Fundamentals of Management, 8th ed

Chapter 5: Entrepreneurship and New Venture Management

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Innovation

History has shown that major innovations are as likely to come from small businesses

(or individuals) as from big businesses. For example, small firms and individuals

invented the personal computer, the stainless-steel razor blade, the transistor radio, the

photocopying machine, the jet engine, and the self-developing photograph. They also gave

us the helicopter and power steering, automatic transmissions and air conditioning, cello-

phane, and the disposable ballpoint pen. Today, says the SBA, small businesses consistently

supply over half of all “innovations” introduced into the U.S. marketplace each year.

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It is no surprise that history is repeating itself with increasing rapidity in the age of compu-

ters and high-tech communication. For example, much of today’s most innovative software is

being written at relatively new start-up companies. Yahoo! and Netscape brought the Internet

into the average U.S. living room, and online companies such as Amazon.com, eBay, and

Google are using it to redefine our shopping habits. Facebook and Twitter have changed how

we interact with one another.

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Each of these firms started out as a small business.

Of course, not all successful new start-ups are leading-edge dot-com enterprises. Take

Sacha White, for example. He moved to Oregon a few years ago and got a job as a bicycle

JOB LOSSES

–3,000

–4,200

–3,020

–6,000

–8,500

–12,000

–1,600

–8,000

–1,500

+7,000

+6,750

+2,000

+1,200

+3,000

+2,500

+3,500

+1,200

+1,000