Honeymoons and the Entrepreneurial Process: A Real Options Perspective

YOUNG ROK CHOI*

School of Business
Singapore Management University
469 Bukit Timah Road
Singapore 259756
Tel: +65 6822 0728; Fax: +65 6822 0777
e-mail: yrchoi@smu.edu.sg

DEAN A. SHEPHERD
College of Business and Administration
University of Colorado at Boulder
Boulder, CO 80309-0419
Tel:(303) 735-5423
e-mail: dean.shepherd@colorado.edu










* Corresponding author

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Honeymoons and the Entrepreneurial Process: A Real Options Perspective
Abstract
This article investigates the entrepreneurial process using a decision making under
uncertainty lens and offers a conceptual model proposing that entrepreneurs are motivated to
devise a honeymoon period to manage the corresponding uncertainty embedded in an
entrepreneurial opportunity. We propose that the entrepreneurial process of starting, exiting, and
growing a business forms a chain of real options (i.e., honeymoon periods) and thus a path
dependent evolution of a new firm. This model complements the currently dominant
organizational life cycle perspective by offering an explanation for how entrepreneurs create
new wealth (new assets). Theoretical implications for both the entrepreneurship and real options
literatures are discussed.

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INTRODUCTION
The entrepreneurial process - - starting, exiting, and growing a business - - is complex
and our understanding of it is limited (Aldrich, 1999; Bhid, 2000; Shane & Venkataraman,
2000). To increase our understanding of how entrepreneurs create new wealth scholars must
focus more attention on the entrepreneurial process itself. It is commonly recognized that the
entrepreneurial process involves uncertainty (Knight, 1921; Rumelt, 1987). Yet previous studies
have primarily used a deterministic life cycle perspective which does not sufficiently consider
the role of uncertainty and decision making and leaves unanswered questions of how new
ventures change and arrive at a specific stage of firm development (Mintzberg & Waters, 1982);
what and how internal and external environmental factors influence the decision to transition
from one stage to the next (Alchian & Demsetz, 1972; Knight, 1921; Penrose, 1952); and what
value is created (Rumelt, 1987).
This article investigates the entrepreneurial process using a decision making under
uncertainty lens and offers a conceptual model proposing that entrepreneurs are motivated to
devise a series of honeymoon periods to manage the uncertainties embedded in an
entrepreneurial opportunity (as defined in Kirzner [1997] and Shane & Venkataraman [2000]).
This type of organizing is necessary for entrepreneurs to both minimize the downside risk and
maximize the upside potential of the new opportunity. This process resembles real options
reasoning, a managerial logic dealing with uncertainty (Bowman & Hurry, 1993; Hurry, 1994;
McGrath, 1996, 1997, 1999; McGrath & McMillan, 2000; Sanchez, 1993). In the proposed
model, we explicitly consider different types of uncertainty and relate them to different types of
learning and new asset creation. By adopting real options reasoning, we can gain greater insight
into entrepreneurs decisions on firm transition and value creation. Therefore, we view the

3
entrepreneurial process of starting, exiting, and growing a business as a chain of real options
(i.e., honeymoon periods), resulting in a path dependent evolution of a new firm (c.f., Bowman
& Hurry, 1993; McGrath, 1996).
This paper proceeds as follows: First, we review the literatures on the entrepreneurial
process and real options reasoning, and propose our view of the entrepreneurial process, in
which uncertainty, and its reduction through learning, represent the underlying logic of the
process. Second, we articulate the nature of the entrepreneurial opportunity and conceptualize
the entrepreneurial process in terms of uncertainty, learning, and new asset creation. We discuss
the honeymoon period and its involvement in the entrepreneurial process as well as the
effectiveness of different learning methods in resolving a specific types of uncertainty. Drawn on
the resource-based view in strategic management, we propose relationships between the
resolution of uncertainties and the creation of new assets. Third, in each section, using real
options reasoning, we propose how entrepreneurs make firm transition decisions and how returns
are achieved. The proposed model sheds a new light on why there are different paths of new
venture development. Finally, we discuss theoretical implications for both the entrepreneurship
and real options literatures.
BACKGROUND AND RESEARCH MODEL
Entrepreneurial Process and Organizational Life Cycle
The entrepreneurial process has been primarily investigated from a lifecycle perspective.
Reynolds and White (1997) use a biological creation analogy to conceptualize the
entrepreneurial process as conception, gestation, infancy, and adolescence. Morris (1998)
proposes a model of the entrepreneurial process, which includes stages to identify an
opportunity, develop the concept, determine the required resources, acquire the necessary

4
resources, implement and manage, and harvest the venture. Van de Ven et al. (1984) views the
entrepreneurial process from a product extension perspective, which also follows the stage
principle - - gestation, planning, contract services, proprietary product, and multiproduct stage.
Refer to the appendix for a further review of the literature on the entrepreneurial process.
Since these entrepreneurial process studies adopt a life cycle approach, they are subject to
its limitations.
1
First, a life cycle approach attempts to determine what observable,
distinguishable organizational forms exist over its evolution. While it is important for
entrepreneurs to understand the stages in a new ventures life, another important aspect, which is
largely ignored, is to understand how and why some new ventures change and arrive at a specific
stage, while others do not. Second, on the assumption that changes in organizations follow
predictable stages of development (e.g., Greiner, 1972), scholars show that firms often fail to
exhibit the common life cycle progression (Miller & Friesen, 1984; Mintzberg & Waters, 1982).
This irregularity in stage progression might be explained by the entrepreneurs decisions. In fact,
the role of an actors decisions on firm evolution has largely been ignored (Child, 1997; Penrose,
1952). Third, most previous studies of the entrepreneurial process have focused on firms that
have survived, severely restricting our understanding of failed businesses. Since firm failure is a
possible outcome of the entrepreneurial process, a model that does not consider failed firms may
generate misleading implications. Finally, these previous studies have not sufficiently considered
the role of uncertainty and decision making in the entrepreneurial process. For example,
Reynolds and White (1997) explain that [O]nce conception has taken place, gestation occurs
as the business structure develops, and the operational procedures emerge (6). Like them, most
scholars of the entrepreneurial process assume that transition from stage to stage occurs

5
automatically. However, since building organizational routines requires the resolution of internal
uncertainty the entrepreneur must make decision under uncertainty and the transition from stage
to stage may not be automatic. Since real options directly deal with decision making under
uncertainty, we adopt that perspective and further develop it to increase our understanding of the
entrepreneurial process.
Real Options Reasoning and Entrepreneurial Process
Management scholars have adapted the notion of real options from the financial
investment fields to build theory in management (strategy, technology, and entrepreneurship),
which forms a real options reasoning approach - - a new thought process that is used in devising
strategy and searching entrepreneurial opportunities (Bowman & Hurry, 1993; McGrath &
MacMillan, 2000; Sanchez, 1993). In real options reasoning, scholars attempt to identify and
build option-like managing logics rather than build a valuation model for an investment project
(McGrath & MacMillan, 2000; Sanchez, 1993). Real options reasoning studies in management
are reviewed in Table 1.
..
Insert Table 1 About Here
..

