Charles B. Wang

1
Starting Your Own IT Company
Kristen Farberman Michelle Hoffmann Jeff
Laughlin Xin Liu April 29, 2004
2
Presentation Outline

• Traits of a typical entrepreneur
• How to start a business
• The business plan
• Case studies
• Grant Willer, Note Knowledge, LLC
• Richard Laughlin, Midwest Testing, Inc.
• Charles Wang, Computer Associates, Inc.
• Reasons for failure
• Conclusion

3
Definition

• An entrepreneur is described as one who
  organizes, manages, and assumes the risks of a
  business or enterprise

Miriam Webster Online, www.m-w.com, March 17, 2004
4
Characteristics of Successful Business Owners

• Vision
• Need for achievement
• Desire to work for self
• Willingness to listen
• Opportunistic
• Creativity and innovativeness
• Awareness of risk

Johnson, David Ma, Rosa Suet Fan, A Method for
Selecting and Training Entrants on New Business
Start-up Programmers, International Small
Business Journal Apr-Jun 1995 13, 3 pg. 8084
5
Benefits to Owning a Business

• Self-management
• Financial independence
• Creative freedom
• Full use of personal skills and knowledge
• Greater opportunities

Start up Basics. www.sbaonline.sba.gov, March
17, 2004 lthttp//www.sbaonline.sba.gov/starting_bu
siness/startup/basics.htmlgt
6
Determine an Entrepreneurial Passion

• What do I like to do with my time?
• What technical skills do I possess?
• What do others say are my strengths?
• Could this endeavor become a profitable business?

"Are You Ready?." www.sbaonline.sba.gov, March
17, 2004 http//www.sbaonline.sba.gov/starting_bus
iness/startup/areyouready.html
7
Identify a Business Niche

• What services or products will be sold?
• Is the idea practical?
• Who are the competitors?
• What are the competitive advantages?
• Can better quality service be provided?
• Can a demand be created?

Start up Basics. www.sbaonline.sba.gov, March
17, 2004 lthttp//www.sbaonline.sba.gov/starting_bu
siness/startup/basics.htmlgt
8
The Business Plan

• Defines the business
• Identifies goals
• Includes a current and projected balance sheet,
  income statement, and cash flow analysis
• Allows all stakeholders to better understand the
  company
• Identifies the potential customers for the
  product of service

"Busines Plan Basics. www.sbaonline.sba.gov,
March 17, 2004 http//www.sbaonline.sba.gov/starti
ng_business/planning/basic.html
9
The Business Plan

• Establishes marketing strategies to reach
  customers
• Projects all necessary financial needs
• Displays technical competency and business
  efficiency

"Busines Plan Basics. www.sbaonline.sba.gov,
March17, 2004 http//www.sbaonline.sba.gov/startin
g_business/planning/basic.html
10
Next Steps

• Hire a management team
• Follow a budget to control costs
• Determine accounting procedures
• Build key relationships

Pentilla, Chris. Souped Up. www.entrepreneur.com
, October 2002.  March 16, 2004
lthttp//www.entrpreneur.com/article/0,4621,303085
-1,00.htmlgt
11
The Ultimate Goal

• Locate customers
• Satisfy customers
• Retain customers

12
Grant Willer
President of Note Knowledge, LLC
Personal Interview with Grant Willer, President
of Note Knowledge, LLC, Feb. 28, 2004
13
Background

• Born in 1980 in Saint Louis
• Oldest of four boys
• Graduated from UMSL in 2003 with degrees in
  marketing and management
• Family history of entrepreneurship

14
Personality Traits

• Creative
• Inventive
• Constructive
• Rational

• Outgoing
• Friendly
• Down-to-earth
• Assertive

15
Motivations for Starting a Company

• Escape
• Freedom
• The challenge
• Success
• Desire to lead

16
Note Knowledge Objectives

• Website will initially target beginners
• The business purpose is to teach guitar playing
  at a lower cost by means of the internet
• The short term goal is to have the website active
  within two months

17
Current Development of Note Knowledge

• Wrote a business plan
• Used strategic management principles
• Surveyed potential customers
• Spoke with an accountant
• Met with a lawyer
• Talked with a web designer
• Create lessons
• Begin advertising

