How to Predict if a New Business Idea is Any Good

In 2008, entrepreneur Brian Chesky and his two San Francisco roommates made the rounds of Silicon Valley VC firms with what they thought was a great idea. Five VC firms rejected the start-up’s pitch outright, and two didn’t even bother to reply. Fortunately, they were able to get some funding, and eight years later AirBnB is worth billions of dollars

This is one of the most difficult questions in the business world: How can you tell if a new business will succeed? A recent post on the HBS Working Knowledge business blog highlights research by Harvard Business School Assistant Professor Pian Shu to find answers to this question.

One interesting factor is that when an investor does make an investment in a startup, that fact alone increases the probability of success.

You can read more about Professor Shu’s research at:

photo credit: BulbHead > brain via photopin (license)

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