Journal of World Business 45 (2010) 228–236

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Journal of World Business

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Broadening the concept of international entrepreneurship:

‘Consumers as International Entrepreneurs’
Yanto Chandra a,1, Nicole Coviello b,*
a
Department of Strategy and Marketing, Amsterdam Business School, University of Amsterdam, Plantage Muidergracht 12, 1018 TV, Amsterdam, The Netherlands
b
School of Business and Economics, Wilfrid Laurier University, 75 University Avenue, Waterloo, ON, Canada N2L 3C5

A R T I C L E I N F O A B S T R A C T

Keywords: We integrate theories from international business, entrepreneurship, innovation, marketing and
International entrepreneur network economics to develop a four-part typology of ‘consumers as international entrepreneurs’. This
International marketing broadens the concept of international entrepreneurship and complements the firm-level focus
User entrepreneur
customary in research on international new ventures and entrepreneurs within those ventures. We
Consumer entrepreneur
Co-creation
develop our arguments in the context of the new economy and discuss areas for investigation in this
Born Global emerging area of inquiry.
New economy Crown Copyright ß 2009 Published by Elsevier Inc. All rights reserved.

1. Introduction phenomenon ‘consumers as international entrepreneurs’. Exam-

The last two decades have seen academics, policy makers and
practitioners develop considerable interest in the entrepreneurial
activities of young firms in global markets. In particular, a
relatively large body of research has emerged focusing on
international entrepreneurship. As defined by McDougall and
Oviatt (2000, p. 903), study in this area encompasses two topics.
These are: (1) research on ‘‘innovative, proactive and risk-seeking
behavior that crosses national borders and is intended to create
value and organizations’’ and (2) research ‘‘comparing domestic
entrepreneurial behavior in multiple countries.’’
A review of the literature reveals that international entrepre-
neurship research has generally been conducted at either the level
of the firm or the individual within the firm (i.e. where the
entrepreneur acts on behalf of his/her own international new
venture or in a corporate environment). This focus on ‘business’ is
consistent with the entrepreneurship traditions investigating
firms (e.g. Covin & Slevin, 1991; Zahra, 1993) or individuals (e.g.
Shane, 2000). In contrast, research on non-business entrepreneur-
ship, i.e. ‘consumer’ or ‘user’ entrepreneurs, has been relatively
unexplored (Huefner & Hunt, 1994; Shah & Tripsas, 2007). This is
particularly evident in the international entrepreneurship litera-
ture despite the growing trend of entrepreneurially minded
consumers who individually and collectively, exploit opportunities
to create and market products internationally. We label this
* Corresponding author. Tel.: +1 519 884 0710; fax: +1 519 884 0201.
E-mail addresses: y.chandra@uva.nl (Y. Chandra),
ncoviello@wlu.ca (N. Coviello).
1
Tel.: +31 020 525 4262; fax: +31 020 525 4182.
ples of such innovating consumers range from those found in the
open source software industries and Second Life, to those trading
in eBay, all of whom: (i) develop cross-border resource config-
uration and value creation using online communities and, (ii)
market products across national borders without pursuing venture
creation for, (iii) financial and non-financial reasons. This
phenomenon is especially evident in what is often referred to as
the ‘new economy’ where growth and productivity are fuelled by
information and communication technologies (Godin, 2004).
Our research contributes to the literature by broadening the
concept of international entrepreneurship beyond both conven-
tional business settings and the generally accepted definition from
McDougall and Oviatt (2000). More specifically, we define and
develop a typology of four different kinds of consumers-as-
international entrepreneurs. This allows us to identify a domain of
research and related topics of interest that complement extant
theories of international business and entrepreneurship. By
focusing on the international opportunities discovered and
exploited by consumer entrepreneurs, we also provide conceptual
arguments and managerial implications relevant to pre-inter-
nationalization of the firm.
The paper proceeds with the background to our research. We
then use arguments from the international business, entrepreneur-
ship, innovation, marketing and network economics literatures to
explain why consumers act as international entrepreneurs. This is
followed by a formal definition of ‘consumers as international
entrepreneurs’. Our argument explaining this concept is then
presented. Finally, a typology of consumers-as-international
entrepreneurs is developed in terms of the nature of entrepreneur-
ship evidenced and influence on customer preference formation.
We conclude by discussing avenues that might be pursued to

1090-9516/$ – see front matter . Crown Copyright ß 2009 Published by Elsevier Inc. All rights reserved.
doi:10.1016/j.jwb.2009.09.006
 Y. Chandra, N. Coviello / Journal of World Business 45 (2010) 228–236
advance research in this emerging area of international entrepre-
neurship, as well as practical implications.
2. Background
Recent trends in innovation management, changes in consumer
behavior and developments in information and communication
technology deserve special attention in relation to international
entrepreneurship. In terms of innovation, we are witnessing a
paradigm shift from that of an enterprise-centric and closed form
of innovation to lead-user (von Hippel, 2005) and open innovation
(Chesbrough, 2003). Indeed, a large body of research has shown
that users of products and processes are the developers of many
important innovations later sold by manufacturers (Baldwin,
Hienerth, & von Hippel, 2006; von Hippel, 1976, 1986).
Large firms have realized that it is more effective and efficient to
let lead customers and communities of individual users engage in
innovation on their behalf. One example is Procter and Gamble’s
efforts to make use of end-user ideas generated through InnoCenti-
ve.com. Not unexpectedly, smaller firms have followed down the
same path and capitalized on other online markets for innovation,
e.g. www.rentacoder.com. The long-held view that firms ‘know
everything’ has gradually been replaced by the growing recognition
that users and collectives of users external to the organization are
remarkably intelligent (Surowiecki, 2004) and are active in the
development of innovations (Jeppesen & Frederiksen, 2006). This
has opened new types of opportunities for consumers in interna-
tional markets to act informally as entrepreneurs.
