Cyberentrepreneurship:A multiple case study

CyberentrepreneurshipA multiple case study

Camille Carrier and Louis RaymondUniversite du Quebec a Trois-Rivieres, Trois-Rivieres Qc, Canada, and

Anissa EltaiefUniversite de Toulouse I, Toulouse, France

Keywords Entrepreneurs, Internet, Small enterprises

Abstract New information technologies have become the source of a new form ofentrepreneurship known as cyberentrepreneurship. The cyberentrepreneur creates a firm that isessentially founded upon electronic commerce (e-business start-up), and whose main activities arebased on exploiting networks using Internet technologies. So far, researchers have tended to studyentrepreneurship as it is expressed in more traditional business models, even though there is recentinterest in technology-based entrepreneurs. Given that cyberentrepreneurship is still in its emergentphase, further research is needed on the subject. The study described in this paper, an in-depthexploratory study of five cyberentrepreneurs, was designed to throw more light oncyberentrepreneurial processes and on the competitive elements applied by cyberentrepreneursin starting up their business.

IntroductionInformation technologies (IT) are currently becoming the key element of worldeconomic well-being, since they impact upon every aspect of industry and service(Scott-Morton, 1995). They are changing the world in a more permanent andfar-reaching way than any other technology in the history of mankind. A neweconomy, in which knowledge is the most important strategic resource, is forcinggrowing numbers of firms to review their traditional practices and take advantage ofpowerful information tools able to handle commercial transactions on a much broaderscale, deal with new partnerships and networks with customers and suppliers, andoperate techno-watch systems to help detect new business opportunities andinnovations (Malone and Laubacher, 1998).

New technologies are also spawning new entrepreneurial forms, includingcyberentrepreneurship. The cyberentrepreneur creates a firm that is essentiallyfounded upon electronic commerce, and whose main activities are based on exploitingnetworks using Internet technologies, intranets, and extranets (Bret and Champeaux,2000). Electronic commerce includes functions that support information andcommercial transaction exchanges. It consisted originally in electronic datainterchanges (EDI) on private added-value networks, generally imposed by largeorganisations and based on rigid and relatively complex specifications. However,electronic commerce has rapidly evolved toward the Internet and the Web, that is, amore “open” communication and transaction infrastructure that is accessible to allfirms, providing growth opportunities and relational benefits to entrepreneurial firmsin particular (Mullane et al., 2001; Raymond, 2001).

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

www.emeraldinsight.com/researchregister www.emeraldinsight.com/1355-2554.htm

The authors would like to thank Professor Damian Hine, Queensland University of Technology,for his insightful comments on an earlier version of this paper.

Cyber-entrepreneurship

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International Journal ofEntrepreneurial Behaviour &

ResearchVol. 10 No. 5, 2004

pp. 349-363q Emerald Group Publishing Limited

1355-2554DOI 10.1108/13552550410554320

Cyberentrepreneurship appears to offer promise for individuals wishing to innovateand exploit opportunities generated by the development of new informationtechnologies. Following on from Shane and Venkataraman (2000), who situate thediscovery and exploitation of profitable opportunities at the very core ofentrepreneurship, it is tempting to assert that cyberentrepreneurship isrepresentative, to a large extent, of entrepreneurship in its most noble sense.Innovation and business opportunity have also been described as the “essence” ofentrepreneurship by authors ranging from Schumpeter (1934) to Kirzner (1973).Innovative small firms can add significant value to their industry (Hine and Ryan,1999), which explains why many governments seek to foster “technopreneurism” (Fooand Foo, 2000). Cyberentrepreneurship is, of itself, an innovative business practice thatenables business opportunities to be detected and seized. As true entrepreneurs inMcFarling’s (2000) sense, cyberentrepreneurs thus introduce change into acommercially organised economic system. One must note however that the largenumber of recent failures presently casts a shadow on cyberentrepreneurship(Nwachukwu, 2002).

Whereas researchers tended to concentrate on entrepreneurship as expressed inmore traditional business models, some are beginning to examine new forms ofentrepreneurship based upon technology, and more specifically the Internet.Cyberentrepreneurship is still in its emergent phase, and it is hardly surprising thatthere is more to know about the phenomenon as such and the elements of the venturecreation process. Who are cyberentrepreneurs? How do they manage to identify andexploit interesting business ideas? What are their entrepreneurial processes, and howdo they define the basis of their firms’ competitive edge? This paper attempts toanswer these questions, at least in part, by presenting an in-depth exploratory study offive cyberentrepreneurial cases.

