Why do entrepreneurs found so many new firms?

MANAGEMENT

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Why do entrepreneurs found so many new firms?
This is an era of innovative business. Whenever the entrepreneurs find new ideas or see an
opportunity in the market, they open new firms. An entrepreneur generally sees opportunity,
builds a plan for it, starts the business and manages it with the use of available resources.
This is done for the sake of profit. The needs in the society are changing and this change is
building new opportunities for the market which the entrepreneurs want to convert into the
money. For new and innovative ideas, entrepreneurs are always ready to invest money into it
(Barringer, 2015).
It is not that every time start-up becomes successful rather most of the time it fails because
they are unable to understand the actual need of the market and the problems that are exist in
the market so as to make the start-ups successful. Another reason for it is the fact that only
investment cannot make a venture to be successful but it’s the business model that makes
them successful. It also fails because there is poor management of team or sometimes they
run out finance that can give them a push to their venture. Sometimes there are problems in
the product as they are unable to provide the value to the customers as promised (Feinleib,
2011). Their ideas are easily copied by the big organisation and start a new business with
higher amount of capital and better business model. They also fail as they are unable to
compete in the highly competitive environment.
After so many problems and failure stories, entrepreneurs are still willing to open new firms
because they have a strong desire for achieving something extraordinary and want results that
give value that is not higher. They have new energy to take risks and tolerate ambiguities.
Entrepreneurs sometimes also open firms to resolve the problems existing in the society for
building a community where jobs are created or to change the scenario in the society. The
investments in the new firms have increased after the digital revolution and reach of mobile
technologies and internet facilities in the hand of the people (Hogarth & Karelaia, 2012). This
is because through these mediums entrepreneurs are able to extend their reach in the larger
part of the market and hence can capture large market share. People have become aspirational
where they want to create a lot of wealth which cannot be possible with working in any firm
under someone else.