This Golden Era for Entrepreneurs UBC Sauder School of Business

Lecture to the MBA class: Growing and Exiting a Venture at the UBC Sauder School of Business on why I believe this is a ‘Golden Era’ for entrepreneurs.

Topics include:

  • There has never been a time before when it was so easy for so many entrepreneurs,
  • to create such valuable companies on so little capital,
  • and sell them so early for so much money
  • The biggest change in the 21st century
  • Big companies and startups today
  • What’s working in our economy
  • M&A is the transition from innovation to growth

Double Your Exits – 6th Angel Summit Dunedin, New Zealand

I believe Angel Investors could double their number of exits. This would double the returns on their portfolios. Yes, double. This video is from the 6th Annual Angel Investor Summit, Dunedin, New Zealand.

Double Your Exits includes:

  • OK, I’ll say it…Most angel investors lose money
  • We need to talk about it and I know we are already improving
  • Generating a consistent return on any investment portfolio isn’t easy
  • “To learn to be a VC takes 6 to 8 years and costs $20 million”
  • Angel investing is actually more difficult than Venture Capital investing
  • Angel investing is still quite new – about where Venture Capital was in the early 1980s
  • Our biggest problem is a lack of good data
  • From “An Evaluation of the Venture Capital Program in British Columbia”
  • 206 angel-backed companies 2001-2008: 0.5% did an IPO and 2.9% were acquired
  • Each direct observation is a company observed through its entire life cycle from startup to exit
  • Which usually costs $millions (all investors) and often takes 5 to 10 years
  • One data point = $millions and a decade -the 3rd reason learning to be an angel is difficult and expensive
  • The current exit rate for all angel-backed companies seems to be around 2 – 3%
  • I believe we can get to 5 – 6% which would more than double our returns
  • My hope is that we can get to 10% eventually
  • Here are some ways we can improve our probabilities of successful exits

Why Big Companies Can’t Innovate

When I was in grad school I co-founded a company that grew to become the second largest manufacturer of cable television headend equipment in the world. For the ten years after I graduated, I woke up every morning thinking of ways to out-innovate our two major competitors. We were a startup and they were both Fortune 500 companies. Ultimately, we succeeded because we were better at innovation. Today, the business I started in grad school is part of Cisco.

For over two decades, I’ve wondered about how our small startup was able to out-innovate our Fortune 500 competitors. Up until now, I didn’t really understand why that happens so often.

Like most startups we started in an under-served market

Our initial strategy, like a lot of startups, was to target a market segment that our huge competitors didn’t seem interested in. We initially focusing on building very economical and utilitarian products – Volkswagens to our competitors’ Chevrolets and Cadillacs.

Once we dominated the low end, the only place we could to go was up-market. We started building products in the Chevrolet class. That was when the upper end of our product line started to compete directly with our biggest Fortune 500 competitor. They had a 60 percent market share in the Chevrolet and Cadillac markets.

For several years we fought head-to-head over every order – our competitor using what we perceived to be every nasty sales trick in the book.

Around that time, the industry started to go through a period of revolutionary technological change. A fundamentally new technology, in our case fiber optics, gave us an opportunity to build a dramatically better and larger system. The engineers and entrepreneurs in us were fascinated by the opportunity.

After fighting it out against these much larger companies in the mid-range market, I was confident our more innovative design strategies would enable us to leapfrog the competition with a better product at the absolute upper end of the price and performance range. This was literally a “bet the company” strategy.

Trying to get the senior team onside – and failing

As the CEO, I could tell our team was far from confident about my ambitious goal. I thought the first crucial step was to develop consensus among our senior team.

For several weeks, I had discussions with my co-founder about how were going to develop this consensus. I spent several days developing an agenda for a two-day strategic planning retreat focused on this one objective. My plan was to demonstrate to our management team that we had consistently out-innovated our major competitor, beaten them on every cost performance measure that was important, and that we could pull off never-been-done-before innovation in technology to leapfrog their high-end products.

At the strategic planning retreat, through the afternoon and evening of the first day I worked as hard as I’ve ever worked to inspire confidence in the idea that we could out-innovate these two Fortune 500 companies. The conversation continued over a large investment in wine at dinner.

Despite my hard work, that evening the consensus was still that if we tried this, our much larger competitors would surely crush us.

The next morning, we started again over breakfast. I was hopeful that after sleeping on it, a few of the senior team would be willing to sign on to my goal. I wasn’t prepared for what happened next.

