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Learning from entrepreneurial failure
 

Learning from entrepreneurial failure

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A short overview of how to learn from Entrepreneurial Failure

A short overview of how to learn from Entrepreneurial Failure

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    Learning from entrepreneurial failure Learning from entrepreneurial failure Presentation Transcript

    • Where it went wrong?
      Learning from Entrepreneurial Failure
      Ing. M.H.M. Hammer M.Sc.
      • Theory:
      • What is Entrepreneurial Failure?
      • Can you find some examples?
      • Practice:
      • What could help to prevent an Entrepreneur from failure?
      Index
    • Entrepreneurial Failure
      Definition:
      According to the entrepreneur, undesirable stopping the company
    • Introduction to the topic
      Why some entrepreneurs succeed and others fail?
      At the time of launch all entrepreneurs are convinced of their businesses to achieve success (Shane & Venkataraman, 2000; Driessen, 2005, Shane, 2003).
      In the Netherlands ± 50% of the ventures is not surviving the first 5 years (Meijaard et al, 2007; Bangma & Snel, 2009).
      TOP program: dropout rate is 25%, while unaccompanied spin-off companies have a dropout of 40% (University of Twente, 2005).
    • Key concepts
      Why quit a venture (dropout)?:
      Entrepreneurial exit; quit because of good performance (e.g. Detienne, 2008; Wennberg et al, 2009)
      Entrepreneurial failure; quit because the performances are not good (e.g. Samuels et al, 2008; Wennberg et al, 2009)
      Ratio (after 1st 7 years) EE/EF: 50/50 (Wennberg et al, 2009).
    • Key concepts
      Entrepreneurial Failure is divided in (Cardon et al, 2009):
      tough luck
      mistakes by the operator
      Reasons for Entrepreneurial Failure:
      the entrepreneur (e.g., Simon et al, 2000, Ottesen &, 2005, Hayward el al, 2006)
      The entrepreneurial environment (Vaillant, 2007)
    • Theory
      Fostering entrepreneurship:
      the person of the entrepreneur (e.g. Stewart & Roth, 2007, Judge & Ilies, 2002 and Kirton, 1976)
      the process of entrepreneurship (e.g. Shane & Venkataraman, 2000, Gartner, 1985 and Shapero, 1982).
      A starting entrepreneur, sequential runs a number of steps (van der Veen & Wakkee, 2004, van der Sijde, 2004, Shane & Venkataraman, 2000, Low & MacMillen, 1988, Gartner, 1985; Shapero & Sokol, 1982).
    • Theory
      Generalized model is that of Veccio(Veccio, 2003):
      the preparatory phase (pre-start)
      start,
      the venture being in action (exploration)
      stopping doing business (exit)
    • Reasons for Failure
      Lack of experience
      Insufficient capital (money)
      Poor location
      Poor inventory management
      Over-investment in fixed assets
      Poor credit arrangements
      Personal use of business funds
      Unexpected growth
      Competition
      Low sales
      (Source: Michael Ames, Custav Berle)
    • Your turn!
      Please write down some examples you know of an entrepreneur who failed with the enterprise.
      Stopped, unwanted.
      Bankruptcy
      Closed down with grieve.
    • What are causes?
      What could be causes for the failure?
      Please write down as much as you can come-up with.
      (Use yellow post-it’s)
    • Goal / Question
      How to reduce Entrepreneurial Failure (EF) in the post start-up phase of entrepreneurship?
    • Finaly:
      What should have helped the entrepreneur to prevent from failure?
    • Research model
    • Summarize
    • Thank you for your help andattention!
    • For more information, suggestions or cooperation, do not hesitate to contact:
      m.h.m.hammermsc@saxion.nl