Critical events and the interplay between serendipity and effectuation in an unforeseen venture creation Open Access

How do individuals who never considered themselves entrepreneurs end up becoming one? And how do entrepreneurs find themselves starting ventures they never anticipated? This study responds to calls for further research on new venture creation (Davidsson and Gruenhagen, 2021) by focusing on serendipitous critical events that lead to unforeseen outcomes. Entrepreneurship can be understood as a cumulative series of interdependent events, and deeper insight into how these events are processed and acted upon enhances our understanding of the entrepreneurial process (Morris et al., 2012). While events have been recognised as significant in theorising about firm formation, opportunity recognition and process approaches, placing them at the centre of the entrepreneurship research is considered both novel and insightful (Rauch and Hulsink, 2023).

This study examines critical events as part of serendipitous processes, and effectuation in shaping these processes and their unanticipated outcomes. It addresses the question:

Analysing critical events through the lenses of serendipity and effectuation offers insight into the factors influencing entrepreneurs’ reasoning and actions along their entrepreneurial journeys.

Serendipity has received surprisingly little academic attention in the context of new venture creation, although its role in entrepreneurial opportunities (Dew, 2009) and innovation (De Rond, 2014) has long been acknowledged. Its antecedents, conditions and outcomes remain understudied (Fultz and Hmieleski, 2025), even though entrepreneurship theory has been argued to be incomplete without the concept of serendipity (Dew, 2009). Moreover, within effectuation theory, contingencies are viewed as gateways to opportunity, and the entrepreneurial journeys can be a result of serendipitous events (Sarasvathy, 2001). Despite this conceptual proximity, a deeper analysis of the relationship between effectuation and serendipity is lacking. This kind of study is needed because effectuation does not explain, for example, how unexpected observations are recognised, how meaningful bisociations between such observations and emerging entrepreneurial opportunities are formed, or how these insights are subsequently pursued. Given that serendipity is deeply embedded in entrepreneurship, a more nuanced understanding of its process and enabling factors holds significant potential for both research and practice.

This pioneering study addresses these research gaps by empirically examining the interplay between serendipity and effectuation as it unfolds through critical events in immigrant entrepreneurship. It introduces a conceptual model of effectuation-enabled serendipity in new venture creation, highlighting the role of serendipity in the discovery of entrepreneurial opportunities and their unexpected outcomes, and the supporting role of effectuation in this process. In doing so, the study addresses a notable research gap at the intersection of serendipity, entrepreneurship and new venture creation (Busch and Grimes, 2023), reinforcing arguments that serendipity can play a genuine and significant role in triggering entrepreneurial opportunity discovery (Dew, 2009). Additionally, the study contributes to the literature on new venture creation that has thus far paid limited attention to critical events (Davidsson and Gruenhagen, 2021). Without the processual logic provided by serendipity, such events may remain as isolated incidents and fail to fully explain the journey towards entrepreneurial outcomes.

With respect to effectuation, some scholars have questioned its ability to provide a robust explanation for new venture creation (Kitching and Rouse, 2020). However, empirical evidence supports the interplay between causation and effectuation in venture creation processes (Galkina et al., 2022), as originally proposed by Sarasvathy (2001). This study aims to deepen the understanding of how effectuation enables entrepreneurs to exploit unexpected opportunities in new ventures, and it shows empirical evidence of this process. It also offers insights into the underexplored cognitive processes of non-experienced entrepreneurs and the role of effectuation therein (Laskovaia et al., 2017).

Finally, by focusing on immigrant entrepreneurs, this study responds to calls for examining immigrant entrepreneurship from diverse perspectives (Sinkovics and Reuber, 2021) and for better accounting for entrepreneur heterogeneity in effectuation research (Liu, 2019).

The remainder of the article is structured as follows. First, critical events, serendipity and effectuation are discussed and integrated into a conceptual model. Next, the methodology is described, including narrative research design, data collection, and analysis, as well as the context of immigrant entrepreneurship. The results section presents and analyses three narratives of immigrant entrepreneurs in Finland. The article conclude with key findings and suggestions for future research.

