August 6, 2008

User entrepreneurship

One of the common topics at the UOI conference has been user entrepreneurship.

Perhaps the most general talk was that by Mary Tripsas, who presented a broader typology of the phenomenon of users who become entrepreneurs, based on her 2007 paper with Sonali Shah (available free) in Strategic Entrepreneurship Journal.

Tripsas told the interesting story behind the story. They wrote a theory paper on user entrepreneurship for the leading theory journal, but it was rejected by reviewers who said “Why do we care? Users don’t start companies.”

After that rejection, they decided to augment their paper with some data. They investigated an obvious opportunity: parents who create kids stuff. They identified three categories of user entrepreneurs: those creating a new category (jogging strollers), those targeting an unmet niche need (e.g. car seats for low-weight babies), and incremental improvements on existing technologies.

Another example of user entrepreneurship was given by Lars Frederiksen, as part of his ongoing studies of the online user community hosted by Propellerhead Software to support its music editing and synthesis software. He presented a quote showing that users originally created complements for other reasons, and then realized over time that there was a business opportunity in it. (This is very similar to the market for PC freeware/shareware software that developed during the 1980s before the Internet.)

Sheryl Winston Smith also presented a paper that built on the user entrepreneurship ideas of the Tripsas & Shah paper, using examples from the medical equipment industry.

The fun thing about these examples is that the problem-solving usually came first: the users first wanted to fix something they saw broken (or make something possible that wasn’t previously possible) — then they created a business. Once upon a time, even Silicon Valley entrepreneurship was about solving unsolved (or seemingly unsolvable) problems, not about making a quick buck.

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