This article offers a critical reflection on how the concept of innovation is used within current research on entrepreneurship—a field that is experiencing a significant paradigm shift. Traditionally centered on the actions of individual entrepreneurs, contemporary scholarship is increasingly focusing on the dynamics of collective action within entrepreneurial groups. Against this backdrop, we critique a prevailing, overly narrow conceptualization of innovation that tends to emphasize linear input–output relationships. Such a limited view fails to capture the more complex, emergent, and socially embedded nature of innovation as it occurs within collaborative entrepreneurial settings. This misalignment calls for a reconsideration of how innovation is framed and studied in the context of entrepreneurship. We propose that addressing this tension requires an expanded theoretical lens—one that incorporates sensemaking and reflexive innovation. These approaches recognize the interpretive, iterative, and context-sensitive aspects of innovation and may serve to enrich the broader academic discourse. By doing so, we aim to contribute to a more nuanced and inclusive understanding of innovation in the field of entrepreneurship.