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REFLECTIONS ON THE 2010 AMR DECADE
AWARD: WHITHER THE PROMISE? MOVING
FORWARD WITH ENTREPRENEURSHIP AS A
SCIENCE OF THE ARTIFICIAL
SANKARAN VENKATARAMAN
SARAS D. SARASVATHY
University of Virginia
NICHOLAS DEW
Naval Postgraduate School
WILLIAM R. FORSTER
Lehigh University
In this article we speak of roads taken and paths yet to be traversed. Over the past
decade, entrepreneurship researchers have accumulated considerable work related to
opportunities. Here we outline new possibilities opened up by that work and seek to
recast entrepreneurship as a science of the artificial in three ways: understanding
opportunities as made as well as found, moving beyond new combinations to trans-
formations, and developing a new nexus around actions and interactions.
In “The Promise of Entrepreneurship As a
Field of Research” (hereon referred to as “Prom-
ise”), Shane and Venkataraman (2000) staked out
a distinctive territory for entrepreneurship re-
search centered on the concept of “opportuni-
ties” that has since become the focus of consid-
erable scholarship. In the decade following
publication of the article, “Promise” has influ-
enced scholars within the fields of entrepreneur-
ship and management, as well as scholars from
a variety of other disciplines. Only 46 percent of
the published journal articles citing the article
are from entrepreneurship and small business-
focused journals; the rest have been published
either in general management journals (32 per-
cent) or in outlets outside of management (24
percent).
1
“Promise” has been cited in fields as
varied as sociology (Bowman, 2007), law
(Abramowicz & Duffy, 2008), and psychology
(Hisrich, Langan-Fox, & Grant, 2007), and it has
inspired a variety of theoretical and empirical
investigations. While some scholars have built
on the ideas from the article to offer additional
theoretical contributions (e.g., Cardon, Wincent,
Singh, & Drnovsek, 2009; McMullen & Shepherd,
2006), others have used a variety of empirical
techniques, such as qualitative analysis (Ma-
guire, Hardy, & Lawrence, 2004), conjoint analy-
sis (Haynie, Shepherd, & McMullen, 2009), exper-
iments (Brundin, Patzelt, & Shepherd, 2008), and
surveys (Lechner, Dowling, & Welpe, 2006),
among others.
Here we aim to outline a few more opportuni-
ties for future work that draw on the growing
body of work already under way. We begin by
extracting a dominant thread in current entre-
preneurship research, on which we build a
framework for moving forward into the future.
The framework draws on Herbert Simon’s (1996)
notion of a science of the artificial and outlines
three ways we can transform entrepreneurship
from a social science to a science of the artifi-
cial. We conclude by pointing out the possibility
that entrepreneurship research may be at a cru-
cial juncture in the history of ideas, evocative of
We thank Anil Menon for his help with this project, as
well as Amy Hillman and two anonymous reviewers for their
insightful comments during the review process. We are also
grateful for the financial support of the Batten Institute at the
University of Virginia’s Darden Graduate School of Business.
1
Based on a search of the ISI Web of Science conducted
on February 20, 2011. The search returned 548 scholarly
works. Of those, 238 were published in journals focusing on
entrepreneurship and small business, 178 in the broader
category of management (including organizational behavior
and strategy), and 132 in journals outside of management.
姝Academy of Management Review
2012, Vol. 37, No. 1, 21–33.
http://dx.doi.org/10.5465/amr.2011.0079
21
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the development of the scientific method in the
seventeenth century.
THE PROMISE TO DATE
Upon perusal of the articles citing “Promise,”
we noticed a number of developments, includ-
ing (1) a more nuanced view of entrepreneurs,
spanning cognition, intuition, emotion, learning,
and expertise (Cardon et al., 2009; Corbett, 2005);
(2) an ongoing theoretical conversation on the
discovery versus the creation of entrepreneurial
opportunities (Chiasson & Saunders, 2005); and
(3) the identification of specific mechanisms of
entrepreneurial action, such as bricolage (Baker
& Nelson, 2005), improvisation (Baker, Miner, &
Eesley, 2003; Hmieleski & Corbett, 2008), and ef-
fectuation (Read, Song, & Smit, 2009; Sarasvathy,
2001), and how these may lead to resilience,
identity, new markets, and social change. Below
we do not attempt a comprehensive review; in-
stead, we seek to highlight and draw out spe-
cific threads that can be woven together to form
a new set of possibilities for future research.
What Opportunities Are: A Dominant Thread in
Current Research
“Promise” appears to have set in motion sev-
eral productive exchanges on the ontology and
epistemology of opportunities. The immediate
comments on the article (Erikson, 2001; Singh,
2001; Zahra & Dess, 2001) launched exchanges
that have evolved into sophisticated conversa-
tions through the past decade. Gartner, Carter,
Hills, Steyaert, and Hjorth (2003), for example,
identified contrasting ontological conceptions—
one arising out of the positivist/realist position
predominant among North American research-
ers (namely, that opportunities exist in the envi-
ronment independent of the entrepreneur, wait-
ing to be discovered) and another out of a social
constructionist position, more prevalent in the
European research tradition (namely, opportuni-
ties are enacted, depending upon the entrepre-
neur’s perception, interpretation, and under-
standing of environmental forces). Dutta and
Crossan (2005) brought a related yet different
take on the ontological controversy by examin-
ing a Schumpeterian versus a Kirznerian view of
entrepreneurial opportunities. Furthermore, by
applying an organizational learning framework
to entrepreneurial opportunities, they explicitly
highlighted the importance of stakeholders to
the development of these opportunities.
