Thus, Hart implied that knowledge about natural and communal problems may interact with knowledge about digital technologies when individuals recognize opportunities for sustainable development. We believe that future research can make important contributions by exploring this proposition. Further, since our theorizing was mainly focused on the formation of the belief that a sustainable development opportunity exists for someone (i.e., third-person opportunity), future research can also explore the role of knowledge about the natural and communal environment (and interactions with entrepreneurial knowledge) in forming the belief that a recognized opportunity can be exploited by the individual who recognized it (i.e., first-person opportunity belief) (McMullen and Shepherd 2006; Shepherd et al. 2007). Finally, it is important to note that little empirical work has tested the proposed (interaction) relationships between knowledge types and sustainable development opportunities. Such studies are urgently needed.
Third, we argued that prior knowledge of health-related problems derived from one’s own health problems or the health problems of loved ones can trigger individuals’ recognition of opportunities that improve the health of others. However, knowledge of health-related problems can be diverse and captures the medical reason behind the problem, interactions between parts of the problem (e.g., diagnosis, medication, cure plan), and/or the reasons current solutions are insufficient. Future research should go deeper and (potentially empirically) explore how types of health-related knowledge (perhaps interactively) impact opportunity identification . Further, the context of identifying opportunities based on prior knowledge of health-related problems may be interesting for studying the poorly understood phenomenon of user entrepreneurship (Shah and Tripsas 2007). Those who suffer from health-related problems and find insufficient solutions on the market may be particularly attentive to the adoption and improvement of existing products, potentially resulting in the identification of opportunities that not only improve their own health but others’ health as well. It appears that future research investigating the user entrepreneurship process in the context of health-related technologies, products, and services can contribute to our understanding of opportunity identification and the role of knowledge therein. Finally, scholars may also investigate how people apply their technological knowledge to a health problem they have not experienced themselves. For example, based on their health-related knowledge, individuals could attend to health problems shared by people worldwide, or to the problems with the greatest financial market potential, or to the problems that are particularly prevalent in their own communities . Perhaps observing a health-related problem only through those suffering from it enables perspective taking in a more distant manner, which facilitates the creativity needed for recognizing health-related opportunities.
Fourth, in the context of international opportunities, Chap. 2 highlighted the importance of considering both internal and external knowledge sources to explain opportunity identification , particularly the contingent relationships between these knowledge sources. Specifically, it appears that entrepreneurs and their management teams with low levels of international knowledge capitalize most on external sources of international knowledge for opportunity recognition in foreign markets. This substitution effect is contrary to findings from absorptive capacity research, which emphasizes the need for knowledge in a particular domain in order to effectively incorporate additional knowledge in that domain (Cohen and Levinthal 1990; Zahra and George 2002). It is also contrary to findings by me (Holger) and my colleague (Domurath and Patzelt 2016), which showed that entrepreneurs who perceive that their venture has higher absorptive capacity for integrating knowledge about foreign markets are more likely to rely on foreign ties (as knowledge sources) when assessing the attractiveness of international opportunities for exploitation . Thus, the findings suggest the need for future research to explore the role of absorptive capacity in individuals’ recognition of international opportunities. Further, it is interesting to note that venture capitalists can provide knowledge specific to internationalization to investees and that they seem to gain this knowledge from prior investees outside their domestic market. From an absorptive capacity perspective and related to the earlier discussion, one future research opportunity would be to explore how venture capital managers’ own international experience and the experience their venture capital firm has gained through investments abroad interact in triggering future investees’ internationalization. Chapter 2 also discussed the potentially important role of proximal firms with international knowledge, arguing that this knowledge might spill over to new ventures and thereby facilitate the recognition of opportunities in foreign markets. Indeed, this situation seems somewhat paradoxical because the most proximal firms trigger the recognition of opportunities in the most distant markets. However, research on knowledge spillover in the context of technological knowledge (Audretsch and Feldman 1996) helps resolve this paradox. It appears that there is further need to extend this notion of knowledge spillover beyond technological domains.
