistance in
Appendix E, Table 7-5 through Table 7-9).
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Additionally this shows that ER spans multiple instances of
perceived resistance which is consistent with previous research of work-
related performance episodes where affective states influencing
performance spans multiple episodes (Beal, Weiss, Barros, &
MacDermid, 2005). It furthermore depicts how issues with no direct
connection to perceived resistance, through ER affect entrepreneurs’
perceptions of resistance. These issues are the deliberate choices that
entrepreneurs make in relation to other aspects of life. An example of
this is Jonas’ choice to go on paternity leave which limits his ability to
channel ER towards his venture idea.
Nina responds differently to similar situations as Eric faces. She
regulates her ER by focusing more effort on coping and by implicitly
decreasing her attention to other aspects of her life (N2, N5, N6). At the
same time as she actively regulates her use of ER she uses strategies to
energise herself (N2, N3, N4). Through this she avoids the emotional
consequence of depleted ER.
This indicates that it is important for entrepreneurs to have ER
available on demand as argued in the theoretical framework (Zohar et
al., 2003). Increasing levels of stress and decreasing levels of ER go hand
in hand, and negative emotions arise as an effect of this. In such
situations, theory and empirical findings indicate that overcoming
perceived resistance becomes difficult as other aspects of an
entrepreneurs’ life take over as more important to channel existing and
decreased ER towards.
As I have pointed out in a number of instances throughout this
study, the cases show that entrepreneurs’ entire life situations come to
play in how they evaluate and cope with a certain goal disruption. This
issue of life goals and how entrepreneurs’ entire life situations influence
their venture creation attempts is an understudied area in
entrepreneurship research. Some research has focused on the life
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experiences or life issues
52
of entrepreneurs, their past, and how those
shape entrepreneurial strategies (Kisfalvi, 2002). However this research
does not take entrepreneurs’ current life situations into consideration,
only their past. Lately there has also been a call to use the work-family
interface to address business owners' actual experiences and challenges.
To argue their case, the authors point to how male and female
entrepreneurs differ in the work-family interface concerning experiences
and coping strategies and how this can be used to explain the
performance differential between the two sexes (Jennings & McDougald,
2007). Jennings et al also propose that there is a call “for a reframing of
the literature, encouraging researchers to analyze the activities of
entrepreneurs within the context of their whole lives” (2007: 747).
However when reviewing the literature, this is not so much a call
concerning entrepreneurs’ whole life, but relating to more specific issues
such as the support from family during start-up (Dyer & Handler, 1994),
how family resources, roles, norms and attitudes influence the venture
creation process (Aldrich & Cliff, 2003). Although family is one aspect of
entrepreneurs’ whole lives, it concerns interesting issues which relate to
the findings of this study. Previous research for example proposes that
family goals and values influence strategic decisions and that sources of
conflict might arise from within the family which influences
organisations (Dyer, 2003), and that female small business owners
experience significant conflicts between work and home roles (Stoner,
Hartman, & Arora, 1990) while valuing personal life orientations higher
than their male counterparts (DeMartino & Barbato, 2003; DeMartino,
Barbato, & Jacques, 2006). The issue of life goals revealed in this study
moves beyond the family as primary interest as it focuses on how
mobilising mental effort to maintain performance stability in demanding
situations incurs costs to entrepreneurs’ lives. The more severe the
52
“The thorny issues that are the legacies of developmental stages in which an
individual experienced frustration and in which his or her coping abilities were
severely tested” (Kisfalvi, 2002: 493).
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resistance, the more effort is needed and the greater the costs. Eric for
example states again and again that his relationship with his wife is
characterised by equality, and that he takes responsibility for his sons
and his home.
53
He chooses to make commitments which compete for
attention with his venture idea, much like those made by Jonas in
relation to his work and family (J1). With a view of the importance of
such responsibilities, they are likely to generate conflicting demands
with other goals in times of decreasing ER, which is exactly what
happens and what eventually leads to Eric’s decision to abandon his
venture creation efforts and brings Jonas’ fading of efforts to a standstill.
Another aspect of decreasing ER and the need for exerting mental
effort is the increase in moodiness and fatigue. Jonas keeps his mood in
check but grows gradually more and more tired of coping with
disruptions and balancing his life (J1); this is also the case of Eric who
experiences a similar development. Susanne on the other hand becomes
irritated and less and less interested in her venture idea (S2, S4, S5).
Increasing moodiness and fatigue is a result and a signal of
decreased ER and also indicates that negative side-effects to an
entrepreneur’s start-up attempts risk occurring. As Jonas’ and Eric’s
weariness grow, they have to invest more and more effort into coping,
and the cases show how they finally have no more energy to continue
this negative spiral. This in turn makes them feel even more stressed
with more pressure to be all that they want to be at home, at work and
with their venture ideas. Ultimately this begins to influence their
perceptions of the resistance they meet. As they appraise their situations
as becoming more and more difficult to handle, what they earlier
perceived as disruptions possible to overcome, turn into something
impossible. Eric for example fails to do the tests at the national soccer
53
These aspects come from Eric’s deliberate choices in areas of his life outside the
venture idea. They influence perceived resistance indirectly through ER as discussed
here and thus have no resistance pattern to refer to.
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match, something he originally even saw as desirable, even necessary for
his venture idea (E1). This feeds back into the system and additionally
increases stress levels and emotional reactions. In a similar manner
Susanne is stuck in a negative spiral where she views her venture idea
and what is required to realise it as something she is not so interested in
doing, while she also needs additional funding. This affects her mood as
she perceives resistance.
Over and above entrepreneurs’ entire life situations, the negative
side-effects show the importance of regulating emotions, especially
under time pressure or threatening situations in order to uphold task
performance as a key issue. As stress and effort to cope are involved here
and both tax on ER, regulation requires minimising goals and deciding
which are important to uphold as well as active strategies to recover and
refill energy.
Nina exemplifies how successful regulation of ER and an
energising approach helps her to avoid many of the negative side-effects.
What she has to do is to try harder and increase the amount of effort she
puts into realising her idea. As she overcomes resistances, she prevents
negative spirals that risk increased stress and perceptions of resistance.
Instead her self-regulation, energising and successful coping puts her on
a positive spiral towards further increased ER and higher self-
confidence. Research has confirmed this effect where positive emotions
in the present have been found to generate enhanced emotional well-
being in the future (Fredrickson & Joiner, 2002). This strengthens the
importance of focusing on self-regulation and energising when coping
with perceived resistance as strategies to sustain positive emotions.
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6.3 Summarising the influence of energetic resources’ on
perceived resistance
ER act as a moderator to the model of perceived resistance. To
begin with, the initial level of ER when an entrepreneur faces a goal
disruption, which could potentially be perceived as a resistance,
influences the actual perception. Lowered ER increases the sensitivity to
disruptions and increases the risk of perception of resistance, whereas
where ER levels are complete, no resistance would be perceived.
Furthermore, if an entrepreneur perceives a resistance, this in itself is
likely to negatively affect ER levels due to the stress that comes from this
perception.
As entrepreneurs attempt to cope with an instance of resistance,
they further tax their ER levels through the effort they exert. There are
ways to refill these stores, which Nina’s case illustrates when she uses
her friends as sources of energy in times of need. Entrepreneurs’ social
assets have an important role in energising through emotional support
primarily from friends in times of hardship. The importance of
emotional support from friends has long been discussed in
entrepreneurship research (see for example Bird, 1989; Jianwen &
Harold, 2005; Nelson, 1989), but the use of emotional support as an
energising strategy is new and thus further directs attention to its
importance for the survival of emerging new ventures. In addition to
this, an awareness of the need for regulation of ER and the monitoring of
this process seems to enable entrepreneurs to move to and stay on a
positive spiral.
The outcome of coping is in effect the entrepreneurs’ appraisal of
the status of their venture idea in relation to the resistance they perceive.
If they manage to overcome it, it strengthens their ER but this does not
necessarily mean that ER levels are restored. Eric exemplifies this when
he does not test his venture idea at the national soccer match after
overcoming the resistance perceived from the soccer association. In
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many of the instances of perceived resistance the entrepreneurs loop
from outcome to coping once or multiple times. The longer and the more
effort it takes to overcome an instance of resistance that is of key
importance to their venture idea, the more stress it creates and the more
it drains their ER.
