The Origin and Evolution of New Businesses

Amar V. Bhidé 
Glaubinger Professor of Business, Columbia University
© 2000 Amar V. Bhidé . All rights reserved. ISBN: 0-19-513144-4

A synopsis of the book from © The Oxford University Press

The first major study of entrepreneurs and the nature of the opportunities they exploit.

I cannot say enough about The Origin and Evolution of New Businesses. It is, in my estimation, the single most significant contribution to our understanding of entrepreneurship to date. It illuminates what lies at the very heart of capitalism itself--the process by which men and women transform human capital (daring, imagination, resourcefulness) into financial capital (wealth). The only negative thing I have to say about this remarkable book is, 'damn, I wish I had written it myself.

George Gendron, Editor in Chief, Inc. Magazine

Early drafts of The Origin and Evolution of New Business changed my thinking about start-ups and were a formative influence on the business I co-founded, Case Shiller Weiss, Inc. The book provides a substantial chunk of what people go to business schools for but don't always find. It offers an inspiring perspective on how entrepreneurs can turn tiny, thinly capitalized start-ups into major businesses. And, in a broader sense, Bhide's insights help explain the success of our capitalist system and confirm the hopes of many countries around the world that are now encouraging entrepreneurship.

Robert Shiller, Stanley B. Resor Professor of Economics, Yale University and author of "Irrational Exuberance".

What is this mysterious activity we call entrepreneurship? Does success require special traits and skills or just luck? Can large companies follow their example? What role does venture capital play?

In a field dominated by anecdote and folklore, this landmark study integrates more than ten years of intensive research and modern theories of business and economics. The result is a comprehensive framework for understanding entrepreneurship that provides new and penetrating insights. Examining hundreds of successful ventures, the author finds that the typical business has humble, improvised origins. Well-planned start-ups, backed by substantial venture capital, are exceptional. Entrepreneurs like Bill Gates and Sam Walton initially pursue small, uncertain opportunities, without much capital, market research, or breakthrough technologies. Coping with ambiguity and surprises, face-to-face selling, and making do with second-tier employees is more important than foresight, deal-making, or recruiting top-notch teams.

Transforming improvised start-ups into noteworthy enterprises requires a radical shift, from "opportunistic adaptation" in niche markets to the pursuit of ambitious strategies. This requires traits such as ambition and risk-taking that are initially unimportant. Mature corporations have to pursue entrepreneurial activity in a much more disciplined way. Companies like Intel and Merck focus their resources on large-scale initiatives that scrappy entrepreneurs cannot undertake. Their success requires carefully chosen bets, meticulous planning, and the smooth coordination of many employees rather than the talents of a driven few.

This clearly and concisely written book is essential for anyone who wants to start a business, for the entrepreneur or executive who wants to grow a company, and for the scholar who wants to understand this crucial economic activity.

Amar Bhidé, an Associate Professor on leave from the Harvard Business School, is teaching at the University of Chicago. A former consultant at McKinsey & Company and proprietary trader at E.F. Hutton, Bhide received a doctorate and an MBA from the Harvard Business School where he was a Baker Scholar, and a B.Tech. from the Indian Institute of Technology. He has written eight Harvard Business Review articles, papers on corporate governance in the Journal of Financial Economics and the Journal of Applied Corporate Finance and Of Politics and Economic Reality (Basic Books).