BPOL 536 /CSE 590IP Software Entrepreneurship

Class Hours: Monday and Wednesday 3:30-5:20pm, Balmer 413

Instructors:     Emer Dooley, Business School;; 616-8682

                        Dan Weld, Computer Science & Engineering; 543-9196



To be read before class starts: Business 2.0 March 2000, P 136-184.  “The smart way to start a net company”

22 Immutable Laws of Marketing, by Al Ries and Jack Trout

Startup, by Jerry Kaplan

Additional Readings:

High-Tech Startup by John Nesheim, on reserve in the Foster business library

Going Global: Four Entrepreneurs map the new world marketplace. William Taylor, Alan Webber. Penguin paperback. One-sitting read.

Information Rules: A strategic guide to the networked economy. Carl Shapiro and Hal Varian. HBS Press.

Reading packet : Available from the Balmer copy center. Includes:

“How to write a great business plan”. HBR July-Aug 1997.

HBS case studies:         Microsoft Office: Finding the suite spot

                                    Edmark Corp.


Course Description


The course provides an overview of the major elements of entrepreneurial activity in software, including market identification and analysis, evaluation and planning of the business, financing, typical operating and administrative problems and alter natives for growth or sale. Particular emphasis will be placed on the changing face of starting a business in the Internet space.

The course is organized as a series of case studies and lectures. Case studies are supplemented by class discussion with entrepreneurs, lawyers and financiers.


Course Objectives

  1. To provide a multi-disciplined look at software start-ups.
  2. To provide students an opportunity to develop a product concept and outline business plan.
  3. To provide an opportunity to transform a technology concept into a business.


Course Project

Students will work in cross-disciplinary groups of four or so to develop a product concept and preliminary market analysis for a business plan along the following lines:

Week 2: One minute per person description of a software business concept.

Week 4 Preliminary presentation : The idea, target market, technology (2-3 slides max –5-10 minute pitch)

Week 6 Short presentation due: 5 slides something along the line of:

The market (Who is the customer)

The product –the competitive advantage ( What’s the customers’ compelling reason to buy)

The Channel (How do you reach them, How do they buy?)

The money (Financing, Projections : revenues and profits)

The plan (Overall direction; Schedule, risks and problems?)

Week 9 10 page plan and presentation


Grades will be awarded as follows:

Class Participation 10%

Class notes and web page 10%

2 page project report due by Jan 16th (before MLK holiday) 10%

Group presentation and slides Jan 26th 20%

Final Business Plan :50%  (Presentation 20% ; Written Plan 30%)







Mar 27 Week 1

Session #1

History of the computer industry.


Brian Bershad, CEO, Appliant



Mar 29

Session #2

Software industry structure and opportunities –nature of competition –distribution channels, value-added chains, business models: How are people making money? What opportunities are there?


Patrick Ennis, Arch Venture Partners


The B-B boom, Business 2.0

Apr 3 Week 2

Session #3

Go-to-market strategies

Strategic partnerships and alliances

Allan Adler, Venture Vision

Susan DelBene, CEO,

Apr 5

Session #4

One minute per person on company idea



Apr 10 Week 3

 Session #5

The Business Plan -Assignment: Business plans to be read in advance. Critique of plans.

Why you need one, even if the VCs don’t require it. Essential elements etc.



Readings: How to write a great business plan by Bill Sahlman, HBR July-August 1997 . 2 Business plans TBD –Madrona helping out here


Apr 12

Session #6

Lecture: Financing the startup

Determining capital requirements; Crafting financial and fund-raising strategies. Overview of the sources of risk capital. What’s the right capital structure?


Linden Rhoads

Readings: High-tech Startup

Chapter 7, 8 and 9


Apr 17 Week 4

Session #7

The team –The importance of the team; Hiring, keeping and motivating great people (rewards and incentives) Putting together a board of advisors.

Difference between Internet startup and more traditional firms.

Steve Sperry, CEO Acadio

(Founder, Primus -now a company with market cap >$1billion. Just raised over $50m for new web-based startup

Apr 19

Session #8

The development cycle. Understanding and managing the development cycle. Putting the customer first. The classic problems: Feature creep, code complete vs. ship date etc.

Steve Sinofsky, VP Office Eric Zocher (Go2net)

HBS case: Microsoft Office: Finding the suite spot

Apr 24

Week 5

Session #8

Operations & cashflow management

What’s involved and what does it cost to set up an operation. How do you plan for and cost out growth?

Chris Birkeland

Cedargrove investments

(asked –not confirmed)

Apr 26

Session #10

Group presentations


May 1

Week 6

Session #11

Information Rules? Or Suzan


Emer: Rules for the Information Economy ; Dan leads case study on

May 3

Session #12

Protecting your intellectual property & University licensing

Ed Lazowska, Chair Competer Science and Engineering on Univesity Licencing.

Al AuYeung, Patent Attorney,

May 8

Week 7

Session #13

Ready, Aim, Switch: Listening to your customers no matter how hard it hurts.

Brian Bershad, CEO Appliant

May 10

Session #14

Stanford Case Study on IBM’s bid for Edmark

Sally Narodick, now CEO of Apex

Reading: Stanford case: Edmark Corp.

May 15

Week 8

Session #15

Netbot/ AdRelevance Case Study

Dan Weld

May 17

Session #16

Lecture: The deal: Valuation of high growth businesses; structuring the deal; negotiations; traps. Focus on exit strategies rather than early-stage.


Bill McAleer, Voyager Capital 

May 22

Week 9

Session #17

International aspects of doing business

Katarina Bonde, EVP Captura

Reading: Going Global.

May 24

Session #18

Group Final presentations






May 29

Week 10

Session #19

Holiday –Memorial Day


May 31

Session #20

Group Final presentations



 Background (non-required) reading :

• Built to Last by James Collins and Jerry Porras (How great companies are built)

• New Venture Creation: Entrepreneurship for the 21st Century, Jeffry Timmons

• Going Public by Michael Malone (Story of MIPS IPO)