Stanford GSB study: tech firms are “discovered and not planned.”
The tech landscape is lush with entrepreneurial companies, such as Facebook, Lyft and Airbnb, whose success blossomed only after the founders had modified or even abandoned their original vision.
“It’s almost always the case that the greatest firms are discovered and not planned,” says William P. Barnett, a professor of business leadership, strategy, and organizations at Stanford’s Graduate School of Business.
Barnett co-authored with colleague Elizabeth G. Pontikes of the University of Chicago. They decided to gauge entrepreneurial success rates by researching the early choices made by software entrepreneurs operating in 4,566 organizations in 456 different market categories over 12 years.
Barnett and Pontikes found that entrepreneurs who were willing to adapt their vision and products to find the right market often did the best. They also found that those who followed the herd into perceived hot markets, or “consensus” entrants, were less viable in the long run than those who made “non-consensus” choices by defying common wisdom and entering markets that were tainted by failures and thus regarded as riskier.
Nearly every move Jobs made at Apple turned out to be different from what he intended, Barnett says. “These ‘geniuses’ — we think they knew, but they didn’t.”
One thing that wildly successful entrepreneurs like Jobs and Zuckerberg did understand, Barnett says, is how to put together systems “that could discover the future, that allowed for uncertainty, that ferreted out possibilities. Then they doubled down on those discoveries.”
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