These trends are facilitated in the new economy by the rapid
emergence of self-organizing ecosystems of technologies that have
changed the competitive landscape (Michel, Brown, & Gallan,
2008) and allowed consumers to buy and sell to each other
(Berthon, Pitt, & Campbell, 2008). More specifically, these
technologies enable individual consumers to co-produce, co-
design, co-innovate, co-distribute and co-consume with others.
Critically, consumers do this across national borders. Their
interconnected activities are facilitated by the rise of internet-
based communication technologies (e.g. Skype, GTalk), supporting
online infrastructures (e.g. PayPal, Paymate), online/virtual com-
munities (e.g. Linux, eBay, Second Life) and various platforms for
online/virtual collaboration.
Consumer adoption of these technologies and communities is
widespread. For example, 2008 Q4 results for eBay Inc. report it has
a presence in 42 markets worldwide and accounts for 14% share of
global eCommerce. It has 86 million active users and 405
registered users (eBay, 2008). This has contributed to consumers
acting as entrepreneurs across national borders. As one example,
eBay creates a trading community that (e.g.) enables a teenager in
Amsterdam, a consumer of Nintendo Wii, to become an interna-
tional trader by profitably selling his 6-month-old Nintendo Wii to
someone in Paris. The teenager does this for his personal
enjoyment and to fund further interests in computer games. By
acting as an opportunity seeker and exploiter in the eBay online
community he creates value by distributing a product across
national borders. Accordingly, this teenager has acted as an
international entrepreneur. In this case, he was driven by both
financial and non-financial reasons without pursuing venture
creation.
A second example is where a full time software engineer in a
large Indian firm uses Linux for his work and also to co-develop
software with other users in different countries. He applies the
new software in his professional work and then sees opportunities
to re-customize and sell it on a personal basis to a company in
Singapore. Of note however, he remains embedded in the Indian
organization, i.e. does not leave it to pursue venture creation. This
co-development of the Linux-based application software across
229
national borders demonstrates international entrepreneurship
since it is an example of cross-border resource configuration
and value creation. It also involves commercialization across
borders, albeit in an informal manner.
Both the eBay and Linux examples involve entrepreneurs that
are atypical when compared to those common in the international
entrepreneurship literature. That is, where researchers emphasize
issues related to the ‘business’ rather than the ‘consumer’ by
investigating international ventures that exist to generate share-
holder value and/or individuals within those ventures who engage
in full time entrepreneurial activities as their primary occupation.
Given the emergence of users/consumers who display behavior
that is not only entrepreneurial but international, do extant
theories explain the emergence of consumers acting as interna-
tional entrepreneurs? This is discussed in the following review of
the literature. We begin by reviewing aspects of the international
business, international entrepreneurship and marketing litera-
tures. We also draw on arguments from research in network
economics and innovation.
3. Literature review
A prominent theory in international business involves transac-
tion cost economics (Coase, 1937; Williamson, 1985). This
proposes that firms will internalize their activities so long as
the costs and benefits of doing so are greater than externalizing
them. Growing recognition of the ‘wisdom of the crowds’ or
distributed intelligence has however, led organizations to exter-
nalize activities by tapping into innovations produced by end-user
consumers and external entities (von Hippel, 2005). As one
example, products originally developed by lead end-users2 (e.g.
physicians), have generated eight times more sales for 3M than
those produced internally (von Hippel, Thomke, & Sonnack, 2000).
Externalization has changed the face of innovation and provides
unprecedented opportunities for innovative consumers to act as
international entrepreneurs.
Another prominent argument in the literature pertains to the
international new venture and networks. This organizational form
is argued to be unique for a number of reasons, including its foreign
location advantage, minimal use of internalization and greater use
of networks (Oviatt & McDougall, 1994). This is evidenced by
empirical studies highlighting the international new venture’s
active use of inter-organizational and social networks to mobilize
and leverage resources (Coviello & Cox, 2006) and facilitate
internationalization (Coviello, 2006). We argue that like the new
venture, consumers draw on the resources of others, i.e.
individuals, to engage in entrepreneurial activities. This is
generally consistent with network theory and the resource-based
view of Barney (1991). However, rather than use the lens of
interconnected firms as per Lavie (2006) or Coviello (2006), we
focus on the individual consumer/user. That is, a resource-based
view of interconnected individuals.
The mobility of heterogeneous resources in the hands and
homes of individual consumers has been facilitated by interactive
technologies that unite individual consumers in an interconnected
(online and virtual) world for free (Jeppesen & Frederiksen, 2006).
Examples include general internet-based communication tech-
nologies such as FaceBook, Skype, GTalk and YouTube, as well as
online/virtual communities such as BootB, openad and Linux. Their
interconnected nature helps individual consumers identify and
exploit opportunities across national borders. These intercon-
nected technologies help opportunity seekers and creators exploit
asymmetric knowledge and information, mobilize resources and
2
In this paper we refer to consumers or users who are individuals rather than
organizations.
230 Y. Chandra, N. Coviello / Journal of World Business 45 (2010) 228–236
collaborate with other individuals across national borders.
Consumers can become international entrepreneurs not because
of any location or internalization advantage but because they are
connected to nearly all other consumers at all times; consumers
with whom they can share and draw resources from. This reflects
the collective intelligence of consumers. This is further enhanced
because consumers face immaterial sunk and fixed costs
associated with exploiting and developing opportunities in the
online world. The only cost that remains relevant is the variable
cost consisting of the time, effort and idiosyncratic resources
needed to perform particular tasks. Accordingly, this decrease in
barriers of entry encourages individuals to participate in entre-
preneurial activities across borders.