Moving from entrepreneurial intention to effective entrepreneurial behaviour typically requires a triggering event (Ruiz-Rosa et al., 2022; Kuvshinikov and Kuvshinikov, 2024). In entrepreneurship research, a triggering event is broadly understood as an event in an individual’s life that alters entrepreneurial intention, either reinforcing the motivation to pursue an idea or discouraging its further development (Ruiz-Rosa et al., 2022). The range of potential triggering events is virtually limitless (Schindehutte et al., 2000), and can include, for example, market acceptance of a product, access to financing, project support, finding suitable partners and unfavourable economic situation (Ruiz-Rosa et al., 2022). Some triggering events have a broad scope, while others are more specific, or can be subdivided into detailed components (Schindehutte et al., 2000).

In contrast, critical events have clearly defined temporal boundaries and the characteristics of a coherent episode (García-Montoya and Mahoney, 2023). They are typically unplanned, unanticipated and uncontrolled, yet they produce radical change in the individual’s life, often affecting their professional or work-related roles (Mertova and Webster, 2019). Critical events are both contingent and causally important: contingency refers to their occurrence outside well-defined expectations, while causal importance encompasses two dimensions: (a) sufficiency properties, which establish a logical link between the event and its outcome and (b) necessity properties, which enable and permit the outcome to occur (García-Montoya and Mahoney, 2023). Importantly, critical events can only be identified retrospectively (Mertova and Webster, 2019). In sum, a critical event may serve as a triggering event for entrepreneurship, but not all triggering events meet the criteria to be considered critical events.

Serendipity is described as a slippery and elusive phenomenon, lacking universally accepted definition (Makri and Blandford, 2012; Foster and Ellis, 2014). It has been defined as finding something valuable by chance (e Cunha et al., 2010) or encountering resources, such as information, people or objects, in unplanned ways (Björneborn, 2017). While serendipity involves contingency as a trigger (Dew, 2009), it should not be equated with mere luck. Serendipitous events may be either fortunate or unfortunate (Dew, 2009), and chance plays only a peripheral role. Serendipity is better understood as a capability than as a coincidence (De Rond, 2014).

Recognising serendipity requires a mental ability to detect the unusual (Mirvahedi and Morrish, 2017) and flourishes through alertness (e Cunha et al., 2010). It often involves active search, management and organisation (Denrell et al., 2003; e Cunha et al., 2010). Key elements include sagacity, the integration of prior knowledge with prepared mind, which enables individuals to identify meaning in unexpected situations (Dew, 2009). Additional cognitive processes, such as deduction and creative recombination, further support the making of valuable connections (Busch and Barkema, 2022; De Rond, 2014). Experience and social networks can likewise increase the likelihood of encountering serendipity (Dew, 2009; e Cunha et al., 2010).

A crucial component of serendipity is enactment: acting upon the opportunity when it arises (e Cunha et al., 2010). A prepared mind, knowledge, skills and awareness all enable action, and taken together, can be described as strategic serendipity (Knudsen and Lemmergaard, 2014.). From the enactment perspective, serendipity is best conceptualised as a process rather than a single event. For instance, entrepreneurial serendipity involves an unexpected observation, a meaningful connection and subsequent action (Busch and Barkema, 2022). Lawley and Tompkins (2011) outline six components in the serendipitous process: a prepared mind, unexpected event, recognition of potential, seizing the moment, amplifying effects and evaluating outcomes.

One possible consequence of serendipity is entrepreneurship. Dew (2009) even characterises serendipity as a focal, intermittent attribute of entrepreneurial activity. It is particularly relevant in the early stages of business formation (Mirvahedi and Morrish, 2017), when entrepreneurs must adapt to rapidly changing environments and identify emerging opportunities (Lassalle, 2018).

Effectuation is a theory developed specifically for entrepreneurship (Fisher, 2012). It focuses on how individuals think and act when starting new ventures (Perry et al., 2012). Initially derived from the behaviours and thought processes of expert entrepreneurs (e.g. Sarasvathy and Dew, 2013), it has since been applied to novice entrepreneurs as well (Liu, 2019).

