Entrepreneurial Learning, Heuristics and Venture Creation

Abstract: After rigorous criticism on trait approach and with the emergence of behavioral approach in entrepreneurship during 1980s, the researchers started to introduce learning and cognitive theories in entrepreneurship to describe and explain the dynamic nature of entrepreneurship. Many researchers have described venture creation as a core and the single most important element of entrepreneurship. This thesis will discuss and present the role of entrepreneurial learning and heuristics in venture creation. Hence, the purpose of this research thesis is to study and analyze the role of entrepreneurial learning and heuristics in venture creation. To fulfill the purpose of this thesis, we followed qualitative research and conducted semi structured interviews with open ended questionnaires to collect empirical data. For this study, we have included only four interviews which were conducted on four different businesses based in Jönköping, Sweden, following convenience sampling. In the analysis, we used data analysis model of Walker, Cooke and McAllister (2008) and inductively generated three propositions, depicting the role and importance of entrepreneurial learning and heuristics in venture creation. Individuals adopt entrepreneurship in their careers with necessary skills, abilities, and knowledge, which are learned or gained through experiential learning and/or vicarious learning (i.e., learning by observing or modeling the actions of others). Learning by doing is considered the most important factor by entrepreneurs which helped them to overcome different business start up hurdles, to make various entrepreneurial decisions and to perform many entrepreneurial activities during venture creation. Similarly, individuals within their own situation use, learning by observing or modeling other people’s behaviour, actions and consequences of the actions. Entrepreneurs use learning by modeling the behaviour and actions of others as benchmarking strategy during venture creation. Entrepreneurs believe that without any learning they will not be able to start their own businesses. Heuristics as decisions making mechanism, particularly during venture creation, is used by entrepreneurs as simplifying strategy when sufficient information related to a specific market, certain industry and products are scarce. Additionally, entrepreneurs are passionate to grab profitable business opportunity, and due to time pressure and brief window of opportunity, they can’t go for gathering each and every information of the potential business or product. Hence, heuristics as decisions making mechanism is considered the best suitable approach to make many entrepreneurial decisions during venture creation.