New ventures based on open innovation– an empirical analysis of start-up firms inembedded Linux

An important and intriguing aspect of e-entrepreneurship is theformation of new ventures in the domain of open source software (OSS).Previous research on these ventures has primarily looked at the design ofbusiness models. The purpose of this paper is to explore how three keychallenges of venture management – the liabilities of newness and smallness ofstart-ups and market entry barriers – affect new ventures in OSS. Based onempirical data from personal interviews and a large scale survey, we find thatseveral liabilities that are typically discussed in the entrepreneurship literatureare much less of a challenge for new ventures in OSS. Our findings haveimplications for the emerging theory on e-entrepreneurship and for entrepreneursconsidering to exploit business opportunities based on OSS and on openinnovation in general....