The article Perspective: Economic Conditions, Entrepreneurship, First-Product Development, and New Venture Success in Journal of Product Innovation Management studies 539 new ventures started between 1998 and 2001 and has the following great findings:
- Consistent with prior research, less than half of the 539 ventures survived more than two years.
- Economic downturns lead to higher failure rates for new ventures.
- New venture success is highly correlated with first-product success.
- First-product success is enhanced when those products are introduced into markets with emerging market needs but with established industry standards.
- First-product and venture performance are significantly higher for products based on ideas that came from the founders.
- Most successful first products are based on ideas that reflect both technology development and an analysis of customer needs.