In strategic management, option scholars seem to agree that the firms resources and
capabilities act as an option for future opportunities. Shadow options represent the firms
resources and capabilities that await managers recognition (Bowman & Hurry, 1993; Hurry,
1994; Sanchez, 1993). The sequential recognition of shadow options and a series of sequential
investments form a chain of options throughout the firms life cycle (Bowman & Hurry, 1993).

1
For a review of life cycle stage models, see Hanks et al. (1993).

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Sanchez (1993) uses the term strategic options to indicate the firms opportunities for both
growth and operating flexibility, and suggest that the firms strategy (and its choices of resources
and capabilities) be developed so as to optimize these strategic options. Some scholars consider
explicit organization strategies as options (Folta, 1998; Hurry, Miller, & Bowman, 1992;
McGrath, 1997).
In entrepreneurship, McGrath (1996) views the entrepreneurial process as an options
chain and explains entrepreneurs opportunities and wealth creation with social capital, asset
parsimony, and technical and external uncertainties in the entrepreneurial process. This
perspective of viewing entrepreneurial initiatives as a real option suggests that attempts to
constrain initiatives related to high variance outcomes result in low wealth creation (McGrath,
1999). While real options reasoning has potential to provide more insight into the entrepreneurial
process, there are a number of criticisms that need to be addressed.
Critiques on real options reasoning. First, the concept of an option in management is so
widely defined that it becomes unclear. Bettis (1994) points out that the popular usage of the
term option as an alternative is much closer to what is being discussed in the strategy option
literature. Furthermore, by definition (Bowman & Hurry, 1993; Sanchez, 1993), an option is
equivalent to a resource or bundle of resources (Bettis, 1994), which indicates that this approach
of real options reasoning contributes little to our understanding of a management phenomenon
beyond the resource-based view. We argue that little contribution is made because the role of
uncertainty has been de-emphasized. In particular, the role of endogenous uncertainty has largely
been ignored in current real options studies - - [T]he value of real options lies in the enhanced
ability of the firm to cope with exogenous uncertainty (Kulatilaka, 1995: 91). Options to wait
and to expand implicitly assume that there is little endogenous uncertainty. For example,

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constructing an existing restaurant or plant may not involve much technological endogenous
uncertainty because decision makers can purchase the necessary knowledge to build the existing
restaurant or plant. The entrepreneurial opportunity, however, entails substantial endogenous
uncertainty such as developing new technologies and building new venture teams.
Second, most of these studies have not explicitly defined the real option being
investigated or its underlying asset. To accumulate knowledge on real options reasoning and
provide explicit managerial implications, explicit definitions are required. The underlying asset
is an asset with the same risks as the project (or asset) that the firm would own if the option were
exercised, that is, if the investment were made and the project completed (Teisberg, 1995:35).
For example, in the development of an oil field, the underlying asset is an identical, but already
developed oil field (Teisberg, 1995). In a technological positioning investment (a real option),
the future rent stream is the underlying asset of the real option (McGrath, 1997). While McGrath
(1996) defines business formation as a real option and economic return as its underlying asset in
the entrepreneurial process, further extension is required to enhance our understanding of the
entrepreneurial phenomenon through an options lens - - for example, when an entrepreneur
begins an entrepreneurial initiative (a real option), what does the entrepreneur expect or want to
obtain from the initiative? Is it the same for all entrepreneurs? Does it change as the
entrepreneur proceeds through the entrepreneurial process? We propose a model that
acknowledges the abovementioned limitations.
An Integrated Model of the Entrepreneurial Process
Following Garud, Kumaraswamy, and Nayyars (1998) suggestion that scholars must
first understand the context in which a real option occurs, we closely examine the entrepreneurial
process and identify its key elements, namely, uncertainty, honeymoon period, learning, and new

8
asset creation.


..
Insert Figure 1About Here
..

Our model of the entrepreneurial process is shown in Figure 1. We argue that the
entrepreneur begins the entrepreneurial process with a newly theorized opportunity. As
discussed above, entrepreneurs therefore face endogenous and exogenous uncertainties. The
level of these uncertainties depends on the nature of both the new opportunity and the founding
conditions. The initial psychological attachment and resource commitment of the entrepreneur
and founding members form the basis of a honeymoon - - a period where the entrepreneur
attempts to reduce uncertainty surrounding the viability of the new opportunity. This organizing
process resembles a real option because as the uncertainty embedded in the entrepreneurial
opportunity is resolved a new asset is created.
The entrepreneur utilizes various learning activities during the honeymoon period to
resolve uncertainty. Having created a new asset, the entrepreneur faces the question of whether
or not to proceed in building it into a rent generating business. Several internal and external
factors, such as the entrepreneurs ability and the condition of the strategic factor market for new
assets, will influence the economic return of different option decisions. The entrepreneurs could
sell the new asset and exit the entrepreneurial process or reenter with a new or related
opportunity. For both these cases the real option is related to a put. On the other hand, if the
entrepreneur decides to further build up the new asset by remaining in the entrepreneurial
process, he/she exercises a call option. In this case the entrepreneur faces another type of

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uncertainty that can be resolved through learning which leads to the creation of a different asset.
2

This entrepreneurial process forms a path-dependent chain of real options (c.f., Bowman &
Hurry, 1993; McGrath, 1996). To make our real options reasoning explicit, a direct analogy of
the honeymoon to an option contract is presented in the Table 2. Specifically, the greater the
volatility of the underlying asset, the greater the option value. We further argue that the learning
ability of the entrepreneur influences option value by increasing or decreasing the chance that the
entrepreneur can obtain the underlying assets. We now elaborate on each element of the model
and offer a series of propositions.

