Speaker:

Damon J. Phillips, Associate Professor of Organizations and Strategy and Neubauer Family Faculty Fellow, U. of Chicago Graduate School of Business

A number of studies have shown that people working at small firms are more likely to become entrepreneurs.  A key question, however, is whether the experience and skills acquired in smaller firms better prepare people to be entrepreneurs. 

Damon Phillips and Jesper Sorensen of MIT’s Sloan School of Management sought to answer that question by examining the relationship between the size of an entrepreneur’s prior employer and the entrepreneur’s success in running his own business.  Their finding:  entrepreneurs coming from small businesses have better performance than those coming from larger companies, whether measured by failure rate or self-employment income in the first year.  Success rates are also significantly higher when the entrepreneur starts his new company in the same industry as his prior employer.

Professor Phillips’ research certainly raises important issues for individuals who seek to have their own business.  Why do small firms appear to be better training grounds than large corporations for entrepreneurs?  Is it more important to success that entrepreneurs have broad experience spanning all aspects of business rather than in-depth knowledge in a few areas?   Do small businesses tend to offer more opportunities for employees to take greater responsibility or to up-grade their skills?   Is the difference between working for large and small firms less important if the entrepreneur moves to an entirely different industry to start his new business?  Click here for more on Professor Phillips’ findings.

Professor Philips has his Ph.D. from Stanford University, an M.S. in aeronautics form MIT and a B.S. in Physics from Morehouse College.

Click here for more information on Professor Phillips’ research, click below:

http://chicagogsb.edu/capideas/dec05/3.aspx