Entrepreneurial Opportunities in User Enterprises Affecting Entrepreneurial Performance: History
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Contributor:
Hongjin Zhang
,
Longying Hu
,
Yeom Kim
The iteration of entrepreneurial opportunities is vital to the growth and maintenance of long-term competitive advantages of user enterprises. However, there needs to be more comprehensive theoretical discussion within the academic community on how entrepreneurial opportunity iteration contributes to the entrepreneurial performance of user enterprises. Here, the researchers investigate Smartmi Technology and Zepp Technology as the research subjects and employ the case study method encoded in the programmed rootedness theory to uncover the intrinsic mechanism by which the entrepreneurial opportunity iteration of user enterprises affects entrepreneurial performance and explicate the mechanistic model between different types of entrepreneurial opportunity iteration and the dual strategic orientations and entrepreneurial performance. Specifically, the entrepreneurial opportunity iterations of user enterprises are mainly categorized into efficiency-based and innovative entrepreneurial opportunity iterations. The dual strategic orientations of stakeholder long-termism and professionalism play a significant moderating role in promoting user and growth performance improvement.
  • entrepreneurial opportunity iteration
  • dual strategic orientation
  • entrepreneurial performance
  • user enterprises

1. Introduction

User enterprises are a “new species” spawned by the continuous fission of new technologies, new modes, and new business models, and refers to enterprises that use user experience and user satisfaction as the primary decision-making criteria [1] and its entrepreneurial opportunities for iteration is an effective way to drive enterprise resilience, growth, self-evolution, and positive development. In recent years, with the upgrading of consumption, the continuous emergence of disruptive and innovative technologies and business models has given rise to several gazelle enterprises with fast growth speeds and new industrial fields, as well as user-based unicorn enterprises that breakthrough from the red ocean market and create a blue ocean market. Research indicates that successful enterprises are all adherents of long-termism and professionalism, insisting on the user first, innovation, and continuously creating long-term value. In this context, Smartmi Technology and Zepp Technology, as practitioners of long-termism and professionalism, have adopted an iterative approach to entrepreneurial opportunities oriented toward efficiency improvement and innovation iteration and have grown into user-based unicorns in a relatively short amount of time, attracting our attention.
A review of the existing literature reveals that entrepreneurial opportunity iteration is a prevalent phenomenon [2]; however, the fundamental questions regarding the origin, causes, and outcomes of entrepreneurial opportunity iteration are still in the initial exploration stage. Previous scholars have primarily focused on discussing the general process of entrepreneurial opportunity iteration and its influencing factors. At the same time, only a few studies have thoroughly analyzed the outcomes resulting from entrepreneurial opportunity iteration. Some scholars argue that the iteration of entrepreneurial opportunities is a process in which stakeholders continuously optimize existing opportunities based on user feedback to formulate mature opportunities [3][4], which is mainly affected by user experience, disruption of stakeholder opportunity consensus, whether there is a strategic consensus within the organization, the founder’s mindset, and customer orientation [2][4][5]. Some scholars have suggested that customer orientation positively impacts digital new venture opportunity iteration through entrepreneurial learning from a social constructivist perspective [5]. Some scholars have also tried to explore the role of opportunity attributes in influencing entrepreneurial performance, suggesting that innovative opportunities have first-mover advantages and barriers to entry [6] and that the development of highly innovative and creative opportunities creates demand for customers [7], which helps firms to focus on entirely new customer segments, tap into new markets, and select efficiency-based business models to achieve high-performance returns [7][8]. Although some studies have demonstrated the positive effects of efficient business models and innovative opportunities on entrepreneurial performance, the relevant studies are still “cumulative fragments”. There is a gap in the research on the dimensions of entrepreneurial opportunity iteration, and the general interaction process with other variables, especially the mechanism of entrepreneurial opportunity iteration and entrepreneurial performance, still needs to be clarified [5]. In particular, the mechanism of entrepreneurial opportunity iteration and performance could be more precise.