Insert Table 2 About Here


ENTREPRENEURIAL OPPORTUNTY AND UNCERTAINTY
Entrepreneurial Opportunity
Entrepreneurial opportunities are those opportunities to bring into existence future goods
and services rather than producing existing goods and services (Kirzner, 1997; Shane &
Venkataraman, 2000). The sources of entrepreneurial opportunities include technological change
(Schumpeter, 1934), inefficiencies within existing market, the emergence of significant changes
in social, political, demographic, and economic forces, and inventions and discoveries (Drucker,
1985). These entrepreneurial opportunities exist, because different members of society have
different beliefs about the value of resources (Barney, 1986; Casson, 1982; Kirzner, 1997; Shane
& Venkataraman, 2000). Moreover, even in the case of holding the same beliefs, they may differ
in preferences on the way to obtain value from these opportunities. Entrepreneurs are individuals

2
We discuss the detail nature of this process (i.e., sequential vs. simultaneous) in the discussion section.

10
that pursue entrepreneurial rents (Rumelt, 1987) - - entrepreneurial rents are defined as the
difference between a ventures ex post value (or payment stream) and the ex ante cost (or value)
of the resources combined to form the venture(Rumelt, 1987: 143). Therefore, we can assert
that entrepreneurial opportunities are those cause-and-effect relationships believed to lead to
value creation based on the entrepreneurs theorization on the unproven (c.f., Block &
MacMillan, 1985; McGrath, 1999). Theorizing on these future cause-and-effect relationships
involves inevitable assumptions that lead to various types of uncertainties.
Dimensions of Uncertainty in the Entrepreneurial Process
Uncertainty, according to Knight (1921), refers to situations where an individual is
unable to calculate probabilities on the basis of an objective classification of outcomes. More
generally, uncertainty is defined as an individuals perceived inability to predict something
accurately (Milliken, 1987: 136). Even though entrepreneurs might be optimistic about the
future, they are uncertain about something, for example, sufficient demand, successful
development of proprietary technology, harmony with other founders, and an advantageous
position in the industry (Christensen, Suarez, & Utterback, 1998; Tegarden, Hatfield, & Echols,
1999; Wernerfelt & Karnani, 1987). Uncertainties are classified as either endogenous or
exogenous (Dixit & Pindyck, 1994; Folta, 1998; McGrath, 1997; Williamson, 1985). In this
study, we further classify uncertainties into technological endogenous, organizational
endogenous, quasi exogenous, and pure exogenous uncertainties, as shown in Table 3.
..
Insert Table 3 About Here
..
Endogenous uncertainty is largely affected by firm actions (Folta, 1998) and can be
represented by technological and organizational uncertainty. Technological endogenous

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uncertainty is related to the realization of the theorized technological promises. Dixit and
Pindyck (1994) referred to technological uncertainty to indicate the likely costs and probabilities
of accomplishing technical success. Organizational endogenous uncertainty is related to the
realization of organizational routines and a sustainable venture team. As Stinchcombe (1965)
mentioned, the likelihood of shirking and the need for metering would be particularly immense
during the early periods of the entrepreneurial process due to unfamiliar roles and new work
relationships. The new roles and new work relationships indicate that new ventures lack
accountability of organizational actions, which refers to the firms ability to document how
resources have been used and to reconstruct the sequences of organizational decisions, rules, and
actions that produced particular outcomes (Hannan & Carroll, 1995; Hannan & Freeman, 1984).
Moreover, scholars proposing the theory of the firm recognize organizational endogenous
uncertainty as a fundamental issue that firms must face and deal with. Alchian and Demsetz
(1972) view the firm as a team production system with two critical organizing tasks - - metering
input productivity and metering rewards - - which are designed to reduce an incentive to shirk.
Transaction cost economics recognizes that uncertainty may arise from endogenous sources such
as adverse selection, moral hazard, or performance ambiguity (Williamson, 1985).
Exogenous uncertainty is largely unaffected by firm actions and is predominantly
resolved over time (Folta, 1998: 1011). Exogenous uncertainty - - such as uncertainties in
input cost (Dixit & Pindyck, 1994), technological trajectory (Folta, 1998; Wernerfelt &
Karnani, 1987), demand (Wernerfelt & Karnani, 1987), industry infrastructure and legislation,
and competitive environments - - do not appear to be identical in the means by which they are
resolved. Thus we distinguish two types of exogenous uncertainty. Quasi exogenous uncertainty
can be resolved by the ventures external collective and/or relational activities and its

12
investments i.e., it is largely not affected by the new ventures investments in internal areas, but
can be resolved by either external joint activities among firms, communities, and industries over
time, or the firms special investment in external areas (McGrath, 1997). Pure exogenous
uncertainty is primarily resolved by the passage of time (c.f., Achrol, Reve, & Stern, 1983). In
most cases, the entrepreneur or collective activities cannot influence the entire social, economic,
or technological trends. Moreover, there exist some unexpected changes and events in the
environment, which are not included in the expected future consideration sets of entrepreneurs.
These pure exogenous uncertainties are almost impossible to control or influence ex ante (e.g.,
Folta, 1998).
We argue that the entrepreneurial process involves honeymoon periods that are used to
resolve each of the above uncertainties. We now detail the honeymoon phenomenon and the
entrepreneurs real options reasoning.
HONEYMOON PERIOD FOR UNCERTAINTY REDUCTION
According to Merriam-Webster Collegiate Dictionary, the term honeymoon was coined
from the idea that the first month of marriage is the sweetest. A secondary meaning of
honeymoon is a period of unusual harmony especially following the establishment of a new
relationship. The honeymoon has been observed in the dynamics of various relational formations
at several levels of analysis, e.g., individual-individual as in marriage (Diekmann & Mitter,
1984; Ferriss, 1970), individual-organization as in job match (March & March, 1978), inter-
organizations as in auditor-client (Levinthal & Fichman, 1988), or in organization building such
as new firm formations and dissolutions (Brderl & Schssler, 1990; Fichman & Levinthal,
1991). Levinthal and Fichman (1988) capture reasons for the honeymoon observed in various

