KEY CONCEPT
Based on a meta-analysis of academic publications, researchers identify two strategies and four tools that entrepreneurs can deploy to gain access to vital external resources.
IDEA SUMMARY
The greatest hurdle for entrepreneurial enterprises, especially in the early stages, is gaining access to the external resources required to launch and maintain the venture. After synthesizing the lessons from their meta-analysis of 76 articles in academic journals across various economic, sociological and psychological disciplines, a team of three researchers from the U.S. and Spain identified two overarching strategies that entrepreneurs can use to gain access to external resources:
- Projective strategies. Projective strategies entail providing potential resource providers — what the researchers call ‘resource gatekeepers’ — with a vision of the future of the venture. Many resource gatekeepers are sceptical of projections into the future, especially by enthusiastic entrepreneurs. However, projective strategies can succeed even if the entrepreneur simply places an element of doubt into gatekeepers’ heads (i.e., causing them to think, “This may not be successful… but what if it is?”). Once there’s at least a potential for great success in the minds of the gatekeepers, the ‘fear of missing out’ sentiment can do the rest.
- Interpersonal strategies. The goal here is to take deliberate actions grow and leverage personal contacts and networks. One key to success is the quality of the relationship, including a sense of trust, mutual obligation or reciprocity on the part of the resources gatekeeper.
The meta-analysis also revealed the four fundamental sets of tools that entrepreneurs can use to implement these two strategies.
- Words. The first set of tools involves communication, specifically what entrepreneurs say and how they say it. Effectively conveying a compelling, believable vision of the future through their words is an essential tool for a projective strategy. For example, the research shows the power of stories as well as metaphors and analogies in giving the venture legitimacy. Choosing the right words can also be vital in strengthening relationships with others in a variety of ways, such as highlighting personal similarities or even communicating the interest of others (thus indicating that the gatekeeper may want to invest to maintain the relationship with the entrepreneur).
- Actions. For productive strategies, actions send signals to resource gatekeepers about the future of the venture. For example, gatekeepers will be looking for actions that signal product quality and innovativeness. For interpersonal strategies, productive actions can include: deliberate networking with government officials, customers, suppliers, friends and social organizations; setting up repeated meetings with potential partners before attempting a formal partnership; sharing information, helping with problems, giving favours and other actions that generate obligations, trust, gratitude and friendship.
- Associations. Intuitively, words and actions will play a role in influencing resource gatekeeper. The third set of tools identified by the researchers from their analysis of the 76 research articles involves associations. For projective strategies, the research shows, entrepreneurs can boost their resource acquisition efforts by enlisting the support of reputable parties to give the venture credibility to potential resource gatekeepers. For interpersonal strategies, the focus is on strengthening the relationship with the gatekeepers themselves, for example through more frequent interactions or better relationships with referrers.
- Intangibles. The final set of tools at the disposition of entrepreneurs relates to the variety of soft assets, such as skills, capabilities and intellectual capital, that they can use to convince resource gatekeepers to support their ventures. The number of patents or the quality and reputation of key players in the venture can make the difference for projective strategies. For interpersonal strategies, entrepreneurs can overlook intangible assets such as a network of relationships created for other purposes but that can be leveraged for access to resources.
BUSINESS APPLICATION
Combining the two strategies with the four sets of tools to implement them yields eight different options for entrepreneurs seeking access to resources (from productive-words to interpersonal-intangibles). Of course, not all of the strategies and tools will be feasible or even relevant to all situations — or all entrepreneurs. For example, developing relationships with key venture capitalists and underwriters can help maximize an initial public offering. In this situation, a projective-associations strategy is the best approach: using a vision of the future to establish partnerships.
The process of gaining access to resources can be oversimplified: Isn’t it just a matter of having a good pitch? In reality, the wide variety of resource needs and situations and of entrepreneur attributes requires approaching the problem with as many options as possible. The “menu” of options created by this research helps organize all potential options into eight categories, offering a roadmap for practitioners seeking resources.
REFERENCES
Strategies and Tools for Entrepreneurial Resource Access: A Cross-disciplinary Review and Typology. Hans Rawhouser, Jaume Villanueva & Scott Newbert. International Journal of Management Reviews (April 2016).
