eThesis - Kauppakorkeakoulun sähköiset gradut

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Introduction While social entrepreneurs and high-growth, high-risk ventures are catching the eyes of the youth, it is lifestyle entrepreneurs that are catching the eyes of the politicians. The business models used by lifestyle entrepreneurs require very little movement of resources, very few employees and tend not to expand. All of these factors are critical for maintaining a healthy macro and micro level economy. A lifestyle entrepreneur focuses more on the life rewards within the context of people that enjoy and have a passion for what they are doing. Intrinsic satisfaction is of greater value than extrinsic rewards (Rodriguez, 2010). Reasons for choosing to become a lifestyle entrepreneur are vast, but the underlying difference in lifestyle entrepreneurs compared to other types of entrepreneurs is that passion is placed before profit. That is to say intrinsic satisfaction is greater than extrinsic rewards (Rodriguez, 2010). With passion as a priority, lifestyle entrepreneurs are more likely to create ventures that are unlikely to generate economic returns large enough to interest outside investors (Sullivan, 2007).

Aim and Objectives The aim of this research is to discover the strategies of lifestyle entrepreneurs operating in potentially hostile environments, characterized by scarce resources, an uneducated labor force, corruption, lack of infrastructure (roads, hospitals, police, fire, water and waste disposal), lack of formal institutions, lack of a local customer base, scarce technology access and an abundance of tropical diseases. Given the Wild West context, the research question inspiring the research is, how do lifestyle entrepreneurs create and sustain viable ventures while maintaining their way of life? Supporting objectives were: a) to explore the contextual factors impacting entrepreneurs in Playa Gigante, Nicaragua b) to explore the realities of creating lifestyle ventures in Playa Gigante and the self-imposed limitations of venture growth the entrepreneurs operate within. c) to investigate and establish the active coping strategies developed by the entrepreneurs d) to inductively discover theories and practices to better prepare lifestyle entrepreneurs in developing economies for the future.

Theoretical Framework The premise of this study is lifestyle entrepreneurship theory, along with Sarasvathy’s (2008) effectuation logic process. Effectuation logic looks at entrepreneurs’ thought processes and actions. It is logic, not just theory. While others yield and plan, effectuating entrepreneurs press forward. They trek on and actively explore in a holistic manner the dynamics of the venture’s environment. They examine all the possible opportunities with an open mind and without prejudice. The logic is a process, an action, thus a verb. Within a world of uncertainty, effectuation logic is a process that all entrepreneurs operating within a harsh entrepreneurial context should be able to grasp. It is a creative process, much like the creation of a quilt. It requires gathering the experience of intrinsic and extrinsic opportunities and patching together the positives of each to build a unique and personally rewarding venture over time (Sarasvathy, 2008).

Methodology Through a grounded theory approach, eight transnational cases were explored over a three month period. Surveys, interviews and observations were gathered while participating in their daily lives. Data were coded and sorted in line with Strauss and Corbin’s grounded theory approach (1990). After gathering data and outside of Nicaragua, an unstructured interview took place with a Nicaraguan entrepreneurial expert. Through triangulation of data points, 38 critical concepts were grouped into 4 major categories. The 4 categories developed the foundation to systematically find the solution to the aim and objectives of the study.

Findings The analysis of Playa Gigante highlights the lack of supportive infrastructures and formal tools needed for starting a business in Playa Gigante. However, the entrepreneurs of this region display a uniform set of traits that have been applied to successfully debunk those hurdles. It is important to note that all the cases demonstrated the utilization of Sarasvathy’s effectuation logic without any prior knowledge to the logic’s theoretical existence. Local networks, knowledge and experience key stoned their opportunities and abilities to create a balance between a successful business venture and personal lifestyle preferences. A key finding in the analysis was the lack of trust that all entrepreneurs expressed with governmental regulations and officials. The high level of corruption entrepreneurs experienced everyday was one of many external forces that threatened their creativity and success. With this lack of support in a developing region, the lifestyle entrepreneurs developed behaviors similar to the effectual logic suggested by Saravathsy to provide for their families and the local community. Despite harsh economic environments, these cases have succeeded and followed in the footsteps of pioneering entrepreneurs who risked relocating to newly discovered lands to pursue and build a venture. The findings of this study will aide future entrepreneurial pioneers as they seek to start a new business in a developing region.

Conclusions The research of this study shows that entrepreneurial ventures in Playa Gigante are financially sustainable. This diverse set of entrepreneurs developed coping strategies similar to those suggested by Dr. Sarasvathy. Their businesses thrive, and so do their personal lives. Could effectuation logic be a critical process needed to ensure success for lifestyle entrepreneurs in developing regions like Nicaragua and around the world?