13
contexts: [A]ll relationships start with some initial capital of favorable prior beliefs, trust,
goodwill, financial resources, or psychological commitment. The fact that a relationship has been
initiated usually indicates that the participants must have some optimism about its viability
(366).
Recognizing that both the honeymoon and the entrepreneurial process involve beliefs,
theorization, and uncertainty, we propose that the honeymoon is an essential element of the
entrepreneurial process. Entrepreneurs make their initial commitment to the new opportunitys
value creation based on idiosyncratic beliefs and assumptions. These beliefs and assumptions
will be tested during the entrepreneurial process. We propose that entrepreneurs and
participants unique conjectures and optimism about the viability of entrepreneurial opportunities
(Shane & Venkataraman, 2000) forms the basis of a honeymoon in the entrepreneurial process.
Though useful, the honeymoon literature in organization fields appear to ignore a fundamental
reason for the existence of the honeymoon -- the presence of uncertainty in the process of
relational formations. In client-auditor relationships, for instance, client companies are uncertain
about a new auditors judgment quality on important issues influencing firm values (such as the
going-concern opinion) (Louwers, 1998). Employers are uncertain about applicants productivity
and employment match (Simon & Warner, 1992). Potential employees are also uncertain about
the match between their career development and the employers human resource management
policy. Entrepreneurs and stakeholders are uncertain about the viability of new opportunities
(Brderl & Schssler, 1990). If little uncertainty exists, there is no reason to make a confined
investment or commitment in the relationship formation and no reason to explore its viability. As
a result, we define the honeymoon in the entrepreneurial process as the time the new venture is
permitted by the participants (entrepreneur and stakeholders) to resolve uncertainty in the

14
theorized opportunity (thus creating new assets) or until the participants resources and
commitments are depleted. Therefore, the presence of uncertainty is necessary to warrant a
honeymoon. As defined in the previous section, four types of uncertainty embedded in the new
opportunity will lead the entrepreneur to form a honeymoon that corresponds to a type of
uncertainty.
3

From the option contract perspective, this relationship indicates that the entrepreneur can
create multiple options in the entrepreneurial process and as a result s/he can minimize the
downside risk while maintaining the upside potential. Thus,
Proposition 1a: In the entrepreneurial process there exist multiple honeymoons (a chain
of options), each corresponding to a type of uncertainty (technological endogenous,
organizational endogenous, quasi exogenous, and pure exogenous), until a rent
generating business has been created or until resources have been depleted.
Proposition 1b: Those entrepreneurs that manage the entrepreneurial process through
its multiple honeymoons (a chain of options or sub-entrepreneurial processes) are better
able to reduce possible losses than those who do not.
An entrepreneur may face less uncertainty in one dimension than in other dimensions.
For example, the new venture team that has extensive prior joint work experience (thus high
trustworthiness and shared value among team members) may face a lower organizational
endogenous uncertainty and thus, the team may need a shorter honeymoon period to reduce that
uncertainty. We argue that the length of the honeymoon permitted for the resolution of a
particular type of uncertainty is positively related to the level of that uncertainty embedded in the

3
The presence of the four uncertainties depends on the nature of new opportunities.

15
new opportunity. From the option contract perspective, this relationship indicates that the
entrepreneur and stakeholders should expect a longer honeymoon period (longer expiration date)
and a higher option price (in the form of opportunity cost), for an opportunity with a higher
uncertainty. Thus,
Proposition 1c: The higher the uncertainty of a particular type, the longer the
corresponding honeymoon period (option expiration) and thus the higher the opportunity
cost (option price) for the corresponding new asset.
While the new venture invests its resources in the development of technical functions of
the new opportunity, they can also engage in other activities to the other uncertainties. For
example, as a necessary step for product development the entrepreneur can work with lead
customers, suppliers, and distributors. This will reduce some portion of quasi exogenous
uncertainty. Moreover, organizational endogenous uncertainty (routines and team building) can
also be reduced while they repeat product/technology development activities. Pure exogenous
uncertainty reduces as time passes. That is, there might be an overlap between the honeymoons
in the entrepreneurial process, as shown in Figure 1.
4
Due to the overlap nature of the
honeymoons for different uncertainties, the total length of the honeymoons (total options price)
will be smaller than the sum of each honeymoon (sum of each option price). Thus,
Proposition 1d: The entrepreneur who goes through the whole entrepreneurial process
using a chain of real options (honeymoons) will pay less option price than other
entrepreneurs who repeat the same type of option (honeymoon) for different
opportunities.

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NEW ASSETS CREATION FROM UNCERTAINTY REDUCTION
Why is it so important that the entrepreneur resolve the uncertainties surrounding a new
opportunity and its potential returns? Institutional theory and population ecology suggest that
stakeholders favor certain and reliable organizational results (e.g., Hannan & Freeman, 1984).
From the entrepreneurship perspective, we suggest that in resolving corresponding uncertainties
embedded in the entrepreneurial opportunity the entrepreneur generates new assets - - assets that
had not previously existed. To understand the nature of the new asset, we first briefly review
literature related to assets and resources in strategic management, and then we articulate the
types of new assets that can be created and their strategic implications.
Resources, Factors and Assets in Strategic Management
Resource-based view explains above normal economic performance of the firm through
the notions of firm resources - - resources, strategic factors, or strategic assets. These notions are
interlaced. In general, resources refer to a source of supply or support or an available means
(Merriam-Webster Dictionary). Similarly, Amit and Schoemaker (1993) defined resources as
stocks of available factors that are owned or controlled by the firm and these resources include
know-how that can be traded (e.g., patents and license), financial or physical assets (e.g.,
property, plant and equipment), and human capital. Resource-based view scholars are interested
in particular types of resources that are insisted to bring firms above normal economic
performance - - resources that are rare (not widely held), valuable (contribute to firm efficiency
and effectiveness), not substitutable (other resources cannot fulfill the same function), not

4
The possible patterns of the honeymoon seem to largely rely on both the nature of the new opportunity and
founding conditions. We focus here on the entrepreneurial opportunities as such defined in Venkataramans (1997)
strong premise of entrepreneurship, and independent start-ups.