Technology and Internet-based entrepreneursPrevious studies have attempted to identify specific characteristics oftechnology-based entrepreneurs. According to Kisfalvi (2002), personalcharacteristics such as age and experience can influence entrepreneurs’ strategicchoices in creating and developing their firm. In Blais and Toulouse’s (1992) study,technopreneurs were found to be rather young, their average age being around 30 atthe time they launch their businesses. After completing their postgraduate universitystudies, they have acquired extensive experience with the technology they use, and aretherefore familiar with their respective sectors. In terms of personal characteristics,technopreneurs appear to be passionate about their technology, and are diehardinnovators.

In another study, Roure and Keeley (1990) linked an entrepreneur’s previousexperience in a similar position or in rapid-growth companies to the success of a newtechnology-based ventures. For their part, Colombo and Delmastro (2001) found thatInternet entrepreneurs are generally younger and less educated, especially in technicaldomains, as opposed to high-tech entrepreneurs. For most, creating an Internet-basedenterprise constituted their first professional experience. When there was previousexperience, it was generally in industries unrelated to information and communicationtechnology. Siu (2002) also found Internet-based entrepreneurs to have higher levels ofmarketing education and backgrounds than traditional ones.

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Researchers have also looked at the aims or motivations of technology-basedentrepreneurs, as Blanchflower and Oswald (1998) emphasised that these are anessential component of the entrepreneurial process. In this regard, Reid and Smith(2000) found that most technopreneurs were motivated to satisfy a need forachievement or to find an alternative to unemployment, as opposed to exploiting amarket opportunity or gaining financial freedom. For Internet-based entrepreneurshowever, Colombo and Delmastro (2001) established that their main motivations werethe potential for higher income, the intrinsic desire to innovate, and autonomousmanagement of working time related to an aversion to corporate cultures.

Another group of researchers have surmised the business creation and developmentprocesses of technology-based entrepreneurs to be predictors of their venture’s successor failure (Van de Ven et al., 1984). In this line of research, entrepreneurial processes inthe new economy need to address the same strategic preoccupations as in the oldeconomy, namely customers, capabilities, competitive advantage, and internalconsistency (Finkelstein, 2001). However, Internet-based entrepreneurs operate theirfirm as an “extended enterprise” in a networked environment in which they closelywith multiple stakeholders (Tovstiga and Fantner, 2000). They are also seen by Siu(2002) as being more marketing information and planning oriented than traditionalentrepreneurs.

The technopreneurs studied by Blais and Toulouse (1992) were shown to have acuteperceptions of market needs and to develop pragmatic solutions to meet those needs.Generally speaking, they were patient managers who maintained their strategicorientation even when profits were not forthcoming, since they understood thefinancial investments required and the long technology development and adjustmentperiods involved. Looking at e-commerce ventures, Feindt et al. (2002) concluded thatsuccessful entrepreneurs have mastered the processes by which they control theirbusiness operations, some of which can be outsourced, and those by which theyinteract with their business partners.

Globally, technology and Internet-based entrepreneurship could be characterized asbeing of the “development” or “adventure” form. Bruyat and Julien (2000) proposed theidea that entrepreneurship could take four different forms, each characterized by theintrinsic importance of innovation or new value creation, and by the importanceascribed by the entrepreneur to the new value created. Reproduction entrepreneurshipcreates very little new value and generates very little change in the creator. Imitationentrepreneurship creates very little new value but allows the creator to change his orher own situation, sometimes quite radically (spin-offs are a good example of this).Development entrepreneurship usually involves an entrepreneur who has a new ideaand is able to create new value, while adventure entrepreneurship is the type that trulycreates new value (for example, a brand new product) that sometimes triggers asignificant change in the economy.

Research methodAs seen previously, researchers are giving more attention to the technologicalentrepreneur. However, there has been less interest to-date in the cyberentrepreneur,that is, an entrepreneur whose activity is exclusively Internet-based. In such a context,an exploratory type of research appears appropriate in order to obtain greaterknowledge on cyberentrepreneurs and on the process by which they create and develop


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their business. As stated by Eisenhardt (1989), an inductive strategy based on theobservation of a given element appears to be necessary where the target researchobject is relatively new.

