This article develops and tests theory on when and where a new organizational form will emerge. Recent theory holds that as the number of organizations using a particular external identity code first increases beyond a critical minimal level, the code becomes an organizational form. Going beyond this formulation, we theorize about how an external identity code is established. We argue that when the identities of individual organizations are perceptually focused, they will more readily cohere into a distinct collective identity. We develop ideas about how two observable aspects of organizations might generate perceptually focused identities in a common market: (1) de novo entry and (2) agglomeration in a geographic place with a related identity. Using comprehensive data from the market for disk drive arrays, we test these ideas and an alternative by estimating effects of different specifications of organizational and product densities on rates of entry and exit for array producers. Overall, the analysis supports the notion that firms with perceptually focused identities aid in establishing an organizational form.