Entrepreneurs Extra Credit Assignment
Apple, PowerPoint, Atari, Cisco, Tandem, Genentech, and Intel are among the companies that saw world class growth throughout the 20th century. These companies had shared common qualities that led to the success. First the companies offered fresh business ideas that aimed at filling a void in the marketplace. The unique ideas would not be replicated easily. For example, Steve Jobs had a unique idea of providing home computers, Nolan Bushnell had the unique idea of introducing video games that are hand-held, Herb Boyer had the unique idea of engineering human genes. With these unique ideas, the businesses were able to attract venture capitalists who funded them and now the companies are successful. As Tom Perkins says in the documentary, what matters to venture capitalists is the kind of business. Therefore having unique business ideas helped the companies to be successful. The potential business ideas made Don Valentine invest in Atari, Apple, and Cisco. As Nola Bushnell the founder of Atari says in the interview, the companies would not have been successful without the venture capitalists.
The second market is scalability. The companies offer products that more people are interested in. The market for the products is sizeable. For instance Apple has many opportunities in the tech market. People are willing to pay for the companies’ products. For instance according to the documentary, entrepreneur of Tandem Computers realized that financial transactions and stock markets needed computers. In response they offered to build quality computers that would never fail. Other companies also offered unique products that were needed in the society hence the sizeable market. These elements helped the companies to succeed.
Venture capital enables entrepreneurs to grow their business ideas. However, it is important for the entrepreneurs to evaluate risks in signing venture capital to reduce the risk of losing everything. According to the documentary, the entrepreneurs evaluated the risks by ensuring that the market timing was right, looking at the network connection of the venture capitalists, agreeing to favourable shareholder’s agreement, looking at the compatibility of the entrepreneur with the VC and ensuring that the entrepreneur has the say in the company based on the ownership. Market size determines whether it’s the right time to accept funding or wait for a favourable time. Not having a VC with network connection would be risky for a business especially when it comes to international product distribution. To have a say in a business, an entrepreneur must look at what ownership to retain. Compatibility also determines whether a business will be a success or a fail. Evaluation of these risks enabled the companies in each venture to emerge successfully.
The idea that that entrepreneurship is all about having a killer business plan is a myth. In reality many business plans are written after businesses are already generating revenues. The exercise is good for convincing external parties to support an idea. However, prioritizing the exercise at the expense of other practices puts a business at the risk of failing. Based on the documentary, the companies attracted venture capitalists when they were barely just an idea. The companies had unproven vague visions, and unseasoned entrepreneurs. Again, it is not the entrepreneurs that sought help from the venture capitalists rather the opposite is true. What business should seek to be successful according to the documentary is the uniqueness of a business idea and market size. The two qualities reduce the risk of a business failure as evident in the success of the companies enlisted in the documentary.
‘Something Ventured’. San Francisco Chronicle, 2011.