17
imitable (not easily replicated by competitors), and/or not transferable (cannot be purchased in
resource markets) (Barney, 1991; Priem & Butler, 2001).
Such resources are equivalent to the notion of strategic assets, since strategic assets are
defined as the set of firm-specific resources and capabilities that are difficult to trade and imitate,
scarce, appropriable and specialized (Amit & Schoemaker, 1993; Dierickx & Cool, 1989).
Unlike strategic assets, strategic factors in this study can be defined as resources that rare,
valuable, but tradable and not bundled, since these factors are necessary resources to implement
strategy and one can purchase them in the strategic factor market (Barney, 1986). Dierickx and
Cool (1989) argue that [F]irms may of course acquire imperfect substitutes for the desired
strategic input factor(s) and adapt them, at a cost to the specific use it intends. General
labor is rented in the market; firm-specific skills, knowledge and values are accumulated
through on the job learning and training (1505). That is, valuable labor forces can be considered
as a strategic factor, while the same labor force bundled with other human resources and
embodied in the firm can be considered as a strategic asset. We now discuss each type of new
asset created through uncertainty reduction in the entrepreneurial process, in which we
characterizes each asset with properties of resources.
5

Creating Strategic Technological Assets
We argue that as technological endogenous uncertainty around a new opportunity is
reduced during the honeymoon period, entrepreneurs create new assets. Since the entrepreneur
creates the new asset by reducing technological endogenous uncertainty of the new opportunity,
the new asset is rare. Moreover, it is valuable, since it makes the new opportunity viable

18
(through increased efficiency and/or effectiveness) by providing functions for the new
opportunity. The new technological asset may lack some necessary characteristics of a strategic
asset, for instance, they may be not bundled with other firm resources so that they are not firm-
specific and are subject to imitation. That is, the new asset likely lacks asset mass efficiencies
(e.g., the advantage of network externalities), and interconnectedness of asset stocks (e.g.,
necessity of complementary assets and infrastructure) (Dierickx & Cool, 1989). Furthermore, in
the early development of the new opportunity, industry strategic factors (i.e., industry key
success factors) have not likely been defined yet.
The new technological asset arising from the reduction in technological endogenous
uncertainty is insufficient to produce above normal economic profits in the future, if there exist
other types of uncertainty. It requires further development with complementary assets and the
reduction of exogenous uncertainty. For example, a new-to-the-industry Web system that
incorporates both 3D display of fashion items and online supply-distribution procurements
represents a new technological asset but uncertainties in market demand and dominant design
competition hamper an accurate assessment of the new assets value. The entrepreneur may be
able to build on the asset with other resources purchased in the strategic factor market or
accumulated internally to create a new strategic asset (Amit & Schoemaker, 1993; Dierickx &
Cool, 1989). The new strategic asset could then be sold in the technology factor market.
Proposition 2a: The new technological asset created from the reduction of
technological endogenous uncertainty is a rare and valuable resource; it is either

5
Even though we use the term asset for the outcome of uncertainty reduction in this article, it does not mean
the notion of strategic asset defined in Amit and Schoemaker (1993). Instead, we characterize the new assets with
the properties of resources.

19
sellable in the technology factor market or further bundled with other resources moving
closer toward a rent generating new business.
Proposition 2b: The greater the volatility of the value of the new technological asset in
the technology factor market, the higher the honeymoon (real option) value for reducing
technological endogenous uncertainty.
Creating Strategic Organizational Assets
Resolving organizational endogenous uncertainty (e.g., shirking, metering input
productivity and rewards, and adverse selection) enhances confidence between the entrepreneur
and key founding members creating a set of cohesive human assets. These cohesive human
assets will share values, knowledge, and skills about business operations and strategy. They
know how to get along, communicate with each other, and have knowledge about each others
idiosyncrasies and strengths (Eisenhardt & Schoonhoven, 1990). They are a cohesive team.
More cohesive teams have greater commitment to the organization (e.g., Mathieu & Zajac, 1990;
Podsakoff, MacKenzie, & Bommer, 1996), which may help sustain an extended honeymoon.
The honeymoon provides a safe period for the new venture to create routines. Several
scholars have proposed that the reliability of an organization depends on the extent to which the
organization builds routines, as the routines represent the memorized (institutionalized)
knowledge of the organization (Nelson & Winter, 1982). Based on this relationship, scholars
have also proposed that the shared knowledge embedded within an organizations systems
represent the core capabilities of highly experienced teams and highly-reliable organizations
(e.g., Araujo, 1998; Nahapiet & Ghoshal, 1998).
6
Thus, routines increase accountability and

6
Once these routines are created they are not necessarily permanent -- changes that render an organization's
accumulated skills, roles, and routines obsolete, or upset its exchange relationships with the environment, can


20
trust among the stakeholders of the new venture. The new organizational asset is rare, since
forming an accountable new venture and building trust among team members are difficult (c.f.,
Stinchcombe, 1965). The asset is also valuable, since it is related to efficient and effective
collective actions (Araujo, 1998). The asset is difficult to trade and difficult for competitors to
imitate because it is deeply rooted in the new ventures history.
Proposition 2c: The new organizational asset created from the reduction of
organizational endogenous uncertainty is rare, valuable, and a substantially bundled
resource; it is positively related to a cohesive entrepreneurial team and an accountable
new venture.
Proposition 2d: The greater the volatility of the value of the cohesive entrepreneurial
team and accountable new venture in the IPO (Initial Public Offering) or trade sale
market, the higher the honeymoon (real option) value for reducing organizational
endogenous uncertainty.
Creating Strategic Complementary Assets
In the presence of quasi exogenous uncertainty, it is difficult to accurately assess the
ability of strategic technological assets to generate above normal economic profits in the future
The strategic technology assets, created from the reduction of technological endogenous
uncertainty, are rare and valuable resources. However, they are by themselves not sufficient to
prove the new opportunitys viability in the market and thus unable to generate continuous above
normal profits. For example, only with the strategic technological assets, the entrepreneur will
find it difficult to eliminate market skepticism regarding the newness of the opportunity; the

reduce its reliability of performance thereby increasing mortality risk (Amburgey, Kelly, & Barnett, 1993; Hannan
& Freeman, 1984).

