This document summarizes research on factors that contribute to the success of high-technology startups. It discusses that about 15% of startups become high performers and succeed, while 15% merely survive and 16% fail. Key factors that determine success include the founders' characteristics like problem-solving skills and management experience. Other important factors are the startup's focus on advanced technology, product orientation, quality investors, and strategic evolution over time to address new challenges.

1. Success Factors & Success Predictors
Ed Roberts, MIT-Sloan
John T. Preston, MIT Entrepreneurship Center
Geoffrey Moore, Silicon Valley
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2. “you could forecast anything but the future”
Neils Bohr
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3. Success Factors in
High-Technology Start-Ups
conclusions based on 25 years of research
carried out on 769 companies
by Prof. Edward B. Roberts
Chairman, MIT Management of Technology and Innovation Group
MIT Sloan School of Management
Founder, MIT Enterprise Forum Inc.
All data from E.B. Roberts
Entrepreneurs in High-Technology: Lessons from MIT and Beyond
(New York: Oxford University Press, 1991)
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4. SUCCESS OF TECHNOLOGY-BASED FIRMS
(5-7 years post-founding)
As measured by Entrepreneurs’
growth & profitability self-assessments
(%) (%)
High Performers 15
Succeeding 15
Merely Surviving 54
Failures 16
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5. SUCCESS OF TECHNOLOGY-BASED FIRMS
(5-7 years post-founding)
As measured by Entrepreneurs’
growth & profitability self-assessments
(%) (%)
High Performers 15
85
Succeeding 15
Merely Surviving 54
15
Failures 16
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6. WHAT MAKES HIGH-TECH FIRMS SUCCEED
• Founders’ Characteristics
• Start-up Characteristics
• Later Strategic Evolution
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7. WHAT MAKES HIGH-TECH FIRMS SUCCEED
Founders’ Characteristics
• Outperformed colleagues, problem solving projects
• Less than Ph.D. education, usually
• Made, not born
• High N-Ach; optimally with moderate N-Pow
• Supervisory experience
Multiple co-founders
especially including sales/marketing
Build complimentary teams
Quality of people / management determines success
John T. Preston, MIT Entrepreneurship Center
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8. WHAT MAKES HIGH-TECH FIRMS SUCCEED
Start-up Characteristics
• High degree of advanced technology transfer
• Product orientation
• Marketing (i.e. customer first) orientation & practices
• Focused growth strategy
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9. WHAT MAKES HIGH-TECH FIRMS SUCCEED
Start-up Characteristics (cont.)
John T. Preston, MIT Entrepreneurship Center
• Quality Investors (open doors, deep pockets, hands on)
• Move Quickly to the Market (Fast or Dead)
• Attack the Fiercest Market Early
• Strong IP
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10. WHAT MAKES HIGH-TECH FIRMS SUCCEED
Start-up Characteristics (cont.)
John T. Preston, MIT Entrepreneurship Center
LOCATION OF COMPANY (Regional Advantages - Michael Porter)
• Near Fiercest Competitor and/or Most Demanding Customer
• Clusters of Complementary Companies Provide Advantage:
– Dutch Flowers
– Route 128/Silicon Valley
– Japanese Consumer Electronics
– Singapore Hard Disk Drives
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11. WHAT MAKES HIGH-TECH FIRMS SUCCEED
Later Strategic Evolution
• Strategic product/business focus
• Strengthen market orientation
• Overcome new problems
o Measuring change in Market Applications
o Current “New Problems”
o “Founder’s Diseases”
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12. WHAT MAKES HIGH-TECH FIRMS SUCCEED
Measuring Change in Market Applications
DIMENSION MEASURE
For what purpose? Product Functionality
To whom? End User Customer Group
What selling methods? Distribution Channels
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13. Crossing the Chasm (Geoffrey A. Moore)
"still the bible for entrepreneurial marketing"
Visionaries
(Innovators and Early Adopters)
– Technology buyer
– Looking for paradigm shift
– Willing to live with bugs
Early majority
– Productivity improvement
– Business buyer
– Looking for similar references
– Company name, Product support base
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14. WHAT MAKES HIGH-TECH FIRMS SUCCEED
Current “New Problems” Facing
Successful and Growing High-Tech Firms
• Shorter product life cycle
• Increased competition
• Difficulty in maintaining state of the art technology in all
areas of business
• Decreased product differentiation
• Shift to non-engineering customer base
• Problems in maintaining a growth atmosphere in the company
• Periodically, problems in securing growth capital
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15. WHAT MAKES HIGH-TECH FIRMS SUCCEED
A Key Problem for Founder-CEOs:
Avoid Fatal “Founder’s Diseases”
“Founder’s Diseases”
affect 2/3 founder / CEOs
• Replacement is almost always by a more marketing-oriented
person, usually brought in from the outside
• “Survivor CEOs” are either not successes or are the
1/3 “super-successes” who are unexplainable by our studies
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16. WHAT MAKES FIRMS SUCCEED
Losing my Virginity
Richard Branson
“There are no strategies or techniques that assure the success of a business.
There are a number of operational practices that, if you follow, there is a
certain level of confidence that the business will keep going; however you cannot reach a
clear formula for business success and then bottle it like a perfume. It doesn't work that
way. In order to succeed, you have to be there, feel the vibes and react accordingly.
And if you have a good team and more than a little bit of luck, you may
succeed. But in no way can this be taken for granted just by trying to reproduce someone
else’s success.”
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