Toward a theory of the entrepreneurial process

This paper models the entrepreneurial process as both creation and discovery composed of an iterative two-step process where entrepreneurs create social networks based on subjective expectations about the future effectiveness of those networks, and then choose the innovation to pursue and map a search process to discover how to bring the innovation to fruition. Critical to this process is the mix of strong ties and weak ties that make up social networks and the ability to carry forward the social capital embodied in such networks. The tendency of long-existing entrepreneurs to be less innovative can be explained using this model.