It is a good week for Better-The-World as they are gaining more traction and gearing up to launch a number of new features over the coming months. These people work so hard and try to move as fast as they can. The team is not only growing in size but also in learning about user behaviors and partnerships. It is one of the most original idea and make senses for all parties - user, non-profit and advertisers. Called it "Free-raising".
Start-up is never easy and sometimes you wonder what is more important - passion or experience? For any innovative start-up, you can only have so much experience otherwise it is not an innovative start-up. VCs like to back people with prior experiences, is that a smart practice?
We’ve talked so much how failing is part of building a foundation for future success (that is if you will stop failing one day). Why is it often bankers and VCs are more willing to back those who back those who succeeded the first time than those who failed a few times? The gurus are all saying let’s fail more and fail often. Who is right? I personally don’t like failing, unless it is planned for as part of the strategic learning in an uncertain technology or market environment. Otherwise failure is failure. But pushing failure up-front and making them small is smart. Fail big and fail late is tragedy,
Paul A. Gompers et la.(Prof at HBS) has just finished an interesting working paper on the subject titled : Performance Persistence in Entrepreneurship:
On the other hand, first-time entrepreneurs, have only an 18% chance of succeeding, and entrepreneurs who previously failed have a 20% chance of succeeding. But why do these contrasts exist?
The key idea is that there is evidence for the role of skill as well as the perception of skill in inducing performance persistence. This is consistent with the view that if suppliers and customers perceive the entrepreneur to have market timing skill, and is therefore more likely to succeed, they will be more willing to commit resources to the firm. In this way, success breeds success and strengthens performance persistence.
What does it tells us? One interesting observation from the authors is that the very best and the very worst entrepreneurs do not become serial entrepreneurs. That makes sense. The very best entrepreneurs are either too wealthy or too deeply involved in their business or too lazy to start new ones. The successful one either become partner of VC firms or decided to pursue social ventures to contribute back to societies, both are good. And there aren’t too many serial entrepreneurs anyway. Any who failed decided to just to back to work for a large company.
So what are we left with, smart first timers or someone who failed recently, you still get roughly the same 1/5 of a chance for succeeding.