ER levels are decreased by stress which arises as a consequence of
perceived resistance. The impact this has on entrepreneurs’ venture
creation attempts connects to their life goals. When ER levels drop,
entrepreneurs have to consider which goals to uphold and which to drop
or lower and as the cases show they all make different choices in relation
to their overall life goals. Furthermore the empirical material indicates
that entrepreneurs’ commitment, coping skills, and cognitive control
are
related to the initial amounts of available ER; these factors also moderate
the speed with which ER is decreased when facing goal disruptions. The
importance of commitment, coping skills, and cognitive control
has also
been pointed out in earlier research on executives’ abilities to handle
stress without becoming ill (Kobasa, 1979). The observations from this
study indicate in a similar vein that these concepts offer entrepreneurs
the possibility to handle more stress without depleting their ER.
This also connects to the experience loop in the model of
perceived resistance which indicates how entrepreneurs, over time and
as a consequence of coping with perceived resistance, can either enhance
their possibilities of overcoming resistance, or risk ending up in a
negative spiral (see section 5.2.4). Nina’s successful coping and
energising strategies enabled her to move towards the lower half of the
model of perceived resistance. This was a consequence of increased
abilities and a strengthened self-efficacy, as discussed in Chapter 5).
From an ER perspective, increased abilities and self-efficacy buffer
against decreased ER as stress levels from goal disruptions are likely
lowered.
In addition to the direct connection with perceived resistance, ER
also influences entrepreneurs’ perceptions of and abilities to cope with
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resistance from “the outside”. This study concludes that entrepreneurs’
entire life situations need to be included in order to understand their
venture creation efforts. When entrepreneurs’ activities outside venture
creation are disrupted, an effort to cope is required which causes stress.
As a result, ER are diminished which forces goal prioritisation and thus
indirectly affects their start-up attempts.
Additionally, this offers an explanation for new venture survival
or not as there appears to be a proportion between the ER put into a
venture and ER required by a venture to survive. Apparently individuals
put in different amounts of effort into the realisation of their venture
ideas. This effort can be approximated by calculating the percentage of
total time used for all life goals that is spent on their venture ideas. The
greater the percentage, the more venture creation effort their ER need to
cater to in order to achieve the venture creation goal, and the more
sensitive entrepreneurs will be to goal disruptions that affect non-
venture life goals. Comparing Nina and Jonas, Nina invests nearly all her
time in her venture creation attempts, while Jonas invests a very limited
amount. Nina maintains a steady pace and overcomes a number of
instances of resistances while sustaining her ER levels so that her coping
efforts are not negatively influenced. Jonas, on the other hand, has
difficulties keeping a sufficient pace to ensure progress, and also suffers
from decreasing levels of ER, particularly in relation to other life goals.
The issue of proportion of ER input in relation to the requirement
of the venture idea furthermore connects to the world of sports. Athletes
must invest a substantial amount of ER to reach their goals if they aspire
to reach world class. However an amateur whose goal is to play and
have fun does not at all have the same demand for ER and can thus
allow him- or herself to have a number of other life goals in parallel.
Aspirations and requirements for ER expenditure are equally significant
for entrepreneurs and, as exemplified by Jonas and Susanne, result in a
significant difference in outcome.
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The world of sports has more contributions to make because
research in that field has identified athletes’ lives as a whole as a key
factor in order to understand their stress levels and need for recovery
(Kenttä & Svensson, 2008). In the case of athletes it has been observed
that sustained effort to cope and perform, with consequent lower
priority to other important life goals, eventually leads to an insufficient
recovery. This, in turn, undermines focused effort directed towards a
specific goal (Lundqvist, 2006). It is important to emphasise that
increased effort without sufficient recovery leads to fatigue and
subsequently to a need to rest in order to refill ER. An increased effort
thus requires additional attention to recovery, which includes rest and
activities that generate positive emotions (Kenttä et al., 2008).
By adding ER to the model of perceived resistance it is possible to
gain both a deeper understanding of the process, as well as to connect
individual instances of perceived resistance.
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7 Bringing it all together
The very first paragraph of this thesis began by stating that this
study is about “the resistance that entrepreneurs perceive towards their
venture ideas... how entrepreneurs cope in adverse environments, how they
survive or not against seemingly poor odds”. The four cases focusing on
Jonas, Eric, Nina and Susanne have illustrated how entrepreneurs
perceive and cope with resistance. These cases have also depicted how
the contexts in which entrepreneurs act may be adverse, but also how the
entrepreneurs themselves are involved in creating those contexts.
In the introduction, examples of how entrepreneurs are portrayed
in the media were given. One issue is related to entrepreneurs’ requests
for support, someone to hold on to and who can guide them in their first
steps. In at least three of the cases this was a relevant issue. At the same
time, when the entrepreneurs realised that no one would be there for
them in the way they wanted, they attempted to cope with problems
themselves. This is perhaps the spirit of entrepreneurship, which this
study illustrates, that is as an entrepreneur you have to do it yourself,
and the manner in which this is approached and achieved directly
influences the venture creation process. I will return to the policy
implications of this in section 7.2, and focus here on the purpose of this
study.
How entrepreneurs perceive and deal with resistance is an
important aspect of the venture creation process, and yet it is hereto
unknown. This study offers the potential to deepen our understanding of
venture creation as a whole, and thus the aim of this study, to explore:
• Where and why do novice entrepreneurs perceive resistance to their
venture creation efforts?
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• How do novice entrepreneurs cope with perceived resistance?
and to describe:
• Which effects do perceived resistance have on outcomes of venture
creation processes?
In theory this appeared to be a relatively straight forward topic
with a simple model. In practice however, the empirical study however
revealed a different picture. A linear step-by-step model can be used to
describe the process and the steps of venture creation when perceiving
and coping with resistance, but it fails to make visible the underlying
dynamics that influence the process as a whole. The results of this study
show that entrepreneurs’ energetic resources are a key aspect of these
underlying dynamics, and thus should be included when creating a
model. Furthermore, when contemplating the creation of a model of
perceived resistance, entrepreneurs’ contexts illustrated by the
contextual model (see Figure 1-1) also needs to be considered.
The analysis concludes by building a model of perceived
resistance (see Figure 5-4), which embodies the result of exploring and
describing the dynamics of perceived resistance, that is, fulfilling the
purpose of this study. It proposes that perceived resistance arises as a
consequence of goal disruptions within three categories: dyadic
interactions between entrepreneurs and stakeholders, relationships with
depersonalised gatekeepers like government authorities, and the beliefs
of the entrepreneurs. These categories are influenced by the origin of the
goal disruption. The origin of the goal disruption refers to three contexts:
events like a stakeholder deciding to block an action, decisions or actions
where entrepreneurs’ own behaviour causes it as the building of certain
relationships that seems appropriate but eventually turns out to be a
liability, and finally entrepreneurs’ frame of mind which directly affects
their perceptions.
Entrepreneurs chose to cope with perceived resistance by using
strategies that depend on their view of the significance of the resistance
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to the venture idea and to their perceived ability to successfully cope
with the resistance (see Figure 5-3). The lower the significance and the
higher their perceived coping abilities are, the more likely it is that they
chose a problem-focused coping strategy. Such a strategy can be
accommodating in the sense that the entrepreneur tries to meet the
demands placed on them, bold through bricolage or other innovative
means, or output focused where an effort is invested to “work through”
the resistance either on their own accord of the entrepreneur or by
outsourcing tasks. On the opposite end of the scale, in the case of high
significance and lower perceived coping abilities, an emotion-focused
coping strategy is likely. This is a strategy which focuses on the
entrepreneurs’ feelings in relation to the resistance, instead of actually
trying to overcome the resistance they deal with their feelings of
(probably) not overcoming it. The observed emotion-focused strategy is
an ostrich strategy where entrepreneurs figuratively stick their heads in
sand, in that they are unwilling or unable to deal with the practical
consequences of the resistance and instead focus on minimising the pain
from not being able to overcome the perceived resistance. In between the
problem-focused and emotion-focused strategies are social support
seeking strategies, where entrepreneurs perceive their own abilities to
overcome a resistance as poor, but where they instead use their social
network to complement those abilities.
These coping strategies are continuously appraised in relation to
the perceived resistance, whether it is overcome or not. The manner in
which progress in coping with perceived resistance is appraised takes
into consideration both the status of the resistance as well as the time it
has taken to cope and is likely to take until resistance is overcome. At
any point, coping can be deserted if possibilities to overcome it are
deemed to be futile, but until then there is a continuous loop from
resistance appraised as still existing and back to coping. Why
entrepreneurs give up coping can be a result of having tried all they can
think of at no avail, but it can also be a matter of lacking in ER.
