Want Your Startup to Succeed? Stay Home

  • Michael S. Dahl



A new study shows that startups do better when they’re launched in the place where their founders were born or have lived for a long time. Makes sense, but the reasons why are surprisingly complex and modern. Our first guess was that the key to startup success is the founder’s ability to go to their parents’ house to cadge a hot meal. And that’s not entirely wrong. But there’s more to it than that. The study, by Professor Olav Sorenson of the Yale School of Management and Michael Dahl of Aalborg University, Denmark, is titled “Home Sweet Home: Entrepreneurs’ Location Choices and the Performance of Their Ventures.” It looked at data from 13,166 Danish startups founded between 1995 to 2004 and discovered that companies launched by founders with an average tenure of 6.4 years in a region had a 9% lower failure rate and took in $8,172 more in annual profit than companies launched by newcomers. Each additional year of tenure reduced the failure rate by nearly 2% and increased profits by $1,362.
Periode1 aug. 2012