2. Entrepreneurial Opportunity Iteration

Entrepreneurial opportunities are defined as previously unnoticed profit opportunities [9], such as forming new means, goals, or means–goal relationships to introduce new products, services, and organizational approaches [10]. As an extension of entrepreneurial opportunity research, entrepreneurial opportunity iteration is a process in which stakeholders continuously optimize or subvert existing opportunities based on user experience feedback through opportunity identification, user–enterprise interactions, and agile development [4], which is essentially the adjustment, refinement, or upgrading of the original opportunity without destroying the opportunity prototype [2]. However, since the iteration of entrepreneurial opportunities is not determined by subjective or objective external or internal unilateral factors, its internal mechanism has duality, and there is a joint role of multi-level and multi-faceted factors based on the formation of interactions. It has been shown that the core motivation for entrepreneurial opportunity iteration comes from changes in internal and external systems. Changes in intrinsic system factors, such as entrepreneurs’ cognitive model and knowledge base, and extrinsic system elements, such as entrepreneurial network members’ interaction and cooperation, are essential factors triggering the iteration of entrepreneurial opportunities [11]. There are few research results on the outcome variable of entrepreneurial opportunity iteration. Some scholars have found, based on empirical research, that entrepreneurial opportunity iteration is an essential means for user-based enterprises to enhance their entrepreneurial performance and continuously create highly anticipated products and services for users while continuously enhancing their competitive advantages through efficiency revolution and innovation iteration and then realizing resilient growth [12]. Existing studies have conducted preliminary explorations of the antecedents and outcomes of entrepreneurial opportunity iteration, but some limitations remain. Lacking the exploration of the dimensions that constitute the iteration of entrepreneurial opportunities, some scholars, based on the logic of efficiency, argue that entrepreneurship is the process of creating the inputs and outputs of enterprises and that successful entrepreneurial opportunity development tends to realize the improvement of efficiency or to solve a significant social problem, subject to the influence of rational efficiency mechanisms [8]. Based on the observation and summary of entrepreneurial practice, some scholars also believe that innovation-driven entrepreneurship is the process of developing opportunities and creating value jointly by multiple subjects through the iterative interaction of multiple elements triggered by technological innovation, institutional innovation, business model innovation, etc. [13]. Although scholars have pointed out that efficiency and innovation are the logic and means of entrepreneurial opportunity development and have an essential impact on entrepreneurial opportunity development, the exploration of how the different dimensions of efficiency and innovation interact with entrepreneurial opportunities and the underlying logic of the iteration of entrepreneurial opportunities is still obviously insufficient.

3. Long-Termism

The concept of long termism was first introduced by Jeff Bezos, founder of Amazon, in his Letter to Shareholders in 1997. He referred to the extent to which the fundamental assumptions of organizational culture value long-term orientation [14]. Long-termism, as a methodology and value, is the preferred option for any company to cope with complex and dynamically changing environments, reconfigure timely production relationships, create a business model that aligns with humanity and nature, and achieve sustainable growth. By adopting a long-termist growth strategy, a company not only focuses on the interests of its stakeholders and obtains higher social performance and stable core competencies [14][15], but also outperforms its short-term-focused counterparts in terms of financial performance and creates more jobs [16]. Managers play a pivotal role in business development as the helmsman of a company’s strategy [17]. To obtain sustainable development, any successful entrepreneur needs to have long-termism behavioral choices, which require entrepreneurs to resist short-term temptations, focusing on the long-term plans for enterprise development [18]. Enterprises can only realize leading innovation by upholding a long-termist view of innovation, and identifying and adhering to significant innovations that have far-reaching impacts on future development [19]. Managerial myopia will reduce capital and R&D expenditures and lower investment efficiency, harming the firm’s future performance [17]. In summary, although scholars have suggested the importance of long-termism, the existing studies only stop at the concept and the description of its positives and need an in-depth exploration of the nature and constitutive dimensions of long-termism.

4. Professionalism

The study of professionalism originates from the sociology of the professions and is a multidimensional concept. Some scholars regard it as the intellectual capital of enterprises [20] and believe that professionals are the primary carriers of professionalism [21]. Most scholars concur that professionalism is a positive concept, believing that employees with professionalism tend to have an adequate reserve of professional knowledge and the ability to flexibly use professional knowledge, which can help the organization integrate the existing resources, skills, and knowledge to align with market demand [22]. Some scholars hold the opposite view that under the influence of the human tendency to profit, professionalism becomes a means for professionals to purse private gain, maintain power and status, and monopolize job opportunities [23]. Others define it as a work ethic by arguing that sustainable professionalism is about maintaining consistent integrity in applying one’s skills to benefit society [24]. Employees with professionalism demonstrate a positive and responsible attitude towards the organization and their work and a spirit of cooperation and interaction [25]; they support the profession they are engaged in, are concerned about their behavior, adhere to their code of service, and emphasize independence and autonomy [26], and are committed to contributing to decision making and ensuring that outcomes are sound, balancing the short-term interests of the company and its stakeholders, the value expectations of the end customer, and the long-term interests of society [24]. In summary, existing studies have provided a comprehensive explanation of professionalism. However, the nature, constitutive dimensions, and interaction mechanism with other variables of professionalism need to be further explored.

