IT Entrepreneurs Amanda Koehler, Dee Dee Veal, Balazs Klanicza, Kesorn Tongwan 1 Self-Portrait of...

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IT EntrepreneursAmanda Koehler,

Dee Dee Veal,

Balazs Klanicza,

Kesorn Tongwan

Self-Portrait of Poly, Monet

Objectives Understand the evolving definition of an

entrepreneur Learn about the characteristics and demographics of

entrepreneurs Meet real entrepreneurs from around the globe Examine the large amount of research that has been

conducted on entrepreneurs and compare it to the entrepreneurs we interviewed

Find out if you have what it takes2

Entrepreneur French origin – “to undertake” (13)

Richard Cantillon (1730) – “self-employment of any and every sort”, including beggars and robbers (22)

One who organizes, manages and assumes the risk of a business or enterprise (13)

Peter Drucker, modern management theorist - “Shifts economic resources out of an area of lower and into an area of higher productivity and greater yield,” (22)

Qualities of an Entrepreneur Inner drive to succeed Strong belief in

themselves Open to change Competitive Highly motivated

Initiative Commitment Leadership Self-direction Optimism Hard work

(11,12,13)5

Demographics: Age Greater levels of experience,

superior personal networks, and a stronger financial asset base

Entrepreneurship increases with age (2002) 21% of the working

population, age 66+ 11%, age 25-54 8%, age 25-34

Pablo Picasso’s Old Guitarist(17)6

Demographics: Gender Women owned firms have a higher probability of

closure and a lower probability of becoming profitable (Study of 2,994 US companies, 1993)

In 2000, more men than women in the US were self-employed

Cultural Influences

In a review of 21 empirical studies, Hayton, George and Zhara found that cultures that value risk taking and independent thinking (such as the United States, Singapore and many European countries) have more entrepreneurial activity

Cultures that value conformity, group interests and control (many Asian and Islamic nations) over the future have less

Guess the Entrepreneur

9Bill Gates, Microsoft

Meet Real Entrepreneurs from Around the WorldMatthew Porter,

St. Louis, MO

Akom Thongloy,

Thailand

Csaba Zajdó,

Hungary

Matthew Porter Owner and founder of Contegix St. Louis, MO 32 years old

Background Introverted, logical middle child Grandpa bought him his first computer when he was

six years old Sold his first commercial software at age seven CBC High School graduate Began as a Pre-Med Student at St. Louis University Changed his major to computer science after the

first semester

Career Background Started a small business computer consulting

company in 1998 Sold the customer base to pay for his wedding Worked in industry to learn the right and

wrong ways to operate Managed a software development project that

was shelved when the company was acquired by a competitor

Contegix With his wife’s help, he decided it was time

to start his own business Founded Metissian with his friend Craig,

while still working full time at Demand Management

Contegix began because customers wanted and needed hosting services

Csaba Zajdó Co-owner, founder and CEO of WebShop-

Experts Debrecen, Hungary 25 years old

Csaba’s Background Extroverted, logical Very talented in Math and Computer Sciences Competitive personality Local high school MSc Degree in Business Administration at

the University of Debrecen Programming-mathematic studies, graduation

in 2008 or 2009

Business icon: Bill Gates First thought of starting a business at age 14 Early plans at the age of 18 Started his company in the beginning of 2006,

at the age of 23

Csaba’s Background

No prior work experience, started in the last semester of business studies

He started the company with almost no money and experience

Founded the company with his brother with minimal financial help from their parents

Csaba’s Career Background

WebShop-Experts

Founded in the beginning of 2006 In 6 months, he got an office equipped and

had his first employee After one year, he had 5 employees Currently, 14 people on his team with good

potential for further growth

Akom Thongloy Owner and founder of Extreme Solution Bangkok, Thailand 30 years old

Akom’s background Extroverted, self-directed Grew up in agricultural family Graduated with a Bachelor’s degree in

Electronics Engineering Interested in Web designing and Visual Basic

Akom’s Career Background Worked in an IT company for 2 years Together with his former classmate, he started

his own company, Extreme Solution Started serving clients who he had known

since he worked in former company.

