How Do Entrepreneurs Form Social Business Opportunity Beliefs? An Opportunity Actualization Perspective

Abstract

The opportunity actualization perspective has recently gained attention as a key framework for exploring entrepreneurial opportunity. The perspective’s theorizing, however, predominantly focuses on profit-driven opportunities, limiting its applicability across the spectrum of entrepreneurial behavior. To broaden applicability, we examine how entrepreneurs motivated by social and economic considerations form their opportunity beliefs. We use a qualitative research approach that combines think-aloud protocols and semi-structured interviews with 24 impact entrepreneurs. Our findings allow us to develop a holistic model of social business opportunity belief formation, incorporating market and non-economic considerations, emphasizing the role of non-market stakeholders. We derive important implications for both theory and practice.

Introduction

In an attempt to resolve the lack of conceptual clarity and debate on opportunity creation and discovery in the entrepreneurship literature, the opportunity actualization perspective has gained considerable resonance in recent years (McMullen et al., 2024; Ramoglou et al., 2023; Ramoglou & McMullen, 2024; Shepherd et al., 2007). This perspective introduces a novel view of entrepreneurial opportunities as demand-driven, in the sense that entrepreneurs operate in a pre-existing environment which creates the conditions for what is possible (Gras et al., 2020; Ramoglou & McMullen, 2024; Ramoglou & Tsang, 2016). This is, it aims to challenge the prevailing agency-driven understanding of entrepreneurs with a “worldmaking mindset” (Alvarez & Porac, 2020; Sarasvathy, 2021). In line with the actualization perspective, entrepreneurial opportunities are possibilities for the actualization of desirable states of the world, not entities to be discovered or created (Alvarez & Barney, 2007). Accordingly, a prerequisite of entrepreneurial action is the belief in the existence of the environmental conditions generating such possibilities (Ramoglou & McMullen, 2024). More specifically, the propensity toward certain opportunities perceived as worth and possible to actualize emerges from the entrepreneur’s formation of the belief ¹ in the existence of “the convolution of consumer desire, technical feasibility, and economic viability of an innovation” (McMullen et al., 2024, p. 1). While the actualization perspective has only recently been introduced into the mainstream discussion of entrepreneurial opportunities, it has already received much recognition, leading many studies to base their understanding on it (Gras et al., 2020; Mitchell et al., 2024; Townsend et al., 2024).

The actualization perspective has been widely adopted to address existing problems in the entrepreneurial opportunity debate (Alvarez & Barney, 2020; Davidsson, 2023; Foss & Klein, 2020; Ramoglou & Gartner, 2023) and aims at capturing the concept of entrepreneurial opportunity comprehensively (Ramoglou & McMullen, 2024). The perspective has been particularly well-received due to its understanding of opportunities as pre-existing and embedded in the “real world,” regardless of entrepreneurial agency. However, at the same time, the perspective in its current form is based on limited assumptions, which restrict its applicability to the entire spectrum of entrepreneurial activities. So far, the actualization perspective has almost exclusively theorized what is “understood about ‘opportunity’ when discussing it within the context of pre-action and for-profit entrepreneurship” (Ramoglou & McMullen, 2024, p. 290). For instance, the first attempts to develop an understanding of how opportunity beliefs are formed focused solely on “profit opportunity beliefs” (McMullen et al., 2024, p. 5). Accordingly, the perspective is mainly based on the understanding of consumer demand as the most important precondition, and the consumer as the most decisive stakeholder in determining what can be considered an entrepreneurial opportunity (McMullen et al., 2024).

However, this understanding neglects the diverse nature from which entrepreneurial behavior emerges (Welter, 2011; Welter et al., 2017), which is particularly problematic in today’s world, where entrepreneurship is seen not only as a means to financial prosperity but also as the key to solving major societal challenges (Bacq & Wang, 2024; Markman et al., 2019). Following Gras et al. (2020), societal problems, social aspects, influences, and outcomes must be considered part of the basis for what is understood as entrepreneurial opportunities in today’s world. In other words: “the actualization of desirable economic outcomes cannot be decoupled from nonmarket and noneconomic considerations” (Ramoglou et al., 2023, p. 132). Thus, to allow even broader applicability, the actualization perspective needs to be extended by integrating external demands and stakeholders in a more holistic approach. This is particularly important when considering the recent deterministic trends in current entrepreneurship theory, which pay more attention to non-market stakeholders and non-economic considerations as external preconditions and enablers of opportunities (Davidsson et al., 2020; Ramoglou, 2021).

In our study, we seek to extend the actualization perspective by developing a broader understanding of entrepreneurial opportunities, specifically, examining how opportunity beliefs are formed in the context of social business opportunities that encompass both economic and social dimensions. We do so by merging the ongoing discussion of for-profit-focused opportunity actualization (McMullen et al., 2024) and social opportunities (Hu et al., 2020) to build a more holistic opportunity understanding that entails economic and social conditions as a prerequisite for opportunity belief formation.

To gain insight into how entrepreneurs form entrepreneurial opportunity beliefs that merge social and economic motivations, we adopted a qualitative research approach that draws on two data sources: semi-structured in-depth interviews and think-aloud verbal protocols from an imaginary decision-making task, both with a sample of 24 impact entrepreneurs. ² Based on our findings, we were able to develop a holistic framework of social business opportunity belief formation that integrates non-market and market considerations. We find that the social and business opportunity belief formation occurs separately and is then iteratively integrated through a balancing act of the different supporting and constraining boundary conditions. This alignment process is characterized by a broad inclusion of both economic and non-economic opportunity stakeholders (stakeholder breadth) and their deep engagement in the belief formation process (stakeholder depth).

This article contributes to the opportunity actualization perspective (McMullen et al., 2024; Ramoglou et al., 2023; Ramoglou & McMullen, 2024) and the debate on social business opportunities (Hu et al., 2020) in three ways. First, we expand the solely market-oriented understanding of entrepreneurial opportunities (McMullen et al., 2024) to integrate non-market considerations (Ramoglou et al., 2023). More specifically, we integrate social and societal considerations (Gras et al., 2020). This expansion of the actualization perspective allows even broader application, encompassing not only profit-oriented opportunities but also opportunities that are economically viable, socially motivated, and environmentally responsible (Bosse et al., 2023; Hägg et al., 2024). Second, we contribute to the literature on opportunity belief formation (Gras et al., 2020; McMullen et al., 2024; Wood et al., 2014) by shedding light on the increasing importance of the supporting and constraining influence of stakeholder engagement in the context of socially motivated entrepreneurial opportunities (Bacq & Wang, 2024; Bosse et al., 2023). Third, our work helps to resolve conceptual challenges and controversies in the social and hybrid entrepreneurship discourse (Hu et al., 2020; Yitshaki et al., 2022). In particular, we posit how the introduction of the theoretical perspective of actualization can resolve the conceptual challenges posed by the problematic use of the creation and discovery perspective adopted from commercial entrepreneurship in most previous work (González et al., 2017; Sassmannshausen & Volkmann, 2018). In contrast to most of these studies, we understand social opportunities as embedded and pre-existing, independent of entrepreneurial agency (Hu et al., 2020), which provides a more appropriate and ethical theoretical framework for future studies exploring social opportunities.

Theoretical Background

Actualization Perspective of Entrepreneurial Opportunities

A substantial body of literature has established entrepreneurial opportunity as a fundamental concept in entrepreneurship literature (Alvarez & Barney, 2007; Davidsson, 2017; McMullen et al., 2024; Shane & Venkataraman, 2000; Wood, 2017). Some scholars even argue that “what is an entrepreneurial opportunity?” is the main question in entrepreneurship research (Ramoglou & McMullen, 2024; Shane & Venkataraman, 2000; Singh, 2001).

However, despite its utility, there are notable challenges associated with the concept, and several scholars have criticized the lack of definitional clarity and theoretical precision associated with the opportunity concept (Ramoglou & McMullen, 2024; Wood, 2017). A key contributor to these challenges is the long-running debate about whether entrepreneurial opportunities emerge in a process of creation or discovery (Alvarez & Barney, 2007; Berglund et al., 2020; Braver & Danneels, 2018; McBride & Wuebker, 2022). In turn, the increasing complexity of the entrepreneurial opportunity discussion has led to calls from scholars to abandon the concept of entrepreneurial opportunity altogether (Klein, 2008) or to “start afresh” completely with a new focus (Davidsson & Tonelli, 2013, p. 7; Foss & Klein, 2012).