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As I stated earlier, the model cannot be understood by adopting a
rational and simple cause and effect approach. The empirical study
revealed that something more than what is captured in the model
seemed to influence perceptions of resistance, applied coping strategies,
as well as the entrepreneurs’ persistence in coping. This “something
more” is proposed to be entrepreneurs’ ER. The way in which ER
influence the model of perceived resistance can be described as a positive
or negative moderator of the different stages, all depending on the
current level of available ER in relation to the effort needed to cope. With
optimal levels of ER, the model is initially unaffected by ER, but the
stress involved in perceiving resistance immediately begins to diminish
ER. Thus ER always affect the model of perceived resistance.
The lower the levels of ER, the more resistance entrepreneurs are
likely to perceive, and this resistance will also be perceived as more
significant than with an optimal level of ER. When entrepreneurs have
low levels of ER, they view their ability to cope with resistance as poor.
As a consequence, lower levels of ER increase both the likelihood of
entrepreneurs resorting to emotion-focused coping strategies as well as
the risk of failing to overcome resistance.
To complicate matters, ER levels are unique to each individual
and can be refilled and regulated. This was evident when the four
entrepreneurs in the empirical material were compared. Nina actively
regulated her ER, refilling them in times of need, which helped her
maintain her effort and apply problem-focused or social support seeking
strategies. The three others were more at the mercy of ER and they used
emotion-focused strategies more extensively. They also gradually lost ER
over time which eventually influenced the termination of their ventures.
This study has also explored the effect that perceived resistance
has on the venture creation process. There are four specific issues that
appear to be important, issues which also happen to be more or less
researched in the field of entrepreneurship. They are the influence of
family resistance towards venture creation, how entrepreneurs’ life goals
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affect the prospects of dealing with resistance, the importance of
entrepreneurs’ selves to the venture creation process and how this interacts
with external context and stimuli, and the positive/negative spirals
observed where entrepreneurs’ ER levels affect their abilities to cope
which in turn, through appraisal and reappraisal, affects ER levels.
Much previous research has shown that family and friends are
key supporters for entrepreneurs in their start-up endeavours (see for
example Greve et al., 2003; Renzulli et al., 2000). The current study shows
however that examining both support and resistance on the part of family
and friends is important. This study reveals that such resistance is
exceptionally difficult for entrepreneurs to deal with, possibly as those
stakeholders are emotionally close and coping thus becomes more
difficult.
The life goals of entrepreneurs is one of the most central aspects
affecting how entrepreneurs cope with perceived resistance, and
whether they manage to realise their ventures or not in adverse
environments. When entrepreneurs perceive resistance and try to cope
with it, they are simultaneously forced to pit their venture idea against
all their other life goals. This comes as a consequence of having to
allocate ER to cope with perceived resistance, and ER are limited
resources. In effect, what entrepreneurs must do is to re-evaluate their
goals, their desire to reach them and then choose which goals are the
most important. This study has illustrated what happens when goals
related to family have higher importance than the venture idea. In those
circumstances, the venture idea is down-prioritised and then likely to
suffer when resistance is perceived.
Entrepreneurs, for good and bad, bring their feelings with them
into the venture creation process. This is especially evident when taking
an ER perspective as this directly governs the feelings and emotions of
entrepreneurs. Examining a start-up process without taking
entrepreneurs’ feelings into consideration is likely to miss out valuable
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aspects that can help interpret what happens and why, specifically in
relation to decisions made and activities chosen.
Finally, the positive and negative spirals of venture creation
efforts that were observed underline the importance of taking the aspects
discussed so far into consideration when approaching venture creation
processes. These aspects and the model including ER hold a key to
where an entrepreneur carries a venture idea, but can only be
understood by considering all aspects put forth here. Breaking it down
into smaller parts on which to focus may simplify analysis but as I have
shown throughout this thesis, lessens the possibility of correctly
assessing the situation.
Using knowledge created by this study, we can attend to policies
that support in the right places and individual entrepreneurs can better
value beforehand what they can expect when trying to realise a new
idea.
This concludes the summary of the study and I now turn to the
theoretical and empirical contributions as well as to the need for further
research.
7.1 Theoretical contribution
Few studies have followed novice entrepreneurs’ venture creation
attempts over time, one exception is Mosey and Wright’s study on the
relationship between novice entrepreneurs and social networks, where
novices were compared with nascent and habitual entrepreneurs (2007).
By longitudinally following four novice entrepreneurs in real time from
the start of their ideas, this study adds to our knowledge of how novice
entrepreneurs go about realising their venture ideas. This study also
addresses the issue of gestation of new ventures which is an
understudied area of research (Reynolds et al., 2004). Furthermore, the
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method in itself – longitudinal exploration of how entrepreneurs create
their ventures – is a contribution to the field of entrepreneurship where
such methods are in demand (Aldrich, 1999; Reynolds et al., 2004).
Studies of entrepreneurs tend to describe them (most often a “he”)
as risk-takers and success-driven individuals (Kodithuwakku & Rosa,
2002; Mitton, 1989; Stewart, Watson, Carland, & Carland, 1999). In this
context there is little room for perceived resistance in the relationships
between entrepreneur and stakeholder. However, as I have discussed,
the issue of resistance depends on what one looks for in a study. To date,
much research within entrepreneurship has focused on success factors in
one or the other way contributing to for example growth (Wiklund,
Davidsson, & Delmar, 2001). The concept of perceived resistance
develops our understanding of the dynamics behind both termination
and survival in venture creation. This is crucial in forming a complete
picture of the start-up process, which is lacking in entrepreneurship
research (Katz et al., 1988). Furthermore by using a perspective of
resource dependence (Pfeffer et al., 1978) when longitudinally exploring
the concept of perceived resistance this study identified the tensions
between goal commitment and stress as a consequence of entrepreneurs’
attempts to acquire critical resources.
An increasing number of researchers are looking at the
importance of social capital in the creation of new ventures (Batjargal,
2003; Brush et al., 2001; Davidsson et al., 2003; Florin et al., 2003).
However, current research mostly focuses on finding and testing factors
that may contribute to the success of new ventures. Few studies aim to
understand how entrepreneurs use their social capital in developing
their ventures, with some exceptions (see for example Bowey, 2002). This
study addresses this issue by revealing entrepreneurs’ social support
seeking strategies as central to their coping efforts when facing goal
disruptions. Their social capital forms the basis for their social support
seeking strategies, and this is particularly important when they lack
other resources. In addition to the support aspect, perceived resistance
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also reveals the opposite, namely family and friends who oppose an
entrepreneur’s attempts at creating a new venture. The study found that
this type of perceived resistance as particularly important.
Studies of interorganisational relations have primarily looked at
structural aspects, for example the number of external relationships a
young firm has is important (Dollinger & Golden, 1992; Jarillo, 1988).
Simultaneously, the coping strategies of new entrepreneurial firms have
been proposed as being of critical importance in the field of
entrepreneurship (Alvarez & Barney, 2001; Venkataraman, Van de Ven,
Buckeye, & Hudson, 1990). Lately, the approach of measuring the
number of external relationships in order to explain entrepreneurial
outcome has been questioned. Findings instead propose that the key
issue is the manner in which relations with critical stakeholders are
managed (Yli-Renko, Sapienza, & Hay, 2001) – i.e. entrepreneurial
coping strategies. However, in-depth studies of entrepreneurs’ responses
to relationships characterised by resource dependence are lacking.
Studies have focused on finding the implications of dependence to the
venture, not how entrepreneurs cope with this dependence (Eisenhardt
& Schoonhoven, 1996; Larson, 1992; Yli-Renko et al., 2001). In this study
this gap is illuminated by studying entrepreneurial coping strategies in
dependence relationships with stakeholders. This focuses on how
entrepreneurs manage their relationships with stakeholders, also
including a broader range such as family and friends, and moves beyond
this to how the entrepreneurs’ selves influence their perceptions and
behaviours.
For entrepreneurship research in general, the study shows that a
consequence of bringing in ER is that the world outside start-up
activities needs to be taken into consideration. The study points to direct
links between entrepreneurs’ whole life situation and their perceptions
and responses to goal disruptions pertaining to their creation attempts.
This means that it extends the call of bringing the whole life situation of
entrepreneurs into the picture when carrying out entrepreneurship
203
research from family only (Jennings et al., 2007), to actually include all
life goals of entrepreneurs. By bringing in life goals when studying
entrepreneurs also connects to current research in management where
researchers take a life perspective in order to further an understanding of
leadership (Pirie, Forthcoming).
