8 Introduction
Iv.
Market development stage:exchange (stock in company for cash from investors);
recruit (superstar sales team);
while money is in bank do
begin sell (product) ; produce (product);
deliver (product) ; the business cycle
if
company is profitable for six quarters thengo to exit and cash in; steady state
end;
if
company is still viable and investors are willing thencontinue market development stage else
sell (company) or close (company);
V. Steady-state stage:
Exit and cash in: Company is sold to achieve liquidity.
sell (company for sales revenue X 20, to public or to
another company); continue (company);
retire and return (entrepreneurs);
if
entrepreneurs are not tired thenstart (next company) else
go to venture capital company;
end
; completion of start-up program
a
In the early 1980s, the development tool was VAX, and the system plan was to design a product to "beat VAX" with a UNIX-based system. In the late 1980s, the development tool was a Sun workstation, a Macintosh, or an IBM-compatible PC. The software license depended on the product: UNIX, Macintosh, MS-DOS, or OS/2. In 1990, it's DOS with Windows and UNIX.b
Finis Conner, CEO of Conner Peripherals, characterizes his market-driven product planning and development philosophy as "sell, design, and build."
Figure 1-2.
Detailed "Program" for Starting a High-Information-Technology Company.
As the company grows, it proceeds according to a plan, which allows it to move from one stage to the next by obtaining funds from its investors in exchange for stock. During the course of each stage, the firm does one of two things:
· Achieves its goals for the current stage and advances to the next stage
In the second case, the firm becomes subject to the "if' statement at the end of each stage of the start-up "program." If the investors believe the company is still viable and are willing to proceed, then the company continues with the stage. If not, it is sold or closed.