The entrepreneurship is considered as the choice under conditions of scarcity and entrepreneurs were the people who specialized in making choices that require intensive use of judgement. In this paper, the authors demonstrated that an entrepreneurial opportunity is best conceived as a potentially profitable but hitherto unexploited project. The reason why people did not notice the project could be rooted in the costs of discovery, since the information is often costly for potential entrepreneurs to obtain.
Entrepreneurs are the people who believe they have lower information costs than other people, believe that they had better theories, and advantage in collecting and processing information. The ends pursued by entrepreneurs might be non-materialistic or purely financial rewards.
As the result of changes in the environment and the opportunity recognition stimulated by the prospect of profit, entrepreneurs will search different opportunities. And, the success or failure is decided by their search strategy.
On the set of projects, entrepreneurship is objective and exogenous whilst on the set of opportunities, it is often subjective and endogenous. Much of the confusion over opportunity has arisen because of the failure to distinguish properly between the project set and the opportunity set (p. 290). By subjective, it is because it reflects individual entrepreneurs' perceptions of prospective profits; by endogenous, it is because some of the unexplored projects which formed the basis for the opportunity set since entrepreneurs decided not to exploit them previously.
To make this transparent, the authors illustrated three stages involved in a project: discovery, investment, and operation.
At the first stage, Coordination in a project-based economy is necessary to understand entrepreneurial opportunity. In a volatile economy, the project portfolio needs to be continually updated; and there is always the competition with each project for scarce resources. Also, existing projects are competing with new projects to retain the resources already under their control (p. 290). Thus, there are always Complements and substitutes between projects. It is reasonable to allocate resources to the most promising projects. When there is conflicting projects, the provision that only one project could be undertaken is the most direct solution. Then, Infrastructure and knowledge is necessary to any type of project. The knowledge spill-overs could bring the opportunity in the future.
At the second stage, since Evaluating new projects is costly, it is important to find a strategy for economizing on the costs of entrepreneurial discovery. Here are two stages: one is to locate the fields where entrepreneurs intend to focus his search; and two is to examine a set of potential projects. The characteristics of each project would be the "symptoms of the projects' underlying profitability" (p. 293), since at this stage how profitable the project will be is unknown to anyone (p. 296). When evaluating, there are two approaches to do this. One is An inward-looking approach, where it focuses on the preferences and capabilities of the entrepreneur such as the lifestyle. Another is An outward-looking approach where the change in the trends in the long run were taken into entrepreneurs' consideration, such as technological change. Also in this approach, the performance of current projects will also be treated as the criteria for opportunity evaluation. Here, more projects of the best performing types will remained; or the projects whose significance was not appreciated by the previous investments will be emphasized.
At the third stage, different entrepreneurs might look different part of an opportunity and they tend to have different pools of information. This makes the Sequential screening different from each other. Essentially, the project which is felt uncertain would be put "on hold." Owing to their limited information and resources, entrepreneurs will carry one project at one time and terminate the project ASAP so that he can proceed to investigate others. Entrepreneurs are not working along, but they will have to take account of the choices of the field made by other entrepreneurs. Sophisticated entrepreneurs may be able to gain further advantage through the strategic exploitation of the social processes such as starting a rumor.
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