The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By (Hardcover)

~ Scott A. Shane (Author)
Key Phrases: new employer firms, typical new business, lesser human capital, United States, Land of Entrepreneurship, Panel Study of Entrepreneurial Dynamics (more...)

Editorial Reviews

Review

"This fascinating book, by one of the most competent investigators of the subject, tells us how much we think we know about entrepreneurship that is just not true. It has already led me to change several of my lectures (with thanks to the author). This book is a must read for anyone who takes a serious interest in the subject of entrepreneurship."-William J. Baumol, Academic Director, Center for Entrepreneurial Studies, Stern School of Business, New York University (William J. Baumol 20080208)

"Scott has clearly and entertainingly shown why policy makers, entrepreneurs and investors should focus more attention on high growth, high potential start-ups and less on the ''me-too'' new companies than is currently the case."-David T. Morgenthaler, founder, Morgenthaler Ventures (David T. Morgenthaler 20080303)

"In this fact-filled, but fun-to-read book, Scott Shane demolishes many myths about entrepreneurship and in the process provides much-needed guidance to entrepreneurs, investors, and policymakers."-Steve Crawford, Director, Social, Economic, and Workforce Programs Division, National Governor's Association (Steve Crawford )

"For its myth-busting findings and analytical rigor, Mr. Shane''s book is a welcome addition to the literature on a crucial part of any modern economy."-Nick Schulz, Wall Street Journal (Nick Schulz Wall Street Journal )

"The belief that the U.S. is a relative haven for small businesses is one of the many bubbles burst by Scott Shane. . . . While he''s busting myths, Shane also unveils weaknesses in common entrepreneur practices."-Mark Henricks, The Industry Standard (Mark Henricks The Industry Standard )

"This makes an excellent reality-check for anyone considering beginning their own business."-Publishers Weekly (Publishers Weekly )

"Business scholar Scott Shane debunks popular theories with research-based answers to questions such as why people start businesses, which industries are most popular for startups and what are the most common characteristics of the typical entrepreneur."-Mark Henricks, Entrepreneur Magazine (Mark Henricks Entrepreneur Magazine )

"The lessons in this book will perhaps save its readers a bundle of money that would otherwise be wasted on an ill-conceived business idea."-Morgan Lewis Jr., Inside Business (Morgan Lewis Jr., Inside Business )

"[This] book is important not just for clearing our minds of what''s erroneous but for reconsidering our public policy, which is based on the widespread feeling that startups are a magic bullet that will create a lot of jobs and generate innovation."-Harvey Schachter, Toronto Globe and Mail (Harvey Schachter Toronto Globe and Mail )

Product Description

There are far more entrepreneurs than most people realize. But the failure rate of new businesses is disappointingly high, and the economic impact of most of them disappointingly low, suggesting that enthusiastic would-be entrepreneurs and their investors all too often operate under a false set of assumptions.

 

This book shows that the reality of entrepreneurship is decidedly different from the myths that have come to surround it. Scott Shane, a leading expert in entrepreneurial activity in the United States and other countries, draws on the data from extensive research to provide accurate, useful information about who becomes an entrepreneur and why, how businesses are started, which factors lead to success, and which predict a likely failure.

 

The Illusions of Entrepreneurship is an essential resource for everyone who has dreamed of starting a new business, for investors in start-ups, for policy makers attempting to facilitate the formation and survival of new businesses, and for researchers interested in the economic impact of entrepreneurial activity. Scott Shane offers research-based answers to these questions and many others:

·        Why do people start businesses?

·        What industries are popular for start-ups?

·        How many jobs do new businesses create?

·        How do entrepreneurs finance their start-ups?

·        What makes some locations and some countries more entrepreneurial than others?

·        What are the characteristics of the typical entrepreneur?

·        How well does the typical start-up perform?

·        What strategies contribute to the survival and profitability of new businesses over time?

