Keys to Entrepreneurial Success

The Kauffman Foundation, the world's largest foundation devoted to entrepreneurship, recently released a new study entitled "Making of a Successful Entrepreneur."

In the study the research team explored company founders' opinions and observations about what influenced the success or failure of their businesses. The research is based on a survey of 549 company founders in a variety of industries, including aerospace
and defense, computer and electronics, health care, and services.

The researchers asked the company founders to rank the importance of a number of factors on the success of their business. The key takeaway is that these founders believe that experience, management, and luck are the biggest drivers.

  • 96 percent ranked prior work experience as an important success factor
  • 88 percent said that learning from previous successes, and 78 percent said that learning from previous failures, played an important role in their present successes
  • 82 percent said their management team was important to their success
  • 73 percent said that good fortune was an important
    factor in their success.entrepreneurs

Lines up pretty well with Malcolm Gladwell's conclusion in "Outliers", successful people are not that way due to personal ambition alone, it's a combination of circumstances that some would call luck coupled with expertise based on practice.

Back to the Kauffman study, some more interesting findings.

  • Availability of financing/capital was considered important to the success of their current businesses by 68 percent of respondents
  • 50 percent of Entrepreneurs ranked location as not at all important
  • Of the entrepreneurs who received advice from investors, 38 percent said it was not at all important

The sources of funding these entrepreneurs used to start their business is of great interest. The most significant source of funding was personal savings.  The funding sources broke down as follows.

  • 70 percent used personal savings
  • 13 percent took friends and family money
  • 11 percent venture capital
  • 9 percent had angel investors

Some of the findings of the study line up pretty nicely with my experience.  A good team with domain expertise has a better chance of creating a successful startup.  Having those attributes is good.  They are actually controllable. 

December 16, 2009  |  Comments  |  Tweet  |  Posted in Entrepreneurship