Entrepreneurship and Small Business Development - Essay Example

Entrepreneurship and Small Business Development: Bill Gates in Focus Introduction Any entrepreneur worth his salt will realize that innovation is the key to success. Indeed, one will notice that the companies that have made it big in the past have all done so because of their lack of fear when it came to breaking the mold, and going their own way. While playing it safe and sticking to what works can and does indeed result in revenue, the profits gained this way pale in comparison to what can potentially be incurred through generous amounts of innovation. Microsoft is arguably one of the most triumphant examples of this, having become one of today's corporate giants despite of its relatively humble beginnings. Founded by Bill Gates and Paul Allen, this company has since become the world's largest software company (Wahba, 2008). Gates himself has become one of the wealthiest people in the world through his accomplishments as one of the best-known entrepreneurs of the personal computer revolution. Criticisms of his business tactics aside, the astounding heights to which Bill Gates has led Microsoft to cannot be denied. This paper, then, shall focus on Bill Gates and on Microsoft, with emphasis to be placed on how their innovations allowed them to become the household names they are today. The word 'innovation' itself shall be given a comprehensive definition, while particularly exemplary instances of innovation on the part of Bill Gates and of Microsoft shall be examined. Following these parts is a synthesis of everything that has be discussed, with a conclusion to round it all off. All in all, the purpose of this paper is not only to examine exactly how the innovations of Bill Gates and Microsoft allowed them to achieve such success, but also to inspire average or even underachieving students to hopefully follow in this example. All About Innovation 'Innovation' has always been a word synonymous with Bill Gates. Even as a child, he would fiddle with software, improving on existing ones and writing his own. Before exploring his history of innovation, however, it would be more prudent to discuss what innovation is first. As already mentioned above, innovation is the one characteristic no entrepreneur would get very far without. Sticking to what works and what is known may allow one to get by and make some money, but the ones who truly make it big are those who are unafraid of challenging conventions and taking risks, and who manage to breathe new life into supposedly exhausted industries. In short, while a conservative approach to entrepreneurship may bring security, it is through a more innovative approach that one would be more likely to experience success. That being said, it would be well worth defining exactly what innovation is supposed to be. It is said to be a way of encouraging customer value, which can be done either through meeting new needs, or through meeting old, existing needs in new and different ways. From an entrepreneur's perspective, this is most often attained through the introduction of unique products, services, technologies or ideas to the market. What sets innovation apart from mere improvement is that it is more concerned with taking a new, unique and different approach to something, rather than just building on the usual approach. The current environment has evolved such that innovation has become a major, major catalyst for growth, as the greater ease of transportation and communication has made factor endowments and comparative advantage less important in the long run. Instead, argues Schumpeter (1943), companies such as Microsoft need to constantly revolutionize the economic structure, as can be seen from their constant innovation of their products and services. Heyne et al (2010) lend further credence to this statement, describing a pattern among entrepreneurs in which they constantly aim to satisfy customers by continually improving on the quality, durability, service and price of their products, using a combination of technology and organizational strategy. This pattern of constant innovation is constant among Microsoft; for one thing, the constant system updates that tend to annoy users of Windows XP, Windows Vista and Windows 7 are intended to improve the system, making an already capable OS that much more so. This is on top of the fact that Microsoft constantly releases multiple variants of the same OS, as can be seen from how Windows 7 in particular has the Starter, Basic, Home Premium, Professional and Ultimate editions, to name a few (Hachman, 2009). And of course, Microsoft has also been known for its constant releases of new and updated operating systems, while simultaneously retaining support for the previous ones. This is to say that while users of Windows 7 a lot of features and advantages to enjoy, Microsoft has not forgotten about its customers