21
strategic assets may be contradictory to current technological standards and/or legal regulations.
The new technological assets may need infrastructure or complementary assets to convey its
value to customers, which externally legitimizes the new technological assets.
To do so, the entrepreneur may make investments in shifting boundary conditions such as
regulations and environmental constraints, as argued by McGrath (1997) and engage in co-
evolutionary activities (e.g., Aldrich, 1999; Garud, Kumaraswamy, & Nayyar, 1998) - - joint
activities of new firms, communities, and related industries can increase the legitimacy of new
activities and facilitate infrastructure developments (e.g., Lewin & Volberda, 1999; Van de Ven
& Grazman, 1999). Uncertainty surrounding potential suppliers and users support, determines,
in part, the value of the new technological assets. The strategic complementary assets provide the
new venture a value chain through which economic profits can accrue. Thus,
Proposition 2e: The new complementary asset created from the reduction of quasi
exogenous uncertainty is rare, valuable, and a substantially bundled resource; it
completes the value chain for the new opportunity.
Proposition 2f: The greater the volatility of the value of the complementary assets in the
value chain, the higher the honeymoon (real option) value for reducing quasi exogenous
uncertainty.
UNCERTAINTY REDUCTION THROUGH LEARNING
Our next investigation is on both how the new venture reduces the uncertainty and how
real options reasoning is involved in the uncertainty reduction method. Entrepreneurs decrease
uncertainty through learning (Huber, 1991; Miller, 1996). Miller (1996) distinguishes six modes
of learning including analytical, synthetic, experimental, interactive, structural, and instrumental
learning. Miller (1996) argues that these modes produce disparate outcomes and must occur in

22
distinctive contexts. Since structural and instrumental learning are based on established routines
and organizational ritual, these types of learning seem less applicable to the entrepreneurial
process. Analytical learning refers to learning through a systematic rational analysis. Synthetic
learning refers to a less systematic but more emergent, intuitive and holistic model of learning,
compared to analytical learning. Experimental learning refers to an intendedly rational learning
through performing small experiments and monitoring the results (Quinn, 1980). Interactive
learning refers to learning by bargaining and trading with internal members and with external
stakeholders (Cohen, March, & Olsen, 1972).
Technological Endogenous Uncertainty and Experimental Learning
Entrepreneurs will benefit from a reduction in technological uncertainty because in doing
so they can create new assets that will be the basis of quality products or services and maybe for
negotiation with investors. This reduction in technological endogenous uncertainty may best be
achieved by learning, investment, and doing (Folta, 1998; McGrath, 1997). Since reducing
technological endogenous uncertainty requires analytical activities, both analytical and
experimental types of learning have potential to reduce this uncertainty. Synthetic and interactive
learning rely on subtle emergent and normative values (Miller, 1996), which are inappropriate
for reducing technological endogenous uncertainty.
Analytical learning is best conceptualized as a scientific and engineering type of learning,
which will create technological knowledge needed to reduce functional uncertainties embedded
in the new products or services. Although analytical learning is well suited to creating
knowledge, entrepreneurs may need to do experimental learning activities in order to materialize
working products or services, since new ventures are bounded by intellectual, temporal, and
economic constraints (Grandori, 1984; Miller, 1996). Learning scholars suggest that

23
experimental learning overcomes such organizational constraints (March & Simon, 1958; Quinn,
1980) and increases the accuracy of feedback about cause-effect relationships between
organizational actions and outcomes (c.f., Warner, 1984; Wildavsky, 1972). For example,
technological endogenous uncertainty can be reduced, and reliability of products and services
enhanced, when entrepreneurs change and modify their original ideas in responding to new
information about its potential viability. This experimental learning by individuals in the
entrepreneurial process appears more important than analytical learning, since the technological
validity of the unproven cause-and-effect relationships will be defined largely by the market.
Thus,
Proposition 3a: Experimental learning is more effective than other forms of learning in
reducing technological endogenous uncertainty. Thus, the more experimental learning
during the entrepreneurial process, the greater the reduction in technological
endogenous uncertainty.
Organizational Endogenous Uncertainty and Internal Interactive Learning
Creating a new business entity is accomplished by multiple actors. To reduce
organizational endogenous uncertainty in this context, team members should be linked through
communication and an authority structure. They also learn from other members of the team if
they have been socialized to organizational beliefs (mutual learning) (March, 1991). By
conducting joint venture creation activities and learning, team members create routines (Cohen
& Bacdayan, 1994). These routines encourage the continuation of joint activities, which
increases accountability and trust among the stakeholders of the new venture.
We argue that building organizational routines relies on interactive learning. Miller
(1996) states that [L]ike experimentation, interactive learning involves learning-by-doing,

24
which occurs simultaneously in many parts of an organization (493). Since it is difficult to
systematically experiment with organizational practices and confidence building activities,
experimental learning is rather limited. Instead, interactive learning that happens in a more
emergent and implicit way by bargaining and trading with each other (Cohen, March, & Olson,
1972) will be more effective in informal confidence building. Thus,
Proposition 3b: Interactive learning is more effective than other forms of learning for
reducing organizational endogenous uncertainty. Thus, the more the interactive learning
among team members during the entrepreneurial process, the greater the reduction in
organizational endogenous uncertainty.
Quasi Exogenous Uncertainty and External Interactive Learning
While experimentation may generate information on exogenous uncertainty (for example,
a pilot market test may reveal an aspect of uncertain customer preferences), it does not reduce it.
Entrepreneurs appear to reduce quasi exogenous uncertainty through investments in shifting
boundary conditions (e.g., McGrath, 1997) and co-evolutionary activities (e.g., Aldrich, 1999;
Lewin & Volberda, 1999; Van de Ven & Grazman, 1999). Since reducing quasi exogenous
uncertainty involves mostly collective (at least with one external agent)

or political activities
7
,
entrepreneurs should be able to perform collective and interactive learning with stakeholders or
other firms in the value chain of the new opportunity (see Miller, 1996). For example, Rosenkopf
and Nerkar (1999) suggest that in a product hierarchy -- consisting of component-specific
communities, firms manufacturing the product, and system-level community -- simultaneous
processes of variation, selection and retention operate and interact at each of these three levels.

7
In political science, collective action refers to the collaboration and cooperation of two or more individuals or
firms in the policy process e.g., a trade association of firms lobbying political decision makers (Olson, 1965).

