Sunday, March 22, 2009
A new study has been conducted at the Harvard Business School. The Harvard team looked at thousand so of venture-backed companies for their performance. The professors found that, on average, there is no new learning from the failures for a first time entrepreneurs. Here are some key results of the study:
1. First-time entrepreneurs who received venture capital funding had a 22 percent chance of success
2. Success rate of already-successful entrepreneurs for later venture-backed companies was 34 percent.
3. Entrepreneurs whose companies had been liquidated or gone bankrupt had almost the same follow-on success rate as the first-timers: 23 percent.
Professor Gompers even says “for the average entrepreneur who failed, no learning happened.” I have read Mr. Gompers books during my MBA at Oxford University. He is great. But my belief is that the learning is not a quantifiable thing that can be measured by a statistical tool. The circumstances are different for each and every entrepreneurs even if they are in the same industry or sector. So there must be some learning. From the methodology it seems that they assumed that things that caused first failure may not have caused the second failure. Generally entrepreneurs don't make the same mistake again. If they do then you can say that there was no learning from the first failure.
What do you think? Please comment...
Anyway you can read the NY Times article HERE
1. First-time entrepreneurs who received venture capital funding had a 22 percent chance of success
2. Success rate of already-successful entrepreneurs for later venture-backed companies was 34 percent.
3. Entrepreneurs whose companies had been liquidated or gone bankrupt had almost the same follow-on success rate as the first-timers: 23 percent.
Professor Gompers even says “for the average entrepreneur who failed, no learning happened.” I have read Mr. Gompers books during my MBA at Oxford University. He is great. But my belief is that the learning is not a quantifiable thing that can be measured by a statistical tool. The circumstances are different for each and every entrepreneurs even if they are in the same industry or sector. So there must be some learning. From the methodology it seems that they assumed that things that caused first failure may not have caused the second failure. Generally entrepreneurs don't make the same mistake again. If they do then you can say that there was no learning from the first failure.
What do you think? Please comment...
Anyway you can read the NY Times article HERE
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