PRESS-NEWS.org - Press Release Distribution
PRESS RELEASES DISTRIBUTION

Why do so many businesses fail? A new study suggests it has to do with when they're born

2023-05-19
(Press-News.org) Only 25% of new businesses make it to 15 years or more, according to data from the U.S. Bureau of Labor and Statistics. Despite vacillating economic conditions between and across markets, that statistic has remained consistent for 30 years. A new study from the Strategic Entrepreneurship Journal suggests an elegant explanation: a business’s long-term success  depends significantly on its founding conditions not just changes in its markets.

“A venture’s performance following environmental change depends on its internal processes,” says D. Carrington Motley, an instructor in entrepreneurship at Carnegie Mellon University and co-author of the study. “Environmental conditions at a business’s founding shape those processes, and they quickly become cemented and embedded in beliefs about how to operate.”

Motley and his co-authors, Charles E. Eesley of Stanford and Wesley Koo of INSEAD Asia, examined performance for more than 1,000 ventures founded from 1960 to 2011. The businesses operated in 19 industries ranging from agriculture to energy and utilities. The authors used data from the Bureau of Economic Analysis to quantify dynamism within each industry over time and within each venture’s founding year. They used alumni survey data to establish the composition of each business’s founding team as well as its longevity and ultimate outcome.

“Businesses founded in dynamic environments by a functionally diverse team show meaningfully more ability to survive during market change,” Eesley said. “However, they don’t necessarily have an increased likelihood of a positive exit.”    

Businesses founded in dynamic environments typically favor slower, decentralized decision-making and increased creativity and flexibility. A founding team with many distinct functional roles compounds these behaviors — they have broader strategic focus and seek large amounts of information. These risk-averse structures and strategies help businesses persevere during environmental change, but the study also found that these businesses where less likely to gain IPOs or acquisitions if their market stabilized.

“In stable, more predictable environments, being more aggressive can produce better outcomes,” Woo said. “The risk of untested assumptions is less, so continued use of risk-averse processes produces fewer benefits and may detract from a venture’s ability to respond to opportunities.”

The authors argue that the key differentiator for businesses founded in dynamic environments by functionally diverse teams was slower decision-making. They tested the theory by first examining their performance in industries where fast product development was critical to competitive advantage and second by determining how quickly they took to receive angel or venture capital funding. Businesses founded in dynamic environments by functionally diverse teams fared worse in both instances.

Whether an industry is in flux or stabilizing, the study indicates that typically businesses benefit from market change only if that change better aligns with their founding environment. Despite its premise that founding processes become entrenched, it offers an insight to entrepreneurs hoping to both survive chaos and thrive in calm. Businesses need to examine their founding structure and internal processes and consistently re-evaluate whether they are best suited to their market environment.

Find a full explanation of the study and how founding conditions affect performance in dynamic environments in the full text, available in the Strategic Entrepreneurship Journal.

END


ELSE PRESS RELEASES FROM THIS DATE:

Blinding idea evaluation? New experiment reveals little bias in the innovation process

2023-05-19
Innovation and implementation of new ideas can directly influence organizational outcomes. Thus, organizations often dedicate significant time to the assessment of countless new ideas through myriad idea evaluation systems. However, the evaluation process is often distorted by various biases arising from hierarchy, sequence, and nepotism. Data on evaluation studies show that evaluators can be biased toward specific idea proposers. In a new study published in the Strategic Management Journal, a research team sought evidence for the bias claim by employing a blinding approach for evaluating ...

Novel approach that stimulates cells’ DNA repair mechanisms may combat a leading cause of autism spectrum disorders

2023-05-19
Key Takeaways Researchers have discovered that stimulating cells’ DNA repair mechanisms may correct the inherited genetic defect that defines fragile X syndrome, a leading cause of autism spectrum disorders. The method involves enhanced production of special nucleic acid structures called “R-loops” that cells see as DNA damage. BOSTON – New research has identified a potential method for treating fragile X syndrome, a leading cause of autism spectrum disorders that is characterized ...

UAF scientists to hunt for clues about Arctic Ocean glaciation

2023-05-19
Evidence indicates a thick ice sheet, not annual sea ice and icebergs, covered the Arctic Ocean at some point during the last 140,000 years. Now, University of Alaska Fairbanks scientists will be looking for more geologic proof of the ice sheet’s existence, sources, behavior and extent. UAF Geophysical Institute scientists will focus on the Beaufort and Chukchi seas region, both offshore and onshore.  They hope to discover the extent of glaciation and improve understanding of the timing of glacial advances and retreats. Those cycles are thought to have occurred approximately 140,000 to 70,000 years ago, a period known as the ...

Pollinators are attracted to humidity, not just scent

2023-05-19
ITHACA, N.Y. -- Humidity is as important as scent in attracting pollinators to a plant, new Cornell-led research finds, advancing basic biology and opening new avenues to support agriculture. In a study published May 7 in Current Biology, a team of Cornell researchers and colleagues at Harvard University and the Montgomery Botanical Center found that the weevil responsible for pollinating the plant Zamia furfuracea was just as sensitive to humidity as to scent. “The world of plant-insect interactions was drastically changed by the work that was done on visual and scent cues,” ...

Puppeteer fungus’ targeted takeover of zombie flies

Puppeteer fungus’ targeted takeover of zombie flies
2023-05-19
In a new study published in eLife, lead author Carolyn Elya, postdoctoral researcher in the Department of Organismic and Evolutionary Biology at Harvard, reveals the molecular and cellular underpinnings behind the parasitic fungus, Entomophthora muscae’s (E. muscae), ability to manipulate the behavior of fruit flies. Elya first described the manipulated behavior, called summiting, in a study published in eLife in 2018. Elya, who was studying microbes carried by fruit flies while a graduate student ...