My co-founder, swayed by the persuasive arguments of the rest of the senior team, defected and joined the majority. I was completely alone. Nobody thought we could out-innovate these two enormous companies. Not one member of our senior team wanted to sign up to build the highest performance, most expensive product in the market.

Driving back with my partner, I asked what had caused him to lose faith. He said that after listening to the rest of the team, he also came to believe it was possible for us to actually out-innovate two giant companies who had dominated this upper end of the market for well over a decade.

I did what leaders often have to do

So I did what many CEOs have had to do before, and I went ahead anyway. For the next couple of years my first meeting every morning was with about 25 engineers who were executing the vision. To make a very long story short, we succeeded.

We knew we’d succeeded when we were selected by the largest cable company in the world at that time – Time Warner – to build a showcase new installation in New York. That was proof. We’d out-innovated our two major competitors – both Fortune 500 companies – again.

Soon after, our biggest competitor acquired our company. This was my first exit experience, and it literally changed my life. But one element that has stayed with me all these years was why such a large and well-funded company could be out-innovated by a little startup like ours.

Large companies are just bad at innovation  

The night after we signed the agreement to sell our company, we sat around a table with the senior executives from our new Fortune 500 owners. The most senior executive from the big company told me: “I’m so glad we’ve acquired your company because now I’ll be able to sleep at night.” He went on to say “You guys absolutely terrified us.”

For a few seconds, time stopped for me. I could not believe my ears. For the better part of a decade I had woken up every morning and prepared to do battle with this mighty Fortune 500 company. I just heard that we terrified them! How could that be?

As part of the transaction, I spent a year working inside the company who acquired us. It was even less fun than I imagined. But today, I’m glad that I did because I gained some insight into why we had succeeded in out-innovating them.

I was used to the fact that one of the competitive strategies our Fortune 500 nemesis used was simply to outspend us. In one case, they’d spent more than ten times what we’d spent to get to a similar level of product development. What shocked me was how casually they decided that they had failed and decided to scrap the entire project. During my year there, I kept trying to find someon who wanted to talk about why they’d failed and the things that were so obvious to me that they could have done differently. Nobody wanted to have the conversation.

In the end, I concluded that they were just shockingly bad at innovation.

 A decades-long puzzle

The question of why big companies are so bad at innovation has tortured me for decades. How can companies filled with smart people, deep experience, and seemingly infinite development resources be out-innovated by startups?

After my first exit I evolved from being an entrepreneurial CEO to being an investor and board member. What continued to surprise me over the following decades was how often I saw the same story play itself out over and over again. The small underfunded entrepreneurial companies regularly out-innovated their enormous, and infinitely better-financed, competitors. This didn’t happen just some of the time. It happened most all of the time.

Sure, I admit that a lot of smaller companies that weren’t good at innovation just died a natural death and were removed from the entrepreneurial ecosystem. That’s a natural normal Darwinian part of late 20th century economics.

I began to notice that when one of my investments succeeded, it was most often because their competitors were much larger companies.

At that stage in my career, I was still always surprised when a startup beat out a much larger company. But after I had seen this happen over and over again, I started to appreciate there was something more fundamental going on.

Each time I saw the same pattern I became more and more confident. I heard myself around the boardroom table assuring founders that they could beat out Fortune 500 companies.

Time and time again I told the story of not only how my own first company had beaten a Fortune 500 competitor by out-innovating them, but also recounted stories of other companies that I’d invested in who done exactly the same thing.

I also became more confident when I read that Josh Kopelman says, “Big companies suck at innovation and they know it,” And I’ve quoted him many times over the years.

But it still bothered me that I didn’t understand why this happened so consistently.

What it used to be like at big companies

I grew up in an era where everyone from my engineering graduating class wanted to go and work for one of the big companies. That’s where the really exciting projects seemed to be being done. That’s where we as undergrads perceived the innovation was happening. And that’s certainly where the big money was.

At that point we all thought that it was the big companies like 3M and Xerox that brought us the breakthrough innovations like Post-It Notes and photocopiers. The things that most of us labeled innovative seemed to have originated inside the large R&D facilities at these Fortune 500 companies.

Today, I see very few of the best and the brightest grads going to work in the big companies. It seems pretty obvious to me that the most innovative people are now choosing to work in startups and younger companies. I believe this is partly because it’s where they believe they have a better chance of creating some real wealth for themselves.

But, it’s also because most people now realize that the really interesting and innovative work today is more likely being done in startups, rather than large companies.