The moderating aspect of ER in itself also contributes to the
understanding of entrepreneurs by the use of cognitive psychology, in
itself an emerging and active field in entrepreneurship research (see for
example Baron, 2008; Busenitz & Arthurs, 2007; Krueger, 2003). In
addition to the moderating aspect, ER thus contributes to theory by
extending the scope and impact of cognitive psychology on
entrepreneurship research.
7.2 Implications for policy and practice
This study and others
54
, show how entrepreneurs face a great
number of potential goal disruptions. Perceptions of these goal
disruptions vary depending on the individual. The model developed in
this study facilitates the understanding of this process.
There are three groups in particular that can benefit from this
study: entrepreneurs, those supporting entrepreneurs and policy
makers.
It is likely to be futile to prepare for specific issues that arise when
attempting to realise a venture idea as there is no way of knowing
exactly what will happen. However, understanding the process of
perceiving and coping with resistance and the issues influencing and
moderating that process can better prepare entrepreneurs for goal
disruptions. When also adding the dimension of ER to the picture,
54
I discussed these earlier in the theoretical framework, see page 25.
204
entrepreneurs have a tool to understand and explain the process.
Moreover they have a way to deal with it. By sustaining ER levels, the
probability of perceiving resistance is decreased and entrepreneurs’
abilities to overcome resistance is improved.
In the same manner, understanding the process enables those
with the intention to support entrepreneurs to direct measured support
that can aid entrepreneurs in realising their venture ideas. Even policy
makers can make use of this knowledge when forging policies which
encourage entrepreneurial initiatives, because supporting entrepreneurs
to overcome perceived resistance at start-up helps decrease individuals’
hesitation to start. This in turn facilitates that invested resources generate
a better effect on growth and employment.
As a general implication, this study indicates the importance to
entrepreneurs to move towards and stay in the lower half of the model
of perceived resistance (see Figure 5-4), as well as continuously
moderating and refilling their ER. While in the lower half, entrepreneurs
appraise their abilities to successfully cope with goal disruptions as high
thus limiting stress and the taxing effect it has on their ER. Attaining this
enhances the survival of new venture ideas through maintained ER
levels and the possibility of entrepreneurs to attend to building their
venture ideas instead of being forced to continuously cope with goal
disruptions.
7.3 Further research
The manner in which life goals influence the entrepreneurs of this
study contradicts studies of microenterprises which have found that
when there is a higher demand for attention from both business and
family, the needs of the family does not get more consideration than the
needs of the business (Miller, Winter, Fitzgerald, & Paul, 2000). However
this is slightly off subject as the entrepreneurs studied in this thesis do
205
not compare with microenterprises. Instead it would be more interesting
to look at research of work and family in the field of entrepreneurship.
Unfortunately this interface is understudied in entrepreneurship
research. Lately there has been a call to include it as a way to for example
explain why there is a difference in performance between firms run by
women and firms run by men (Jennings et al., 2007), and where family is
proposed to be an important embedded issue in the entrepreneurial
process (Aldrich et al., 2003). From the perspective of this study, what
would be particularly interesting would be to focus on entrepreneurs’
goal setting in all life goals, thus moving beyond the limits of the family
only, and how this influences their perceptions of resistance and
subsequent coping.
The study furthermore suggests that research is needed into the
implications of entrepreneurs’ perceptions of disruptions as a threat or a
challenge and the implications this has on the model of entrepreneurs’
ER and venture creation. The contribution of such research could help
further explain why owners make certain choices in respect to their
ventures (Gimeno, Folta et al. 1997; McGrath 1999), and the development
of new ventures over time, particularly in the early phases (Bruderl and
Schussler 1990; Fichman and Levinthal 1991). ER could thus aid in
bridging our knowledge gap between seeing the results of
entrepreneurial activity and understanding how new businesses come
into existence (Reynolds et al., 2004). In addition to this, the study
indicates that future research should explore the influence of ER on
entrepreneurs’ decisions to cease creation attempts.
The empirical data of this study is based on novice entrepreneurs,
but in the analysis and conclusion, experience is discussed as an issue
which appears to influence entrepreneurs’ perceptions of and coping
with resistance. This indicates that a study including serial entrepreneurs
would further our understanding of perceived resistance. Moreover,
studies of mental workload indicate that such comparison could be
important as mental workload acts as a go-between between task
206
difficulty, skill-level of the individual and observed performance
(Moray, 1979). It thus seems to support previous studies of
entrepreneurs pointing to experience as a key factor to success (Baron &
Markman, 2000; Bruderl et al., 1992; Shepherd et al., 2000; Wennberg,
Forthcoming). According to this, and compared with novice
entrepreneurs, entrepreneurs with previous experience can potentially
deal with relatively more difficult tasks without adversely affecting
performance. When using the concept of ER this conclusion becomes less
certain as this study shows. As individuals during limited periods of
time can “try harder” by incurring additional costs to ER in order to
maintain performance levels (Hockey et al., 1986). However this study
also points to experience as an issue with positive effects on ER. Future
research should explore this and untangle the dynamics of ER and its
effects on novice versus serial entrepreneurs in relation to perceived
resistance.
This study also reveals how ER levels and entrepreneurs’ abilities
to refill their ER moderates their perceptions of resistance and their
subsequent coping. Given this, further research into entrepreneurs’
levels of ER would be beneficial. Specifically comparing differences
between entrepreneurs, the speed at which they are depleted in
comparable situations and the manner in which they are refilled should
be the foci. This would also contribute to our understanding of
entrepreneurial persistence which so far has been addressed through
constructs such as passion (Cardon et al., 2005) and perseverance (Baum
et al., 2004).
Most of the research drawn upon when developing the ER
construct has primarily used subjective reports of affective states to
measure effort. Much of this research has carried out cross-sectional
analyses of demand and outcome variables or experiments. Although
research methods differ considerably, it has been shown that results
produced from laboratory studies do not differ from those generated
from field studies and the findings from one can thus be used in another
207
(Locke, 1986). Furthermore and in order to develop and explore theory,
concepts, and dynamics of ER further, there has been a call for
longitudinal studies (Hockey, 1997). Examples of such studies now exist
with longitudinal surveys (see for example Zohar et al., 2003), but more
is needed. The further research proposed here would thus also
contribute methodologically when employed as a development from this
explorative study.
208
209
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Appendix A.
Deciding on design – a pre-study
Previous research has taken of a perspective of external shocks to
venture creation which generates objective problems for entrepreneurs
to deal with (see page 40). Through its subjective aspects taking a view
from the entrepreneurs, perceived resistance is a new way of studying
venture creation which makes earlier research difficult to reconcile with.
Thus when perceived resistance occurs, why and how it influences the
entrepreneurial process is largely unknown. Because of this I decided to
carry out a pre-study to explore themes of interest which could guide me
in building a theoretical framework as well as which methodological
issues I needed to consider when studying resistance.
The pre-study was based on three cases:
Case 1: Two novice entrepreneurs who had just started a venture together were
interviewed twice, in Autumn 2001 and in Autumn 2003.
Case 2: An entrepreneur who had previously started a venture which had failed
was interviewed in Autumn 2003.
In both case 1 and 2, the interviews focused on the process of starting their
venture, relationships with stakeholders during this process, and the
entrepreneurs’ feelings and thoughts throughout.
Case 3: The start up of a venture was followed in Spring 2002, primarily through
written material, e?mails sent over a period of 1 ½ years and meeting notes.
The venture
55
was started by novice entrepreneurs in 1999/2000, and I was given
access to the e?mail correspondence of one of five co?founders from December
1999 to April 2001. The data contained more than 11.000 e?mails and covered
the start?up phase, as well as all meeting notes from the same period. In
combination with this, two of the founders were interviewed at two occasions.
The e?mails were analysed in a fashion akin to a longitudinal study in order to
simulate as closely as possible a study in real time. This meant that the e?mails
were browsed beginning from December 1999. During this browsing a log was
55
The venture [name omitted by author] was a game development studio. At the
time of the study it had nine employees, three game titles, and four customers in
Europe.
228
kept of names of stakeholders, keywords and expressions, I also deleted e?mails
which I perceived as being unrelated to the venture, narrowing the amount to
little over 9000. Parallel to browsing the e?mails I also read the meeting notes as
they took place in time. Next all the material was imported into NVIVO. In NVIVO
I created nodes based on occurrences of stakeholders and added them under the
case nodes venture capital companies; customers (actual and potential);
partners; entrepreneurs; and their personal networks. These nodes I then
searched using the keywords and expressions from my log.