Finally, we elaborated on the role of cognitive processes, particularly the process of structural alignment , in translating entrepreneurial knowledge into the recognition of new business opportunities. While Baron (2006) and Baron and Ensley (2006) pointed out the importance of recognizing patterns for opportunity recognition , structural alignment is a particular cognitive process that describes how such patterns can be recognized. Given the central role of higher-order structural similarities in the process, our arguments explain why pattern recognition that guides opportunity identification is challenging (cf. Dutton 1993; Julian et al. 2008). Specifically, not only do entrepreneurs need to direct attention to environmental signals, but they also must invest cognitive energy to encode and process them at the deep level of structural relationships. It is here that entrepreneurs’ prior knowledge comes into play because it facilitates the evaluation of structural relationships based on more developed mental representations of potential opportunities. In recognizing new opportunities, experienced entrepreneurs tend to focus on the causes and effects of difficulties in markets rather than on these markets’ superficial features. As Chap. 2 illustrated, the role of knowledge in opportunity recognition goes beyond individuals’ idiosyncratic advantages over others (Fiet 1996): prior knowledge serves as an important resource for superior cognitive processing that allows individuals to think of opportunities that have few superficial features in common with the original technology market. Finally, it is important to note that while there is initial evidence about structural-alignment processes in opportunity recognition , the setting of existing studies has been experimental and thus somewhat artificial. It is important that future studies explore , for example, the role of these processes in real-world conditions in terms of entrepreneurs’ information overload, work stress, and the team environment typical of young ventures.
Motivation and Entrepreneurial Cognition
Both knowledge and motivation are critical for understanding opportunity beliefs and entrepreneurial action (McMullen and Shepherd 2006). In Chap. 3, we focused on the role of motivation in entrepreneurial cognition.
First, we highlighted how motivation can direct attention toward identifying potential opportunities and toward exploiting those potential opportunities identified . We started this discussion with the promise of financial rewards. Financial rewards provide extrinsic motivation , which in turn enables individuals to generate a greater number of ideas, and these ideas tend to be more innovative. Further, this positive impact of financial rewards is even more positive when entrepreneurs have greater domain knowledge (Shepherd and DeTienne 2005).
Second, people can be passionate about various activities, and we described how individuals can be passionate about entrepreneurial activities, which drive effort, persistence , and hopefully eventual success for the key tasks of the entrepreneurial process. Further, there are different types of entrepreneurial passion . For example, Cardon et al. (2009) described that entre
preneurs can be passionate about innovating, founding, and/or developing a new venture. However, there is little research on how these different types of passion relate to and interact with other motivations. For example, to what extent can financial motivation compensate for the lack of certain types of passion in an entrepreneur’s motivation to start or persist with a venture? However, perhaps financial motivation and different passion types are not substitutes but complements. For instance, perhaps an entrepreneur’s motivation from passion for developing/growing a venture is even stronger when he or she is also financially motivated. It is important to address these and other questions to better understand the impact of (different types of) passion on entrepreneurs’ motivations.
Third, we highlighted how fear of failure is often believed to obstruct entrepreneurial action given the uncertainty (and possibility of failure ) inherent in the pursuit of potential opportunities. However, we highlighted the different dimensions of fear of failure and how some may motivate (rather than obstruct) entrepreneurial action . The dimensions of fear of failure are (1) fear of feeling shame and embarrassment, (2) fear of devaluing one’s self-estimate, (3) fear of having an uncertain future, (4) fear of losing social influence, and (5) fear of upsetting important others (Conroy 2001; Conroy and Elliot 2004; Conroy et al. 2002). We also explained how passion and fear of failure can interact in determining entrepreneurial action . Again, from these different types of fear of failure , a number of novel research opportunities arise. For example, under what circumstances and for what types of ventures are these fear of failure dimensions most influential in deterring entrepreneurial action? Perhaps entrepreneurs who evaluate opportunities for ventures that will be highly visible in the media may be most influenced by their fear of shame and embarrassment and/or their fear of losing social influence, whereas entrepreneurs with weak personal financial resources might be most influenced by their fear of having an uncertain future when evaluating new business opportunities. Further, going forward, scholars can explore how different fear of failure dimensions interact with other motivational triggers for entrepreneurial action . For example, the impact of prosocial motivation on an entrepreneur’s motivation to engage in social entrepreneurship may be diminished when the entrepreneur also has high fear of upsetting others. When a social venture fails, the numerous stakeholders of the venture—including those who are being helped—may become particularly upset, especially if they must return to the miserable situation they were in before the venture started to help them.
Fourth, in the chapter, we discussed how motivation can help explain the identification and exploitation of a special kind of potential opportunity—potential opportunities to preserve nature or sustain communities . We described how an individual’s local environment can influence the way he or she “sees” the world, which in turn can motivate the identification and pursuit of potential opportunities to solve social or ecological problems. In exploiting these potential opportunities, entrepreneurs have the chance to generate economic gain for themselves and/or for others. This promise of economic gain for the self and/or others can also motivate the pursuit of potential opportunities for sustainable development (Patzelt and Shepherd 2011; Shepherd and Patzelt 2011). However, to date, we have little empirical evidence of how economic and non-economic gains motivate entrepreneurs’ recognition and exploitation of opportunities for sustaining natural and communal environments.
