William Sahlman

Steve Jobs and Steve Wozniak created a motherboard early on in the mid-70s, but it was when they went out to raise money to do this at a larger scale that Mike Markkula, Mike Scott, and Arthur Rock joined the team. This team then created the business plan that was able to attract capital from investors, and this is the original Apple business plan which can be found online.
 
Transcript: "Well, everyone can get access to the original Apple business plan because it's if you just search for it, you know people I think have some mistaken impressions of how Apple got started. Steve Wozniak and Steve Jobs did indeed create a product a motherboard early on in the mid-70s. They decided the sell it that was all. Great, but they went out to raise money to do this at a larger scale and no one was prepared to give them money. And one venture capitalist said you ought to talk to this guy Mike markkula. He's a seasoned executive. Mike came in and started to work with them might became the CEO recruited, another guy, Mike Scott, and it was the team of those for that created. The business plan that was able to attract capital from Arthur Rock. A convened rock and other investors. So again, it wasn't just Steve Jobs. It wasn't just Steve Wozniak. It was a team which is the fundamental underpinning of every successful venture."

I've learned that success in entrepreneurship is often driven by overconfidence and being able to form a relationship with investors so that if tests are promising, they will give more money even if the plan wasn't achieved. Apple's success story demonstrates this, as VisiCalc created an unexpected market for business computers despite their initial plans. The importance of not running out of cash or trust when forming these relationships cannot be understated.
 
Transcript: "I've read, maybe, 10,000 business plans. I don't really know at this point. But I've only seen three companies actually meet their plan. And I think that's a pattern. I don't know about other people but-- so you're almost always overconfident. And without overconfidence, there's no parenting, there's no entrepreneurship. So I think what I've learned is you have to be able to form a relationship with your investors such that, if your tests are promising the things you've learned about customer product-market fit, then they will give you more money, even though you didn't accomplish what you said you were going to accomplish in your first slide deck or business plan. Apple missed by 60%-70% in the first year. Apple didn't think there was going to be a market for business computers and then somebody invents VisiCalc. The market for business personal computers explodes. So again, they could have said, you didn't do what you were promising. We hate you. We're going to take away the money. No, I've got faith that you're going to be able to figure this out. Don't run out of cash. Don't run out of trust."

Over the years, there has been a great shift in students' understanding of entrepreneurship. Today, students come from all kinds of backgrounds and are eager to learn about how to identify an opportunity, get access to resources, and run tests - skills that can be applied to many different careers.
 
Transcript: "You know, I've had at least 6,000 students. A little complicated because I've given lots of talks. I would say that the students-- the great shift over the years has been in their understanding of the basic phenomenon, because in the early 1980s, there were a few dabblers in entrepreneurial activity. There wasn't much venture capital. It certainly was mainly a US phenomenon. And today we have students from 70 countries. We have almost half women. We've got a tremendous mix of backgrounds, people from not-for-profit, from military, from marketing, from human resources, management. And so I think they're all eager to learn about how to identify an opportunity, how to get access to the resources, how to run those tests. And that's going to be something that's useful no matter what they do in their careers."

The news often focuses on the negative aspects of society, such as shootings or the manipulation of Facebook, instead of highlighting the positive progress people are making in areas such as education, healthcare, and the environment. This type of emphasis is demoralizing and destructive, and not helpful.
 
Transcript: "Well, when you read the paper or listen to the news, or as I do often, listen to NPR on the radio, most of the attention is on the things that are going badly. And it could be this horrible shooting. It could be concerns about Facebook and whether or not it's creating Echo Chambers, or whether it's being manipulated. So it gets rid of conservative and keeps liberal, or gets rid of liberal and keeps conservative. And very little attention, is paid to the positive things people are doing in the economy. So even this morning, there was an article on South Congress. Sal Khan was a hedge fund manager. He starts Khan Academy. He's reaching 100 million people. He provides a free world-class education to anyone anywhere. He figured out how to do it. And tend to 12 minute chunks. He figured out how to show whether you had mastered, the material, not based on some arbitrary scale and the school. And I live in a world in which I see in education, Healthcare in the environment in every aspect of the economy and Society. I see people trying to solve real problems. So the emphasis on the - strikes me as demoralizing destructive and not helpful."

The best approach to entrepreneurship is combining a great idea with great people. Successful teams require all parts to be working, including hiring, finance, product, marketing, and communications. Individuals are not as successful on their own.
 
Transcript: "There's not a controversy, but there are two schools of thought. One is the the idea is what matters. The others. The people that's what's most important. And I guess I would say that I really like great people with a great idea. Seems like combining the two is, the better way to approach the world. The fact is all successful entrepreneurial efforts, our team efforts. They're messy often team members. Don't work out the company like PayPal. They went through four different business, models. They fired CEOs. They did all sorts of things and eventually they get to the point where they have a high performance team. So the hiring part is working. The finance. Part is working. The product marketing. Part is working, Communications is working and team. He's accomplished enormously important things, and individuals, not so much."

I wrote a case in the early days of Amazon about its decision to go public at a time when it was losing money. The case explains Amazon's efficient capital model, which allowed it to lose money but still have positive cash flow.
 
Transcript: "Well, at this point, I've done 230 cases and there are a certain number of cases that I give an example. I wrote a case in the early days on Amazon and its decision to go public, and it was a time when Amazon was losing money, had been able to get access to Capital and the capital markets from venture capitalist, But people didn't know whether or not it would succeed and one of the things that was true back then is that Amazon had a business model where you and I pay upfront they get the cash, they pay their suppliers in 60 days, they don't have fancy store locations so they operate their business with - capital and Barnes and Noble at the time, needed the dollar of assets to support a dollar of sales. And so, part of the reason the case works, is it explains this very, very efficient Capital model in which you can actually lose money, but still have positive cash flow. So there would be an example of a important case."