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Is There a Magic Sauce for High-Growth Entrepreneurship?

Posted by: Mark Marich on October 17, 2011 Source: Policy Dialogue on Entrepreneurship

If the best indicator of a country's growth is the number of new firms started every year, as Kauffman Foundation research indicates, how do we get more companies to start and grow? What's the magic sauce?

That's the subject of the latest animated video in the Kauffman Sketchbook series released today. In "Magic Sauce, " Carl Schramm, president and CEO of the Foundation, points out that nearly 700,000 new businesses start every year, but the failure rate is high and many of them are not creating jobs. Schramm asks, how do we make those firms more successful at the outset?

The three-minute video goes on to outline the issues that the Kauffman Foundation is studying to learn how to help more entrepreneurs become more successful. "We do a lot of research, because if you don't get the story right, you'll get the solution wrong," Schramm says.

3 Comments

RE: Is There a Magic Sauce for High Growth Entrepreneurship
October 17, 2011 @ 04:32 PM
Dale B. Halling said...
High Growth Companies that create high paying jobs are built on new technologies. They either create new technologies or they implement them. They need three things. First, they need access to capital. SOX, Dodd Frank, and the SEC all limit access to capital. Second, they need the greatest return possible. Taxes and regulations all reduce the return on investment. Third, they need a strong and effective intellectual property rights system.
On an individual firm level, people who understand technology are the people who create high growth businesses. Now they may need marketing, financing, legal, and other help, but they are the primary drivers. Note they would need less help but for government regulation and taxes.
Now some firms will become large because of their political connections. These firms are not true wealth producers. For instance, a number of for-profit universities have made a lot of entrepreneurs wealthy. There is nothing inherently wrong with for-profit universities, but many have made their money by abusing the financial aid process, which is a market distorting government program.
RE: Is There a Magic Sauce for High Growth Entrepreneurship
October 17, 2011 @ 05:04 PM
Joe Wasylyk said...
I think that up to 80% of Entrepreneurial Business Start ups Fail because there is basically inadequate Micro-Business or regular business Training Programs/Courses setup for prospective business owners, who obviously can't do everything by themselves. Most new businesses for instance the '50 Plus Entrepreneur' category has different expectations for the field of business, and as a result needs better coaching and hands-on mentoring. If these support conditions are in place then it might be possible to increase the labor supply required for the more successful businesses. If no business support is provided then in most cases only one in five businesses will succeed after 5 years of business operation, chiefly because of low volume sales and limited growth possibilities due to lacking management skills and proper marketing strategies.

Joe W.
Seniorpreneur
RE: Is There a Magic Sauce for High Growth Entrepreneurship
October 17, 2011 @ 07:33 PM
BOB PORTER said...
THE LABEL IS "SECRET SAUCE."

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