Bootstrapping and the Problem of Being New
This chapter outlines the issues associated with newness. As noted, new ventures fail at a much higher rate than older firms and while this may seem commonsensical, there is value in understanding exactly why new firms are so apt to fail. If we can drill down into this failure rate, to identify specific aspects of newness, then we might be able to devise ways around them to increase our chances of success—even for bootstrappers.
For example, pundits will often report that the most common cause of new firm failure is “a lack of capital.” While this is most certainly the case, the reasoning is circular and therefore not all that helpful to the entrepreneur. Eventually, every ...
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