The multiple case study method was retained for this study, since it would allow usto document in some depth the experience of the entrepreneurs studied. According toEisenhardt (1989), Maxwell (1998) and Yin (1994), cases should be selected according tohow well they represent the phenomenon under consideration. Multiple cases wereused in a descriptive perspective. In such a perspective, one aims to portray theresearch object in order to know it better and provide a basis for further research (Yin,1998; Maxwell, 1996; Robson, 1997). As emphasized by Bickman et al. (1998), there isno question here of trying to determine causal links or to generalize. Having more thanone case also allows one to discover elements of convergence and divergence (Pires,1997).

Five entrepreneurs were selected to represent different sectors of activity. We alsosought different business models, including business-to-business (B2B) andbusiness-to-consumer (B2C) types. The cases were selected from a population ofcyberenterprises identified by search engines such as Yahoo. The selection criteriawere established from the firms’ Web page structures. For the B2C cases, we selectedfirms with electronic payment capability offering products in digital form. For the B2Bcases, we opted for businesses offering a full range of services via the Internet, forwhich this was the primary as opposed to a secondary or complementary activity. Thecases were thus selected on the basis of convenience rather than a probabilisticsampling criterion.

Semi-structured interviews were used to collect case data, with an interview guideto ensure uniform coverage of the research themes (Grawitz, 1996). This type ofinterview is appropriate in an exploratory research context, as open-ended questionsallowed us to gain deeper understanding of the cyberentrepreneurs, theirentrepreneurial process, and the factors on which they base the competitiveness oftheir firm (Rubin and Rubin, 1995). These interviews were carried out withentrepreneurs in the Montreal region of the province of Quebec, Canada. Eachinterview lasted approximately two hours and was recorded. The materials were thenanalyzed (intra- and inter-case) using summary tables and matrices developed with themethods suggested by Huberman and Miles (2002).

ResultsA significant amount of data was collected, and it is therefore difficult to present all theintra-case analyses carried out for each individual enterprise. For the sake ofparsimony, we opted for a comparative or integrative approach to data analysis. Table Ipresents the business profiles of the cases studied. Fictitious names have been used,since the subjects were guaranteed confidentiality. In addition, it should be noted thatnot all the enterprises were willing to state their annual turnover.

Socio-demographic profileTable II presents the profiles of the five cyberenterpreneurs studied. As the Tableshows, all were university graduates, and two had master’s degrees. The success of thefirms studied was by no means the result of improvisation or “strokes of genius”, as isoften suggested in the “success stories” printed by newspapers and business

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Enterprise

sector

Datecreated

Number

ofem

ployees

Averageannual

turnover

Type

Product

orserviceoffered

A.com

Advertising

August

1999

4Not

available

B2B

Internet

marketingfirm

promotingthe

productsof

companiessellingonline

Constructionof

longconsumer

chainson

the

Internet

B.com

Managem

ent

computing

January

1999

7-10

Between$100,000

and$200,000

B2B

Provides

anASP(application

service

provider)service,i.e.offers

different

computerizedmanagem

entservices

(payroll,

general

accounting,stockmanagem

ent,sales,

etc.)

C.com

Internet

products

February

1996

14Between$1

million

and$1.5

million

B2C

Principal

product:HTMLeditorsin

French

PC/Internet

server

filetransfer

software

Web

imageanim

ationsoftwarefor

Webmasters

Internet

graphicssearch

portal

D.com

Legal

May

1995

2Not

available

B2C

Saleof

legal

documents

tobusinesspeople

(sales

contracts,insurance

policies,bank

documents,etc.)

Saleof

policymodels

Virtual

books(e.g.aguideexplainingtheUS

immigration

process)

E.com

Automobileindustry

August

1995

60Between$1

million

and$5

million

B2B

and

B2C

Car

dealership

portalwith400mem

ber

dealers

Variousservices

available:Internet

site

creation,graphicdesign,creation

ofextranet

networks,etc.

