An entrepreneur studies the business literature

Prior knowledge and the discovery of entrepreneurial opportunities

Figure 1. Conceptual model (adapted from Shane 2000).

There is an ongoing debate about whether investors should bet on the jockey or the horse, i.e., the founders’ abilities to succeed or the quality of the entrepreneurial opportunities pursued. There is no doubt, though, that high-quality opportunities are an important ingredient contributing to startup success, particularly when they revolve around technological innovations.

But, how do entrepreneurs discover opportunities? Scott Shane, in his 2000 article, “Prior knowledge and the discovery of entrepreneurial opportunities,” studies eight different companies that launched in an effort to exploit the 3DP™ process in different ways. Shane’s research shows “entrepreneurs discover opportunities related to the information that they already possess” and those discoveries are immediate epiphanies—not the result of systematic search and evaluation.