There is no success formula for startups, but the right mindset will catapult your business to unimaginable heights. Princeton faculty member Professor Swati Bhatt shared these insights in her latest book, Entrepreneurship Today: The Resurgence of Small, Technology-Driven Businesses in a Dynamic New Economy. Her new publication shifts our understanding of risk-taking culture in entrepreneurship towards viewing startups as a positive force in overcoming inequality. In our recent interview with Prof. Bhatt, she revealed the inspirations for her book, her tips for creating successful startups, and thoughts for future Princetonian entrepreneurs on using the Princeton ecosystem as a launching pad.
In her 10 years of lecturing Economics of the Internet, Prof. Bhatt and her class faced a grim observation. Although the U.S. saw a startup boom beginning in the late 1990s, few businesses survived and became successful. Try listing the big names—Google, Microsoft, Facebook, Spotify—you’ll find the list starting to run out. Prof. Bhatt raised a question we all wonder, “Why aren’t there more start-ups like these?” It is easy to feel discouraged by this daunting outlook. However, Prof. Bhatt’s research and analysis of the entrepreneurship market show otherwise. When asked about her motivation for penning her book, Prof. Bhatt said she wants this book to be an easy read for “someone thinking of founding a startup to feel encouraged by the numbers.” She suggests two simple yet powerful steps to create a successful startup: 1. Being aware of the risk-taking culture and 2. Developing the right mindset.
Startup founders must first change their attitude towards rapid scaling. “Start-ups are growing too fast without enough support,” Prof. Bhatt noted, “Young founders are impatient. Everyone wants to be the next unicorn.” Many tech founders create debt and try to pitch their startups to VCs by adopting glamorous technologies that “look good on paper but are not practical.” Prof. Bhatt said that startups do not have to look far to find success. Community support is the best starting point to raise funds, establish customer and supplier connections, and find inspiration for potential business ideas. To expand sustainably, startups should improve current customers’ experience and build brand loyalty instead of scaling up for new customers. Strong connection, Prof. Bhatt asserts, is therefore the key component to early stage startup success.
Prof. Bhatt also urged us to rethink the qualifications of startup founders. “Higher education is not the only way to create successful startups,” she argued. “The ties closest to you can build a strong buyer and supplier ecosystem.” Besides networking, founders only need practical skills specific to their businesses, and they can acquire those skills from channels beyond the traditional college education. “Learning is a lifelong process,” Prof. Bhatt added. “We learn as we need.”
The Princeton entrepreneurial ecosystem provides the ingredients needed for startups to find success. Various programs developed by the Princeton Entrepreneurship Council and the Keller Center pool the many talents in Princeton’s robust alumni network and connect them with campus startups. “Our startup scene is quite strong, but we are also working to improve it,” Prof. Bhatt commented. When asked about tips for young Princetonians, she encouraged students to foster connections and take advantage of the Princeton ecosystem. “Be aware of the people around you,” she said. “Friendship and ties propel you forward.”
Swati Bhatt received her Ph.D. in Economics from Princeton in 1986 and has been a faculty member there since 1992. Her research interests include the economics of digitization and industrial organization with a focus on the technology industry. Prior to joining Princeton’s Department of Economics, Bhatt was a research economist at the Federal Reserve Bank of New York from 1985 to 1990 and taught at New York University's Stern School of Business from 1990 to 1992. She has authored several publications, such as How Digital Communication Technology Shapes Markets: Redefining Competition, Building Cooperation (2017) and The Attention Deficit: Unintended Consequences of Digital Connectivity (2019), both published by Palgrave Macmillan.