Sarason, Dean, and Dillard (2006) added an-
other thread to the conversation through struc-
turation—the view that entrepreneurs and so-
cial systems coevolve (Giddens, 1984). This view
provided a reflexive and emergent ontology for
entrepreneurial opportunities. In the spirit of the
“nexus of individual and opportunity” in “Prom-
ise,” these authors argued that “while ventures
are reflections of [social] systems, the reflection
is altered through the processes of interpreta-
tion and influential action” (2006: 301) by indi-
vidual entrepreneurs. Consistent with this per-
spective, scholars have further argued that
much entrepreneurship is a team and/or com-
munity endeavor, rather than an individual one
(Gartner, Shaver, Gatewood, & Katz, 1994), thus
highlighting the role of collective interaction,
negotiation, and shared experience in shaping
and reshaping opportunities (Peredo & Chris-
man, 2006; West, 2007). This thread of the conver-
sation has further served to focus the field’s at-
tention on the deeply social nature and
institutional nature of entrepreneurial opportu-
nity, factors that are also very much at the fore-
front of emerging research on social entrepre-
neurship (Hill, Kothari, & Shea, 2010).
2
Alvarez and Barney simplified the ontological
debate by talking about the discovery and cre-
ation of opportunities as follows: “Do entrepre-
neurial opportunities exist, independent of the
perceptions of entrepreneurs, just waiting to be
discovered? Or, are these opportunities created
by the actions of entrepreneurs?” (2007: 11). This,
in turn, prompted a rejoinder from Klein, who
urged us to adopt the subjectivist view from
Cantillon-Knight-Mises: “As such, opportunities
are neither discovered nor created (Alvarez &
Barney, 2007), but imagined. They exist, in other
words, only in the minds of decision makers”
(2008: 176). Using a feminist lens, Calás, Smir-
cich, and Bourne added to this conversation the
necessity to recognize the role of researchers
themselves in producing both the ontologies
and the controversies these generate: “These
premises are antiontological in that there is no
actual ground to justify the stability of knowl-
2
We thank an anonymous reviewer for highlighting sev-
eral points that appear in this paragraph.
22 JanuaryAcademy of Management Review
edge claims other than the processes of knowl-
edge production themselves” (2009: 563)
In the most recent version of the debate, which
has moved from ontology to epistemology, we
seem to have come full circle with Wood and
McKinley (2010), postulating a constructivist per-
spective, and Alvarez and Barney (2010), arguing
for two kinds of realist perspectives. In the latest
Entrepreneurship Theory and Practice special
issue on the future of entrepreneurship research,
Dimov suggests what appears to us an impor-
tant way forward:
Discussions about opportunities as a central fo-
cus of entrepreneurship research are at once con-
ceptually grabbing and empirically elusive. The
general notion that there are entrepreneurial op-
portunities out there—possibilities for profitable
introduction of products or services—is very intu-
itive and hard to disprove; indeed, it is made
evident by incessant entrepreneurial successes
around us. But in turning toward an empirical
investigation of those aspiring to such possibili-
ties, one finds it impossible to reliably distin-
guish opportunities from nonopportunities. Such
a conundrum naturally stifles empirical investi-
gation as the construct of opportunity lacks tan-
gible tenets to guide our observations of aspiring
entrepreneurs (2011: 75).
Dimov then urges us to clarify the construct of
opportunity “in substantive terms, i.e., in terms
of what aspiring entrepreneurs do” (2011: 75)—a
strategy we also follow here.
What Entrepreneurs Do: Toward a Science of
the Artificial
In Table 1 we present a list of recent studies
that have identified particular strategies, tech-
niques, heuristics, and mechanisms used by en-
trepreneurs in building new ventures and new
markets. Taken together, these studies empha-
size how elements of the internal environment of
the organism (the entrepreneur’s cognition, emo-
tions, actions, and aspirations) interact with el-
ements of the external environment (be they
market structures, institutions or institutional
voids, stakeholders, resources, or cofounders).
The findings being cumulated in this stream are
both practically relevant and pedagogically
useful. More important, however, they are evoc-
ative of Simon’s (1996) description of sciences of
the artificial.
It is customary to think of two classes of sci-
ences: natural and social. And it is routine to
classify fields such as management and organi-
zational studies under the social sciences. But
there are at least two major problems with this
classification. First, it creates the illusion that
the two categories exhaust all phenomena of
interest to scientists. Second, it obscures one of
the most fascinating aspects of the phenomena
we file away under the rubric of social sci-
ences—namely, the fact that they have to do
with what can be rather than with what is or
what ought to be. Simon expressed his insight
as follows:
Finally, I thought I began to see in the problem of
artificiality an explanation of the difficulty that
has been experienced in filling engineering and
other professions with empirical and theoretical
substance distinct from the substance of their
supporting sciences. Engineering, medicine,
business, architecture, and painting are con-
cerned not with the necessary but with the con-
tingent—not with how things are but with how
they might be—in short, with design (1981: ix).
