Realizing value from entrepreneurial firms
Introduction Value realization is the natural next step for an entrepreneurial firm that has done the “right” things throughout its development. The “right” approach always begins with identifying unmet demand, solving the “real” problems of customers (rather than removing small irritants), correcting market imperfections where existing competitors are unable to meet customer expectations, and developing new market segments. Business opportunities in the marketplace are either temporary (i.e., a window of opportunity which lasts for a short period of time) or permanent (i.e., a market niche which is presumed to exist indefinitely). Many entrepreneurial firms operate in sectors of the economy that are different from what Wall Street defines as attractive. Although a small group of entrepreneurial firms owe their market success to a superb idea, the vast majority succeed because they have extraordinarily executed an ordinary idea. Entrepreneurs often stumble across potential opportunities unexpectedly while developing their firms by skillfully observing the marketplace in which they are operating. The initial business ideas or products of many successful entrepreneurial firms have in many cases failed; in fact, an initial product or service failure is often regarded as a predictor of long-term entrepreneurial success. Resilience, persistence, and experimentation are the signatures of successful firms.