In an attempt to propose an alternative perspective on entrepreneurial opportunities and solve the existing challenges, the entrepreneurial opportunity actualization perspective has been introduced and recently taken up by the mainstream entrepreneurship literature (McMullen et al., 2024; Ramoglou et al., 2023; Ramoglou & McMullen, 2024; Shepherd et al., 2007). The actualization perspective has emerged as an alternative understanding of entrepreneurial opportunities lying on the demand side, as opposed to the prevailing agent-centric perspectives of opportunity discovery and creation that focus heavily on the supply side (Ramoglou & Tsang, 2018). The focus here is on the independent existence of these conditions from the entrepreneurial agent. More specifically, entrepreneurs operate within boundaries set by the environment in which they are embedded. Unless they recognize and operate within these boundaries, their entrepreneurial agency alone will not be sufficient for success (Ramoglou et al., 2023).

Opportunity Belief Formation in the Opportunity Actualization Perspective

The opportunity actualization perspective proposes that before an opportunity can be actualized, opportunity beliefs must be formed (Gras et al., 2020; McMullen & Shepherd, 2006; McMullen et al., 2024). According to Shepherd et al. (2007) and Grégoire et al. (2010b), opportunity beliefs are the formation of subjective beliefs that an opportunity exists for the willing and able. Importantly, those beliefs are separate from the evaluation of whether one particular individual (or firm) should attempt to exploit the opportunity. In other words, “opportunities consist of environmental conditions (situations) that are interpreted as opportunities when those conditions allow advancement of goals” (McMullen, 2015, p. 659).

Accordingly, opportunities are not products, services, or artefacts discovered or created by the “world-making” agentic power of the entrepreneur (Ramoglou et al., 2023), but rather the existence of the necessary agent-independent conditions for an imagined world state to be genuinely possible and not just imaginary (Ramoglou & McMullen, 2024). As McMullen and Shepherd (2006) and Shepherd et al. (2007) note, from an epistemological perspective, the prospective assessment of opportunities can be nothing other than beliefs that guide the propensity toward opportunities that are perceived as actualizable. Consequently, opportunity-oriented entrepreneurial action requires the formation of a belief that all the necessary conditions are present to reach a desired world state, leading to a propensity for certain opportunities to actualize (Ramoglou & McMullen, 2024).

According to the opportunity actualization perspective, these necessary pre-existing conditions are referred to as “opportunity ingredients” (Ramoglou, 2021). Most studies adopting the opportunity actualization perspective focus on one market condition in particular, the existence of consumer desire (McMullen et al., 2024), as a key ingredient for the formation of an entrepreneurial opportunity belief. Accordingly, and in line with the Schumpeterian understanding, “the real leader is the consumer” (Schumpeter, 1983, p. 21). That is, while products that satisfy desires can be created, desire itself, as a necessary precondition, is invariably pre-existent (Ramoglou & Tsang, 2016). Yet, whereas the pre-existence of desire constitutes a fundamental condition, it is not, in isolation, sufficient for the formation of an opportunity belief, which additionally necessitates belief in both the technical feasibility and the economic viability. Technical feasibility refers to the realizability of a product or service. Economic viability, on the other hand, emerges from the interplay of consumer demand and technical feasibility, leading to profitability. Together, these three preconditions and the belief in their existence represent the basis for the formation of for-profit opportunity beliefs (McMullen et al., 2024). In that regard, it is important to note that opportunity beliefs are essential as they “can cause action—but not opportunity existence” (McMullen et al., 2024, p. 3). If an opportunity belief but not an actual opportunity exists, a respective belief will eventually prove wrong, and entrepreneurs find themselves in the state of non-opportunity (Gras et al., 2020; Ramoglou et al., 2023).

Social Issues as Non-economic Considerations in the Opportunity Belief Formation

Recent studies have criticized the current state of the actualization perspective as being too narrowly defined and theorized for two main reasons: First, due to the lack of integration of non-market considerations into the actualization perspective (Ramoglou et al., 2023), and second, the unexploited potential on an integration of the perspective into the social entrepreneurship literature to overcome current conceptual challenges related to social opportunities (Gras et al., 2020; Hu et al., 2020).

First, in addition to consumer desire, technical feasibility, and economic viability, other opportunity ingredients, such as non-market considerations and holistic stakeholder engagement, may play a central role in what should be understood as an entrepreneurial opportunity. On the same notion, additional opportunity ingredients may precondition a propensity toward what ought to determine an actual entrepreneurial opportunity in today’s world (Bosse et al., 2023; Bosse & Sutton, 2019). More specifically, it is assumed that the power of non-economic considerations and the underappreciated role of non-market-related interest groups can lead to a state of non-opportunity, even when consumer desire, technical feasibility, and economic profitability are present (Gras et al., 2020; Ramoglou et al., 2023). In today’s world, all organizations are required to consider their externalities (Zankl & Grimes, 2024); thus, defining what should be pursued as an opportunity or not is central to discuss. Consequently, according to this understanding, business opportunity beliefs may not be successfully actualizable without the adoption of a comprehensive consideration of the sustainable and social feasibility of opportunities. In other words: “the actualization of desirable economic outcomes cannot be decoupled from nonmarket and noneconomic considerations” (Ramoglou et al., 2023, p. 132).

Moreover, the neglect of considering non-market and non-economic considerations in theorizing about entrepreneurial opportunities and opportunity beliefs is particularly problematic in times where scholars call for responsible entrepreneurship as the new normal (Kickul et al., 2025; Zankl & Grimes, 2024), the entrepreneur as a responsible individual (Hägg et al., 2024), the entrepreneurial opportunity as a responsibility (Bosse et al., 2023), or a new focus towards (wicked) problems as the basis for opportunity (Gras et al., 2020).

Second, previous literature has shown that for-profit and social opportunities differ greatly not only in their nature but also in the methods used to identify them (Corner & Ho, 2010; Hu et al., 2020; Yitshaki et al., 2022). While the perception of consumer desire, technological feasibility and economic viability may mainly explain the emergence of opportunity beliefs and propensities toward the actualization of certain commercial opportunities (McMullen et al., 2024), socially motivated opportunities are often based on much more complex social and environmental issues, where an even greater number of factors can lead to states of opportunity or non-opportunity (Gras et al., 2020; Ramoglou et al., 2023). This is particularly because effective solutions to social problems are much more deeply rooted in and intertwined with broad social structures (Hu et al., 2020), leading to additional assessments of the feasibility and viability of opportunities (Ramoglou et al., 2023).

At the same time, although there have been attempts in the social and hybrid entrepreneurship literature to theorize entrepreneurial opportunities, the discourse faces its own challenges concerning this construct. Despite the central importance of social opportunities, there is relatively little research on this construct (Sassmannshausen & Volkmann, 2018). This, in turn, led to the biggest challenge: “SE scholars borrow concepts from market-based commercial entrepreneurship literatures such as opportunity discovery, creation, recognition, identification—often used interchangeably—to study SE opportunities” (Hu et al., 2020, p. 1034). In particular, the “world-shaping” nature of entrepreneurs is criticized when such concepts are adopted to social opportunities, as social problems are often obvious to everyone as potential opportunities to act upon, as opposed to commercial opportunities, and therefore their discovery does not require entrepreneurial cognitive labor (Hu et al., 2020). At the same time, there has been a critical discussion of the application of the creation perspective to socially motivated opportunities. The adoption of the creation understanding would require the active creation of social problems as a given starting point for entrepreneurial behavior in order to subsequently solve them through developed solutions. While Braver and Danneels (2018), for instance, argue that this is a possibility, others again criticize this understanding (Ramoglou & Tsang, 2018). Thus, in line with earlier work (Hu et al., 2020; Ramoglou, 2013; Short et al., 2009), we argue that new discourses and theoretical frameworks are needed in the context of social and hybrid entrepreneurship to investigate how (socially-motivated) opportunities arise.

To bridge these gaps in the broader entrepreneurship and social and hybrid entrepreneurship literature, it is important to understand how beliefs about opportunities that are perceived as actualizable are formed when non-economic aspects, such as social needs, non-market stakeholders, and economic considerations, are taken into account (Hägg et al., 2024; Ramoglou et al., 2023). Therefore, we investigate the research question: “How do entrepreneurs form social business opportunity beliefs?”

Method

Research Design

To investigate our research question, we employ a qualitative research approach. Our study is based on two types of data collected from the same set of 24 impact entrepreneurs, who are defined as individuals applying economic logic while prioritizing the resolution of significant environmental, social, and/or economic challenges over wealth creation (Markman et al., 2019). To gain deeper insights into their experiences and how these influence their motivations to integrate social and economic considerations, we combined semi-structured biographic interviews with a think-aloud verbal decision-making task (Ericsson & Simon, 1993) to examine the formation of social business opportunity beliefs. In this task, participants were asked to verbalize their thoughts while engaging in problem-solving exercises related to the formation of beliefs about hypothetical social business opportunities. The think-aloud approach related to imaginary cases, reflecting beliefs about pre-existing market and nonmarket conditions, fits accurately into the theoretical framework of our study, as according to the actualization perspective, opportunities emerge from “beliefs that there exist the necessary conditions for an imagined state of the world to be genuinely possible” (Ramoglou & McMullen, 2024, p. 17).

