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Persistence and Experience Pay Off
By Jerry Kalish
The Harvard Business School and its research isn’t just for the big companies. In fact, a significant amount of research has been done in the area of entrepreneurship. New research in a just-published working paper, "Performance Persistence in Entrepreneurship" (35 pages, PDF here), indicates that entrepreneurs with a history of success are much more likely to succeed in new ventures than first-timers or those who failed previously.
Quite obvious, you might say. But HBS researchers were surprised at just how much successful experience, or performance persistence, pays off. Successful entrepreneurs in the study had a 34% chance of succeeding in their next venture-backed firm, compared with 23% who previously failed and 22% for first-timers. (It should come as no surprise that success, in general, is difficult and rare!)
The research, conducted by HBS Professors Paul A. Gompers, Josh Lerner, and David S. Scharfstein, and former doctoral student Anna Kovner, can be summarized as follows:
* Previously successful entrepreneurs are significantly more likely to lead successful new ventures than first-timers or those who previously failed.
* Some of successful entrepreneurs' edge comes from their adeptness at selecting the right industry and the right time to start new ventures.
* Suppliers and customers are more likely to back a person with previous successes.
Bottom line: Their research suggests that if you want to be a successful entrepreneur, it might be best for you to team up with other entrepreneurs who have a track record of success.
Here is a link to an article by Sarah Jane Gilbert in the Harvard Business School Working Knowledge newsletter about the study.
And if you want to get a first look at cutting-edge management thinking, you can subscribe to the Harvard Business School Working Knowledge newsletter as a weekly newsletter or through an RSS feed.
Jerry Kalish is founder and President of National Benefit Services, Inc., a Chicago-based employee benefit consulting and administrative firm that serves private-held companies, publicly traded companies, and public sector employers. He blogs at The Retirement Plan Blog and can be reached at jerry@nationalbenefit.com.
Comments (2)February 3, 2009 9:40 AM
Comments (2)
The link to the study is broken. Do you have an updated link you could post or email?
Posted by Spencer | February 3, 2009 2:29 PM
Posted on February 3, 2009 14:29
fixed. sorry about that.
Posted by Marc | February 3, 2009 4:37 PM
Posted on February 3, 2009 16:37