Mutualistic Interaction of Host and Entrepreneur: Entrepreneurial Organization Genesis at Facebook

In this paper, a stylized model of inter-firm collaboration is developed and used to cast long-term, post-learning collaborative relationships in three broad types: competing, piggy-back and mutualistic relationships. In a competing relationship, the total revenue for the collaboration is fixed, and profit-motivated partner firms are inclined to increase their revenue share at the expense of one another. In a piggy-back relationship, at least one partner is more likely to be able to increase the total revenue for the collaboration, and hence other partners are willing to be content with their fixed share of revenue. In a mutualistic relationship, all partners are capable of increasing and likely to increase the total revenue for the collaboration than to merely increase their respective shares of the collaboration. As the advent of the information and communication technologies dramatically lower the cost of some internet platforms such as Facebook to host novel (or new variations of) products or services for distribution, the phenomenon of mutualistic entrepreneurship emerges. This paper uses the case of Facebook to examine several propositions on the phenomenon of mutualistic entrepreneurship, namely the tendency for entrepreneurs in mutualistic entrepreneurship to be involved in multiple projects (or products), for projects to involve more than one entrepreneur in collaboration, and for the projects to be linked in a diffused network.