Book PrefaceEntrepreneurship is a vital source of change in all facets of society,
empowering individuals to seek opportunity where others see insurmountable
problems. For the past century, entrepreneurs have created
many great enterprises that subsequently led to job creation, improved productivity,
increased prosperity, and a higher quality of life. With one-third of
the world’s population lacking access to basic energy needs and two-thirds with
annual incomes of less than $2,000, entrepreneurship can play an important
role in finding solutions to these challenges facing civilization.
Many books have been written to help educate others about entrepreneurship.
Our textbook is the first to thoroughly examine a global phenomenon known as
“technology entrepreneurship.” Technology entrepreneurship is a style of business
leadership that involves identifying high-potential, technology-intensive commercial
opportunities, gathering resources such as talent and capital, and managing
rapid growth and significant risks using principled decision-making skills. Technology
ventures exploit breakthrough advancements in science and engineering to
develop better products and services for customers. The leaders of technology ventures
demonstrate focus, passion, and an unrelenting will to succeed.
Why is technology so important? The technology sector represents a significant
portion of the economy of every industrialized nation. In the United
States, more than one-third of the gross national product and about half of
private-sector spending on capital goods are related to technology. Although
making up only 15 percent of the S&P 500, the technology sector generates
45 percent of the daily trading volume on the New York stock markets. It is
clear that national and global economic growth depends on the health and contributions
of technology businesses.
Technology has also become ubiquitous in modern society. Note the proliferation
of cell phones, personal computers, and the Internet in the past
decade and their subsequent integration into everyday commerce and our personal
lives. When we refer to “high technology,” we include information
technology and electronics companies, life science and biotechnology businesses,
and those service firms where technology is critical to their missions.
At the beginning of the 21st century, many technologies show tremendous
promise, including photonics and Internet advancements, medical devices and
drug discovery, nanotechnology, and materials technologies related to energy
and the environment. The intersection of these technologies may indeed
enable the most promising opportunities.
The drive to understand technology venturing has frequently been associated
with boom times. Certainly, the often-dramatic fluctuations of economic
cycles can foster periods of extreme optimism as well as fear with respect to
entrepreneurship. However, some of the most important technology companies have been founded during recessions (e.g., Intel, Cisco, and Amgen). This
book’s principles endure regardless of the current state of the economy. APPROACH
Just as entrepreneurs combine things to create innovations, we integrate the
most valuable entrepreneurship and technology management theories from
some of the world’s leading scholars, educators, and authors. We also provide
an action-oriented approach to the subject through the use of examples, exercises,
and lists. By striking a balance between theory and practice, we hope
our readers will benefit from both perspectives.
Our comprehensive collection of concepts and applications provides the
tools necessary for success in starting and growing a technology enterprise. We
show the critical differences between scientific ideas and true business opportunities.
Readers will benefit from the book’s integrated set of cases, examples,
business plans, and recommended sources for more information.
We illustrate the book’s concepts with examples from the early stages of
both traditional high-technology firms (e.g., Microsoft, Google, and Genentech)
and those that use technology strategically (e.g., Starbucks and Wal-Mart). How
did they develop enterprises that have had such positive impact, sustainable
performance, and longevity? In fact, the book’s major principles are applicable
to any high-growth, high-potential venture. This includes nonprofit enterprises
such as Conservation International and the Kauffman Foundation.AUDIENCE
This book is designed for students in colleges and universities, as well as others
in industry and public service, who seek to learn the essentials of technology
entrepreneurship. No prerequisite knowledge is necessary, although an understanding
of basic accounting principles will prove useful.
Entrepreneurship was traditionally taught only to business majors. Because
entrepreneurship education opportunities now span the entire campus, we wrote
this book to be approachable for students of all majors and levels including
undergraduate, graduate, and executive education. Our primary focus is on science
and engineering majors enrolled in entrepreneurship and innovation
courses, but the book is also valuable to business and other students with a
particular interest in technology ventures.
