Theoretical Framework

The theory presented in this paper is divided into two sections. First a framework for the phenomenn of entrepreneurship is presented based on a broad review of the literature on entrepreneurship and the startup process. The narrower theoretical framework utilized directly by this thesis is then presented afterwards. The framework for the phenomenon is summarized and synthesized into a strategic framework for academic entrepreneurship, which is subsequently incorporated into the framework of the thesis.

1.3.1 Framework of the Phenomenon

Kirzner defines entrepreneurship as the exploitation of profit opportunities (Kirzner 1973, 1979, 1992 cited in Klein 2008, 177). The theoretical framework for the phenomenon of

entrepreneurship first looks at the origins and characteristics of opportunities by looking at several different theories at both the micro and macro levels. Next, the framework

explores several challenges to opportunity exploitation. The framework then looks at methods for exploiting opportunities before finally describing ways of optimizing these methods. An overview of the Framework Elements and their contribution to the

Framework is presented in Table 1 below.

Table 1: Elements in the Framework for the Phenomenon of Entrepreneurship and their Contribution to the Framework

Framework Element Contribution to Framework

Origins and Characteristics of Opportunities

Perfect Competition Idealized economic model where all opportunities are exploited already

Knightian Uncertainty Opportunities exist due to imperfect information, which varies between firms. Opportunities can be exploited by gaining information.

Transaction Cost Economics

Unexploited opportunities exist because of the costs of doing business, which vary between firms. Opportunities can be exploited when a solution to these costs is

developed.

Resource Based View (RBV)

Unexploited opportunities exist because existing firms lack the resources to exploit them. Opportunities can be

exploited when those resources are acquired.

Opportunity Discovery Opportunities are an inherent concept that exist despite being undiscovered. With sufficient data and analysis, the opportunity can be defined and exploited.

Opportunity Creation Opportunities cannot be fully defined at the outset. The opportunity is developed or created through entrepreneurial actions.

Opportunity Exploitation Challenges Opportunity Creation /

Knightian Uncertainty / Path Dependency

Additional risk to the opportunity exploitation process because the endpoints cannot be determined at the outset.

Liability of Newness Additional risk to opportunity exploitation for new firms or business units due to a lack of experience and credibility Resources Based View –

Accumulating Resources

Developing resources often requires having other resources Methods for Opportunity Exploitation

Business Model A construct to describe how resources are used to exploit opportunities

Innovation Process Process description for innovation in general and as applied to Business Model Innovation

University Technology Commercialization Modes

Possible organizational solutions for implementing a business model

University Technology Commercialization Process

Processes for achieving the identified commercialization modes

The Lean Startup Methods and tools for reducing risk in the commercialization process

The starting point for the phenomenon framework is the neoclassical economic theory of perfect competition which describes an idealized economy with no unexploited

opportunities. Knightian uncertainty, Transaction Cost Economics and the RBV are then presented; each theory relaxes a different assumption from perfect competition to create room for unexploited profit opportunities at the macro level of the entire economy. The Resource Based View is adopted as the primary model to explain the existence of

opportunities since it has sufficient flexibility to account for the insights presented by the other theories. Opportunity discovery and opportunity creation are competing theories that describe the origin of opportunities at the micro level. Each theory presented in this

section of the framework implies that opportunities contain a different set of characteristics which are relevant to the exploitation of opportunities. Some of these characteristics are then further expanded upon as they represent specific challenges to opportunity

exploitation. In addition, the general challenges of engaging in new business activities (Liability of Newness) are presented.

The phenomenon framework then presents methods for opportunity exploitation. The Business Model is presented as a construct that explains how exactly the resources called for by the RBV exploit an opportunity. University Technology Commercialization Modes are presented to demonstrate the organizational requirements for implementing a business model. Several versions of the University Technology Commercialization Process are presented to show the steps that a university-based commercialization team must take to accomplish these modes. Finally, The Lean Startup methodology is presented as a set of tools and methods for reducing the risk of this process.

1.3.2 Theoretical Framework for Thesis

This thesis will explore the application of entrepreneurship theory in practice. Table 2 shows the theoretical framework utilized by this thesis.

Table 2: Theoretical Framework for the Thesis

Framework Element Contribution to Framework Implementation of the

Lean Startup

Applying The Lean Startup methods for specific commercialization projects

Educating Academic

Entrepreneurs Methods for communicating commercialization process methods to academic entrepreneurs

Summary and Synthesis Summary and synthesis of the phenomenon framework into a condensed, actionable algorithm

The theoretical framework for this thesis first presents methods for implementation of The Lean Startup. The next element of the framework looks at how insights from The Lean Startup and from the framework for the phenomenon are communicated to academic entrepreneurs so that they can be implemented. Lastly, the overall framework of the phenomenon is summarized and synthesized into a general strategy for navigating through the commercialization process.