Although attempting to study at least the third case over time, the case
studies were mostly retrospective. This fact turned out to be the most
important lesson from the pre-study. All cases indicated that the
entrepreneurs did experience resistance, but due to the time which had
passed between the instances they described and the interviews, they
could not specify what had happened or elaborate on their perceptions.
229
Appendix B.
Interview guide
Each interview contained three main themes of questions directed at:
• Venture creation strategy
- how the entrepreneurs built their ventures
• Relationships
- the role of their relations
- who the critical stakeholders were
- how those stakeholders’ responses to their ventures were
perceived
• Perceptions and choices
- how they perceived the development of their ventures
- how they viewed their own choices
- what their own actions were in the face of perceived
resistance
The structure of each interview in turn followed three parts:
retrospective, issues of concern and future goals. Specifically which
question each part contained depended on the issues that came up. As a
general guide, each part focused on:
Part 1: Retrospective
Which stakeholders have been the most important ones since the last
interview?
Why have they been important?
How do the actions taken connect with the goals expressed during the
previous interview?
230
What has happened outside the venture creation attempts? Family,
friends, work etc.
Part 2: Issues of concern
The retrospective part thus revealed critical stakeholders, critical
incidents and how those unfolded concerning issues such as trust,
reliance and credibility.
This in turn generated new questions like:
How does the entrepreneur feel about the process of realising the
venture idea?
How do the issues found in the retrospective part interact with each
other?
Part 3: Future goals
What are the main goals that the entrepreneur plan to achieve until next
interview?
Are there any potential difficulties that might arise? Why?
231
Appendix C.
Example of visualisation of a venture
creation map
232
Appendix D.
Overview of the steps of the empirical
study
Pre?study phase
Empirical problem
Reading of theory to appraise the theoretical viability of the empirical
problem
Test cases
Construct criteria to guide selection of cases
Construct criteria to guide the manner and time of data collection
Construct themes as interview guides
Real life phase
Interviews
Notes of observation and ideas for potential perceived resistance
Pre?analysis phase
Transcription
NVIVO phase
Create projects in NVIVO, one for each case
Code into nodes
Add attributes for each stakeholder node
Recode each case’s resistance nodes with a focus on earlier coded
nodes within those
Resistance nodes are separated into instances of perceived
resistance, each generating a new node
Each resistance node is analysed with a focus on nodes contained
within and those nodes’ attributes
Between case comparison of resistance nodes – focus on identifying
similar patterns
Sort instances of perceived resistance into resistance patterns, based
on between case comparison
Build longitudinal visual models for each case of resistance nodes
On paper phase
Write cases stories for each case based on the instances of perceived
resistance
Entrepreneurs read and respond to written case stories
Visualise each resistance pattern through the theoretical model of
perceived resistance
Compare resistance patterns and build categories of instances of
perceived resistance
Study phase
Write analysis into study – iterative process back to NVIVO analysis
and on paper analysis
BCERK conference
paper
AOM conference
paper
Book chapter
233
Appendix E.
All instances of perceived resistance
Table 7-1: Jonas’ resistance pattern 1 – Multiple goals
Item Date Actions or events
J1A 2004?02 Jonas has limited time to put into his new venture as he is occupied by
employment and family
J1B 2004?05 He is worried that time will not be enough when he goes on paternity
leave in autumn. He even thinks it would be good if he fails
J1C 2004?09 Time becomes as limited as he feared
J1D 2004?09 Because the development of the service is finished, it does not matter to
product development that he puts in less time
J1E 2004?11 The project enters a new phase and he begins marketing it, now his
available time is again restricting pace of development
J1F 2004?11 Time with his family and towards his employment is still prioritised above
his venture idea
J1G 2004?11 Even though it is slow, Jonas still feels that he can handle development
through focused and temporary efforts
J1H 2005?03 The students complete their courses and the venture idea becomes
something that they work with in their spare time
J1I 2005?03 The speed of development of the venture idea drops further
Table 7-2: Jonas’ resistance pattern 2 – Conflict with external rules or
bureaucracy
Item Date Actions or events
J2A 2004?01 Jonas loses the computer that had been allocated to the student projects
when the course ends
J2B 2004?01 Development of the venture idea cannot continue without computers
J2C 2004?01 He tries to convince the university’s lawyers, but they refuse to change
the rules
J2D 2004?02 He tries to get help from the university’s pre?incubator and the start?up
course he participated in, but they offer no help
J2E 2004?02 Eventually he finds a room they can use at his institution, but they still
need to get their own computers
J2F 2004?03 To find computers Jonas contacts a computer company to ask for
sponsoring
J2G 2004?04 After some time the computer company agrees to sponsor them for two
months
234
Table 7-3: Jonas’ resistance pattern 3 – Conflict with external rules or
bureaucracy
Item Date Actions or events
J3A 2004?04 When they have completed the development of the service, they ask the
people responsible for the institution’s IT environment to help them set it
up
J3B 2004?04 They are refused to run commercial activities on the institution’s servers
J3C 2004?04 Development of the venture idea cannot continue without access to
servers
J3D 2004?04 Jonas contacts the university’s lawyers who have no objections to using
the servers commercially
J3E 2004?04 The only requirement for using the servers is that it is within the
framework of a course assignment
Table 7-4: Jonas’ resistance pattern 4 – Multiple goals
Item Date Actions or events
J4A 20004?
12
The cost of downloading a 4 MB song charged by the mobile service
provider is eight times as high as the cost for the song itself
J4B 2005?03 After a few months of marketing the service Jonas realises that the current
business model is not feasible given the high cost of downloading
J4C 2005?03 Jonas decides to abandon the old idea and instead sell music
downloadable via the Internet to computers
J4D 2005?03 The service must be reprogrammed
J4E 2005?03 With the new strategy, the student programmers’ time again becomes a
bottleneck. None of them have any time to spare and can only work
during the weekends
J4F 2005?03 Jonas and the students start reprogramming the service
J4G 2005?03 The bands that have uploaded songs want to see some development fast,
otherwise they might desert it and instead sell their songs through other
services
J4H 2005?03 Jonas worries that the programmers might abandon the project if he
pushes too hard
235
Table 7-5: Eric’s resistance pattern 1 – Key stakeholder blocks operations
Item Date Actions or events
E1A 2004?05 Testing at Swedish Premier League games is terminated by the association
of Swedish soccer.
