What is this mysterious activity we call entrepreneurship?
What exactly do entrepreneurs do? Does success require special traits and
skills or just luck? Can large companies follow their example? What role does
venture capital play?
In a field dominated by anecdote and folklore, this landmark study
integrates more than ten years of intensive research and modern theories of
business and economics. The result is a comprehensive framework for
understanding entrepreneurship that provides new and penetrating insights.
Examining hundreds of successful ventures, the author finds that the typical
business has humble, improvised origins. Well-planned startups, backed by
substantial venture capital, are exceptional. Entrepreneurs like Bill Gates
and Sam Walton initially pursue small, uncertain opportunities, without much
capital, market research or breakthrough technologies. Coping with ambiguity
and surprises, face-to-face selling, and making do with second-tier employees
is more important than foresight, deal-making or recruiting top-notch teams.
Transforming improvised startups into noteworthy enterprises requires a
radical shift, from 'opportunistic adaptation' in niche markets to the
pursuit of ambitious strategies. This requires traits such as ambition and
risk taking that are initially unimportant.
Mature corporations have to pursue entrepreneurial activity in a much more
disciplined way. Companies like Intel and Merck focus their resources on
large-scale initiatives that scrappy entrepreneurs cannot undertake. Their
success requires carefully chosen bets, meticulous planning and the smooth
coordination of many employees rather
than the talents of a driven few.
This clearly and concisely written book is essential for anyone who wants
to start a business, the entrepreneur or executive who wants to grow a
company and for the scholar who wants to understand this crucial economic
Amar Bhidé, an Associate Professor on leave from the Harvard
is teaching at the University
of Chicago. A former
consultant at McKinsey & Company and proprietary trader at E.F. Hutton,
Bhidé received a doctorate and an MBA from the Harvard Business
School where he was a
Baker Scholar, and a B.Tech. from the Indian Institute of Technology. He has
written eight Harvard Business Review articles, papers on corporate
governance in the Journal of Financial Economics and the Journal of Applied
Corporate Finance and Of Politics and Economic Reality (Basic Books).