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Prakash L Dheeriya
To cite this article: Prakash L Dheeriya (2009) A Conceptual Framework for Describing
Online Entrepreneurship, Journal of Small Business & Entrepreneurship, 22:3, 275-283, DOI:
10.1080/08276331.2009.10593456
Introduction
Current research in entrepreneurship tends to focus on or prove the notion that entrepre-
neurs are different from non-entrepreneurs1 or that entrepreneurial firms are different from
non-entrepreneurial firms.2 In these studies, the basic assumption is that all entrepreneurs
and their new ventures are homogenous. The focus of this paper is on differences between
brick-and-mortar entrepreneurs and entrepreneurs who conduct ventures completely
online. Differences between these two may be greater than the differences between entre-
preneurs and non-entrepreneurs and those between entrepreneurial firms and non-entre-
preneurial firms, as discovered in the studies mentioned earlier. Once we identify and rec-
ognize that online entrepreneurs are different from regular entrepreneurs, it becomes nec-
essary to find a way to classify those online ventures.
The meaning of entrepreneurship and its measurement has been discussed in several
studies.3 Determinants of entrepreneurship have been the focus of several studies cover-
ing a wide range of theories and explanations (Brock and Evans, 1989; Gavron, Cowling,
Holtham and Westall, 1998; OECD, 1998; Blanchflower, 2000, 2004; Verheul, Wennekers
_________________________
1. See Brockhaus, 1980; Carland et al., 1984; Collins and Moore, 1964; DeCarlo and Lyons, 1979; Hornaday
and Aboud, 1971; Howell, 1972; Komives, 1972; Litzinger, 1965; McClelland, 1961; McClelland and Winter,
1969; Palmer, 1971; Schrier, 1975; Shapiro, 1975.
2. See Collins and Moore, 1970; Cooper, 1979; Smith, 1967; Thorne and Ball, 1981.
3. See Hébert and Link, 1982; Bull and Willard, 1993; Lumpkin and Dess, 1996; OECD, 1998; Praag, 1999.
Journal of Small Business and Entrepreneurship 22, no. 3 (2009): pp. 275–284 275
276 DHEERIYA
and Thurik, 2002; Arenius and Minniti, 2005). Entrepreneurship has been found to be a
significant factor in economic development of countries ((Baumol, 1990; Wennekers and
Thurik, 1999; Carree and Thurik, 2003, 2006; Acs et al., 2005). The extent of entrepre-
neurship has been found to vary systematically across countries and across time (Rees and
Shah, 1986; Wit and Van Winden, 1989; Blanchflower and Meyer, 1994; Blanchflower,
2000, 2004). However, similar research on “online entrepreneurship” is sparse, even
though the coverage of “online” entrepreneurship is truly global.
Interest in international entrepreneurship has increased rapidly over the past decade
(Brush, 1993, 1995; Hitt and Bartkus, 1997; Hisrich et al., 1995). Scholars have observed
the close theoretical link between entrepreneurship and international business (IB) research
(Hisrich et al., 1994; McDougall and Oviatt, 2000). However, a conceptual framework for
analyzing “online entrepreneurship” has yet to be developed formally in the field of online
entrepreneurship. It is this gap that this paper purports to fill.
The conceptual framework that is developed in this paper will provide a way of ana-
lyzing past research studies. Each study can be broken down into types of individuals,
organizations, environment of internet and processes that were studied. This paper will not
seek to answer questions such as how online ventures are started or provide theoretical
models of online entrepreneurship. Instead, it will provide a different perspective on the
online entrepreneur; a shift that will emphasize the complexities and variations involved
in online entrepreneurship.
The goal of coming up with a framework is not to smooth differences between entre-
preneurship and online entrepreneurship and come up with typical properties of a typical
entrepreneur. The goal is to identify specific variables that describe how online entre-
preneurship is created, in order that meaningful contrasts and comparisons among new
ventures can be made.
Growth of Online Entrepreneurship
The internet-based commerce has been stealing billions of dollars away from traditional
retail outlets, and is becoming a significant component of global sales of a growing enter-
prise. Once we acknowledge that online entrepreneurship is becoming more and more sig-
nificant in today’s business world, it then becomes necessary to find a framework for sys-
tematically discovering and evaluating the similarities and differences among new online
ventures. The population of entrepreneurs may be homogenous but the subset of “online”
entrepreneurs within the entrepreneurial universe must be further analyzed so that entre-
preneurial research can produce meaningful results. A primary value of such a framework
for describing online entrepreneurship presented here is that it provides a systematic
means of comparing and contrasting brick-and-mortar ventures with online ventures. In
addition, it provides a way to conceptualize variation and complexity in entrepreneurship
(Gartner, 1985).
Existing frameworks of entrepreneurship consider variables such as country effects,
role of government intervention, supply of resources and willingness of entrepreneurs.
