Opportunity Exploitation in Software Startups. A Human Capital View
Background – Transforming a business opportunity to a valid business case is a crucial process of an early-stage software startups. Prior literature on entrepreneurship defines two types of opportunity exploitations, opportunity discovery and opportunity creation, and proposes models describing the exploitation processes. The factors affecting startups’ abilities to conduct the exploitation are, however, addressed only to a limited extend in prior research. Aim – This research aims at increasing the knowledge on those factors by studying empirically the effects of the available human capital on the opportunity exploitation processes in software startups. Method – We conducted a multiple-case study on a group of software startups in Italy, Norway and Finland. We focused on the founders of the startups, examining their opportunity processes, their human capital, and the interdependencies between the opportunity processes and human capital. Results – Our results are in line with the findings of prior research, which point out that uncertainty is the key differentiator between the opportunity discovery and creation processes. The results reveal, however, that both process types co-exist in the early stages of software startups, independently of how the opportunity was initially recognized, and also highlight missing human capital as a key reason for the uncertainty. We conclude that in software startups the availability of human capital plays a bigger role in the exploitation of opportunities than their types, discovered or created, because even exploitation of a-priori existing opportunities turn to opportunity creation processes in case of human capital shortages.
KeywordsSoftware startup Opportunity discovery theory Opportunity creation theory Product development process Human capital theory
This study was partly funded by TEKES as part of the HILLA program. We thank the members of the Software Startups Global Research Network that supported this study, especially Anh Nguyen Duc and Pekka Abrahamsson for their help in gathering the empirical data.
- 2.Alvarez, S.A., Barney, J.B., Anderson, P.: Perspective-forming and exploiting opportunities: the implications of discovery and creation processes for entrepreneurial and organizational research. Organ. Sci. 24, 8–13 (2012)Google Scholar
- 4.Ries, E.: The Lean Startup, pp. 1–28. Crown Business, New York (2011)Google Scholar
- 5.Bosch, J., Holmström Olsson, H., Björk, J., Ljungblad, J.: The early stage software startup development model: a framework for operationalizing lean principles in software startups. In: Fitzgerald, B., Conboy, K., Power, K., Valerdi, R., Morgan, L., Stol, K.-J. (eds.) LESS 2013. LNBIP, vol. 167, pp. 1–15. Springer, Heidelberg (2013). https://doi.org/10.1007/978-3-642-44930-7_1CrossRefGoogle Scholar
- 9.Becker, G.: Human capital revisted. J. Chem. Inf. Model. 53, 1689–1699 (1994)Google Scholar
- 10.Sarasvathy, S.D.: Effectuation: Elements of Entrepreneurial Expertise. Edward Elgar Publishing, Northampton (2009)Google Scholar
- 12.Ries, E.: The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. Random House LLC, New York (2011)Google Scholar
- 13.Hitt, M.A., Bierman, L., Shimizu, K., Kochhar, R.: Direct and moderating effects of human capital on strategy and performance in professional service firms: a resource-based perspective. Acad. Manag. J. 44, 13–28 (2001)Google Scholar
- 22.Cruzes, D.S., Dybå, T., Runeson, P., Höst, M.: Case studies synthesis: a thematic, cross-case, and narrative synthesis worked example. Empirical Softw. Eng. 20, 1–32 (2014)Google Scholar
- 24.Cruzes, D.S., Dybå, T.: Recommended steps for thematic synthesis in software engineering. In: International Symposium on Empirical Software Engineering and Measurement, pp. 275–284. IEEE (2011)Google Scholar