Effectuation represents a means-driven approach (Karami et al., 2020), whereby entrepreneurs begin with a general aspiration rather than a predefined goal (Sarasvathy, 2001). This aspiration may be economic or non-economic (Sarasvathy and Dew, 2013). Entrepreneurs assess their available resources by asking: Who am I? What do I know? Whom do I know (Fisher, 2012)? and operate within the limits of what they can afford to lose (Karami et al., 2020). Turning means into new ends is central to effectuation (Hensel and Visser, 2020), with early stakeholder interaction playing a pivotal role (Sarasvathy and Dew, 2013). Instead of actively seeking predefined “right” people, entrepreneurs allow stakeholders to self-select and contribute, thereby shaping the venture’s direction (Sarasvathy and Dew, 2013; Pacho and Mushi, 2021). The emphasis is on controlling the future rather than predicting it (Sarasvathy, 2001; Bhowmick, 2015), with uncertainty mitigated through collaboration and experimentation (Ryman and Roach, 2022).

Based on the discussion above, Table 1 summarises the definitions, interrelations and distinguishing features of the core concepts examined in this study. Although prior research has identified the distinct roles of critical events (Rauch and Hulsink, 2023), serendipity (Mirvahedi and Morrish, 2017), and effectuation (Perry et al., 2012) in new venture creation individually, these elements have not yet been examined jointly within an integrative conceptual framework. Specifically, existing research has not proposed an effectuation-enabled serendipitous pathway to new venture creation.

Building on a serendipity process described by Lawley and Tompkins (2011), this study argues that a critical event can constitute a central component of a serendipitous process, and that effectuation can leverage such a process, thereby leading to outcomes that are often puzzling or unexpected (see Figure 1). A serendipitous process includes an unexpected event that is unanticipated, anomalous and possesses the potential for long-term value (Lawley and Tompkins, 2011). The value is primarily evaluated subjectively, and outcomes may range from useful information retrieval and professional collaboration (Olshannikova et al., 2020) to radical innovations, such as the discovery of penicillin (Ban, 2006). Less significant serendipitous insights occur frequently in everyday life (Reviglio, 2019).

In contrast, this study focuses on unforeseen venture creation, which is comparatively rare and can be considered, from an objective perspective, a radical professional change – an outcome characteristic of a critical event (Mertova and Webster, 2019). Accordingly, we specify the event included in the serendipitous process under investigation as a critical event. This specification is enabled by the observation that serendipitous events and critical events share several attributes, including contingency, defined temporal boundaries and the need for retrospective analysis (Fultz and Hmieleski, 2025; Mertova and Webster, 2019; Lawley and Tompkins, 2011; García-Montoya and Mahoney, 2023). Both types of events also exhibit a logical connection between event and outcome, as well as enabling conditions that allow the outcome to materialise (Busch, 2024; García-Montoya and Mahoney, 2023).

A defining feature of serendipity is agency: the notion that outcomes result partly from purposeful human action (Fultz and Hmieleski, 2021). In the conceptual model developed here, this agency is expressed through effectual thinking and action. Because exploiting contingencies is a central principle of effectuation, it provides a relevant framework for examining when and how serendipity is acted upon (Dew, 2009). Nevertheless, serendipity and effectuation are grounded in different premises. Serendipity involves an unexpected event, the recognition of weak signals and the connection of disparate information to a potential solution (Busch and Grimes, 2023). In contrast, effectuation begins with existing means and resources and subsequently searches for problems that can be addressed using those means (Busch and Grimes, 2023). Starting with the existing means and without a definite plan or goal, effectuation is well suited at dealing with contingencies that cannot easily be predicted or analysed, but instead must be seized and exploited (Sarasvathy, 2001).

As suggested by Lawley and Tompkins (2011), in the serendipitous process examined here, the unexpected critical event is preceded by a prepared mind and followed by recognising potential, seizing the moment and amplifying effects, respectively. In other words, it involves a trigger (prepared mind and unexpected event), bisociation (recognising the potential) and enactment (seizing the moment and amplifying effects) (Busch and Grimes, 2023). In our model, the last component of the serendipitous process – the evaluation of effects (Lawley and Tompkins, 2011) is realised in the form of an unforeseen new venture.

This study argues that effectuation can leverage the serendipitous process. Prior to the occurrence of a critical event, entrepreneurial alertness, that is the presence of a prepared mind, is a powerful determinant of the accidental discovery of opportunities (Ardichvili et al., 2003). All dimensions of entrepreneurial alertness have been shown to exhibit a strong relationship with effectuation (Karami and Hossain, 2024). Further, effectual thinking, that is, making decisions based on available means and prior knowledge, enables individuals to recognise the potential, connect the dots and seize emerging opportunities (Long et al., 2017). Finally, effectuation can support the amplification of effects by creating new means-end relations (Maine et al., 2015).