5. Dual Strategic Orientation

Strategic orientation, as a strategic direction pursued by a firm in order to achieve performance goals [27], refers to the values and beliefs that underlie the operation and development of a firm [28] and can be used to guide particular management concepts, tendencies, motivations, and aspirations in the strategic planning and development process [29]. Dual strategic orientation is an extended concept of strategic orientation based on the theory of organizational duality [27]. It has been argued that a positive dual strategic orientation in a firm helps to avoid the capability deficiencies associated with a firm’s over-reliance on a single orientation [28] and that firms can gain a long-term competitive advantage by adjusting their strategic orientations to adapt to the environment or to shape the organizational climate [30]; in addition, successful firms are often those that need to balance and blend both strategic orientations [28]. Long-termism and professionalism are strategic orientations used by successful firms to gain a sustained competitive advantage, and both have a high degree of fit and mutual dissimilarity with dual strategic orientations in terms of connotations and goals. Therefore, this research argues that long-termism and professionalism are essential dimensions of the dual strategic orientation.
In addition, most existing studies focus on the positive effects of a particular type of strategic orientation on the improvement of firm performance and the maintenance of competitive advantages, ignoring the study of the intrinsic path mechanism of strategic orientation on firm performance [31]. In particular, in the digitalized scenario, the strategic orientation of enterprises has a specific social complexity and irreplaceability [32]. The iterative upgrading of existing products and services by enterprises through the iteration of entrepreneurial opportunities to help them obtain satisfactory performance is constrained by resources and capabilities [33]. Stakeholder-based strategic orientation is an essential factor affecting the performance improvement of enterprises [34]. Effective and precise strategic orientation can enhance its competitive advantage through the rational allocation of resources and lead to the emergence of new products, services, and technologies, which provides a new paradigm through which enterprises can obtain satisfactory performances [32]. Therefore, strategic orientation can strengthen the role of user enterprise in enhancing entrepreneurial performance through iterative entrepreneurial opportunities.

6. Entrepreneurial Performance

Entrepreneurial performance, as a landmark indicator for assessing the market management level of start-ups and a fundamental means of evaluating success or failure [35], is a holistic and multidimensional concept of the outcome of entrepreneurial activities [36][37], which is both an objective reflection of the survival and development status of start-ups and a social cognition of the level of development of start-ups by entrepreneurs, investors, customers, etc. [38]. The existing literature on entrepreneurial performance mainly focuses on studying the influence mechanism of factors such as entrepreneurial environment, entrepreneurial ability, and entrepreneurial orientation on financial performance, growth performance, and innovation performance. At the individual level, entrepreneurs, as decision makers and executors of entrepreneurial opportunities, positively impact entrepreneurial performance through their entrepreneurial passion, prior experience, resource integration ability, and metacognitive experience. At the same time, overconfidence in the perception of the institutional environment negatively affects entrepreneurial performance [39]. At the firm level, some scholars have found that entrepreneurial opportunity identification contributes to a significant increase in entrepreneurial performance from an opportunity perspective. Scholars have discussed the impact on entrepreneurial performance at different levels, pointing out the positive effect of entrepreneurial opportunity identification on entrepreneurial performance. However, entrepreneurial opportunity identification is only one aspect of entrepreneurial opportunity iteration, which has certain limitations, and no study has conducted in-depth and systematic research on the role and mechanisms of entrepreneurial opportunity iteration and entrepreneurial performance.

7. Summary

The existing studies concur that entrepreneurial opportunity, long-termism, and professionalism influence entrepreneurial performance. However, they are limited to exploring the impact on entrepreneurial performance from the perspective of entrepreneurial opportunity identification. Firstly, as an extension of research on entrepreneurial opportunity, the existing literature focuses on the initial exploration of the concept, influencing factors, and iterative process. However, we need more comprehensive research on its constituent dimensions and their relationship with outcome variables. Second, long-termism and professionalism are strategic orientations adopted by user enterprises to gain a competitive advantage. Nonetheless, no academic study has considered them as key research elements to discuss the mechanisms of long-termism and professionalism in promoting the entrepreneurial performance of user enterprises. More in-depth research on their connotations and constituent dimensions is needed.

This entry is adapted from the peer-reviewed paper 10.3390/systems11090459

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