Crave Success? Don’t Start a Business With Your Friends
If you’re looking for entrepreneurial success, look outside your social circle for business partners. A new Harvard University working paper reveals that venture capitalists who teamed up with another investor based on shared personal characteristics, such as an alma mater, fraternity or ethnicity, were less successful than duos who joined forces solely based on their talents. Why is this so?
The researchers didn’t find substantial clues that point to poor company choices, which suggests that the like-minded investor teams were worse at advising their selected startups than other venture capitalists. “Groupthink,” or the tendency for similar individuals to think alike, may hamper investors’ ability to isolate poor decisions or consider novel ideas from others.
When picking a business partner, the Harvard researchers recommend choosing someone who shares your talent rather than personal characteristics. Teams of the same ethnic minority, for example, were 25 percent less likely to be successful venture capitalists. And teams who shared an alma mater saw a drop of 22 percent in their likelihood of success.
Have you experienced the pitfalls of groupthink at your workplace?
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