There is also a trend that shows how consumer preference
depends on the preference of the masses (Salganik, Dodds, & Watts,
2006). In network economics, this social influence is known as
network externality, where the utility that a consumer derives
from consumption of the offer increases with the number of agents
consuming it (Katz & Shapiro, 1985). In our argument, the larger
the number of individuals joining a community, such as Linux or
eBay (and deriving advantages by drawing resources from other
individuals as well as co-creating and co-producing opportunities),
the more consumers will join the community and potentially,
become international entrepreneurs. This is a positive and self-
reinforcing feedback loop that sustains the creation of future
consumers who act entrepreneurially across markets.
A final argument related to this emerging form of international
entrepreneurship comes from marketing and reflects the fact that
our subject of interest is the consumer. According to Vargo and
Lusch (2004), marketing is evolving from a good to service-
dominant view. The service-dominant logic has relationships at
the core of marketing and focuses on exchange of intangibles,
specialized skills, knowledge and processes, and the co-creation
and co-production of value. The premises of this new logic parallel
postmodernism in marketing (see Firat & Venkatesh, 1995), a view
that rejects the separation of spheres of consumption and
production and acknowledges the importance of cyber culture.
In the new economy, participation in the co-creation and co-
production of value with other consumers allows users to gain
more control and power over their own consumption choices. It
also helps them influence international firms’ strategies and the
preference of the masses in the global market. As discussed by
Michel et al. (2008, p. 49): ‘‘the line between product and
consumer is not only blurring, but vanishing.’’
There is a growing belief among consumers that knowledge
should be shared in the form of ‘building blocks’. Through sharing,
individuals can use these building blocks for personal consumption
as well as product development and commercialization. The open
source movement (e.g. Linux, MySQL, Apache) is a good example of
how consumers are empowered by being able to participate in the
co-creation and co-production of value and opportunity across
national borders (Schiff, 2002; von Hippel & von Krogh, 2003).
Previous research also shows how individuals are keen to help each
other solve technical problems, including helping strangers in the
online world (Constant, Sproull, & Kiesler, 1996) and volunteering
assistance on a user-to-user basis (Lakhani & von Hippel, 2003).
This suggests that cyber culture encourages the co-creation and co-
production of value and opportunity. When this occurs across
borders, we see international entrepreneurship at the level of the
individual consumer.
3.1. Consumers-as-international entrepreneurs: a relevant domain of
enquiry?
To this point, we have argued that in the new economy,
consumers are active as international entrepreneurs. This is seen in
Fig. 1. The domain of academic literature in international business and
entrepreneurship.
firms pursuing strategies of externalization rather than inter-
nalization, consumers using new technologies to connect with
each other and develop market influence, and consumers creating
value with other consumers (and organizations) in a world where
service means the application of specialized competencies through
deeds, processes and performances for the benefit of another
entity, or the entity itself (Vargo & Lusch, 2004; Lusch & Vargo,
2006). Traditionally however, research in international business
has been dominated by studies on the multinational organization,
i.e. the international activities of large established firms. Two other
areas of enquiry are also evident. First, the international marketing
literature examines consumers, but views them in a conventional
manner. That is, as targets of the international marketing efforts of
established organizations (see Cavusgil, Deligonul, & Yaprak, 2005
or Leonidou, Katsikeas, & Samiee, 2002 for reviews of research in
this area). Second, interest in the international new venture has
generated another fruitful research area (see Coviello & Jones,
2004, Jones & Coviello, 2005 or Rialp, Rialp, & Knight, 2005 for
review articles). Together, these three general fields of study are
summarized in Fig. 1 as Quadrants i–iii.
Quadrant iv however, is the subject of interest here. It differs
from the others in that it allows for the argument that some users
will not only consume products (as per Quadrant iii) but also
produce and distribute them. These individuals differ from the
‘conventional’ consumers in Quadrant iii due to their participation
in the new economy. In particular, they own an online or virtual life
through internet-based technologies. Two other points are notable.
First, the traditional research in Quadrant iii emphasizes ‘market-
ing/exchange’ rather than the interface of marketing and
entrepreneurship in the international context. Second, the
research in Quadrants i and ii emphasizes the ‘business’ form of
entrepreneurship across borders. Quadrant iv therefore reflects the
concept of ‘consumers as international entrepreneurs’. As such, it
broadens the concept of international entrepreneurship. This is
important since most research in the area has developed from the
parameters established by McDougall and Oviatt (2000).
4. Defining consumers-as-international entrepreneurs
We will now focus on Quadrant iv from Fig. 1, and define
‘consumers as international entrepreneurs’ to be: individual
consumers and online communities of consumers who identify,
evaluate and exploit opportunities across national borders to
create and distribute products for both financial and non-financial
reasons. Our definition incorporates the: (i) development of cross-
border resource configuration and value creation using online
communities, (ii) activities to market products across national
borders without pursuing venture creation and (iii) the fact that
these international entrepreneurs are not necessarily driven by
 Y. Chandra, N. Coviello / Journal of World Business 45 (2010) 228–236
pecuniary motives. This builds on the well-established literature
on user-innovators (Baldwin et al., 2006; von Hippel, 1976, 1986)
and adapts the recent definition of international entrepreneurship
from Oviatt and McDougall (2005). To a certain extent, it also
builds on Huefner and Hunt (1994, p.64) who describe the
consumer entrepreneur as one: ‘‘recognizing an opportunity and
marshalling the resources to take advantage of or act on that
opportunity while engaged in the cognitive and emotional
processes and physical activities of selecting, purchasing, using
and discarding products and services so as to satisfy needs and
desires.’’ Importantly, such activities are initiated by the consumer
to enhance their well-being and do not involve venture creation in
any formal sense. As an example, Huefner and Hunt (1994)
describe a car lover who uses, sells and buys cars for his personal
interest and uses the profit to enjoy driving different cars and pay
for his schooling. We are also consistent with the ‘accidental’ or
‘user’ entrepreneur discussed by Shah and Tripsas (2007). These
are consumers who happen upon an idea through their own use
and then share it with others.3 Finally, we make explicit the acts of
opportunity exploitation and product creation and distribution.