18
Major Challenges

• Designing the service to create maximum value for
  customers
• Encouraging efficient learning through an
  entertaining website
• Developing the step-by-step detailed lessons

19
Words of Wisdom

• Dont be discouraged. Write a solid business
  plan and seek advice from those who have been
  through the process.
• We planned for over a month before we even
  incorporated.
• Planning is key.
• - Grant Willer

20
Comparison to Successful Entrepreneurs
Vision Strong Intense
Need for Achievement Essential
Desire to work for self Great Aspiration
Willingness to listen Listening gives an opening to greater ideas
Opportunistic Pioneer for new methods
Creativity Innovativeness Always flourishing
Awareness of Risk Planning is key
21
Midwest Testing, Inc.
Personal Interview with Richard Laughlin,
President of MTI, Feb. 25, 2004
22
Company History

• Founded in 1985 by Richard Laughlin
• Financed with 30k loan from a friend
• Started with 3 employees, currently 40 total
  personnel
• A highly mobile construction firm based in the
  St. Louis metro area

23
Richard Laughlins Bio

• Born March 27, 1953
• Older of two boys
• Graduated UMR Civil Engineering in 1975 with
  Masters in Geotechnical
• Brief experiences as an employee

24
Childhood Experiences

• Always took charge and thrived as a leader
• Learned business principles for independence (Ex.
  pulling weeds)
• Constantly brainstorming different ways to earn
  money

25
Entrepreneurial History

• Mowing lawns
• House painting
• Laughlin Brothers
• Broetke-Laughlin partnership
• Midwest Testing, Inc

26
Major Challenges

• Learning to be a businessman
• Finding work during difficult times such as a
  recession
• Making the tough decisions, especially in regards
  to costs

27
His Vision
Our clients talk. We listen. We deliver
creative solutions. Let Midwest Testing apply
innovation and technology to make a positive
impression on the construction industry.
-
Richard Laughlin
"Midwest Testing." www.mwtesting.com  23 Mar.
2004
28
Closing Thoughts

• Customers, customers, customers
• Simplify how to run a business
• Honesty, hard work, persistence, and the desire
  to listen
• Find and maintain long term relationships
• Hire great people and make them part of the team

29
Comparison to Successful Entrepreneurs
Vision Customer focus
Need for Achievement High
Desire to work for self Strong desire
Willingness to listen Moderate
Opportunistic Very
Creativity Innovativeness Always
Awareness of Risk Conservative
30
Charles B. Wang

• Chairman of the Board at Computer Associates
  International, Inc. (CA) from April 1980 to
  November 2002
• CEO of the company from 1976 to July 2000.
• Co-founded the company with three associates in
  1976

Inglesby, Tom. An Interview with Charles Wang,
MSI Jul 1991 9, 7 pg. 2834
31
Player Behind the Scene

• In 1999, CA sold 5.6 billion worth of
  software, trailing only Microsoft Corp. and IBM,
  but did not take in a dollar from the consumer
  market. CA makes a vast array of programs for
  managing large, diverse computer systems. We are
  all the plumbing behind the scenes, as opposed to
  all the pretty faucets, says Wang

Anthony Bianco, Steve Hamm, Manjeet Kripalani,
Software's Tough GuyCharles Wang muscled his way
to the top. Now he wants respect, Business
Week, New York March, 6, 2000, Iss. 3671  pg. 13
2
32
Company Profile
CA delivers software and services that
enable organizations to manage their IT
environments.
About CA, Computer Associates. 15 Apr. 2004.
lthttp//www.ca.com/about/timeline.htmgt
33
Investor Relations

• Revenue Over 3 billion in fiscal year 2003
• Number of employees 16000
• Stock symbol and price NYSE CA

