1.
Opportunity formation,
stakeholder management and
the role of personal and business
networks in digital entrepreneurship
Mario Morello
exploringdigital@gmail.com

2.
Over 110 sources referenced and hundreds more reviewed
In-depth interviews and thematic coding
15 digital entrepreneurs from the
US, UK, Denmark, Norway and Italy
took part in this qualitative study.

3.
vContent
Summary 4-5
Theory 6-7
Methodology 8-9
Findings 10-30
Objective 1: To explore the notion of opportunity formation (creation, discovery and
narrative) amongst moderate and extreme digital entrepreneurs.
Objective 2: To gain an insight into the role of networks in opportunity formation amongst
moderate and extreme digital entrepreneurs.
Objective 3: To understand how moderate and extreme digital entrepreneurs manage
opportunities with stakeholders within their networks.

4.
v
Prevalent view: Opportunities come into existence from the recombination of
relations and time in a continuum.
Summary
Opportunity formation as a process: identification of problems or unmet
needs, which are usually found in traditional industries.
Those problems can evolve into ideas.
The entrepreneur transforms ideas into opportunities through high quality
information.
Information can be acquired through strong relations within networks which
help digital entrepreneurs to see the environment through different lenses.

5.
v
Stakeholders should be managed in an open and transparent manner
through special attention, regular communication and a clear strategy.
This is to forge strong relations which favour dynamism and induce a
joint effort towards increased opportunity formation.
Effective stakeholder management will ensure an active flow of
information from both sides of the relationship.
This will lead to stronger and trustworthy relations which are essential,
in line with the shift from know-how to know-who.
Summary

6.
Theory

7.
vTheory
Opportunity
formation
Stakeholder
management
Network theory
Business
Knowledge
Institutional
Type of
opportunities
Classification
of networks
How they
occur
Effect on
information
Know-how to
know-who
Efficient tie
formation
Creation
Discovery
Narrative
Interpretation
Trust
Diversity
Brokerage
Quality
Quantity
Speed
Personal
Business
Density
Centrality

8.
Methodology

9.
v
This exploratory research is influenced by an interpretive worldview (Daymon
and Holloway 2002). Interpretivism seeks to understand the ‘social world’ using
fieldwork to uncover the meanings by which people comprehend their own
experiences, behaviours and communication (Denscombe 2007).
Methodology
The subjective input of participants is the key to exploring the reality as this is
constructed by human beings interacting with each other and giving meanings
to their actions.
This research has used an inductive philosophy in which objectives are
researched in order to create general conclusions or theories (Bryman 2008),
while keeping an open mind towards end results (Perkmann and Walsh 2009).
The adoption of in-depth interviews allowed for adaptation of the interaction
between the interviewer and the participant (Mack et al. 2005). This led to the
revelation of a greater amount of information (Stacks 2002).

10.
Findings

11.
v
Prevalent view: The digitalisation of processes increases the amount of
opportunities open to the entrepreneur. This is due to the entrepreneur
perceiving a decreased risk in identifying a vast array of opportunities in
digital entrepreneurship as opposed to traditional entrepreneurship.
Less risk, more opportunities
Before I identify an opportunity, I see an idea and think about whether I can
exploit it.
I know that through digital technology things are cheaper and quicker to produce so I
look at the world with different eyes and I am open to more opportunities because the
path to failure is not as daunting as in traditional settings.

12.
Prevalent view: Opportunity formation is a three phase process. First, there is a
problem, issue, unmet need, pain point or hurdle that is present in the
environment. From there, an idea is born which, if reputed viable, creates value
and becomes an opportunity.
If it is a problem for me and if it is a problem for my immediate group, there exists a
problem, first of all… Once you have a problem you have to think of a possible solution and you
think, will other people buy it or would other people be happy to have this solutionfor an existing
problem? If I answer yes to all of those questions, to me that’s an opportunity.
vOpportunity formation: a three phase process
In traditional industries things are complicated, expensive and manual. Digitalis an
opportunity for me to automate the process, to pick one service and offer it to people who
didn'thave access to that service previously because of the internetinfrastructure that allows
me to do that.

13.
Prevalent view: We aim for opportunities which generate profit as well as
acquire and expand a knowledge base. The focus is on knowledge opportunities
while institutional opportunities are not deemed as valuable.
vGenerate profit and expand the knowledge base
Geo-cultural differences were mentioned as factors affecting the identification of the most
valuable opportunities.
Knowledge is by far the greatestopportunity which ultimately leads to profit…I am sceptical
of institutions just to create institutions. I am much more interested in social structures.
In SiliconValley they don’t really think about the money as long as you manage to meet a need.
In Europe they typically look at the money.