Maxwell Wessel on why big companies can’t innovate

Regardless of what I’d observed over all these years, I continued to be plagued by the question of why big companies can’t innovate. Until I read Maxwell Wessel.

Mr. Wessel is a member of Harvard Business School’s Forum for Growth and Innovation, a think tank devoted to developing the academic understanding of the innovation. He recently published a three-part blog series in the Harvard Business Review titled “Why Big Companies Can’t Innovate.”

In the first post in the series, Wessel argues that big companies are really bad at innovation because they’re designed to be bad at innovation. Successful mature companies do what they’re designed to do: create operational efficiency and deliver profit. Seasoned managers steer their employees from pursuing the art of discovery and towards engaging in the science of delivery. Such practices and policies minimize the types and scale of innovation that can be pursued successfully within an organization.

In the second post, Wessel offers four pieces of advice every executive should take into account if he or she wants to pursue transformational innovation. With the right approach, Wessel argues, big company innovation is possible. In the third and final post in the series, Wessel challenges big company executives who are passionate about innovation to commit to innovation not just in technology but in its business development and other aspects of its operations.

I highly recommend reading Maxwell Wessel’s three-part series in the Harvard Business Review and thank him sincerely for helping shed light on the place of innovation in the 21st century economy.

I’ll always be grateful to Maxwell Wessel for helped me finally understand why big companies just aren’t good at innovation.

This is a Golden Age for Entrepreneurs

I speak often to groups of entrepreneurs and investors about the fabulous opportunities that are available today to start, grow, and sell technology companies. I believe that history will call this period we’re now living through a Golden Age for Entrepreneurs.

The editor of Inc. Magazine recently wrote that I sounded vaguely Churchillian when I said, “Never before in history has it been so easy for entrepreneurs to create such valuable companies on so little capital and sell them so early for so much money.”

Today, most of my time is devoted to helping companies design and execute early exits. This is a great deal of fun and gives me a lot of personal satisfaction.

The wealth of opportunity for technology companies and the work I enjoy doing so much are possible because today’s innovation is not likely to be happened in the big companies. It’s happening in the startups and entrepreneurial young companies. And the big companies have never been more eager to acquire these companies at earlier and earlier stages – creating this huge shift towards early exits.

If we want our children and grandchildren to have good knowledge-based jobs and enjoy a standard of living anywhere nearly as good as the one that we’ve had, it’s important that we all better understand how changings in innovation and entrepreneurship are reshaping the 21st century economy.

The Exit Strategies Workshop 2011 Part 1
The Economy Has Changed

The first presentation at The Exit Strategies Workshop 2011 describes why this is a “Golden Era for Entrepreneurs.”

Highlights of Part 1 – The Economy Has Changed:

  • The whole world has changed.
  • The big tech companies aren’t creating wealth anymore – for their investors or employees.
  • Startups create ALL of the new jobs.
  • What does this mean for the startup economy? How can we make money?
  • Four changes that make entrepreneurs money:
  • 1. Innovation happens in startups
  • 2. Internet acceleration
  • 3. Capital efficiency
  • 4. Early exits
  • The biggest opportunity for entreprenuers is “innovation.”
  • Why innovation happens in startups not big companies.
  • Our 21st Century economy – “A Golden Era for Entrepreneurs.”

Being an Entrepreneur in the 21st Century

Being an Entrepreneur in the 21st Century Video Series

Presented at New Westminster, BC  ByzHub Meetup on October 20, 2011

The PowerPoint for this talk is available here.

Highlights of Being an Entrepreneur in the 21st Century – Part 1:

Being an Entrepreneur in the 21st Century Part 1

  • Everyone living here has enjoyed a very high standard of living.
  • Unfortunately, that’s changing. The economy has changed. The whole world is changing.
  • Why is this happening? Quite simply – global trade. The world has become a very small place.
  • What about the big, great technology companies? Like Intel, Microsoft and Cisco?
  • None of these companies have created any wealth for their shareholders for over 15 years.
  • Startups are now where the innovation happens, where the excitement is and where the wealth is being created.
  • The three big trends that entrepreneurs can capitalize on to create wealth today are:
  • Innovation, Internet Acceleration and Capital Efficiency
  • And the other good news is that there is no shortage of capital. Let me repeat that – no shortage of capital.