Extreme Solution Founded in 2005 Focus on customer service Decentralized organizational structure Profit increased around 40% since first year

Hobbies of Entrepreneurs

Matthew Porter, Contegix

Csaba Zajdó,

WebShop-Experts

Akom Thongloy, Extreme Solution

Weekly yoga class with wife Spend time with three kids Write code for fun

Body building Starcraft (3x WCG) Girlfriend

Play guitar Surf the InternetRead a book

26Jeff Bezos, Amazon

Hatch & Zweig Study Sample: Over 50 In-depth interviews with

entrepreneurs from the Chicago area Findings:

Middle to Upper Class families Post secondary degree unrelated to business field Different stages of onset Modest performers in other aspects 5 key personal characteristics

The Stuff Entrepreneurs are Made of

RISK TOLERANCE

DESIRE FOR CONTROL

DESIRE TO SUCCEED

PERSEVERANCE

DECISIVENESS

ENTREPRE-NEURIAL SPIRIT

GENERATION OF BUSINESS CONCEPT

BIRTH OF THE FIRM

Northeastern University Study School of Technological Entrepreneurship Sample: 202 U.S. based entrepreneurs

(9) 30

Were your parents, grandparents, or siblings entrepreneurs?

Yes38%

Northeastern University Study

Yes33%

Our Interviews

At what age did you launch your first venture ?

Childhood

Our Interviews

Childhood

18 - 30

Childhood

18 - 30

30 -40

What was your biggest inspiration?

20% Myself

Family

IndustryIconWorkExperience

Our Interviews

Myself

Family

IconIcon Myself

Family

What were your biggest motivators towards starting your own venture?

PeerSuccesses

WorkExperience

HigherEducation

InnateDrive

Our Interviews

Innate

WorkPeers

How fearful were you that your first venture would not succeed?

Fear delayedventure

Significantfear

No fear

Some fear,but confident

Our Interviews

Some fear

No fear

Significant

Fear delayed

Do you consider yourself a risk taker when making big decisions that deal with your business?

5% 5%Yes

Somewhatcautious

Big decisionskeep me up atnightI avoid bigdecisions 100%

Our Interviews

Somewhat

Results of SurveyQuestion Survey Majority

ResponseInterview Majority

Response

Family member Entrepreneur No No

First Venture During Childhood Age 18-30

Biggest Inspiration Family Mixed response

Biggest Motivator Innate Drive Work

Fear of failure Some fear, but confident

Some fear, but confident

Risk taker Somewhat cautious Yes

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Donald J. Taffi ResearchMatthew Porter,

Contegix

Csaba Zajdó, WebShop-

Experts

Akom Thongloy,

Extreme Solution

Unusually well-developed ego

Detail oriented, perfectionists who rarely develop personal intimacy in their relationships

Endowed with inexhaustible reservoir of energy

Nothing is done soon enough, everything is a crisis

Tend to be contingency thinkers, generally six months or longer ahead

Unwilling to surrender the need for complete control

Above average intelligence; tend to see the “big picture”

Higher than normal level of emotional stability

Strong desire to succeed, passion for product or business

Calculated risk takes, not gamblers

Taffi’s Conclusion “It takes one to know one”

40Mark Zuckerberg, Facebook

Start Up Cost One of the most intimidating aspects of starting

your own business in any industry Microsoft’s Small Business Center recommends

saving enough to cover your initial expenses plus six months worth of operating expenses

Interviews: Start Up Costs

Matthew Porter, Contegix: Initially none, because still working full time. Then when money was needed for expansion, they sold an interest to a minority shareholder company

Csaba Zajdó, WebShop-Experts: Almost nothing, but foundation costs. Needed only a computer and knowledge (rather business skills than technical!)

Akom Thongloy, Extreme Solution: Initially none. Reinvested profits to expand the company.

Location, Location, Location West and Bamford studied two recent literature

reviews to identify the characteristics present in communities that foster entrepreneurial growth

What factors created the Silicon Valley successes?

Universities Government Business Human Resources

Social/Financial Structure

Community Resources Infrastructure

Interviews: LocationMatthew Porter,

St. Louis, MO

Csaba Zajdó, Debrecen,

Hungary

Akom Thongloy, Bangkok,

Thailand

Pros Moderate wages;

Low cost of living; Family environment

Cheap labor force;

Huge opportunities; Globalized market

Center of Business;

Close to customers

Cons Conservative money Highly competitive because of low start up costs

Highly competitive

Perfect Timing MobileStar’s portable data

network failure Interviews:

Matthew Porter, Contegix – fate led to good timing

Csaba Zajdó, WebShop-Experts – Cool e-commerce, everyone is in the hype of internet

