Steve Jobs the Founder of Apple Entrepreneurial Venture - Research Paper Example

Steve Jobs the Founder of Apple Entrepreneurial Venture Executive Summary The study describes the ways by which Steve Jobs as an entrepreneur developed his entrepreneurial venture. The traditional entrepreneurial path will be observed in this study which follows a step-by-step approach with certain conventional norms that are followed by an entrepreneur. With this context, the study will also endeavor to identify Steve Jobs’ venture in light of the traditional methods and whether his methods differ or concur from the traditional methods will be identified. In the concluding section, the key aspects that have helped Steve Jobs to achieve success will be reflected. Traditional Entrepreneurial Path An entrepreneur can be described as a person, who undertakes the probable risks that can arise in order to organize, manage and develop a business. In the present day context, an entrepreneur is recognized as a developer or an innovator who generally recognizes as well as seizes opportunities and translates those opportunities to marketable as well as workable ideas (Kuratko, D. F. & Hodgetts, R. M., “Entrepreneurship: Theory, Process, and Practice”). A traditional entrepreneur intends to make the undertaken business venture successful. The path that generally is followed by an entrepreneur in traditional process of entrepreneurship are converging on an idea of business, preparing a business plan, business formation, growth and exit strategies identification and going public with the business venture (Silver, “Stages of Entrepreneurship”). In traditional entrepreneurial path, the virtues possessed by an entrepreneur include ingenuity, diligence, ambition, tenacity, perseverance and self-discipline. These virtues guide in the endeavor of building a financially stable as well as successful business venture (Belmont University, “The Good Entrepreneur”) In the inception stage, the idea of business is conceived which is then analyzed in the traditional path in terms of feasibility of the business idea from financial viewpoint as well as other crucial aspects such as availability of the sources for funding. The sources of funding can be from two aspects i.e. financial bootstrapping method where acceptance of financial resources are avoided from any external source of investor and in the other aspect, traditional sources of finance are sought e.g. venture capital investors, hedge funds, crowd funding to start-up the entrepreneurial venture. The financial aspects such as analysis of ratio, capital budgeting which includes payback method, net-present value, internal rate of return analysis and break-even analysis are part of the traditional method of entrepreneurship (Kuratko, D. F. & Hodgetts, R. M., “Entrepreneurship: Theory, Process, and Practice”). Path Followed By Entrepreneur Steve Jobs The endeavor of Steve Jobs, the entrepreneur, can be comprehended from his saying that “We started out to get a computer in the hands of everyday people, and we succeeded beyond our wildest dreams” (Entrepreneur Media, Inc, “Steve Jobs The Comeback Kid”). Steve Jobs’ vision had been to develop a “computer for the rest of us”. This endeavor sparked a PC revolution and turned Apple into an American business icon. The business plan of entrepreneur Steve Jobs was conceived from the endeavor of Steve Wozniak, who was an engineer and as part of his hobby, was trying his best to construct a small computer. Visionary Steve Jobs with his entrepreneurial traits convinced Steve Wozniak to be a partner in his venture. Steve Jobs had grasped the potential of the business with a computer in the initial phase. In the business formation stage, they started on their business named as Apple, in Steve Jobs’ parental garage and started working towards developing a prototype called Apple I. They generated funding for their business by selling Apple I, which was mainly sold to hobbyists. This provided them with enough funding so that they were able to improve as well as refine their design. Thus, their initial funding was garnered from their own created prototype, Apple I. In the year 1977, Steve Jobs and Steve Wozniak introduced Apple-II, the inaugural personal computer that had color graphics as well as keyboard (Entrepreneur Media, Inc, “Steve Jobs The Comeback Kid”). Early strategy of Apple was to promote businesses towards purchasing exclusive Lisa as well as Apple III computers that had a cost between $3000 and $5000. They also fathomed that popular users would intend to purchase cheap Mac, thus it would enable them to beat the competition by leaving out Band 3 manufacturers in the cold. The original investor of Apple was Mike Markkula, who at that time observed a tremendous potential in the start-up business of Steve