Highlights of Being an Entrepreneur in the 21st Century – Part 2

Being an Entrepreneur in the 21st Century Part 2

  • Uh, Oh. These are our friends and family! And we really need their money.
  • The solution: Fairness, Alignment and Governance. All built into the structure of the company.
  • Angel Co-Investment – groups of angels now often invest $5 to $10 million in a company over several rounds.
  • Tip: Why are they investing? Hint: This answer applies not just to the Friends and Family round but to all rounds.
  • I believe exits are the best part of being an entrepreneur or investor.
  • But it’s also the least well understood part of being an entrepreneur or private investor.
  • One of my life goals is to provide information to help entrepreneurs execute better exits.
  • Google wants even earlier exits!
  • Google said: “we do prefer companies that are pre-revenue”
  • Examples of these exits. Why this is happening now. How it looks from a Fortune 500 senior exec.

Highlights of Being an Entrepreneur in the 21st Century – Part 3

Being an Entrepreneur in the 21st Century Part 3

  • Many big companies have so much cash that it’s a problem.
  • A local really early exit: This is a Vancouver company but they asked me to keep their details confidential – for now.
  • How early can you sell? Why selling early is often the optimum time.
  • The most heartbreaking error I see is entrepreneurs waiting too long to start the exit. Here’s why.
  • I believe this time will come to be known as a “Golden Era for Entrepreneurs”
  • There has never been a time before when, it was so easy for entrepreneurs to create such valuable companies on so little capital,
  • And sell them so early for so much money

You can also watch this series on YouTube, starting with Part 1 here.

Many of these lessons are described in my new book on selling businesses for entrepreneurs and angel investors – www.Early-Exits.com.

If you enjoyed this video, you might also like Selling a Business Guide, Don’t Blow the Biggest Deal of Your Life, Early Exits – Your Golden Opportunity or Start at the End – Your Exit Strategy.

Being an Entrepreneur in the 21st Century -Part 1

Highlights of Being an Entrepreneur in the 21st Century – Part 1:

  • Everyone living here has enjoyed a very high standard of living.
  • Unfortunately, that’s changing. The economy has changed. The whole world is changing.
  • Entire countries are bankrupt and more are certain to follow. Lehman Brothers is gone. GM was bankrupt.
  • Why is this happening? Quite simply – global trade. The world has become a very small place.
  • This has had a dramatic effect on many big companies. For a Canadian example: Nortel.
  • What about the big, great technology companies? Like Intel, Microsoft and Cisco?
  • None of these companies have created any wealth for their shareholders for over 15 years.
  • Today big companies seem to be risky, and not very lucrative, places to work.
  • The best and brightest are now often working in startups. And startups have been creating all of the new jobs.
  • Startups are now where the innovation happens, where the excitement is and where the wealth is being created.
  • The three big trends that entrepreneurs can capitalize on to create wealth today are:
  • Innovation, Internet Acceleration and Capital Efficiency
  • And the other good news is that there is no shortage of capital. Let me repeat that – no shortage of capital.
  • Who actually finances startups? It’s not the Venture Capital funds.
  • Angel investors finance 27x more companies than VC funds
  • But the really big money is from Friends and Family. (Which can create some problems if we aren’t careful.)

Part 1 of the Being an Entrepreneur video series is also available on Youtube.

Click here for part 2 of Being an Entrepreneur in the 21st Century.

Being an Entrepreneur in the 21st Century -Part 2

Highlights of Being an Entrepreneur in the 21st Century – Part 2:

  • Uh, Oh. These are our friends and family! And we really need their money.
  • The solution: Fairness, Alignment and Governance. All built into the structure of the company.
  • More good news is that there are lots of angel investors.
  • Angel Co-Investment – groups of angels now often invest $5 to $10 million in a company over several rounds.
  • Tip: Why are they investing? Hint: This answer applies not just to the Friends and Family round but to all rounds.
  • I believe exits are the best part of being an entrepreneur or investor.
  • But it’s also the least well understood part of being an entrepreneur or private investor.
  • One of my life goals is to provide information to help entrepreneurs execute better exits.
  • The media always reports on the really big exits.The ‘new’ big story is the large number of smaller exits.
  • Google wants even earlier exits!
  • “90% plus of our transactions are small transactions…less than 20 people, less than $20 million”
  • Google said: “we do prefer companies that are pre-revenue”
  • Examples of these exits. Why this is happening now. How it looks from a Fortune 500 senior exec.

Part 2 of the Being an Entrepreneur video series is also available on Youtube.

Click here for part 3 of Being an Entrepreneur in the 21st Century.

