eveownf4.ppt

STARTING YOUR OWN
IT COMPANY
Sarah Anderson
Matt Selter
Erin Wilke
Jermaine Williford

Agenda
►The Entrepreneur Test
►Characteristics of Entrepreneurs
►Case Study: STLToday.com
►Case Study: Quilogy
►Case Study: Amazon.com
►Case Study: Dell
►Conclusion

Do YOU Have What It Takes?
THE
ENTREPRENEUR
TEST
http://www.bizmove.com/other/quiz.htm

1. Are you a self-starter?
a) If someone gets me started, I keep going
alright.
b) Easy does it. I don’t put myself out until I have
to.
c) I do things my own way. Nobody needs to tell
me to get going.

2. How do you feel about other people?
a) Most people bug me.
b) I have enough friends and I don't need
anybody else.
c) I like people. I can get along with just about
anybody.

3. Can you lead others?
a) I usually let someone else get things moving.
b) I can get people to do things if I drive them.
c) I can get most people to go along with me
without much difficulty.

4. Can you take responsibility?
a) There’s always some eager beaver around
waiting to show off. I say, let him.
b) I’ll take over if I have to, but I’d rather let
someone else be responsible.
c) I like to take charge and see things through.

5. How good of an organizer are you?
a) I just take things as they come.
b) I do alright unless things get too complicated.
Then I may cop out.
c) I like to have a plan before I start. I’m usually
the one who lines things up.

6. How good of a worker are you?
a) I can’t see that hard work gets you anywhere.
b) I’ll work hard for a while, but when I’ve had
enough, that’s it.
c) I can keep going as long as necessary. I don’t
mind working hard.

7. Can you make decisions?
a) I don’t like to be the one who decides things,
I’ll probably blow it.
b) I can if I have plenty of time. If I have to make
up my mind fast, I usually regret it.
c) I can make up my mind in a hurry if necessary,
and my decision is usually O.K.

8. Can people trust what you say?
a) Why sweat it if the other guy doesn’t know the
difference?
b) I try to be on the level, but sometimes I just
say what’s easiest.
c) They sure can. I don’t say things I don’t mean.

9. Can you stick with it?
a) If a job doesn’t go right, I turn off. Why
beat my brains out?
b) I usually finish what I start.
c) If I make up my mind to do something, I
don’t let anything stop me.

10. Can you keep records?
a) Records are not important. I know what needs
to be known without keeping records.
b) I can, but it’s more important to get the work
out than to shuffle numbers.
c) Since they are needed, I’ll keep records even
though I don’t want to.

WHAT IS AN ENTREPRENEUR?
 “An entrepreneur is someone who perceives an
opportunity and creates an organization to
pursue it.”
 “The entrepreneurial process involves all the
functions, activities, and actions associated with
perceiving opportunities and creating
organizations to pursue them.”
Bygrave, William D., and Andrew Zacharakis, eds. The Portable MBA in Entrepreneurship, 3rd
Edition. Hoboken:John Wiley and Sons, Inc., 2004. Page2.

Personal Factors
– Achievement
– Locus of control
– Risk Taking
– Education
– Experience
– Job dissatisfaction
– Job loss
– Age
– Commitment
– Vision

Environmental Factors
– Opportunities
– Role Models
– Creativity
– Competition
– Resources
– Investors
– Government Policy

Sociological Factors
– Networks
– Teams
– Parents
– Family Responsibilities
– Role Models

“The 10 D’s”
Dream – A vision of the future
Decisiveness – No procrastination,
quick decisions
Doers – Speedy implementation of
idea
Determination – Commitment, stick-
to-it
Dedication – Tireless efforts

“The 10 D’s”
Devotion – Love what they do
Details – Stay on top of it
Destiny – Make things happen for
themselves
Dollars – Money measures
success
Distribute – Delegate critical tasks

IS THAT ENOUGH?
Only about 50% of small
businesses are still
trading after their first
three years from initial
set up.
http://www.bizhelp24.com/small_business/business_failure_introduction_1.shtml

Reasons for Failure
Lack of Funds
Financial Control Issues
Development Problems
Lack of Skills
Marketing Issues
Sales Problems
Etc.
www.bizhelp24.com/small_business/business-failure-print.htm

“The 9 F’s” for Success
Founders – good entrepreneur
Focused - specialize
Fast – make quick decisions and
implement them ASAP
Flexible – open-minded response
to change

“The 9 F’s” for Success
Forever-innovating
Flat – few management levels
Frugal – keep costs down
Friendly – to workers, customers,
and suppliers
Fun!