E1B 2004?05 Eric feels like “a bucket of cold water” has been poured over his head and
the development of his venture idea is halted
E1C 2004?05 He assumes that the reason for the termination is his affiliation with the
Internet site owned by his friends
E1D 2004?05 He calls the lawyer at the association to talk about why this has happened
and what can be done about it
E1E 2004?05 The lawyer confirms his suspicions about the Internet site being the
reason and tells him to get back again in autumn
E1F 2004?05 Eric feels motivated and hopeful that he will secure continued testing at
the meeting in autumn
E1G 2004?10 The service has been improved and a user interface has been set up, with
this Eric contacts the association and a meeting is arranged
E1H 2004?10 The meeting is a success and Eric is offered to run tests at a match with
the Swedish national team at the beginning of 2005
E1I 2005?02 After the meeting Eric never manages to organise his team to run tests at
the match, instead he focuses on the patenting issue
Table 7-6: Eric’s resistance pattern 2 – Perceived inadequate ability
Item Date Actions or events
E2A 2003?12 Eric must write a business plan within the framework of the start?up
course and also needs it to get external funding
E2B 2004?01 He does not feel that he has the skills necessary to write a business plan
E2C 2004?01 He starts thinking about bringing in a person with business know?how
E2D 2004?01 He tries to force himself to work on the business plan but only gets stuck
in Excel charts counting millions
E2E 2004?03 Eric cannot find a solution to how to produce a business plan
E2F 2004?03 Without a business plan he is forced to make do with the personal means
he has
236
Table 7-7: Eric’s resistance pattern 3 – External criticism
Item Date Actions or events
E3A 2004?02 Eric wants suggestions for improvement and participates in a business
plan competition for that purpose
E3B 2004?02 He receives what he describes as destructive criticism from the members
of the jury
E3C 2004?02 He is very disappointed with the reception he gets, says that it is like
“pouring cold water over entrepreneurs fire”
E3D 2004?02 He directs his anger at the organisers to ventilate it and to boost his belief
in himself
E3E 2004?02 Eric is disillusioned regarding people who supposedly have know?how of
the start?up process
Table 7-8: Eric’s resistance pattern 4 – Multiple goals
Item Date Actions or events
E4A 2003?09 Eric contemplates stopping his job application efforts and focus entirely
on his venture idea
E4B 2003?09 His wife states that he has to contribute to the household, that he has to
have a salary
E4C 2003?09 He interprets his wife’s views as scepticism towards his venture idea
E4D 2003?09 He tries to convince his wife that his venture has the potential to offer a
solid financial base for them
E4E 2003?09 She doubts the viability of it and wants him to get a job
E4F 2003?10 Eric feels that he must have a paying job to contribute and continues
applying for jobs
E4G 2003?10 He finds a job
E4H 2003?12 His wife worries that he might quit his job to focus on his venture and
wants to make sure that he wont
237
Table 7-9: Eric’s resistance pattern 5 – Resource needs
Item Date Actions or events
E5A 2004?01 In order to develop his idea, Eric believes that he needs funding,
particularly to hire programmers
E5B 2004?01 He is hesitant to bring in investors as he fears that he would then loose
absolute control of his venture idea
E5C 2004?02 He decides to talk to some people he knows in the venture capital
industry to see what his chances are of acquiring funding
E5D 2004?02 He finds out that he must have a business plan with amongst other things
a solid market survey
E5E 2004?02 Eric does not feel that he can produce what is required so he stops looking
for venture capital
E5F 2004?02 Borrowing from banks is a possibility, but he is hesitant as they have taken
a mortgage on their house to renovate it and therefore doubts that banks
would extend more credit to him
E5G 2004?02 He ponders borrowing from friends and family, but wants to wait as long
as possible with that, seeing it as a last option
E5H 2004?04 Eric says “I ponder it [funding] all the ‘darn time, should I go to the
government funding agency or something and try and get funding”
E5I 2004?04 He feels that he lacks in competence, drive and ability concerning funding
issues and is unable to solve it
Table 7-10: Eric’s resistance pattern 6 – Key stakeholder blocks operations
Item Date Actions or events
E6A 2003?10 David joins in the venture idea and Eric makes him an equal partner
E6B 2004?08 Eric talks to David who says that he wants to feel that his work with the
venture is fun, and that he wanted to work hard at getting the patent
organised
E6C 2004?10 Eric is displeased with the lack of work with the venture idea on David’s
part
E6D 2004?10 Eric has not talked to him for a long time and considers talking to him,
asking him to make a better effort with his areas of responsibility
E6E 2004?12 Time goes and Eric does not talk to David
E6F 2005?01 He starts organising the patent himself
E6G 2005?02 He is annoyed with himself for not talking to David, and worried about the
consequences for the venture idea
E6H 2005?05 Eric says that he has given up on the venture idea and that his last efforts
at sorting out the patent probably came out of a wish to leave something
behind of all the efforts he has put into the idea
238
Table 7-11: Nina’s resistance pattern 1 – Resource needs
Item Date Actions or events
N1A 2004?03 Nina finds the store location she wants, but lacks in funding to acquire it
N1B 2004?03 She feels that “well as long as you have money, if you have started a
venture and begun generating income you can borrow any sum you
want”. Without any personal fortune or mortgageable assets, and her
venture still untested she sees her means of acquiring funding as limited
N1C 2004?03 She considers borrowing from family or friends but none has much extra
to invest
N1D 2004?03 Venture capital is no option because of the consequences to her venture
idea. She says that she would rather “own 80 percent of a SEK20 million
company than 20 percent of an SEK80 million company”
N1E 2004?03 Decides to try and borrow money from banks
N1F 2004?05 First bank is a disappointment, the bank person gave an unprofessional
impression and they reject her application unless her boyfriend, who has a
steady income applies
N1G 2004?05 Second bank more trustworthy but still rejects her application.
Recommends that she talks to a government funding agency
239
Table 7-12: Nina’s resistance pattern 2 – Key stakeholder blocks operations
Item Date Actions or events
N2A 2004?03 Nina needs to receive funding from a government funding agency in order
to also have her loan application from the bank approved. The funding is
necessary to rent her store and realise her venture idea
N2B 2004?03 She forms the opinion that the government funding agency tends to
support ideas that are more traditional with less of an entrepreneurial
approach and fears that this indicates that her application will be rejected
N2C 2004?04 She tries to work with her handling officer to convince her of the business
model
N2D 2004?04 Her initial hesitation with the handling officer’s ability to judge her
venture idea is deepened for each point of contact that they have. She
describes her as “a lady in her 50s who does not even live in Stockholm
and who does not have any idea about what it looks like here [in
Stockholm]”
N2E 2004?05 The bank informs her that the loan application has been rejected because
the government funding agency turned her down
N2F 2004?05 Nina is angry, disappointed and frustrated with being rejected and most of
all by finding out from the bank and not from the agency directly
N2G 2004?05 She considers giving up, wondering how she will be able to start without
money
N2H 2004?05 She calls her best friends for emotional support
N2I 2004?05 The day after talking to the bank, Nina calls her handling officer to ask
why her application was rejected
N2J 2004?05 She fails to make the handling officer reconsider the decision and asks her
contacts to try and convince her, but the decision is final
N2K 2004?05 She rethinks her business model
240
Table 7-13: Nina’s resistance pattern 3 – Key stakeholder blocks operations
Item Date Actions or events
N3A 2004?09 Nina wants to have products from the market leader in her store
N3B 2004?10 She meets with the marketing director of the company, but they do not
want to sell to a web shop
N3C 2004?10 She feels inferior when meeting the company, and as if she is begging
them to sell her their products. She also perceives their response as
conveying superiority when they question why she should be allowed to
sell their products
N3D 2004?10 She tries to persuade them to sell her their products but they maintain
that their policy prevents them from selling to a web shop
N3E 2004?10 She argues that she will shortly have a physical store and that stores
already exist on the web selling their products
N3F 2004?10 Nina contacts mid?sized suppliers but many of those are also hesitant to
sell her their products
N3G 2004?10 The most annoying thing she experiences are suppliers who do not even
bother to get back to her after she has tried to make contact and left
several messages
N3H 2004?10 Her motivation to work on her venture idea suffers from the set?backs
and thoughts of giving up arise
N3I 2004?10 Talks to a friend who is in a similar situation as she – starting up a new
venture – and they support each other
N3J 2004?10 She reconsiders her strategy
N3K 2004?10 Decides to turn to smaller suppliers, even suppliers in start?up situations
similar to her own
N3L 2004?11 Manages to buy a range of products large enough to be able to open her
store
241
Table 7-14: Nina’s resistance pattern 4 – Conflict with stakeholder
Item Date Actions or events
N4A 2004?07 Nina begins developing her web shop and signs up a small web design firm
to do the job. Her wish to be a part of the process creates tensions with
the designers who say they want total freedom to do the design as they
want
N4B 2004?08 She feels like she constantly argues with the designers to push her ideas
through
N4C 2004?09 The design firm demands that she must pay more for their services
because they do things that were not included in the original agreement
N4D 2004?09 She agrees to pay more but that things then have to be done her way. The
designers agree to her demands
N4E 2004?10 Things settle down but after a while she again feels frustrated about how
they relate
N4F 2004?10 As the web site is nearing finalisation Nina has an argument with the
designers about the colours used
N4G 2004?10 She suggests a different colour, they refuse and express their irritation
with her demands which they feel infringes on their artistic freedom
N4H 2004?10 Nina asks some people she knows who are involved in design for a second
opinion on choice of colours. They agree with her
N4I 2004?10 She demands that her choice of colours is used
N4J 2004?11 The designers express annoyance about her demands, but do as she says
Table 7-15: Nina’s resistance pattern 5 – Conflict with stakeholder
Item Date Actions or events
N5A 2005?01 Her boyfriend questions whether her venture is a real job. He does not
think that there is so much to do, and wants her to spend more time with
him
N5B 2005?01 Nina believes that he has that attitude as a consequence of having an
employment and place to go and work, something that he deems as
important. Her own time is not enough with all the work she has and she
is irritated with him for not appreciating her situation
N5C 2005?01 She feels she must work more, and considers keeping a diary of how her
days look like so he can see and understand
242
Table 7-16: Nina’s resistance pattern 6 – Pace
Item Date Actions or events
N6A 2005?01 Nina has kept much of administration and also issues concerning design
on her own shoulders. Now she is beginning to feel like she is stretched
out over too many activities and that she should have outsourced some
things
N6B 2005?01 She perceives that the grind of just keeping her venture operational is a
constant battle and blocks her need to work with strategic and future
oriented issues.