TABLE 1
Mechanisms in the Making of Entrepreneurial Artifacts
Mechanism(s) Article(s)
Articulated cognition Geroski (2003), Bingham, Eisenhardt, & Furr (2007)
Bricolage Baker & Nelson (2005), Mair & Marti (2009)
Coconstruction/cocreation of markets Read, Dew, Sarasvathy, Song, & Wiltbank (2009), Santos & Eisenhardt (2009)
Effectuation Sarasvathy (2001), Read Song, & Smit (2009)
Emotions Brundin, Patzelt, & Shepherd (2008), Chen, Yao, & Kotha (2009)
Equity negotiations Hellmann & Wasserman (2010)
Exaptation Dew, Sarasvathy, & Venkataraman (2004)
Improvisation Baker, Miner, & Eesley (2003), Hmieleski & Corbett (2006)
Pattern recognition Baron (2006), Baron & Ensley (2006)
Reassessment of assumptions Haynie, Shepherd, Mosakowski, & Earley (2010)
Transformation Sarasvathy & Dew (2005), Dew, Read, Sarasvathy, & Wiltbank (2010)
2012 23Venkataraman, Sarasvathy, Dew, and Forster
In short, artificial phenomena embody teleol-
ogy. That does not mean, however, that we can-
not study them scientifically. Nor does it mean
that we can afford to ignore the laws of nature
and/or relevant theories from the social sciences
as they apply to artifacts. Simon’s insight was
forged through decades of trying to deepen our
understanding of organizational and other phe-
nomena that involve motivations, aspirations,
and purposes, most of which are often ambigu-
ous yet operate within contexts of multiple un-
certainties. Simon’s insight not only foreshad-
owed our recent angst about the prescriptive
relevance of our scholarship (McGahan, 2007)
but also pointed out the possibility of construct-
ing an entirely new class of sciences where such
relevance is stitched into its methods. The chal-
lenge he had envisioned—to design worlds and
not just to study them—is no doubt massive and
daunting, but it is not a problem that entrepre-
neurship researchers should shy away from.
MOVING FORWARD WITH
ENTREPRENEURSHIP AS A SCIENCE OF
THE ARTIFICIAL
Let us begin by asking the obvious pragmatic
question: What difference does it make whether
we study any particular phenomenon as natu-
ral, social, or artificial? The difference is not in
the phenomenon as such but in whether we take
ittobeagiven—needing explanation in terms
of consensus-arrived material, formal and effi-
cient causes—or whether we take it to be a
contingency.
The natural and social sciences are mainly
interested in providing causal explanations.
These explanations may yield normative pre-
scriptions for controlling the phenomenon, but
the lack of such prescriptions will not, in gen-
eral, be held as a strike against them. In math-
ematical terms, we’re interested in how the key
variables relate to each other. Altering those
relations is a subsidiary and often minority con-
cern. No theory on the weather, for example, will
be rejected on the grounds it doesn’t offer any
means for controlling the weather. As a theory
develops, it splits into two streams: (1) “basic”
research that continues to refine the causal ex-
planations and (2) “applied” research that seeks
to alter the variables of explanation. At that
point the phenomenon of interest has become
an artifact. It has become something to be
designed.
The phenomenon of drought, for example,
may be seen as both a physical and social con-
struct. Thus, the claim that the lawns of subur-
ban Las Vegas suffer from drought conditions
may be studied in terms of models explaining
how foreign grass species adapt to different
climes. Or the so-called drought may be re-
vealed to be a socially constructed phenomenon
in that it assumes human-planted species can
be permitted to set the terms for describing a
landscape. If we poll the cacti, there may well
be a surfeit of rainfall rather than a drought. But
if we had the capacity to design grass species
for a given clime or to effect rainfall in an envi-
ronmentally safe way or to create effective sys-
tems to recycle waste water, then the drought
problem would become an artifact. It would
move from something to be studied to something
to be designed.
A science of the artificial is interested in phe-
nomena that can be designed. Such an interest
assumes that the phenomenon under consider-
ation is a contingent one. It is not a given, with
a mostly fixed or essential identity, and separa-
ble into external and internal environments. A
science of the artificial is interested in a phe-
nomenon’s variables precisely to the extent we
can intervene and change them. Design lies in
the choice of the boundary values; control lies in
the means to change them.
The basic outline of what constitutes a sci-
ence of the artificial owes much to Simon. How-
ever, his focus on human artifacts should not be
taken to mean that a science of the artificial is
so restricted. First, the existence of a designer is
sufficient but not necessary for the possibility of
design. Second, contingency manipulation is a
fundamental ability of all life. For example, con-
tingency generation is of critical importance in
the proper realization of developmental path-
ways (Gerhart & Kirschner, 1997: 45–90). As Le-
wontin put it:
The first rule of the real relation between organ-
isms and environment is that environments
do not exist in the absence of organisms but are
constructed by them out of bits and pieces of the
external world. The second rule is that the envi-
ronment of organisms is constantly being remade
during the life of those living beings....Third,
organisms determine the statistical nature of the
environment as far as it has an influence on
themselves (1991: 113).
