Entrepreneurship

Introduction
Andrew Erkin, CEO and founder of d1g1t, gave a presentation about his experience in
entrepreneurship and opportunity recognition. The company, founded in 2013, is both a tech and
accounting service firm. The firm was recognized for taking the forefront in financial forecasting
amidst the uncertainty brought about by the 2020 pandemic. Erkin is a repeat entrepreneur;
having started several business ventures in the same industry. In this essay, Andrew Erkin’s
process of opportunity recognition, are analyzed and related to theories discussed in select pre-
provided seminal articles. His personal experience as an entrepreneur is examined to extract a
token form of what an entrepreneur is and they act with regards to opportunity recognition.
Discussion
Erkin ostensibly leans towards cognition-based theories in opportunity recognition. He

specifically mentions Robert Baron (2006a; 2006b) and shares his process of actively looking
for “gaps” in industries, determines value in said gaps, finds “scalable solution”, and then later
exploits these gaps when he recognizes opportunity in them. He asserts that his prior experience
in business ventures, prior knowledge in web design and the tech industry, and extensive social
network are instrumental in finding and later developing opportunity. Erkin is also sensitive to
the changing landscape of the finance industry brought about by technological innovations. He is
one of the very first to recognize the opportunity in these changes and actively pursue them.
These factors are emblematic of Baron’s cognition-based theory of pattern recognition.
Moreover, Erkin admits that his years as a new entrepreneur—specifically his

untempered passion and enthusiasm—reached a critical threshold that obstructed objective
judgment of the value and viability of an opportunity. This further aligns Erkin with Baron’s
emphasis on experiential knowledge and his conclusion that new entrepreneur tend to “love their
own ideas too much” to let go or objectively evaluate them. Erkin claims that his experience with
past ventures and failure prompted him to “step back” and reassess the situation with a much
clearer eye and a more educated mind. Baron’s assertion that pattern recognition can be honed
through education, training, and experience is supported by Erkin’s anecdotes.
Further, it can be observed that Erkin and his experience with d1g1t share the same
elements with Corbett’s proposals. Erkin talks of lessons he picked up during the process of
running a business (e.g. pricing, human resource, etc.) which supports Corbetts argument that
information and learning is acquired continuously at different intervals in the venture. This
reiterates Baron’s conclusions that differences in information (assymetrical knowledge) and
innate individual traits (e.g. creativity and intelligence) affect opportunity recognition. Overall,
the theories mentioned support the hypothesis that cognition-related factors significantly impacts
opportunity recognition and best explains why Erkin recognizes opportunity where others do not.
Although Erkin now actively searches for opportunity through pattern recognition, his
initial experience in entrepreneurship was not due to active or even passive searching.
Nevertheless, it did require a measure of entrepreneurial alertness. His first business venture,
Entropic, is an exemplary example of a spontaneous recognition of opportunity. Dew (2014)
defines spontaneous recognition as a direct amalgamation of prior knowledge of domain (Erkin’s
knowledge in graphic design) and a contingent factor (payment from Erkin’s DJ roommate).1
Later on, Erkin mentions that he was left with a “feeling” of discovery after a break prior
to the founding of d1g1t. Abstract notions such as gut-feelings and “eureka-moments” are
common themes in serendipitous recognition. However, Dew’s (2014) definition of serendipitous
recovery is less about instinct and more about the element of contingency introduced to active
search and prior knowledge. This definition falls in line with Erkin’s personal and environmental
circumstances at that time. He had prior knowledge of the industry and was also actively
searching for opportunity. The contingency factor may have come from the infectious energy of
1
Erkin mentions he was surprised to be paid for doing what he loves therefore it is safe to assume he was not
passively searching for an opportunity in that domain at that time.
the startups he hang out with or in the form of Xero, whose business practices, values, and
principles inspired Erkin as they were not all that dissimilar from his own.
The partnership between Xero and d1g1t may have been serendipitous, but its success is
best explain by cognition, specifically that of Ward. Erkin mentioned the way real-estate markets
rejected d1g1t’s services and only years later on caught up to cloud. According to Ward, a
balance between creativity and cognitive processing should be established to form a more
constrained venture that would be relatable to others instead of being too alien. One of these
constrained cognitive processes is analogous processing. This explains how and why d1g1t and
Xero’s partnership formed and why it is a success. Xero’s objectives of digitizing finances and
accounting appealed to Erkin who shared the same ideas and values regarding web services. The
partnership dealt positive effects on funding and stored knowledge while effectively minimizing
risk. Furthermore, Xero was already making a name for itself at that time and the idea of a cloud
as platform for finance services was already familiar to the masses. Communicating d1g1t’s
ideas to markets through analogous association with Xero helped familiarize people with less
than full understanding of the opportunity.
Conclusion

Entrepreneurship

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Introduction

Erkin ostensibly leans towards cognition-based theories in opportunity recognition. He

Moreover, Erkin admits that his years as a new entrepreneur—specifically his

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