Book Forward

I am delighted to introduce this book on technology entrepreneurship by Byers, Dorf, and Nelson. Technology and similar high-growth enterprises are both an important part of our world’s economic growth story as well as the place where many young entrepreneurs realize their dreams.

Unfortunately, there have been relatively few complete and analytical books on technology entrepreneurship. Byers, Dorf, and Nelson bring their years of experience in teaching to this book, and it shows. Their personal experiences as entrepreneurs are also clear throughout the book. Their connections and involvement with start-ups—ranging from established companies like Google and Genentech to new ventures just delivering their first products—add a tremendous amount of real-world insight 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 involved when deciding to pursue an entrepreneurial vision and what characteristics are vital to success from the very beginning. I am pleased to see that key topics include building and maintaining a competitive advantage and market timing. During the Internet boom of 2000, several great new companies were built, but too many entrepreneurs and investors forgot several key principles: have a sustainable advantage, create a significant barrier to entry, and be a leader when the market and the technology are both ready. Hopefully, the material in these chapters will help prevent future irrational behavior by both entrepreneurs and investors.

Part II examines the major strategic decisions with which any group of entrepreneurs must grapple: how to balance risk and return, what entrepreneurial structure to pursue, how to find and cultivate the best employees and help make them productive, and the critical issue of intellectual property. Indeed, these are problems faced by every company, and ones that must be continuously examined by the leadership in any organization.

Part III discusses the operational and organizational challenges that all entrepreneurs must tackle. Virtually every start-up led by a technologist that I have been close to inevitably wonders whether it needs sales and marketing. Sometimes in such companies, you hear a remark like: "We have great technology and that will bring us customers; nothing else matters!" I remind them that without sales, there is no revenue, and without marketing, sales will be diminished. It is important to understand how to approach these vital aspects of any successful business. The related topics of building the organization, thinking about acquisitions, and managing operations are also important. If you fail to address these aspects of your company, it will not matter how good your technology is.

Finally, Part IV talks about putting together a solid financial plan for the company, including exit and funding strategies. Of course, such topics are crucial, and they are often the sole or dominant topics of "how-to" books on entrepreneurship. Certainly, the financing and the choice of investors are key, but 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 sage and comprehensive treatment, my overwhelming 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 many of the topics covered here in real-time and often by making a mistake on the first attempt. In my experience, it is the challenges discussed in the earlier sections that really prove to be the minefields. Yes, it is helpful to know how to negotiate a good deal and to structure the right mix of financing sources, especially so that employees can retain as much equity as possible. If, however, 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 heart of the land of technology entrepreneurship. With this book, many others will get to share the extensive and deep insights of Byers, Dorf, and Nelson on this wonderful process that builds tomorrow’s enterprises and business leaders.