24 JanuaryAcademy of Management Review
The idea of the distinction between object/
environment is also useful because it offers an
alternative to the idea that design consists of
intervening in the values of a problem’s vari-
ables. The object/environment distinction high-
lights the existence of an interface or, to use
Simon’s preferred term, a boundary. The natural
and the social are the givens of inner and outer
environment. While the organism and its envi-
ronment both embody and may be explained by
the natural and/or social sciences, the artifact—
what may be designed—lies on the boundary
between them. This shift from a language of
variables and values to a language of boundar-
ies is significant, because, as we’ll discuss a
little later, it marks a shift from a language of
things to a language of relationships.
Just as there are several ways to conceptual-
ize design, there are several ways to study de-
sign in different domains. To cite just a couple of
examples, Gresov and Drazin (1997) contrast
contingency theory with equifinality as a way to
study organization design, and Pil and Cohen
(2006) bring together facilitators of imitation
with the drivers of dynamic capabilities in the
context of innovation. With regard to studying
entrepreneurship as a science of the artificial,
we offer three starting points: (1) seeing oppor-
tunities as made as well as found, (2) moving
beyond new combinations to include transfor-
mations as a central concept, and (3) focusing
our empirical work on the actions and interac-
tions of entrepreneurs and their stakeholders as
an important unit of analysis. We turn now to
briefly elaborating on each of these.
Made As Well As Found
The distinctive domain of entrepreneurship
consists of the study of opportunities for value
creation (Venkataraman, 1997). And opportuni-
ties may be of several different kinds—some
obvious and easily recognized, others more sub-
tle and not so easily discovered, and yet others
nonexistent until people set out to make them
from unexpected ingredients (Sarasvathy, Dew,
Velamuri, & Venkataraman, 2005). When we
seek to model entrepreneurship as a science of
the artificial, we can begin to see opportunities
as epistemological constructs of the kind tack-
led by the philosopher Donald Davidson. In Da-
vidson’s thesis knowledge is an irreducible tri-
pod consisting of the objective, subjective, and
intersubjective (Davidson, 2001). This tripod is
derived from a masterful synthesis of recent
findings in a number of areas, including the
neurosciences and robotics, where the brain and
body are no longer seen as truly apart from
physical and social reality (Churchland & Sej-
nowski, 1992; Jeannerod, 1997). For example, the
eyes do not register images like a camera does;
instead, perception is a complex process that
brings together physical, social, and cognitive
elements (Thompson, 1995). Even language is
embodied (Lakoff & Johnson, 1999), just as the
brain itself can be wired and rewired through
nontrivial interactions between the subjective,
objective, and intersubjective (Schwartz & Beg-
ley, 2002).
Note that in this thesis the vast and disembod-
ied “social” is replaced with the more local and
bounded concept of “intersubjective.” This
serves to refocus social constructionist perspec-
tives in a novel way while at the same time
offering a more nuanced and scientifically co-
herent notion of constructivism. Davidson is con-
cerned not with the myth of the objective but
with the more intriguing idea that the mind (or
the subjective) itself is constructed out of lived
experiences—hence, it is the notion ofsubjective
that is largely a myth. Furthermore, these lived
experiences include actual interactions with
physical reality as well as with other people. It
follows, then, that intersubjective does not equal
interpersonal. When we use the term interper-
sonal, we assume two or more people with inde-
pendent “subjective” viewpoints who exchange
and come together through interpersonal inter-
action. Davidson’s notion of intersubjective re-
fers to the fact that our subjective viewpoint
already assumes vast areas of coherence with
others because we share in and experience the
same objective reality. Hence, intersubjective
refers to the ex ante taken-for-granted shared
core between the persons interacting, not to
their ex ante differences overcome through ne-
gotiation. Whether the ex post coherence
achieved through any particular negotiation
eventually becomes part of the intersubjective
core in the future depends on selection pro-
cesses embodied in the lived consequences of
such “deals” over time. All knowledge therefore
is inextricably intertwined in terms of the sub-
jective, objective, and intersubjective. Whether
we study opportunities as made or found, or
both, the Davidsonian tripod, with a particular
2012 25Venkataraman, Sarasvathy, Dew, and Forster
emphasis on the intersubjective, does bring
something unique and useful to deepen our un-
derstanding. A classic example might illumi-
nate the point.
Let’s start with the easiest case, and the clear-
est one in terms of a “found” opportunity—
finding a $100 bill on the sidewalk. What makes
this an opportunity consists of at least three
things:
1. The bill has to exist, and someone has to
find it (objective person-opportunity nexus).
2. Someone who comes upon it has to know it
is a $100 bill (subjective interpretation of
objective data).
3. Other people have to acknowledge its val-
ue—that is, the value of the bill depends on
someone else being willing and able to ex-
change something of value for it based on
extant shared understandings of its place in
the world (intersubjective basis for a
market).
