Is a goal-driven view on entrepreneurship sustainable in the era of digital transformation? Reflections from the video game industry


Durukan C., Wasti Pamuksuz S. N.

1st KEEN Forum PhD Colloquium 2020, Kaunas, Lithuania, 20 August 2020

  • Publication Type: Conference Paper / Unpublished
  • City: Kaunas
  • Country: Lithuania

Abstract


Is a goal-driven view on entrepreneurship sustainable in the era of digital transformation? Reflections from the video game industry


Digital platforms are often considered as a venue for entrepreneurial experimentation with different business models (De Marco et al., 2019). It is argued that the traditional approach of entrepreneurship may remain insufficient to understand and conceptualize entrepreneurial activity in the context of digital business models, and therefore further conceptualization of market opportunities and business models is needed for digital entrepreneurship (Standing & Mattsson, 2018).


Although most popular approaches on the entrepreneurship on the practitioners’ literature reserve a space for learning from the possible failures of a startup (Ries, 2009), they advise to start with a targeted customer segment beforehand and to plan how the startup is to generate value (Blank, 2007; Osterwalder et al., 2010).  This goal-driven process described in the entrepreneurship literature may be deemed irrelevant, since in reality strategies based on prediction often fail and entrepreneurial goals change frequently. One of the recent theories that portrays an entrepreneurial process in which goals are shaped and determined as the outcome of the entrepreneurial process is effectuation theory (Sarasvathy, 2001). The theory proposes an artificial view on entrepreneurial opportunities (Venkataraman et al., 2012) and argues that market opportunities are created, rather discovered by the entrepreneur (Sarasvathy, 2013). The theory argues that since the future is unknown, entrepreneurs rely on their existing means when they need to take strategic decisions.  Outcomes (product/service/market) are shaped with the contributions of stakeholders who are willing to make commitments (Read et al., 2009) and active feedback mechanisms, while taking risks about alternative routes are based on the affordability of losses in actual terms (Sarasvathy, 2001; Sarasvathy, 2008).


Applying a goal driven mindset is problematic for the cultural and creative industries because of their symbolic knowledge base (Chaminade et al., 2020) and uncertain nature of demand for cultural products (Caves, 2000). The case of the video game industry (VGI) is even more complex due to its digital production and distribution components. The video game industry is highly dynamic ; approximately “every six years” a new product has arrived (Chatfield, 2011, pp. 397-399). Entrepreneurs in this sector need to produce in a fast-industrial clock-speed (Cadin & Guérin, 2006) and integrate multiple knowledge bases to keep their ventures alive (Camerani, Masucci & Sapsed, 2015).


In this paper, we present key issues from the first author’s dissertation in which she examined with a qualitative methodology the decision-making logics of 22 video game entrepreneurs based in a university technopark and an incubation center. The dissertation examined the milestone events, challenges, network relations and decision-making approaches (effectuation or causation) of these entrepreneurs during their entrepreneurial journeys through interpretation of face to face interviews and available secondary data.


We found that VGI entrepreneurs’ decision-making logic was mostly driven by their means rather than goals. They changed their business model, monetization model, game genre, game development platform, and market segment often in order to adapt to the dynamic nature of the sector and to overcome several uncertainties. However, we also observed that the desire to apply prediction-based decision making also existed. Prediction-based strategies could be used by more experienced entrepreneurs whose ventures were more scaled, or those who adopted analytical data tools which helped them to guide their strategies.


Our findings also indicated a coopetition strategy among the entrepreneurs in our sample (Dagnino, 2009). The entrepreneures had trust-based relationships with their incubates and the nature of the relationship was combined social and professional purposes. The collaboration between entrepreneurs were high and observed as openly sharing knowledge, publishing each other’s games, taking and giving feedback, and providing a source of motivation and inspiration. Besides, the network of the incubation center functioned as a consulting authority for their strategic decisions.


