Fixed, tethered or free: the role of space and place in online homebased businesses Professor Elizabeth Daniel Open University Business School E.M.Daniel@open.ac.uk
Basis of presentation Three papers Anwar, N. and Daniel, E.M. (2014) Online Home Based Businesses: Systematic Literature Review and Future Research Agenda UK Academy of Information Systems, Oxford University, 7 9 April. Daniel, E.M.; Di Domenico, M.L. and Sharma, S. (2014), Effectuation and Home-Based Online Business Entrepreneurs, International Small Business Journal. Available as online early. Daniel, E.M.; Anwar, N. and Di Domenico, M. (2014) Fixed, tethered or free: the role of space and place in online home-based businesses paper presented to ESRC Seminar Series: Entrepreneurship in Homes and Neighbourhoods. Middlesex University, Sept 16 th Three studies A systematic review of literature addressing online hbbs 20 interviews with online hbb entrepreneurs 22 interviews with online hbb entrepreneurs who have moved to the UK or their parents had moved to the UK (termed ethnic entrepreneur group) 2
Online Home-based businesses Our definition: a business entity operated by a self-employed person working at home and who is using the internet to carry out a significant proportion of business activities that may include sourcing, selling, providing services and communicating with stakeholders. The business may be operated full or part-time and may utilise building surrounding the home such as studios and garages. Examples/types Online communities, online retailers, ebay sellers, web developers, IT consultants, business service providers, writers, translators Importance Need for sector specific studies of home-based businesses Online hbbs provide a unique opportunity for innovation and hence a source of business diversity (Gelderen et al, 2008) Provide an opportunity for an effectual entrepreneurial approach (Daniel et al, 2014) Many of the largest online and tech companies started in home/garage/student bedroom - Microsoft, HP, Amazon, Facebook, Apple Growth in publications looking at online hbbs 3
Entrepreneur Characteristics Balanced gender ownership (54% male and 46% female) Clark and Douglas (2009-2010) Risk averse low set up costs due to combination of home-base and online (Gelderen et al, 2008) and reduced loss of face (Daniel et al, 2014) Experience time related stress (Chalmers, 2008) and work family conflict (e.g. Baines, 2002) More likely to be single or divorced than other home-based entrepreneurs (Deschamps et al, 1998) More likely to have no children (Deschamps et al, 1998) but this is not because they are younger Better educated than other home-based entrepreneurs (Deschamps et al, 1998) Keen to undertake trial and error learning (Betts and Huzey, 2009) 4
Business Characteristics SMILES characteristics (Gelderen et al, 2008) Speed, Multiple income, Inexpensive, LEan and Smart all it takes to start an internet business is a computer and an idea Operation within a network of other businesses jobless growth (Mason et al, 2011) Opportunity to leverage labour I really wanted to establish a business that could exist without me and so moving into a home based internet business was a conscious decision (Gelderen et al, 2008) Potential for reinforcement of existing inequalities in the labour market Entrepreneurs with skills that are scarce and has autonomy hbb is likely to reinforce self-control and reduce stress. Those with few skills hbb may result in reduced autonomy and increased stress (Olson and Primps,1984) Engenders feelings of isolation (Wynarczyk and Graham, 2013) 5
Allows an Effectual Approach to Entrepreneurship. Traditional view of entrepreneurship the task of the entrepreneur is to discover opportunities and exploit them (Read et al., 2009, p. 573). Suggests that opportunities are out there and the entrepreneur must find them. Once an opportunity identified sticks to this and acquires additional resources to achieve the predetermined outcome. Much focus on raising business plan and raising external finance Requires high degree of self-efficacy and has appetite for risk Effectual view Entrepreneurial role is to create opportunities through experimentation and drawing on either available or obtainable means. (Sarasvathy, 2001) Rather than define a predetermined goal effectuators see what means they have available and how these can be used to produced valuable outcomes 6
Consideration of Space and Place of online home-based businesses Online businesses considered as anytime, anyplace, anywhere businesses but home is a conscious choice how are these two brought together in online home-based businesses? Need to manage spatial and temporal boundaries known in homeworking how do these manifest in the case of online hbbs? Brought together all 42 interviews undertaken ethnic entrepreneurs and non-ethnic entrepreneurs inductive, grounded approach, NOT theory driven More commonalities than differences between groups Role of space use of space in the home Role of place factors enabling independence and factors requiring location dependence 7
Space and online home-based businesses Often a separate working space in the home The office is one room, it s upstairs. I can come downstairs and, if I m watching television or playing the piano, or whatever, then that s something I can do away from work. I m not constantly feeling that I m surrounded by work; I can get away from it, turn the computer off and go to a different room. Allowed a physical boundary also help with a temporal boundary BUT does not need to be a room use of sheds and garages and. I've just got a little box. It's all in a box...all my files. I've given myself a page on my computer, where I've done an excel document and logged everything, and so I've got it all; what I paid for, what I need to sell, and all that kind of stuff... Also work in family areas It s difficult now because the baby is everywhere so everything s in the middle of the [living room] table, and the laptop s in the kitchen, because she can reach up and grab things. We have got an office upstairs which I guess I could use. I tend to stay down here just for ease. Requires entrepreneur and family members to dynamically manage physical and temporal boundaries Blurred roles of who worked in business family members taking part 8