Jobs. Steve Jobs was able to convince him and was able to collect a funding of $250,000 invested by Mike Markkula, and thus he held one-third stake of the company. Steve Jobs and Steve Wozniak prepared a 30-page long business plan. Apple Computer made endeavored to go public with their IPO in 1980. It was the largest public offering since that of the Ford Motor Company in the American history. After the IPO, Steve Jobs’ net worth was estimated at $217.5 million, which was $210 million greater than the before the IPO (Romain Moisescot, “Long Bio”). In the IPO (Initial Public Offering) for the products of Apple certain benefits that can be derived from using own, home, personal computer were highlighted by the owners such as personal pleasure as well as enjoyment, savings of time and money, increase in leisure time, increase in variety, better opportunity to make correct financial decisions, increase in personal level of comfort as well as standard of living, increasing in learning efficiency and knowledge regarding computers as well as related technologies. The few other factors were reduction in pollution, total security of personal data and information, ability of using non-verbal communications and others. These aspects were touched upon to attract consumers in the market (Martinelli, “Apple History: First Business Plan, IPO Now Public”). Steve Jobs in order to build the first boards required around $1,000 which he gathered from selling his Volkswagen car, and Steve Wozniak also sold his own HP 65 calculator. Steve Jobs’ initial business offer that helped the Apple Computers to get a kick start was from Homebrew which placed an order of 50 computers at a price of $500 each, which helped Apple to gather $25,000. In terms of financial analysis of the venture by Steve Jobs, it was seen that the parts of the Apple sold to Homebrew, had a cost of $220, against its selling price of $500. The retail price of the computer was agreed upon at $666.66 which was arrived at keeping in mind a 33% margin. Thus, this was the initial valuation of the PCs. Steve Jobs did incorporate Apple in 1976 by buying out the shares of Ron Wayne at a valuation of $800. After the development of Apple II, in order to generate funding, Steve Jobs started searching investors basically venture capitalists. Mike Markkula was such as potential investor and put in $250,000 towards the business initiative of Steve Jobs and wanted them to prepare 1,000 machines. Apple gathered around 300 orders for their Apple II from the west coast computer fair, which was observed to be twice the number of Apple I ever sold. This was seen as an initial valuation of their computers and a massive turnaround towards an eventful path of history (Romain Moisescot, “Long Bio”). In 1983, Steve Jobs clashed with the board of directors of Apple and thus was ousted by the then CEO John Sculley. Steve Jobs sold his part of the shares of Apple in 1985 and resigned. In this context, it can be observed Apple might not have existed at all if the initial offer after the development of circuit board made to Hewlett-Packard by Steve Wozniak was accepted (Entrepreneur Media, Inc, “Steve Jobs The Comeback Kid”). Conclusion Steve Jobs as an entrepreneur was able to achieve success by developing certain out of the box strategies through his business plan. His vision and zeal to achieve his goal made him succeed. His shrewd idea such as identifying the enormity of achievable success of the small computer, which was developed by Steve Wozniak, was a stating factor towards his ideation capabilities. His persuasive as well as charismatic personal traits also helped to draw in investors such as Mike Markkula, which was extremely important in the initial stages. In the long run, despite resigning once from Apple, Steve Jobs returned in 1996 with renewed endeavor and diligence. His return sparked a renewed growth of Apple with new products such as iPod, iTunes and iPads. Thus, his presence and influence in Apple as an entrepreneur can be fathomed from these developments. Therefore, it can be said that Steve Jobs, as an entrepreneur followed traditional model of entrepreneurship, but he also took certain unconventional steps which made his entrepreneurial style not only unique but also commendable. References Belmont University. “The Good Entrepreneur”. April 06, 2011. Archives, 2007. Entrepreneur Media, Inc. “Steve Jobs The Comeback Kid”. April 06, 2011. Home, 2008. Kuratko, Donald F. & Hodgetts, Richard M. Entrepreneurship: Theory, Process, and Practice Cengage Learning, 2008. Martinelli, Nicole. “Apple History: First Business Plan, IPO Now Public”. April 06, 2011. News, 2009. Romain Moisescot. “Long Bio”. April 06, 2011. Bio, 2010. Silver, Milton. “Stages of Entrepreneurship”. April 06, 2011. Drexel University, No Date. Read More