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Data for this study were collected by mail survey of entrepreneurs in the seven-county Chicago area. The survey instrument was developed and refined over an 18 month period by the first author. Five focus groups were conducted in 1994 and 1995, yielding a rich discussion of opportunity recognition and related issues. These results were valuable for questionnaire design. In addition to numerous new survey items, the questionnaire replicated and modified selected items from the above noted studies by Teach, Schwartz, & Tarpley; Christensen & Peterson; and Kaish & Gilad. The questionnaire was extensively pretested and modified based on the focus groups as well as by a convenience sample of 47 business owners.

The sampling frame for the study was obtained from Dun and Bradstreet (D&B). A randomly selected group of 1,500 Chicago-area organizations with revenues between $5 and $100 million were selected (from a total of 18,000 in the D&B database). Prior to data collection, 81 individuals were eliminated because the business entity was either a non-profit or the contact individual was not the owner, president, or CEO. A cover letter and questionnaire were mailed to 1,419 entrepreneurs from the D&B list. Following the first mailing, another 128 of the 1,419 in the sample were eliminated because: 1) The firm had either moved or gone out of business and had not provided a forwarding address; 2) The individual to whom the survey was addressed was no longer with the firm; or 3) The business entity was found to be a non-profit organization. This left a total potential sample of 1,291 firms. Following the mail survey and one postcard follow up, 190 useable surveys were returned for a response rate of 14.7 percent. To determine if there was a difference between the business owners who chose to complete and return the survey and those who did not, a comparison of respondents to non-respondents was made. This revealed that there was little difference between the two groups as shown in Table 1. In fact, average annual revenues were nearly identical.  


Comparison Of Respondents To Sampling Frame Of Mail Survey










For the purposes of this paper, entrepreneurs were defined as individuals who had recognized an opportunity and brought together the resources to take advantage of the opportunity. This broad definition is similar to that proposed by Bygrave & Hofer (1991) and Christensen, Madsen, & Peterson (1989). As stated above, the total number of mail survey respondents was 190; however, it was decided for purposes of analysis to delete six franchisees and also to delete 13 respondents who were not founders/cofounders and who had not started a "major, new part of (the) business." This left 171 respondents who could definitionally be considered "entrepreneurs." The mail survey entrepreneurs' firms ranged in size from $5 million to $100 million in annual revenues and employed between 2 and 1,100 people. The mean values for this entrepreneurial sample were $16.5 million (73 percent were between $5 million and $20 million) in annual revenues and 89 employees. The mean age was 53 years old and the entrepreneurs averaged 8 years of experience in their industry prior to founding their firms.

The first part of the study examined perceptions and behaviors of entrepreneurs with respect to opportunity recognition. The primary statistical method was frequency results to gain a better understanding of the phenomenon. To explore the importance of social networks to opportunity recognition, we divided entrepreneurs into two groups based on the response to the following item from the survey questionnaire: "The business idea was strictly my idea alone." Those who agreed with the statement were considered "Solo Entrepreneurs" (SEs) because they had recognized the opportunity as an individual. The second type indicated that they had recognized an opportunity through their personal social networks by disagreeing with the statement. These entrepreneurs were labeled "Network Entrepreneurs" (NEs). Forty-six entrepreneurs indicated that they were "neutral" on the question; they were excluded from the first part of the analysis. We tested differences between the two types of entrepreneurs by conducting t-tests on mean responses.

The second part of the study was an exploratory factor analysis of entrepreneurs' responses to a number of opportunity search and behavior items. We used the principal factors method with varimax rotation to test whether distinct types of entrepreneurs with respect to opportunity recognition processes could be identified.

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