who prefer XP and/or Vista, and so continue to release updates for the older operating systems even with Windows 8 looming over the horizon. Truly, then, Microsoft - and, by extension, Bill Gates - can be held as an exemplar of innovation. Bill Gates - A History of Innovation However successful Bill Gates is today, even he had to start at the bottom. Indeed, one looking at Bill Gates today might not realize or fully believe that the highly successful businessman was once a dropout of Harvard, or that he once cheated the system at his school to give him more free computer time - or, for that matter, that he actually got arrested once. Difficult though it may be to believe, the success Gates achieved is belied by his tender beginnings (Schaller, 2010). Even in his days as a student, Gates had already shown signs of an inclination towards working with computers. The earliest of these signs manifested when he was in 8th grade, where he took an interest in programming a computer in BASIC - an endeavor in which he received the support of one of his teachers, who were gracious enough to excuse him from Math class. He would then come up with his first piece of software on this machine, in the form of a tic-tac-toe game playable against a computer opponent. It was around this time that the above incident took place, where he and 3 others were punished for tinkering with the school computer at the Computer Center Corporation (CCC) to give them more free computer time. However, even this turned out to be worth it, as Gates and his fellow students were allowed extra computer time in exchange for helping to work out the bugs in CCC's software. Eventually, Gates was made to write the school's computer program that scheduled students in classes (Lesinski, 2000). Bill Gates would go on to Harvard in 1973, where he met Steve Ballmer, who would become his eventual successor as Microsoft's CEO. It was also here that his now-iconic innovation made itself known when, in his sophomore year, he devised an algorithm for pancake sorting in one of his classes - an algorithm which turned out to be the fastest ever for over 30 years (Kestenbaum, 2008). In fact, this solution would later be formalized in a published paper, which he co-wrote with computer scientist Christos Papadimitriou (Gates and Papadimitriou, 1979). The year 1975 would see the beginning of his meteoric rise to the top when, on the first day of the new year, Paul Allen showed Bill Gates the demonstration of the Altair 8800 as published in Popular Electronics. By this time, Gates had already dropped out of Harvard, having lost interest in his studies. As such, he jumped at the chance to implement the BASIC programming language on this system. It did not take long for them to get in touch with MITS (Micro Instrumentation and Telemetry Systems), offering to demonstrate the implementation in order to win a contract with them. Needless to say, MITS agreed to distribute Altair BASIC after the interpreter worked successfully. Not long after that, Allen and Gates moved to MITS headquarters in Albuquerque, where they co-founded Microsoft (Gammon, 2008). The earliest products created and distributed by Microsoft were variants of Microsoft BASIC, which was the dominant programming language at the time, aside from the computers of the time such as the Apple II and the Commodore 64. In 1980, the now-trademark innovative spirit of Bill Gates would again surface in the form of Xenix, the first ever OS released by Microsoft, which would then be ported to several other platforms with the help of Santa Cruz Operation. It was on this OS that Microsoft Word would make its debut, as would Microsoft's well-known concept of 'WYSIWYG' - 'what you see is what you get' (Levitt, 2000). However, all these would pale in comparison to DOS, which would be created in 1981 to become Microsoft's greatest achievement yet (Bunnell, 1982). Things would only get better from here as Microsoft continued to improve on this OS, culminating in MS-DOS, which would eventually allow Microsoft to be known as one of the biggest software vendors in the industry. This would continue later on when, in 1995, Windows 95 was released. Those old enough to have encountered it will remember that, while it came with MS-DOS for the sake of backwards compatibility with earlier software, Windows 95 itself did require DOS to run. And the rest, as they say, is history (Manes and Andrews, 1993). As of the year 2000, Bill Gates has stepped down as CEO of Microsoft. However, he remains very much active in the company he has come to be known for, in his capacity as Chairman and as head of the Board of Directors. Indeed, his continued activity at Microsoft lends truth to his declaration that he was not, in fact, retiring, and was simply reordering his priorities. Today, Gates has also become known for his philanthropic work, most notably through the foundation he