Steve Blank Why Entrepreneurs Start Companies Rather Than Join Them


29 bookmarks. First posted by aebraddy 11 days ago.


If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love risk.” “I want flexible work hours.” “I want to work on tough problems that matter. via Pocket
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3 days ago by archizoo
If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love…
from instapaper
8 days ago by freeatnet
If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love…
from instapaper
8 days ago by aapostol
# Asymmetric Information and Entrepreneurship:

- Entrepreneurs start their own companies because existing companies don’t value the skills that don’t fit on a resume.
- The most talented people choose entrepreneurship (Lemons versus Cherries)

# Traits of entrepreneurs.

1. Signalling
How one party (job hunters) credibly conveys information to another party (a potential employer).

2. Capable
Entrepreneurs start ventures because they can't signal their worth to potential employers and they feel they're more capable than what employers can tell from their resume or an interview.

3. Better pay

4. (but) less predictable pay

5. Smarter
...on cognitive abilities

6. Immigrants and funding
Immigrants are with less credible signals.
Fund from families and friends is a dominant source of financing for early-stage ventures.

7. Defer getting a more formal education

# Factors:

1. Companies want employees to help them execute current business models which has little emphasis on entrepreneurial skills.
2. Entrepreneurship: schools don't provide a good way to signal someone's (full) potential to employers.
3. Economic Environment: employment rate might have an impact since it's easier to find a good traditional job in a period of low unemployment but entrepreneurship might start to sound attracting in a downturn; other public policies such as tax also come in the play in the decision making.
4. Leaving a Company: an employer doesn’t value skills for innovation and is just measuring on execution.
5. Entrepreneurial Education
business  career  entrepreneur 
8 days ago by mazin_z1
If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love…
from instapaper
8 days ago by hiroprot
It never crossed my mind that I gravitated to startups because I thought more of my abilities than the value a large company would put on them. At least not consciously. But that’s the conclusion of a provocative research paper, Asymmetric Information and Entrepreneurship, that explains a new theory of why some people choose to be entrepreneurs. The authors’ conclusion — Entrepreneurs think they are better than their resumes show and realize they can make more money by going it alone. And in most cases, they are right.


this is anti-clickbait: an article that delivers way more than its title suggests.

also:
Surprisingly, the company that best epitomized this was not some old-line manufacturing company but Google. When Marissa Mayer ran products at Google the New York Times described her hiring process, “More often than not, she relies on charts, graphs and quantitative analysis as a foundation for a decision, particularly when it comes to evaluating people…At a recent personnel meeting, she homes in on grade-point averages and SAT scores to narrow a list of candidates, many having graduated from Ivy League schools, …One candidate got a C in macroeconomics. “That’s troubling to me,” Ms. Mayer says. “Good students are good at all things.”

Really. What a perfect example of adverse signaling. No wonder the most successful Google products, other than search, have been acquisitions of startups not internal products: YouTube, Android, DoubleClick, Keyhole (Google Maps), Waze were started and run by entrepreneurs. The type of people Google and Marissa Mayer wouldn’t and didn’t hire started the companies they bought.
%contrarian  %theory  %econ  %policystats  !write!technologist  #startup 
8 days ago by lemeb
Entrepreneurs choose to start companies because their education and experience don’t send good signals to the hiring market. The author’s call this, “adverse signaling”.

Not sure what I think of this research yet. But this is right on the money. One of the biggest reasons I’ve never applied at a place like google.

Surprisingly, the company that best epitomized this was not some old-line manufacturing company but Google. When Marissa Mayer ran products at Google the New York Times described her hiring process, “More often than not, she relies on charts, graphs and quantitative analysis as a foundation for a decision, particularly when it comes to evaluating people…At a recent personnel meeting, she homes in on grade-point averages and SAT scores to narrow a list of candidates, many having graduated from Ivy League schools, …One candidate got a C in macroeconomics. “That’s troubling to me,” Ms. Mayer says. “Good students are good at all things.”

Really. What a perfect example of adverse signaling. No wonder the most successful Google products, other than search, have been acquisitions of startups not internal products: YouTube, Android, DoubleClick, Keyhole (Google Maps), Waze were started and run by entrepreneurs. The type of people Google and Marissa Mayer wouldn’t and didn’t hire started the companies they bought.
entrepreneurship  business  career  startup  research  psychology  google 
8 days ago by jefframnani
Entrepreneurs start their own companies because existing companies don’t value the skills that don’t fit on a resume
The most talented people choose entrepreneurship (Lemons versus Cherries)
business  career  entrepreneurship  research 
8 days ago by karim
If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love risk.” “I want flexible work hours.” “I want to work on tough problems that matter.” “I have a vision and want to see…
9 days ago by marionzualo
If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love…
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9 days ago by edmadrid
If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love risk.” “I want flexible work hours.” “I want to work on tough problems that matter.” “I have a vision and want to see…
prediction  asymmetric_information  social_science  entrepreneurship  signaling  business  inefficiency  structure 
9 days ago by jbkcc
It never crossed my mind that I gravitated to startups because I thought more of my abilities than the value a large company would put on them. At least not consciously. But that’s the conclusion of a provocative research paper, Asymmetric Information and Entrepreneurship, that explains a new theory of why some people choose to be entrepreneurs. The authors’ conclusion — Entrepreneurs think they are better than their resumes show and realize they can make more money by going it alone. And in most cases, they are right.

I’ll summarize the paper’s conclusions, then share a few thoughts about what they might mean – for companies, entrepreneurs and entrepreneurial education. (By the way, as you read the conclusions keep in mind the authors are not talking just about high-tech entrepreneurs. They are talking about everyone who chooses to be self-employed – from a corner food vendor without a high school diploma to a high-tech founder with a PhD in Computer Science from Stanford.)
startups  research  psychology 
9 days ago by Chirael
RT : Why Entrepreneurs Start Companies Rather Than Join Them
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11 days ago by peba