Abstract Research summary Entrepreneurship unfolds under uncertainty, which complicates entrepreneurs' efforts to align idea, action, and environment to reach product–market fit. To illuminate how entrepreneurs perform such alignment, we complement the theory‐based view and its focus on cognitive uncertainty with a discussion of behavioral uncertainty. We propose that entrepreneurs face four types of uncertainty: (1) uncertainty about the state of their environment (state uncertainty), (2) uncertainty about the interpretation of environmental cues (perception uncertainty), (3) uncertainty about the feasibility of turning an idea into a tangible product (execution uncertainty), and (4) uncertainty about the effect of their action in the environment (effect uncertainty). To mitigate these forms of uncertainty, entrepreneurs engage in idea–environment (entrepreneurs as visionaries), idea–action (entrepreneurs as engineers), and action–environment (entrepreneurs as experimenters) alignment. Each of these alignment strategies is associated with benefits and constraints in mitigating the uncertainty discussed. Our paper thus generates new insights into the nature of uncertainty and its effective mitigation in the quest for product–market fit, a critical precursor of success in entrepreneurship. Managerial summary Entrepreneurship succeeds when product and market are aligned. We map two sources of uncertainty that stand in the way of reaching product–market fit. Agentic uncertainty concerns the entrepreneur: interpreting signals (perception uncertainty) and making the idea work (execution uncertainty). Environmental uncertainty concerns the market: what state the market is in (state uncertainty) and how the market will react to products (effect uncertainty). Entrepreneurs can mitigate these uncertainties via three complementary strategies: (1) idea–environment alignment (“visionary” scanning the environment), (2) idea–action alignment (“engineering” to prove feasibility), and (3) action–environment alignment (“experimenter” testing to learn what sells). Each alignment strategy yields benefits and costs toward reaching product–market fit. In combination, they accelerate product–market fit—a critical driver of success in entrepreneurship.
Zellweger et al. (Sun,) studied this question.