Narratives in entrepreneurial ecosystems: drivers of effectuation versus causation

This paper introduces narratives in entrepreneurial ecosystems as drivers of effectuation vs. causation. Drawing on 43 interviews with successful players in Silicon Valley, Munich, and Singapore, we found ecosystem-specific narratives indicate what is common, appropriate, and successful in each ecosystem, and these narratives encourage either effectuation or causation. Our findings indicate that the narratives in the ecosystem in Silicon Valley facilitate effectuation, in Munich causation, and in Singapore a cautious balance of both. Our research suggests that narratives can explain mechanisms how ecosystems influence entrepreneurship: the national culture, market characteristics, available resources, and networks in an ecosystem spark ecosystem-specific narratives, which in turn shape tendencies towards effectuation and causation. Thereby, we introduce a new ecosystem-focused perspective on predictors of effectuation and causation. The ecosystems in Silicon Valley, Munich, and Singapore spark different narratives about entrepreneurship, which indicate what is common, appropriate, and successful in the ecosystem and in turn encourage different kinds of entrepreneurial approaches. We conducted 43 interviews with successful players in Silicon Valley, Munich, and Singapore. We found ecosystem-specific narratives indicate what is common, appropriate, and successful in an ecosystem and encourage different kinds of entrepreneurial behavior and decision-making. Those narratives seem to shape tendencies towards specific strategic logics. The narratives either encourage “effectuation” (i.e., when they focus on building partnerships and utilizing the networks, and when they encourage confidence and speed) or “causation” (i.e., when they focus on developing systematics and structured plans, and when they encourage harmony and conformity). Narratives in Silicon Valley seem to facilitate effectuation, in Munich causation, and in Singapore both. Our research suggests that narratives explain mechanisms how ecosystems influence entrepreneurship: the national culture, market characteristics, available resources, and networks in an ecosystem spark ecosystem-specific narratives, which in turn shape tendencies towards effectuation and causation. Thereby, we introduce a new ecosystem-focused perspective on predictors of effectuation and causation. Our findings suggest specific strategies and success factors in each ecosystem. For example, the narratives prevalent in Silicon Valley have a sales focus, in Munich a need for detailed plans, and in Singapore value conformity. Thus, our findings provide insights for entrepreneurs for strategic location choices and on how to position their new venture at a specific location. VCs and policy makers gain from insights into how to leverage strengths and how to counteract problematic mechanisms in an ecosystem.