To the question how social capital benefits innovation and entrepreneurship, existing literature has provided one dominant answer: the inflow of new information and knowledge recombination promote innovative ideas. However, it is not sufficient that new ideas are generated, as entrepreneurship requires the new ideas to be executed and released in market. In this study, I suggest a novel insight on the benefit of social capital on an individual’s transition to avocational entrepreneurs: social networks provide potential entrepreneurs self-confidence on the promise of their new ideas and encourages their entry into the market. Using a unique setting in a niche field of knitting, I first show that there are individuals with great potential to become innovators. Also, with closely matched sample of potential innovators, I show that an individual’s participation in a closely connected small group encourages her transition to innovator, especially for those who already have the necessary skills for the transition. The empirical analysis resonates with qualitative evidence that knitting hobbyists make transition to knit designers when encouraged by their friends.

We study how individuals who belong to one of two distinct types of institutions, traditional employment or free production, value the institutions differently. Based on preliminary interviews on bloggers, we conducted a field experiment testing the perceived value of autonomy in Korean webcomics markets where creators can be either regularly paid by internet firms or work independently as bloggers. Using hypothetical “outside job” offers that both types of creators often receive, we show that the value of autonomy (i.e., the difference in financial rewards between high autonomy and low autonomy job) is lower for the creators who get paid by firms in traditional employment arrangement, compared to independent bloggers. Furthermore, we show that the difference between hired and independent creators magnifies among hobbyist creators, while the difference disappears when they are fully committed to the profession. Broader implications on the meaning of work and professional identity among creative workers will be discussed.

We investigate how the demand for an innovative product changes according to the identity of its producer, even when the quality of the product remains the same. In short, we show that when a producer experiences an “identity shock” suggesting that she is more committed to the audience for one category than another, the “betrayed” audience tends to regard her as having always been less committed to the rival audience/category. We name this “commitment-based typecasting” and theorize two characteristic features: asymmetry in audience valuation and retrospective revaluation.

To empirically test for the mechanism, we find a natural experiment setting of an identity shock in the domain of knitting. Based on a qualitative study, we first show that the knitting community consists of knitters with competing identities: (a) traditional knitters and (b) young, “net-savvy,” “avant-garde” knitters. Then, based on large-scale observational data, we show that when a novice knit designer is first published in a magazine associated with one category, it elicits a retrospective devaluation of her priorwork by the audience of the opposing category.

We study why and when user-driven motives are employed by the founders of entrepreneurial startups. This paper was motivated by the common trope in founder stories whereby founders say that their offerings were motivated by their own experiences as a user. However, it is not so clear why founders would tell these stories. We argue that by adopting user-driven motives, producers can effectively signal their commitment to consumers and convey the message that they are not opportunistic sellers who appropriate profits from consumers. Because user-driven motives can be used as a strategy to resolve commitment concerns, we expect that entrepreneurs are more likely to adopt user-driven motives in industries where consumers are strongly resistant to firm’s commercial motives and are more likely to raise commitment concerns. To investigate these questions, we are taking advantage of entrepreneurial pitches in Kickstarter, the largest crowdfunding platform, and compare the presence of user-motives across product categories. We are also testing our theory with an online experiment.