This recognizes that consumers go beyond Huefner and Hunt
(1994) to actively innovate and then share and/or sell their
innovation.
The key distinction between the ‘consumer as international
entrepreneur’ described here and the arguments of both Huefner
and Hunt (1994) and Shah and Tripsas (2007) is that we equip
users with online technologies and communities that provide
them with the ability to trade or engage in exchange across
borders. As such, they are manifestations of the new economy and
prevail for a number of reasons. These include relatively low
opportunity costs for the consumer entrepreneur, high variety in
demand with many small market niches, and markets character-
ized as emerging, uncertain and turbulent (Shah & Tripsas, 2007).
While entrepreneurial international behavior by consumers can
be explained by the extant literature (e.g. regarding externalization
or network economics), we believe that the consumer-as-inter-
national entrepreneur is a unique concept. This is because the
conventional focus on business entrepreneurship is too limiting
when trying to explain the emerging phenomenon of consumers
who essentially, act as international entrepreneurs. Similar
arguments can be made regarding the traditional locus of
innovation, production and consumption, and the traditional
conception of the market. These reflect three distinctive aspects of
the consumer-as-international entrepreneur (as opposed to the
conventional consumer or international entrepreneur) and will
now be discussed.
4.1. Informal consumer entrepreneurship rather than formal business
entrepreneurship
Theories, such as the Eclectic Paradigm (Dunning, 1988), the
Uppsala Model (Johanson & Vahlne, 1977, 1990) and the network
perspective (Johanson & Mattsson, 1988), as well as those
pertaining to international new ventures (Di Gregorio, Musteen,
& Thomas, 2008; Oviatt & McDougall, 1994) assume firms/
ventures and the entrepreneurs within them to be at the heart
of international entrepreneurial activities. The contributions made
by these theories have been well documented and will not be
reviewed here. What is notable is that the frame of reference for
such theories is different and with the advent of interactive
technologies in the hands of consumers, none explain the
phenomenon of the teenage eBay trader or the Linux user’s
involvement in global markets.
3
This ‘user entrepreneurship’ can include end-users or professionals and is
differentiated from ‘employee entrepreneurship’ such as spin-offs.
231
Penrose’s (1959) arguments regarding the codification of
business knowledge, practices and routines are nearly absent in
the context of consumers-as-international entrepreneurs. They
are users/consumers and not organizations/firms or entrepre-
neurs in the classic ‘business’ sense. These consumers do not
conduct strategic planning in international markets according to
the dynamic knowledge-commitment model of Johanson and
Vahlne (1990) nor do they seek to optimize choices of foreign
markets based on costs, investments or rate of returns to
shareholders as per Dunning (1988). While the notion of
international network extension, penetration and integration
from Johanson and Mattsson (1988) is evidenced, this occurs not
at the firm level but at the level of the consumers and informal
networks (communities) of consumers. Development and imple-
mentation of formal international marketing strategies as
discussed by Cavusgil et al. (2005) or Leonidou et al. (2002) are
also universally absent from the entrepreneurial acts of these
consumers. Accordingly, their activities reflect ‘informal entre-
preneurship’. This has a number of implications. For example,
consumers-as-international entrepreneurs do not necessarily
own fixed assets in foreign countries but practice bricolage
(Baker & Nelson, 2005) by relying on whatever resources they
have at hand. They do not operate within the legal boundary of ‘a
firm’. Rather, they remain ‘organization-less’ because complex
tasks are distributed among a community of individuals. In this
situation, it is consumer identification with the group that
motivates collaboration rather than actor ties as in an inter-firm
network (Shah & Tripsas, 2007).
Finally, while theories of international business and interna-
tional entrepreneurship implicitly recognize the role of profit-
making and the principle of going-concern, consumers-as-inter-
national entrepreneurs have varying motives. These include
engaging in entrepreneurial experimentation and interacting with
others, as well as learning, changing perceptions, reciprocity and
enhancing reputation within their user community (Berthon et al.,
2008; Lakhani & von Hippel, 2003; von Hippel, 2001). Importantly,
although additional income may be earned, the entrepreneurial
activities of these consumers are not their primary occupation.
Consequently, while theories suggest that international operations
are driven by ‘business’ entrepreneurship motives, such as market,
export, efficiency, resource, and strategic asset seeking (see
Dunning, 1993), and the business entrepreneur depends on the
international new venture for their livelihood, the ‘consumer as
international entrepreneur’ is driven by user entrepreneurship
motives (enjoyment, learning, etc.). That is, while they are
proactive, risk-taking and innovative in their mindsets and
behavior, they are driven by what Scott Morton and Podolny
(2002) refer to as the ‘love factor’ or non-pecuniary rewards.
