Which location had the most startups per capita in the United States: San Jose, California or Austin, Texas?
Naaahhhh! (Wrong answer buzzer sounded.)
Neither is the right answer.
The question is part of an Entrepreneurship Quiz prepared by Dr. Scott Shane in connection with his new book, The Illusions of Entrepreneurship. Dr. Shane is the A. Malachi Mixon III Professor of Entrepreneurial Studies at Case Western Reserve University.
Back in the days when Small Business Trends was new, we did a quick email interview with Dr. Shane. Now that he has this new book out, we’ll try to get him on the radio show or else do another Q&A article to find out more.
Meanwhile, go take the Entrepreneurship Quiz.
Then come back and leave a comment below. Tell us, did anything on the quiz surprise you? Would it change your startup plans? Does it address the issues that are important to you in starting or running your business?
We want to hear what YOU think.
Very interesting statistics. Most answers surprised me. I guess that’s why I only got 5 right.
Wow. I am amazed by some of those stats… especially the number of businesses with at least 1 employee 10 years later. Guess I’m not as far behind as I thought!
Overall, I thought the stats were encouraging, considering how many Ralph Kramden-like “dreamers” there are out there.
Hi Mimi, you raise a good point about the quiz reinforcing that you are doing OK when compared with others.
The reality is, for every Bill Gates or Sergey Brin who becomes impossibly rich, there are millions of entrepreneurs who are in it for flexible schedules, the challenge of building a business, and the desire to do what we want.
Mimi’s point is really important – and it’s why I wrote the book and the quiz. Because the media is so focused on the big tech companies, they make it seem like you’ve done nothing if Google didn’t pay $1 billion to buy your company. If you’ve started a company, are making money and have some employees, you should be very proud of yourself. You are a SUCCESS at entrepreneurship.
Anita, Thank for posting this great test.
Scott, fantastic job!
I only got 35% right, but #4 was a no-brainer for me, because in my consulting business, I meet with former mangers and execs who desire change.
Almost all of the folks that I meet with to try to help them find appropriate opportunities in the world of franchise ownership tell me that their #1 reason for considering small business ownership is “They do not want to work for others…anymore”
I’m surprised I got 8 right. Very interesting results.
First off as a marketing tactic the quiz worked on me. I bought the book right after taking the quiz. This is also the 2nd book I’ve recently purchased because of a mention in a blog. Shows the power of word of blog on book sales:).
I got the first question wrong and was surprised by the answer. I think I got it wrong because I use a different definition of small business than the author does. I keep running into this problem – different people using different definitions of small business and this leading to confusion (and wrong test answers). Anita has covered this issue in her blogs in the past.
In 2004 there were about 112 million households in the US. This measn the test says there were roughly 13 million small businesses in 2004. As a side note, I thought it was unfair to require math to do the quiz. 🙂 It also was a bit of a trick question since 1983 was at the end of a long period of high unemployment, huge corporate layoffs (the midwest was called the rust belt back then) and a very weak economy.
I’ve seen small business numbers for 2004 that range from roughly 5.5 million all the way up to roughly 27 million – a pretty broad range that exists becasue it depends on how you define small business and account for non-employer businesses.
I think non-employer businesses – we call them personal businesses – are real small businesses. I do this based both on our research and because I own one and it pays our bills, which makes it real to me (it is actually a non-employer Mom and Pop business).
So where did this leave me on question #1?? My math, which included personal businesses and some guesstimate assumptions got me to about 14% of US households owning a business in 2004. I also think the percentage has grown since the early 80’s because of the growth of personal businesses, so I chose C.
I got question 6 (survival rates) right because I am familar with the data. I believe the success rate is actually higher for small business because many small businesses that don’t survive 5 years are actually succesful from the perspective of the owner. This is particularly true for personal businesses. Again this is a definition issue – success versus survival.
I got most of the rest right, although I picked Anniston over Laramie. I got the queston on men versus women correct but I think it is wrong – or at least out of date. I think including personal businesses drives this ratio closer to 1-1.
I look forward to reading the book. It sounds excellent.
Steve’s comment is dead on, took me twenty minutes to read it but it says what I think.
The quiz is vague, not a knock, a little web quiz to drive book sales should be vague.
I hope my copy of the book proves to be more detailed in it’s statistics. (It worked on me too!)
I LUV this quiz! It made me feel like i’m not doing too bad. You can’t turn on TV these days without seeing some rich and famous entreprenuer blabbing. Gives you an inferiority complex..
The 4th question reminded me that one very relevant measure of success, and one perhaps even more relevant to the small business owner, is simply living your life the way you want to.
Quite shocking indeed. I got only 6 right. I thought the typical capitalization is around $100,000.
I was most surprised to see that Japan had the highest per capita business creation and also to see the 5-year mortality rate for startups at 55%. I thought it was 70%. I think it is great that 50% of financing takes the form of debt for comapnies less than 2-years old. This would not be the case in my country. And ceratinly, it would not be the case in Greece that only 50% of business founders expect to have 5th year sales of 100k. The number would definitely be 90%!
Joel, agreed. An independent working life is very much at the heart of what we all want. Of course, none of us is truly independent. We always answer to someone, somewhere. Clients and customers; stakeholders; employees. But at least we feel more in control.
Steve, great point about the different ways of defining “small business.” That’s fodder for another discussion altogether, as we’ve talked about from time to time. And if you want to get really confused, we can start describing how vendors define small business – it gets really crazy.
Cody, yes, I agree that a quiz should be vague. A quiz should intrigue, captivate your interest, drive you to want more. Apparently it did just that for some of you.
Just when you think you almost know it all. I didn’t do as well as I expected but certainly did learn alot while doing so.
A quiz test every week would be great…I love it.
Here are 4 other quizzes for entrepreneurs (see service pages) and tons of resources for entrepreuners who are dealing with a board.
I was happily shocked to score a 50%, especially after I read here and elsewhere about many low scores. I was surprised by the number of five year old home-based businesses. That made me feel more confident in my desire to be home-based. Since these aren’t stats that many people, even seasoned entrepreneurs, will know off the top of their head, I hope that people who buy the book are doing so out of pure interest rather than a fear of less than average knowledge. Good marketing tactic though and a great way to virally spread little known and interesting facts.
Location isn’t really a problem, it depends on what business you are going to establish. You just have to research on what the people wants and what the people needs, if you already know what are those then you will know what business you are going to put in a certain place.
I challenge you to a game of trivia! Click here to battle against me online at ConQUIZtador. Let’s see who’s the winner… https://www.conquiztador.com/?a=26041
Location is not a problem… What?? Huh? Wow?!?!?
I easily got a 50% score,