If any one of those three conditions does not
hold, the opportunity will not, in fact, be an
opportunity. Furthermore, in order for the third
condition to hold, the person who found the bill
has to pick it up and use the bill in some way
and that involves actions and interactions that
constitute the atomic units of “making” a market
opportunity. Note that intersubjective here refers
to something more local and bounded than the
entrepreneurs’ social networks or environ-
ment—the local bounds consisting of the actual
shared experiences of those involved. Sociality
in this view is filtered through the lived experi-
ences of active agents and is not an amorphous
force anonymously impacting their behavior.
Additionally, the notion of intersubjective al-
lows variations into the concept of the social,
pluralizing the latter as well as localizing it. The
intersubjective, therefore, is particularly rele-
vant to designing artifacts because it shifts the
focus to partial orders stitched together into
nearly decomposable structures that provide
ample possibilities for redesign. It stands to rea-
son that redesigning the “social” is a lot harder
to do than redesigning at the level of the inter-
subjective.
It is interesting to note that the Davidsonian
tripod is relevant even if we consider a subjec-
tivist or constructivist opportunity (in contrast to
the more obvious realist or discovered example
of the $100 bill on the sidewalk). The relevant
example here may be that of J. S. G. Boggs, an
artist who draws near-perfect replicas of U.S.
currency. In a book that chronicles his story,
Weschler (2000) describes how Boggs paid his
restaurant bill of $87 by offering a choice to the
maitre d’—either take a real $100 bill or take his
drawing of a $100 bill, in both cases requesting
the return of $13 in real dollar bills. While sev-
eral people faced with this choice preferred real
money, as may be expected, over the course of
two years Boggs had gathered over $35,000
through transactions where the other person ac-
cepted his drawing instead of real currency.
Most entrepreneurial opportunities are, of
course, not so simple as the $100 bill left on the
sidewalk, nor are they as surreal as the case of
the Boggs bills. Instead, they are subject to un-
certainties along all three legs of the Davidso-
nian tripod. Under conditions of uncertainty, the
actions and interactions that the entrepreneur
has to undertake, including the decision to take
action at all, increase in complexity and ambi-
guity. In other words, both processes of making
and finding are intertwined in the practical re-
ality of how opportunities come to be. Yet by
adding the dimension of the intersubjective to
the objective elements of opportunities found in
the world and the subjective motivations, be-
havior, and activities of the entrepreneurs who
realize them, we bring to light an important and
as yet ignored aspect of empirical reality that
opens up fertile pastures for future research in
entrepreneurship.
In sum, most entrepreneurial opportunities in
the world have to be made through the actions
and interactions of stakeholders in the enter-
prise, using materials and concepts found in the
world. Opportunities are, in fact, artifacts. And
their making involves transforming the extant
world into new possibilities. We turn to examin-
ing the notion of transformation next.
Beyond New Combinations to Transformations
For the most part, entrepreneurship research-
ers are intellectual descendants of Schumpeter,
who conceptualized entrepreneurial innova-
tions as rooted in the creation of new combina-
tions, a term derived from mathematics and evo-
lutionary biology (Weitzman, 1998). However,
there are good reasons for thinking that design
processes are not limited to combinatorial ma-
nipulations. All combinations may be thought of
26 JanuaryAcademy of Management Review
as being transformational, of course, but there
are transformations that are not combinatorial.
To see this, consider units in a collection be-
ing combined that are not random but share
certain similarities. If that were not the case,
one would merely have a juxtaposition. On the
other hand, the units are also dissimilar. In
other words, the units’ similarities instantiate a
common interboundary with an external envi-
ronment, and their dissimilarities instantiate a
collection of intraboundaries. A large corpora-
tion with multiple business units is a good ex-
ample of both the common interboundary with
the external environment and the intraboundar-
ies that separate the various divisions. In a com-
binatorial transformation the relationships be-
tween a collection of units may be changed and
the new collection may be fundamentally differ-
ent from the old. However, the new object is
related to the old in a distinct way: the inter-
boundary is left untouched. The environment re-
mains the same. In short, it functions as a given
and, therefore, can be studied entirely as a phe-
nomenon of the natural or social sciences.
For example, we can model corporate reorga-
nizations as a combinatorial event. People are
shuffled around; departments are merged, cre-
ated, or eliminated; logos are changed; and so
on. However, the company continues to compete
in the same market environment. Such reorga-
nizations erase the boundaries between the
company’s units, but they leave the boundary
between unit/environment mostly intact. A
merger between two organizations, however, of-
ten changes the competitive landscape while at
the same time reorganizing both entities inter-
nally. The latter could be modeled as a transfor-
mation that goes beyond recombination.
We can see that when the environment is not
taken as a given, the interboundary may not
only undergo modification but may also be rad-
ically transformed. Here the very essence of
what constituted a unit gives way, and there
may be no identifiable connection between the
new and old entities, except that of history. Evo-
lution is replete with examples of transforma-
tions of this sort. A reptile’s egg is part of the
reptile’s environment. The mating of different
reptiles may have produced interesting new
reptiles, but they produced reptiles. The evolu-
tion of reptiles into mammals, however, re-
quired a bit of the environment—the egg—to be
incorporated into the reptile. The requisite
changes—thermoregulation, fused pelvic
plates, and so on—required plasticity of form,
not combinations of different forms.