25
As the entrepreneur attracts and negotiates with component suppliers and system users, this
uncertainty decreases. In this kind of coevolutionary process, it is essential for a participating
new venture to build more realistic collaborations through negotiation and exchange. Thus,
Proposition 3c: Interactive learning with outside stakeholders is more effective than
other forms of learning for reducing quasi exogenous uncertainty. Thus, the more the
interactive learning with outside stakeholders during the entrepreneurial process, the
greater the reduction of quasi exogenous uncertainty.
Pure Exogenous Uncertainty and Environmental Scanning
Strictly speaking, the only way to resolve pure exogenous uncertainty is to wait and
gather information on environmental changes. Even though entrepreneurs are unable to directly
influence the reduction of pure exogenous uncertainty, they may adopt environmental scanning
activities to collect relevant information. The ability to engage in wide-ranging environmental
scanning produces information on pure exogenous events and contributes to learning through
interpretation (Daft & Weick, 1984; Huber, 1991), and better decisions (c.f., Daft, Sormunen, &
Parks, 1988).
Proposition 3d: Environmental scanning is more effective than other forms of learning
for collecting information on pure exogenous uncertainty. Thus, the more the
environmental scanning during the entrepreneurial process, the greater the information
on pure exogenous events.
Learning Ability and Option Exercise Decisions
According to our model, shown in Figure 1, the entrepreneur and founding team may
make three transitional option exercise decisions before they have established a rent generating
business. One of the purposes of this article is to explain different evolution paths of the new

26
venture through an options lens. Since the entrepreneurial process can be depicted as a process of
creating new assets, we draw on Barney (1986) who argues that in the investigation of potential
sources of above normal economic profits the tradeability or nontradeability of assets is a
nonissue - - the real issue is comparing the total costs of developing (or purchasing) assets with
the value they create. How does the entrepreneur make his/her assessment of the costs and
benefits of an asset? Is it luck, belief, superior expectation or private information? Hayek (1945)
asserts that asymmetrical distribution of knowledge among people leads them to different
economic behaviors. Following Hayeks (1945) assertion, we suggest that the new ventures
learning ability influences their option exercise decisions and thus different evolution paths of
the new venture. This is because in the presence of an ability to learn and reduce endogenous
(and/or quasi exogenous) uncertainty will influence the likelihood of obtaining the underlying
asset. In fact, we believe that entrepreneurs decisions are influenced by the economic valuation
of their new ventures learning abilities in a particular option exercise decision.
Specifically, after a new venture has created new technological assets, there will likely be
tension among new venture team members over problems association with metering and
institutionalizing rules. Thus, the most urgent task of the new venture is to engage in building
both a cohesive entrepreneurial team and organizational routines. If the new venture possesses
greater experimental learning ability in reducing technological uncertainty than in internal
interactive learning ability, more value will be produced by repeating the first sub-
entrepreneurial process than by moving forward to the incompetent learning area. By the same
logic, if a new venture lacks competence in external interactive learning, there is a lower
expectation in their ability to create the new complementary assets that are necessary for the
completion of the value chain for the new opportunity. In such a situation, a put option is more

27
economically reasonable for the new venture. In this aspect, the composition of the new venture
team seems to influence its interactive learning ability. Thus,
Proposition 3e: The learning ability of the new venture will positively influence the
likelihood of the transition to the next sub-entrepreneurial process by influencing its expectation
on new asset creation.
DISCUSSION AND CONCLUSION
Implications for Entrepreneurship Research
In this article, we developed a model of the entrepreneurial process that explicitly
incorporates uncertainty and the entrepreneurs decision making. That is, the entrepreneurial
process is viewed as a nexus of uncertainty, learning, and value creation, in which real options
reasoning can be used to manage the process. Our model of a chain of real options provides a
way to better understand firm evolution in its earliest phases: Entrepreneurs resolve an
uncertainty and create an underlying asset. This way of organizing the entrepreneurial process
minimizes the downside risk, while maintaining the same upside potential for the new
opportunity.
With the extended classification of uncertainty including organizational endogenous and
quasi exogenous uncertainties, the entrepreneurial process model provides a parsimonious view
to enhance our understanding of the entrepreneurial process. As an important outcome of the
entrepreneurial process, various types of value creation are articulated. We suggested three value
creation intermediaries - - new strategic technological assets, organizational assets,
complementary assets, and the creation of a rent generating business. We also argued that these
assets are direct result of reducing uncertainty that is embedded in the entrepreneurial
opportunity, which is an extension of Rumelts (1987) assertion that entrepreneurial rents stem

28
from ex ante uncertainty. These value creation intermediaries - - underlying assets of
honeymoons - - are new assets both for entrepreneurs and society. The entrepreneur can sell
these new assets or use them to create a business entity that generates above normal returns.
Another important contribution of this article is the incorporation of the honeymoon
phenomenon as part of the entrepreneurial process. Scholars of entrepreneurship tend to agree
that entrepreneurs initiate disequilibrium in the market, in the sense of discovery of opportunity,
reallocation of resources, and creation of change (Kirzner, 1997; Minniti & Bygrave, 1999;
Schumpeter, 1934; Shane & Venkataraman, 2000; c.f., Sarasvathy, 1999). The presence of the
honeymoon implies that within the context of disequilibrium initiatives and thus high uncertainty,
entrepreneurs may attempt to be rational by organizing the entrepreneurial process with
honeymoons, following real options reasoning.
Implications for Managerial Real Options Research
Our real options model of the entrepreneurial process has made a number of contributions
over and above previous real options studies in management fields. We identified gaps in the real
options literature - - the role of endogenous uncertainty and learning in generating and exercising
real options has been largely ignored in the literature. The present study suggested a way to fill
these gaps by illustrating, for example, how technological endogenous uncertainty motivates the
entrepreneur use a honeymoon (a real option) for new technological assets (underlying assets).
Learning activities reduce uncertainty necessary to develop the underlying assets.
This approach is considered a response to recent debates on real options theorizing in
management. Garud, Kumaraswamy, and Nayyar (1998) suggest that the real options approach
should embrace the aspects of coevolutionary dynamics (simultaneously rather than sequentially)
and examine the context in which real options occur. The model in this article supports both

29
simultaneous and sequential aspects of a technology real option. A technological real option
possesses a simultaneous coevolutionary dynamics in that multiple uncertainties are involved
from the beginning of the real option and there might be some overlap among corresponding
honeymoons. The technological real option, on the other hand, possesses a sequential
progression in that decision makers may need to resolve a salient uncertainty at a specific point
in time.
Also, Bettis (1994) proposes that real options scholars need to pay more attention to the
organizational process in the creation and use of options rather than a specific option itself. We
further argued that the honeymoon is an organizing process for entrepreneurship and acts as a
real option. Responding to Bettis suggestion, we proposed a model that helps explain how new
ventures can differ in their honeymoons (real options) for new assets and the organizational
factors (e.g., learning ability in this article) that influence the firms ability to do so. His
emphasis on capability and resources is extended with our arguments on learning. We focused on
the ongoing process of resource and capability development rather than the allocation of existing
resource or capability.
There exist issues around our real options approach to the entrepreneurial process, which
are beyond the scope of the present article but are worthy of future research. First, it is important
to investigate the distinctive patterns of various uncertainties throughout the entrepreneurial
process. The patterns will be influenced by founding factors such as the composition of the
founding team and level of newness of both the technology and market. The next question will
be in what order should entrepreneurs reduce different uncertainties. Should the entrepreneur
reduce technological endogenous uncertainty first before organizational endogenous or quasi
exogenous uncertainty? Does the differing order of uncertainty reduction impact the path of new