N6C 2005?01 She wants to have control of design issues, and the best way she sees is if
she does the job herself
N6D 2005?02 Some issues of design are outsourced
N6E 2005?02 Outsourcing turns out to be a source of frustration as it is not done in the
way she wants, thus she is even more hesitant to outsource and feels that
she can do things better than specialists
N6F 2005?03 Supplier mistakes eat up more of the time she needs to spend on
developing her venture
N6G 2005?03 As soon as something does not work or run as planned her time is eaten
up
Table 7-17: Susanne’s resistance pattern 1 – Product development
Item Date Actions or events
S1A 2003?11 Problems developing the prototype
S1B 2003?11 Does not think innovation is any fun
S1C 2003?11 Enlists a friend of her father to build the prototype
S1D 2004?02 Friend of father not as competent as she had expected
S1E 2004?03 Media review of similar products
S1F 2004?04 Susanne and her father develop their own prototype
S1G 2004?04 Fails to construct a safe product
S1H 2004?04 Finds a producer working in plastics
S1I 2004?05 New producer solves basic problems with brush
S1J 2004?05 Susanne drops her direct involvement in developing the prototype
S1K 2004?06 Producer stops working on prototype when no money is paid
243
Table 7-18: Susanne’s resistance pattern 2 – Product development
Item Date Actions or events
S2A 2003?11 Problems developing the prototype
S2B 2003?11 Wants to be an entrepreneur, not an inventor
S2C 2004?02 Tries to solve the prototype issue quickly be searching through a network
of more than 100 points of contact
S2D 2004?05 Happens upon licensing through one contact and sees it as a way towards
being an entrepreneur instead of an inventor
S2E 2004?05 Need to patent before the brush can be licensed, and need money to
patent
S2F 2004?05 Problems with prototype persist
S2G 2004?06 Decision on her loan application does not come through in time for when
she need patent to present her innovation
S2H 2004?07 Susanne’s attention is turned towards a new licensing project
Table 7-19: Susanne’s resistance pattern 3 – Conflict with rigid structures or
bureaucracy
Item Date Actions or events
S3A 2004?03 Susanne needs money to develop her prototype and patent it
S3B 2004?03 Applies for a loan from a government run funding agency, but after a
couple of months there is still no response to her application
S3C 2004?05 She fears that her plan of action might fail if she does not get the funding
in time
S3D 2004?05 She calls the handling officer to try and speed up the application process
S3E 2004?06 Views the government run funding agency as slow bureaucrats
S3F 2004?06 Until the loan is approved she cannot continue developing the prototype
S3G 2004?06 Worries that loan will not be approved until after summer
S3H 2004?06 Applies for a loan from another agency with poorer conditions
S3I 2004?06 Dislikes sitting idle and waiting, tries to work with the producer to develop
the prototype
S3J 2004?08 Summer goes and no response to her application
S3K 2004?08 She now refocuses her venture creation activities on the licensing project
instead
S3L 2004?09 Application is approved, but the brush is now only a low prioritised
product in a portfolio owned by her new licensing project
244
Table 7-20: Susanne’s resistance pattern 4 – Pressure to patent
Item Date Actions or events
S4A 2004?01 Susanne feels that she must have a patent
S4B 2004?01 Without a patent she cannot start talking about her product to potential
stakeholders as she is afraid that they might steal her idea
S4C 2004?03 To patent she must have funding and thus applies through a government
run funding agency
S4D 2004?05 Funding process is too slow for her liking
S4E 2004?08 The project is more or less abandoned because she finds more promising
ideas to work on while waiting for funding
Table 7-21: Susanne’s resistance pattern 5 – Pace
Item Date Actions or events
S5A 2004?01 Susanne believes that the product will take years to bring to the market
S5B 2004?01 She is impatient and feels that the pace of development is too slow and
that it is more difficult than she had expected
S5C 2004?03 Feeling stuck and unsure of what to do Susanne finds out about licensing
as a way to develop the product
S5D 2004?03 Susanne join forces with Jack in setting up a new project focusing on
licensing a portfolio of products for inventors
S5E 2004?06 When lack of funding prevents her to keep the pace up on developing her
brush she spends more and more time on the licensing project
S5F 2004?11 Without much success in prototype development Susanne questions
whether the brush even belongs in the licensing projects product portfolio
EFI, The Economic Research Institute
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2008
Books
Breman, Anna. Forskning om filantropi. Varför skänker vi bort pengar? Forskning i
Fickformat.
Einarsson, Torbjörn. Medlemskapet i den svenska idrottsrörelsen: En studie av
medlemmar i fyra idrotts föreningar. EFI Civil Society Reports.
Kraus, Kalle. Sven eller pengarna? Styrningsdilemman i äldrevården. Forskning i
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Petrelius Karlberg, Pernilla. Vd under press – om medialiseringen av näringslivets
ledare. Forskning i Fickformat.
Portnoff, Linda. Musikbranschens styrningsproblematik. Forskning i Fickformat.
Östman, Lars. Den finansiella styrningens realiteter och fiktioner: De finansiella
styrformernas svenska historia. Berättelser om Petersson och ”Ericsson”.
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Benson, Ilinca. Organisering av övergångar på arbetsmarknaden: en studie av
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Elhouar, Mikael. Essays on interest rate theory.
Farooqi Lind, Raana. On capital structure and debt placement in Swedish companies.
Granström, Ola. Aid, drugs, and informality: essays in empirical economics.
Hvenmark, Johan. Reconsidering membership: a study of individual members’
formal affiliation with democratically governed federations.
Höglin, Erik. Inequality in the labor market: insurance, unions, and discrimination.
Johansson, Marjana. Engaging resources for cultural events: a performative view.
Kviselius, Niklas Z. Trust-building and communication in SME internationalization:
a study of Swedish-Japanese business relations.
Landberg, Anders. New venture creation: resistance, coping and energy.
Pemer, Frida. Framgång eller fiasko? En studie av hur konsultprojekt värderas i
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Rosengren, Sara. Facing Clutter: On Message Competition in Marketing
Communication.
Schilling, Annika. Kan konsulter fusionera?: en studie av betydelsen av identitet vid
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Schriber, Svante. Ledning av synergirealisering i fusioner och förvärv.
Sjödin, Henrik. Tensions of extensions: adverse effects of brand extension within
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Strandqvist, Kristoffer. Kritiska år: formativa moment för den svenska
flygplansindustrin 1944–1951.
Strömqvist, Maria. Hedge funds and international capital flow.
Söderström, Johan. Empirical studies in market efficiency.
Sölvell, Ingela. Formalization in high-technology ventures.
Thorsell, Håkan. The pricing of corporate bonds and determinants of financial
structure.
Ulbrich, Frank. The adoption of IT-enabled management ideas: insights from shared
services in government agencies.
Östling, Robert. Bounded rationality and endogenous preferences.
2007
Books
Andersson, Per, Ulf Essler and Bertil Thorngren (eds). Beyond mobility. EFI
Yearbook 2007. EFI/Studentlitteratur.
Ericsson, Daniel. Musikmysteriet: organiserade stämningar och motstämningar.
Samuelson, Lennart (red). Bönder och bolsjeviker: den ryska landsbygdens historia
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Wijkström, Filip och Torbjörn Einarsson. Analysmodell för sektorsöverskridande
statistik: fallet vård och omsorg. EFI Civil Society Reports.
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Ahlersten, Krister. Empirical asset pricing and investment strategies.
Alexius, Susanna. Regelmotståndarna : om konsten att undkomma regler.
Andersson, Magnus. Essays in empirical finance.
Berg, Bengt Åke. Volatility, integration and grain bank : studies in harvests, rye
prices and institutional development of the parish magasins in Sweden in the
18th and 19th centuries.
Bianchi, Milo. Of speculators, migrants and entrepreneurs : essays on the economics
of trying your fortune.
Brodin, Karolina. Consuming the commercial break : an ethnographic study of the
potential audiences for television advertising.
Elger, Max. Three essays on investment-specific technical change.
Hagberg, Axel. Bankkrishantering : aktörer, marknad och stat.
Hinnerich, Mia. Derivatives pricing and term Structure modeling.
Hjalmarson, Hanna. En växande marknad : studie av nöjdheten med
konsumtionsrelaterade livsområden bland unga konsumenter.
Hjelström, Tomas. The closed-end investment company premium puzzle : model
development and empirical tests on Swedish and British data.
Kraus, Kalle. Sven, inter-organisational relationships and control : a case study of
domestic care of the elderly.
Lindqvist, Erik. Essays on privatization, identity, and political polarization.
Macquet, Monica. Partnerskap för hållbar utveckling : systrar av Oikos och
guvernanten som blev diplomat.