Thus, while all combinations are transforma-
tional, not all transformations are combinato-
rial. Both operations may start with the same
ingredients but may end up with very different
outcomes. Philosophically, transformations deal
with meronomic rather than taxonomic relations
between parts and wholes (Casati & Varzi, 1999).
In mereology an object never exists independent
of a given context; it is always part of something
else. Indeed, it is being part of that matters.
Relationships, not things, are the items of inter-
est. And interfaces between parts and wholes
being the quintessential phenomena of design,
meronomic relations and the transformations
they enable become core to a science of the
artificial.
For our purposes we do not need to fully grasp
the logical complexities of mereology. We can
simply draw from one of its most lucid propo-
nents, Nelson Goodman, who translated its logic
into usable operators in a brief and accessible
monograph titled Ways of Worldmaking (1978).
Goodman outlined five transformation candi-
dates. In an empirical investigation into entre-
preneurial expertise, Dew, Read, Sarasvathy,
and Wiltbank (2010) extracted eleven transfor-
mation types used by expert entrepreneurs in
building new ventures, including the five sug-
gested by Goodman. Additionally, biologists
Gould and Vrba (1982) kicked off the study of
exaptation as an important transformatory pro-
cess in evolution. Mokyr (1990) and Dew, Saras-
vathy, and Venkataraman (2004) chronicled evi-
dence for exaptation in the economics of
technological innovations and in entrepreneur-
ship, respectively. So evidence for the existence
and use of both combinatorial and transforma-
tional strategies and heuristics in what entre-
preneurs actually do is beginning to accumu-
late. As both Goodman (1978) and Gould and
Vrba (1982) argued in different ways, both com-
binatorial and transformational approaches
take as their starting points the same concrete
reality:
The many stuffs...that worlds are made of are
made along with the worlds. But made of what?
Not from nothing, after all, but from other worlds.
Worldmaking as we know it always starts from
worlds already on hand; the making is a remak-
ing (Goodman, 1978: 6).
2012 27Venkataraman, Sarasvathy, Dew, and Forster
In general, while combinations are a simple
and useful shorthand for explaining how entre-
preneurs create novelty, a deeper look into what
entrepreneurs actually do compels us to expand
the set of tactical possibilities offered by combi-
natorics alone. As Brian Loasby (1999) argued,
even in the canonical case of “creative destruc-
tion” proffered by Schumpeter, historical reality
points to more evolutionary transformational
processes at work than revolutionary recombi-
nations.
The pluralistic nature of transformation ought
to be an important theme for those of us who
wish to build on the notion of entrepreneurship
as a science of the artificial. Once we move from
abstract mathematics into the realm of physical
space and time, not to mention social space and
history, it is easy to see that there are other
processes with significant promise for enriching
our future research agendas. Additionally, an
important assumption underlying these (and
other yet-to-be-discovered) processes of trans-
formation is that of the freedom to choose one’s
ends as well as one’s courses of action—a core
element of any science of the artificial. This
freedom, however, is not arbitrary or uncon-
strained: “While readiness to recognize alterna-
tive worlds may be liberating, and suggestive of
new avenues of exploration, a willingness to
welcome all worlds builds none....A broad
mind is no substitute for hard work” (Goodman,
1978: 21).
The hard work involves forging commitments
from within the intersubjective space to specific
courses of action that provide the sufficient con-
dition for transforming. This brings us to the
hypothesis that enduring entrepreneurial sto-
ries will provide room for stakeholders to en-
gage in cooperative as well as competitive in-
teractions leading to new intersubjective
understandings. These redesigns of the inter-
subjective space then lead to new opportunities
that, in turn, transform the venture’s business
model and the market structures that make it
work well. Moreover, both commitments and the
changes they require and enable would be em-
pirically observable and verifiable through
event histories as well as process theories
(Poole, Van de Ven, Dooley, & Holmes, 2000). In
other words, tracing and measuring entrepre-
neurial transformations could be a viable line of
empirical research, where the unit of analysis
would consist of the actions and interactions of
entrepreneurs and their stakeholders. In fact,
these provide the possibility of a new nexus for
the field of entrepreneurship research in the
near future.
A New Nexus: Action and Interaction
“Promise” emphasized the importance of the
nexus between individual and opportunity. As
the empirical findings inspired by that nexus
have accumulated, we can now see the impor-
tance of looking deeper within simple and direct
relationships (signified by arrows in our models)
between individual and opportunity (inner and
outer environment) to find patterns of actions
and interactions (signified by boxes that contain
mechanisms and processes such as those listed
in Table 1). Let us start with an example of the
individual-opportunity nexus. In an empirical
examination of individuals transitioning from
unemployment to self-employment, Dencker,
Gruber, and Shah “considered interactions be-
tween a founder’s human capital characteristics
and one key opportunity characteristic that
seemed to be the most relevant in the context of
our research: the sector-specific labor require-
ments of a newly founded firm” (2009: 1126). And
they found differential impacts on outcomes
when looking at individual characteristics
alone as opposed to looking at the interactions
between the individual characteristic and the
opportunity characteristic. In particular,
founders possessing a greater breadth of knowl-
edge create fewer jobs, and founders possessing
prior leadership experience create more jobs.
