Search-Based Discovery

Entrepreneurial opportunity is a fascinating topic and central to the field of new venture management, but what have we learned about how to find an opportunity? The dominant theories reflect an assumption that entrepreneurs either search and discover opportunities or create opportunities without a deliberate search. Sharon Alvarez and Jay Barney describe these views as “discovery theory” and “creation theory.”

Creation theory indicates that opportunities do not necessarily develop from existing industries or markets and it is the entrepreneur's actions that result in opportunities. According to this view, entrepreneurs do not seek to find opportunities but instead act and observe how consumers and markets respond to their actions as opportunities that are social constructions and cannot exist independent of the entrepreneur.

Discovery theory differs fundamentally from creation ...