Easy Money: Garage Companies Sell Out
Go to B-School.
Start Fortune 500 Company in Garage.
-- Ad for Kaplan Educational Centers, test preparation services.
The garage has taken on mythic qualities, rivaling the kitchen and the bedroom for subtext. It's the inventor's lab of the '80s and '90s, occupied by geniuses, and working there has become shorthand for unadorned inspiration.The current version of the humble-beginnings script has its roots in the Bill Gateses and the Jerry Yangs. Michael Dell is the gold standard in this regard, having started Dell in 1979 in a dorm room and now enjoying a healthy company as well as a sterling reputation (unlike Big Brother incarnate Gates or Apple's (AAPL) Steve Jobs, who imploded several years back). But with each passing year, new entrepreneurs seem to acquire another coat of polish while dulling some of the raw pioneering spirit. What used to be the bootstraps of a generation -- the long-haired, bespectacled genius cranking out source code next to the Weed Whacker -- has become as trite as the log cabin. It's no longer a visionary start, it's step one in the business plan.
|Illustration by Paula Wood|
Of course, that doesn't necessarily prevent anybody from maxing out the credit cards and borrowing from Aunt Tilly in indie-film style. Across the U.S., teenagers still set up ISPs and Web-based businesses. But times, as they say, have changed. Forget the long, hard struggle toiling next to the circular saw and lug wrenches, as did companies such as Excite. The six founders of that business, launched in 1992, spent 18 months in the garage, eating away at a 50-pound bag of rice. WebOrder, a company begun in 1995, develops e-commerce architecture to help companies handle online sales. It decided office space was a good idea after 18 months as well, after having to fake it once for investors flying in from Singapore. But take a look at 25-year-old Chris Klaus's antihacking security company Internet Security Systems, whose parent ISS Group (ISSX) is now acquiring Netrex Secure Solutions for stock worth $57 million. Founded in 1994, ISS moved out of Klaus's grandma's guest room after a scant six months.
|The excitement started at home.|
|Michael Dell returns to the old 'hood earlier this year. No word on whether the two current residents of his old dorm room have landed VC money yet.|
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV