Entrepreneurship Theories

When we think about a digital entrepreneur, we might imagine a single person making millions of dollars through a fully automated website or app. That seems very different from the traditional view of entrepreneurship as a process of organization-building. Where is the organization in digital entrepreneurship?

The Rise of Digital Business Models

According to a literature review by Zaheer et al. (2019), the specific focus on 'digital entrepreneurship' is relatively new, gaining traction around 2013. Before that, research focused primarily on the transformation of existing business models due to the internet and e-commerce.

It only became a distinct research stream when entrepreneurs started making waves with digital business models that possess very small human organizational footprints but massive reach.

Distinguishing Digital from Traditional Ventures

There has been a growing movement to distinguish digital entrepreneurship from traditional types of entrepreneurship. Kraus et al. (2019) identify six research themes central to this field:

The Digital Entrepreneurship Ecosystem

One of the most distinguishing features of digital entrepreneurs is that they operate in a digital entrepreneurship ecosystem (Elia et al., 2020). Unlike traditional geographic clusters, digital ecosystems comprise:

• Accelerators and investor networks: Virtual pitch decks and global VC access.
• Open source repositories: Access to code (GitHub) that replaces internal R&D.
• Research institutes: University networks providing the latest AI and data science breakthroughs.

The first two sources of information and know-how are critical for digital entrepreneurs, especially since many do not have a formal business education, but often hail from technical fields or the arts.

Digital Value and Theoretical Lenses

Scholars have started to apply a theoretical lens to the field. Sahut et al. (2021) propose that digital entrepreneurs generate "digital value" through three specific stages:

The concept of digital value includes new ways to store and trade value, such as crypto-currencies and virtual assets inside games and apps. This shifts the focus from physical inventory to "informational assets."

The Future: AI and Autonomous Business

If a digital entrepreneur can reach a point where their entire business is run by software or AI, we face a unique ethical and economic scenario. One can imagine a future where a proliferate tech entrepreneur passes away, and their rogue, fully autonomous businesses continue to maximize profits in perpetuity.

Related Theories

Digital entrepreneurship has intersections with generativity theory and the born open startup concept.

References

• Elia, G., Margherita, A., & Passiante, G. (2020). Digital entrepreneurship ecosystem: Reshaping the entrepreneurial process. Technological Forecasting and Social Change, 150.
• Kraus, S., et al. (2019). Digital entrepreneurship: A research agenda on new business models. International Journal of Entrepreneurial Behavior & Research.
• Sahut, J. M., et al. (2021). The age of digital entrepreneurship. Small Business Economics, 56.