When professionals become entrepreneurs: Identity construction of lawtech startup founders in Japan

Abstract

Abstract How do professionals develop their identity when they become digital venture founders, and how does such identity affect their venture strategy? This article examines this understudied yet important question. The recent wave of digitalization has created opportunities for various professionals to participate in creating new firms. However, studies of professions and entrepreneurship to date have narrowly focussed on professionals’ intrapreneurship efforts within professional service firms (PSFs). This inductive study of lawtech ventures in Japan examines the sources of Founder Social Identity (FSI). The study shows that founders’ professional role identity developed during prior work experience influences their identity work to become an entrepreneur; moreover, the resulting FSI shapes founders’ strategic decisions on market segment choice. This study highlights the significance of a distinct type of FSI, which we call ‘professional communitarian’, for professionals who engage in entrepreneurship beyond the boundary of PSFs.