By adopting the think-aloud approach, we can investigate in “real-time” how beliefs about the “possible” as pre-action to opportunity actualization are formed (Ramoglou et al., 2023). Hence, our think-aloud approach combined with the biographical interviews allows us to gain an in-depth understanding of the formation of social business opportunity beliefs. The choice of methodology and research design is appropriate for capturing insights into real-time cognitive processes, decision-making steps, and participants’“real” efforts to identify opportunities while minimizing the bias associated with purely retrospective recall (Ericsson & Simon, 1980; Grégoire et al., 2010a; Read et al., 2009).

Moreover, the choice to include biographic data is based on previous research that has shown that cognitive processes cannot be fully understood without considering the individual carrying out those processes (cf. Shepherd & Patzelt, 2018). The semi-structured interviews provide background knowledge on their individual mindsets, helping to better understand the motivations and the context in which beliefs about social business opportunities are formed.

Data Collection and Data Analysis

Our data collection involved a variety of primary data, including think-aloud verbal protocols of an imaginary decision-making task, in-depth interviews with the entrepreneurs, and publicly available documents of the entrepreneurs’ social ventures as secondary data. The cross-checking of our diverse sources validated our data through triangulation (Flick, 2018). For theoretical selection of interviewees, we operationalized theory-based criteria (Eisenhardt & Graebner, 2007): (a) experience in founding new ventures and are therefore familiar with the task of identifying and exploiting opportunities (Grégoire et al., 2010a), and (b) have founded at least one social venture which sets out to solve a social need and simultaneously relies on commercial business practices (Battilana & Lee, 2014; Doherty et al., 2014; Santos et al., 2015). To broaden the generalizability of our findings, we have no restrictions in terms of industry, age, ownership, or size of the ventures of the entrepreneurs.

Our participant recruitment strategy comprised three key pillars: First, we recruited participants through a call for participation in our internal network. Second, we conducted comprehensive research on experienced entrepreneurs in Germany and contacted them using a cold call strategy. Third, we employed a snowball sampling technique and asked the initial participants to introduce us to potential additional participants from their network.

For the core part of our study, we adapted the quantitative research instrument of Sarasvathy (2001) and Read et al. (2009) to a qualitative research design and developed an experimental research design consisting of ideation tasks to identify: (a) a social problem and (b) a market opportunity for an imagined product or service solving this problem. The participants were given a brief introduction to a task on imaginary social business cases and then asked to think aloud while performing a set of entrepreneurial problem-solving tasks of ideation and information screening (Read et al., 2009; Sarasvathy, 2001). They were invited to express such thoughts as opinions, decisions, and feelings. For the imaginary case, the participants were asked open-ended questions, such as: “What could be your potential social issue you want to solve?—Why?,”“What information would you seek about the social problem, potential customers, and potential competitors?,” or “What would be your first steps of opportunity development?—Why?”

The task was framed in a way that explicitly prompted the entrepreneurs to address a self-chosen social issue as a starting point to stick to the social business context. In addition, the questions were not tied to a strict sequence but served as a guideline that allowed for deviations during the interview. We also conducted semi-structured biographic interviews with the participating entrepreneurs to understand their background and previous experiences, ending up mainly informing the first part of our model that contains information about motivations, private experiences, and how this is related to social and economic alertness.

All the data are digitally recorded, transcribed (where necessary, translated into English), coded, and interpreted, following an inductive, qualitative methodology for the data analysis of our study (Edmondson & McManus, 2007; Gioia et al., 2013). This allowed us to clearly structure and present our qualitative findings, ensuring analytical rigor. Our analysis consisted of the following three-step process, supporting us to develop a clear data structure and derive a grounded framework (Magnani & Gioia, 2023):

First, similar to other recent qualitative studies (Mittermaier et al., 2023), we started segmenting our data into first-order codes. We coded openly with the help of Atlas.ti to sort our data into small segments and interpreted them to assign codes (Strauss & Corbin, 1998). As an example, we coded statements about dissatisfaction with the lack of integration of migrants into society as “Dissatisfaction of Status Quo.” The codes and their interpretation are the result of the consensus between three of the authors. In the case of disagreements, the two additional authors facilitated until a consensus was reached on the codes. In the second step, we grouped our first-order codes into second-order theoretical themes by comparing the resulting categories and labelling them (Miles & Huberman, 1994). This step allowed us to identify patterns related to the opportunity belief formation process, which, however, were detached from the order of the questions, reflecting that the sequence of our questions was not leading the participants. In the final step, these second-order themes were aggregated into dimensions, which were then reflected in an iterative process with theory from the entrepreneurship literature and mapped in the development of a framework (Gioia et al., 2013). To demonstrate the rigor of this qualitative research, Figure 1 provides an overview of the data structure of the first-order codes, second-order themes, and dimensions (Gehman et al., 2018).

Figure 1.

Coding structure.

Findings

We conducted this study to investigate how entrepreneurs form social business opportunity beliefs. In this section, we report the findings of our analysis. They are organized according to the data structure in Figure 1, which groups nine second-order themes into four aggregated dimensions. These dimensions represent the four key concepts introduced in our study, which are: “Individual alertness to social business opportunities,”“Forming social opportunity belief,”“Forming business opportunity belief,” and “Iterative Reconciliation of (Mis-)Fit between Social and Business Opportunity.” We developed a framework (Figure 2) to visualize the understanding of the observed mechanisms of the social business opportunity belief formation. While both types of data were incorporated into our overall model, the think-aloud protocols mainly provided information about opportunity belief formation and iterative balancing processes, as opposed to the semi-structured interviews, which provided mainly insights into entrepreneurial alertness and motivation.

Figure 2.

A framework of social business opportunity belief formation.

In addition, Table A1 condenses the details of the interviewees, including the entrepreneur’s background, the chosen social issues, their imaginary solution approaches, and their designed social business concepts.

Individual Alertness to Social Business Opportunities

In our analysis, and in line with previous studies (Brownell et al., 2025; Lanivich et al., 2022; Tang et al., 2012), we identified individual alertness to social business opportunities as the starting point for initiating opportunity belief formation. This alertness arises from a dual acknowledgement on the entrepreneur’s side: alertness to the existence of a social issue and, simultaneously, acknowledging that this issue is best addressed through business-driven solutions.

Alertness to Social Problems

Our analysis revealed that most entrepreneurs strongly believe that social conditions are deteriorating or moving in an unfavorable direction. This influences their perception of the current economic, political, and social status quo. Thus, many entrepreneurs admitted that they continuously observe others, reflect on their day-to-day environment, and finally come to the conclusion that change is needed. For example, some participants described a sense of disharmony when faced with pervasive issues such as food waste, poverty, or homelessness within their social or natural environments. The following quote exemplifies this perspective:

“So, I became increasingly aware that there were too many things that were simply wrong and could no longer be justified. For me, it always felt a bit like failing to provide assistance. People who know that things are not going well and who know that people are dying somewhere. People who know that climate change has to be stopped but don’t do everything they can to stop it are actually guilty.” (entrepreneur #18)

Given this sensitivity, many entrepreneurs developed specific alertness to social issues, as reflected by the following quote:

“So, I try to go through everyday life with open eyes and look where someone has a problem. And what I see, for example, is that there are always homeless people outside my front door, in front of the bank, and that is just very obvious. That jumps out at you, that problem.” (entrepreneur #6)

This alertness to social problems encompasses broader global trends, such as “climate change and global inequalities” (entrepreneur #4) or “the refugee crisis in the Mediterranean” (entrepreneur #11), as well as locally limited or family-related social challenges. One entrepreneur exemplified the latter by addressing the issue of experiencing youth crime among young migrants in his neighborhood in Berlin, as highlighted by the following quote: “So, I believe, in my neighborhood right now, and personally, it’s also happened to me and to my friends, that violent assaults have become more frequent” (entrepreneur #3).

Furthermore, few entrepreneurs stated that they were connected to or even are still part of a disadvantaged community affected by the social challenges they identified. One example of this is entrepreneur #1, a participant with a migrant background, who developed an educational service for immigrants starting out in his new host country. He explained that his alertness to this issue stems from his perspective as an entrepreneurial migrant:

“When I arrived in Germany in 2011, I would think I had some challenges to understand the communities, the society, and I’m still facing some challenges to get mostly integrated into society. I believe that I try to solve my own personal problems, but on a bigger scale, which would be our social start-up’s chief goal, the one we founded.” (entrepreneur #1)

Overall, the alertness to social problems transforms into the desire to create (social) impact or even change the current status quo. Thus, all entrepreneurs are driven by the desire “to make the world a better place,” aiming to have the “greatest possible impact” (entrepreneur #17) on a macro level or to radically change a social issue, as illustrated by the following quote:

“I’m trying to bend the economic system itself into something better, in the sense of something more humane, ecologically, economically, and socially different, so to speak, from the ground up… So, it’s basically an attempt to radically restructure and radically democratize an economic model.” (entrepreneur #21)

To summarize, all entrepreneurs interviewed represented the perspective of entrepreneurship (Kickul et al., 2025; Mulloth et al., 2025) and entrepreneurial opportunity as a responsibility (Bosse et al., 2023; Zankl & Grimes, 2024).

