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Tuesday, November 15, 2005

How Can Start-Up Ventures Grow?

For new start-up ventures, a lack of resources makes growth difficult to come by—just ask those 9 our of 10 fledgling firms that fail.

Harvard Business School Professor Mukti Khaire says from her research the key may be in acquiring intangible resources such as legitimacy, status, and reputation.

So how do those 1 our of 10 firms grow into successful, sustained enterprises? Some of her key findings:
  • Only one out of every ten newly founded firms in the United States grows to a size of more than ten employees (Aldrich, 1999).
  • One revelation was the strong positive effect that mimicking older organizations had on new venture growth. Mimicry is important - for new firms in established industries, there is value to doing some non-technical, symbolic things in the manner that is widely accepted, and to adhering to industry norms and culture.
  • Entrepreneurs and managers should almost never shy away from stepping out of their comfort zone and taking on large jobs, since the payoff does arrive.

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