Towards an Error-Driven Theory of Ownership Competences: Evidence from First-Time Founders

When navigating the early-stages of startup creation, first-time founders are confronted with extreme uncertainty, scarce resources, and time pressure; in this context, errors are unavoidable yet potentially generative. We study how they interpret and learn from errors and how these processes build ownership competences (OCs). Using a grounded-theory approach, we investigate 72 first-time founders who made the decision to incorporate their startup. Our study enriches the literature on entrepreneurial errors by developing a process model that treats errors as generative antecedents for OCs. We show that cognitive approaches—shaped by psychological distance—govern the depth and trajectory of learning. We extend competence-based theory by demonstrating how OCs emerge through error-driven interdependencies and synergies, outlining the contours of an error-driven theory of OCs.