In this study, the terms “story” and “narrative” are used interchangeably. Narrative research employs stories to deepen understanding of the phenomenon under investigation (Pino Gavidia and Adu, 2022). Freeman (2015) contends that, as a mode of understanding, narrative is the most natural and appropriate means for examining real-life human affairs, with a capacity to illuminate motivations and behaviours in entrepreneurial contexts (Johansson, 2004).

Narrative inquiry considers relational dimensions between individuals, the social context and material elements, as well as temporal dimensions of past, present, and future (Garud and Giuliani, 2013; Hytti, 2010). Meaning emerges through the interaction of these dimensions (Garud and Giuliani, 2013). The objective is to understand how individuals organise their experiences to make sense of what has occurred and how they have acted, explaining the past motives and meanings that shape the present (Hytti, 2010). Within their stories, participants emphasise events and details they perceive as meaningful to the current circumstances. Narrative understanding is inherently interpretive and provisional (Freeman, 2015), reflecting how people make their experiences rationally accountable to themselves and others (Weick, 1993).

Narratives collected through interviews are co-constructed in interaction between the storyteller and the interviewer (Slembrouck, 2015). Researcher decisions in transcription and interpretation influence how these narratives are represented (Riessman, 2008). As is typical in narrative research, the aim is not to produce a single, definite truth, but a version shaped by a particular perspective (Eriksson and Kovalainen, 2016). In this study, identification of critical events (discussed in detail below) is based on the authors’ interpretation of how these events are depicted as leading to radical, unexpected change in entrepreneurial journeys.

The data for this study comprise narratives from three immigrant entrepreneurs in Finland. Although limited in number, these accounts provide valuable insights into the role of serendipity and effectuation in the critical events leading to new venture creation. Participants were recruited via a Facebook group and a networking event, both targeted at immigrant entrepreneurs. One interview was conducted in person and two were online; two were in English and one in Finnish.

Prior to each interview, participants were informed about the purpose and format of narrative interviews. Interviews began with the open-ended prompt: “Tell me freely about your journey towards entrepreneurship”. Following the initial storytelling, the interviewer posed follow-up questions based on pre-prepared themes or topics raised by the interviewees. As in Down and Warren (2008) the concepts of critical events, effectuation or serendipity were not addressed directly. Interviews lasted between 60 and 90 min, were recorded with participant consent, and transcribed verbatim.

Narratives analysis concentrated on critical events (Mertova and Webster, 2019, p. 58) and followed three steps:

• Step 1: Familiarisation. The authors read each transcript multiple times to gain a holistic understanding and isolate segments pertinent to the research question. A graphical timeline was developed to visualise the sequence of events. Each narrative was summarised, highlighting key events, actions, contexts, individuals and thought processes.

• Step 2: Critical event analyses. Using García-Montoya and Mahoney’s (2023) framework, the authors assessed whether each identified occurrence qualified as a critical event to confirm their relevance to the study. This involved examining: (1) whether the event had temporal boundaries and clear features of a coherent episode, (2) whether it was contingent (unexpected), (3) its potential causal properties, (4) the extent to which it was necessary and sufficient for the specific outcome and (5) its overall causal importance.

• Step 3: Analyses from the perspective of serendipity and effectuation. Segments relating to critical events were examined for elements of serendipity and effectuation. Serendipity was analysed using Lawley and Tompkins' (2011) perceptual model. Since the topic was not explicitly addressed in the interviews, the evaluation of serendipitous effects was conducted by the researchers. Effectuation was identified through its key features: (1) short-term experimentation to uncover business opportunities, (2) operating within affordable loss even in worst-case scenarios, (3) forming precommitments and alliances to control an unpredictable future and (4) exploiting environmental contingencies (Chandler et al., 2011).

In the following Table 2, there is a snippet of Ginger’s story with direct quotes showing concrete examples of the analysis. The findings are elaborated in the results section.

