title: Mechanisms Driving Digital New Venture Creation & Performance: An Insider Action Research Study of Pure Digital Entrepreneurship in EdTech
Creators: name: Nzembayie, Kisito Futonge
Publisher: name: Technological University Dublin
Year: 2019

description: Digitisation has ushered in a new era of value creation where cross border data flows generate more economic value than traditional flows of goods. The powerful new combination of digital and traditional forms of innovation has seen several new industries branded with a ‘tech’ suffix. In the education technology sector (EdTech), which is the industry context of this research, digitisation is driving double-digit growth into a projected $240 billion industry by 2021. Yet, despite its contemporary significance, the field of entrepreneurship has paid little attention to the phenomenon of digital entrepreneurship. As several scholars observe, digitisation challenges core organising axioms of entrepreneurship, with significant implications for the new venture creation process in new sectors such as EdTech. New venture creation no longer appears to follow discrete and linear models of innovation, as spatial and temporal boundaries get compressed. Given the paradigmatic shift, this study investigates three interrelated themes. Firstly, it seeks to determine how a Pure Digital Entrepreneurship (PDE) process develops over time; and more importantly, how the journey challenges extant assumptions of the entrepreneurial process. Secondly, it strives to identify and theorise the deep structures which underlie the PDE process through mechanism-based explanations. Consequently, the study also seeks to determine the causal pathways and enablers which overtly or covertly interrelate to power new venture emergence and performance. Thirdly, it aims to offer practical guidelines for nurturing the growth of PDE ventures, and for the development of supportive ecosystems. To meet the stated objectives, this study utilises an Insider Action Research (IAR) approach to inquiry, which incorporates reflective practice, collaborative inquiry and design research for third-person knowledge production. This three-pronged approach to inquiry allows for the enactment of a PDE journey in real-time, while acquiring a holistic narrative in the ‘swampy lowlands’ of new venture creation. The findings indicate that the PDE process is differentiated by the centrality of digital artifacts in new venture ideas, which in turn result in less-bounded processes that deliver temporal efficiencies – hence, the shorter new venture creation processes than in traditional forms of entrepreneurship. Further, PDE action is defined by two interrelated events – digital product development and digital growth marketing. These events are characterised by the constant forking, merging and termination of diverse activities. Secondly, concurrent enactment and piecemeal co-creation were found to be consequential mechanisms driving temporal efficiencies in digital product development. Meanwhile, data-driven operation and flexibility combine in digital growth marketing, to form higher order mechanisms which considerably reduce the levels of task-specific and outcome uncertainties. Finally, the study finds that digital growth marketing is differentiated from traditional marketing by the critical role of algorithmic agencies in their capacity as gatekeepers. Thus, unlike traditional marketing, which emphasises customer sovereignty, digital growth marketing involves a dual focus on the needs of human and algorithmic stakeholders. Based on the findings, this research develops a pragmatic model of pure digital new venture creation and suggests critical policy guidelines for nurturing the growth of PDE ventures and ecosystems.