The Entrepreneur in Software

Encoder QR Code JIS X 0510 in Software The Entrepreneur

Initiative, which is directing $100 million to the creation of entrepreneurial education programs Does entrepreneurial training work While concrete research is difficult to gather and entrepreneurs such as Steve Jobs of Apple and Bill Gates of Microsoft have certainly succeeded without such education, a 2002 study by the University of Arizona showed that five years after graduation, the average annual income for entrepreneurship majors and MBAs who concentrated in entrepreneurship at school was 27 percent higher than that for students with other business majors and students with standard MBA s48 In addition, according to a study by the Kauffman Foundation, 32 percent of successful entrepreneurs had taken at least five business classes, while only 18 percent of unsuccessful entrepreneurs had taken these kinds of courses Anecdotal evidence is plentiful Mark Cuban, who sold his start-up, Broadcastcom, to Yahoo! for $6 billion in 1999 and is the current owner of the Dallas Mavericks and HDNet, swears by his entrepreneurship training He notes, One of the best classes I ever took was entrepreneurship in my freshman year at Indiana University It really motivated me There is so much more to starting a business than just understanding finance, accounting, and marketing Teaching kids what has worked with startup companies and learning about experiences that others have had could really make a difference I know it did for me 49 Tatiana Saribekian, a Russian immigrant, believes that San Diego State University s MBA program helped her master the art of the deal After failing with her first US-based lumber venture, she decided to get an MBA, and concentrated in entrepreneurship She has recently started over as a builder and reflects on her MBA in entrepreneurship: My classes opened my eyes to how business works here in America It is completely different from Russia I think this time I will have a better chance at success 50 Finally, the growth in entrepreneurship will be forever linked with America s technological revolution, which began in the early 1980s Companies such as Microsoft, Apple, Lotus, and Dell, to name a few, gave birth to the present $600 billion technology industry Advances in technology have led to the proliferation of new products and services fostering the creation of companies in new areas, such as Internet-based businesses For example, in 1999,

a new computer product was developed every 7 seconds, and a new Internet-related company was established every 48 hours51 The years 1995 and 1996 were heady times for Internet pioneers Table 2-3 shows the growth of Internet services companies during the 1990s as the new sector s growth began to explode

T A B L E 2-3

Fastest-Growing Businesses, 1995 1996

Number of Firms in 1995 24 4,539 1,636 2,522 4,037 2,156 Number of Firms in 1996 2,298 6,573 2,148 3,291 5,253 2,569

Business Internet services PC networking services Pager services Bagel shops Cellular phone services Tattoo parlors

Source: USA Today, March 26, 1997

Growth 9,475% 45% 31% 31% 30% 19%

This spur in entrepreneurial activity resulted in unprecedented job and wealth creation In 1997, for example, in Silicon Valley (which is 50 miles long, crossing 30 different city lines), 11 new companies were created each week, resulting in the creation of 62 new millionaires every day52 This Internet bubble peaked on March 19, 2000, when the Nasdaq Composite reached 5,048, or twice its value just a year earlier Of course, many of those millionaires saw their paper fortunes disappear in the coming years More than seven years later, in the summer of 2007, the Nasdaq index was still 40 percent below its March 2000 peak While much has been made of the losses stemming from the dot-bomb era, technology entrepreneurship has come roaring back Venture capital funding has risen from $38 billion in 2002 to over $27 and $30 billion in 2005 and 2006, respectively In 2005, the software and telecommunications industry accounted for over $14 billion in revenues53 One of the most prominent entrepreneurial technology firms of the 1990s was Yahoo! It was started in 1995 and went public in 1996 at an astonishing valuation of $850 million, despite the fact