NAME THAT FOUNDER!
Randy Schilling – Quilogy
Michael Dell – Dell
Jeff Bezos – Amazon.com
Fred and Marilynn Wilke – Sports Stats for STLtoday.com

Fred & Marilynn Wilke
Sports Stats

Fred & Marilynn Wilke
Sports Stats
 Both born in St. Louis, MO
 Had been married for 8 years
 First child one-year old
 Fred was in the military & worked full-time
teaching at Florissant Valley CC
 Marilynn was a homemaker
 Bought a house, computer, and got out of
the military all in the same day

Personality Characteristics
Fred
 Collaborative
Manager
 Workaholic
 Hard Worker
 Life-Long Learner
 Competitive
 Analytical
Marilynn
 Trusts her gut feelings
 Visionary
 Creative – “Thinks
outside the box”
 Loves to read
 Persistent
 Outgoing

Sports Stats
 Began the company in 1977 in their
basement
 Cost of a new computer?
 Fred wrote the programs & Marilynn
supported the company logistically
 Everything was saved on a floppy disk
 Had 14 Part-time & 1 full-time employee
 Several people tried to implement this idea

Sports Stats
 Previously, the only statistics
available were for football
 Changed to give play-by-plays &
achievements of several different sports
 Sold the statistics to the local newspapers
 Paid through advertisements & a small
amount from newspapers
http://prepsports3.stltoday.com/photo/top.
htm

Sports Stats
 Relied on coaches to call
and report game highlights at no charge
 In exchange, coaches would receive a
weekly scorebook for local schools
 Statistical information used only in
professional sports – not in colleges yet
 Extremely popular immediately
A Happy Shamrock team poses with
their 1A Championship trophy.
Fred Wilke
Photo

Challenges
 Convincing coaches to
call-in stats
 Strict 11 p.m.
deadlines with the
local newspapers
 No cell phones!
 Making a profit
 Getting advertisements
 Working with attorneys

Selling the Company
 1981 sold the company to the Post-Dispatch
for $225,000 – now worth millions
 Didn’t have the specific databases & name
recognition as the Post
 Promised Fred a part-time job
 Incorporated into Stltoday.com in 1992
 Coaches still call in stats
 Today they report on 40 different sports

Success of
 St. Louis’ #1 Viewed Website
 Reaches 35% of online adults per month¹
 Average monthly page views 23.1 Million
for 2003¹
 Prep Sports website averaged 60,000 total
visitors in 2003²
 Prep Sports website averaged 1.5 Million
page views in 2003²
¹ Pulitizer.com http://media.corporate-ir.net/media_files/NYS/PTZ/presentations/ptz_06212004a/sld001.htm, viewed Nov. 6, 2004
² Sports Stats, Fred Wilke, Nov. 6, 2004

Sports Stats Total Page Views¹
Sports Stats Total Page Views 10/2001 through 9/2004 by Month
0
500000
1000000
1500000
2000000
2500000
3000000
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
10/01-9/02 10/02-9/03 10/03-9/04
¹Sports Stats, Fred Wilke, Nov. 6, 2004

Randy Schilling
 St. Charles High School in 1981
 University of MO-Columbia BSEE 1985
 He was a typical ‘B’ student
 Worked at Illinois Power 1985-1990
Electrical Engineer
 University of IL-Springfield MBA 1989
 Worked at Grant Thornton Consultant 1990-
1992
 Began Solutech, Inc. in August 1992

Randy’s Personality
Characteristics
 Great programmer
 Mixture of left & right brained
 Strong blend of technical & creative traits
 Competitive
 Persistent
 Analytical
 Life-long learner

Quilogy Timeline
1992 1994 1996 1997 2002 2004 Future
Revenues
$40,000 $1.5 M $6.5 M $42 M $35.6 M $45 M $100 M
Employees
1 10 50 100 450 520 1,000

Clients include:
 Chicago Brookfield Zoo
 Seattle’s Children's
Hospital
 U.S. Air Force, Air Mobility
Command
 Nebraska Public Schools
 St. Charles City-County
Library District
 Mario Olives

Quilogy Focus
 Full Service e-Business
Professional Services
* eStrategy
* Creative
* Technology
* Hosting
* Technical Training
 Secondary Markets
 Vendor Certified

