Success as an entrepreneur
These short descriptions of life cycle and resource based theories could guide your thinking about why you want to be an entrepreneur and how you want to measure your success.
Life cycle theory views successful innovation as having three phases: beginning, growth, and maturity. It evaluates the value of the innovation at each phase and measures the success of the venture based on its ability to grow:
- number of employees
- facility size
- sales volume, and
Life cycle theory often applies to high-growth, high-profit entrepreneurial businesses that are favorites of venture capitalists.
Resource based theory views success as the ability to take a discovery, do something with it (innovate), and commercialize its value for selling. The emphasis is on the firm's ability to acquire and develop resources for commercializing the discovery rather than for the growth of the company. This theory covers entrepreneurial businesses that focus on discovery and continue to make new discoveries through research and development.
The large firm with extensive expenditures on research and development that is known for innovative product offerings can also be explained by resource based theory - its resource expenditures result in innovation.
1. What is a major difference between an entrepreneur and a small business owner?
What is innovative about your business idea, product, process, potential market, or guiding principles?
What business objectives best match your personal goals?