Karl H. Vesper

A taxonomy of new business ventures

Abstract In this study we develop and validate an empirically grounded taxonomy of new business ventures (NBVs) using qualitative and quantitative data generated from interviews of and questionnaire responses from 106 entrepreneurs. The taxonomy describes eight different types (gestalts) of NBVs. These eight types are profiled across four dimensions: Individual: What kinds of background characteristics, abilities, skills, and motivations do these entrepreneurs have? Organizational: What kinds of competitive strategies and organization structures are used by NBVs? Environmental: What kinds of competitive environments are NBVs created in? Process: What kinds of activities are pursued, and how much effort is devoted to the activities that entrepreneurs undertake to create their NBVs? An NBV gestalt is an ideal type generated through cluster analysis. It is a composite summary of the case descriptions of the NBVs that fell into each particular cluster. Although each NBV gestalt is a complex combination of many different characteristics, a simplistic description of each NBV gestalt is outlined to provide an overall view of the taxonomy. Type 1: Escaping to Something New: Individuals who start these firms seek to escape from their previous jobs—jobs that from their perspective offer few rewards in terms of salary, challenging work, and promotion opportunities. The new venture is in a different industry and is a different type of work than the entrepreneurs previous job. This firm enters an established highly competitive market and offers goods/services similar to its competitors. Type 2: Putting the Deal Together: The concern of the entrepreneurs in this group is to assemble the different aspects of the business (suppliers, wholesale and retail channels, customers) into a “deal” in which each participant in the deal can be assured of winning. Contacts are a crucial factor. Type 3: Roll Over Skills/Contacts: Before the start-up the entrepreneur worked in a position using technical skills and expertise similar to those required in the new venture. He or she spends little time selling, marketing, or advertising because customer contacts from a previous position are used. This firm provides goods or services that are based on the owners professional expertise and are usually generic services (e.g., auditing, advertising). The firm competes by offering better service than competitors. Type 4: Purchasing a Firm: Since this is a purchase, a great deal of time is spent acquiring capital for the acquisition. The venture is viewed as a turn-around situation from the previous owners. Upon acquisition a great amount of time is spent evaluating the firms products and services. The firm competes by adapting to the changing needs of customers. Type 5: Leveraging Expertise: This entrepreneur is among the best in his or her technical field. The firm starts with the help of partners. The firm enters an established market and competes through flexibility in adapting to customer needs since the entrepreneur is keenly aware of changes in the environment. A great deal of time is devoted to sales. The environment is characterized by high technical change and complexity. Type 6: Aggressive Service: The firm is a very aggressive service-oriented firm, usually a consulting firm in a very specialized area. The environment requires that the entrepreneur have profes- sional or technical expertise of some kind. Knowing the right people in this industry is very important for making sales or for gaining access to those who influence which firms have the opportunity to make sales. Type 7: Pursuing the Unique Idea: The firm is created because of a new idea for a product or service that is not being offered. The products or services are not technically sophisticated or difficult to manufacture. Since this is the first firm in the marketplace to offer such products/services, there is some uncertainty as to whether customers can be found. Type 8: Methodical Organizing: The methodical aspect of the start-up is reflected in the entrepreneurs use of planning both in acquiring the skill venture. The firms products or services are similar to those of other firms, but the firm has some new twist, either a slightly different way to manufacture the product or provide the service or by selling to a slightly different customer. The NBV taxonomy outlines a situation-based framework that may be useful for helping potential entrepreneurs match their skills, abilities, and interests to possible new venture types.

Some problems in using subjective measures of effectiveness to evaluate entrepreneurial assistance programs

Two samples of entrepreneurs and small business owners who received assistance from entrepreneurship training programs were used to Investigate the relationships between (1) subjective measures of client satisfaction, (2) perceptions of performance Improvements attributable to the programs, and (3) objective measures of post-assistance business performance. The results show that subjective measures are not correlated with either attributions of performance or actual performance. Clients’ attributions of the portion of performance improvements attributed to the programs are generally correlated with the objective measurements. An implication seems to be that program evaluations relying exclusively upon participants’ satisfaction or subjective judgments of program effectiveness may lead to erroneous conclusions about a programs impact on venture performance. Conversely, measures of attribution, used In conjunction with objective measures, may be useful to support claims for causal connections between assistance programs and subsequent client performance.

