Last week, several of us at MIT Sloan had the opportunity to hear about the cool research done at MIT about founding technology based enterprises from Professor Edward Roberts, the Founder and Chair of the MIT Entrepreneurship Center. We were offered a glimpse of the results of many years of research spanning hundreds of Technology companies, and the findings were fascinating.
Successful founders had the following traits:
- They became successful over their lifetime. Genetic predisposition had nothing to do with it. In other words, successful entrepreneurs are made, not born.
- They typically have a high need to achieve, and a moderate need for power. Professor Roberts made the point that people with a high need for power do not succeed in enabling and benefiting from the talents and insights of those around them, effectively holding the organization back and sometimes driving it into the ground.
- They partner with other co-founders. When the original founder does not have sales and marketing expertise, they seek out co-founders with that expertise.
- More the number of co-founders, higher the probability of success. His research studied companies with up to four co-founders. There was not enough data points to conclude about the effectiveness of companies with five or more co-founders.
Successful start-ups shared the following traits:
- They possessed a high degree of advanced technology transfer.
- They were product oriented.
- They had strong marketing orientation and practices, always putting customers first.
- They all possessed a focused growth strategy
For the super successful companies, later stage strategies included:
- A strategic product/business focus
- Strengthened market orientation
- Overcoming new problems
- Personally avoiding fatal "founder's diseases"
One other point that struck me which Professor Roberts made was that VCs on a start-up's board have mixed interests. Their focus is the company's exit strategy. For people who want to build great companies and help entrepreneurs build these companies, this is a painful and incompatible mindset.
He left us with a lot of food for thought, and speaking for myself, very curious and excited about what else the research uncovered.