Acknowledging the Importance of Business

For most entrepreneurs, the product and/or venture itself was not the central focus. Rather, it serves as an instrument to achieve the higher-order goal of addressing structural issues in society or economy: “I can also put it more harshly. So, the products don’t really matter, because it’s about turning this consumer goods industry upside down” (entrepreneur #17).

However, even though the commercial aspects are seen by the majority as “only” a means to an end, we have observed a strong determination to make a long-term impact by addressing social issues through the creation of a solid business foundation that ensures financial independence and sustainability, as the following quote shows:

“So, I think you can’t underestimate the fact that earning money is essential for it to work, or that you need to have sources of money from somewhere to make it work. I don’t think you should underestimate that. So that’s a gimmick. You can do things passionately without money, on a voluntary basis, everything for free. Of course you can. But it’s incredible what a difference it makes when you have the sources of money and can actually remunerate people for the work they do. For me, volunteering is something that is always limited in time.” (entrepreneur #9)

Some respondents even rejected the stereotype of being solely driven by altruism and instead, embraced both social impact and business ambition. One example:

“…our goal is to maximize our social impact. Of course, it is important to us that we are profitable, because we define sustainability in three pillars: social, ecological, and economic. Our aim is not to compete with non-profit organizations for funding, but to keep our business model alive in the long term with the money we generate.” (entrepreneur #15)

Further, many founders expressed themselves not being afraid to scale their ventures, aiming for significant financial success while maintaining their commitment, as illustrated by the following quote:

“No, I definitely don’t let them (business focus) fall by the wayside, although I don’t like the label… the image of social entrepreneurs is that they have no ambitions to become huge, but rather they run their small social enterprise and somehow want to be a bit of a do-gooder…and we’re not hiding our ambitions at all… we have the ambition to build a hundred-million-euro company here and ideally kick Unilever’s arse.” (entrepreneur #17)

Forming a Social Opportunity Belief

According to our findings, most entrepreneurs developed their beliefs about social and business opportunities separately, followed by an iterative evaluation and alignment of a potential fit for integration between the two. We found that while most, but surprisingly not all, participants in our think-aloud tasks started by seeking out and identifying social challenges, beneficiaries, and their needs. Some also started by creating a for-profit business opportunity belief as a starting point for creating social impact later on. However, for a clearer illustration, and because most started with a belief in social opportunity, we will present our findings in this order. Yet, it is important to note that our framework aims to map both paths as a possibility: first, the social opportunity belief formation, and then the for-profit business belief formation, or vice versa.

Beneficiary Needs

As a first opportunity ingredient in the social opportunity belief formation, we identified that all entrepreneurs started by identifying a social challenge and those who may be affected by it. Based on this reflection, they then purposefully selected their (first) target communities and potential beneficiaries as a starting point to systematically analyze their needs in more depth. For instance, entrepreneur #3 expressed thoughts to address intercultural misunderstandings between migrants and locals, reflecting on his target in the following terms:

“Then, of course, [I think of] somehow affected people from both sides: So, both young people and any residents who have already had problematic contacts here in some form or other. And that would probably also be the target group in this case. […] And for whom do we want to develop a solution?” (entrepreneur #3)

In another example, an entrepreneur was just recently confronted with a social issue in his personal life. Subsequently, he started to reflect on how a relatively broad personal experience can act as a trigger for more in-depth analysis to identify the deeply underlying social aspects and issues that may lay out the basis of a social opportunity belief: “Because I was just on the phone with my grandma yesterday. I was actually thinking yesterday about what would happen if my grandad died? Exactly. Because it affects me personally right now, so, exactly, it was more of a personal thing” (entrepreneur #12).

Focusing primarily on the social impact, the entrepreneurs in our sample iteratively evaluated, adjusted, and refined their imagination of the beneficiary’s need to create the greatest added value and leverage the greatest potential of the social opportunity. As entrepreneur #17 argued: “Where is the biggest need there, where is the easiest lever? To really work this out very, very precisely, coming from the client need” (entrepreneur #17). Without finding a satisfactory answer to these questions about a social problem, entrepreneurs did not identify a social need as the valid basis for a social opportunity that they could actualize through venturing.

Feasible Solution Approach

As the second opportunity ingredient of social opportunity belief formation, we observed the entrepreneurs’ conception of (initial) feasible solution approaches by building upon the derived needs of their beneficiaries to solve the social issue. Many of the entrepreneurs stressed the importance of first identifying potential connecting points for their solutions. Thinking aloud, entrepreneur #3 discovered that an initial idea for a possible and feasible solution to the failure to integrate immigrants in the multicultural district of Neukölln in Berlin could be addressed to the public administration:

“It could also be that the solution ends up being for the Neukölln district administration, which is somehow dealing with the matter in a completely wrong way, and somehow has to do something different first. And we want to help them with the solution.” (entrepreneur #3)

Here, it shows how the formation of a belief in potential solutions is strongly linked to the perception of a stakeholder environment that would appreciate and leverage a solution collaboratively. More specifically, it reflects how beliefs about potential solutions only emerge when it is perceived as an immediate fit with potential stakeholders; otherwise, if it is perceived that there are no collaborative stakeholders or they are even seen as a constraint, the belief in a potential opportunity is immediately discarded, and new thoughts are developed. Consequently, most entrepreneurs searched, shaped, assessed, and evaluated various approaches and ideas for solving the social issue. Moreover, to form beliefs about feasible solutions to social issues, most entrepreneurs leverage experiences or potential links with pre-existing practices and organizations to orient their approach. They tended to mention the belief in seeing the potential in advancing pre-existing projects or collaborating with organizations already tackling the same social issue, rather than starting from scratch. One entrepreneur reflected: “Who recognizes the problem right away? And what already exists? Who cares already? […] Who could you actually add something to it? Another one like that—give it a spin. Or build something on it. Or make it together” (entrepreneur #7).

The entrepreneurs also started to think about existing processes, practices, products, or frameworks in other markets to potentially apply them to the given social issue context. Entrepreneur #22 explained: “I would probably do more research at the beginning. […] What are the worst cases, what are the best practices? I know in any case that in Holland there is this […], which is also in home health care.” Others chose a different approach and designed beliefs around more novel solutions by seeing the potential of the recombination of (scarce) resources. For example, entrepreneur #8 developed the concept of a ridesharing platform for severely disabled people, gaining an understanding of the unique value of cross-usage of resources:

“Where they say, that’s a very interesting combination of things that are already there anyway, but still used in a new way. […] As an example, many severely disabled people’s ID cards also have the symbol “B” for accompaniment. […] I could build a platform for this and offer, so to speak, on this platform that the severely disabled can say, Okay, I have a severely disabled pass with the possibility of accompaniment. The companion can ride along for free.”

As an outcome of the social opportunity belief formation stage, the participants of the imaginary decision-making task came up with problem-solving ideas and first concepts for social value creation. We discovered that many entrepreneurs also regarded this exercise of forming beliefs about what is potentially possible by thinking about pre-existing conditions as a valuable and important task:

“I think that’s definitely important as a social entrepreneur to move away from utopian visions. […] In my experience, social entrepreneurs often tend to have utopian ideas and always float in this ideal world: ‘Oh, hm, it would be nice to shape this world like this.’ But […] compared to a normal entrepreneur, I would say, of this reality, of realizability, so that you really try to make a business out of it.” (entrepreneur #13)

Forming Business Opportunity Belief

In line with previous studies (McMullen et al., 2024), we also uncovered the mechanism of belief formation about business opportunities in our sample. This process is indicated by the interplay of the following opportunity ingredients: 1. the belief in a consumer desire, 2. technical feasibility, and 3. economic viability. Hence, the entrepreneurs were actively striving for identification of a commercial business opportunity and therefore discussed the belief of whether they evaluated the pre-existing conditions as feasible to underpin an economic business model. For example, entrepreneur #8 acknowledged the need to move on with economic business modeling: “So, now I have to develop some kind of business model where I can say, okay, in the end there is enough left over so that those who work in the company can live on it.”