Moreover, as the sector-specific labor require-
ments of a business opportunity increase, both
breadth of knowledge and leadership experience
allow founders to run their firms with fewer em-
ployees (2009: 1141).
If we added to this finding the notion of a
nexus between action and interaction, we would
begin to collect data on a more fine-grained
level of analysis in order to model particular
strategies within the individual-opportunity
nexus that are more or less likely to lead to job
creation. And if our aim was to create more jobs
or manage with fewer employees, we could
teach these strategies to the unemployed in de-
signing their transition to self-employment. The
unit of analysis for our research, therefore,
would include not only demographic variables
pertaining to individuals and structural vari-
28 JanuaryAcademy of Management Review
ables relevant to preconceived opportunities but
also specific deals between entrepreneurs and
their stakeholders that could lead to the making
as well as finding of new opportunities.
For an example of the action-interaction
nexus, consider the deal between Richard Bran-
son and Boeing, where Branson got Boeing to
lease him a used airplane for a year. If Virgin
Airlines did not take off (in a financial sense), he
wanted the option of returning the plane so his
investment/loss would be affordable. And it
could well be that if Boeing had not agreed to
the deal, Branson may not have founded Virgin
Atlantic. Contingency is explicit and inescap-
able in deal making at the action-interac-
tion nexus.
Consider a similar example in the case of a
more mundane venture. Ruth Owades, founder
of specialty catalogs such as Callyx and Co-
rolla, used a loophole in the law to convince the
U.S. Postal Service to waive the big fee charged
for patrons to collect their own bulk mail earlier
in the day. Through a variety of such deals with
many different stakeholders, Owades took her
original estimated investment of around
$250,000 down to less than $30,000, which was
well within her affordable loss level. Examples
of such deal making abound in the start-up his-
tories of every kind of entrepreneurial venture.
Each of these made it more viable for the entre-
preneurs involved to start the venture and cre-
ate new jobs, even though the investment up
front might easily have deterred them had they
not used the particular deal-making tactics
they used.
One important implication of models of the
artificial involving human beings is that they
put humanpurposes at front and center of the
design process. In turn, this puts normative is-
sues within the purview of our work. For exam-
ple, we can now illuminate how and by whom
opportunities are made and found, but it also
becomes imperative for us to examine issues
such as for whom opportunities are made as
well as for whom they are not (Baker, Gedaj-
lovic, & Lubatkin, 2005). Take the case of the
Internet dating site eHarmony and the suit filed
against it by Eric McKinley, which led to the
company’s accepting personal ads from gay
people. Or that of Gene’s TV, a preferred retailer
supplying television and stereo equipment to
wealthy gay people in the Los Angeles area. The
company prospered after its founder, Gene
Kettredge, successfully pressured Pacific Bell in
the late 1970s to force the Yellow Pages to accept
ads for gay businesses. Through examples such
as these, the issue of opportunity creation in the
face of strong and value-laden resistance bub-
bles up as an important but underresearched
topic in entrepreneurship.
3
Similarly, an explicit focus on actions and in-
teractions also raises the specter of destruction
of opportunities for some, even as new opportu-
nities may become possible for others. For ex-
ample, some U.S. policymakers argue that the
introduction of private charter schools by edu-
cational entrepreneurs is destroying the public
school system and therefore damaging the fam-
ilies it caters to. Issues such as these have in the
past been outside the scope of entrepreneurship
research. By shining a spotlight on the actual
actions of entrepreneurs and their interactions
with the physical and social environment in the
process of designing new ventures and new
market structures, we open up a research
agenda that can tackle issues that span micro
and macro levels of analysis.
Another aspect central to the new nexus of
action and interaction between entrepreneur
and environment consists of the contingent na-
ture of hitherto taken-for-granted stable rela-
tionships, such as those between resources and
their value, risk, and venture creation and even
demand and expected return. For example,
scholars have already begun debating the role
of entrepreneurship in generating resource
value (Foss, Foss, Klein, & Klein, 2007). Technol-
ogy studies make a similar point—what seems
like failure and waste at one point in a technol-
ogy’s development may become the basis for
creation and value later on (Cattani, 2006;
Garud, Nayyar, & Shapira, 1997). Whether and
how valuable any particular resource becomes
is contingent upon how people use it—the ac-
tions they take can transform waste into value
and can couple/decouple complementary assets
in ways that make some resources precious
while making others redundant (Baker & Nelson,
2005). Therefore, questions such as “When is a
resource not a resource?” and “What are the key
elements and processes of transformation that
3
We thank our anonymous reviewers for the Gene
Kittredge example and several other substantial comments
that improved the manuscript.
2012 29Venkataraman, Sarasvathy, Dew, and Forster
help make existing resources more valuable?”
become of interest.
There has been an implicit assumption in
most of entrepreneurship research that the de-
cision to become an entrepreneur (also called
the “plunge decision”) is an inherently risky one.