30
venture evolution and the ability to create value? To further investigate this issue, one may draw
on the decision-making literature and/or investigate empirically the patterns of uncertainty
resolution. Finally, scholarly attention needs to also focus on the timing and content of option
exercise decisions within the entrepreneurial process with emphasis on environmental and
individual factors that influence the entrepreneurs decision (e.g., nature of opportunity,
perception on mortality risk, and psychological attachments). This could be tested using a think
aloud procedure and/or conjoint analysis based on hypothetical scenarios.
Conclusion
In this article we developed a theoretical model to view the entrepreneurial process as a
path-dependent chain of real options incorporating uncertainty and an entrepreneurs decision
making. By doing so, this article addresses previously unanswered questions on the
entrepreneurial process and value creation. Moreover, this article extends the real options
literature in management by articulating the roles of various uncertainties and learning in
entrepreneurs real options reasoning and by showing a way that an organizing process such as
the honeymoon can be considered real options.

31
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36
TABLE 1
Summary of Studies Adopting Real Options Reasoning in Management
Authors
(Year)
Application
Fields
Real Options Underlying Assets Related Uncertainties
Sanchez
(1993)
Strategic
management
Resources and capabilities Learning and revenues
(from new products)
Exogenous uncertainty
Kogut &
Kulatilaka
(1994)
Strategic
management
Platform investment in new
capabilities, including new
technologies,
organizational capabilities,
and joint venture, flexible
manufacturing system,
country platform
Not explicitly mentioned Exogenous uncertainty
Bowman &
Hurry
(1993)
Strategic
management
Strategy, a process of
organizational resource-
investment choices
Not explicitly mentioned
(exploitation of the
opportunity)
Environmental uncertainty
(Exogenous)
Folta
(1998)
Strategic
management
Governance choices (equity
R&D collaboration & JV)
Technology acquisition Emphasize exogenous
uncertainty & mention
endogenous uncertainty
McGrath
(1996)
Entrepreneur-
ship
Entrepreneurs resources as
shadow option; business
formation as real option
Wealth creation External uncertainty
(exogenous) & technical
uncertainty (endogenous)
McGrath
(1999)
Entrepreneur-
ship
Entrepreneurial initiatives Wealth creation Not explicitly mention
Hurry,
Miller, &
Bowman
(1992)
Strategy &
Technology
management
Japan VCs' Investment New technology Not explicitly mention
McGrath
(1997)
Technology
management
Technology positioning
investment
Rent stream Recognize three types of
uncertainties (technical,
input cost, and boundary
conditions) and emphasize
the value of shifting
boundary conditions
(exogenous uncertainty)
Hurry
(1994)
Strategy &
International
business
Four shadow options
(entry, exit,
global/integration,
flexibility)
Not explicitly mentioned Exogenous uncertainty

37
TABLE 2
An Explicit Analogy of the Honeymoon to a Call Option Contract
Elements of a Call Option Contract Corresponding Elements of the Honeymoon
1. A call option 1. Forming the honeymoon
2. An underlying asset (a share of stock)
2. A new asset (ultimately a rent generating
business entity)
3. Premium (option price) 3. Opportunity cost of forming the honeymoon
4. Exercise price (buying price of the stock)
4. Expense paid for maintaining the honeymoon,
including investments
5. Expiration date 5. The honeymoon length


38
TABLE 3
Dimensions of Uncertainty and Related New Assets
Technological
Endogenous
Uncertainty
Organizational
Endogenous
Uncertainty
Quasi-Exogenous
Uncertainty
Pure Exogenous
Uncertainty
Related
Studies
Dixit & Pindyck
(1994), Folta (1998)
Alchian & Demsetz
(1972), Hannan &
Freeman (1984),
Stinchcombe (1965),
Williamson (1985)
McGrath (1997) Achrol (1991),
Achrol, Reve, & Stern
(1983), Folta (1998),
Weiss & Heide
(1993), Wernerfelt &
Karnani (1987)
Definition One that is related to
technological
functioning of a new
opportunity and can
be resolved by the
new ventures internal
technological
activities
One that is related to
shirking, need for
metering, and
accountability of
organizational
actions, and can be
resolved by the new
venture members
internal managerial
activities
One that is related to
external factors affecting
the viability of the new
opportunity and can be
resolved by the new
ventures external
collective and/or relational
activities (e.g., , industry
infrastructure, regulation,
and particular
technological regime, etc.)
One that is related to
external factors
affecting the viability
of the new
opportunity and can
not be resolved by any
kinds of the new
ventures internal and
external activities
(e.g., demand, the
entire social,
economic, or
technological trends).
Learning
Methods
Experimental learning Internal interactive
learning
External interactive
learning
Environmental
scanning
New
Assets
New technological
strategic assets
Organizational
routines; a
sustainable
entrepreneurial team
Jointly possessed
complementary strategic
assets (dominant design;
complementary assets;
favorable legal
environment; all these
assets together make up a
value chain for the new
opportunity)
Rent generating new
business entity
Nature of
asset
Rare & valuable
resource (increase
technological
efficiency &
effectiveness)
Rare, valuable
(increase
organizational
efficiency and
effectiveness); &
substantially
bundled resource
Rare, valuable (increase
system level efficiency and
effectiveness); &
substantially bundled
resource
Rare, valuable, &
bundled resource


39
FIGURE 1
An Integrated Model for the Entrepreneurial Process: The Honeymoons as Real Options
Entrepreneurial Process (Time)
Pure exogenous uncertainty
Quasi exogenous uncertainty
Organizational endogenous uncertainty
Technological
endogenous uncertainty
Forming honeymoon Forming honeymoon Forming honeymoon Forming honeymoon
Engaging Learning Engaging Learning Engaging Learning Scanning environments
Creating New Assets Creating New Assets Creating New Assets
Rent generating
business entity
Real option
decision
making
Sell accumulated new assets & exit or restart
Real option
decision
making
Real option
decision
making
*
* Sub-entrepreneurial Process (Real options reasoning)
* * *