New venture strategies

There exists a variety of ways of working at entrepreneurship, some of which offer more promise of success than others. This text suggests patterns for organizing the existing entrepreneurial examples in order to help potential entrepreneurs see what options are available to them. The analyses present data concerning both success and non-success, as well as conceptual schemes for analyzing and for developing entrepreneurial action, in order to offer strategies for business entry, whether by startup or acquisition. Often used as a textbook, this work is also cited in the research literature, in part because of its synthesis of prior research. Organizes the prior research into a framework that includes the following components: Perspectives on Entrepreneurship (which points out eight different types of entrepreneurs); Success and Failure Factors; Career Departure Points (the different points in life at which individuals start ventures); Sequences in Startups; Sources of Venture Ideas; Evaluating Venture Ideas; Competitive Entry Wedges (advantages that new firms use to break into a market); Acquisition Finding and Dealing; Corporate Entrepreneurship; and Public Policies. Categorizes entrepreneurs into eight different types: solo self-employed individuals (including Mom 'n' Pop operators, trades people, and high-hourly-rate professionals); deal-to-dealers (serial and portfolio entrepreneurs); team builders (whose who go on to build larger companies using hiring and delegation) ; independent innovators (who create companies in order to develop, produce, and sell their own innovations and inventions); pattern multipliers (those who spot an effective business plan, possibly originated by someone else, and multiply it to realize profits on additional such ventures); economy-of-scale exploiters (who locate in lower rent and tax areas and reduce services in order to reduce prices, which makes it more difficult for competitors to enter), capital aggregators (who initiate such ventures as banks or insurance companies by pulling together a substantial financial stake); and acquirers (who acquire a going concern). The analysis of success and failure concludes that performance depends on a number of factors such as: the right time and place, education and experience, working with partners, starting with greater capital, and applying better management practices. While many sequences are possible for creating new ventures, generally five key elements must be recruited by the entrepreneur in order to start: the venture idea, physical resources, technical know-how in the particular line of work, personal contacts critical to the business, and sales orders from customers. The venture idea is one of the most difficult ones to acquire and most important, because if it is good, it facilitates the acquisition of the remaining ones. The analysis of sources of venture ideas offers eight suggestions that can increase the odds of discovering a good idea by taking action, rather than passively waiting for fortunate coincidence. Four sets of factors primarily determine why entrepreneurs choose some ventures rather than others: head start factors, apparent feasibility, cost factors, and payoff potential of the business. Key questions include how much can be made, how much can be lost, and how likely breakeven can be attained. There are general types of advantages most new companies use to break into the stream of established commerce. The study presents three main economic entry wedges: introduction of a new product of service, parallel competition not involving anything really new but employing lesser differentiation, and franchise entry. Eleven more entry wedges can be regarded to some extent as variants of the main wedges presented. These wedges can be grouped into four categories: exploiting partial momentum, customer sponsorship, parent company sponsorship