4.2. The locus of innovation, production and consumption
Building on the traditions of Smith (1776) and Taylor (1911)
regarding the advantage of division of labor and specialization,
theories of international business and entrepreneurship typically
draw sharp boundaries between the roles of innovators, producers
and consumers. The possession of firm-specific advantages
(Dunning, 1988; Oviatt & McDougall, 1994) allows organizations
and entrepreneurs within them to innovate and produce offers,
which are then consumed by users. This commonly held view is
based on the notion of centralized intelligence logic. In the new
economy however, the logic of distributed, collective intelligence
is manifest in the shifting innovation paradigm (from firms and
entrepreneurs to consumers/communities of consumers who co-
produce, co-innovate and co-consume) and the inward–outward
flow of innovation between firms and consumers (Surowiecki,
2004).
232 Y. Chandra, N. Coviello / Journal of World Business 45 (2010) 228–236
We also suggest that the traditional conceptualization of a
location-specific advantage such as low labor costs driving foreign
direct investment to emerging economies (Dunning, 1988), may
require some reconsideration. This is due to the rapid rise of more
affluent, better educated consumers worldwide who take a
proactive role via online/virtual communities. As a consequence,
individual consumers and communities of individual consumers
have become a new locus of innovation, production and
consumption activities. They use online communities to co-
innovate, co-design, co-produce, co-distribute and co-consume
products with other individuals and communities across borders.
As such, they act as international entrepreneurs. Our idea of co-
production and co-creation follows the service-dominant logic
(Lusch & Vargo, 2006; Vargo & Lusch, 2004) that implies that all
economies are in reality, service economies. Vargo and Lusch
(2004) also argue that physical goods are only the distribution
mechanisms for the provision of service benefits and as a result, are
a special case of service provision. In this paper, we do not make the
distinction between services and physical goods as commonly
found in the conventional services marketing literature. In the new
economy context of consumers-as-international entrepreneurs,
co-creation gravitates towards the use of technology for service
delivery and value creation. Consequently, the product can be
marketed via digital/virtual channels or can be electronically
stored, downloaded, uploaded and consumed by the parties
involved, at any time.
4.3. The definition of the market
Finally, theories of international business and entrepreneurship
typically view the market as a topographical 3-dimensional
concept of space and time where supply meets demand in a
tangible market place. Markets in the eyes of consumers-as-
international entrepreneurs are instead, hyper-real. In this sense,
they exist in the form of 2-dimensional communities (e.g. online
market space such as eBay), 4-dimensions (e.g. virtual market
space such as Second Life) or within the context of collaborative
communities (e.g. Linux, creativecommons.org).
These community-based markets are the typical manifesta-
tion of the new economy. They are not the platform for buying
and selling alone but also for co-producing, co-designing and co-
innovating. They are often real time in that the time lag between
changes in market information is nearly instant. Using social
capital theory from Burt (1997), such markets are efficient
because they bridge information asymmetry and structural
holes. These markets, where the time to build market knowledge
is shorter, the costs of entry are low and the institutional hurdles
are nearly absent, have made the liabilities of newness,
smallness and foreignness less relevant than posited in the
international business literature. As a result, consumers commit
significant resources (e.g. time, effort, knowledge) to the online/
virtual/collaborative market space without regard to country
boundaries.
This redefinition of the market also allows consumers to
exercise more freedom and control thereby influencing customer
preference formation, the process by which consumers learn and
form their preferences for the product (Carpenter & Nakamoto,
1994). While Carpenter and Nakamoto’s view of preference
formation basically refers to the firms’ influence on consumers,
the phenomenon of ‘consumers as international entrepreneurs’
highlights the consumers’ influence on other consumers as well as
on firms. This allows consumers-as-international entrepreneurs to
shape both the nature of the market and the dominant designs of
technology (see Suarez & Utterback, 1995). These are essentially
entrepreneurial acts and help justify our conceptualization of
‘consumers as international entrepreneurs’.
5. A typology of ‘consumers as international entrepreneurs’
The previous section defined the ‘consumer as international
entrepreneur’ and described three considerations underpinning
the concept. These arguments suggest that there is: (1) an
international entrepreneurial process of consumer actions in the
supply-side of the economy, and (2) the actions of consumers-as-
international entrepreneurs have marketing impacts on the
demand-side of the economy. There are however, different forms
of entrepreneurship and varying levels of influence on customer
preference formation. This suggests that the ‘consumer as
international entrepreneur’ manifests itself in different ways. To
explain this, we use the nature of entrepreneurship evidenced and
the extent to which the consumer-as-international entrepreneur
influences customer preference formation (see Fig. 2). Together,
the two variables reflect the interface of international entrepre-
neurship and marketing.
In Fig. 2, the nature of entrepreneurship refers to two prominent
schools of thought. The first is the Kirznerian view of the
entrepreneur as an arbitrageur who discovers misalignment in
the market and creates new value by reorganizing new means-
ends relationships (Kirzner, 1997). The second is the Schumpeter-
ian view of the entrepreneur as an innovator who creates new
products, new sources of supply, new markets, new ways of
production and new ways of organizing (Schumpeter, 1934). While
some consumers-as-international entrepreneurs close the gaps
arising out of differences in prior knowledge and bring the
economy toward equilibrium (Kirzner, 1997), others generate
different types of Schumpeterian innovation and break the
economy away from equilibrium. These two types of entrepre-
neurship complement each other.
The extent of influence on customer preference formation – that
is the ability to influence what the consumers at large will
consume and prefer in the market (Carpenter & Nakamoto, 1994) –
is presented as the second dimension in Fig. 2. In classic marketing
theory, it is the firm that bears the responsibility of shaping
customer preference formation. However, in our new context,
consumers play a major role in shaping not only what they prefer
in the market but also the trajectory firms will later take to meet
customer preferences.