Yet the journeys of the entrepreneurs showed that entrepreneurs were still faced with the prediction-based view on entrepreneurship at many instances; for instance, when they were applying for entrepreneurship grants or searching for investors.  Therefore, we argue that there is a need to find a common language to evaluate the digital business models among the actors of entrepreneurial ecosystems. With the rising rates of digital transformation across the industries, we argue that revisiting our view on entrepreneurship is necessary.


In tlight of these background and findings, the authors would like to take the opportunity of the KEEN Colloquium to discuss, if any, challenges imposed by digital entrepreneurship into the way we conceptualize business models and market opportunities, reflecting on the case of the video game industry. We would like to benefit from the feedback from distinguished participants at the Colloquium about 1) How can we better approach VGI entrepreneurship and digital entrepreneurship in general? 2) What could be drawbacks of maintaining a goal-driven approach to entrepreneurial activities with digital business models, especially for the public support programs? 3) How can we come up with a sustainable framework for digital entrepreneurship from whichentrepreneurs and other actors of the entrepreneurial ecosystems can benefit? 


References


Blank, S. G. (2007). The four steps to the epiphany: Successful strategies for products that win (3rd ed). S. G. Blank.


Cadin, L., & Guérin, F. (2006). What can we learn from the video games industry? European Management Journal, 24(4), 248–255. https://doi.org/10.1016/j.emj.2006.05.001


Camerani, R., Masucci, M., & Sapsed, J. (2015). Brighton Fuse 2: The Brighton CDIT cluster three years later. Second wave firms survey. Retrieved from: http://www.brightonfuse.com/wp-content/uploads/2015/11/Brighton-Fuse-Second-Wave-Firms-Survey.pdf


Caves, R. E. (2000). Creative industries: Contracts between art and commerce. Cambridge: Harvard University Press.


Chatfield, T. (2011). Fun inc.: Why games are the twenty-first century's most serious business. Pegasus Books.


Chaminade, C., Martin, R., & McKeever, J. (2020). When regional meets global: exploring the nature of global innovation networks in the video game industry in Southern Sweden. Entrepreneurship & Regional Development, 1-16.


Dagnino, G. B. (2009). Coopetition strategy: a new kind of interfirm dynamics for value creation. In G.B. Dagnino & E. Rocco (Eds.), Coopetition strategy: Theory, experiments and cases (pp. 45-63). London: Routledge.


De Marco, C., Di Minin, A., Marullo, C., & Nepelski, D. (2019). Digital platform innovation in European SMEs. An analysis of sme instrument business proposals and case studies. Publications Office of the European Union, Luxembourg, EUR 29690 EN, ISBN 978-92-76-00776-0, doi:10.2760/57240, JRC115240


Osterwalder, A., Pigneur, Y., & Clark, T. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Wiley.


Read, S., Dew, N., Sarasvathy, S. D., Song, M., & Wiltbank, R. (2009). Marketing under uncertainty: The logic of an effectual approach. Journal of Marketing, 73(3), 1–18. https://doi.org/10.1509/jmkg.73.3.001


Sarasvathy, S. D. (2001). Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency. The Academy of Management Review, 26(2), 243. https://doi.org/10.2307/259121


Sarasvathy, S. D. (2013). MAZES without minotaurs: Herbert Simon and the sciences of the artificial. European Management Journal, 31(1), 82–87. https://doi.org/10.1016/j.emj.2012.11.002


Standing, C., & Mattsson, J. (2018). “Fake it until you make it”: Business model conceptualization in digital entrepreneurship. Journal of Strategic Marketing, 26(5), 385–399. https://doi.org/10.1080/0965254X.2016.1240218


Venkataraman, S., Sarasvathy, S. D., Dew, N., & Forster, W. R. (2012). Reflections on the 2010 AMR Decade Award: Whither the Promise? Moving Forward with Entrepreneurship As a Science of the Artificial. Academy of Management Review, 37(1), 21–33. https://doi.org/10.5465/amr.2011.0079