Compared to many Western European countries, Finland has a relatively short migration history (Busk and Jauhiainen, 2022). Immigration began to increase modestly in the early 1980s and then picked up pace in the last 2 decades (Heino and Jauhiainen, 2020). In 2023, Finland was home to approximately 571,000 foreign-born immigrants, representing around 10% of the total population (Statistics Finland). For countries such as Finland, facing a declining population growth rate, a rapidly ageing demographic and consequently a shrinking working-age population, immigration offers one means of addressing challenges such as labour availability and the sustainability gap (Finnish Government, 2021). Consequently, Finland has introduced programmes to attract skilled immigrants, including (potential) entrepreneurs.

Prior research demonstrates that both serendipity and effectuation are relevant to immigrant entrepreneurship. Serendipitous encounters can influence immigrant choices regarding settlement locations and the economic roles they assume (Williams, 2009). Chance meetings may serve as critical enablers, particularly when access to formal business support structures is limited, sometimes resulting in self-employment even against initial expectations (Berntsen et al., 2022).

The effectuation perspective also provides a practical lens on immigrant entrepreneurship, given its various forms and the wide range of resources and strategies individuals adopt to address the challenges of unpredictable and dynamic socio-economic environments creatively (Gurău et al., 2020). While immigrants have been shown to be as entrepreneurial as natives – or even more entrepreneurial than (Dabić et al., 2020) natives, research suggests that the risks experienced during migration may lower their tolerance for additional risk in starting a business, as well as affect their perceived ability to secure resources for a business venture (Kushnirovich et al., 2018). Effectuation offers a mechanism enabling immigrant entrepreneurs to act within their personal risk limits (Duening et al., 2012). Moreover, although both internal (e.g. related to goals and personal abilities) and external uncertainty (e.g. related to market and stakeholder reactions) are central to the effectuation context, contextual knowledge does not necessarily determine action – effectuators often initiate activities even with limited knowledge of their immediate environment (Scazziota et al., 2023), a situation frequently encountered by immigrants.

In the next section, the authors present the findings. To ensure anonymity, names have been changed and details about the entrepreneurs’ businesses, ideas and operations have been omitted.

Sam moved to Finland at age two with his family. With no formal qualifications recognised in Finland, his father became a serial entrepreneur, and over time, his mother joined the family businesses. Entrepreneurship was a natural part of their everyday life.

At seventeen, Sam left high school and began working in the same industry as his parents. A year later, he bought his parents’ business, made significant changes and constantly sought new opportunities. He later sold the business to pursue a larger venture with better working hours, but when his goals did not materialise, he sold it after a year, worked briefly as an employee and eventually reacquired his original business. At one point, he also ran a small side hustle for fun.

A turning point came when a friend asked Sam to modify one of the products by integrating a new element. The element and its target audience were unfamiliar to Sam and his team, and after evaluating the prototype, they dismissed it. However, the friend posted the modified product in a dedicated Facebook group, and the next day, people were asking to buy it. Sam had to admit it was not yet available.

Curious, Sam began researching the phenomenon and its niche market. Information online was limited and in English, and his wholesaler did not carry the required element. Determined, Sam visited the supermarket where his friend had purchased it, found the importer’s details on the label, searched for them online and made contact. Within a week, he was collecting the element from the importer’s warehouse, testing it with his other products and brainstorming ways to meet the needs of this new customer base.

One of his products was particularly difficult to adapt to the niche market. Sam spent long hours after closing time experimenting, taking notes and watching videos for inspiration. Through this process, he developed an innovation that became the foundation of a new venture. He invited the importer to join him, and together they launched the business.

Sam also found support in his community. A local bank employee who frequented his business appreciated Sam’s approach and became a trusted advisor, eventually joining the board of Sam’s current company. Another customer, a business consultant, offered free advice simply because she wanted to help. Sam believes that the environment in which one starts a business, matters. Feeling welcomed and supported by customers and the local community can make a real difference.

Ginger moved to Finland to start a startup, seeking a major life change after feeling worn out by the repetitive nature of her previous work. While exploring options, she discovered Finland’s Startup Permit. Although she had not considered herself courageous enough for startup life, things progressed quickly. Drawing on her professional and customer experience, she developed a business idea, secured her former boss as an investor and found a technical partner. She quit her job, moved to Finland, and received the Startup Permit. Finland appealed to her for three reasons: she had visited and liked the country, the visa requirements were minimal and it offered easier access to European markets.