Notable in Fig. 2 is how our typology differs from Oviatt and
McDougall (1994) view of international new ventures; one that
uses Porter’s coordination of value chain activities and number of
countries entered. These two dimensions are not considered
relevant to the ‘consumer as international entrepreneur’ argument
for two reasons. First, in our conceptualization, the value chain is
distributed among individual consumers. Second, the boundary of
country markets where ‘consumers as international entrepreneurs’
co-create and co-produce value and opportunity is blurred through
Fig. 2. A typology of consumers-as-international entrepreneurs.
 Y. Chandra, N. Coviello / Journal of World Business 45 (2010) 228–236
the 2- and 4-dimension concepts of space and time. We now
outline the quadrants of our typology of consumers-as-interna-
tional entrepreneurs.
5.1. Consumers as international arbitrageurs (Quadrants i and iii)
The international arbitrageur is perhaps the simplest form of
international entrepreneurial activity undertaken by consumers.
These Kirznerian arbitrageurs can manifest themselves as
international traders (Quadrant i). This is akin to Oviatt and
McDougall’s (1994) exporters and importers except they buy and
sell to each other in an online environment. Their buyers can be
individuals as well as organizations. Examples of international
traders include the millions of end-user consumers who discover,
create and exploit opportunities by acting as traders in the eBay
online community. The products traded range from digital
products such as CDs and computer games to collectibles and
furniture. Trading in a community like eBay requires an under-
standing of international transactions and typically involves
knowledge of bank remittance across borders, using electronic
payment services, coordinating international logistics and how to
attract potential buyers across markets. Therefore, there are
elements of ‘‘entrepreneurship’’ and ‘‘international-ness’’ in
engaging in eBay.
These consumers-as-international entrepreneurs who operate
as traders share many similarities with the consumer entrepreneur
of Huefner and Hunt (1994) described earlier, except that they
operate in the international context, are empowered by online
technologies, and are members of online communities. They do not
possess unique expertise or knowledge nor are they ahead of the
trends as normally found among those in Quadrant iv, and to some
extent, Quadrant ii. However, their general knowledge of market
imperfections across various product categories combined with
their understanding of how the online market works, helps them
exploit opportunities. At the same time, these international
entrepreneurs only trade and consequently, have little influence
over the preference of the market.
Individual consumers can however, play the role of international
financiers who bridge failures in the financial markets (Quadrant
iii). Examples of international financiers include the peer-to-peer
lenders in Zopa.com or Boober.com who act as online bankers or
venture capitalists using their own money to provide different
types of personal and business loans to people in many countries
(Kupp & Anderson, 2007). These international financiers are
essentially consumers of financial and banking services who
understand the challenges in obtaining financing from formal,
established institutions by average borrowers. Peer-to-peer
community websites help these international financiers identify
and exploit opportunities to create value from the gaps left by the
traditional financial markets. The motives of the peer-to-peer
lenders are not only to generate additional income from interest
fees but also for altruistic reasons such as satisfaction with
assisting others and moral worth (Hulme & Wright, 2006).
As Kirznerian entrepreneurs, arbitrageurs meet the existing
needs of individual consumers with the ‘buy low-sell high’ logic.
However, the international financiers (Quadrant iii) generate more
influence on consumer preference in the market space compared
to international traders (Quadrant i). The sustained competitive
advantage among both types of consumer-as-international arbi-
trageur lies in their unusual ability to spot and act on emerging
opportunities before competition reduce profits and knowledge of
markets and sellers. As implied by Fig. 2, those in the Kirznerian
quadrants (i and iii) do not involve the creation of new products,
new sources of supply, new markets, new ways of production and
new ways of organizing that those in the Schumpeterian quadrants
(ii and iv) do. Rather, they discover and are alert to misallocated
233
resources and create new value by changing means-ends relation-
ships in online markets.
5.2. Consumers as international outsourcers (Quadrant ii)
International outsourcers are Schumpeterian in that they
engage in more innovative or creative activities in the creation
of products than do international arbitrageurs (Quadrants i and iii).
They are however, less influential in shaping customer preferences
in the market compared to the international innovators and
producers discussed later in Quadrant iv. Instead, they tend to
function by serving the specialized needs of firms, or they perform
‘made-to-order’ types of activities in the value chain of the global
economy. They rely on their tacit knowledge, creativity and
understanding of themselves as consumers as sources of compe-
titive advantage.
These international entrepreneurs emerge in response to the
rise of online markets that attempt to fill the needs of large firms
for better ideas and solutions using heterogeneous consumers
scattered around the world. Examples include knowledgeable
consumers who participate as international outsourcers in the
online market by contributing advertising ideas (see www.bootb.-
com, a community with 7500 members from 116 countries). Large
firms such as Lego, Peugeot and UNICEF have looked outside their
firm and traditional advertising industry for new ideas by tapping
into Bootb’s networks. Briefs are published online with set
financial rewards, ranging from thousands to hundreds of
thousands of dollars. For instance, in 2008, an individual from
India used his spare time to create an imaginative advertising
concept for a large US client and ‘won’ US$100,000. In this case,
Bootb received 322 submissions from 67 countries. Here, the
opportunity is international by nature and is identified and
exploited using IT-enabled tools leading to international revenue
generation by the user/consumer. As such, it is an example of
international entrepreneurship. Another is www.trendwatching.-
com where over 8000 individuals from over 70 countries, all
consumers of news and lifestyle products, act as entrepreneurial
trend watchers. As a result, they receive rewards in the form of
gifts, e.g. iPods and computer games. The growth of such users/
consumers in online communities reflects the growing trend of
consumers-as-international outsourcers.
