Thomas H. Byers,
Stanford University Richard C. Dorf,
University of California, Davis Andrew J. Nelson,
University of Oregon
ISBN: 0073523429 Copyright year: 2015
Book Forward
by John L. Hennessy, President of Stanford University
I am delighted to introduce this book on technology entrepreneurship by Professors Byers,
Dorf, and Nelson. Technology and similar high-growth enterprises play a key role in the development of the global economy and offer many young entrepreneurs a chance to realize their dreams.
Unfortunately, there have been few complete and analytical books on technology entrepreneurship. Byers, Dorf, and Nelson bring years of experience in teaching and direct background as entrepreneurs to this book, and it shows. Their connections and involvement with start-ups—ranging from established companies like Facebook and Genentech to new ventures delivering their first products—add real-world insights and relevance.
One of the most impressive aspects of this book is its broad coverage of the challenges involved in technology entrepreneurship. Part I talks about the core issues around deciding to pursue an entrepreneurial vision and the characteristics vital to success. Key topics include building and maintaining a competitive advantage and market timing. As recent history has shown, it is easy to lose sight of these principles. Although market trends in technology are ever shifting, entrepreneurs are rewarded when they maintain a consistent focus on having a sustainable advantage, creating a significant barrier to entry, and leading when both the market and the technology are ready. The material in these chapters will help entrepreneurs and investors respond in an informed and thoughtful manner.
Part II examines the major strategic decisions with which every entrepreneur grapples: how to balance risk and return, what entrepreneurial structure to pursue, and how to develop innovative products and services for the right users and customers. It is not uncommon for start-ups led by a technologist to question the role of sales and marketing. Sometimes, you hear a remark like: “We have great technology and that will bring us customers; nothing else matters!” But without sales, there is no revenue, and without marketing, sales will be diminished. It is important to understand these vital aspects of any successful business. These are challenges faced by every company, and the leadership in any organization must regularly examine them.
Part III discusses operational and organizational issues as well as the vital topic in technology-intensive enterprises of intellectual property. Similar matters of building the organization, thinking about acquisitions, and managing operations are also critical. If you fail to address them, it will not matter how good your technology is.
Finally, Part IV talks about putting together a solid financial plan for the enterprise including exit and funding strategies. Such topics are crucial, and they are often the dominant topics of “how-to” books on entrepreneurship. While the financing and the choice of investors are key, unless the challenges discussed in the preceding sections are overcome, it is unlikely that a new venture, even if well financed, will be successful.
In looking through this book, my reaction was, “I wish I had read a book like this before I started my first company (MIPS Technologies in 1984).” Unfortunately, I had to learn much of this in real-time, often making mistakes on the first attempt. In my experience, the challenges discussed in the earlier sections are the real minefields. Yes, it is helpful to know how to negotiate a good deal and to structure the right mix of financing sources, especially so employees can retain as much equity as possible. However, if you fail to create a sustainable advantage or lack a solid sales and marketing plan, the employees’ equity will not be worth much.
Those of us who work at Stanford and live near Silicon Valley are in the heartland of technology entrepreneurship. We see firsthand the tenacity and intelligence of some of the world's most innovative entrepreneurs. With this book, many others will have the opportunity to tap into this experience. Exposure to the extensive and deep insights of Byers, Dorf, and Nelson will help build tomorrow's enterprises and business leaders.
2015