Entrepreneurial academics--How can we tell when the field is getting somewhere?

The many achievements of entrepreneurship research have given it some of the characteristics of a legitimate academic field. But there is a gap between what is being done, and what could be done better. Potential research topics include analysis of startups by various dimensions, longitudinal studies of success and failure, comparative geographic studies, examination of various roles in startups, and experimental (as opposed to simple observational) studies. Strategies for making research more rigorous could be adopted from the methods of other academic fields, especially for reconsidering indicators of valid entrepreneurship research, measuring its advances, and making progress. Researchers could do more experimental projects, report and study mysteries, paradoxes, and puzzles about the subject, and not exaggerate the priority of research methodology, especially inappropriately adopting statistical significance between means as sufficient indicator; what may be more important is the exceptional. Causes of differences between industries should also be addressed. Nonetheless, it is unlikely entrepreneur research can become anything near a general science. Entrepreneurship research can, though, reconsider old paradigms and established conventions. Entrepreneurship research and business school teaching could, for example, credit coursework where students participate in startups; let entrepreneurs participate in classes; use business creation projects as tests of accomplishment; provide freedom, encouragement, and positive feedback instead of grades; and abandon the school calendar. Moreover, research could be more experimental, involving design of interventions aimed at facilitating startups through education and assistance. Research could also be run and tracked by different parties. Overall, experimenting with different ideas and approaches could advance the field of entrepreneurial academics. (TNM)

Entrepreneurship Education: More Than Just an Adjustment to Management Education

Professor Vesper is with the University of Washington, USA and W Ed McMullan and Dennis M. Ray are with the University of Calgary, Canada. At least half of the business schools in the United States and Canada now offer courses in entrepreneurship. In those schools the typical pattern is to offer one three- credit cours in the subject. Such a course ordinarily centres around preparation by students of a detailed plan of steps to be followed for creating a new business enterprise. Class activities usually include some lectures by entrepreneurs as well as the instructor; plus review of prior business plans by other entrepreneurs, often combined with case studies. A few schools have gone on to offer more than one course, possibly a second course in which those students who wish to do so can carry further forward their business plan. A still smaller number of schools, around a dozen, have enough different entrepreneurship courses to permit students to major in the subject. A next step, already being explored by two or three schools, would seem to be development of an entrepreneurship degree programme.

New venture scholarship versus practice: When entrepreneurship academics try the real thing as applied research

Abstract Whether entrepreneurship as an academic subject is a liberal art or a professional field can be argued. Either case can be constructed logically, but only the professional case can be tested empirically. This investigation attempts empiricism. After many years of study in the field of entrepreneurship each of the authors undertook a venture. One was a very small venture, book publishing; the other, a fairly large venture, chemical manufacturing. Neither venture, at this point, is a clear success or failure. But in the history of both can be seen better and poorer decisions. To evaluate the utility of scholastic entrepreneurship knowledge on these decisions, a conceptual scheme is imposed which allows exploration of how either the possession or the lack of knowledge, both academic and industrial, helped or hindered venturing performance. Inferences are drawn about further inquiry that would contribute useful academic knowledge to would-be entrepreneurs.

Venture Initiation Courses in U.S. Business Schools

The article reports the authors opinions regarding the nature of business education in the U.S. He focuses on discussing a study related to the entrepreneurship aspect of business education. The f...

Views on College Courses in Venture Initiation

The article presents a follow-up to a survey on the growing venture initiation courses being offered among U.S. business schools. The survey aimed to learn what additional schools had introduced su...

Project Set StrategiesDerkinderenFranz G. J. and Crum.Roy L. Project Set Strategies. Boston: Martinus Nijhoff, 1979. 167

The article reviews the book “Project Set Strategies,” by Franz G.J. Derkinderen and Roy L. Crum.