The New Rules of Entrepreneurship

This is a challenging time to be an entrepreneur. Many investors are clearly still spooked by the tech bust of 2000, and the IPO market has been soft for years. I traveled to Menlo Park to speak about the start-up industry with Marc Andreessen, a cofounder and partner of the venture capital firm Andreessen Horowitz. Andreessen has seen it all. As a young university graduate, he helped lead Netscape to a high-profile IPO in 1995—in just 18 months. Now he sits on the other side of the investing fence, and he sees his role as preparing start-ups for a long, difficult road before an IPO is even a possibility. “I tell [start-ups] they shouldn’t even think about going public until they’ve built what I call a fortress,” Andreessen says. “You [have to] build a company that’s so big and powerful and well defended that it can withstand the pressures of being public.” My interview with Andreessen is part of this month’s Spotlight on Entrepreneurship. The lead article, by entrepreneur-turned-academic Steve Blank, explains how the “lean start-up” movement is changing the rules of the game and could make entrepreneurship accessible to more and more people. In another Spotlight piece, academics from Babson College and IPADE share learning from their research into how dozens of company founders approached the critical task of making their initial sales. The authors offer a new sales model that takes into account the specific challenges start-ups face. Elsewhere in the package, Diane Mulcahy, a former venture capitalist, explodes various myths about VCs—including the notion that they’re particularly skilled at picking companies that will succeed. And HBS professor Deepak Malhotra gives advice to entrepreneurs about negotiating the best possible deals with their investors. As the economy recovers, we’re sure to see a new wave of start-ups and a steadier flow of IPOs. We hope the ideas in this package will help entrepreneurs, and their investors, create a fresh generation of innovative and enduring companies. Adi Ignatius, Editor in Chief

The New Rules of Entrepreneurship

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