Internet

purchasinggroups

Inform

ationforconsumers

Table I.Descriptive data on the

cases studied


353

Profile

A.com

B.com

C.com

D.com

E.com

Training

Master’sdegreein

econom

icsand

marketing

Collegediplomain

computingand

undergraduatestudiesin

law

Bachelor’sdegreeand

certificate

incomputing

Bachelor’sdegreeandMBA

ininform

ationsystem

sBachelor’sdegreein

computing(softw

are

development)

Experience

Self-em

ployed

inthe

marketingsector

Twenty

years

inthe

managem

entsoftware

sector

Self-em

ployed

inbusinessWeb

site

creation

Inform

ationsystem

smanagem

ent

Ten

years

inbusinesswith

anumber

offirm

s,includingonenetworking

firm

Age

(years)

3845

3044

29

Table II.Socio-democratic profileof cyberentrepreneurs

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magazines. All the cyberentrepreneurs studied had extensive experience in their firms’specialty areas. Interestingly, the owner of A.com was the only one to have noinformation technology background. His strength was primarily in marketing, and hisinnovative contribution lay more in his highly original Internet advertising conceptthan in any creative use of IT. His approach was to employ people with more computerskills than he had. Unlike the other four cases, he cannot be described as atechnological entrepreneur.

Some of the cyberentrepreneurs studied had in fact received two complementarytypes of training. For example, the owner of B.com had studied law at university andcomputing at college, and had combined these two fields of expertise to create anddistribute legal products using information and communication technologies. Moregenerally, the extensive experience of the entrepreneurs studied conforms to one of theprincipal venture creation success factors identified for more traditional firms, namelythe need for expertise in the business sector concerned. Lastly, none of the fiveentrepreneurs was very young, which once again explodes the cyberentrepreneurshipmyth of the young computer graduate straight out of university, launching an Internetbusiness and making a fortune.

The entrepreneurial processWe also examined the processes used by the cyberentrepreneurs to create their firms.In the first part of the interviews, the subjects were asked to give a detailed history ofhow they built their firms, from the time they first had the idea until the time the firmwas actually launched. The information collected was analyzed, and the processreconstructed. A comparison of the five reconstructions reveals that the fivecyberentrepreneurs studied appear to have gone through basically the same sixphases, as follows:

(1) Emergence of the business idea.

(2) Analysis of market needs.

(3) Identification of the business opportunity.

(4) Feasibility.

(5) Search for support.

(6) Venture creation.

A summary of the results analysis is presented in Table III, and shows the steps,actions or attitudes related to each of the above phases. The next section looks in moredetail at each phase.

Emergence of the business idea. This first phase in the entrepreneurial process iswhere the initial vision or idea is generated. The owner of A.com was aware of thepossibility of advertising in the new economy, knew about the capabilities offered bynew IT, and was thinking about an advertising concept based on the “word of mouth”formula. The owner of B.com literally heard a kind of alarm bell in his mind at a lectureon Internet technology. He talked about his idea with colleagues, friends and futurepartners, and held brainstorming sessions to explore the various products or servicesthat could be offered via the technology in his field. For the owner of C.com, his initialidea took him far beyond what he finally selected as his business. Originally, hewanted to create an art gallery on an electronic bulletin board and then on an Internet


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Phases

A.com

B.com

C.com

D.com

E.com

Emergence

ofbusinessidea

Primaryvisionandfocus

ontheidea

andinvention

ofthealgorithm

form

ing

thebasisof

thebusiness

concept

Signal

then

brainstormingand

refinem

entof

the

businessidea

Primaryvision,then

signal

follow

ingunmet

market

needs,and

refinem

entprocess

Signal

generated

by

market

problems,and

refinem

entof

the

businessidea

Signal

from

desireto

changetheindustry,and

refinem

entof

the

businessidea

Needsanalysis

Behaviouralproblemsof

custom

ers

Problem

oflack

ofresources

inSMEs

Market

neednot

met

by

HTMLeditors

Unmet

needof

businesspeople

Problem

oflack

ofaccess

byconsumersto

the

inform

ationthey

require

tomakepurchasing

decisions

Identification

ofbusiness

opportunity

Related

tocreation

ofthe

algorithm

anduse

ofthe

Internet

tomakeitwork

Related

touse

ofthe

Internet

inservice

provision

Gradual

based

onproduct

creation

and

intensified

byuse

ofthe

Internet

forsalesand

distribution

Gradual,began

by

offeringan

electronic

solution

that

served

totrigger

Internet

commerce

Immediate

thanksto

use

oftheInternet,w

hichhas

arevolutionary

inform

ativepow

er

Feasibilitystudy

Formal

Inform

al(prototypeand

test)

