Opportunity development and information search: What's the use of social media?

Natalie den Engelse

    Research output: ThesisPhD Thesis - Research UT, graduation UT


    Information search takes a central stance in the opportunity development process [Ozgen & Baron, 2007; Shephard et al., 2000]. If information search is vital for opportunity development, then an important question follows: which information sources are useful to acquire information that facilitates entrepreneurs to identify and exploit opportunities [Ozgen & Baron, 2007]. Social media are drastically changing the information landscape and individuals’ information search practices. Yet, the majority of studies on entrepreneurs’ external information sources and search practices have not addressed new Internet-based sources, such as social. This dissertation set out to understand the usefulness of entrepreneurial information search on social media for opportunity development. The research question central to this thesis is the following: What is the usefullness of social media for gathering information that can faciliate opportunity development? To answer this question, we undertook four empirical studies among entrepreneurs who participated in an institutional incubation/acceleration program. In the first empirical study, we investigated the relationship between performing entrepreneurial search behaviors on social media and entrepreneurs’ information use for opportunity development. In our study, we focused on four entrepreneurial search behaviors, being observing, questioning, networking and experimenting, and two types of information use, namely instrumental use and conceptual use. Our study indicates that observing, and questioning combined with experimenting are the strongest predictors for instrumental use. Observing leads to higher levels of conceptual information use, whereas questioning negatively influences conceptual information use. In addition, there is a weak but significant effect of the interaction between question and experiment. The study results of the first study add new insights to the discussion on whether entrepreneurial search takes place by means of alterness or systematic search. Our results imply that, on the one hand, entrepreneurs actively seek for specific information that is directly applicable to a decision task, and, on the other hand, entrepreneurs gather information passively by positioning themselves in the flow of information to gather both applicable information and information for general enlightenment. In the second study, we studied entrepreneurial information search in more detail by focusing on the joint effects of search strategies (browse and analytical search strategies) and search behaviors on entrepreneurs’ information use for identifying and exploiting business opportunities. Our study findings reveal that the identification and exploitation stage of opportunity development require different configurations of information search strategies and information search behaviors. For opportunity identification, entrepreneurs mainly follow a browse strategy. Through search for information that relates to entrepreneurs’ personal interest, and broadly scanning through information available on social media, entrepreneurs might encounter information that is not directly applicable, but helps to understand how to break current means-end relationships. In the exploitation stage, the analytical strategy is more prominent. This result show that entrepreneurs have comprised needs that allow them to formulate search queries that help them to find communities useful for testing their ideas or to find people with whom they can collaborate. A broad search in this stage can even negatively influence information use. In the third study, we focused on assessing the relationship between entrepreneurs’ personality traits and entrepreneurs’ search behaviors on social media. The results show that experimenting and questioning behaviors are mostly conducted by extraverted entrepreneurs, and that entrepreneurs scoring high on the openness-to-experience traits are less inclined to perform questioning behavior on social media. These results corroborate previous findings {Hughes et al., 2012} that personality traits mainly influence online socializing and information exchange. While studies have shown that personality traits in general do not effect venture growth {Ciavarella, Buchholtz, Riordan, Gatewood & Stokes, 2004}, our study shows that personality traits effect search behaviors that are important for opportunity development, and as such can impact the opportunity development process. The fourth study was a qualitative study that eleborated on the quantitative results and provided clarification on how entrepreneurs leverage social media as an information source for opportunity development. The results show that entrepreneurs use social media to (1) acess information about the external environment, (2) acquire information that enables creative thinking, (3) to get early access to information, (4) to network with others who are relevant to the business, (5) acquire resources embedded in the relationships, and (6) acquire referrals. In addition, the study revealed five main barriers that hinder entrepreneurs from deploying social media for opportunity development: (1) lack of knowledge, (2) the transparancy of social media, (3) the industry in which entrepreneurs operate, (4) entrepreneur’s attitude towards social media, and (5) entrepreneur’s resource constraints.
    Original languageEnglish
    Awarding Institution
    • University of Twente
    • Groen, Aard, Supervisor
    • Wijnhoven, Fons, Co-Supervisor
    Award date16 Mar 2018
    Place of PublicationEnschede
    Print ISBNs978-90-365-4498-6
    Publication statusPublished - 16 Mar 2018

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