Fifth, individuals are also embedded in environments that can experience or reflect negative health situations—their own or close others—and these experiences can motivate the identification and exploitation of potential opportunities to offer health-related solutions (Shepherd and Patzelt 2015). Moreover, many people with physical or psychological problems are drawn to entrepreneurial careers because these careers provide flexibility , autonomy , and performance-related advantages not available in employment (e.g., Wiklund et al. 2016). However, under what circumstances are those suffering with physical or psychological problems able to adjust their ventures to their needs and therefore maintain motivation over time? For example, some industries may be so dynamic that keeping up with competition requires adaptation that is so fast or has to occur in such a way that it is incompatible with the needs of entrepreneurs with health-related problems. Indeed, in such situations, the competitive pressure faced may actually worsen the entrepreneur’s health conditions, causing a downward spiral of diminished health and decreased ability to address the competitive pressure of the venture’s environment. The outcome of such a downward spiral for the entrepreneur may not only be decreased motivation for continuing the venture but also bad health. These and related research questions warrant considerable attention to clarify the relationship between entrepreneurs’ health and motivation and thereby help those with physical or psychological health problems develop successful entrepreneurial careers.
Finally, motivation can also come from an individual’s values . Building on Schwartz (1992; Holland and Shepherd 2013), we discussed the role of the following values in motivating entrepreneurial action : (1) self-enhancement, (2) openness to change, (3) self-transcendence, and (4) conservation. More precisely, we discussed the role of values and other motivational influences in the decision to persist with a particular course of action when the best decision is to stop the action —in this case, terminate the project or business. Entrepreneurs persist with a losing course of action because of (1) personal sunk costs, (2) personal self-interest , (3) lack of other personal opportunities, (4) norms for consistency, (5) previous organizational success, and (6) perceived collective efficacy of organizational members. The impact of these attributes on the decision to persist with a losing course of action depends on the entrepreneur’s level of extrinsic motivation (DeTienne et al. 2008). Such persistence can be costly to the entrepreneur and stakeholders if and when the venture eventually fails (Shepherd et al. 2009a, b). Therefore, more motivation is not always an unambiguous blessing in the entrepreneurial context. We encourage further research on the conditions in which entrepreneurial motivation is good or bad for the individual and his or her venture and the ways entrepreneurs can balance both their motivation to start and develop a venture and their ability able to withdraw from the venture when feedback from the environment signals that future success is highly unlikely.
Attention and Entrepreneurial Cognition
In Chap. 4, we discussed the role of attention in the entrepreneurial process. We distinguished between top-down and bottom-up attention allocation and noted how we most often think about entrepreneurial decision making and action arising from a top-down approach. However, we highlighted how bottom-up processes can operate as individuals detect and interpret signals of potential opportunities (Shepherd et al. 2007, 2017). In this situation, the entrepreneur’s attention is “free” to be drawn to changes in the external environment and can be focused on interpreting the nature of and the potential opportunities arising from these environmental changes . More research is needed on the role of bottom-up attention-allocation processes in the detection and interpretation of signals of environmental change and how these interpretations impact the formation of opportunity beliefs. We suspect that this future research on attention will involve consideration of entrepreneurs’ task demands given that attention allocated to demanding tasks is simultaneously unavailable for scanning the external environment for signals of potential opportunities (i.e., people have limited attentional capacity).
Of course, attention may not be allocated to one task and one potential opportunity. In Chap. 4, we also detailed how the composition of a portfolio of potential opportunities at varying stages of development reflects different firm capabilities for advancing or terminating potential opportunities at specific stages of development in a timely manner. These capabilities to speed opportunity advancement or terminate opportunity pursuit are reflected in the firm’s experiences , standard operating procedures, and confidence —all of which direct attention within the organization.
In the chapter findings, we also highlighted how engineers were disappointed when the marginal projects they were working on were not terminated—they wanted to be transferred to the next hot project. Indeed, although those who were immediately transferred from a failing project to a new project experienced positive emotions , they did not reflect on the failed project and therefore did not learn from the experience (and neither did the organization). In contrast, those who experienced a delayed termination felt negative emotions but used that time to reflect on, document, and ultimately learn from the failure experience (Shepherd et al. 2014). Future research can, for example, explore how the apparent conflict between experiencing negative emotions and learning can be resolved—that is, under what conditions can team members minimize negative emotions and maximize learning within the project-shutdown period? In addition, perhaps some managerial interventions and support practices can direct employees’ attention toward learning in quickly terminated projects (yielding few negative emotions ) or minimize the experience of negative emotions in slowly terminated projects (yielding opportunities for learning).
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