Being an Entrepreneur in the 21st Century -Part 3

Highlights of Being an Entrepreneur in the 21st Century – Part 3:

  • Many big companies have so much cash that it’s a problem.
  • Big companies are not the only buyers. There are many more medium and small sized buyers.
  • And an even larger number of successful, wealthy, boomers who have realized they aren’t ready to retire.
  • A “weekender” is where entrepreneurs build an entire company in a weekend.
  • In 2009 when I wrote “Early Exits” I speculated that one day:
  • “They’ll probably define an early exit as selling the company before the end of the weekender”
  • That almost happened in November 2009.
  • A local really early exit: This is a Vancouver company but they asked me to keep their details confidential – for now.
  • This company was successful sold less than 12 months from startup and they hadn’t launched the product yet.
  • Here is a list of exits that happened in the 2 to 3 year from startup range – but they were also huge.
  • How early can you sell? Why selling early is often the optimum time.
  • The most heartbreaking error I see is entrepreneurs waiting too long to start the exit. Here’s why.
  • What works best today: startups innovate and create new jobs, angels and friends and family finance them.
  • Angels and friends and family finance them. If they really can’t be bootstrapped.
  • Big companies, and others, buy and continue to grow the businesses. Entrepreneurs and angels to it all again.
  • I believe this time will come to be known as a “Golden Era for Entrepreneurs”
  • There has never been a time before when, it was so easy for entrepreneurs to create such valuable companies,
  • On so little capital and sell them so early for so much money

Part 3 of the Being an Entrepreneur video series is also available on Youtube.

Click here to return to the Summary Page for Being an Entrepreneur in the 21st Century.

Startups Create ALL the Jobs

I was a little sad listening to President Obama talk about his job creation plans last week.

Most of us in North America would agree that our highest economic priority is finding ways to create more new jobs.

My take on Obama’s plans is that he proposes to borrow more, or tax more, to subsidize companies to hire the people who are least employable. He also plans to require companies to “buy American” as long as that won’t increase prices more than 25%. In my opinion, borrowing, taxing and raising prices are all going in the wrong direction.

I wish Obama, and our other elected leaders, could appreciate that startups create ALL the new jobs in our economy.

The Kauffman Foundation recently published some fascinating new research clearly showing that all of the job creation in the American economy over the past 30 years has come from startups.

Startups Create ALL the Jobs

From the Kauffman Foundation press release: “The study reveals that, both on average and for all but seven years between 1977 and 2005, existing firms are net job destroyers, losing 1 million jobs net combined per year. By contrast, in their first year, new firms add an average of 3 million jobs.” (A PDF of the study is also available at that link.)

If governments want to make a difference in creating jobs, they should focus on:

  • encouraging more people to become entrepreneurs, and
  • initiatives that will create more startups.

In a post last week, I discuss how big companies haven’t been creating wealth for their employees from share price appreciation. The graph above shows the same thing – in general, big companies in North America just aren’t prospering in the new, global economy. The economic growth, and wealth creation, is happening in startups.

Canada’s Most Valuable Company – RIP

My previous post discusses some of the reasons the best and brightest are leaving big companies to work in startups. One factor is that the employees in the world’s greatest software, chip and networking companies haven’t earned any significant wealth from options for over a decade. The result is that many of the most valuable employees have been choosing to work in startups where there is a better opportunity to do innovative work and make possibly make some significant equity gains.

The company examples in the previous article are some of the world’s very best, big companies – Microsoft, Intel and Cisco. This post continues on the same topic but looks at what happened to Canada’s most valuable company – Nortel.

100 Year Old Tech Company

Nortel was founded in 1882. In recent times, the company manufactured telecommunications and computer network equipment. Their customers were primarily telephone, mobile phone and cable TV companies.

In 2000, Nortel employed 94,500 people and had a market capitalization of $398 billion. Its value made up one-third of the entire TSX index – making it Canada’s most valuable company.

Most Valuable in the Country to Bankrupt in Under a Decade

By 2009 (less than 10 years later) Nortel was bankrupt. The bankruptcy trustee tried to find a buyer for the entire company but there were never any serious offers. Instead parts of Nortel were sold to the highest bidders.

How can this happen? How can a company that’s over 100 years old, employing close to 100,000 people, go from being the most valuable in our country to being bankrupt in less than a decade?

In my opinion, a large part of the reason is that the company was too big. Being a big company in the 21st century seems to have a similar outlook to being a big dinosaur 50,000 years ago. (That’s a good topic for another post or possibly a book. Perhaps a 21st-century version of Good to Great – but titled something like Big to Gone.)

