Choosing to stay small: Growth boundaries in lifestyle entrepreneurship

Venture growth is widely regarded as the defining outcome of entrepreneurship, yet many lifestyle entrepreneurs intentionally remain small despite viable opportunities to expand. While studies explain the motivations of entrepreneurs behind their preference for lifestyle over high-growth ventures, little insight is given to how founders utilize their values and beliefs to set venture growth boundaries and make sense for readjustments thereof. Using sensemaking theory and employing an abductive, multiple-case-study design of eight Vietnamese lifestyle ventures, this study draws on 36 in-depth interviews, eight focus groups, and a variety of other documentary evidence. Herein, entrepreneurs’ evaluations of potential expansion employ a number of value-based filters that, in turn, generate market, legitimacy, financial, and identity-related tensions and that, consequently, trigger value-driven sensemaking. These processes end up in strategic containment, an organizing logic for growth that tries to keep value while containing it. By repeatedly checking and adapting growth limits, the founders of these companies maintained and fine-tuned their growth boundaries. The study develops a process model, based on empirical research, of how lifestyle entrepreneurs come up with growth opportunities, limit their growth, and readjust these limits again when necessary. The model offers a process-based account of strategic smallness and connects value-based interpretation with the regulation of venture growth.