 

(20080130)

See all Editorial Reviews

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Product Details Hardcover: 224 pages Publisher: Yale University Press (January 28, 2008) Language: English ISBN-10: 0300113315 ISBN-13: 978-0300113310 Product Dimensions: 9.3 x 6 x 0.9 inches Shipping Weight: 10.4 ounces (View shipping rates and policies) Average Customer Review: 4.4 out of 5 stars  See all reviews (47 customer reviews) Amazon.com Sales Rank: #35,339 in Books (See Bestsellers in Books) Popular in these categories: (What's this?) #41 in  Books > Business & Investing > Small Business & Entrepreneurship > New Business Enterprises #53 in  Books > Business & Investing > Management & Leadership > Strategy & Competition

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More About the Author

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› Visit Amazon's Scott Andrew Shane Page

Front Cover | Table of Contents | First Pages | Index | Surprise Me!

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Inside This Book (learn more)

Key Phrases - Statistically Improbable Phrases (SIPs): (learn more)
new employer firms, typical new business, lesser human capital, people starting companies, new business founders, informal investors, new firm formation, getting venture capital, typical entrepreneur, black entrepreneurship, new business creation, lesser performance, new business formation, white entrepreneurs, net new jobs, most new businesses, new business ideas

Key Phrases - Capitalized Phrases (CAPs): (learn more)
United States, Land of Entrepreneurship, Panel Study of Entrepreneurial Dynamics, Kauffman Firm Survey, Small Business Administration, Silicon Valley, Today's Entrepreneurial Industries, Percent of Self-Employed Workers, Global Entrepreneurship Monitor, New Zealand, Year Figure, Bureau of Labor Statistics, Professor Fairlie, United Kingdom, Birth Rate of Establishments, Larry Ellison, National Federation of Independent Businesses, North American Classification System, New Small, Monthly Labor Review, Employees Fewer, Office of Advocacy, Bill Gates, Florida International University, Establishments New Rate of Birth

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Front Cover | Table of Contents | First Pages | Index | Surprise Me!