5.3. Consumers as international innovators and producers
(Quadrant iv)
This final group is the hallmark of international entrepreneur-
ship among consumers. These consumers-as-international entre-
preneurs engage in design/production/innovation activities and
have a significant influence on shaping the nature of consumer
preferences in the market. Their competitive advantage lies in the
extensive use of knowledge and creativity and their collaboration
with others in the process of creative destruction. As such, they are
Schumpeterian entrepreneurs. They draw resources and ideas
from their proprietary ties with colleagues. They tend to be ahead
of the trends in the market, have unique needs and specific
technical expertise. Therefore, they have the greatest power to
influence market preference compared to the other forms of
international entrepreneur in Quadrants i–iii. Their role as lead
consumers/users may also shorten their path towards interna-
tional business entrepreneurship.
One example is the software engineer (discussed earlier) from
the open source software community Linux (von Hippel, 2001; von
Krogh & von Hippel, 2006). The development of Linux-based
software by the Indian engineer/user involves complex resource
configuration and value creation that crosses national borders.
Moreover, the software is sold by the user across borders and
234 Y. Chandra, N. Coviello / Journal of World Business 45 (2010) 228–236
generates foreign revenue. This shows evidence of international
entrepreneurship. Another example is seen in the InnoCentive.com
platform where users/consumers take part in the design of new
technical products and solutions. There are over 160,000 creative
thinkers in 175 countries in this community, many of whom are
based in emerging economies in former Soviet Union states, India,
China, South America as well as those in Western Europe and the
US. The creative outputs of these users/consumers are commer-
cialized across borders through the InnoCentive website. The
recipients and contributors of the outputs are frequently located in
different countries. Since users identify and exploit opportunities
to create value regardless of geographical location, and then
commercialize their creative outputs across national borders, we
again see evidence of international entrepreneurship. These
consumers-as-international entrepreneurs do not act within or
as an organization, nor do they pursue their activities as a full time
occupation. Rather, this is a hobby with some financial reward.
Additional examples include the consumer entrepreneurs at
Wikipedia.com. These are users of information who identify
opportunities across national borders to co-create information-
based products. Importantly, they are specific examples of
consumers-as-international entrepreneurs driven primarily by
non-economic motives. In contrast, consumer entrepreneurs in
Second Life (the 4-dimension digital world functioning as a fully
integrated economy architected to reward risk, innovation, and
craftsmanship) make real profit by creating their own virtual
products. For example, a Dutch fashion designer met a Hungarian
engineer and programmer in Second Life and this led to
collaborative efforts to create a virtual gallery for new technology
and art. The gallery generates visitors from many countries around
the world and proceeds from the activities are retained partly by
the founders and partly donated to charity. These activities are
pursued neither through venture creation nor as a full time
occupation. They do however involve proactive, innovative and
risk-seeking behavior to create new value in the new economy.
They involve resource configuration across borders by different
users/consumers and foreign revenue generation. These are again,
international entrepreneurial acts.
6. Conclusions and research directions
This paper has identified, defined and described the emerging
phenomenon of consumers-as-international entrepreneurs. It also
presents a typology that differentiates between four types of
consumer-as-international entrepreneur. Our work advances
theory in international entrepreneurship by highlighting that
the processes and activities involved in the discovery, evaluation
and exploitation of opportunities across national borders do not
necessarily take place within: (1) a formal business environment
orchestrated by full-time entrepreneurs who pursue entrepre-
neurship as a vocation, or (2) the conventional definition of the
market as a 3D form. We propose that as a consequence of
‘interconnectedness’, the contemporary processes and activities of
international entrepreneurship extend to individual consumers/
users who actively participate in the innovation, production,
distribution and consumption of products across national borders.
They pursue this through 2D and 4D conceptions of online
communities as markets. They are also engaged in informal
entrepreneurship for financial and non-financial reasons.
Our general premise is that the traditional focus on ‘business’
entrepreneurship, a concept that operates with a legal boundary
and within a tangible market space and time, does not fully explain
the growing prevalence of this form of international entrepreneur.
In spite of this, users as a source of entrepreneurial activity are
understudied (Shah & Tripsas, 2007), particularly in international
entrepreneurship. Accordingly, we believe the democratization of
entrepreneurship on a global scale deserves more serious attention
and should be included in the international business and
entrepreneurship research agendas. In particular, the rise of
consumers who blur the distinction between consumption,
production and distribution in international markets may become
a point for greater integration between the international business,
entrepreneurship and marketing disciplines and encourage
collaboration among scholars in these areas. From a data collection
perspective, accessing consumers-as-international entrepreneurs
will be more straightforward than for (e.g.) international new
ventures (see Coviello & Jones, 2004), given the large population of
consumers in all quadrants of Fig. 2.
One of the unresolved questions in international business and
international entrepreneurship is the definitional ambiguity
concerning venture age. This was highlighted by Oviatt and
McDougall (1994) who proposed that researchers should rely on
observable commitments in sales and resources to establish the
point of new firm inception. We return however, to Vesper’s
argument that the emergence of a venture is ‘‘spread over time in
which its existence becomes progressively more established’’
(1990, p. 97). This suggests there can be important epochs prior to
the formation of a firm that affect its knowledge, network and
resource development. Because the age of a venture is primarily
determined by its legal incorporation, most activities conducted by
consumers-as-international entrepreneurs are missing in the
explanation of current theories. This is in spite of calls for research
on the drivers of internationalization prior to firm existence, i.e. the
entrepreneurs (Weerawardena, Sullivan Mort, Liesh, & Knight,
2007; Zucchella, Palamara, & Denicolai, 2007). Further, in the same
way that international start-ups may evolve to other forms of
international organization, consumers who act as international
entrepreneurs may develop their experience, networks and
resources. Over time they may decide to form new ventures.