established together with his wife Melinda (Waters, 2006). Microsoft Today The previous paragraphs discussed the tendency Bill Gates had toward innovation - a tendency that only became stronger following the birth of Microsoft. From DOS to MS-DOS, and from MS-DOS to Windows 95, the innovative spirit of Bill Gates has outdone itself time and again. This next part, then, shall focus on the more recent innovations that have been made available to the public courtesy of Bill Gates and of Microsoft. For instance, rather than becoming content with its current success, Microsoft has since branched out its services. First among these is its creation of a new version of its MSN search engine, which is intended to allow it to go toe-to-toe with internet companies such as Google (Perez, 2005). This was followed by the launch of adCenter (Guth and Delaney, 2006). Even Bill Gates stepping down from his day-to-day duties in 2008 did little to slow the corporate giant down, given that he still maintained a healthy, if slightly lesser, level of involvement in company affairs. Microsoft would once again demonstrate its passion for innovation in 2007, through its release of Windows Vista (TechNet, 2006). Unfortunately, while still relatively successful, Vista turned out to be one of the company's more debatable operating systems, with desktop widgets and themes alone requiring disproportionately large amounts of power to run. It is largely for this reason that many people continued to rely on Windows XP despite the release of Vista - even well into the present day, despite the surprisingly improved Windows 7 and the announcement of Windows 8. Windows 7, for that matter, would make its debut at the Consumer Electronics Show (CES) of 2009, which incidentally was hosted by Steve Ballmer, where it was first made available for open beta testing. Eventually, it came out on October 22, 2009, and was made available to the public in several editions. And in stark contrast to Windows Vista, which was infamous for its aforementioned high power requirements, Windows 7 could run even on relatively underpowered netbooks. Microsoft would make news yet again in May 2011, where it acquired Skype Communications for $8.5 million (Skype, 2011). This has been said to allow for greater opportunities for business and revenue generation by boosting accessibility of realtime voice and video chat, in a manner blending the strengths of both Microsoft and Skype. At the time, Skype had been stated to have 170 million connected users worldwide; as such, it made perfect sense for Microsoft to acquire them, allowing it to introduce new and more innovative services while enhancing existing ones. From what has been said, it should be plain as day that Microsoft's passion for innovation did not die when Bill Gates stepped down as CEO. On the contrary, it remained as strong as ever, and has continued to lead it to success and prosperity. And while it can be argued, and rightly so, that Steve Ballmer has made for a more than worthy successor to Gates, it is also just as clear that much of this continued success can be attributed to the latter retaining a semi-active role in company affairs. Without Gates, the company might not be continuing to perform as it has known to. Synthesis Innovation, again, is different from mere improvement in that it requires one to continue to seek newer and more unique alternatives to the somewhat stale options currently available. Rather than merely building on a previous product that has already succeeded, the innovative entrepreneur will take a look at it and come up with another product that does what its predecessor did, but in a different and more effective manner. And considering how entrepreneurs in any given field are constantly trying to outdo their competitors, innovation is something none of them should ever be caught dead without. This is especially true in the world of software and computers, where what was top-of-the-line the previous year will probably be equaled if not surprised by what is available today. Any given software, while admittedly already good on its release, will no doubt receive further patches and upgrades that improve upon it and continually tailor-fit it to suit the needs of its users. Needless to say, those that get complacent with their current product, thinking it is enough, will quickly be left in the dust by their competitors who actually bother to better themselves by offering newer and more innovative products and services. Bill Gates and Microsoft have always taken this rule to heart. For a start, Gates has always been fond of tinkering with computers and software even as a child, and so constantly strove to outdo himself in this aspect. MS-DOS for that matter was highly advanced for its day, as was the concept of a 'personal' computer; before then, computers generally took up entire rooms, and had an appearance not unlike what could