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By Casey Lindberg

Steve Ballmer, Microsoft’s energetic chief executive officer, gave a humorous and optimistic pep talk Wednesday to a large crowd of Stanford students, including some about to graduate into the midst of the Great Recession.

Pacing the stage and gesturing with his arms, Ballmer spoke to a packed house of 1,700 people, many of them engineering students, at Memorial Auditorium. His advice to aspiring tech innovators was part of the Entrepreneurial Thought Leaders Seminar, normally attended by about 50 students.

After finishing his undergraduate career at Harvard, Ballmer enrolled in the Stanford Graduate School of Business for one year before dropping out to join forces with Bill Gates at Microsoft. Now bald, Ballmer poked fun at a picture of himself presented on a slide accompanying his recollection of those early days.

“That’s me when I got to Stanford. I still part my hair, by the way, on the right,” said Ballmer.

While speaking about the economy’s impact on entrepreneurship, Ballmer acknowledged the concern many soon-to-be graduates might have.

“My gosh—I am graduating, I am starting a company, I am moving forward, in the worst economy in, whatever, 70-plus years—is that a good thing or not?” said Ballmer. “It definitely is a tough, tough, tough environment. There’s no question about it.”

Ballmer, though, is convinced that the economic climate still provides enough room for entrepreneurs. He argued that there is enough venture capital available to fund the good ideas that are out there.

“The opportunity and need to invent … remains strong,” said Ballmer. “There’s going to be less venture capital this year than last year. There’s still probably in my opinion more venture capital than there are really good ideas to absorb the venture capital.”

Ballmer conceded that venture capital can contract too much and strain innovation, but maintained that excess venture capital is also not ideal.

“Let’s say there was four times as much venture capital. Would we have four times as much innovation? I don’t think so,” he said. “In a sense you could say there’s really not a better time to start a business. If you’ve got the right idea, you will get some funding. The ideas that weren’t good enough shouldn’t have been funded, and they won’t be funded today.”

Ballmer said the economy is resetting to a lower level and will then build back up from a lower base. That new base will provide a place for great ideas for companies and products to grow alongside the economy. He observed that Microsoft, Apple and General Electric are all companies that started under similar economic circumstances.

Ballmer argued that ideas for new technology are always changing. “Since I’ve been at Microsoft, the basic paradigm for how software gets written has changed a few times,” he said.

He suggested that these paradigm shifts open up new opportunities for people with good ideas. In particular, he noted that there is plenty of room for technological innovation in the fields of health and science.

“You’re able to model today the physical world with computers in a way that was never possible before,” said Ballmer. “Software accelerates the process.”

One of the next big changes will be the way people interact with technology. “That’s the future. That’s where things are going,” he said. “Today you learn to speak the computer’s language. If you want to write programs, you learn to write programs in the computer’s language.” He told the audience that his computer is incapable of understanding a simple request: “Get me ready for my trip to Stanford.”

“My secretary’s able to process that command,” he said. “My computer cannot process that command.”

In closing, Ballmer cautioned that even though there is room for entrepreneurship, success doesn’t come quickly and requires long hours and dedication. Because of this, he warned the audience about choosing a career for the wrong reasons.

“I think the biggest mistake most people make when they pick their first job is they don’t worry enough about whether they’ll love the work, and they worry more about whether it’s good experience,” Ballmer said. “You might pick a school because it’s good for you, and you might pick a second school because it’s good for you, but by the time you’re picking jobs I really think you’ve got to pick a job because you really think you’re going to love doing the work that you’re doing, and it’s a mistake not to.”

Ballmer’s talk was cosponsored by the Business Association of Stanford Entrepreneurial Students, the venture capital firm Draper Fisher Jurvetson and the Stanford Technology Ventures Program.

Casey Lindberg is an intern at the Stanford News Service.

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Also on Stanford Knowledgebase:

  1. Microsoft’s Ballmer Says Nurturing Innovation and Top Talent Are Priorities
  2. Video: Routes to Entrepreneurship
  3. Stanford Roundtable: Recession Ending, Innovation Needed

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