Akom Thongloy, Extreme Solution – Initial customers encourage to start own company

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Now is the time! Sales figures for tech leaders, like Microsoft

and Intel are up Stock prices are up Venture capital investment increase 8% in 2004, and

similarly in 2005 and 2006 Amazing stories like that of Google show that

companies are making a come back from the dot-com burst

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Acting as CEO According to Mark

Henricks in Entrepreneur Magazine, it may be best to demote yourself and place someone with experience in your company’s top position

Role of Entrepreneurial CEO

The remaining 12% is devoted to “Playing” activities including negotiating, technical grasp of firm, monitoring employees, and contacting suppliers, customers and other related parties.

Interviews: Acting as CEO Matthew Porter, Contegix: “I don’t have an MBA,

but I know when to shut up and listen to what customers want and balance that with our core competencies.”

Csaba Zajdó, WebShop-Experts:“Marketing and management - that's the two main parts where I concentrate my efforts.”

Akom Thongloy, Extreme Solution: “Empowering employees is the way to keep them with the company”

Importance of Education1. Dropouts: $131.36 Billion

*Bill Gates Microsoft 56 Billion*Paul Allen Microsoft 18 Billion*Larry Ellison Oracle 21.5 Billion*Steve Jobs Apple 20 Billion*Michael Dell Dell 15.8 Billion*Mark Zuckerberg Facebook 1 Billion (2006 rejected buyout offer)*Kevin Rose Digg 60 Million+ (Business Week August, 2006)

2. Stanford University: $38.9 Billion*Larry Page Google 16.6 Billion*Sergey Brin Google 16.6 Billion*David Filo Yahoo $3 Billion*Jerry Yang Yahoo 2.2 Billion*Reid Hoffman Linkedin 500 Million (Digg, Technorati, Facebook; original PayPal board member)

3. Tufts University: $10.2 Billion 4. Princeton University: $3.6 Billion 5. University of Illinois at Urbana-Champaign: $600 Million 6. Indiana University of Pennsylvania: $500 Million 7. Claremont Colleges: $30 Million

Interviews: Education Matthew Porter, Contegix: BS, Computer Science

Education was crucial. Not because of textbook knowledge, but learning how to think (develop professionalism and views).

Csaba Zajdó, WebShop-Experts: MSc in Business Administration and ongoing MSc studies in Programming-Mathematics Learned the basics of most of the important fields

Akom Thongloy, Extreme Solution: BE, Electronics Important to get degree, because it gave him credibility in the eyes of

his customers.

Do You Feel “Cool”? David Margulius of InfoWorld said in a recent article that

“Entrepreneurship has become cool again, if not obligatory, for IT.”

Interviews: Matt Porter, Contegix

No need for “Rockstar CEOs” Tells people, “I work for Contegix”, not “I own it!”Csaba Zajdó, WebShop-Experts It is rather “uncool” in Hungary Usual for everyone, who can make a website to make his

own company, and start earning "big money" Akom Thongloy, Extreme Solution Feeling more proud than cool

53Larry Ellison,

Oracle

Marriott School Entrepreneurial Test Audience results? If you scored +35 or more, you have everything going for you. You ought to achieve spectacular

entrepreneurial success (barring acts of God or other variables beyond your control). lf you scored +15 to +34, your background, skills and talents give you excellent chances for

success in your own business. You should go far. If you scored 0 to +15, you have a head start of ability and/or experience in running a business and

ought to be successful in opening an enterprise of your own if you apply yourself and learn the necessary skills to make it happen.

If you scores 0 to -15, you might be able to make a go of it if you ventured on your own, but you would have to work extra hard to compensate for a lack of built-in advantages and skills that give others a leg up in beginning their own business.

If you scored -15 to -43, your talents probably lie elsewhere. You ought to consider whether building your own business is what you really want to do, because you may find yourself swimming against the tide if you make the attempt. Another work arrangement—working for a company or for someone else, or developing a career in a profession or an area of technical expertise—may be far more congenial to you and allow you to enjoy a lifestyle appropriate to your abilities and interests.