be seen on the sci-fi programs of the time. However, it, too, would be outmoded by Windows 95, which was known for its utilization of a graphical user interface (GUI). This pattern would then be repeated with Windows 98 and XP. And while it would be briefly broken by Windows Vista, the debut of Windows 7 started it all over again. Another innovation on the part of Microsoft under Gates is that it was not content with merely dominating the personal computer industry. Rather than sticking to this comfort zone, it branched out into the realm of videogame consoles, most notably butting heads with Sony and Nintendo when it pit its Xbox against the Sony Playstation 2 and the Nintendo Gamecube. Today, it seems safe to say that this gamble paid off; not only has the Xbox received a worthy successor in the form of the Xbox 360, it has also received a healthy amount of focus that ensures that Microsoft will continue to be a major player in this field, possibly for years to come. Today, even after Gates has long stepped down as CEO of Microsoft, he continues to guide the company towards further success and prosperity. This is not the least bit surprising; while his tenure has not passed without controversy or scandal, Gates nevertheless managed to weather these storms and lead Microsoft to even greater heights. As such, it stands to reason that the people who once answered to him know full well what he is yet capable of doing for the company. Conclusion Not for nothing have Bill Gates and Microsoft become household names in this day and age. Gates has always been a top ranker in the list of richest people of the world, while Microsoft has long since carved its place in history not only as the world's largest software maker, but also as one of the world's most valuable companies. Indeed, the heights of success Gates and Microsoft have achieved cannot be denied. Gates in particular is worthy of admiration in light of his rather humble origins - first being branded a troublemaker in middle school, then as a college dropout. While either of these might have discouraged some people, Bill Gates instead bounced back from them to become one of the biggest names the world has ever known - as opposed to the mere functionary or office worker he might have been had he lacked the courage to step off the beaten path. And this, more than any of his many successes as part of Microsoft, is the most triumphant example of his innovative spirit: rather than simply try to do the same old thing everyone else he knew did, only better, he chose to do something completely different. And that, as they say, makes all the difference. References - Online: Gammon, K., 2008. "What We'll Miss About Bill Gates - A Very Long Goodbye" [online] available at [Accessed 10 December 2012] Guth, R. A. and. "With adCenter, Microsoft Bids For Web-Search Bonanza" [online] available at [Accessed 10 December 2012] Hachman, M., 2009. "All Windows 7 Versions - What You Need to Know" [online] available at [Accessed 10 December 2012] Kestenbaum, D., 2008. "Before Microsoft, Gates Solved A Pancake Problem" [online] available at < http://www.npr.org/templates/story/story.php?storyId=92236781> [Accessed 10 December 2012] Levitt, J., 2000. "Is It Time Again For Microsoft And Unix?" [online] available at < http://www.informationweek.com/author/internet36.htm?> [Accessed 10 December 2012] Perez, J. C., 2005. "Microsoft Spotlights Its Search Engine" available at [Accessed 10 December 2012] Skype, 2001. "Microsoft to Acquire Skype" [online] available at < http://about.skype.com/press/2011/05/microsoft_to_acquire_skype.html#more> [Accessed 10 December 2012] TechNet Archive, 2006. " It's Official: Windows Vista RC1 Is Complete" [online] available at [Accessed 10 December 2012] Wahba, P., 2008. "Bill Gates tops U.S. wealth list 15 years in a row" [online] available at < http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN1748882920080917> [Accessed 10 December 2012] Waters, R., 2006. "Bill Gates calls time on career at Microsoft" [online] available at < http://www.ft.com/cms/s/2/fb5a5b88-fcab-11da-9599-0000779e2340.html> [Accessed 10 December 2012] References - Printed: Bunnell, D., 1982. "The Man Behind The Machine? / A PC Exclusive Interview With Software Guru Bill Gates". PC Magazine (Feb-Mar 1982): pp. 16. Gates, W. and Papadimitriou, C., 1979. Bounds for sorting by prefix reversal. Discrete mathematics, 27: 47–57 Heyne, P., Boettke, P. J., and Prychitko, D. L., 2010. The Economic Way of Thinking. Prentice Hall, 12th ed. pp. 163, 317–318. Manes, S. and Andrews, P., 1993. Gates: How Microsoft's Mogul Reinvented an Industry and Made Himself the Richest Man in America. Doubleday: pp. 149-181. Lesinski, J. M., 2000. Bill Gates. Lerner Publications Schaller, B., 2010. Bill Gates: A Biography. Greenwood Press Schumpeter, J. A., 1943. "Capitalism, Socialism, and Democracy". Routledge, 6th ed. pp. 81–84 Read More