Start-Up Ventures : Towards the Prediction of Initial Success

Develops a theoretical and empirical framework for determining the success potential, at the earliest possible stage, of new high-technology ventures and the most effective entrepreneurial and managerial techniques for attaining this potential. Data were gathered through 68-item questionnaires sent to the chief executive officers of twenty-four technology startups, all associated with the Rensselaer Polytechnic Institute (RPI) incubator or technology park. Two measures of success--quantified initial success and subjective initial success--were feebly correlated. Results show a strong negative regression coefficient related to market attractiveness. This is surprising since previous research notes the desirability of finding attractive markets. However, in this study, the companies performing better were in smaller, more stable markets (such as machine tools and technical and business services) while the firms in more attractive, growth markets were not yet as successful. Using both measures, a positive regression coefficient was found for questions exploring the personal orientation of the leader or leadership teams. Also a strong positive correlation was found for strategic compatibility. Other factors that were measured and found to be negatively correlated included market dynamics, R&D intensity, and organizational characteristics. (SFL)