Identifying Consumer Desire

As a first observation of the mechanism, all entrepreneurs attempted to identify and provide a more in-depth definition of various economic target groups. Many entrepreneurs made a clear distinction between customers, users, and beneficiaries. Often, as a first step, they questioned whether the beneficiaries of their solution would be equal to the customer group paying for their products, services, or economic activities. For example, entrepreneur #14 imagined an educational game with a climate change topic and differentiated between general communities as part of a natural environment as beneficiaries and the game users as paying customers. The entrepreneur reflected:

“The end users are citizens [beneficiaries] for me, but the end users are not always your customers. So, if you really know the added value of your project, like of your solution, then you can find, okay, who will be interested in this added value?” (entrepreneur #14)

We noticed that the entrepreneurs sought a better understanding of a distinct market need to generate value for potential customers and users. Thus, many entrepreneurs investigated who would potentially use the solution, product, or service and why these groups would do so. While thinking aloud, they also mentioned the importance of proactively reaching out to potential customers, users (who may be different from beneficiaries), and competitors to gain even more detailed information about consumer behavior and preferences. This is an essential prerequisite for building an opportunity belief, leading to a propensity toward certain opportunities. In an example from our data, one entrepreneur identified an idea where customers travel together with severely disabled people who own a disability ID card. This would lead to reduced travel rates for the traveler and supervised and supported travel for the disabled individual:

“I can also ultimately show the users […] what’s in it for you? […] There are already [benefits] that are quantitatively clear: you save costs. If you go by train to Hamburg, you would pay maybe normally fifty euros. […] And that is then surely such a point, where one can say, okay, there is then surely a user already ready to give there an obolus—no idea—so a standard rate of ten euros.” (entrepreneur #8)

Technical Feasibility

Moreover, the entrepreneurs also elaborated on elements of the technical and economic implementation of their concepts. We observed the entrepreneurs’ thought processes toward beliefs about potential revenue-generating activities, products, or services. We found evidence that the entrepreneurs mainly started with the screening and identification of necessary means (e.g. availability of key resources and own capabilities) while elaborating on the economic business model and the venture’s feasibility. In doing so, the entrepreneurs thought about the availability of funding and financial resources connected to the technical implementation and feasibility. Thinking aloud, entrepreneur #15 questioned his resources: “Then I would ask myself, what do I need for resources? Do I need a lot of money for that? What do I need? Programmers? User experience designers and someone who does communications? […] And access to the right collaborators?”

Moreover, we observed that the interviewees indicated initial economic stakeholders such as suppliers, competitors, and strategic partners to enrich their set of means to evaluate the technical feasibility. They mentioned especially those stakeholders with a prosocial mindset sharing the same values and beliefs toward the social mission, and who are willing to develop the venture concept further. While defining and deriving the financial value, most entrepreneurs in our study actively acknowledged the perception of the commercial business opportunity based on their economic ideation. As entrepreneur #5 outlined: “We have this problem. We can try to find a solution that can turn it into an opportunity. We can also make money on that and build on that. Two sides.”

In sum, the leverage of commercial practices (e.g. economic business modeling) indicates the economic logic of this mechanism. An outcome of this step was that the entrepreneurs came up with beliefs about possible initial underlying business model concepts, which they perceived as a crucial element for an economic business opportunity.

Iterative Reconciliation of (Mis-)Fit between Social and Business Opportunity

Although the entrepreneurs initially evaluated social and commercial business opportunity beliefs mostly separately, our findings reveal that to ultimately form a social business opportunity belief, the two separate opportunity beliefs must be imagined to be combinable. This happened through mechanisms of assessment and alignment to ensure that the social issues can be addressed in an economically viable way, integrating all stakeholders and further contradicting considerations. Here, we found that the entrepreneurs frequently adopted a stakeholder-centric approach, consistently accounting for a broad and diverse group of stakeholders at nearly every stage of aligning their opportunity beliefs. Notably, the entrepreneurs emphasized the critical importance of the existence of a broad stakeholder network (stakeholder breadth) and the expectation that these stakeholders would be willing to engage deeply in the solution development process (stakeholder depth) as part of opportunity belief formation. This broad focus refers to the involvement of an unexpectedly wide range of actors in the formation of beliefs about social opportunities, often including stakeholders not previously discussed in the literature. Meanwhile, the perceived depth of their orientation highlights the significant and often pivotal role stakeholders play in shaping and refining these beliefs.

Here, it is important to highlight how the stakeholder environment must be understood as a double-edged sword that the entrepreneurs, through iterative processes, have to balance. In other words, the apparent breadth and depth of stakeholders can unfold and interact in both enabling and constraining ways in the formation of beliefs about social business opportunities, as outlined in the following.

Combining and Balancing Social Opportunity and Business Opportunity Beliefs

To develop a combined social business opportunity belief, the entrepreneurs stated the importance of believing in the perceived possibility to collaboratively evaluate, align, and refine their concepts of social value creation and business models through the involvement of diverse stakeholders. For example, to be able to successfully define their customer segments in relation to the beneficiaries, entrepreneur #10 repeatedly expressed thoughts questioning whether beneficiaries would be the paying customers of the business model:

“What offers more added value? What’s better for them? What’s in proportion to the membership that they’re supposed to pay? And if that doesn’t work, then I would first make up my mind, okay, maybe you can get other people to pay that. So, for families, for example, that would be the companies that maybe pay that for their employees, for old people, maybe the health insurance companies.”

In doing so, the entrepreneurs also attempted to develop an understanding of whether a balance between social problem-solving and economic activities (e.g. revenue generation) is possible. On the same notion, entrepreneur #9’s reflections on a possible idea related to climate change illustrate this ongoing exploration of possible alignment and integration of social and economic opportunity beliefs:

“I think I could tweak the business model of how I generate money a bit, definitely. Of course, I can sell T-shirts if I stand up for the environment, but then I would need something smarter that also reflects that. I’d have to think a bit longer about which business model actually flatters the impact and is in harmony with it. […] What works well, and try that out. […] See what you can make money with, so that it serves your vision and purpose.”

During the imaginary decision-making process, we found that sooner or later entrepreneurs came to a point where they experienced certain challenges related to the belief that it is possible to combine social and business considerations, which would be a prerequisite for successful belief formation: “It’s certainly a tougher path than doing a normal startup because so many things are unclear” (entrepreneur #4). Those experienced challenges in the thought process primarily stemmed from the inherent complexity of forming a belief around the combination of two logics that appear fundamentally incompatible due to differing mindsets and mechanisms of action. This is evident from the following statement of entrepreneur #4, who, after many years of professional experience in the for-profit sector, decided to transition to pursue a social business opportunity.

“I’ve only been in the social innovation sector for three years. I’m a very business-minded person. I worked in corporate for twenty years. And there (in the social business sector) I didn’t understand the language and the codes and probably also tended to scare people off…“

This statement further confirms how demanding and constraining it can be to continuously operate in such diverse environments with distinct institutional logics, stakeholders, and needs.

Most participants acknowledged that to form a social business opportunity belief, they must perceive the possibility of incorporating profitability aspects, as otherwise, they would not be able to achieve their impact goals. Given this, they expressed that they must think about this tension between maximizing impact and pursuing profit, as highlighted by the following quote:

“As long as you don’t build a functioning company, you can write as much socially in front of it as you like, you won’t generate any social benefit. In this respect, the very first maxim is to build a functioning company.” (entrepreneur #11)

Another precondition challenging social business belief formation is the difficulty of achieving a “perfect” balance between the two missions. As entrepreneur #7 shared:

“It is not enough to somehow have a nice idea in your own head. But it also has to work in reality/ in the economic, social, and environmental reality in which we live, so to speak. Without losing your vision at the same time, of course. But I believe that you have to work realistically. And really scrutinize and test and try to measure what you’re doing. Because I think there are an incredible number of good ideas and people who then just get a bit lost in this one idea. Which is then perhaps not particularly scalable or not scalable in the format. And if just two or three things were to deviate from ideological principles, it would reach a lot more people. And say the overall effect is much greater. I think I see that quite often. That people are then a bit ideologically stubborn.”

Overall, the struggle and continuous effort to balance the two opportunity beliefs have been identified as key characteristics of the social business opportunity belief formation process. One approach to addressing this challenge is to adopt a stakeholder-centric perspective, allowing those perceived as opportunity stakeholders to play an active role in shaping and guiding the belief formation process.