For example, the courses at Stanford University and the University of
California, Davis, based on this textbook regularly attract students from majors
as diverse as computer science, product design, political science, economics,
pre-med, electrical engineering, history, biology, and business. Although the
focus is on technology entrepreneurship, these students find this material applicable
to the pursuit of a wide variety of endeavors. Entrepreneurship education
is a wonderful way to teach universal leadership skills, which include being
comfortable with constant change, contributing to an innovative team, and demonstrating passion in any effort. Anyone can learn entrepreneurial thinking
and leadership. We particularly encourage instructors to design courses where
the students form study teams early in the term and learn to work together
effectively on group assignments.WHAT’S NEW
Based upon feedback from readers and new developments in the field of hightechnology
entrepreneurship, numerous enhancements appear in this second
edition. Recent compelling academic theories and practitioner insights in
entrepreneurship are included in the text. Upgraded examples and exercises
place even more emphasis on technology ventures worldwide. A special exercise
called the “venture challenge” at the end of each chapter steps the reader
through the formation of a venture.
Business plan development materials and tools are expanded and summarized
in a single chapter. This includes an annotated table showing how to
best organize the contents of a professional business plan. A bundled DVD
has numerous video clips that highlight specific sections and cases in the book
with inspirational comments by entrepreneurs, investors, and teachers. Two
new full-length cases are included in the appendix. Some minor reordering of
chapters streamlines the remaining content.FEATURES
The book is organized in a modular format to allow for both systematic learning
and random access of the material to suit the needs of any reader seeking
to learn how to grow successful technology ventures. Readers focused on business
plan development should consider placing a higher priority on chapters 7,
10, 12, 17, and 18. Regardless of the immediate learning goals, the book is a
handy reference and companion tool for future use. We deploy the following
wide variety of methods and features to achieve this goal, and we welcome
feedback and comments.Principles and Chapter Previews—A set of 20 fundamental principles
are developed and defined throughout the book. They are listed in the
inside front cover as well. Each chapter opens with a key question and
outlines its content and objectives.Examples and Exercises—Examples of cutting-edge technologies illustrate
concepts in a shaded-box format. Information technology is chosen for
many examples because students are familiar with its products and services.
Exercises are offered at the end of each chapter to test comprehension
of the concepts.Sequential Exercise and Case—A special exercise called the “venture
challenge” guides readers through a chapter-by-chapter formation of a
new enterprise. In addition, a case study about an actual biotechnology
firm, AgraQuest, runs from one chapter to the next. <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073529222/373509/tableP1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (74.0K)</a>]]>
Business Plans—Methods and tools for the development of a business plan
are gathered into one special chapter, which includes a thoroughly annotated
table of contents. Two complete business plans are also provided as samples
in appendix A.Cases—Seven comprehensive cases are included in appendix B. A mapping
of how these cases relate to specific chapters in the book is provided
in Table P1. Additional cases from Harvard and ECCH are recommended
on the textbook’s websites.References—References are indicated in brackets [Smith, 2001] and are
listed as a complete set in the back of the book. This is followed by a list of
entrepreneurship-related websites in appendix C and a comprehensive
glossary.Chapter Sequence—The chapter sequence represents our best effort to
organize the material in a format that can be used in various types of entrepreneurship
courses. The chapters follow the four-part layout shown in
figure P1. Courses focused on creating business plans can reorder the
chapters with emphasis on chapter 7 among others.DVD Media Package—A DVD of video segments is bundled with the book.
