Great entrepreneurial regions aren’t created. They’re born.<\/p>\n
And fortunately we’re in one of the nation’s best places to start a company.<\/p>\n
That’s apparent from new research published by the Cambridge- based National Bureau of Economic Research.<\/p>\n
The study, by authors Paul Gompers, Josh Lerner and David Scharfstein of the Harvard Business School, looks at how and where new ventures were spawned from public companies between 1986 and 1999.<\/p>\n
They analyzed a database they created of venture-backed companies whose founders had been previously employed by large publicly traded firms.<\/p>\n
What they found was most start-ups sprang from successful public companies that were originally seeded by venture capital themselves but had hit a wall. Most were computer or medical equipment companies and located in California’s Silicon Valley or in Massachusetts.<\/p>\n
They were also usually started by founders who got to see up close how successful start-ups work and got to know the network of investors and customers needed to help launch their new ventures.<\/p>\n
This runs counter to the popular belief that most entrepreneurs start their businesses out of frustration that their ideas aren’t being accepted in a big bureaucratic company.<\/p>\n
“We know both types of entrepreneurs exist,” Lerner says.<\/p>\n
But the overwhelming majority of entrepreneurs in the study were what the professors call Fairchild types, named after the legendary California semiconductor company. From Fairchild Semiconductor sprang 23 more semiconductor companies between 1957 and 1976, including giants like Advanced Micro Devices, Intel and National Semiconductor.<\/p>\n
A big part of their success was the confluence of entrepreneurs, skilled workers, venture investors and customers, Lerner, Gompers and Sharfstein conclude.<\/p>\n
“There just aren’t that many places in the country where you have all that,” Gompers says. “And it takes an awful lot to create all of that from nothing.”<\/p>\n
That doesn’t stop political leaders from trying to recreate the success of Massachusetts and Silicon Valley, though.<\/p>\n
“I gave a talk in China last year where I shared some of our early findings, and a man got up in the back of the hall, shouting angrily,” says Lerner. “He was from a frontier region that they were trying to turn into an entrepreneurial hotbed. He wanted to know who I was to say that wouldn’t work.”<\/p>\n
Gompers says that’s a common misunderstanding.<\/p>\n
“We’re not saying it can’t be done,” he says. “We are saying that entrepreneurial start-ups are more likely where there is already a working network established – like here and in Silicon Valley.”<\/p>\n","protected":false},"excerpt":{"rendered":"
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