The Influence of Outsider-Generated Knowledge Resources on Venture Creation

Entrepreneurship is the creation of new combinations (Schumpeter 1934). Studies of surviving and successful ventures have made a significant contribution to our understanding of entrepreneurship (for example, Sandberg 1986). Nevertheless, serious gaps in our knowledge remain about the events that occur before an independent organization is started. The theoretical work of Bird (1988) suggests that an entrepreneur's intentions to start a business and the decisions that occur before start-up shape the subsequent goals, strategies, and structures of the new venture. These difficult-to-reverse initial decisions and alignments will in turn have an influence on the survival, growth, and profitability of a new firm (Hannan and Freeman 1989; Hansen and Wortman 1989). Furthermore, not all aspiring entrepreneurs are successful in starting a business (Learned 1992); the market may not be as attractive as initially perceived, adequate financing may not be available, or the desire to start a business may dissipate. Thus, to understand why some ventures are started and others are not, and why some start-ups are successful and others end in failure, it is important to study venture creation from the earliest possible point in the process (Aldrich et al. 1989; Reynolds and Miller 1992). Research by Reynolds and Miller (1992) has indicated that by far the most frequent first event in the life history of a nascent venture is the personal commitment of the lead entrepreneur to found a business. Although Katz (1990) has shown that many start-ups are enacted or unintended rather than intended, Krueger and Carsrud (1993, p. 315) suggest that intention is the "single best predictor" of entrepreneurial behavior. Furthermore, people with intentions to start a business can be identified and studied as they progress through the entrepreneurial process much more readily than people without an initial intention. Therefore, using intention as a basis for studying nascent entrepreneurs seems to be a logical and practical approach.1 Many theories of the start-up process have been put forward in recent years (Bhave 1994; Hansen and Wortman 1989; Krueger and Carsrud 1993; Learned 1992). Of those theories dealing with intentional entrepreneurial behavior, Krueger and Carsrud's (1993) model is perhaps the most fully developed. Their theoretical model, based on the work of Shapero (1982) and Ajzen (1991), has been partially tested using path analysis (Krueger 1993). Krueger's study showed that exogenous factors significantly influenced attitudes toward entrepreneurship which, in turn, significantly influenced entrepreneurial intentions. His results suggest further investigation is in order to understand how entrepreneurial intentions are translated into entrepreneurial behavior, or in other words, venture creation. Following from Krueger and Carsrud's (1993) model and Krueger's (1993) research, the purpose of this article is to investigate the influence of exogenous factors on the relationship between entrepreneurial intentions and venture creation. Although the intentions to start a business may be a strong predictor of venture creation, we know that not all intentions become reality (Carter, Gartner, and Reynolds 1996). Factors that affect the individual or the situation may intervene to change the likelihood of the start-up event. Krueger and Carsrud (1993) note the particular importance of personal or situational variables that affect perceptions of self-efficacy or feasibility. In this article we extend this viewpoint by arguing that among the most important exogenous variables are those which represent the development or availability of the resources required for a competitive advantage. More specifically, we treat the emergence of organizations as a special application of the resource-based theory of the firm and use this theory to operationalize exogenous factors that influence the entrepreneurial decision. Outsider assistance has been shown to be an important source of the information needed to develop an entrepreneur's knowledge resources (Robinson 1982). …