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The Origin and Evolution of New Businesses
What is this mysterious activity we call entrepreneurship? Does success require special traits and skills or just luck? Can large companies follow their example? What role does venture capital play?
In a field dominated by anecdote and folklore, this landmark study integrates more than ten years of intensive research and modern theories of business and economics. The result is a comprehensive framework for understanding entrepreneurship that provides new and penetrating insights. Examining hundreds of successful ventures, the author finds that the typical business has humble, improvised origins. Well-planned start-ups, backed by substantial venture capital, are exceptional. Entrepreneurs like Bill Gates and Sam Walton initially pursue small, uncertain opportunities, without much capital, market research, or breakthrough technologies. Coping with ambiguity and surprises, face-to-face selling, and making do with second-tier employees is more important than foresight, deal-making, or recruiting top-notch teams.
Transforming improvised start-ups into noteworthy enterprises requires a radical shift, from "opportunistic adaptation" in niche markets to the pursuit of ambitious strategies. This requires traits such as ambition and risk-taking that are initially unimportant. Mature corporations have to pursue entrepreneurial activity in a much more disciplined way. Companies like Intel and Merck focus their resources on large-scale initiatives that scrappy entrepreneurs cannot undertake. Their success requires carefully chosen bets, meticulous planning, and the smooth coordination of many employees rather than the talents of a driven few.
This clearly and concisely written book is essential for anyone who wants to start a business, for the entrepreneur or executive who wants to grow a company, and for the scholar who wants to understand this crucial economic activity.
In a field dominated by anecdote and folklore, this landmark study integrates more than ten years of intensive research and modern theories of business and economics. The result is a comprehensive framework for understanding entrepreneurship that provides new and penetrating insights. Examining hundreds of successful ventures, the author finds that the typical business has humble, improvised origins. Well-planned start-ups, backed by substantial venture capital, are exceptional. Entrepreneurs like Bill Gates and Sam Walton initially pursue small, uncertain opportunities, without much capital, market research, or breakthrough technologies. Coping with ambiguity and surprises, face-to-face selling, and making do with second-tier employees is more important than foresight, deal-making, or recruiting top-notch teams.
Transforming improvised start-ups into noteworthy enterprises requires a radical shift, from "opportunistic adaptation" in niche markets to the pursuit of ambitious strategies. This requires traits such as ambition and risk-taking that are initially unimportant. Mature corporations have to pursue entrepreneurial activity in a much more disciplined way. Companies like Intel and Merck focus their resources on large-scale initiatives that scrappy entrepreneurs cannot undertake. Their success requires carefully chosen bets, meticulous planning, and the smooth coordination of many employees rather than the talents of a driven few.
This clearly and concisely written book is essential for anyone who wants to start a business, for the entrepreneur or executive who wants to grow a company, and for the scholar who wants to understand this crucial economic activity.
432 pages, Paperback
First published November 17, 1999
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Displaying 1 - 12 of 12 reviews
March 6, 2014
good book
May 17, 2017
A great academic study of new business and large corporations. Largely pre-dot com focus
December 31, 2019
One of the best books I've ever read.
Highly recommended for anyone trying to start a new business or looking to understand the product marketing fit and nuances of big company vs small company.
Highly recommended for anyone trying to start a new business or looking to understand the product marketing fit and nuances of big company vs small company.
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January 12, 2022McKinsey & Co, in 1939, they initially served small companies but then quickly cultivated larger clients who could pay higher fees. continues to avoid the start-ups and small companies who cannot pay its fees.
The financial genius, the tax law manipulator, the 'wheeler-dealer,' and the supersalesman images are as much or more the admired stereotypes than the "administrator/manager image implied by the professional standards the School has generated.
Of the nearly million new businesses formed each year in theUnited States, VCs fund only a few hundred.
success of new initiatives depends on a diffused organizational capability rather than the talents of the top decision-makers.
business schools have little interest in maintaining existing equilibriums
When tennis players seek to improve their games, they turn to videos and observation of champions, not of weekend hackers.