Shortly after arriving, Ginger faced her first setback: her tech partner left for a better job. She also declined her former boss’s investment, realising that a partnership without trust could jeopardise the venture.

Soon after arriving in Finland, Ginger joined a local startup incubator. There, she noticed a team of two working on an interesting business idea and eventually approached them. After some conversation, they asked about her background. Upon hearing her experience, they invited her to co-develop a new business idea, unrelated to both her original concept and theirs. Although Ginger had assumed she would not return to work related to her previous job and doubted there would be demand for such an idea in Finland, she agreed to give it a try since the team could handle everything themselves. To her surprise, they soon secured major clients.

Meanwhile, Ginger continued searching for a tech partner for her original company. After several unsuccessful attempts, she invited the team to join her in that venture as well. At the time of the interview, they were partners in two companies, with the original idea still in development.

Sarah moved to Finland to pursue a degree in a field she had discovered while working in her home country. She chose a tuition-free English-language programme at a Finnish university, planning to study for two years before working elsewhere.

Back home, Sarah had been exposed to a growing startup scene and engaged with local entrepreneurs. Upon arriving in Finland, she noticed a similar trend and enrolled in an entrepreneurship programme at her university. She also volunteered at a major international startup event. Despite this, she repeatedly stated during the interview that she never imagined joining a startup team herself and becoming an entrepreneur.

A turning point came when she met two individuals seeking co-founders. While listening to them passionately describe their work, Sarah realised she could contribute based on her professional experience. She joined the team, although she did not see herself as a visionary, but rather as a supporter. The others were technical developers, and Sarah, as the only non-coder, handled “the rest of the stuff”. What encouraged her to take on the challenge was the belief that she could learn things she would never have in a large corporation. As a student, she also obtained a startup visa and residence permit, which she considers easier to obtain than the standard entrepreneurship permit that requires meeting an income criterion.

Sarah was aware of the failure rate among startups but felt Finland’s social safety net allowed her to take the risk without “gambling her life”. She embraced the student-led entrepreneurial ecosystem’s message that failure is part of learning.

Support from her Finnish network was encouraging. While some mentioned the risk of failure, most responded with “why not?” Although she did not rely on an ethnic enclave, she found moral support among other immigrant entrepreneurs and received guidance from public institutions and student-led ecosystem.

Financially, the co-founders invested personal funds and received funding from Business Finland, which helped them a lot in the beginning. Sarah noted that if the venture failed, they would not be burdened by debt or student loans. She believed that had she stayed in her home country, she would likely be working in a large corporation.

Using the critical event analysis framework by García-Montoya and Mahoney (2023), we assess whether the incidents in Sam’s, Ginger’s and Sarah’s stories qualify as critical events (see Table 3).

In Sam’s story, the incident involving “the order from a friend”, has clear temporal boundaries and distinct content, qualifying it as an event. It is contingent, unexpected at the time and easily avoidable. The friend could have gone elsewhere or attempted the modification independently, knowing Sam did not offer such a product. Enabling factors include Sam’s expertise, experimental mindset and their friendship (a stranger likely would not have made the request). Generative aspects include the introduction of the new element, the social media post that revealed market interest and access to resources for product development. Without this event, it is highly unlikely Sam would have developed the innovation or launched the new venture, as he was unaware of the element, the target customers or the broader phenomenon. The outcome depended on several contextual factors, such as the viral post, finding the importer (who became a business partner), and having facilities for experimentation. In sum, the event was contingent, highly necessary and highly sufficient for the outcome.

In Ginger’s story, the meeting with the team at the incubator also qualifies as a critical event. It had temporal boundaries and a distinct content, and it was contingent: it could easily not have occurred. Ginger’s expertise complemented the team’s skills, playing an enabling role, while the team’s combined resources acted as a generative force. Without the meeting, it is unlikely Ginger would have pursued the new business idea. Conversely, without her specific expertise, the team may not have invited her to join. Thus, the event was highly necessary and moderately sufficient for the unexpected outcome of launching a new venture.

