Prior knowledge: the role of virtual worlds in venture creation

Creating a new business often ends in failure arguably the more knowledge of the start-up process an entrepreneur has the more successful the outcome. Whilst business simulations have been researched, the role of virtual worlds in aiding nascent entrepreneurs in gaining important experiential learning is lacking. The paper aims to discuss these issues.

This qualitative research involved six months observational data, with nine in-depth semistructured interviews with the small business owners based in the virtual world Second Life.

The findings highlight important similarities between “real world” and “virtual world” businesses. The nascent entrepreneurs reported a sense of running the business as any other business. The level of risk, in terms of capital, for setting up a virtual business is far less than the real world. However, risks are still associated with a virtual business with entrepreneurs investing time to run the business.

The findings of this study provide important insight into how prior knowledge can be gained through participating in “real” business activities, other than business simulations. Virtual worlds provide can play an important role in aiding nascent entrepreneurs to gain important prior knowledge of the start-up process, that the authors can anticipate will aid the entrepreneur in further ventures.