Launchpad Republic

8The Entrepreneurial Revolution

The stock opened at $28, but it rocketed to over $75 before closing at $58 for the day. For both the company and the rest of the world, the $3 billion market cap signaled that a new era had arrived. Netscape's public offering in February 1995 – dubbed “The IPO That Inflated the Dot‐Com Bubble” – sparked the imagination of entrepreneurs and investors alike.

The upstart soon found the incumbent a powerful foe. Microsoft had itself outmaneuvered IBM as a scrappy upstart 20 years earlier to establish the dominant operating system for personal computers. Now it quickly responded to the threat from Netscape's internet browser. By bundling Internet Explorer into its ubiquitous Windows software, Microsoft soon supplanted Netscape and protected its position as the gateway for computer users. Netscape's share of the browser market plummeted from over 90% to below 10%, and the company was eventually sold to AOL, another high‐flying‐upstart‐turned‐incumbent that would be undone by the dynamism of the era a few years later.

Microsoft's success in fending off the challenge from Netscape was both ironic and instructive. A model of upstart entrepreneurship, it had created thousands of “Microsoft millionaires” after its own IPO in 1986. Despite Netscape's difficulties, its public offering a decade later unleashed a new and greater wave of enthusiasm among aspiring entrepreneurs. Both helped generate increased investor interest in venture capital investing and ...