Sarah’s unplanned discussion with the software developers meets the criteria for a critical event. It had temporal boundaries, distinct content and was clearly contingent. Her expertise enabled her to recognise how she could contribute to turning their technical solution into a business. Productive factors included a small initial investment, formal and informal support, and obtaining a startup visa. Sarah had not planned to become an entrepreneur and did not see herself in that role. Without the meeting, or without the support and manageable risk environment, she likely would not have joined the team. Therefore, the event was highly necessary and moderately sufficient for her entrepreneurial path.

Applying the perceptual model of serendipity by Lawley and Tompkins (2011), the analysis of Sam’s, Ginger’s and Sarah’s stories shows that their process leading to a new venture creation includes all six components of serendipity (see Table 4). Additionally, elements of effectuation are evident throughout each process (see Table 5).

In Sam’s case, his desire to do what others were not doing and his willingness to experiment formed the basis of a prepared mind, enabling him to seize the moment and amplify the effects in a niche market previously unknown to him. Without a predefined goal, he leveraged contingencies – added information and situations – to develop new products. His available resources, such as expertise and facilities, allowed him to act without taking major financial risks. As he stated in the interview, “you don’t need much money, just the right people and idea,” highlighting his reliance on networking over capital.

In Ginger’s story, the process around the critical event leading to the formation of a new venture reflects all components of serendipity. Although she was not actively seeking a new idea, her engagement in developing her original concept within an incubator prepared her to recognise an emerging opportunity. Effectuation is evident in her decision to join the team based on the ability to start with existing resources, minimising financial risk. She viewed the venture as an experiment, without a fixed goal. After losing key precommitments in her original business, she amplified the effects of the critical event by involving her new team in its development.

Sarah’s process of becoming an entrepreneur similarly includes all phases of serendipity. She was not actively searching but recognised an entrepreneurial opportunity during an unplanned discussion with a startup team. Her prepared mind was shaped by her work experience, as well as her prior interest in startups and student entrepreneurship. Effectuation is reflected in her consideration of affordable loss. She accepted the risk of failure, motivated by learning rather than financial gain. As a student, she saw entrepreneurship as a flexible experiment. Without predefined goal, Sarah and her team proactively formed precommitments, both locally and internationally.

The present study introduced a conceptual model of effectuation-enabled serendipity process (see Figure 2) and examined why and how individuals exploit unexpected entrepreneurial opportunities to create unforeseen new ventures. The findings show that the three interviewed immigrants experienced critical events that radically altered their career paths and led to unanticipated outcomes. Serendipity process played a central role, initiating the critical event and then driving the subsequent trajectory, with effectual thinking and action supporting and enabling the process. Without these interconnected elements – the critical event, the process of serendipity, and effectuation – the new ventures would likely not have been started.

Critical events can form part of a broader serendipitous process, with effectuation providing a framework for decision-making and guiding navigation through each step. Networks and alliances, as well as leveraging resources at hand, proved crucial. Environments fostering encounters among like-minded individuals, such as incubators, helped prepare the mind and create opportunities for chance meetings. Social networks and alliances brought together resources that enabled recognition of potential and facilitated seizing the moment and amplifying effects. The availability and assessment of existing resources often determined whether entrepreneurs recognised a potential and acted upon it.

Affordable loss assessments were closely tied to available resources and an experimental mindset. None of the participants were willing to make large financial investments; instead, they worked with means readily accessible to them. Only one explicitly considered the worst-case scenario, but all began with experimentation: through practical trials and an openness to “try and see”. They pursued opportunities without predefined end goals, responding adaptively to emerging circumstances.

To answer the research question of why and how individuals exploit unexpected entrepreneurial opportunities to create unforeseen new ventures, the participants capitalised on unexpected entrepreneurial opportunities because they could do so within the boundaries of available means and affordable loss. They seized the opportunities by using available means, focusing on what they could do with them, experimenting, leveraging social networks and further contingencies to amplify the effects, and ended up with an outcome that was unexpected and produced a radical change.

This study advances understanding of the empirically underexplored dynamic interrelations between critical events, serendipity and effectuation. While these concepts have been treated as distinct yet relevant to entrepreneurship, our findings demonstrate the importance of conceptualising critical events as integral components of serendipitous processes, and of understanding effectuation as the mechanism that enables such processes to unfold towards unexpected venture formation. While prior literature has suggested that effectuation may be a useful framework for examining when serendipity is more likely to occur and be acted upon (Dew, 2009), this study is among the first to conceptualise and empirically demonstrate the underlying mechanisms linking the two.

