Editor’s Note: A few weeks ago Dr. Scott Shane, a very talented professor here in our home town of Cleveland, Ohio hit our radar screen. He recently was named as principal investigator for a new study commissioned by the Ewing Marion Kauffman Foundation to examine what factors affect the performance of newly founded companies. We are very pleased to have Dr. Shane offer the following insights about one recent entrepreneurial trend.
Dr. Shane, professor of economics at Case Western Reserve University, says starting a business is more popular than ever in the United States. But he also says it is harder to be successful at a new business:
“Entrepreneurship is becoming an increasingly popular activity, with 4% of the population annually starting a new business — more individuals than get married each year. But success rates at entrepreneurial activity are not keeping up with start-up rates, making it harder than it used to be to become a successful entrepreneur.”
Dr. Shane also says that starting the right kind of business is crucial to the rate of success. He believes the best new businesses to start right now are high technology businesses. “By that I mean not just Internet businesses but companies in any kind of new technology from nanotechnology to new materials to telecom to advanced manufacturing to biotech,” he notes.
He offers these ten factors on what it takes to be successful starting a new technology business in the 21st Century:
1. Select the right industry
2. Identify valuable business opportunities
3. Manage technological transitions
4. Identify and satisfying real market needs
5. Understand customer adoption
6. Exploit established company weaknesses
7. Manage intellectual property
8. Create barriers to imitation
9. Choose the right organizational form
10. Manage risk and uncertainty
Check out his most recent book, Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures, for more on these ten rules for a successful startup.
In addition to being a professor at Case Western Reserve University, Dr. Shane also serves as academic director of the Center for Regional Economic Issues. He is the author of another book, Academic Entrepreneurship: University Spinoffs and Wealth Creation.[Thanks to George at Brewed Fresh Daily for arranging the email introduction to Dr. Shane.]