Perceptions of Enabling and Constraining Stakeholder Environment in Terms of Breadth

Our findings reveal that the entrepreneurs considered the importance of a wide range of stakeholders during the balancing act of integrating the social and business opportunity belief. This included more obvious groups, such as customers and potential beneficiaries of the impact opportunity, as well as less obvious ones, such as lobbies, NGOs, foundations, state officials, and indirectly involved actors, such as caretakers or beneficiaries’ family members. The following quote exemplifies this breadth of stakeholders:

“So I would probably develop this together with the target groups that I have in mind. In other words, I would probably do a round with non-profit organizations and companies. Then we would do a bit of desk research, and then I would discuss with a group of people, perhaps also with universities, how and where the problem is, and how it can be addressed, and then work something out together.“ (entrepreneur #4)

While beliefs about competitors may be part of any opportunity belief formation, in the context of our study, we find that the competitors play a distinct role. Competitors as market pre-conditions are not perceived as indirect threats, but rather as an opportunity to scale impact. Thus, their perceived existence can positively affect the formation of social business beliefs. For example, the spontaneous reaction of one entrepreneur to the question of what he would do if someone offered exactly the same impact venture model was particularly insightful. He said, “That’s great” (entrepreneur #21). Several entrepreneurs perceived the existence or emergence of potential competitors not as a threat, but as a precondition of the environment that allows them to build partnerships to tackle the issues identified. One entrepreneur explained why the existence of competitors can be understood as an enabling factor for opportunity belief formation: “Basically, if there is actually someone who has already solved the problem at the same time, then the question is whether you can work together somehow. That really is always the first way“ (entrepreneur #17). In line with this logic, another entrepreneur even avoided using the term “competitor” and rather considered competitors as potential co-creators, arguing: “…that perhaps there are no competitors at all, but rather that they are co-creators. If you want to solve the same problem, then you might not have any competitors…” (entrepreneur #7).

Similarly, we observed a difference in how entrepreneurs think about incorporating other stakeholders, particularly investors, who are generally considered essential in any venturing process. A key distinction emerged regarding the time horizons they apply. One entrepreneur, for instance, compared the timeframes and mindsets of distinct groups of stakeholders, in this particular case, traditional investors, with those of so-called impact investors:

“But impact investing is also not this classic venture capital model… so you actually need investors who bring a little more time with them and also have a different expectation, who have so-called patient capital, that they are, yes, behind the cause itself and are not hoping for this big return on investment immediately, but simply bring more time with them… So the mindset is already different from the investors.” (entrepreneur #13)

Here, he tried to portray the point that socially-focused stakeholders often think in longer time periods, as social impact creation may take time to fully materialize, compared to fast-timed financial ROIs, in which commercial stakeholders often show more interest. This complexity leads to further constraints and balancing between distinct groups of stakeholders.

Similarly, opportunity belief formation in the context of social business opportunities is influenced by the presumed presence of other stakeholders, including the state and NGOs or lobbyists, which profit-oriented belief formations may not entail. Given their willingness to maximize impact, the entrepreneurs viewed close relationships with politics as promising avenues for opportunity development, as they see this as the greatest lever to maximize impact. Thus, the perception of the existence in an accessible stakeholder environment had a positive effect on the belief that they are capable of achieving an economically sustainable impact. One entrepreneur shared that the biggest potential to address the challenge of climate change is not in the development of a certain consumer product but in the possibility of establishing a lobby organization: “I would actually try to set up a blatant lobbying department and get people who are so well connected at the political level that regulations actually take place at the political level” (entrepreneur #9). He continued to outline his thought process about whether he sees these conditions and opportunities as pre-existing in his environment to form his belief about the opportunity:

“Yes, I would have access to a few contacts who I know have access to other contacts who, in turn, go upwards. I’d let them introduce me, I’d make a damn good impression, and I’d possibly get someone to help me who is more sophisticated linguistically and can express themselves accordingly in these circles. You have to, because they speak a different language. And then I would slowly work my way in.” (entrepreneur #9)

However, it became clear that without such strong connections (i.e. lobbyists) and broad networks supporting certain solutions, especially related to social injustice and global challenges, entrepreneurs would not form opportunity beliefs as they see the lack of broad stakeholder support, hindering the perceived possibility and thus the propensity to act upon the belief.

Another finding of our research is that impact entrepreneurs heavily rely on their local communities when forming opportunity beliefs. A strong embeddedness in local communities allows them to effectively organize events and generate impact pragmatically, even in the short term, as the following quote shows:

“Yes, I would definitely involve them. By stakeholders, I mean people whom I would bring to the table in this specific case, for example, would be neighborhood workers. I think there are a lot of people here who somehow work a lot with people from the neighborhood, including in problem areas.” (entrepreneur #3)

Overall, we found that entrepreneurs are highly creative in identifying potential opportunity stakeholders, ranging from volunteers as “low-cost workers for the venture” (entrepreneur #12) to large corporations as “reference customers” (entrepreneur #17), who help establish legitimacy in the market.

However, such breadth of stakeholders, especially when integrating the two logics of social and commercial, can also lead to increasing complexity, negative internalities, but also externalities. This is for different reasons. Entrepreneur #9, for instance, expressed that the amount of stakeholders “makes too much of a mess […]” and he “would follow this idea and say, okay, fewer people, but the right people. And not focus too much on mass.” On the same note, representative for most, entrepreneur #8 shared that when trying to merge logics like social and commercial, you often have to manage individuals with very distinct philosophies, often creating challenges in collaborative processes:

“…and that’s always a difficult situation in a company like this when new people join, who perhaps also bring a completely different aspect to the table. Perhaps they see the whole thing from a more business perspective. And then it’s often a case of idealists versus realists in the company. And that is a real warning signal. Then you have to look at how you can bring these two sides together so that both sides find their justification.”

Interestingly, another key constraining criterion for any kind of collaboration is the challenge of stakeholder selection and increased emphasis on expected value fit, as the following quote exemplifies:

“Firstly, of course, a basic requirement is technical expertise. That means they have to compliment me. But what’s even more important… and a necessary condition is that we have similar values, that they don’t just see the concept as a way of earning money, but that they really stand behind it. Exactly, so that’s the necessary condition, I would say.” (entrepreneur #24)

As a result, an act of balance is required to find the right equilibrium between the strengths of many stakeholders involved in impact creation and the disadvantages that slow down processes.

Perceptions of Enabling and Constraining Stakeholder Environment in Terms of Depth

Moreover, the entrepreneurs frequently mentioned that they would intensively involve the stakeholders in the problem-identification and solution-development process. Therefore, they made clear that to develop a social business opportunity belief, they must feel the possibility to deeply involve both sides of the stakeholders. Entrepreneur #14, for instance, stated:

“You have to talk to all the persons more directly concerned. You have to go deep inside. You have to find the inside of their problem. You have to really know what hurts them; you have to do it the way, like the experience for them to grab the pain points to re-identify the pain points. But you have to talk to all the people you want to solve the problems with. So, that’s the only way, and then you prepare the solution, and then you test it with this person and say, ‘Okay, I identify this, I provide you this, am I correct?’ And they say, ‘Well, okay, that’s good, but I forgot to tell you that I also have this feeling.’ And then you try it like this, and you prepare the solution, and you are looking for feedback, feedback, feedback, feedback, and test and learn and build the solution that’s your final customers, let’s say, final users.”

Another entrepreneur supported this: “[You have to] sit with them and try to know what their exact needs are, and what they are seeking, what their preferences are. And based on that, together, we can co-design the solution and the product” (entrepreneur #1).

The perceived possibility to involve stakeholders encompasses varying degrees of engagement, ranging from gathering insights through conversations with both potential beneficiaries and indirect stakeholders such as caretakers, as illustrated by the following quote: “I would probably go to the retirement homes and just pick out a number of people I’d like to interview, both the staff and the elderly themselves” (entrepreneur #10). Another entrepreneur supported this by highlighting it as the purpose of co-designing solutions with them: “That’s why I would try to bring the people who are affected or involved, or who have knowledge about it, into a room and work together on a solution” (entrepreneur #3).

In addition, many entrepreneurs emphasized their intention to test prototypes and the feasibility of the hybrid business models with their stakeholders. This may also include additional iterative steps of pivoting and continuous adaptation to improve the enterprise form:

“Then I would probably build a prototype, […] with which I would make my first features, where I know, okay, this will probably go wrong or I have to have a lucky punch, but through my features I would probably learn how to make it better, which things I have to change.” (entrepreneur #4)

Moreover, the entrepreneurs stated that the possibility to leverage pragmatic approaches to identify and contact relevant stakeholders is a necessary pre-existing condition to form an opportunity belief, as one entrepreneur explained:

“You always have some kind of network, and I would honestly phone around and ask around. Thanks to LinkedIn and Xing, it’s now relatively easy to find out who is based where and who has what name. That’s simply sales work. It’s a bit of cold calling.” (entrepreneur #17)

Lastly, many entrepreneurs described how they would constantly appraise and adapt their venture concepts during the social business opportunity belief formation to balance the two missions. They aimed to form beliefs around the possibility of scaling up to increase the potential of the social impact and to run a profitable venture. Entrepreneur #7’s comments provide a useful illustrative summary of this approach:

“It must also work in reality—in the economic, social, and environmental reality in which we live. Without losing your vision at the same time, of course. […] And also really question and test, and try to measure what you are doing. […] If only two or three things were to deviate from such ideological principles, it would reach many more people. And then the overall effect is much greater.”

