Great data for Entrepreneurs

22 Jul 2010 Sandeep Mehta

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:

  1. Consistent with prior research, less than half of the 539 ventures survived more than two years. 
  2. Economic downturns lead to higher failure rates for new ventures. 
  3. New venture success is highly correlated with first-product success. 
  4. First-product success is enhanced when those products are introduced into markets with emerging market needs but with established industry standards. 
  5. First-product and venture performance are significantly higher for products based on ideas that came from the founders. 
  6. Most successful first products are based on ideas that reflect both technology development and an analysis of customer needs.
Take away for me: Starting a business is risky.  However, as long as it is based on my own ideas and I am strongly aware of / pay attention to customer needs, I should be OK!

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