An analysis of entrepreneurial opportunities in the North American IT sector (1975–1996)

This paper compares the number of top ranked de novo firms in the North American IT sector that have been established in three different windows: 1) before a discontinuity; 2) after a discontinuity but before the release of standards; and 3) after the release of standards. Using Datamationpsilas rankings of the top firms in the IT sector between 1975 and 1996, this paper shows that more top ranked firms were established after the relevant standards (one form of dominant design) had been released than were established between the start of the discontinuity and the release of these standards. These results suggest that the emergence of certain kinds of dominant designs (i.e., open standards) can increase the number of entrepreneurial opportunities, which is contrary to existing theories used in the entrepreneurial literature.