14.
Prevalent view: Opportunities arise from the combination of endogenous and
exogenous shocks. Timing is important in identifying an opportunity as the digital
environment is fast moving. Opportunities emerge from the interaction of
relational space and durational time.
Opportunities emerge from talking to people who have experience withina specific field
and being aware of innovation. I talk with my mom about her experiences, for example. That alone
doesn't give me ideas but when I combine that insightwith my background from IT and digital and
innovation.From that an opportunitymight be born.
An opportunity is about time and space. It's about the position in which you are in life. If you
are in an environmentthat doesn't really force you to look at things creatively, you are not going to
find the people that may help you and encourage you to push those ideas along.
vOpportunities emerge in a combination of shocks

15.
I think an opportunity always has to be something which is good in terms of revenue
…knowledge and education…andcreating great work in developing your brand. I would always say
that really I aim to have at least 2 of those 3.
.
Prevalent view: Opportunities are not formed fully-fledged and can be created
and discovered through various mechanisms. We tend to apply a pattern when
looking for opportunities.
vApplying a pattern to opportunity formation
Minority view: We look for hidden opportunities by scanning the environment at all times.
The process of finding an idea or an opportunity is like groping in the dark. You don’t know
what you are lookingfor…you feel there is somethingyou are curious about.
If there are three obvious good reasons to do something and no obvious bad reasons not to
do it then it’s worth putting it in the list of opportunities.

16.
Prevalent view: Information acquisition in the digital economy is easier and faster
than ever before.
Social media changed the way I seek information. I don't proactively look for information
anymore [it] comes to me from a circle knowledge of people that exposes me to the informationI
need to know.
In Investment Managementthey always say cut your losses and let your profits run and I think,
similarly, if you abstract enough informationas an entrepreneur, you make decisions quickly.
Nowadays I am usually only one click removed from who I want to be speaking to.
Prevalent view: The quality and quantity of information is important to gain insight
into the macro and micro environment but the speed with which meaning-making
emerges is paramount.
vInformation to gain insight into macro and micro environment

17.
Prevalent view: Peer validation is a significant first step in opportunity formation.
However, to make sense of a set of information that is by its nature incomplete,
we believe that the entrepreneur’s interpretation is ultimately the key.
It used to be that I would do a lot of research… but that doesn’t work anymore.Today…
we have come used to looking at somethingthat isn’t quite done using what it’s there.
Gut feeling is the launchingpad to move forward. The difference between an entrepreneur
and a business intelligence person is to turn the informationyou have into action.
vPeer validation as a first step

18.
Prevalent view: Networks exist online and offline and serve different purposes. It
is beneficial to be a member of numerous formal and informal networks as they
add different value.
Different needs make us belong to different networks. All are essentialand have different
strengths and it’s important to know which one to use depending on what you want to achieve.
You shouldn'thave a coffee with someone just for a chat. You must have a need upfront. You
can always meet with people and find opportunities but statistically in most cases you are wasting
your time. Those are called party entrepreneurs.
It is about choosing the right parallels, the right proxies.
Minority view: Networks need to be nurtured as long as they serve a foreseeable purpose.
vNetworks in a continuum

19.
Networks vary from: networks of founders; professional associations; interest networks;
friends and family; alumni networks; previous employers to former colleagues. Membership
of networks is influenced by the entrepreneur’s past experience as much as the present
situation.
This is due to the increase in the number of networks available to entrepreneurs which in
turn require stronger relations in order to make them relevant and valuable.
I don't see a separationbetween the two. I am an entrepreneur all day long. If I can leverage
my grandmother’s sister’s brother for some kind of information, I'll do that.
vMerging personal and business networks
Prevalent view: Business and personal networks are merging or have already
merged.

20.
Prevalent view: Different networks are used at different stages as either a
sounding board, a source of information or to maintain focus in opportunity
formation.
Family is the critical source to sober you up. Friends tend to cheer you up rather than
giving the best advice.
Ideas grow on trees. It’s a matter of what kind of fruit you are going to pick and if you
have the time to eat it. It’s not easy. You have to bring it down. You have to collect the ladder,
you have to climb, you have to get down, you have to have some kind of approval to do that, you
have to access the garden to do that and so on.
You end up testing the water with all of your networks. The first person would be a
friend or family, someone very close to you on a personal level regardless of the industry.Then
you reach out to your business network.
vIdeas grow on trees: test the water with your networks

21.
Prevalent view: The quality and quantity of relations within a network is
important. To build stronger relations, the network should be open and an
entrepreneur should always be giving as much as taking. This helps to establish
the level of trust necessary to move relationships from weak to strong which in
turn enhances the quality and speed of information.
.
One of the things that I have got very used to is seeing opportunities, and filtering
them by three paths in the beginning and then probably 75% of them not being appropriate
for me.
What I like to be able to do is to find other people that they might be appropriate for. I
would probably say that I action or chase 25% of opportunities I see. I probably pass on 25%
to other people and then the other 50% I would probably still classify as being valuable.
vBe open and give as much as you take

