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The entrepreneurial process: Evidence from a nationally representative survey

Publication ,  Journal Article
Bennett, VM; Chatterji, AK
Published in: Strategic Management Journal
January 1, 2023

Research Summary: Scholars have traditionally characterized the variation in firm performance as determined by conditions after entry, where the entry decision is a one-shot binary choice determined by cost–benefit analysis. However, recent theoretical work has posited that the entry decision is an outcome of a learning process and that the information acquired during the pre-entry period shapes subsequent performance dynamics. We provide the first systematic data on the pre-entry period using a nationally representative survey. We document the activities that prospective entrants undertake, finding variation according to opportunity costs, prior experience, and confidence levels. Our results suggest the pre-entry period is shaped by a series of choices by prospective entrants as they contemplate entry, further exploration, or ending the entrepreneurial process. Managerial Summary: We created and implemented a nationally representative survey on the entrepreneurial activities of Americans. Several interesting findings emerged. First, approximately a third of Americans report having had a business idea in the past 5 years, motivated in the vast majority of cases by lifestyle concerns rather than the pursuit of significant business opportunities. Fewer than half of those who considered starting a business take even the lowest cost steps, like searching the Internet for potential competitors or speaking with a friend. Our findings reveal an entrepreneurial process which involves a significant pre-entry period where prospective entrepreneurs seek to acquire information about the quality of their idea, perform administrative tasks to prepare for launch and encounter frictions that impede their progress.

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Published In

Strategic Management Journal

DOI

EISSN

1097-0266

ISSN

0143-2095

Publication Date

January 1, 2023

Volume

44

Issue

1

Start / End Page

86 / 116

Related Subject Headings

  • Business & Management
  • 3507 Strategy, management and organisational behaviour
  • 1505 Marketing
  • 1503 Business and Management
 

Citation

APA
Chicago
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Bennett, V. M., & Chatterji, A. K. (2023). The entrepreneurial process: Evidence from a nationally representative survey. Strategic Management Journal, 44(1), 86–116. https://doi.org/10.1002/smj.3077
Bennett, V. M., and A. K. Chatterji. “The entrepreneurial process: Evidence from a nationally representative survey.” Strategic Management Journal 44, no. 1 (January 1, 2023): 86–116. https://doi.org/10.1002/smj.3077.
Bennett VM, Chatterji AK. The entrepreneurial process: Evidence from a nationally representative survey. Strategic Management Journal. 2023 Jan 1;44(1):86–116.
Bennett, V. M., and A. K. Chatterji. “The entrepreneurial process: Evidence from a nationally representative survey.” Strategic Management Journal, vol. 44, no. 1, Jan. 2023, pp. 86–116. Scopus, doi:10.1002/smj.3077.
Bennett VM, Chatterji AK. The entrepreneurial process: Evidence from a nationally representative survey. Strategic Management Journal. 2023 Jan 1;44(1):86–116.
Journal cover image

Published In

Strategic Management Journal

DOI

EISSN

1097-0266

ISSN

0143-2095

Publication Date

January 1, 2023

Volume

44

Issue

1

Start / End Page

86 / 116

Related Subject Headings

  • Business & Management
  • 3507 Strategy, management and organisational behaviour
  • 1505 Marketing
  • 1503 Business and Management