An Examination of Constrained, Systematic Search by Serial Entrepreneurs

Principal Topic 

Scholars have debated whether systematic search for entrepreneurial discoveries is possible or whether discoveries must be made accidentally. Nevertheless, requiring that discoveries occur through accidental alertness is not necessary provided that entrepreneurs search a limited domain. 

In a series of projects, Fiet and colleagues demonstrated that: (1) it is possible to optimize searching provided it occurs within a constrained domain selected using prior knowledge; (2) entrepreneurs can select a consideration set of information channels to search, which offer the greatest opportunity; (3) using these concepts, subjects in three controlled experiments improved their success rate of making a discovery over chance between 2.9 times and 25 times after only six weeks of training. The average improvement over chance of making a discovery by searching a consideration set was 13 to one. 

Fiet and colleagues did attempt to describe how entrepreneurs actually search. Rather, they tested how entrepreneurs could search using informational economics. Nevertheless, serial entrepreneurs may have intuitively learned how to search using trial and error. Supportive evidence is that they employ a two-step process: first, they search broadly. Second, they narrow their searching to areas where they already possess specific knowledge, which is comparable to a consideration set of information channels. 

Method 

This research develops 9 parallel case studies focused on the actions taken by them to make their discoveries. Using recorded and transcribed interviews, we identified any search patterns among the discoveries made by a single entrepreneur. We also described similarities among the search patterns of different serial entrepreneurs. 

Results and Implications 

These serial entrepreneurs shared the view that their searching would be more effective if they limited it to areas where there they were already knowledgeable. They tended not to bet that they could later acquire the requisite knowledge, which would qualify them to exploit a particular idea if they did not already know about it. They were willing to search outside their personal consideration set if someone one the start-up team was knowledgeable. These results are important because they provide evidence that search principles from informational economics can be taught to aspirants.