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Under the radar: Industry entry by user entrepreneurs

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  • Haefliger, Stefan
  • Jäger, Peter
  • von Krogh, Georg
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    Abstract

    We inductively develop a model of the commercialization process for new products or services user entrepreneurs undertake when entering an industry while drawing on proprietary technology developed in another industry. Extending the growing field of user entrepreneurship, we identify a two-phase approach to industry entry by user entrepreneurs who start "under the radar" of incumbent firms, gain experience, attract a first potential customer base, and then, in a second phase, engage in commercialization. During this process, a community of fellow users is of major importance for the entrepreneur, serving as a knowledge pool for skills development and experimentation with different commercialization paths. We study a nascent group of firms founded by users of video games who became entrepreneurs on entering the animation industry by producing Machinima, a new film genre characterized by shooting film in video games. We explain how user entrepreneurs gain access to complementary assets (video games) for their new use (shooting film), how they deal with intellectual property issues when using other firms' assets, and how user entrepreneurs combine domain knowledge about film production with their experience in video games and the art of Machinima. Our propositions hold implications for management and policy.

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    File URL: http://www.sciencedirect.com/science/article/B6V77-50PB9GM-1/2/00a31c0f25e6ddb5872bf0bfbf211ca8
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    Bibliographic Info

    Article provided by Elsevier in its journal Research Policy.

    Volume (Year): 39 (2010)
    Issue (Month): 9 (November)
    Pages: 1198-1213

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    Handle: RePEc:eee:respol:v:39:y:2010:i:9:p:1198-1213

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    Web page: http://www.elsevier.com/locate/respol

    Related research

    Keywords: User innovation User entrepreneur Market entry Intellectual property Complementary assets Machinima;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Hiro Izushi & Yuko Aoyama, 2006. "Industry evolution and cross-sectoral skill transfers: a comparative analysis of the video game industry in Japan, the United States, and the United Kingdom," Environment and Planning A, Pion Ltd, London, vol. 38(10), pages 1843-1861, October.
    2. Aoyama, Yuko & Izushi, Hiro, 2003. "Hardware gimmick or cultural innovation? Technological, cultural, and social foundations of the Japanese video game industry," Research Policy, Elsevier, vol. 32(3), pages 423-444, March.
    3. Baldwin, Carliss & Hienerth, Christoph & von Hippel, Eric, 2006. "How user innovations become commercial products: A theoretical investigation and case study," Research Policy, Elsevier, vol. 35(9), pages 1291-1313, November.
    4. von Hippel, Eric, 1987. "Cooperation between rivals: Informal know-how trading," Research Policy, Elsevier, vol. 16(6), pages 291-302, December.
    5. Harhoff, Dietmar & Henkel, Joachim & von Hippel, Eric, 2003. "Profiting from voluntary information spillovers: how users benefit by freely revealing their innovations," Research Policy, Elsevier, vol. 32(10), pages 1753-1769, December.
    6. Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
    7. Fuller, Johann & Jawecki, Gregor & Muhlbacher, Hans, 2007. "Innovation creation by online basketball communities," Journal of Business Research, Elsevier, vol. 60(1), pages 60-71, January.
    8. Dominik Papies & Michel Clement, 2008. "Adoption of New Movie Distribution Services on the Internet," Journal of Media Economics, Taylor & Francis Journals, vol. 21(3), pages 131-157.
    9. Henkel, Joachim, 2006. "Selective revealing in open innovation processes: The case of embedded Linux," Research Policy, Elsevier, vol. 35(7), pages 953-969, September.
    10. Sonali K. Shah, 2006. "Motivation, Governance, and the Viability of Hybrid Forms in Open Source Software Development," Management Science, INFORMS, vol. 52(7), pages 1000-1014, July.
    11. Jehoshua Eliashberg & Anita Elberse & Mark A.A.M. Leenders, 2006. "The Motion Picture Industry: Critical Issues in Practice, Current Research, and New Research Directions," Marketing Science, INFORMS, vol. 25(6), pages 638-661, 11-12.
    12. Eric von Hippel, 2007. "Horizontal innovation networks—by and for users," Industrial and Corporate Change, Oxford University Press, vol. 16(2), pages 293-315, April.
    13. von Krogh, Georg & Spaeth, Sebastian & Lakhani, Karim R., 2003. "Community, joining, and specialization in open source software innovation: a case study," Research Policy, Elsevier, vol. 32(7), pages 1217-1241, July.
    14. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April.
    15. Franke, Nikolaus & Shah, Sonali, 2003. "How communities support innovative activities: an exploration of assistance and sharing among end-users," Research Policy, Elsevier, vol. 32(1), pages 157-178, January.
    16. Read, Stuart & Song, Michael & Smit, Willem, 2009. "A meta-analytic review of effectuation and venture performance," Journal of Business Venturing, Elsevier, vol. 24(6), pages 573-587, November.
    17. Eric von Hippel, 1994. ""Sticky Information" and the Locus of Problem Solving: Implications for Innovation," Management Science, INFORMS, vol. 40(4), pages 429-439, April.
    18. Linus Dahlander, 2007. "Penguin in a new suit: a tale of how de novo entrants emerged to harness free and open source software communities," Industrial and Corporate Change, Oxford University Press, vol. 16(5), pages 913-943, October.
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    Cited by:
    1. Broekhuizen, Thijs L.J. & Lampel, Joseph & Rietveld, Joost, 2013. "New horizons or a strategic mirage? Artist-led-distribution versus alliance strategy in the video game industry," Research Policy, Elsevier, vol. 42(4), pages 954-964.
    2. Füller, Johann & Schroll, Roland & von Hippel, Eric, 2013. "User generated brands and their contribution to the diffusion of user innovations," Research Policy, Elsevier, vol. 42(6), pages 1197-1209.
    3. Linda Hamdi-Kidar & Cyrielle Vellera, 2012. "What drives lead users to become users entrepreneurs ? an exploratory study of motivations," Post-Print halshs-00851319, HAL.
    4. Rullani, Francesco & Haefliger, Stefan, 2013. "The periphery on stage: The intra-organizational dynamics in online communities of creation," Research Policy, Elsevier, vol. 42(4), pages 941-953.

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