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Customer Reviews

47 Reviews 5 star:  (36) 4 star:  (4) 3 star:  (1) 2 star:  (4) 1 star:  (2)           Average Customer Review 4.4 out of 5 stars (47 customer reviews)		Share your thoughts with other customers:
Most Helpful Customer Reviews 7 of 7 people found the following review helpful: 5.0 out of 5 stars Facts on the American entrepreneur and entrepreneurial activity, February 13, 2008 By  Toke Reichstein (Copenhagen) - See all my reviews (REAL NAME)    With several books and countless academic articles in major journals, Professor Scott Shane is an internationally recognized scholar in entrepreneurship. Among many other entrepreneurship subjects, Scott Shane has studied the academic entrepreneur, opportunity recognition, the entrepreneur and innovation, franchising, and genetic predisposition to self-employment. Over the years, he has built up an extraordinary portfolio of work addressing the very core questions of entrepreneurship. Drawing from this work, his new book, "The Illusions of Entrepreneurship - The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By", rightly argues there is a general misperception about entrepreneurs and entrepreneurial activity. Professor Shane shows that entrepreneurship in fact is a very common activity, typically carried out by a middle-aged white guy whose primary goal is to earn a living working for no one else. The book argues that "entrepreneurship" unfortunately has become an overly used buzzword creating illusions of the entrepreneur being the successful businessman with psychological powers allowing him to create a multimillion-dollar company living out the American dream. Drawing on extensive empirical data and data sources, the book discusses the true nature of the American entrepreneur. Starting from the general misguided attitude towards entrepreneurship, Professor Shane manages to give a fairly accurate description of the average entrepreneur, hence bringing the illusions to an end. Asking very simple questions like: "Do we live in an entrepreneurial era?" "Why do people start businesses?" "How well do the typical start-up perform?" "To what extend do start-ups create jobs?" and "What does the typical entrepreneur look like?" enables Professor Shane to draw far-reaching conclusions and policy recommendations that for most will be considered surprising and considerably daring. The substantial backing of the regularities and conclusions through solid empirical research, nevertheless leaves the reader comfortable and at ease with the books' final concluding remarks and policy perspectives. The book can be studied as a popular read, but has merits as an input to the development of an entrepreneurship course at a higher academic level as well. The easily followed and highly entertaining text accompanied by an extended notes section renders the book interesting both as a relaxing read and as an input to the more academic audience. I believe we will find this book on various bookshelves across several demographic groups who only share the interest of understanding the entrepreneurial spirit and entrepreneurial activity. 9 of 10 people found the following review helpful: 5.0 out of 5 stars From an angel investor and practitioner, March 25, 2008 By  Frederick A. Lins "life long learner" (Honolulu) - See all my reviews (REAL NAME)    Amazon Verified Purchase Basic Argument: The public, investors, and policy makers mistakenly believe a number of myths about the value of entrepreneurship for the society. Research disproves many of these myths but nevertheless shows an underlying dynamic that can improve the selection of entrepreneurial ventures that will create value for the society. Shane identifies and discusses 67 myths and key realities (truths) grounded in fully cited research. He addresses the topic from the perspective of industries, entrepreneurial traits, startup models, financing, entrepreneurial tasks, entrepreneurial success, women as entrepreneurs, black entrepreneurs, and the value of the average startup. His definition of entrepreneur includes self-employed as well as employers who startup any type of business, thus not limiting the population to those starting firms to create new products or use new methods by Schumpeter's definition. Shane's concluding chapter provides his insight into how to select valuable entrepreneurial ventures. Strengths: The grounding of his arguments in identifying myths and drawing conclusions as to truths is well done. He even tackled the sensitive areas of black and women entrepreneurs without inappropriate political correctness. His conclusions validate the activities of business schools, angel investors, and venture capitalists. Weaknesses: One has to `slog' through the long discussion of myths without knowing that there is `light at the end of the tunnel' in the conclusions. He understated the distinction between entrepreneurship by necessity and by opportunity as brought out by the GEM report. (Acs 2004) This confuses the myth/truth aspect of much of his discussion. Applicability: The conclusions validate a new direction for academic research and the appendix of cited research when keyed to the 67 myths/truths would provide valuable reference data for future work. Useful learning: The broad definition of entrepreneur in use by the public, politicians, and occasionally academics greatly reduces the value of any popular discussion of its merits or consequences. 8 of 9 people found the following review helpful: 2.0 out of 5 stars So Repetitive, September 3, 2008 By  Citidweller (Trenton, NJ) - See all my reviews This book is the perfect example of the folks whose communication style goes like this: they tell you what they are going to tell you, they tell you, and then they tell you what they told you! And just for good measure (or to fill up more pages) this guy adds a numerical list of what he told you! Since the hardcover version I have runs just 165 pages before endnotes, you have to wonder if this is really a business magazine article, stretched waaaayyyyy out. From reading business and economic development literature, I have often seen a distinction made between lifestyle entrepreneurs and other entrepreneurs. Shane makes no such distinction and I think the statistics he uses to bust myths are highly questionable. Do we really think policy-making in this important area should conflate every attorney who hangs a shingle to do real estate closings or draft wills, with businesses that aspire to develop new products, technologies? On the other hand, if you are reading this because you want to leave your law firm and open a solo practice, or sell baked goods prepared in your home (lifestyle entrepreneurs) this book could be quite useful.		Ad feedback   Most Recent Customer Reviews 2.0 out of 5 stars Of little use for investors or entrepreneurs The central goal of this book is to debunk overly optimistic myths about entrepreneurship in the US (and partly abroad). Read more Published 10 days ago by Artur B. Adib 5.0 out of 5 stars rare data-driven book in ocean of startup anecdotes I left Microsoft to attempt a startup, twice with partners and once by myself. In that time, I've read many recommended books on business and received lots of advice about... Read more Published 3 months ago by Samuel Wan 3.0 out of 5 stars Not very inspiring This book is a black and white type of book, there's no in between. You might succeed but chances are that you WON'T is the message throughout the book. Published 6 months ago by Rosario Corral 4.0 out of 5 stars Derek Aude's Review of Chris Anderson's The Illusions of Entrepreneurship Customer Video Review Length:: 7:34 Mins Published 6 months ago by Arthur M. Diamond, Jr. 1.0 out of 5 stars This book is very disappointing This book is very disappointing and contains a basic failure in definitions. A classic mistake of an academic not familiar with the difference between a small business and a high... Read more Published 7 months ago by AZ Book Fan 2.0 out of 5 stars Academically not sound - be as 'groundbreaking' as you like Professor Shane has started off with a good premise, that there are many myths about entrepreneurship, but - sadly - he misses the mark on a few counts due to downright... Read more Published 8 months ago by Mark Lipton 2.0 out of 5 stars Academically sound, but not groundbreaking The book is based on solid academic research which means the thesis is solid. Unfortunately, a solid thesis does not necessarily make an interesting read. Published 9 months ago by Oliver J. Pennington 4.0 out of 5 stars Insightful Nutshell review - The author defines an entrepreneur as anyone who starts, manages and assumes the risk of running a business. Read more Published 10 months ago by Jos Pols 5.0 out of 5 stars Please, Please read this book 1st before you start a business! Give this book to your partner as well so she/he will know what she is getting herself into before you start the business. Read more Published 10 months ago by Robert R. Rowntree 5.0 out of 5 stars Sobering Scott Shane's work "Illusions of Entrepreneurship" was a valuable, yet sobering, addition to my library and knowledge base. Read more Published 12 months ago by Michael Clouser Search Customer Reviews Only search this product's reviews