Formal

Formal

Inform

al(m

arket

survey

andtest)

Searchfor

support

Bankfinancingand

technical

supportfrom

acomputingfirm

Self-financing

Bankfinancing

Self-financingand

Internet

partnership

Inform

alfinancing

(angels)andsupport

from

automobile

associations

Venture

creation

Programmingof

form

ula

andconstructionof

firm

’sWeb

site

Marketingof

prototype

follow

edbybusiness

start-up

Product

creation

follow

edbyconstruction

offirm

’sWeb

site

Original

business

consisted

offaxes

onrequest,subsequently

transferredto

the

Internet

Testingof

idea

onthe

market,followed

byWeb

site

constructionand

developmentof

service

range

Table III.The entrepreneurialprocess of thecyberentrepreneur

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site. In the end, after due reflection and discussions with experts, the idea evolved intothe creation of an Hyper Text Markup Language (HTML) editor in French for artistsand graphic designers. The owner of D.com was struck by a signal from the market,namely the need to develop a legal and administrative guide for potentialentrepreneurs. This eventually evolved into the possibility of developing andmarketing a range of legal documents, which could be sold separately. Finally, theowner of E.com had always been involved in the automobile sector through his father.As his passion for new technology, and especially the Internet, grew, he wondered if hemight be able to find a way of revolutionizing the sector using technology. His originalidea was to create an Internet purchasing center, and he gradually came to focus on alarger public, that of the car dealerships. The “portal” idea persisted, but he hesitatedfor some time and consulted a lot of people before finally clarifying the nature of hisproduct.

Needs analysis. In all five cases, the entrepreneurs invested a tremendous amount ofeffort and took numerous steps to determine the needs of different potential customersfor the products in their initial ideas. In fact, they showed themselves to be pragmatic,and all addressed the needs analysis phase by attempting to identify the problemsexperienced by target consumers or client companies. Clearly, the technical aspects ofthe steps taken to explore and define problems and their relative importance for thecompanies and consumers concerned varied according to the sector. In some cases,individuals were questioned, while in others, the entrepreneurs approached businesspeople and associations (consumers, retailers, dealerships, consultants and so on). Itwas interesting that all the entrepreneurs ascribed such a high level of importance tothe needs analysis. This phase of the process differed significantly from the marketsurvey phase of more traditional entrepreneurial processes. In a typical market survey,the product or service is already identified, and the goal is to see whether or not there isa big enough market for it, and on what conditions future customers would buy theproduct. Employing feedback processes in their development, the cyberentrepreneursused this phase to refine their initial business ideas.

Identifying business opportunities. Taking advantage of a business opportunity is afundamental step in the entrepreneurial process. In most of the cases studied for thisresearch, the opportunity was converted mainly because the entrepreneurs concernedhad invested so much time identifying market needs and were therefore the first topropose concrete solutions that were innovative to boot. Another factor that helped inthe opportunity detection process was the fact that the entrepreneurs were aware of allthe potential offered by new technology, especially the Internet. In short, the solutionsthey proposed were innovative of themselves, but it was the Internet that was the bestway of making them viable and profitable.

Feasibility study. Once a business opportunity had been identified, the entrepreneursall decided to test and examine the potential feasibility of their projects, although thefeasibility analysis took different forms in all five cases. The owner of A.com simplydrew up a business plan, following all the classical steps recommended in theliterature. Although convinced a priori that his project was relevant, he felt thebusiness plan would be of crucial strategic importance when seeking funding.

The owner of B.com, following brainstorming sessions with different groups,carried out extensive research and development culminating in a product prototypethat was then tested with a certain number of potential client businesses. This process


357

led him to obtain contracts with some of the firms involved in the trial, thus confirmingthe feasibility of the project. As a result, the business already had service contractsbefore it was actually created.

The owner of C.com began by carrying out an extensive market survey of artists,and then went on to draw up a business plan (solely with a view to obtaining funding).The owner of D.com, for his part, carried out neither a feasibility study nor a marketsurvey, but simply designed the product and launched the platform, intending to test itwith real customers. He did, however, have a plan of action that would allow him toadjust quickly and continuously throughout the operation. Lastly, the owner of E.comtested the potential of the Internet in the automobile sector by holding extensiveconsultations with large numbers of dealerships.