Overall, the findings reflect that in the context of social business opportunity, perceptions about potential stakeholder engagement play an essential role in each step of the belief formation. Especially as they not only think about a broader range of direct and indirect market and non-market stakeholders, but also must believe in being able to involve them in much more depth and intensity. Thus, without the perception of a broad and deep stakeholder environment, entrepreneurs are not able to form social business opportunity beliefs.

At the same time, while the entrepreneurs appreciate the advantages of in-depth involvement of broad groups of stakeholders, they also outlined how this can be a constraining factor. Entrepreneur #1, for example, discussed the involvement of large groups of stakeholders in terms of use of resources and time: “And then to co-design the solution, it’s also very time-consuming and effort-consuming” (entrepreneur#1). But the necessity to deeply involve different stakeholders also brings strong pressures to create “win-win situations” for often very distinct groups, as if this is not the case, the opportunity is not an opportunity, but a project doomed to failure, as entrepreneur #9 explained:

“Is it possible to create a win-win situation that is worthwhile for both sides? And only then is it worthwhile for me somewhere, only if I can identify something like that, then it is ultimately a model that should be pursued further. If I don’t succeed and I only see success for myself, but leave the others out of it somewhere, then in my opinion it’s largely doomed to failure.”

Here too, as with the breadth of stakeholders, it can be seen that the need for comprehensive involvement of various stakeholders brings advantages, but is also associated with heavy burdens, so that the perceived ability to balance advantages and disadvantages is of key importance in the opportunity belief formation process. Ultimately, we found that while all of the stakeholder breadth and depth considerations mentioned above as supporting are considered beneficial for an opportunity belief formation when they are present, their absence, however, can be perceived as severely constraining. Here, the lack of engagement of certain important stakeholders, similar to over-engagement, can be seen as a constraint, leading to negative opportunity belief evaluations.

A Framework of Social Business Opportunity Belief Formation

Derived from our data, we present a conceptual framework illustrating the emergence of social business opportunity beliefs (see Figure 2), which summarizes the interrelationships between our findings. Our framework shows how an entrepreneur’s alertness to social business opportunities can initiate the formation of two distinct yet interconnected opportunity beliefs: social opportunity beliefs and business opportunity beliefs. Our framework extends previous frameworks that focus solely on the formation of beliefs about for-profit opportunities (McMullen et al., 2024) by theorizing additional opportunity ingredients related to non-market considerations, resulting in a more holistic framework that reflects the demands of entrepreneurship today (Kickul et al., 2025; Zankl & Grimes, 2024).

We posit that entrepreneurs initially develop their social and business opportunity beliefs separately, but in later stages attempt to find a potential fit between them in an iterative process. In doing so, they typically follow one of two paths. The majority first identify beneficiaries and their needs before forming a corresponding business opportunity belief. However, some entrepreneurs take the opposite approach, starting with a for-profit business opportunity belief as a foundation for generating social impact. Regardless of the sequence, entrepreneurs eventually engage in a process of aligning and balancing the two opportunity beliefs, which serves as a necessary step toward forming a social business opportunity belief. Here, we highlight two key factors that affect the alignability: (1) the existence of a broad stakeholder network (stakeholder breadth as an enabling and/or constraining factor) and (2) the active engagement of these stakeholders in the solution development process (stakeholder depth as an enabling and/or constraining factor). These elements play a fundamental role in the formation of social business opportunity beliefs.

Discussion

This study was motivated by the opportunity to expand the actualization perspective (Ramoglou & McMullen, 2024). While the actualization perspective has gained traction in explaining opportunity belief formation for for-profit ventures (McMullen et al., 2024), it has not yet accounted for the formation of the full spectrum of entrepreneurial opportunities, including social business opportunities. To expand the scope of the so far mainly for-profit-oriented actualization perspective (McMullen et al., 2024), we examined social business opportunity belief formation and developed a framework to better understand the process. The proposed framework makes significant contributions to both the actualization perspective (Ramoglou, 2021; Ramoglou et al., 2023) and the broader social opportunity literature (Hu et al., 2020; Yitshaki et al., 2022). In the following sections, we outline the main contributions to the literature as well as to entrepreneurial practice.

First, our study contributes to the opportunity actualization literature by expanding the perspective to a more holistic and integrative understanding of entrepreneurial opportunities, thereby meeting current conceptual demands. We follow recent calls for an understanding of entrepreneurial opportunities as responsibility (Bosse et al., 2023; Gras et al., 2020; Kickul et al., 2025), enabled through challenges and changes present in the entrepreneur’s environment (Davidsson et al., 2020). On the same notion, recent studies on opportunity actualization suggest that “the actualization of desirable economic outcomes cannot be decoupled from nonmarket and noneconomic considerations” (Ramoglou et al., 2023, p. 132). To respond to these calls and to expand the actualization perspective, our study develops a deeper understanding of how opportunity beliefs are formed that takes into account both market and non-market considerations, such as social and societal requirements to control organizational externalities (Zankl & Grimes, 2024). Building on Gras et al. (2020), we expand research with “a new focus to problems as the basis for opportunity” (p. 1). Our more holistic and integrative understanding of entrepreneurial opportunities expands previous conceptualizations as it enables the application of the actualization perspective to a broader spectrum of entrepreneurial behavior, which is not exclusively motivated by the pursuit of profit, but also by a responsible approach to the environment (Bosse et al., 2023; Hägg et al., 2024; Zankl & Grimes, 2024).

More specifically, we integrate market considerations (i.e. consumer desire, competitors, economic viability, etc.), as outlined in previous work, with the novel non-market considerations (i.e. beneficiary needs, social solutions, non-market stakeholders) identified in our study. Compared to a purely profit-oriented opportunity belief formation, we show how shared values, different time horizons, a more complex stakeholder environment, and differing views of certain stakeholder groups (e.g. differing views on competitors) influence opportunity assessment in social business opportunity belief formation, making it more integrative but complex at the same time. We further reveal how conflicting considerations, in conjunction, serve as fundamental opportunity ingredients in the formation of social business opportunity beliefs. We suggest the adoption of this holistic and integrative approach to effectively examine entrepreneurial opportunities that meet today’s requirements towards entrepreneurship (Hägg et al., 2024; Zankl & Grimes, 2024).

Moreover, our framework not only goes beyond simply presenting the different opportunity ingredients that serve as preconditions for social business opportunity beliefs but also highlights the importance of balance and perceived fit between social opportunity beliefs and business opportunity beliefs as a necessary precondition for opportunity belief formation. The proposed framework emphasizes two pathways of opportunity creation driven by previous experiences and increased entrepreneurial alertness (Lanivich et al., 2022). While most impact entrepreneurs, with a particular background and motivation in social entrepreneurship, may start by forming beliefs about social opportunities, followed by forming beliefs about business opportunities before merging the two, it can also be the other way around. Even though in our study most entrepreneurs chose the “social belief formation first path,” probably since they identify as impact entrepreneurs, our framework allows for more differentiation and inclusivity than previous studies. This is because our framework not only reflects the diversity in which entrepreneurial behavior manifests itself (George et al., 2023; Welter, 2011) but also provides a theoretical framework for future studies to further investigate how different types of entrepreneurs develop (social business) opportunity beliefs. For example, it might be interesting to understand how hybrid entrepreneurs who focus primarily on financial goals (i.e. varying degrees of hybridity; Shepherd et al., 2019) but want to achieve social goals as a secondary objective develop opportunity beliefs.

Second, we contribute to the literature on the role of stakeholders in forming opportunity beliefs. We highlight the importance of the perceived breadth and depth of the stakeholder environment as a supportive but also constraining force for the integration of social and business opportunity beliefs. Most previous studies, in general, but also social entrepreneurship literature that have engaged at the intersection of entrepreneurial opportunities and stakeholder engagement, have focused on the stages that precede the opportunity belief formation. These studies investigated the role of stakeholders in the entrepreneurial development or exploitation process of opportunities, where propensities are already formed (Snihur et al., 2017), how existing imagined opportunities can be redefined through engagement with potential stakeholders (Mitchell et al., 2021), or how stakeholder engagement relates and emerges from hybridity tensions (Smith et al., 2013). We follow Ramoglou et al. (2023) and extend this discussion to the phase of opportunity belief formation, which is important because it sheds light on the process that determines why individuals act on certain opportunity beliefs.

Moreover, we show that stakeholders who play a significant role in profit-oriented business opportunities are similarly important for social opportunities but play different roles in the social business opportunity belief formation. For example, competitors in business opportunity belief formation are mainly seen as a constraining factor, but for social opportunity beliefs, they can also be perceived as a positive part of a stakeholder environment, as they can be leveraged to scale impact. We also show how stakeholders who may be initially identified as indirectly influencing the evaluation of social business opportunities are perceived as influential stakeholders with “customer-like” power (Freeman et al., 2018). This finding shows the strong effect of broad groups of stakeholders, because without the support of stakeholders or the perceived hindrance by certain stakeholders, entrepreneurs’ evaluations may lead to unwanted states of non-opportunity (Ramoglou et al., 2023).