NACMI: International COVID-19 Registry uncovers increased incidence of clotting in heart attack patients with COVID-19

2023-05-19
PHOENIX, AZ (May 19, 2023) – The latest analysis from The North American COVID-19 STEMI (NACMI) was presented today as late-breaking clinical research at the Society for Cardiovascular Angiography & Interventions (SCAI) 2023 Scientific Sessions. The findings show patients with an ST-elevated myocardial infarction, or STEMI, and COVID-19 had a significant amount of clotting in their arteries both before and after intervention. Importantly, clots were seen in multiple arteries in close to 30% of patients, a phenomenon observed in less than 5% of  patients with heart attacks who do not ...

Human ancestry has been shaped by mixing and matching alleles

Human ancestry has been shaped by mixing and matching alleles
2023-05-19
The course of human history has been marked by complex patterns of migration, isolation, and admixture, the latter a term that refers to gene flow between individuals from different populations. Admixture results in a blending of genetic lineages, leading to increased genetic diversity within populations. In addition to admixture among modern human populations, ancient humans reproduced with other hominin groups, such as Neanderthals and Denisovans. This resulted in fragments of DNA from these ancient lineages being passed down to modern humans in a process known as introgression. Two ...

Talented 12: Chemical & Engineering News announces its 2023 rising stars in chemistry

2023-05-19
WASHINGTON, May 19, 2023 — Chemical & Engineering News (C&EN), an independent news outlet of the American Chemical Society (ACS), has unveiled its annual “Talented 12” list. The list highlights early-career researchers in the chemical sciences who are fearlessly tackling difficult global problems. These intrepid innovators in chemistry are featured in the May 19 issue of C&EN; read about the impressive class by visiting https://cenm.ag/t12-2023. Using a rigorous review process, C&EN selected this year’s Talented 12 from a highly competitive pool. The world-changing work by this year’s group includes research with ...

Rice University chemist named to C&EN’s 2023 Talented 12

Rice University chemist named to C&EN’s 2023 Talented 12
2023-05-19
HOUSTON – (May 19, 2023) – Rice University chemist Raúl Hernández Sánchez is one of 12 early-career scientists named to C&EN’s 2023 Talented 12 cohort for his research in inorganic and supramolecular chemistry. Awardees are scientists engaged in world-changing work who are at an early stage in their career – pre-tenure if working in academia and 10 years or less from the completion of their postdoctoral studies if working in industry or government. The members of this year’s C&EN ...

Early data from Mass General researchers suggests the BCG vaccine could have a protective effect against Alzheimer's disease

2023-05-19
BOSTON – The Bacillus Calmette-Guérin (BCG) vaccine—which prevents tuberculosis—offers multiple beneficial effects, and it’s currently a recommended therapy for non–muscle-invasive bladder cancer. In a new study led by investigators at Massachusetts General Hospital (MGH) and Brigham and Women’s Hospital (BWH), treatment with the BCG vaccine was associated with a reduced risk of Alzheimer’s disease and related dementias. The findings are published in JAMA Network Open. Although previous research has suggested a link between the BCG vaccine and a lower risk of dementia, studies were limited by size, study design, ...

LAST 30 PRESS RELEASES:

CMD-OPT model enables the discovery of a potent and selective RIPK2 inhibitor as preclinical candidate for the treatment of acute liver injury

Melatonin receptor 1a alleviates sleep fragmentation-aggravated testicular injury in T2DM by suppression of TAB1/TAK1 complex through FGFR1

Single-cell RNA sequencing reveals Shen-Bai-Jie-Du decoction retards colorectal tumorigenesis by regulating the TMEM131–TNF signaling pathway-mediated differentiation of immunosuppressive dendritic ce

Acta Pharmaceutica Sinica B Volume 15, Issue 7 Publishes

New research expands laser technology

Targeted radiation offers promise in patients with metastasized small cell lung cancer to the brain

A high clinically translatable strategy to anti-aging using hyaluronic acid and silk fibroin co-crosslinked hydrogels as dermal regenerative fillers

Mount Sinai researchers uncover differences in how males and females change their mind when reflecting on past mistakes

CTE and normal aging are difficult to distinguish, new study finds

Molecular arms race: How the genome defends itself against internal enemies

Tiny chip speeds up antibody mapping for faster vaccine design

KTU experts reveal why cultural heritage is important for community unity

More misfolded proteins than previously known may contribute to Alzheimer’s and dementia

“Too much going on”: Autistic adults overwhelmed by non-verbal social cues

What’s driving America’s deep freezes in a warming world?

A key role of brain protein in learning and memory is deciphered by scientists

Heart attacks don’t follow a Hollywood script

Erin M. Schuman wins 2026 Nakasone Award for discovery on neural synapse function and change during formation of memories

Global ocean analysis could replace costly in-situ sound speed profiles in seafloor positioning, study finds

Power in numbers: Small group professional coaching reduces rates of physician burnout by nearly 30%

Carbon capture, utilization, and storage: A comprehensive review of CCUS-EOR

New high-temperature stable dispersed particle gel for enhanced profile control in CCUS applications

State gun laws and firearm-related homicides and suicides

Use of tobacco and cannabis following state-level cannabis legalization

Long-term obesity and biological aging in young adults

Eindhoven University of Technology and JMIR Publications announce unlimited open access publishing agreement

Orphan nuclear receptors in metabolic dysfunction-associated steatotic liver disease development

A technological breakthrough for ultra-fast and greener AI

Pusan National University researchers identify key barriers hindering data-driven smart manufacturing adoption

Inking heterometallic nanosheets: A scalable breakthrough for coating, electronics, and electrocatalyst applications

[Press-News.org] Why do so many businesses fail? A new study suggests it has to do with when they're born