This December I finished my entrepreneurship class, which I have been teaching for 11 years at the IE Business School, and it was without a doubt the toughest one I’ve ever had to give. How am I supposed to inspire students to go out and get funding in this market if businesses like Apple and Dell, which generate cash – which have a lot of cash and profit – are seeing their shares hit rock bottom?

Dell’s situation is incredible. A business with more than 20 years of experience that has just earned $700 million this past quarter, with an invoice of $55 billion throughout the world, with no debt and, on the contrary, $10 billion in the bank, is somehow worth only $20 billion: $10 billion more than the cash it has on hand. Right now, the market is only betting against Michael Dell, whom I consider to be one of the best entrepreneurs in the world. Practically the same thing is happening to Apple: it has only $24 billion dollars in cash. If the markets don’t have faith in Steve Jobs or Michael Dell, how in the world are they going to have faith in a recent IE graduate? Right now it’s almost impossible to get anything financed, so teaching entrepreneurship is like giving ocean navigation classes… in Kansas.

Although it’s something that can be learned, that knowledge simply can’t be put to use in these conditions. But I did what I could: I tried to give them the best ideas, to tell them the anecdotes that could best inspire these future entrepreneurs. I tried to be positive, but without straying too far from reality. But it is hard, very hard, to teach entrepreneurship in the current conditions. Especially to students that dipped into their savings or went into debt in order to be able to pay for the Masters offered by IE and get started on something that is almost impossible to finance. Okay. Digg, Facebookand the Huffington Post have managed to obtain funds. Maybe it’s not impossible, but it’s much more difficult. At any rate, whoever manages to grow when there is such little water available…will become king of the desert.

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Borja on January 21, 2009  · 

I agree you. Hard time for adventures.

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rV on January 21, 2009  · 

Hi Martin,
Fortunately I didnt have to suffer ur course despite being currently student from IE. Although having u as a teacher was one of my “dreams”! As it is said in spain “sarna con gusto no pica”. Anyway, what i realized from myself is that I am closed to make businesses due to the current economic uncertainty. Well, it may be because is inherent to me as well.
This is my first contribution in ur blog. Cioa ciao!

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Mike Sax on January 21, 2009  · 

The flip side about this environment is that only the very brave and the very stupid are after funding. The hardest part may not be to get people willing to fund but to get an acceptable deal.

Interesting times: Dell is worth $20 billion and Apple has $28 billion in cash.

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Neil Durbin on January 21, 2009  · 

I have found inspiration from guys like Marc Andreessen and Kevin Rose when they talk about the upsides to starting a web company in a down economy: you don’t have as many competitors crowding the market and you can recruit the best more easily.

Being a hacker and a big fan of bootstraping without looking for VC funding initially, I am really excited about starting is this economy.

p.s. I took your business building workshop class in 2006 and took a ton of inspiration from it. Cheers!

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Enrique on January 22, 2009  · 


I was one of your students this year, and believe me, despite economy is not on its “best time”, it was a real pleasure to attend your classes.

In my case, you inspired me, and i am taking the risk to create a new startup. It is not being easy…but when the time has come… can just face the situation…..and find different opportunities. If it would be easy….everybody could be a “wanna be entrepreneur”.

Working hard and smiling is always a good combination….no matter the situation!!!

Best regards

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Lasse Enersen on January 22, 2009  · 

Times of easy VC money is over. Now it’s time to build companies with your own money. Which is not so bad either 🙂

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Marina on January 23, 2009  · 

Martin, I remember most classes of your course (IMBA07) and I can say that the thing you do the best is inspiring. Of course, time is tough, easy money is over, but the main skill for the entrepreneur is an ability to see (to calculate, to create) opportunity. And they can train their entrepreneurial spirit with the projects requiring less investments with their own money.

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Johannes Reck on January 23, 2009  · 

I fully agree, it is impossible to get funded right now without having solid incomes and achieved break-even (or coming close to it).

However, is this really a bad thing? I believe that technology ventures will be one of the first to gain traction, once we are through the toughest part of this crisis (see an Economist article of last week on the same topic). Generally, most tech companies have already been cut very lean over the last years and in case of new ventures, there is much more pressure to achieve with much less resources. It was about time that the Web 2.0 era is pushed towards profitability and I am very optimistic that we will see many new business models come up over the next years, which was really lacking in 2004-2008 (while everyone wanted only to be big and generate advertisement money).

Those that will make money under these conditions, truly will become kings of the desert and have very valuable companies in 4-6 years from now, when there will be more money in the markets again

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Philipp on January 31, 2009  · 

Hi Martin,

I hope you will teach another course this fall! I am really looking forward to have you as my professor at IE!

Keep up this great blog!

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Wheedegom on March 10, 2009  · 

Hello, I can’t understand how to add your blog in my rss reader

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