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This article was kind of strange and against mainstream opinion about entrepreneurs:
SiliconIndia: Professional Network for Indians Worldwide
Quote:
Last year, former Harvard professor Amar Bhide wrote “The Origin and Evolution of New Businesses,†a book based on hundreds of interviews with Inc. 500 CEOs about the elusive beast known as entrepreneurship. His conclusions are counter-intuitive and should be required reading for would-be entrepreneurs and investors looking at everything from startups to public equity markets.
Bhide’s research showed that virtually all startups fall into two categories: marginal startups (e.g., hair salons, lawn care, etc.) and promising startups (e.g., Microsoft, HP, etc.). Marginal startups have low uncertainty, low investment requirements and low likely profit. Promising startups have high uncertainty, low investment requirements and low likely profit. However, both types have two things in common: they are low risk and arbitrage oriented. This is contrary to the myth that entrepreneurs are risk takers. When Gates dropped out of Harvard and started Microsoft, his opportunity cost was very low. He was not worth much in the job market. But, had Microsoft failed, he could have simply returned to Harvard to finish his degree. He faced uncertainty and ambiguity, but not risk (see figure 1).
What are your opinions guys?
SiliconIndia: Professional Network for Indians Worldwide
Quote:
Last year, former Harvard professor Amar Bhide wrote “The Origin and Evolution of New Businesses,†a book based on hundreds of interviews with Inc. 500 CEOs about the elusive beast known as entrepreneurship. His conclusions are counter-intuitive and should be required reading for would-be entrepreneurs and investors looking at everything from startups to public equity markets.
Bhide’s research showed that virtually all startups fall into two categories: marginal startups (e.g., hair salons, lawn care, etc.) and promising startups (e.g., Microsoft, HP, etc.). Marginal startups have low uncertainty, low investment requirements and low likely profit. Promising startups have high uncertainty, low investment requirements and low likely profit. However, both types have two things in common: they are low risk and arbitrage oriented. This is contrary to the myth that entrepreneurs are risk takers. When Gates dropped out of Harvard and started Microsoft, his opportunity cost was very low. He was not worth much in the job market. But, had Microsoft failed, he could have simply returned to Harvard to finish his degree. He faced uncertainty and ambiguity, but not risk (see figure 1).
What are your opinions guys?
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