Short answer

When entering or creating new markets, adopt a flexible strategy that allows for emergent opportunities to be identified and integrated into the product or service development process.

Field
Innovation & Design
Source
eCommons (Cornell University) (2011)
Method
Grounded Theory, Case Study
Evidence
Strong effect

Firms can successfully build entirely new businesses in non-existent markets by employing a process of 'entrepreneurial sensemaking,' which involves a dynamic interplay between top-down strategic goals and bottom-up, adaptive opportunity construction in the field. This innovation & design research insight is drawn from a 2011 study published in eCommons (Cornell University). Using Grounded theory, case study, researchers explored how this design variable affects real-world outcomes. The key design takeaway: When entering or creating new markets, adopt a flexible strategy that allows for emergent opportunities to be identified and integrated into the product or service development process.

Study
Innovation & DesignHigh ImpactStrong effect

Entrepreneurial Sensemaking: Constructing Novel Businesses in Uncharted Markets

Firms can successfully build entirely new businesses in non-existent markets by employing a process of 'entrepreneurial sensemaking,' which involves a dynamic interplay between top-down strategic goals and bottom-up, adaptive opportunity construction in the field.

eCommons (Cornell University) · 2011

01

Key Findings

  • 01Firms can construct opportunities rather than solely discover them.
  • 02A hybrid logic emerges from the interaction of top-down strategic goals and bottom-up field-level opportunity construction.
  • 03Entrepreneurial sensemaking is a social process that extends beyond individual entrepreneurs.
  • 04Leveraging contingencies and network transformation are key components of opportunity construction.
02

Application

Design takeaway

When entering or creating new markets, adopt a flexible strategy that allows for emergent opportunities to be identified and integrated into the product or service development process.

How to apply

When tasked with developing a product or service for a market with no established precedent, focus on building flexible prototypes and engaging directly with potential users to co-create the solution and the market.

Project actions

  • 01Consider how your design project can actively shape or create a new market, rather than just serve an existing one.
  • 02Document the iterative process of adapting your design based on new information or unexpected findings.
03

Method & Evidence

AimHow do firms build new-to-the-world businesses that serve markets that do not yet exist?
MethodGrounded Theory, Case Study
ProcedureThe research developed an integrative framework for opportunity construction based on theories of inductive entrepreneurial processes. This framework was then applied to ethnographic studies of two Western firms that deployed field teams to create and launch novel businesses in undeveloped markets (the base of the economic pyramid). The study examined the interaction between opportunity discovery mindsets at the upper echelons and opportunity construction logic used by field teams.
ContextNew market development, Base of the Economic Pyramid (BOP) markets, New venture creation

Variables

IV["Top-down strategic goals","Field team opportunity construction logic"]
DV["Novel business creation","Market development"]
CV["Firm size","Industry sector","Geographic location of undeveloped market"]
04

Strengths & Limitations

Strengths

  • +Provides a theoretical framework for understanding innovation in uncharted territories.
  • +Uses rich ethnographic data to support its claims.

Limitations

The complexity of real-world market creation means that simplified experiments may not fully capture the nuances of entrepreneurial sensemaking.

Reliability & validity

The grounded theory approach, while providing rich insights, can be subject to researcher interpretation. Triangulation of data sources and member checking would enhance reliability and validity.

Think critically

To what extent can the principles of 'entrepreneurial sensemaking' be applied to the design of purely digital products or services, where market boundaries might be more fluid?

05

Design Principles

"Embrace adaptive strategy and emergent design in the creation of novel markets and businesses."

This research highlights that innovation in nascent markets isn't solely about discovering existing opportunities, but actively constructing them. Designers and engineers can leverage this understanding to develop strategies for creating products and services where market demand is not yet defined, fostering true innovation.

06

What This Means for Your Design

To create a new business in a market that doesn't exist yet, companies need to be flexible and let their teams on the ground discover and build opportunities, rather than just sticking to a rigid plan.

How to use in your project

  • 1.Reference this research when discussing strategies for innovation in your design project, particularly if your project involves creating a new product category or entering an undefined market space.
07

Add to My Project

08

Quick Cite

Paragraph starter

This research on 'entrepreneurial sensemaking' by Duke (2011) provides a valuable framework for understanding how novel businesses are built in uncharted markets. It suggests that successful ventures often emerge from a dynamic interplay between initial strategic intent and the adaptive construction of opportunities by field teams, a process that can inform the development of innovative design solutions for nascent markets.

09

Source

eCommons (Cornell University)

Entrepreneurial Sensemaking: Building Novel Businesses In New Market Space

journal · 2011

View source

Questions About This Research

What does the research say about entrepreneurial sensemaking: constructing novel businesses in uncharted markets?
When entering or creating new markets, adopt a flexible strategy that allows for emergent opportunities to be identified and integrated into the product or service development process. Evidence: eCommons (Cornell University) (2011).
Why does "Entrepreneurial Sensemaking: Constructing Novel Businesses in Uncharted Markets" matter for design?
This research highlights that innovation in nascent markets isn't solely about discovering existing opportunities, but actively constructing them. Designers and engineers can leverage this understanding to develop strategies for creating products and services where market demand is not yet defined, fostering true innovation.
How can designers apply this research?
When entering or creating new markets, adopt a flexible strategy that allows for emergent opportunities to be identified and integrated into the product or service development process.
What were the main findings?
Firms can construct opportunities rather than solely discover them.. A hybrid logic emerges from the interaction of top-down strategic goals and bottom-up field-level opportunity construction.. Entrepreneurial sensemaking is a social process that extends beyond individual entrepreneurs.. Leveraging contingencies and network transformation are key components of opportunity construction.
What research method was used?
Grounded Theory, Case Study.
How strong is the evidence?
Evidence strength is rated Strong effect, based on a 2011 journal from eCommons (Cornell University).
What should I do differently in my next project?
When tasked with developing a product or service for a market with no established precedent, focus on building flexible prototypes and engaging directly with potential users to co-create the solution and the market.
What are the limitations?
The findings are based on a limited number of case studies, and the specific context of BOP markets may influence the generalizability of the 'entrepreneurial sensemaking' process.