22.
Minority view
It’s about giving to the network what they want. Obviously the normal top three,
pint, dinner or a drink doesn’t hurt.
Opportunities come from 2nd degree connections. They bring the unexpected and
provide more inspiration. First degree you usually pretty much know what to expect. The new
usually comes from people I share contacts with. The more you move away from the people you
know, the more insight you will get.
vFeed the network

23.
Prevalent view: To build stronger and more valuable relationships,
communication is needed in a way that is personalised to the individual. This
process is increasingly time-consuming due to the expansion of networks. Social
media act as a facilitator when face-to-face conversations are not possible.
It takes diligence and over-communication. It’s about adding value. Rather than spamming.
Lots going on because I have so many networks. It takes a lot of organisation and purpose.
Each network has got its own language and delivers particular benefits. It's just a matter of
understanding before starting, make a planwith clear objectives, adaptbut follow it. It needs
continuity.
vCommunication personalised to the individual

24.
Prevalent view: In stakeholder management, there is a need to align stakeholders
with the entrepreneur’s vision in order to favour dynamism and induce a joint
effort towards increased opportunity formation.
Managing stakeholders is very delicate and you learn over time. The most important
thing is aligning them with your vision, objectives, timeline, deadline, roles, what it's involved
etc. I give a lot of flexibility to them as I would expect some flexibility from them.
vAlign stakeholders to your vision

25.
Prevalent view: An entrepreneur should aim to manage opportunities with
stakeholders in a transparent and open manner, thus making them feel valued and
building a higher degree of trust. This is to ensure an effective flow of information
from both parties in the relationship which results in stronger relations.
If we keep them updatedon what we are working on, because we know it best, it makes it
easy for them to present then opportunities to us… It becomes a question of openness because the
more I am sharingand forthcoming with information from my side; the easier it is for everybody
else to give a quick opinionbut also the opportunity to help.
By sharinginfo with them, you build a high degree of trust which is very importantand also,
it helps to solve doubts. They help me to stay focused and to stay all on the same page as a team.
vManage stakeholders in an open and transparent manner

26.
Prevalent view: The depth of information that should be shared varies according
to the stakeholder involvement.
It is only right to give the right people the knowledge and the content that they need to know.
It’s strategic. There is a need to know basis…if it’s not in your remit, why would you need to be
involved in this? It causes the risk of missed opportunities, I think.
vShare depending on stakeholder involvement

27.
Minority view
I am a bit of a mercenary about stakeholders, they are something you have to live
with, you don't decide to live with as opposed to my networks I choose to be involved in.
Most of the time, it could be a pain. With my networks, they feed me, with stakeholders I
feed them.
[They] are not necessarily important to discover opportunities but for validating and
executing. A good network is extremely important and actually totally necessary.
vDifferences between stakeholders and entrepreneurial networks
Prevalent view: Stakeholder networks contribute to opportunities at different
stages and in different ways.
.

28.
Prevalent view: Stakeholders can contribute to testing ideas and help the
entrepreneur to scan the environment.
I discuss ideas, partly to listento myself, partly to get feedback and then I presentthem again
to get a fresh view. The more hit rate I get, the closer I feel that this is an opportunity.
My strategy now is little and often so very, very concise pieces of information are deliveredat
high frequency and because of that, it is quite habitual now.
I like to work with them in person. I just think that there is so much room for misinterpretation in
digital communications especially in email that is too risky to put the really importantdialogue within
those relationships into a medium that could be misunderstood.
Prevalent view: Primary stakeholders need special attention and care, regular
communication and a clear strategy.
vSpecial attention, regular communication and a clear strategy

29.
It is suggested that the increased importance of efficient stakeholder management is due
to the shift from know-how to know-who which was acknowledged by most participants.
There is always someone that can do it better, differently and online opens up this
infinite resource. You are not just dealing with people on your doorstep, you are dealing
globally. There is a massive network there available to you...even if they are not necessarily
involved in your network directly, you can create a new network with them if you have a
shared interest.
vThe shift from know-how to know-who

30.
v
Share this presentation if you liked it and get in touch with any
suggestions to continue, expand and evolve the research.
You can usually grab me for a chat in London or you can find me in the
United States and Canada in May and June 2014.
I will be in New York, Boston, Miami, San Francisco and Toronto, so give
me a shout if you fancy a chat or think there is someone interesting and
inspiring I should meet along the way.
Get in touch
17-19 May New York
19-23 May Boston
24 May-4 June Miami
4-18 June San Francisco
19-21 June Toronto
22 June London
exploringdigital@gmail.com
linkedin.com/in/mariomorello
@morellopr
Mario Morello