Myers Briggs Type Indicator Examines preferred styles of perception and judgment Entrepreneurs are more intuitive, thinking and

perceptive Managers are more sensing, feeling, and judging http://www.funeducation.com/products/testmaster/

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Suggestions for Aspiring Entrepreneurs Matthew Porter, Contegix:

Pay attention to the market, but don’t allow it to be your sole indicator

Do an internship while you are a student to gain experience

Understand what you are getting into – mentally, financially, and intellectually

Suggestions for Aspiring Entrepreneurs Csaba Zajdó, WebShop-Experts

Learn marketing and management Maybe get some experience somewhere first. He

didn't have any, and sometimes he feels that maybe it wouldn't have hurt being employed first. But he has got over his inexperienced phase successfully, so it does not really matter any more

Suggestions for Aspiring Entrepreneurs Akom Thongloy, Extreme Solution:

Know the direction of your company Be able to estimate the market share and competitors Understand the customer demand

conducted on entrepreneurs and the entrepreneurs we interviewed

Conclusion Research on entrepreneurs offers various

conclusions Location of entrepreneur also affects the

business environment Don’t be afraid to start your own business!

References1. Microsoft Small Business Center

http://www.microsoft.com/smallbusiness/resources/expert/strauss102005.mspx2. Henricks, Mark. “Bringing in a CEO.” Entrepreneur Magazine March 2007.3. Fried, Vance H. et al. “The Entrepreneurial CEO as "Coach/Player.”’ The

Journal of Private Equity. London: Summer 2006. Vol. 9, Iss. 3; pg. 35, 8 pgs.4. New York Habit Blog. “The Top Ten Colleges of Today’s Richest Tech

Entrepreneurs.” http://richohanian.wordpress.com/2007/04/11/the-top-10-college-degrees-of-todays-richest-tech-entrepreneurs/

5. Margulius, David L. “Entrepreneurial IT.” InfoWorld 28 (2006): 21-27.6. West, G. Page III and Charles E. Bamford. “Creating a Technology-Based

Entrepreneurial Economy: A Resource Based Theory Perspective.” Journal of Technology Transfer 30 (2005): 433-451.

7. Yarzebinski, Joseph A. “Understanding and Encouraging the Entrepreneur.” Economic Development Review 22 (1992).

References Continued8. Hatch, Jim, and Zweig, Jeffrey, “What is the stuff of an entrepreneur?” Ivey

Business Journal, Nov/Dec 2000, Vol. 65, Issue 2, pp. 68-72.9. “New Survey Shows Two-Thirds of Entrepreneurs Born not Bred…” PR

Newswire US, 2006.10. http://www.neu.edu/sote/Documents/NEU%20STE%20Born%20v%20%20Bred

%20Survey%20Results.pdf?u=618982550144 viewed September 19, 2007.11. http://www.woopidoo.com/articles/geimure/entrepreneur-article.htm, viewed

October 3, 2007.12. Garrett, Sheryl. “The True Entrepreneur.” Financial Planning. May 2006. pp.

115-116.13. http://en.wikipedia.org/wiki/entrepreneur viewed September 27, 2007.14. http://marriottschool.byu.edu/cfe/startingout/test.cfm viewed October 3, 2007.15. Umesh, U.N. et al. “Creating Successful Entrepreneurial Ventures in IT.”

Communications of the ACM 48 (2005):82-87.16. Caird, Sally P. “What Do Psychological Tests Suggest About Entrepreneurs?”

Journal of Managerial Psychology 8 (1993): 11-20.

References Continued17. Weber, Paull and Schaper, Michael. “Understanding the Gray Entrepreneur.” Journal of

Enterprising Culture 12 (2004): 147-164.18. Hayton, James C. et al. “National Culture and Entrepreneurship: A Review of Behavioral

Research.” Entrepreneurship Theory and Practice (2002): 33-52.19. Robb, Alicia M. “Entrepreneurial Performance by Women and Minorities: The Case of New

Firms.” Journal of Developmental Entrepreneurship 7 (2002): 383-396.20. Umesh, U.N. et al. “Current Issues Faced by Technology Entrepreneurs.” Communications

of the ACM 50 (2007): 60-66.21. Interview with Matthew Porter, CEO and founder Contegix. Interviewed September 18,

2007. St. Louis, MO. 22. Interview with Akom Thongloy, CEO and founder Extreme Solution. Interviewed October

20, 2007. 23. www.extremesolution.co.th24. Long, Wayne. “The Meaning of Entrepreneurship.” American Journal of Small Business

VIII (1983).25. Interview with Csaba Zajdó, CEO and founder of Webshop-Experts. Interviewed October

24, 2007. Debrecen, Hungary