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Product Details

• Hardcover: 224 pages
• Publisher: Yale University Press (January 28, 2008)
• Language: English
• ISBN-10: 0300113315
• ISBN-13: 978-0300113310
• Product Dimensions: 9.3 x 6 x 0.9 inches
• Shipping Weight: 10.4 ounces (View shipping rates and policies)
• Average Customer Review: 4.4 out of 5 stars  See all reviews (47 customer reviews)
• Amazon.com Sales Rank: #35,339 in Books (See Bestsellers in Books)

  Popular in these categories: (What's this?)

  #41 in	Books > Business & Investing > Small Business & Entrepreneurship > New Business Enterprises
  #53 in	Books > Business & Investing > Management & Leadership > Strategy & Competition

Customer Reviews

Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

5.0 out of 5 stars Facts on the American entrepreneur and entrepreneurial activity, February 13, 2008

By	Toke Reichstein (Copenhagen) - See all my reviews (REAL NAME)

With several books and countless academic articles in major journals, Professor Scott Shane is an internationally recognized scholar in entrepreneurship. Among many other entrepreneurship subjects, Scott Shane has studied the academic entrepreneur, opportunity recognition, the entrepreneur and innovation, franchising, and genetic predisposition to self-employment. Over the years, he has built up an extraordinary portfolio of work addressing the very core questions of entrepreneurship. Drawing from this work, his new book, "The Illusions of Entrepreneurship - The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By", rightly argues there is a general misperception about entrepreneurs and entrepreneurial activity. Professor Shane shows that entrepreneurship in fact is a very common activity, typically carried out by a middle-aged white guy whose primary goal is to earn a living working for no one else. The book argues that "entrepreneurship" unfortunately has become an overly used buzzword creating illusions of the entrepreneur being the successful businessman with psychological powers allowing him to create a multimillion-dollar company living out the American dream.

