Can Effectuation Give Us A Better Understanding of Entrepreneurial Action in Today’s Web? Evidence from the SoundCloud Case

Purpose: The purpose of this study is to gain a better understanding of the entrepreneurial realities in today’s World Wide Web (the Web). In particular, this thesis investigates whether the concept of effectuation can give us a better understanding of the entrepreneurial actions taken by entrepreneurs in today’s Web. Design/method/approach: An in-depth case study was undertaken to examine the entrepreneurial actions taken during the creation of a typical venture of today’s Web, the audio sharing platform SoundCloud. The longitudinal study is based on data obtained from multiple sources including the company’s founders’ blogs (online diaries), online available audio material, online video material, press releases and media accounts. Findings: The paper presents evidence that the concept of effectuation can describe the entrepreneurial actions taken by entrepreneurs in today’s Web, particularly during the early stages of ventures which are often associated with high uncertainty. Originality/value: Besides its methodological and theoretical contribution to the scholarly study of entrepreneurial activities, the paper also presents implications for practice. Firstly, the paper presents a highly innovative approach in terms of data collection and shows how online resources such as entrepreneurs’ blogs can provide a rich source to inform entrepreneurship research. Secondly, the paper contributes to the academic literature by shedding light on the realities of entrepreneurial activity in today’s Web by incorporating the latest entrepreneurial practices presented by the Lean Startup movement into the analysis. In addition, the findings present further empirical evidence for the descriptive validity of the concept of effectuation. Lastly, the paper has implications for practice by demonstrating that following an effectual logic during the early stages of a venture can result in highly entrepreneurial outcomes