close this bookVolume 3: No. 09
View the documentGovernment funding
View the documentEducation
View the documentIndustry news; research philosophy
View the documentComputists' news
View the documentJob opportunities
View the documentLibrary automation
View the documentLinguistics resources
View the documentEntrepreneurial tips
View the documentUpdates -- Jobs; DC; science fiction

Large companies are too busy servicing customers to react to technological opportunities. That's what opens the door for people like Steve Jobs. [Jon Bayless. Edward O. Welles; Inc., 1/93, p. 54.]

One reason for the growth of small and medium-sized companies (and the decline of large ones) is that manufacturing automation allows a small shop to turn out five times as many different products as it could 10 years ago. [Paul Reynolds, Marquette University. Ibid, p. 53.]

Building equity and then liquidity is harder than building a company. Only 10% of the 400-500 computer-related venture fundings each year will ever go public. Small businesses rarely grow beyond the interests of their proprietors, with cash flow and lifestyle valued more than business growth. That's why buyers might pay 2 to 5 times earnings for a private company but 10, 20, or even 30 times earnings for a public one. An easy way to get rich is to buy undervalued private companies that can pay for themselves in two years. All it takes is focus, drive, and a willingness to endanger your mortgage, marriage, and kids' education. Don't start a company unless that's how you have fun. [Dick Shaffer and Bruce Kirchoff. Ibid, p. 56.]

Software is a niche business. "I see $1M software companies that own two-thirds of a $1.5M niche." [Jeff Tarter, Soft.Letter. Ibid, 1/93, p. 54.]

Sometimes you have to go to the niche. Blackboard Technology Group (BBTech) does about 40% of its software sales outside the US and Canada. [Dan Corkill ([email protected]), 2/3.]

The number of "angels" willing to invest up to $50K in a business has grown in recent years. Some are active, others passive. (You might try letting an active donor interface with the others.) You don't want to offend an angel, so make sure everyone understands the options for cashing out or buying out. If you have to raise more money, talk with angels first to see if they want to contribute instead of having their equity diluted. [Bruce G. Posner; Inc., 1/93, p. 35.]

One of the best ways to start a software company is to find a client who will fund development while leaving you the rights to the product. Root Group (Boulder) got a $50K start that way without having to give up equity or interest. [Bruce G. Posner; Inc., 1/93, p. 35.]

"Technical entrepreneurs are detail-oriented; marketers are people-oriented." Mentors can help bridge that gap. DC-area services are available from the Dingman Center for Entrepreneurship, (301) 405-2144, $35/hour. George Mason University's small-business development center (SBDC), (703) 993-2130, offers free help from high-tech marketing professionals (or extensive help for $50/hour). GMU also has an incubator program with advice from high-tech international CEOs. Other DC-area SBDCs are at Howard University and Montgomery College. Professional associations and networking groups -- from your own industry or from non-competing industries -- can also help with marketing and legal advice. Technology Executive Roundtable, for instance, meets monthly for $400/year. (202) 331-0300 in DC. [Inc., 2/93, p. 47.]

Start-up clients of SBDCs average 209% revenue growth and about 60% job growth after just one year. Mature clients achieve more like 22% and 16%. Services include counseling, training, research help, export and expansion assistance, and help with tech transfer. The federal government contributes $67M to 56 centers. Increased state and federal revenues may be 18 times the cost. [Alessandra Bianchi, Inc., 2/93, p. 51.] (Starting an SBDC seems like a good way for a university to win future corporate donations.)