By the end of this decisive step, which confirmed the feasibility of the businessopportunity, all five entrepreneurs had definitely decided to go into business. It thenremained for them to obtain financing and other types of support.

Search for support. This step, as was the case for the previous step, took differentforms depending on the projects concerned, the related needs and the entrepreneurs’own resources. A.com had to find partners to fund the business, and to refine thetechnological aspects of the business concept program. Its owner was the only onewhose previous training and experience was in a field other than the new technologysector, i.e. marketing. The owner of B.com looked for a company that would agree toincorporate his new firm and contribute financially to its incubation. The owner ofC.com went straight to the banks, rather than to investor-partners. He also entered intopartnership agreements with e-commerce portals on the Web, to promote his firm. Theowner of D.com had no funding problems and was able to concentrate on findingtechnology support partners. E.com’s owner went into partnership with associations(automobile and dealership-related), and some agreed to help with funding. Thecompany was also partly financed by angels.

To conclude this section, it is important to note that, while the actual phases of theprocess were the same for all the firms studied, there were variations in the way theywere approached. The time spent on each phase also differed. However, the moststriking factor was that, in all cases, the steps preceding the feasibility study wereconsidered to be the most important, the most demanding in terms of energy, and alsothe most critical, in the entire process. Figure 1 presents a cyberentrepreneurial processmodel that reflects how each phase was applied by the entrepreneurs studied.

The competitive basis of cyberentrepreneursThe results of the previous section were reconstructed from the entrepreneurs’ answersto the researchers’ questions. In this section, however, the entrepreneurs themselveswere asked to identify what they considered to be their firms’ competitive factors. Inother words, we asked them how they went about achieving success in such a highlycompetitive context. The following subsections present the principal elementsidentified by the subjects as forming the basis of their competitiveness on the market.

Use of network business potential. The cyberenterpreneurs studied first appear tooperate according to a simple structure. However, three of them had adoptedoperational methods that allow their firm to become network enterprises in cyberspace,thanks to a combined Internet and extranet infrastructure. In fact, A.com, B.com andE.com, all B2B firms, connect customers via the Internet by forming virtual

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communities linked together in networks around a common product, service or goal. Intheir view, the more visitors a community’s Web site receives, the more added valuethe network produces for its members.

Staff motivation via capital participation. To retain and motivate their staff to bemore creative and more productive, most of the entrepreneurs studied offered theiremployees the chance to obtain a stake in the company, although the form of theirparticipation differed. In some cases, the offer was made selectively, principally to themost skilled employees, i.e. those holding strategic knowledge on new informationtechnology use. Other entrepreneurs opted to encourage all their employees to becomeshareholders in the firm, on the basis that such an approach would ensure their loyaltyand enhance their commitment. One of the firms took a completely different approach,offering a share of the profits as opposed to a stake in the company, with the goal ofincreasing employee accountability and encouraging them to contribute more to thegroup effort.

Systematic techno-watch and competitive intelligence. The cyberentrepreneursquestioned for this study said they ascribed more importance to more formalizedstrategic planning with structured action plans that were reviewed continuouslyaccording to the dynamics and turbulence present on their markets. They behavedmore like proactive decision-makers, drawing their inspiration from their extensiveknowledge of what was happening in their sector, gleaned from systematictechno-watch and competitive intelligence activities. One of them had this to say:

You must never underestimate the competition, or overestimate it. We work in anenvironment where technology changes almost on a daily basis, and we are dependent ontechnological breakthroughs to improve our product or service supply and find more effectivemethods.

Figure 1.Cyberentrepreneurial

process model


359

Another emphasized the importance of carefully monitoring everything done by actualor potential competitors, and never letting them catch up or overtake. Thesecyberentrepreneurs, due to the very nature of their activities, feel better equipped thanothers to carry out effective strategic watch activities, since they are familiar with thetools required for this task.

Maximum use of information technologies. In the five cases, the entrepreneurs tookadvantage of information technology to integrate their firm’s value chain (production,marketing and sales, upstream and downstream logistics, etc.). Moreover, they optedfor strategic as well as administrative applications, thus emphasising the competitivepotential of IT. In most cases, IT was incorporated into the organization of all the firm’sfunctions and even transactions with their respective customer systems.