Melian, Catharina. Progressive open source
Nilsson, Daniel. Transactions in cyberspace : the continued use of Internet banking.
Petrelius Karlberg, Pernilla. Den medialiserade direktören.
Portnoff, Linda. Control, cultural production and consumption : theoretical
perspectives, empirical dilemmas, and Swedish music industry practices.
Sköld, Martin. Synergirealisering : realisering av produktsynergier efter
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Sonnerby, Per. Contract-theoretic analyses of consultants and trade unions.
Tyrefors, Björn. Institutions, policy and quasi-experimental evidence.
Valiente, Pablo. Re-innovating the existing : a study of wireless IS capabilities to
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2006
Books
Lundeberg, Mats, Pär Mårtensson and Magnus Mähring (eds) IT & business
performance: a dynamic relationship. EFI Yearbook 2006. EFI / Studentlitteratur.
Thodenius, Björn. Organisering av kunskap: en studie av Wallenberg Consortium
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Wijkström, Filip och Torbjörn Einarsson. Från nationalstat till näringsliv?: det civila
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Wijkström, Filip, Einarsson, Stefan och Larsson, Ola. Staten och det civila samhället:
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Östman, Lars. Lysande ögonblick och finansiella kriser: Dramaten under ett sekel.
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Argenton, Cedric. Quality provision in duopoly.
Beckerman, Carina. The clinical eye : constructiong and computerizing an anesthesia
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Borglund, Tommy. Aktievärden i fokus : internationell påverkan på
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Breman, Anna. The Economics of altruism, paternalism and self-control.
Edquist, Harald. Technological breakthroughs and productivity growth.
Eklund, Jana. Essays on forecasting and bayesian model averaging.
Frostenson, Magnus. Legitimitetskontrollen : en studie av etiska värderingars roll i
gränsöverskridande förvärv och fusioner.
Gaspar, Raquel M. Credit risk and forward price models.
Gustafsson, Peter. Essays on trade and technological change.
Hopkins, Elisabeth. Is a higher degree of local currency pricing associated with lower
exchange rate pass-through?: a study of import pricing in 51 Swedish industries.
Kling, Ragnar. Developing product development in times of brutal change.
Langenskiöld, Sophie. Peer influence on smoking : causation or correlation?
Lychnell, Lars-Olof. ”Och fungerar det inte, gör vi på något annat sätt” : en klinisk
fallstudie av IT-relaterat förändringsarbete i småföretag
Meitz, Mika. Five contributions to econometric theory and the econometrics of ultra-
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Mendicino, Caterina. Financial market imperfections, business cycle fluctuations and
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Ovanfors, Anna. Essays on nonlinear time series analysis and health economics.
Paltseva, Elena. Essays on commitment and inefficiency in political economy.
Rogberg, Martin. Den modeföljande organisationen : om acceptansen av TQM och
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Silvennoinen, Annastiina. Essays on autoregressive conditional heteroskedasticity.
Sjögren, Ebba. Reasonable drugs : making decisions with ambiguous knowledge.
Slinko, Irina. Essays in option pricing and interest rate models.
Wilander, Fredrik. Essays on exchange rates and prices.
2005
Books
Andersson, Per, Susanne Hertz and Susanne Sweet (red). Perspectives on market
networks : boundaries and new connections.
Charpentier, Claes. IT inom omsorgen. Förväntade effekter av införande av IT-
system för utförarna inom äldre- och handikappomsorgen.
Dembrower, Maria. Entreprenörskap i industriella nätverk.
Lind, Johnny och Göran Nilsson (red). Ekonomistyrningens metoder, sammanhang
och utveckling : en vänbok till Lars A Samuelson.
Samuelson, Lars A. Organizational governance and control : a summary of research
in the Swedish society.
Svedberg Nilsson, Karin, Roger Henning och Karin Fernler (red). En illusion av
frihet? : företag och organisationer i det nya regelsamhället. EFIs Årsbok 2005.
EFI/Studentlitteratur.
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Andersson, Martin. Making a difference : project result improvement in
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Arvidsson, Per. Styrning med belöningssystem : två fallstudier om effekter av
belöningssystem som styrmedel.
Bems, Rudolfs. Essays in international macroeconomics.
Berg-Suurwee, Ulrika. Nya trender, nya nämnder : effekter av en
stadsdelsnämndsreform inom kultur och fritid.
Björkman, Hans. Learning from members : tools for strategic positioning and service
innovation in trade unions.
Bodnaruk, Andriy. Essays in empirical corporate finance and portfolio choice.
Clapham, Eric. Essays in real estate finance.
Dareblom, Jeanette. Prat, politik och praktik : om individers möten med strukturer i
en kommunal satsning på kvinnors företagande.
Fromm, Jana. Risk denial and neglect : studies in risk perception.
Hjelström, Anja. Understanding international accounting standard setting : a case
study of the process of revising IAS 12 (1996), income tax.
Hortlund, Per. Studies on Swedish banking 1870–2001.
Lindahl, Therese. Strategic and environmental uncertainty in social dilemmas.
Linnarsson, Håkan. Alliances for innovation : a structural perspective on new
business development in cooperative ventures.
Madestam, Andreas. Developing credit markets.
Nilsson, Roland. The market impact of short-sale constraints.
Nordfält, Jens. Is consumer decision-making out of control ? : non-conscious
influences on consumer decision-making for fast moving consumer goods.
Nordin, Fredrik. Externalising services : walking a tightrope between industrial and
service logics.
Parmler, Johan. Essays in empirical asset pricing.
Simbanegavi, Witness. Price discrimination, advertising and competition.
Thodenius, Björn. Användning av ledningsinformationssystem : en longitudinell
studie av svenska storföretag.
Tolis, Christofer. Framing the business : business modelling for business
development.
Östberg, Per. Corporate disclosure and investor recognition.
2004
Books
Ahrne, Göran och Nils Brunsson (red). Regelexplosionen.
Lind, Johnny. Strategi och ekonomistyrning : en studie av sambanden mellan
koncernstrategi, affärsstrategi och ekonomistyrning.
Lind, Johnny och Walter Schuster (red). Redovisningens teori, praktik och pedagogik
: en vänbok till Lars Östman.
Sevón, Guje och Lennart Sjöberg (red). Emotioner och värderingar i näringslivet. EFIs
Årsbok 2004.
Wijkström, Filip and Stefan Einarsson. Foundations in Sweden : their scope, roles
and visions.
Dissertations
Anderson, Anders. Essays in behavioral finance.
Balsvik, Gudrun. Information technology users : studies of self-efficacy and creativity
among Swedish newspaper journalists.
Blix, Magnus. Essays in mathematical finance : modeling the futures price.
González Gómez, Andrés. Nonlinear dynamics and smooth transition models.
Grönqvist, Erik. Selection and moral hazard in health insurance : taking contract
theory to the data.
Ivarsson Westerberg, Anders. Papperspolisen : den ökande administrationen i
moderna organisationer.
Jutterström, Mats. Att påverka beslut : företag i EUs regelsättande.
Jönsson, Kristian. Macroeconomic aspects of capital flows to small open economies in
transition.
Larsson, Pär. Förändringens villkor : en studie av organisatoriskt lärande och
förändring inom skolan.
Lagerwall, Björn. Empirical studies of portfolio choice and asset prices.
Malmsten, Hans. Properties and evaluation of volatility models.
Marshall, Cassandra. Dating for innovation : recognizing and creating opportunities
in fluid environments through collaborative interorganizational relationship.
Mattsson, Susanna. På gränsen mellan ordning och oordning – tingens betydelse vid
marknadsombildningar : en studie av svenska postväsendets ombildning under
1990-talet.
Nilsson, Charlotte. Studies in environmental economics : numerical analyis of
greenhouse gas policies.
Nilsson, Hans. Medborgaren i styrsystemet : beskrivning av VAD och HUR i
styrning av kommunal verksamhet.
Nystedt, Jens. Competition, regulation and integration in international financial
markets.
Pajuste, Anete. Corporate governance and controlling shareholders.
Richtnér, Anders. Balancing knowledge creation : organizational slack and
knowledge creation in product development.
Salabasis, Mickael. Bayesian time series and panel models : unit roots, dynamics and
random effects.
Sandberg, Rickard. Testing the unit root hypothesis in nonlinear time series and
panel models.
Skallsjö, Sven. Essays on term structure and monetary policy.
Strikholm, Birgit. Essays on nonlinear time series modelling and hypothesis testing.
Söderström, John. Från produkt till tjänst : utveckling av affärs- och miljöstrategier i
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