Big Companies can be Risky Places to Work

When I graduated from university, many of my classmates in electrical and computer engineering went to work at Nortel.

I was determined to work in a startup after graduation. The majority of my classmates thought that was a risky plan. A good number of them wanted to work in a big company because they wanted stability and security.

Things didn’t work out as my classmates expected. It’s not just that almost all of the people who worked for Canada’s most valuable company lost their jobs. There was an even worse shock for those who worked for decades at Nortel, believing the contributions they were making to the company’s pension fund would support them during retirement.

There have been reports of $100 million missing from the employee’s Health and Welfare Trust and articles about billion dollar pension shortfalls. Even after Nortel’s assets were sold, pensioners got less than they had been promised and many actually had to pay back money they had already received.

This is a common story for people who thought they had retired after years in large organizations. Many other big companies have gone bankrupt recently. After the bankruptcy accounting was finalized, many retirees received terrible shocks.

Startups for Stability and Opportunity

The world sure has changed. When I speak to young graduates today, I rarely hear anyone talking about working in a big company. They want the benefits of working in a younger company – an organization of a size more compatible with our new hyper-connected, hyper-competitive world. Somewhere they can do innovative work and where their business destiny, and future economic prosperity, is in their own hands and those of their close work friends.

These young grads also appreciate that working in a vibrant, younger company gives them the best chance to make some exciting money on their shares or options.

The Best People are Leaving the Big Companies

How Often Do You See Smart People Leaving a Big Company?

Here’s a typical article from a couple of days ago: Microsoft Loses Key Public Sector, Visual Studio and Bing Execs (UPDATED)

The article starts off with: “Several high-ranking Microsoft executives exited the company this week.” And ends with updates from tweets about other senior people leaving in the same week.

This isn’t just happening at Microsoft, it’s common in most big companies.

When I Graduated Everyone Wanted to Work in Big Companies

Back when I graduated from university in the 1980s many of the best and brightest grads wanted to get jobs in the big companies. That’s where the research money was, where the excitement was, and where the opportunities were to do really innovative work.

The Big Companies was Where the Big Money Was

The trend accelerated in the 1990s. Getting hired by Microsoft or one of the other big companies usually meant you’d get a sizable stock-option grant. With the buoyant markets in the 1990s, those options often created truly staggering amounts of capital gains.

Microsoft was Built on Stock Options

In the latter 1990s, the ownership of Microsoft was split about 50-50 between people who had invested money in the company – outside shareholders – and people who had invested human capital – employees and founders. Back then, over 35% of Microsoft’s fully diluted shares were options held by employees. I’ve met many software developers, and mid-level managers, who cashed out of Microsoft with tens of millions of dollars. Senior managers made much more. Is it any wonder the most innovative and most productive people wanted to get jobs at companies like Microsoft?

Big Doesn’t Seem to Work Anymore

But look what’s happened over the last 10 or 15 years. If you factor out the dot com bubble in 2000, Microsoft’s share graph is essentially flat. The greatest software company on the planet hasn’t made any real money for its shareholders, or its employees, for over a decade.

What about the world’s greatest chip company? Here’s Intel’s stock chart over the last 15 years.

Or the world’s greatest networking company – Cisco? (My first company was acquired by Cisco when they bought Scientific Atlanta. Some of my friends still have Cisco options.)

In the 1990s a good option position at one of these companies could give you enough to retire. But for the last ten years, they haven’t created any real value at all.

And this is what’s happened in the best of the big companies. To see an example of a less than excellent company, read my next post about what happened to Nortel over the same period.

Today the Best and Brightest Work in Startups

Why none of these big, great tech companies has had any stock price appreciation is a complex question. But what’s much easier to see is the effect on recruiting and retaining the really good employees. That’s a pretty simple, direct relationship.

The best and brightest either aren’t joining, or aren’t staying in, these big companies. Today, the best and the brightest are going to work in startups. That’s where the excitement, innovation and big capital gains are now.

Start Up Now Keynote Speech at Enterprize 2009

Start Up Now – Keynote Speech at Enterprize 2009

As part of putting something back, I often speak to students about starting companies – ideally while they are still at university.

This is a video of my Awards Dinner Keynote speech at Enterprise 2009.Enterprise 2009 on February 7, 2009.

My goal was to encourage more students to start companies while they are still at university. I included some suggestions on best practices to maximize the probabilities of success.

Enterprize is Canada’s largest student business plan competition. This year’s event was a huge success and drew excellent teams of competitors from all across the country. There were about 400 people at the awards dinner.