The logic behind this transformation process is well explained by
the Oviatt and McDougall (1994) framework that is central to
traditional international entrepreneurship research. We suspect
that the ‘consumer as international entrepreneur’ is an important
concept in this regard.
We consider this paper as complementary to research on the
drivers of early internationalization (e.g. Weerawardena et al.,
2007; Zucchella et al., 2007). It is also a partial response to Zahra
(2005) and Coviello’s (2006) calls for a better understanding of the
issue of learning and resource/network development in new
ventures. That is, our arguments point to the possibility for
scholars to trace back to the early entrepreneurial learning
experiences of international consumers (e.g. the teenage eBay
trader or the Linux user entrepreneur) to understand how they
discover, evaluate and exploit opportunities which may influence
subsequent learning, capability development and new venture
formation. Related to this is research distinguishing between
opportunity and choice when consumers-as-international entre-
preneurs go international. The early entrepreneurial activities of
these consumers may also influence the resource and network
dynamics of international new ventures when the consumers
formalize their entrepreneurial activities. Research on these issues
may generate new insights as to if and how, for example, the
different types of consumers-as-international entrepreneurs
evolve into Oviatt and McDougall’s (1994) four types of interna-
tional new ventures or more recently, the Di Gregorio et al. (2008)
classification that incorporates cross-border combinations of
resources and/or markets. As such, we consider our arguments
complementary to those focused on the international new venture.
Another important issue for future research relates to why, how
and when consumers in the four quadrants in Fig. 2 may shift from
one quadrant to the other and/or occupy multiple positions. The
Austrian economics’ concept of unequal distribution of knowledge
 Y. Chandra, N. Coviello / Journal of World Business 45 (2010) 228–236
in the society (Hayek, 1945) suggests that each consumer can
develop a unique set of knowledge that others may not necessarily
have access to. This can lead to specialization of knowledge and
interest and therefore, the tendency to become a certain type of
consumer-as-international entrepreneur. More research needs to
be done to better understand this issue and could well incorporate
measures to assess the consumer-as-international entrepreneur’s
entrepreneurial, learning, innovation or market orientations.
Other avenues for research are numerous. In the psychology
and marketing-related stream, studies could explore the motiva-
tions, attitudes and cognitive abilities of consumers who partici-
pate in international entrepreneurial activities. The issue of
motivation is particularly pertinent given the consumer-as-
international entrepreneurs’ desire for financial gain is only one
motive. Other non-pecuniary objectives are also (and perhaps)
more relevant. Scholars can also apply network economics and
macro-marketing perspectives to study how and why consumer-
as-international entrepreneur communities are sustainable.
Returning to the international business and entrepreneurship
lens, there is more work to be done to understand the
consequences of consumers-as-international entrepreneurs on
the success of born global firms. For instance, we do not have a
complete understanding of why certain born global firms are
significantly more successful than others. We suspect that the
highly successful ones may have evolved from consumers who
have previously acted as informal international entrepreneurs.
Research in this area could show if international new ventures
founded by consumers-as-international entrepreneurs compete
differently from others, and if the different forms of the
phenomenon impact this.
More studies are also needed on the impact of the innovations
generated by these consumers on the sustainability, efficiency and
performance of MNCs in today’s competitive global markets. If this
turns out to be significant, theories of international business and
entrepreneurship and the logic of ownership, location and
internalization advantage may need to be complemented by ideas
related to distributed intelligence, resources of interconnected
individuals and network externality. This presents opportunities
for theory development and refinement. Moreover, from a 4-
dimensional concept of market and space, Second Life is only the
tip of the iceberg of the future of consumption, entrepreneurship,
innovation and economics in a global context. This is an interesting
research context that can generate important theories in interna-
tional business and entrepreneurship. Whichever route/domain is
pursued, this new perspective on consumers-as-international
entrepreneurs will put greater attention on individual consumers
and communities of consumers across borders rather than on the
firm per se, as a unit of analysis in light of the democratization of
global entrepreneurship.
7. Managerial relevance
For practitioners, our discussion uses the new economy as
context. Such a context allows for low cost, real-time collection of
ideas, competence signaling and sharing of market offers. Like
Jeppesen and Frederiksen (2006) however, we believe that a
growing number of physical products are increasingly controlled
by software components. Thus, they too will benefit from the
digital environment discussed in our paper, where users and user
communities collaborate to innovate. Further, our typology
highlights the various pathways that individuals may traverse
as international entrepreneurs. Arbitrageurship, in the form of
international traders and financiers, tends to enact relatively lower
entry barriers and is a relevant starting point for consumers
interested in learning the basics of international entrepreneurship.
For consumers who have specialized technical skills or know-how,
235
Schumpeterian innovation in the form of international outsourcers
and innovators/producers can be a natural point of entry in
learning about international entrepreneurship. These allow con-
sumers to accumulate resources, contacts, and overcome psycho-
logical barriers in conducting business internationally. In turn, this
may facilitate further discovery of (unthought-of and unexpected)
opportunities that cross national borders and eventually the
creation of a new venture in international markets. As Holcombe
(2003, p. 33) says: ‘‘each entrepreneurial action creates more
entrepreneurial opportunities.’’ Overall, by outlining how con-
sumers/users can engage in international entrepreneurial activ-
ities via four different avenues, they can develop international
experience as entrepreneurs.
Acknowledgments
We are grateful to Sofy Carayannopoulos for her insightful
comments. We also thank the anonymous JWB reviewers and Peter
Liesch for their constructive guidance and support.
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