More than 80 percent of the Inc. founders I studied bootstrapped their ventures with modest funds derived from personal savings, credit cards, second mortgages, and so on; the median start-up capital was about $10,000. Only 5 percent raised their initial equity from professional venture capitalists. Their ventures were improvised—most Inc. company founders, like William Hewlett and David Packard, did not spend much time searching for opportunities, doing market research, or writing business plans; they merely replicated or modified an idea they encountered through previous employment or by accident.
They have to play rapid-fire pinball rather than a strategic game of chess.
heads I win, tails I don't lose much
Large companies derive their profits from many tangible and intangible assets such as their patents, know-how, production facilities, brand names, customer relationships, and access to distribution channels.
Although we are surrounded by entrepreneurs, their world remains a terra incognita
The financial genius, the tax law manipulator, the 'wheeler-dealer,' and the supersalesman images are as much or more the admired stereotypes than the "administrator/manager image implied by the professional standards the School has generated.
Of the nearly million new businesses formed each year in theUnited States, VCs fund only a few hundred.
success of new initiatives depends on a diffused organizational capability rather than the talents of the top decision-makers.
business schools have little interest in maintaining existing equilibriums
When tennis players seek to improve their games, they turn to videos and observation of champions, not of weekend hackers.
More than 80 percent of the Inc. founders I studied bootstrapped their ventures with modest funds derived from personal savings, credit cards, second mortgages, and so on; the median start-up capital was about $10,000. Only 5 percent raised their initial equity from professional venture capitalists. Their ventures were improvised—most Inc. company founders, like William Hewlett and David Packard, did not spend much time searching for opportunities, doing market research, or writing business plans; they merely replicated or modified an idea they encountered through previous employment or by accident.
They have to play rapid-fire pinball rather than a strategic game of chess.
heads I win, tails I don't lose much
Large companies derive their profits from many tangible and intangible assets such as their patents, know-how, production facilities, brand names, customer relationships, and access to distribution channels.
Although we are surrounded by entrepreneurs, their world remains a terra incognita
November 21, 2021
This book, is old, and perhaps of only limited historical interest; the statistical studies conducted, are in the Fisher era. Data was quite scant, and it is difficult to see strong support for some of the conclusions.
June 25, 2023
Writing style was a little hard for me to read at times, but the information and lessons in the book are priceless. As someone who is an entrepreneur it explained many things I’ve felt but never had the right mental models to really understand.
October 23, 2023
Excellent book for entrepreneurs with hard data on what works and what doesn’t. Personally I wish he would have just focused on startups but to understand the evolution part he had to cover mature companies.
November 24, 2020
History of emerging businesses
- What it takes to create a solid business
- What it takes to create a solid business
This entire review has been hidden because of spoilers.
January 17, 2021
Decent survey of academic thought on entrepreneurship, as well as some unique results from his own research.
October 3, 2011
Entrepreneurship had long been neglected by academics and Bhide changed that with this classic book forever. While a bit outdated and of limited practical value, any serious entrepreneur will find loads of basics / fundamentals in the world of entrepreneurship.
Bhide's concept of 'Investment, Uncertainty & Profit' is in my opinion a principle of entrepreneurship worth the price of the book. The concept has been used a lot and probably the best re-use / improvement was written by Keith McFarland in 'The Breakthrough Company', chapter Upping the Ante.
This is a major book that changed the academic and professional work on how we think about entrepreneurship. Thus, many books have been using Bhide's finding extensively including 'Extradordinary Entrepreneurship', which is to me the finest and very best book for any hands-on entrepreneur.
Comment
Bhide's concept of 'Investment, Uncertainty & Profit' is in my opinion a principle of entrepreneurship worth the price of the book. The concept has been used a lot and probably the best re-use / improvement was written by Keith McFarland in 'The Breakthrough Company', chapter Upping the Ante.
This is a major book that changed the academic and professional work on how we think about entrepreneurship. Thus, many books have been using Bhide's finding extensively including 'Extradordinary Entrepreneurship', which is to me the finest and very best book for any hands-on entrepreneur.
Comment
September 27, 2007
I'm steadily working my way through this book but it doen an excellent job of distilling what it takes to succeed and the nuances of different enterprise startup routes (within a corp, independent, VC etc).
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August 24, 2007Rereading now...
Displaying 1 - 12 of 12 reviews