Quilogy Focus
 Main focus on Healthcare, Manufacturing
and the Public Sector
 Quilogy has 14 offices for the nationwide
delivery of IT services.
 50-100 employees per office

Randy’s Quote
“Don’t be Afraid
to be Crappy,
But Don’t Stay
Crappy”

Quilogy’s Goals
 #1 goal is to become a $100 Million
Company
 He wants to increase the number of offices
& employees to eventually 30 offices &
1000 employees
 Demand a higher cost for a unique product
 Increased service
 He’s never afraid to change his
business model or strategies

Intro
 Jeff Bezos is the mind behind
Amazon.com
 World’s largest “e-tailer”
 Why Amazon.com?
• Simple idea
 Selling books online
• Very IT dependent
 Would not be possible without the current
advances in technology

Why the Name Amazon?
 The Amazon is one of the world’s
largest regions
 Bezos wants to offer the “Earth’s
Biggest Selection” of products
(Fastcompany.com, Deutshcman, 2004)

Bio
 The son of Miguel Bezos, an Exxon
Corp. Executive
 At 14 dreamed of becoming an
astronaut or physicist
 Studied electrical engineering and
computer science at Princeton
• Graduated 1986
• Summa Cum Laude
(Business & Company Resource Center 2004)

Bio
 Worked for FITEL
• High-tech start-up company
 Worked for Bankers Trust Company
• Became company’s youngest VP in 1990
 Worked for D.E. Shaw & Co. 1990-
1994
• Became their youngest Senior VP in
1992
 Left very successful career on Wall
Street (Business & Company Resource Center 2004)

Company profile
 Launched July 1995
 Virtual online retailer of various
items including books, music, DVDs,
videos, electronics, software, video
games and home improvement
products.
 7,800 Employees
(Business & Company Resource Center 2004)

Company profile
 Jeff Bezos
• Chairman
• President
• CEO
 Richard Dalzell
• CIO
(http://www.hoovers.com/free/co/factsheet.xhtml?COID=51493)

Company profile
 Annual Sales
• $5,263.7 M in sales (2003)
 Top Competitors
• eBay
 $2,165.1 M in sales (2003)
• Barnes & Noble
 $5,951.0 M in sales (2003)

Company profile
 Annual Earnings
• $35.3 M in net income (2003)
 Top Competitors
• eBay
 $441.8 M in net income
• Barnes & Noble
 $151 M in net income
 52% annual growth

Strategy
 “We watch our competitors, learn
from them, see the things that they
were doing for customers and copy
those things as much as we can."

Personality
 Extrovert
• Talks with employees at every chance
• Employees see him as a colleague, not a boss
 Persistent
• Faced with small profits, and pessimistic
stakeholders
 Optimistic
• There have been many setbacks
 Adaptive
• Willing to try new things

Influences
 Grandfather
• Learned if you put your mind to it, you
can do most things, even the things you
don’t know how to do
 Dad
• Hardest working person he knows
(Darwin Magazine, Levinson, 2004)

Quotes
 “Obsess about customers, not the
competitors.”
 “Work hard, have fun, make history.”
 “The thing about inventing is you
have to be both stubborn and
flexible. The hard part is figuring out
when to be which!”

The Future
 Jeff is unpredictable.
 If he has an idea that
he feels might work
then he will try it.
 Amazon will continue to
offer new products and
explore different
venues.

Michael Dell
Founder of Dell Computers
http://ye.entreworld.org/1-2001/michael_dell.cfm

Dell The Business
 A computer company that started in 1983
 Dell Computer Corporation started in 1984
 Today one of the largest computer
companies on the planet
http://www.cio.com/archieve/091597/dell.html, http://www.entrepreneur.com/article/0,4621,295495-2,00.html

Stock Information
 Dell vs. Gateway

Some background on Michael Dell
 Born in Houston Texas on February 23
1965
 His father was an orthodontist and his
mother was a financial advisor
 In second grade started his first business,
selling candy
http://en.wikipedia.org/wik/Michael_Dell

Early years
 Started and managed own checking
account at 9
 In 3rd grade he applied for a GED
 At 12 sold stamps through auctions, made
over $2000
http://ye.entreworld.org/1-2001/michale_dell.cfm

The High School Years
 At the age of 15 bought himself a
computer
 Starting upgrading and selling computers
to his friends
 At 16, he got his 1st real job working for the
Houston Post

