
Rich versus King: The Entrepreneur's Dilemma (2006) [pdf] - rokhayakebe
http://www.people.hbs.edu/nwasserman/Rich_vs_King-Proceedings_with_abstract.pdf
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ChuckMcM
Everyone likes rules of thumb, here's mine the probability that you are in a
bubble correlates with the ratio of opportunistic investors to craftsman
investors.

    
    
                   "opportunisitc entrepreneurs"
       P(bubble) = -----------------------------
                     "craftsman entrepreneurs"
    

Or more precisely craftsman(people?) entrepreneurs are more driven to change
the world and have a "purer" motive for what they do, opportunistic
entrepreneurs simply grow the number of startups similar to the ones started
by the craftspeople.

~~~
et2o
What happens when there are more of the numerator than denominator? Can't be a
probability ;-)

~~~
TeMPOraL
Indeed, it should be:

    
    
                                  "opportunisitc entrepreneurs"
       P(bubble) = -------------------------------------------------------------
                     "craftsman entrepreneurs" + "opportunisitc entrepreneurs"

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mattty
If you find this interesting, Wasserman expanded his thesis into a book[0], an
academic study of startups. Highly recommended.

[0]: [http://www.amazon.com/The-Founders-Dilemmas-Anticipating-
Ent...](http://www.amazon.com/The-Founders-Dilemmas-Anticipating-
Entrepreneurship/dp/0691158304)

------
applecore
Of course, the most common outcome is Neither Rich Nor King.

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AndrewKemendo
I think this study and resultant book are flawed because the metrics do not
exist within the same reference frame.

For example, from the abstract:

 _The two major motivations to start a new venture are the profit motive and
the control motive. This paper examines how entrepreneurs’ choices that
increase their potential financial gains (i.e., achieve the profit motive)
should conflict with their ability to achieve the control motive._

In this case, the profit motive, is independent of the organization and would
be compared to the mathematical global "wealth" variable. That is, comparisons
for relative profit are not made between the founder and other founders,
investors or employees within the organization, but rather within the universe
of the larger economy.

Alternatively, the control motive in this study is being compared within the
organization, between the founder and the investors, other founders and
employees.

So the reference frames are not equivalent. One is in the broader economy and
the other is within the organization.

What should be compared is either, relative profit competitive between the
founder and the other parties (investors etc....) or power within the broader
economy, that is for example more political power, economic power, etc...

I would be interested to see that study.

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Matt_Mickiewicz
The book is great - highly recommend it.

