Business plans five years later: Results of a follow-up study.

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Fame and glory for entrepreneurship makes headlines, but the majority of such enterprises fail. As Victoria Black reports in “Bloomberg Businessweek”, this fact also holds true for elite startups.
Bloomberg Businessweek tracked the winners of the Rice Business Plan Competition from 2007; this competition is one of the largest worldwide. Since it targets Business Schools and their MBAs the competition attracts the cream of future entrepreneurs relating to educational background and institutional support. Respected venture capital companies, consulting firms and other actors from the start-up ecosystem sit on the other side of the table. In 2011, the winners received US$ 1.3mn in cash awards. Despite this background of expertise and financial support only three of the seven winners from the contest of 2007 are still in business and one of these three was unwilling to provide detailed information. This data is in line with a less fine-grained analysis of all participants since the inception of the competition in 2001. From the 354 participants only 128 are still in business or had a successful exit.
The specialty of this contest is the expertise and support entered from all sides. An entrepreneur will hardly get better advice and more support than gathered here. The failure of the vast majority of businesses points to the limits of human judgment in predicting the value of an idea and the probability of its realization. Unfortunately, the design of this and comparable studies does not allow inferences on how many business ideas succeed which were prognosticated as failures by experts. Anecdotal evidence of inventors like Graham Bell carry however the comforting message that experts can err on both sides.