I recently read “The Illusions of Entrepreneurship” by Scott A. Shane. The book does a lot of “myth busting” with regard to many of the misconceptions people have about entrepreneurship. It’s a relatively short and interesting read.
In the early nineties I did a short stint at a Small Business Development Center, so I’m aware of many of the inaccurate perceptions and misconceptions surrounding entrepreneurship. However, a few things did surprise me:
- Entrepreneurship in the U.S.has been declining over the past couple of decades. I never would’ve guessed.
- “Between 1982 and 2002, startups in the software industry were 608 times more likely than start-ups in the restaurant industry to become one of the 500 fastest growing private companies in the United States…” The fact that software startups have a higher success rate than restaurants is not a surprise, but the magnitude of the difference is astonishing.
- “On average, businesses founded by people between the ages of 45 and 54 tend to perform better than those founded by people less than 35 years old.” I could see where that would be true on average, but I doubt it holds true for web/software startups.
The one thing to note is that the book looks at small business in aggregate. Thus, the statistics aggregate mom-and-pop businesses as well as more sophisticated startups. The author does provide some suggestions for entrepreneurs, but because of the nature of the book, the suggestions are broad and generalized.
Scott Shane also wrote “Finding Fertile Ground” which is specific to tech startups. I read Furtile Ground a couple of years ago and thought it provided a lot of good information, but the cost-benefit of some of the suggested market and strategic analyses may not be useful for web startups (i.e. it may be cheaper to build the product and test customer response than it would be to do a comprehensive market analysis).
There’s a Business Week interview with Scott Shane here.
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