Adaptation of the business concept over time: The case of historically disadvantaged south african owner/managers

Having recognized an opportunity, some founders of start-up ventures are able to specify a business concept that succeeds with virtually no modification. However, it seems more likely that one of the following scenarios develops in the majority of instances: * the founder has a well-defined and sound concept, but doesn't stay with it long enough, and fails; * the owner/manager has a well-defined and sound concept, but modifies it when it should not have been modified, and fails; * the founder has a good concept that initially works, market circumstances quickly change, and he/she makes the necessary adaptations; * the founder's general concept has promise, but he/she succeeds only because of timely adaptation of the concept as circumstances evolve; * the founder has an partially or completely ill-defined concept, but makes significant changes to it, and succeeds; * the founder's concept is poor from the beginning, he/she refuses to make modifications before it is too late, and it fails; * the founder's concept is poor from the beginning, and in spite of his/her willingness, no amount of modification can salvage it. The first two scenarios above are concerned with both timing and the nature of the window of opportunity. The other five are related to good and bad concepts that succeed or fail as a function of how well the founder adapts the concept over time. It is our contention that these last five scenarios are not only the most common, but that timely adaptation represents one of the most critical factors explaining new venture success. The purpose of this research is to examine the concept of adaptation as it relates to the creation of a successful start-up enterprise, especially when the owner/manager is disadvantaged or operates under adverse conditions, as is the case for Black business operators in South Africa. More specifically, we seek to determine whether characteristics of the owner/manager affect the tendency to adapt the venture over time. Because of the particularly turbulent social and economic conditions in South Africa and the difficulties that Black South African business operators must face to survive there, South Africa provides an especially relevant context within which to study adaptation in small business. Accordingly, this study is based on a sample of successful Black-owned and managed businesses that are less than five years old. Start-Up Ventures and Adaptation One conclusion that can be drawn from research on the entrepreneurial personality is that there is not one all-encompassing personality profile. Rather, a range of characteristics are associated with entrepreneurial behavior (Kao 1990; Timmons, Smollen, and Dingee 1990). And yet, certain characteristics are consistently found in successful owner/managers, even if in varying degrees. Three of the most consistent characteristics are tolerance of ambiguity, a locus of control that is more internal than external, and willingness to take calculated risks. Entrepreneurial ventures also vary considerably in terms of the characteristics of the venture. This variability is the result of a myriad of influences, including the owner/manager, the ownership structure, the nature of the market, the technologies being utilized, and macroeconomic conditions, among others. However, a consistently important characteristic of successful entrepreneurial firms would seem to be their adaptability to changing or unforeseen circumstances. The question becomes whether the owner/manager has a proclivity that allows him or her to adapt the business concept as the venture unfolds. Are the personality variables correlated with entrepreneurial activities associated with this process? Specifically, do such characteristics as an internal locus of control, tolerance of ambiguity, and willingness to take risks affect the venture's ability to adapt successfully? …