Drawing on extensive empirical data and data sources, the book discusses the true nature of the American entrepreneur. Starting from the general misguided attitude towards entrepreneurship, Professor Shane manages to give a fairly accurate description of the average entrepreneur, hence bringing the illusions to an end. Asking very simple questions like: "Do we live in an entrepreneurial era?" "Why do people start businesses?" "How well do the typical start-up perform?" "To what extend do start-ups create jobs?" and "What does the typical entrepreneur look like?" enables Professor Shane to draw far-reaching conclusions and policy recommendations that for most will be considered surprising and considerably daring. The substantial backing of the regularities and conclusions through solid empirical research, nevertheless leaves the reader comfortable and at ease with the books' final concluding remarks and policy perspectives.

The book can be studied as a popular read, but has merits as an input to the development of an entrepreneurship course at a higher academic level as well. The easily followed and highly entertaining text accompanied by an extended notes section renders the book interesting both as a relaxing read and as an input to the more academic audience. I believe we will find this book on various bookshelves across several demographic groups who only share the interest of understanding the entrepreneurial spirit and entrepreneurial activity.

9 of 10 people found the following review helpful:

5.0 out of 5 stars From an angel investor and practitioner, March 25, 2008

By	Frederick A. Lins "life long learner" (Honolulu) - See all my reviews (REAL NAME)

Amazon Verified Purchase

Basic Argument: The public, investors, and policy makers mistakenly believe a number of myths about the value of entrepreneurship for the society. Research disproves many of these myths but nevertheless shows an underlying dynamic that can improve the selection of entrepreneurial ventures that will create value for the society.

Shane identifies and discusses 67 myths and key realities (truths) grounded in fully cited research. He addresses the topic from the perspective of industries, entrepreneurial traits, startup models, financing, entrepreneurial tasks, entrepreneurial success, women as entrepreneurs, black entrepreneurs, and the value of the average startup. His definition of entrepreneur includes self-employed as well as employers who startup any type of business, thus not limiting the population to those starting firms to create new products or use new methods by Schumpeter's definition. Shane's concluding chapter provides his insight into how to select valuable entrepreneurial ventures.

Strengths: The grounding of his arguments in identifying myths and drawing conclusions as to truths is well done. He even tackled the sensitive areas of black and women entrepreneurs without inappropriate political correctness. His conclusions validate the activities of business schools, angel investors, and venture capitalists.

Weaknesses: One has to `slog' through the long discussion of myths without knowing that there is `light at the end of the tunnel' in the conclusions. He understated the distinction between entrepreneurship by necessity and by opportunity as brought out by the GEM report. (Acs 2004) This confuses the myth/truth aspect of much of his discussion.

Applicability: The conclusions validate a new direction for academic research and the appendix of cited research when keyed to the 67 myths/truths would provide valuable reference data for future work.

Useful learning: The broad definition of entrepreneur in use by the public, politicians, and occasionally academics greatly reduces the value of any popular discussion of its merits or consequences.

8 of 9 people found the following review helpful:

2.0 out of 5 stars So Repetitive, September 3, 2008

By	Citidweller (Trenton, NJ) - See all my reviews

This book is the perfect example of the folks whose communication style goes like this: they tell you what they are going to tell you, they tell you, and then they tell you what they told you! And just for good measure (or to fill up more pages) this guy adds a numerical list of what he told you! Since the hardcover version I have runs just 165 pages before endnotes, you have to wonder if this is really a business magazine article, stretched waaaayyyyy out.

From reading business and economic development literature, I have often seen a distinction made between lifestyle entrepreneurs and other entrepreneurs. Shane makes no such distinction and I think the statistics he uses to bust myths are highly questionable. Do we really think policy-making in this important area should conflate every attorney who hangs a shingle to do real estate closings or draft wills, with businesses that aspire to develop new products, technologies?

On the other hand, if you are reading this because you want to leave your law firm and open a solo practice, or sell baked goods prepared in your home (lifestyle entrepreneurs) this book could be quite useful.