Beginning of Dell
 Found out sales people didn’t know what
they were selling
 Went to college to with 2 computers and a
BMW
 Started selling computers out of dorm
room
Dell, Michael with Fredman, Catherine, Direct from Dell, HarperCollins Publishers

Michael’s Decision
 "I firmly believe that if you're going to do
something, you should do it better than
anyone else," Michael says
 Decided he could make them cheaper,
better and have better customer service
 He found he could make a $3000
computer for $700

The Beginning of Something Big
 Hid computers and parts in bathroom
when parents visited
 The dorm room business taking up to
much time so dropped out of school
 Used BMW as backing for a loan to start
Dell computers (mail order)
 Took only 5 days to deliver computer
http://ye.entreworld.org/1-2001/michael_dell.cfm http://ye.entreworld.org/1-2001/michael_dell.cfm

Michael Quits School
 Parents though he was a quitter
 His parents quickly changed their minds
after seeing first financial statement
“He invested $1000 in discounted PC parts he
bought from a retailer and used them to
upgrade some old PCs. During his first month
of business, Dell made $180,000 in sales”
www.vault.com

Some Firsts in the Business
 At the age of 27 he was the youngest
person to be a CEO of a Fortune 500
company
 Has not set up retail stores, sells online,
over the phone and by mail order.
 Keeps only 8-12 days of components on
hand and tries to buy when cheap
http://ye.entreworld.org/1-2001/michael_dell.cfm, Dell, Michael with Fredman, Catherine, Direct from Dell, HarperCollins Publishers

View of Business
 “It’s through curiosity and looking at
opportunities in new ways that we’ve
always mapped our path at Dell. There’s
always an opportunity to make a
difference.”
 “Our business is about technology, yes.
But it’s also about operations and
customer relationship.”
http://www.woopidoo.com /business_qoute/authors/michael-dell-quotes.htm

Dell on Dell
 Get involved
 Mobilize your people to a common goal
 Keep on learning

Personality traits
 “How do you keep your entrepreneurial
spirit alive?”
 “What was your dream when you started
out?”
 “What is your legacy? “
http://www.entrepreneur.com/article/0,4621,295495-2,00.html

Accomplishments
 Here’s a few:
 Entrepreneur of the Year
 Man of the Year
 Top CEO in American Business
 CEO of the year
 And many more

What’s next
 "Today's Internet is more like the Ford
Model T," he remarks. "It's functional, it's
revolutionary for its time, but it will
dramatically evolve over the next ten
years."
 Stepping down as CEO
http://ye.entreworld.org/1-2001/michael_dell.cfm, http://www.signonsandiego.com/uniontrib/20040305/news_1b5dell.html

Characteristics of Successful
Entrepreneurs…
Leadership skills
Passion
Moderate risk-takers
Need for achievement
Innovative/Creative
Motivated
Hard-working
Competitive
Analytical
Persistent
Outgoing
Optimistic
Adaptive
Planning

COMPARISON
Attribute
Sports
Stats Quilogy Amazon Dell
Age Mid to late 20's, early 30's 18
Competitive Niche Market Yes Yes
Education Yes Yes Yes No
Experience Yes Yes Yes Yes
Family Support Yes Yes Yes Yes
Over-Achiever Yes Yes Yes Yes
Passion/Vision Yes Yes Yes Yes
Risk Taker Yes, to a degree

A. Give yourself 0 points
B. Give yourself 6 points
C. Give yourself 10 points

Test Results.
 100 - Excellent. A perfect score. You
are a born entrepreneur. If you are
not presently running your own
business you should definitely start
one -- the sooner the better. You are
on the way to fame and riches.

Test Results.
 91-99 - Very good. You definitely
have what it takes to succeed in a
business of your own. Don't hesitate,
your way to business success is wide
open.

Test Results.
 72-90 - Good. You have the qualities
of a successful entrepreneur with
some weak spots. You should be able
to cover your deficiencies by either
retraining yourself or hiring someone
with the necessary skills.

Test Results.
 40-71 - So so. The prospect of your
success in a business of your own is
questionable. You have some
deficiencies that might out-shadow
some good traits you have. If you still
want to go on with it, be sure to call
up all the persistence you can get.
You are going to face some tough
adversity on the way.

Quiz Results.
 40 and below - Unsatisfactory.
Forget your dreams of being your
own boss, it's not for you. You'd
better keep your comfortable and
secure job. Why bother with all the
risks and hustles of starting a
business?

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