You only have to watch an episode of Shark Tank to realize that turning the glimmer of an idea into a viable business entity is no easy feat. Many researchers attribute a startup’s fortunes to its founder’s ability to attract funding, lure essential employees, and deploy initially limited resources to pursue a strong but sustainable rate of growth. Venture capitalists essentially use the same metrics when they peer through the fog of uncertainty and weigh whether a fledgling project deserves their investment — and if so, for how long.
But perhaps, the authors of a new paper suggest, the success or collapse of a new venture can be predicted by evaluating the fundamental idea behind the business, long before an entrepreneur secures first-round financing or signs the lease on that first office space. Maybe the commercial viability of a new business hinges less on the founder’s personality, experience, and relationships with angel investors, the authors posit, and more on the simpler metric of whether the idea is good.