Special icons throughout the book denote when to view these comments
from world-class entrepreneurs, investors, and teachers. More free videos
clips and podcasts are available at Stanford’s Educators Corner website
(see http://edcorner.stanford.edu). <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073529222/373509/FigureP1ChapterSequence.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (138.0K)</a>]]>Websites and Blog—Please visit websites for this book at both McGraw-Hill
Higher Education (http://www.mhhe.com/dorfbyers2e) and Stanford
University (http://edcorner.stanford.edu/techventures) for supplemental
information applicable to educators, students, and professionals. For example, a complete syllabus for an introductory course on technology entrepreneurship
and a PowerPoint presentation for each chapter are provided
for instructors. Visitors to either website can link to the author’s blog to interact
with the authors and other readers. ACKNOWLEDGEMENTS
Many people have made this book possible. Our editors at McGraw-Hill were
Suzanne Jeans, Michael Hackett, and Katie White. We thank all of them for their
insights and dedication. We also thank Tracy Konrardy and the McGraw-Hill
production team for their diligent efforts.
Our colleagues at Stanford University and the University of California,
Davis, were helpful in numerous ways. We are indebted to them for all of their great ideas and support. At Stanford, they include Scott Cannon, Eric Carr,
Emily Cox, Kathleen Eisenhardt, Forrest Glick, Kailash Gopalakrishnan,
Yvonne Hankins, John Hennessy, Randy Komisar, Thomas Kosnik, Kelley
Porter, James Plummer, Elisabeth Pate-Cornell, Emily Ma, Rajit Marwah, Asha
Nayak, Ted Sacerdoti, Tina Seelig, Robert Sutton, and Adam Wegel. At UC
Davis, they include Robert Smiley, Andrew Hargadon, Nicole Biggart, Jerome
Suran, Ben Finkelor, Kurt Heisinger, and Marc Lowe.
Practitioners and industry leaders who provided key input included Brook
Byers, Ken Byers, Gordon Eubanks, Bob Fung, Jeremy Jaech, Pamela Marrone,
and John Walter. We also express sincere appreciation to all of the reviewers
of the first and second edition manuscripts and media packages: George
Abe, University of California, Los Angeles; Ronald Baecker, University of
Toronto; David Barbe, University of Maryland; Edgar Blevins, Southern University
and A&M College; John Callister, Cornell University; David Charron,
University of California, Berkeley; W. Andrew Clark, East Tennessee State
University; Robert Crocket, California Polytechnic and State University,
San Luis Obispo; Maryann Feldman, University of Toronto; Alan Flury, Georgia
Institute of Technology; Buck Goldstein, University of North Carolina,
Chapel Hill; Susannah Howe, Smith College; Andrew Isaacs, University of California,
Berkeley; Jim Jindrick, University of Arizona; Liz Kisenwether, Pennsylvania
State University; Clifton Kussmaul, Muhlenberg College; Salvador
Landeros, National University of Mexico; Anthony J. Marchese, Rowan University;
Thomas Mason, Rose-Hulman Institute of Technology; Mel I. Mendelson,
Loyola Marymount University; Arlen Meyers, University of Colorado;
Tom Miller, North Carolina State University; Steve Nichols, University of
Texas, Austin; John Ochs, Lehigh University; David Pistrui, Illinois Institute
of Technology; Robert Podlasek, Bradley University; Jon D. Pratt, Louisiana
Tech University; Edward Rubesch, Mahidol University; Erik Sander, University
of Florida; Tammy Schakett, Columbus State Community College; Jerry
Schaufeld, Worcester Polytechnic Institute; Gerry Scheffelmaier, Middle Tennessee
State University; Michael Song, University of Missouri, Kansas City;
James L. Stevenson, Massachusetts Institute of Technology; Brent Strong,
Brigham Young University; Joseph Toth, Duquesne University; Rodrigo Varela
Villegas, Universidad ICESI; Ken Vickers, University of Arkansas; Stephen
Walsh, North Carolina State University; William J. White, Northwestern University;
Charles Wright, Florida A&M University; Wei Zhang, Tsinghua University;
Ed Zschau, Princeton University.Richard C. Dorf, University of California, Davis, rcdorf@ucdavis.edu
Thomas H. Byers, Stanford University, tbyers@stanford.edu |
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2008 McGraw-Hill Higher Education