In particular, this study contributes by disentangling how specific effectuation principles are associated with different components of the serendipity process. The proposed conceptual model offers a new lens to understand how entrepreneurs respond to the unexpected and manage uncertainty. The findings support the notion that in serendipity, outcomes result partly from purposeful human action (Fultz and Hmieleski, 2021) and highlight the role of effectuation as a means of this agency. Moreover, strategic serendipity literature notes that considerable preparation can be necessary to recognise and seize opportunities arising from unanticipated events (Knudsen and Lemmergaard, 2014). Our findings show that effectual thinking fosters a prepared mind (Karami and Hossain, 2024) and improves opportunity exploration efficiency (Long et al., 2017). Interests, social networks and tendencies to experiment and leverage contingencies keep individuals alert and prepared. Prior market and operational knowledge, combined with available resources, helps connect dots, create new meanings, and assess what they are prepared to lose if they pursue the opportunity. Experimentation – practical trials and openness to “try and see” – supports the process throughout. Effectuation may thus facilitate strategic serendipity, with its principles acting as antecedents and enablers, recurring iteratively during different stages of the serendipity process.

This study also highlights the value of examining critical events systematically in new venture creation. The model positions critical events as key components of serendipity processes that can trigger venture formation, illustrating how a single, unplanned, personal event, can generate unexpected, life-changing consequences (Zerbe et al., 2022). In the context of new venture creation, embedding critical events within the serendipity process underscores that the unexpected outcome often entails a radical change in an individual’s professional life, whereas serendipitous events more broadly span a wide range of foci, from everyday micro serendipities (Bogers and Björneborn, 2013) to radical innovations (Ban, 2006). This approach also enables a more fine-grained analysis of the events themselves. Therefore, analysis of critical events offers opportunities to get deeper insight into unexpected entrepreneurship or unforeseen business ventures. The results build on previous findings that serendipity can lead to self-employment, even for individuals who originally did not see themselves as entrepreneurs (Berntsen et al., 2022), with effectuation lowering the threshold for entrepreneurial action.

The narratives demonstrate the heterogeneity in entrepreneurial journeys and illuminate decision-making and enactment processes. Such stories can be valuable in training contexts, inspiring and empowering, for example, immigrants and students to consider entrepreneurship. They underscore the importance of social networks and entrepreneurial communities in generating serendipitous critical events and enabling individuals to capitalise on emergent opportunities. Practical implications include fostering environments for informal, unplanned interactions of entrepreneurially oriented individuals, and ensuring access to formal support structures like business advisors and incubators. Providing spaces that reduce risk and uncertainty, and enable low-threshold experimentation, may encourage entrepreneurial action. For example, micro-funding programmes and pitching competitions can provide resources for early-stage testing and experimentation. Additionally, incubators and informal entrepreneurship societies offer environments for guidance and peer support, while also facilitating serendipitous encounters and ideas (Busch and Barkema, 2022) and the effectual combination of resources at hand.

Drawing on only three narratives, this study invites further research into critical events within serendipity processes and their interplay with effectuation, employing diverse contexts and methods. As the sample consisted solely of immigrant entrepreneurs, the work cannot compare the effectuation-enabled serendipity process of new venture creation between immigrant and native entrepreneurs, which would require data from both groups. Future studies could investigate differences in seizing unexpected entrepreneurial opportunities, evaluating affordable loss and network-building practices, as well as examine whether operating in a native versus host country influences these factors. In addition, other background and situational factors may influence individuals’ willingness and ability to leverage serendipity and enact effectuation, offering further avenues for future research.

This study enhances understanding of new venture creation through the lived experiences of three immigrant entrepreneurs in Finland. Such knowledge can support efforts to attract and support (immigrant) entrepreneurs both in Finland and in similar environments elsewhere. The narratives suggest that recognising the potential of an unexpected opportunity relative to available resources and affordable loss is central. Entrepreneurs proceeded with an experimental mindset, leveraging contingencies and social networks to transform the opportunity into an unforeseen new venture.