Business School Blog: 13/7/06

From a survey of the past five years of ESS participants, we found that 50 per cent of previous cohorts actually started a new business. What’s interesting is that 70 per cent of those who started a business completely changed their original plans and only 22 per cent stuck with their first idea.

Let’s take another survey collected from GrowthBusiness.co.uk website users. When asked the question: ‘Who do you discuss business ideas with initially?’, 67 per cent of the respondents credited friends and family. A surprisingly low two per cent asked industry experts, while a reasonable 17 per cent discussed matters with a business mentor.

So why is this data interesting? It tells us that there is a strong tendency among entrepreneurs to believe in an opportunity. If we ask friends and family – who are invariably supportive – we tend to become overconfident. However, as we found in our summer programme, if we ask the right people (experts and mentors), we tend to be more realistic and assess the opportunity candidly.

So when the next ‘hot’ idea strikes you, don’t bag it. Get your family’s support and then go and have a real chat with an experienced mentor. Better yet, sit down and evaluate your opportunity systematically. And if you want to read more, use John Mullins’ New Business Road Test – a book that tells us how to evaluate opportunities before writing the business plan.

Good luck!

Gerry George recently joined the London Business School as a professor of entrepreneurship and also serves as a faculty director for the Institute of Technology. He has founded three separate technology companies throughout his career and has helped many others to develop.

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