Good market positioning via targeted strategies. In all the cases studied, theentrepreneurs established strong positions on their markets thanks to their strategies.Four of the five firms were leaders in their markets, and the fifth had managed to carveout a niche in a sector of little interest to other software editors.

A.com had opted for a domination-by-cost strategy resulting ultimately fromeconomies of scale obtained as a result of its strong growth. Its principal sources ofcompetitive benefits were its use of the Internet, which is easily accessible andinexpensive, and its strength as a global network. B.com, D.com and E.com optedinstead for a differentiation strategy based either on service quality or on productimage and quality. C.com, for its part, was successful with a niche strategy. Its owner,during the needs analysis phase, realized that the HTML editors’ market wascontrolled for the most part by well-established leaders, including multinationals suchas Microsoft, which had enjoyed a virtual global monopoly for this type of computerproduct for many years. He therefore decided to concentrate on the production ofFrench-language software, a market segment that was unlikely to interest the currentleaders. Despite the relevance and quality of their strategies, all five entrepreneurswere convinced that their current leadership positions were also due to their ability toinnovate and the fact that they were the first to offer a given product or service.

Concern for security. All the entrepreneurs questioned for the research were veryaware of security threats related to Internet-based businesses, knowing that they couldendanger their own competitiveness and security, and that of their partners orcustomers. They had therefore all introduced security measures, tailored to the specificneeds of their firms. Table IV presents the measures taken by each of the firms studied.

ConclusionThe results of this research throw some interesting light on a new entrepreneurial formthat is likely to become much more widespread with the advent of the new economy.

A.com B.com C.com D.com E.com

Firewall to protectthe site, andencryption of datasent via the Web

Firewall for theprivate networks,and protection forcustomers

Firewall to protectproducts, a securepayment system,and rigorouscontrol ofcustomer orders

Firewall to protectproducts and asecure paymentsystem

Firewall to protectthe portal andencryption of datasent via privatenetworksTable IV.

Security measures

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Its most important contribution certainly lies in its observation of the cyberenterprisecreation process and its proposed model incorporating the practices observed. It alsocontributes some additional information on the competitive strategies adopted bycyberentrepreneurs, and on the other factors they associate with their firms’competitive edge.

Our research has enabled us to learn more about what was previously defined asdevelopment entrepreneurship and adventure entrepreneurship. The owners of A.comand D.com did not necessarily offer a new product, but they made a radical change inthe way an existing product was offered. They can thus be classified as developmententrepreneurs. The owners of B.com, C.com and E.com, however, offered a new productand also innovated technologically in their distribution methods. They are thereforeadventure entrepreneurs. Thus, our study of cyberentrepreneurs has provided someearly knowledge on this important generation of new entrepreneur/innovators as aprelude to further research on the subject.

Another of the study’s non-negligible contributions is that it has opened a windowonto the conditions surrounding the emergence of a business idea and on theopportunity exploration process that necessarily precedes identification of the idea.However, more work needs to be done on the exploration process that precedes andgenerates formal recognition of an Internet-based business opportunity. In our study,the five subjects ascribed a great deal of importance to this crucial phase, anddescribed the process they followed in some detail. This type of information willcertainly be of interest to researchers working on business idea exploration, and also toentrepreneurship trainers. As mentioned by Carrier (1999), entrepreneurship trainingunfortunately tends to focus on the technical aspects of venture creation (usually via abusiness plan) and does nothing to help the trainees to find a productive business idea.Moreover, the experiences of the cyberentrepreneurs described here constitute richexamples of business ventures founded upon the strategic use of informationtechnology to meet new market needs and propose value-added solutions toprospective customers. They thus provide future Internet-based entrepreneurs withbusiness models and avenues of development.

Obviously, the results of our study cannot be generalized because the sample wastoo small, and this of itself is one of the study’s limitations. Nonetheless, the aim wasnot to generalise but to outline a phenomenon that is new both to the businessenvironment and to managerial research, and an exploratory approach involving anin-depth analysis of a small number of cases was considered essential. The results haveallowed us to draw up a cyberenterprise creation model and to propose a number ofcompetitive factors. These elements will be used as a basis in the preparation ofhypotheses for future research involving larger samples.

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Cyberentrepreneurship:A multiple case study