Standing in the Way of Control - A Study on the Creation of Markets by Entrepreneurs

Abstract: Entrepreneurship presents itself as a viable solution to current financial turbulences, as it has the power to create not only companies and thus jobs but also markets within economies that suffer (Read and Sarasvathy 2005; Sarasvathy 2001; Santos 2004). Despite the acknowledgement of this fact, there is little academic research into how exactly entrepreneurs create those markets, which leaves a gap in research and in our knowledge about this phenomenon.The purpose of this thesis is to improve the understanding and conceptualization of the 'entrepreneurial market creation' process by investigating the link between entrepreneurship and market creation. In order to do so, the ethnographic case study of LoudSauce is presented and analyzed. LoudSauce is an online 'doing-good' startup based in San Francisco, California that aspires to "transform the medium of advertising from one that has traditionally fueled consumption to one that fuels civic participation." Additionally, LoudSauce is faced with the challenge to create its own market. The startup "is helping to create the (non-existent) market for citizens to buy media."As the main tool for analysis, a consolidated framework - the G&S model - is developed, which draws from both existing literature and empirical observations from LoudSauce. The aim of this framework is to codify the knowledge gained from LoudSauce, in a compact way so that it can be easily compared to other cases and used for further research. Findings indicate that there are two main forces that act as catalysts during the entrepreneurial market creation process: vision and serendipity. They strongly influence each other and the process as a whole. Additionally, two types of external factors have been identified: human and intellectual factors. Entrepreneurs use these two types of 'means at hand' to craft a company. The outcomes of the process in the G&S model can lay the foundations of a brand new market.