Furthermore, our work highlights the supporting and constraining role of a broad stakeholder environment that is deeply involved in the actualization of opportunities (e.g. through co-design of hybrid business models, feedback loops, political support to bring change, etc.) in the formation of social business opportunity beliefs. With this, we shed further light on the increasing importance of stakeholder engagement in the context of socially motivated entrepreneurial opportunities (Bacq & Wang, 2024; Bosse et al., 2023). The understanding of the importance of a broad range of stakeholders, next to the consumer, expands research that states that “all stakeholders have customer-like power” (Freeman et al., 2018, p. 19), and that in today’s world, non-market stakeholders must be understood as important opportunity ingredients even for economic success (Bosse & Phillips, 2016; Ramoglou et al., 2023).

Also, our findings illustrate the importance of differentiation in social business opportunities related to perceived stakeholder engagement. The existence of a broad range of stakeholders, even competitors, alone does not have a positive influence on the possibility of creating social impact (Bacq & Wang, 2024). They must also be perceived as leverageable to integrate and balance beliefs about social and economic opportunities, as otherwise, non-opportunity emerges (Gras et al., 2020; Ramoglou et al., 2023). This is crucial, as the perception that one can successfully or unsuccessfully manage multiple stakeholders (with conflicting interests) affects whether or not an entrepreneur builds a belief in the existence of a social business opportunity. Thus, our study shows the importance of the perceived possibility to successfully integrate and balance supportive and constraining stakeholder environments to evaluate a set of pre-existing market and nonmarket conditions as a prerequisite to act towards actualization of social business opportunities (Bosse et al., 2023; Ramoglou et al., 2023).

To summarize, all these findings are particularly important to understand against the background that the absence of perceived stakeholder support or even perceived hindrance by them can ultimately prevent the formation of a social business opportunity belief. This can lead to a situation where, despite the separately formed business and social opportunity beliefs, no fit or imbalance is perceived with regard to a belief about a combined social business opportunity, and thus an unintended non-opportunity emerges (Gras et al., 2020; Ramoglou et al., 2023).

Third, we contribute to the deeper integration of the opportunity actualization perspective into the discourse of social and hybrid entrepreneurship (Gras et al., 2020). Although the literature on social enterprises with a dual mission of creating social and economic value is growing (Gupta et al., 2020; Seelos & Mair, 2005; Smith et al., 2013; Williams et al., 2023), the question of how beliefs about opportunities that encompass both the business and social dimensions are formed has been largely overlooked. Therefore, our study brings important insights by shedding light on this process and guiding future research to adopt an actualization perspective to clarify open questions in the literature. In particular, in our study, we help to resolve existing contradictions in the social opportunity literature (Hu et al., 2020; Yitshaki et al., 2022).

More specifically, we highlight how the new theoretical angle of opportunity actualization can resolve the conceptual challenges that the creation and discovery perspective brings to the discourse (González et al., 2017; Sassmannshausen & Volkmann, 2018). As previous studies have criticized (Corner & Ho, 2010; Hu et al., 2020), most research investigating social opportunities adopted the discovery or creation perspective of entrepreneurial opportunities, stemming from the commercial entrepreneurship literature where entrepreneurial agency is seen as creating opportunities (Alvarez & Barney, 2007; Alvarez et al., 2010; Sarasvathy et al., 2010).

In line with its origin, studies in the social opportunity literature following the theoretical approaches of opportunity discovery and creation indirectly assume that social opportunities “do not exist” until they are created or discovered through entrepreneurial agency. Braver and Danneels (2018), contrasting Ramoglou and Tsang (2016), for instance, use the example of an entrepreneur potentially being able to “create” a social need through the commitment of a terrorist attack to later profit from a social movement emerging from the attack. This is a highly problematic or even unethical understanding (Hu et al., 2020), not fitting the mission of social entrepreneurs, as the adoption of this understanding of entrepreneurial agency would suggest that entrepreneurial agency would proactively create the social issues in which social opportunities are embedded (Corner & Ho, 2010; Hu et al., 2020).

The actualization perspective, on the other hand, can resolve these issues as it suggests opportunities as embedded and pre-existing in the “real world,” thus representing a more suitable theoretical framework for future studies to investigate social opportunities that emerge from the pre-existence of social demands. Consequently, future studies should leverage the opportunity actualization perspective as a contextually embedded understanding of entrepreneurial opportunities.

Finally, from a practitioner’s perspective, the generated knowledge about the main mechanisms of opportunity belief formation of social business opportunities can strongly support entrepreneurs’ understanding of entrepreneurial opportunities. Especially helpful may be our findings to support entrepreneurs and managers in better understanding the core elements that form a social business opportunity belief, thus supporting effective opportunity identification. Moreover, our holistic representation of an integrated understanding of entrepreneurial opportunities can be used by actors in the startup ecosystem (such as investors or accelerators) to assess the quality of opportunities of startups and entrepreneurs, their social business concepts, and their development progress. In addition, investors and accelerators can be enabled to support the formation of opportunity beliefs, especially with a focus on responsible entrepreneurship. However, it would also be interesting to use our framework to assess the extent to which an entrepreneur’s opportunity belief matches the investors “or accelerators” perception of an opportunity to measure the fit between the two actors.

Limitations and Future Research

This research has certain limitations that must be considered. Due to the qualitative nature of this study and the mainly experimental research design of think-aloud protocols, the findings can be viewed as contextually bound to our study design. It is also beyond the scope of this paper to present a (comparative) analysis of the impact of entrepreneurship in different institutional or sectoral contexts (such as business or government), and national or cultural contexts. As there were no sample restrictions in terms of industry, age, or venture size, we did not fully consider how these factors might influence participant responses. In addition, the focus of our study lies on the observation of the ideation on social venture forms and, hence, the early phases of opportunity belief formation that precede opportunity actualization. Thus, future comparative studies on entrepreneurs’ decision-making in various sectors (including non-profit) or industries, nations, or fully for-profit entrepreneurs could close this gap and advance our understanding of an integrative opportunity belief formation and subsequent opportunity actualization.

Moreover, for the design of this study, we mainly focused on pre-existing social issues and the social opportunity belief as a starting point. However, interestingly, we found that a minority of entrepreneurs in our sample still started with the formation of business opportunities first, finding ways to leverage the commercial logic to create social impact subsequently. With this in mind, our sample consists of entrepreneurs referring to themselves as impact entrepreneurs. Thus, future research could focus on other types of entrepreneurs on the hybridity continuum (Shepherd et al., 2019) or with different entrepreneurial identities (Fauchart & Gruber, 2011). For instance, entrepreneurs who understand themselves primarily as commercial entrepreneurs, however, are controlling for their externalities (Zankl & Grimes, 2024) and are interested in creating social impact as a secondary goal. Also, it could be interesting to understand how the opportunity belief formation process would differ between Darwinian, Communitarian, and Missionary entrepreneurial identity (Fauchart & Gruber, 2011). This could shed light on whether there are differences in terms of starting points and pathways in the development of beliefs about social business opportunities and how this would affect potential outcomes (Brownell et al., 2025). More specifically, research could explore the extent to which initial motivations, cognitive processes, normative hierarchies, and the nature of entrepreneurial action influence the prioritization of the formation of beliefs about social or business opportunities as a starting point for responsible entrepreneurship.

Lastly, we did not consider the detailed comparison and differentiation of the decision-making logic and opportunity belief formation of expert and novice entrepreneurs. Future research is needed to compare cases of experienced entrepreneurs and inexperienced entrepreneurs to gain deeper insights into entrepreneurial opportunity formation, as the literature points to differences in the evaluation and prioritization of certain agent-related but also environmental factors, such as different stakeholders or (non-)market conditions, as a precondition of opportunity belief formation (Ramoglou et al., 2023).

Conclusion

With our study, we answer the question of how entrepreneurs form social business opportunity beliefs. In this way, we inform and expand the scholarly discourse on entrepreneurial opportunity. In particular, we expand the opportunity actualization perspective by developing a more holistic approach that reflects the integration of market and non-market considerations in the formation of opportunity beliefs. Further, we develop a framework that reflects the emergence of beliefs regarding social business opportunities and highlights the importance of the perceived broad stakeholder environment (i.e. breadth) and its deep involvement (i.e. depth) that can support the integration of beliefs regarding social and business opportunities. Moreover, our findings enrich future studies by underlining the importance of the interplay between stakeholder breadth and depth as an essential prerequisite for social business opportunities.