Red Social

Executive summary
New social media, like Facebook, YouTube and Twitter, are being adopted by a growing number of entrepreneurs who seek to deploy them for the benefit of their business. In the relatively few scholarly studies that consider how such social media may benefit firms, the majority has focused on social media as marketing tools. Little is known about how the use of social media mayaffect the entrepreneurs themselves. In our paper, we address this gap by studying how the use of one social medium, Twitter, may trigger effectual entrepreneurial thinking and action.
Given that social interaction is facilitated by social media, and that social interaction is one key element in the effectuation perspective, it is logical to ask how the use of a social media channel may affectentrepreneurs' effectual cognitions. By studying how engagement with social media may be related to aspects of effectuation, we can gain a better understanding of the conditions under which entrepreneurs' use of social media may facilitate cognitions and behaviors that ultimately result in creating opportunities and developing new firms, markets, or industries. At the same time, by studying the use ofsocial media through an effectuation lens, we can gain a theory-informed understanding of the potential impact of adoption of such channels by entrepreneurs.
Our methodology was qualitative, as our goal was to build upon extant theory regarding effectuation. Data were collected from 12 entrepreneurs, all of whom had adopted Twitter within the past two years but who varied widely in terms oftheir levels of usage of the medium and the types of businesses they ran. Each entrepreneur was interviewed and interviews were taped and transcribed. During the two weeks prior to, and the six months following, each interview, all tweets and blog postings by the entrepreneur and/or their company were collected. Data were analyzed via an iterative process consistent with the tenets of grounded theorydevelopment.
Our findings suggest that the social interactions that entrepreneurs engage in via Twitter can trigger effectual cognitions regarding both the means available to the entrepreneur and the effects that the entrepreneur may be able to bring about with the means that are available. However, we also posit that if entrepreneurs engage in very high levels of social interaction via Twitterthey may experience “effectual churn,” which we define as a continuous looping between social interaction through Twitter and the reassessment of means and effects achievable, without progression through the effectuation process. As the term “churn” suggests, this cycling may be unproductive from the perspective of the entrepreneur's business. In effect, this suggests that entrepreneurs may benefitless from their effectual cognitions if they engage too extensively in social interactions via Twitter and are iterating repeatedly from interaction to cognition without advancing through to behaviors that result in achieving desired outcomes. We adapt the concept of affordable loss from effectuation theory to account for the levels of social interaction via Twitter in which entrepreneurs arelikely to engage, positing that “perceived time affordability” accounts for variance in this behavior.
We also identify two emergent constructs that may moderate the extent to which engaging in social interaction leads an entrepreneur to advancing through an effectual process. One moderator is “community orientation” which refers to the extent to which an individual is open to expanding their socialnetwork and engaging with members of the expanded network; we posit that those who are more community oriented are more likely to advance through effectual processes as a result of their social interactions on Twitter. The other is “community norm adherence” which refers to the extent to which an individual adheres to norms that have evolved in the use of the medium; we posit that those who...