Entrepreneurship in the Internet

Entrepreneurship in the Internet

Christian Serarols-Tarrés (Universitat Autònoma de Barcelona, Spain)
DOI: 10.4018/978-1-60566-026-4.ch222
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Abstract

The increasing development of information technologies (IT) has significantly affected both firms and markets. IT is currently changing the world in a more permanent and far-reaching way than any other technology in the history of mankind (Carrier, Raymond, & Eltaief, 2004). A new economy, where knowledge is the most important strategic resource, is forcing firms to review their traditional routines and take advantage of the tools able to create new value. Nowadays, there are two types of firms using this new IT. On the one hand, firms with physical presence (traditional companies) use the Internet as a new distribution channel or alternatively as a logical extension of their traditional business. On the other hand, there are dotcoms, Internet start-ups, or cybertraders (European Commission, 1997), which have been specifically conceived to operate in this new environment. A number of scholars have attempted to explain the creation of new ventures from many different theoretical perspectives (economics, psychology, and population ecology among others) and have also offered frameworks for exploring the characteristics of the creation process (Bhave, 1994; Carter, Gartner, & Reynolds, 1996; Gartner, 1985; Shook, Priem, & McGee, 2003; Veciana, 1988; Vesper, 1990; Webster, 1976). However, despite the growing literature in this area, few studies have explored the process of venture creation in dotcom firms. Cyberentrepreneurship is still in its emergent phase, and there is more to know about the phenomenon and the elements of the venture creation process (Carrier et al., 2004; Jiwa, Lavelle, & Rose, 2004; Martin & Wright, 2005). What are the stages they follow to create their firms? This article attempts to answer this question. First, we analyse the entrepreneurial process of a new firm’s creation. Second, we shed some light on how this process is applied by cyberentrepreneurs in starting their businesses based on an in-depth, multiple case study of eight entrepreneurs in Spain.
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Introduction

The increasing development of information technologies (IT) has significantly affected both firms and markets. IT is currently changing the world in a more permanent and far-reaching way than any other technology in the history of mankind (Carrier, Raymond, & Eltaief, 2004). A new economy, where knowledge is the most important strategic resource, is forcing firms to review their traditional routines and take advantage of the tools able to create new value.

Nowadays, there are two types of firms using this new IT. On the one hand, firms with physical presence (traditional companies) use the Internet as a new distribution channel or alternatively as a logical extension of their traditional business. On the other hand, there are dotcoms, Internet start-ups, or cybertraders (European Commission, 1997), which have been specifically conceived to operate in this new environment.

A number of scholars have attempted to explain the creation of new ventures from many different theoretical perspectives (economics, psychology, and population ecology among others) and have also offered frameworks for exploring the characteristics of the creation process (Bhave, 1994; Carter, Gartner, & Reynolds, 1996; Gartner, 1985; Shook, Priem, & McGee, 2003; Veciana, 1988; Vesper, 1990; Webster, 1976). However, despite the growing literature in this area, few studies have explored the process of venture creation in dotcom firms.

Cyberentrepreneurship is still in its emergent phase, and there is more to know about the phenomenon and the elements of the venture creation process (Carrier et al., 2004; Jiwa, Lavelle, & Rose, 2004; Martin & Wright, 2005). What are the stages they follow to create their firms? This article attempts to answer this question. First, we analyse the entrepreneurial process of a new firm’s creation. Second, we shed some light on how this process is applied by cyberentrepreneurs in starting their businesses based on an in-depth, multiple case study of eight entrepreneurs in Spain.

Key Terms in this Chapter

Venture Creation Process: The process that takes place between the intention to start a business and making the first sale.

Web Aggregator: Web aggregator is an entity that can transparently collect and analyse information from multiple Web data sources.

Cybertraders (dot-coms): These are companies without significant physical presence, which exclusively operate on the Internet. Using IT, they specialise in a market niche or in cost reduction. Most of them are small companies, and they are only known because of their Webs, though others (Amazon, Cdnow, etc.) have turned into companies of recognized prestige.

Cyberentrepreneurs: The individual that creates a firm that is essentially founded upon e-commerce, and whose main activities are based on the exploiting networks using Internet, intranets, and extranets.

Redefinition Stage: This stage begins with the first sales and culminates with the redefinition of business opportunity and the adjustments that need to be done to the organisation for its survival.

Stage Model: A linear sequence or steps involved in the starting-up through the establishment of a chain of events, cause-and-effect phenomenon that should be followed to create the business.

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