Striking It Rich

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In addition, the blue sky and open spaces that attracted the area's pioneers 25 years ago are now becoming obscured by industrial parks and a thin layer of smog. Crime is on the rise. The theft of computers and semiconductors has become an estimated $20 million-a-year problem. Housing is scarce and expensive. The price of an average home in Santa Clara County is now $128,484.

One result is that some Silicon Valley companies are looking around the U.S. when they want room to expand. Many states, in search of industries that are clean, fast-growing and pay good wages and fringe benefits to skilled workers, would like to attract such companies. North Carolina is spending more than $24 million to build a microelectronics center near Durham in what is called the Research Triangle.

The spirit and support structure of the risk culture can be hard to duplicate. Starting a successful new business requires a unique combination of characteristics that has little to do with geography. John Welsh and Jerry White of Southern Methodist University's Caruth Institute of Owner-Managed Business have studied the personality traits of risk takers. Chief among them are self-confidence, vision and the need to be in charge. Indeed, many have been frustrated at larger companies. Says White: "Entrepreneurs have a fundamental need to control their own destiny. Seldom can they find this in someone else's organization." Although most entrepreneurs have worked for large corporations, they usually stayed only a short time.

Headstrong and independent, risk takers are rebels with a cause—themselves. William F.X. Grubb, 37, left Atari, the successful manufacturer of home video equipment, and formed Imagic, which makes video game cartridges and hopes to have sales of $25 million or more this fiscal year. Says he: "Entrepreneurs want to be able to test their abilities and see how far they can go. It's the ultimate report card." That same pioneering spirit can make these businessmen hard to live with. Many are workaholics who lock themselves up in their offices for long stretches and have little tolerance for socializing.

One Wall Street adage has it that if a person has not made his first million dollars by the time he is 30, he is never going to make it. In 1776 Adam Smith wrote that it was young people who had "the contempt of risk and the presumptuous hope of success," precisely the skills needed to found new businesses. Indeed, a large number of entrepreneurs have achieved success at a very early age. One of many examples: William Gates, 26, dropped out of Harvard in 1975 during his sophomore year to form Microsoft, which makes software for personal computers. Its 1981 sales: $15 million.

Patrick Liles, a former Harvard Business School professor now with the Charles River Partnership, a Boston venture capital firm, says that the best time for a businessman to start a company is between the ages of 26 and 36. Says he: "Earlier than that, a young person lacks business experience, competence and self-confidence. And by his late 30s or early 40s, the person is usually too embedded in his corporate career or facing too many financial commitments to take a chance."