Entrepreneurs in high technology: Lessons from MIT and beyond
Citation: Edward B. Roberts (1991) Entrepreneurs in high technology: Lessons from MIT and beyond.
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Ed Robert's book on entrepreneurship focuses on MIT and provides a high level summary of a wide variety of research papers published by Roberts and his colleagues over more than 25 years. Most of this research involves spin-offs from MIT in various types and follow entrepreneurial ventures at a variety of stages in their life cycles.
The book begins with a high-level historical account of entrepreneurship at MIT that focuses on a number of case studies. It describes (a) Ken Olson and Digital Equipment Company which was founded by a number of MIT affiliates and went on to be one the most successful companies of the computer industry, (b) the pseudonymous Samuel Morris and the Transducer Devices who is an unsuccessful, or semi-successful, entrepreneur, (c) Neiil Pappalardo and Meditech (which Roberts was involved in founding).
The second chapter discusses institutional factors around MIT that Roberts argued made it a crucible for entrepreneurial activity. The third chapter provides a high level description of which background factors are associated with entrepreneurship and suggests that coming from an entrepreneurial family is highly associated with entrepreneurial activity and provides other background and demographic data from surveys of MIT entrepreneurs.
The fourth chapter book discusses the role that technology transfer plays and suggests that entrepreneurs are very likely to transfer technological information out from their old positions either in academia or industry and their success is is connected to this transfer. They suggest that development work, and not research, is associated with entrepreneurship. The time delay between leaving the old company and starting the new is a big predictor of entrepreneurship (the sooner the better).
The fifth chapter looks at initial funding of companies summarizing the ways in which entrepreneurs acquire funding. Starts acquire money from angels and personal savign and then there is a shift toward VC and investors toward more traditional funding sources.
The sixth chapter discusses the early growth of companies and suggests that an early market focus shift to this within the first year and that companies with multiple founders are more likely to do this. They suggest that firms that start without a product are less likely to move forward in the early stage and that the lack of a market orientation at the beginning is often not corrected with time.
The seventh chapter discusses the need for additional financing and suggests that firms often do a very bad job of creating plans to seek additional financing and that VC firms tend to be very diverse in their tastes and the decisions they make.
The eight chapter discusses going public and suggests that firms that do so split between ones that do so early and those that do so much later. They suggest that the firms to go public later are in more control and do better with their IPOs than the firms tha tdo so early.
Chapter nine looks at success of entrepreneurial ventures and returns to many of the earlier variables from chapters to look for predictors of success. Technology based transfered into the firm is associated with success and success is linked to the amount of capitalization and marketing orientation but there is little relationship to managerial orientation.
The tenth chapter leave the area of entrepreneurship, to some extend, and suggests that companies showing a product strategic performance perform better over time than companies that implement multiple technologies or seek market diversity. The final chapter on "super success" suggests that backward integration toward suppliers tended to not be a good predictor of success while forward integration did.
Theoretical and Practical Relevance
Roberts book has been cited more than 800 times since it was published 19 years ago and it is a classic text in the literature on entrepreneurship. It summarizes a large number of papers that make up a core of the classic work on entrepreneurship.