The role of demand-side narratives in opportunity formation and enactment

•Demand-side narratives form the micro-foundation of opportunity formation and enactment.•Digital forums such as social media facilitate the co-creation and sharing of narratives.•Benefits from narratives are enhanced by entrepreneurs’ cognitive capabilities.•Two key capabilities relate to demand articulation and resource mobilization.

Our understanding of how entrepreneurs capture knowledge about market needs and identify and exploit promising opportunities remains limited, despite the abundance of studies on the origins of opportunities. We propose that demand-side narratives—the cumulative articulations of needs, desires, ideas and experiences of demand-side participants—form a key micro-foundation of opportunity formation and enactment. New digital infrastructures such as social media facilitate the co-creation, sharing and collective interpretation of these narratives. We further propose that entrepreneurs’ success in forming and enacting opportunities revealed by these narratives is enhanced by their cognitive capabilities related to demand articulation and resource mobilization. Our discussion seeks to improve our understanding of the cognitive underpinnings of opportunity formation and enactment and holds important implications for future research and practice in entrepreneurship.