The plunge decision is most usually modeled as
a choice between stable employment with pre-
dictable income and a leap of faith with uncer-
tain returns (Woodward & Hall, 2010). Hence,
entrepreneurs are seen as risk takers who ig-
nore opportunity costs or hubristic optimists
who overestimate the upside potential of the
ventures they seek to build. But recent empirical
work has shown that techniques such as brico-
lage (Baker & Nelson, 2005) and affordable loss
(Dew, 2009) allow entrepreneurs to reduce the
risk simply by working with what they already
have and investing no more than they can afford
to lose. The deals made by Branson and Owades,
mentioned earlier, both exemplify the affordable
loss principle. Again, a focus on how entrepre-
neurs act and interact with their endowments and
environments moves our scholarship from models
of decision making under uncertainty toward
problems of designing within constraints.
Perhaps the most provocative possibility for
future work is offered by the notion of designing
demand itself. In environments of increasing
disposable income and an explosion of techno-
logical capabilities, market necessities and
gaps or errors in equilibrating forces become
less important than the sheer temptation of the
possible. For example, take new ventures in the
experience economy. Whether it is a hotel made
entirely out of ice (a new version every winter as
the old one melts away in the summer); a res-
taurant run by the blind and visually impaired,
where customers dine in complete darkness; or
the Fojol brothers of Merlindia, who tweet the
changing locations of their traveling culinary
circus every day to serve Indian food to resi-
dents in different parts of Washington, D.C.,
each of these provides a novel and counterintui-
tive yet plausible hypothesis: the only reason
these ventures exist is that the founders and
their stakeholders set out to do what they do.
And the reason they do it is because they can.
We can claim ex post that they fulfill a need,
but we would be manufacturing the ex ante ra-
tionality just as the phenomena we are studying
have been. Here markets themselves are prod-
ucts of design. They are artifacts ensuing from
the actions and interactions of the entrepre-
neurs and their stakeholders. They are not an-
tecedents driving those actions and interac-
tions. Most extant research under the rubric of
entrepreneurship as a social science assumes
rationality to be independent and prior to action.
In a science of the artificial, this assumption
is not taken for granted. Instead, when modeled
at the nexus of actions and interactions, both
markets and market opportunities can be
artifacts.
Promise for the Future: Entrepreneurship
As Method
Artifacts resulting from entrepreneurial ac-
tions and interactions embody knowledge com-
bined with use in ways that transform the extant
world into new opportunities. These opportuni-
ties allow us not only to fashion new ways to
achieve old ends but also to fabricate new ends.
Today’s effects, as Simon pointed out, set the
constraints and provide the means for tomor-
row’s purposes. So what have today’s effects,
ensuing from the decade following publication
of the ”Promise” article, set up for us as possi-
bilities in the next decade?
Taking stock of all the tools and techniques of
entrepreneurial making identified by studies
since the “Promise” article was published, along
with the new possibilities they currently proffer,
has led us to a rather intriguing new line of
thinking about the future of entrepreneurship
research—namely, that what is emerging in our
scholarship may be astonishingly analogous to
the history of the scientific method (Sarasvathy
& Venkataraman, 2011). The scientific method
allowed philosophers to move away from scho-
lastics, from explanations based on the genius
and leisure of a few and from attributing ad-
vancements in our understanding of nature to
ad hoc coincidences. Similarly, the notion of an
entrepreneurial method might help us move
away from an overreliance on heroic individu-
als or faceless social, economic, and technolog-
ical forces in our explanations of entrepreneur-
ship. It might turn us instead toward a more
systematic elicitation of helpful heuristics, tech-
niques, strategies, and principles that enable us
to achieve human ends and even formulate
newer and worthier purposes. In short, in the
next decade we may be on the brink of not only
understanding but actually helping the design
30 JanuaryAcademy of Management Review
of new opportunities fashioned through the ap-
plication of an entrepreneurial method. Recast-
ing opportunities as artifacts and moving for-
ward with entrepreneurship as a science of the
artificial, we hope, may renew the “Promise”
article for the decade to come.
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Sankaran Venkataraman (venkats@darden.virginia.edu) is the MasterCard Professor
of Business Administration at the Darden Graduate School of Business, University of
Virginia. He received his Ph.D. from the University of Minnesota and is currently
interested in the role of intersubjectivity in entrepreneurial opportunity emergence
and in understanding entrepreneurship as a method for the creation of the artificial.
Saras D. Sarasvathy (sarasvathys@darden.virginia.edu) is the Isadore Horween Re-
search Associate Professor of Business Administration at the Darden Graduate School
of Business, University of Virginia. She received her MBA and Ph.D. from Carnegie
Mellon University. Her research interests focus on the cognitive and behavioral
microfoundations of economics, including effectual entrepreneurial expertise and
equity.
Nicholas Dew (ndew@nps.edu) is an associate professor of strategic management at
the Naval Postgraduate School. He received his MBA and Ph.D. from the University of
Virginia. His research interests are entrepreneurial effectuation and innovation in the
U.S. Department of Defense.
William R. Forster (forsterw@lehigh.edu) is an assistant professor of management at
Lehigh University. He received his Ph.D. from the University of Virginia. His research
interests include entrepreneurial decision making, founding partnerships, and effec-
tuation.
2012 33Venkataraman, Sarasvathy, Dew, and Forster
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