A Garage and an Idea

A Garage and an Idea: What More Does an Entrepreneur Need?
Pino G. Audia and Christopher I. Rider
California Management Review, Fall 2005

Silicon Valley started with a garage, or so the story goes.  In a small garage in Palo Alto, California in 1938 to 1939, William Hewlett and David Packard experimented with numerous electronic devices, including a prototype for an audio oscillator.  That product enabled the entrepreneurs to launch Hewlett-Packard, one of the largest high-tech companies in the world today.

The HP garage is the most celebrated example of a common belief in the United States — that it is common for entrepreneurs to start companies in garages.  American business history offers numerous stories of successful entrepreneurs, such as Walt Disney and Steve Jobs, whose garages served as early workshops for the products and services that eventually launched prominent U.S. businesses.

But is this belief accurate?  In “A Garage and an Idea:  What More Does an Entrepreneur Need?” in the Fall 2005 California Management Review, Pino G. Audia and Christopher I. Rider of the Water A. Haas School of Business at the

University of California at Berkeley explore the realities of the entrepreneurial garage.

The authors first set out to gauge how popular the myth of the garage is today. So they conducted surveys to measure people’s familiarity with the idea of the garage entrepreneur.

While the garage appears to be the most prominent reference for entrepreneurial workshops, other stories of successful entrepreneurs emphasize the basement, which is where UPS began; the dorm room, where Michael Dell founded Dell Computer; and the kitchen, where Lillian Vernon launched her catalog business.

So, the authors included these alternative workshops in their surveys.

They found that roughly 90 percent of business school students and people from a broad range of occupations and age groups were able to name at least one company started in a garage, basement, kitchen, or dorm room.  They also found hundreds of articles from the business press in which the words “garage” and “entrepreneur” appeared together.

How accurate is this belief that garages and basements are common to entrepreneurship?  The authors conducted a random survey of 32 startup companies.

This study revealed that some companies actually are started in garages, basements, dorm rooms, kitchens, and living rooms.  Of the 32 companies, eight businesses, or 25 percent, reported starting in a garage, basement, dorm room or a room in one of the founders’ residences.<...