MSN Money, MSN, 20 Apr. 2004,
lthttp//moneycentral.msn.com/scripts/webquote.dll?
ipageqdSymbolCAgt
34
Merger Mania
Five Largest Deals in the History of Software
Industry by 2000
Acquired Company Price (in billions) Year
Sterling Software, Inc 4.0 2000
Platinum Technology International, Inc 3.5 1999
Legent Corp 1.8 1995
Cheyenne Software, Inc 1.2 1996
Uccel Corp 0.8 1987
Anthony Bianco, Steve Hamm, Manjeet Kripalani,
Software's Tough GuyCharles Wang muscled his way
to the top. Now he wants respect, Business
Week, New York March, 6, 2000, Iss. 3671  pg. 13
2
35
Charles B. Wang

• We may be reluctant to commit to something, but
  when we commit to it, its our word on the line
• So I told my mother, I thought that I was going
  to be a programmer. She said, Whats that? I
  said, I dont know, Mom, but boy, they need them

Nahm, H.Y., GoldSea Asian American, 1991. 12 Mar.
2004, lthttp//goldsea.com/Money/Wangcharles/wangch
arles.htmlgt
36
Biography

• Born in Shanghai, China in August 1944
• The second of three sons
• Grandfather was a landowner involved in business
  and politics
• Father studied law at Harvard. He served for a
  time as a justice of the Shanghai Supreme Court
• Moved to the United States with his family in
  1952
• Raised in Queens Village, New York
• Attended Brooklyn Technical High School

Nahm, H.Y., GoldSea Asian American, 1991. 12 Mar.
2004, lthttp//goldsea.com/Money/Wangcharles/wangch
arles.htmlgt
37
Biography

• Earned B.S. in Mathematics from Queens College
• Became a programmer trainee at the Electronics
  Research Laboratory of Columbia University in
  1967
• Joined the software division of Standard Data
  Corporation in 1971
• Spun off SDC in 1976, founded CA, CEO
• Became the Chairman of the Board in 1980
• Retired in 2002

Nahm, H.Y., GoldSea Asian American, 1991. 12 Mar.
2004, lthttp//goldsea.com/Money/Wangcharles/wangch
arles.htmlgt
38
Personality

• Sense of adventure
• Integrity of mans word
• Independent
• Practical approach to life
• Fearless
• Confident
• Hard-working
• Make work fun

39
Starting CA

• Conceived the idea for the business
• Spun off SDC
• Sold the first product CA-SORT
• Utilized product-for-equity swap strategy
• Initial public offering on December 10, 1981
• First acquisition Capex Corp.

Anthony Bianco, Steve Hamm, Manjeet Kripalani,
Software's Tough GuyCharles Wang muscled his way
to the top. Now he wants respect,
Business Week, New York March, 6,
2000, Iss. 3671  pg. 132
40
Major Challenges

• Giving up a quality job to start a company
• Preparing the payroll initially
• Establishing market driven ideas
• Surviving a fast-changing technological industry
• Maintaining cultural stability during
  acquisitions
• Understanding the market
• Obtaining sufficient resources

41
Comparison to Successful Entrepreneurs
Vision Customer focus
Need for Achievement Essential
Desire to work for self Strong
Willingness to listen Moderate
Opportunistic Very
Creativity Innovativeness Always
Awareness of Risk Very
42
10 Common Mistakes

• Miscalculating potential market share, market
  size, timing, and ease of entry
• Underestimating financial requirements and timing
• Hiring too many people and spending too much
  money on offices and other facilities
• Lacking a contingency plan for unexpected
  shortfalls in the expectations

Henricks, Mark. What not to do. Entrepreneur
Magazine, February 2004
43
10 Common Mistakes

• Making cost projections that are too low
• Lacking simplicity in your vision
• Lacking a long-term plan and business purpose
• Hiring for convenience rather than skill
• Neglecting to manage the entire company as a
  whole
• Lacking an exit strategy

Henricks, Mark. What not to do. Entrepreneur
Magazine, February 2004
44
Comparison of Three Entrepreneurs
Grant Willer Richard Laughlin Charles Wang
Vision Strong Intense Customer focus Strong Clear
Need for achievement Essential High Essential
Desire to work for self Great Aspiration Strong desire Strong
Willingness to listen Listening gives an opening to greater ideas Moderate Moderate
Opportunistic Pioneer for new methods Very High
Creative Innovative Always flourishing Always Always
Risk taker Planning is key Conservative High
45
Questions?