Place and online home-based businesses: Location Independence IT, service or small product based businesses The thing is, with web design, with online business, I don't think you have to work from home. You can work from anywhere because if you've got a computer or a laptop you can work in a café, you can work anywhere, as long as you've got a connection. Internationally based staff and clients Well, I am a single owner, but I have other people who are working for me. Initially I managed like a virtual team, three contractors, and there are two in different countries, but now I have an office as well back in Pakistan, and I am here [in the UK]. So I am still managing it like virtually. Harnessing a network of suppliers I can switch off now; I can make it look after itself. Now I ve gone over a certain turnover with the supplier, I m linked direct to that supplier, so if somebody places an order in my shop that I haven t got, it goes straight to my supplier and then that supplier ships it out. 9
Place and online home-based businesses: Location Independence /contd Professional and social interactions mainly online Any other challenges? Maybe meeting other professionals, other people who do the same job as you. Sitting at a computer all day you don t have colleagues to bounce things about and say, what do you think, what if we did this and that? I have built up a network, an online network of other professionals and we communicate, such as, what do you think of this sentence? Well, I d have put it that way, that way or that way. But that goes a bit further sometimes and we have a bit of fun. 10
Place and online home-based businesses: Location Dependence Familiarity with working in a particular place To a certain extent, I am a bit tied to my office here because most things are on my desktop, in terms of reference material and software, reference managing software and that sort of thing. So, it s not as easy as I think it should be to go and work somewhere else. If I do know that I m going to be away, then I usually put everything that I need onto my laptop and make sure I ve got everything that I could possibly need, but So, it can be a bit of an effort to go and work elsewhere... Physical presence helps promote business the thing with online business is that because you don t have immediate footfalls It s not the same thing with an online business, with an online business if you set up a website today it s on the internet along with billions of other webpages, so you need to market, you need to get people to the website. It s not just going to have footfall or not your target audience anyway. EE13 11
Place and online home-based businesses: Location Dependence../contd Other responsibilities that are location dependent I m quite prepared to work really, really hard but I have to take my children to school, I have to pick my children up from school and I have to be able to be able to look after them during half-term and summer holidays I have to be able to juggle. An online presence enables there to be a [business name] web presence, 24/7, 365 days a year but I can manage the time that I commit to it. Geographical focus If you talk about my business, maybe it will be possible to operate from anywhere, because it s more about technically, as I say, the world is inside the laptop..but for example if I've got a customer who has taken a network solution from me, if some problem is physical, I cannot solve that from back home. I need to be here, or one of my engineers needs to be here, who is going to solve that problem. Maybe if it is a problem of the website that one page is not flowing, one page is not properly functioning, in that case okay, from anywhere I can access it, and from anywhere I can troubleshoot the problem. 12
Place and online home-based businesses: Location Dependence../contd Availability of workforce we could keep the office here and relocate the warehouse to south Sheffield or somewhere, where there s more cheap labour. There is no labour out here and people don t want to drive to work here because of the cost of petrol. There are some new people in the village, but it is not enough. Social networks and clients are location based We are still very heavily networked in with people that we used to work with through this business, not so much the management tier, not surprisingly, they made us redundant, we weren t very keen on them. But our colleagues who all ran similar practices in other sectors, and we re in contact with them..august is coming up and it s time for us to get together. We ll get together semi-socially and we ll trade gossip on how business is going. 13
Discussion Have identified factors that contribute to location independence And factors that contribute to location dependence Individual entrepreneurs will find a personal balance between these and this may vary over time (family stage business stage). Many balance both leading to a tethered mode of working - the business has a primary location, but the entrepreneur can operate from other locations for appropriate periods. Tethered working identified from an inductive/grounded approach to our data how does this relate to existing theory on the role of place or space in entrepreneurial endeavour? How does it differ from other types of home-based businesses is working from home rather than at home tethered working? So, whilst online hbbs have points of difference w.r.t space and place they are more similar than different to other types of hbb? Interest in economic contribution local, national or international. Fixed, tethered or free allows online hbbs to contribute at all three levels 14
Thank You & Questions? 15