One such framework was developed by Verheul et al. (2002) (see Figure 1) in which they
compared levels of motivation of entrepreneurs between the U.S. and European countries.
They empirically tested this framework and discovered that factors such as lack of finan-
cial support and perceived administrative bureaucracies at government levels did not
influence levels of motivation.
Another conceptual framework of entrepreneurship went deeper by distinguishing itself
from domestic entrepreneurship (e.g. see Zahra and George (2002)). In this framework,
A CONCEPTUAL FRAMEWORK FOR DESCRIBING ONLINE ENTREPRENEURSHIP 277
country G
entry / exit
Resources E
Abilities / traits E-
SUPPLY
Preferences E
G
G
G
G
gender, age,
Strategic Factors
Competencies
Differentials/Proximity
Generic Strategies
Functional Strategies
Entry Strategy
Individuals
Tech-Savvy
Location, age, work
experience not as
relevant
Process
Domain name
registration,
Security, Marketing,
Regulatory
concerns,
Infrastructure
Individual
The characteristics of an individual who starts a new venture have been extensively stud-
ied in traditional entrepreneurship literature.4 Those characteristics typically apply to an
entrepreneur starting a venture in the real world, as opposed to an online world. For an
online venture, an individual needs to possess different skills. The requirement of being a
team player, as mentioned in Cooper (1979), may not be relevant for a one-man-based
online business that is selling items on, for example, eBay. Other requirements—propen-
sity to take risk, age, previous work experience, entrepreneurial parents, etc.—that are
extensively studied in entrepreneurship literature may not be appropriate to be successful
in an online environment. A good knowledge of basic HTML language, or electronic pay-
ments, or shopping cart software may be more appropriate for an individual undertaking
an online venture, though such technical knowledge may not be relevant nowadays con-
sidering one can buy or download off-the-shelf software solutions. In the framework that
has been developed, we consider the desire to use technology as a primary driver of
_________________________
For a good reference to qualities that make up an entrepreneur, please see Gartner (1985), Carland et al. (1984)
and Collins and Moore (1984).
280 DHEERIYA
used in the venture. Constant updating and upgrading of these tools is key in an online set-
ting, although assets like land and building are not upgraded as often in the traditional
business environment.
Conclusions
Separately listing key variables involved in a successful online venture under the appro-
priate dimension of the conceptual framework demonstrates the complexity of the online
entrepreneurship. These key variables are very different from those used in studies of tra-
ditional entrepreneurship models. Earlier studies on entrepreneurship fail to differentiate
the needs of the online entrepreneur from those of regular entrepreneurs or even non-
entrepreneurs. An online entrepreneur selling, for example, coffee operates in a very dif-
ferent environment when compared with the environment of a coffee shop owner. By
lumping these two entrepreneurs together in traditional entrepreneurship studies, we fail
to see that generalizations about entrepreneurs cannot easily be carried over to online
entrepreneurs. The conceptual framework presented in this paper provides a way of ana-
lyzing entrepreneurship in the online environment by clearly identifying relevant vari-
ables. Any new research in online entrepreneurship can then be designed to account for
the unique traits of online entrepreneurship. Another benefit of using the conceptual
framework pertains to resolution of conflicts noticed in earlier entrepreneurship studies.
For instance, Collins and Moore (1970) and Cooper (1970) come up with different traits
that are required for a successful entrepreneur, but these studies failed to look at the qual-
ity of their data. Collins and Moore (1970) looked at manufacturing firms whereas Cooper
(1970) studies high technology firms.
The framework developed in this paper can be used as a basis for future research in
online entrepreneurship and for reporting results from such studies. Assuming the sample
will consist of only online entrepreneurial firms, the researcher can study each of the four
dimensions and compare results with other researchers on the same dimensions. For
instance, a researcher may ask: Is there any difference in age, work experience and edu-
cational backgrounds between entrepreneurs who have storefronts on Amazon versus
Yahoo? Are business-to-business (B2B) stores different from business-to-government
(B2G) stores on any of the four dimensions of the framework? Is the process of starting
an online retail site different from an online dating site? Online ventures that share mean-
ingful similarities across the four dimensions can be classified and described together,
resulting in useful generalizations.
The paper does not seek to answer or provide steps on creating an online venture, nor
does it exhaustively list all variables relevant to an online venture. The paper does provide
a new focus on online ventures, far more distinct from typical ventures. It does this by
destroying the assumption that all entrepreneurs are alike, that all entrepreneurs share
common traits, and that online entrepreneurs are no different from regular entrepreneurs.
In this respect, the framework recognizes and appreciates the complexity and multi-
dimensionality of online entrepreneurship.
Contact Information
For further information on this article, contact:
Acknowledgements
I would like to thank the College of Business and Public Policy Summer Entrepreneurship Grant
Program for providing financial support for this project.
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