Title: Do Actions Matter More than Resources?

A Signalling Theory Perspective on the

Technology Entrepreneurship Process
By: Ferran Giones and Francesc Miralles
Name: Muhammad Fiqri Rihyawan
Course Code: MM5014
Date: 5th July 2017

Article Overview:
The article is about how the entrepreneurs figure out how to change their thoughts into viable
business, paying little respect to their asset constraints and the many-sided quality and flow of
innovation exceptional settings. There are some set of point of view of how entrepreneur
unlocking their value proposition and make into something useful for their business. In this
article, there are explanation about the weight of actions that entrepreneur do will carry on the
technology process. There will be a set of theories about the technology entrepreneurship
process and the signalling theories. And both will be used to discussed on the case studies on
3 different technological venture. The results of this research are suggesting that entrepreneurs
strategically use market, technology, and social capital signalling to mitigate uncertainty and
advance in the technology entrepreneurship process. This research holds implications for
academic research on the integration of resource and demand-side views, as well as for
entrepreneurs and practitioners interested in understanding the impact of visible actions in the
early stages of a new technology-based venture.
This article is started with the technological entrepreneurship process which is divided into 2
processes. The first is opportunity exploration or identification and opportunity exploitation.
The opportunity exploration is about one side that the company do to create new things also to
create new capabilities. The activity example is search, variation, taking a risk,
experimentation, play with something new, flexibility, discovery, innovation. The
technological component in the entrepreneurial opportunity is observed to introduce additional
sources of uncertainty and complexity in the opportunity exploration; technology-based
entrepreneurs are often seen to strongly rely on interactions with stakeholders and other
external actors to make sense of the opportunity at hand.
For the opportunity exploitation is based on building on what the companies have.
Strengthening their business is one of the action. For example, is making more variety of the
products and creating more features of the products. Improving business to make more money
can also become the action in opportunity exploitation. Opportunity exploitation can also
become a refinement of the business, making a choice for the product, implementation, and
execution. These action is to be expected to have an incremental effect on improving the
performance.
Switching to signalling theory, it is a theory that interpret all the action that been done by some
venture into some signals that can conveys some of information whether its about the product
or the firm itself to the potential customers or to stakeholders. The signals can prevent some
asymmetric information that usually occur between the entrepreneur and its potential
customers. Because some customers are reluctant to consider a new and untested product from
an unknown new venture. Therefore, to reduce asymmetric information to the customers, some
signal is needed to convey some information regarding the product to the customers. So, it may
convince to the customer that our product is a quality product and it is ready to be
commercialized.
There is a case study in this reading about 3 new technological company by grouping some of
the activity conducted by the company into two technology entrepreneurship process. The first
is grouped into opportunity exploration or identification and second is opportunity exploitation.
Below is the table of the 3 new technological companies.

And below is the grouping table of activities and actions into a technological entrepreneurship
process.

From the case studies can be conclude that:

In opportunity exploration:
Market signals were useful to increase the legitimacy and credibility of the venture
Technology signals were used as credentials to access funding resources to sustain the
exploration activities
Social capital signals were used to gain access to relevant contacts and to demonstrate
legitimacy with institutions.
And in opportunity exploitation:
Market signals were used to accelerate first sales, making visible the confidence of the
entrepreneur in the long-term quality of its products and services.
Technology signals were seen to have a limited effect on sales, but still would be related to
an indirect effect on raising the profile of the venture and its ability to stay in the market in
the long run.
Social capital signals were mostly seen in relation to raising the team's legitimacy and
demonstrating their performance record.