The Evolution of New Business

The Evolution of New Business - The Evolution of New...

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Unformatted text preview: The Evolution of New Business The following material is based on case studies, surveys and meetings with Inc 500 companies conducted by Bhide. Vintage is 1989, but results true still today. Summary of The Origin and Evolution of New Businesses Amar Bhide Nature of Promising Start-ups Issues Endowments and opportunities Planning vs. opportunistic adaptation Securing resources Distinctive qualities Initial Endowments Typically have products or services very similar to existing products and services Inc 500 58% identical or close substitutes 36% substitutes that differed in price, function or value 6% had no substitutes available Survey of attributes of success 12% due to extraordinary or unusual idea 88% due to exceptional execution of an ordinary idea Initial Endowments (2) Founders typically lack business experience Gates, Jobs, Dell Resources (Inc 500) Startup capital from family, friends and personal savings 26% raised $5,000 or less 21% raised over $50,000 0.5% raised over $1 million Initial Endowments (3) Sources of startup capital Personal savings 55% Personal charge cards 5% Bank loans 7% Family and friends 13% Angel investors 3% Venture capital 4% Opportunities Most started by serving local markets or small number of specialized customers Most avoided competition from large corporations Competition with Fortune 500 4% Mid-sized companies 4% Small companies 73% No direct competitors 18% Nature of Promising Start-ups...
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The Evolution of New Business - The Evolution of New...

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