First, Some Interesting Facts about Stanford University and Startups

The sheer number of companies started by Stanford is staggering

Stanford students, alumni, and faculty have started almost 40,000 companies and greater than 30,000 non profit organizations since the 1930’s.

This is the equivalent of almost 10 new companies and 7 new non profits every week, for the past 80 years.

Stanford University takes ownership of Intellectual Property

Stanford operates the Office of Technology Licensing which takes ownership of inventions created by Stanford students, faculty, and staff, then licenses that technology to start up companies founded by Stanford students, faculty, and staff.

Some Stanford Professors Have Become Enormously Wealthy from Equity Stakes

There is no list of Stanford Professor’s who have become enormously wealthy due to equity stakes in the companies founded by their students, but it does happens with some regularity. To the point where an article published in the New Yorker in September of 2013, titled “Stanford and its Startups” describes how Stanford’s partnership with Silicon Valley has raised some ethical issues, mostly when Stanford professors invest in companies founded by their students.

Do students who’ve started companies in which a professor has a financial stake receive preferential treatment? Do students who’ve started companies which compete with companies in which a professor has a financial stake have the opposite experience?

What is it about Stanford?

Some of what makes Stanford such a successful breeding ground for startups will be difficult to replicate elsewhere for a variety of reasons, but other aspects could be replicated by any other University almost immediately (or at least as quickly as their bureaucratic decision making process allows).

I’ll start by describing what (I think) will be difficult to replicate, then I’ll describe what will be (fairly) easy.

Aspects Other Schools Will be Challenged to Replicate

I’m not saying these can not be replicated, over time. I’m saying it won’t be quick and it won’t be easy.

The Self Selection Process

One of the Founders I interviewed had a great phrase which he referred to as “self selection” which is his way of describing how the reputation or the brand of Stanford University is so strong that students very much want to attend. Coupled with the high academic standards of Stanford, the students who are admitted are the best and brightest.

A Culture of Risk Taking

This is not so much a Stanford thing as a California thing. California became a populous state as a result of the gold rush, which was hugely risky for the people who answered the call. While some did strike it rich most did not, but they were credited with trying.

Stanford University was founded in an area where risking and failing is not a social detriment and trying again (and sometimes again and again) is admirable behavior.

Aspects Other Schools Can Fairly Easily Replicate

Suspension of Academic Studies

I learned that any student at Stanford can suspect their academic studies at any time, for an indefinite period of time, and resume those students at any time. Even if the delay is years.

Image you’re a student at Stanford working on a Ph.D program and you have an opportunity to form a startup company with other students and some faculty advisors.

At another school your Ph.D program has a time limit. If you join the startup and it fails, you may have to either restart your Ph.D program from the beginning, or give up on the idea.

At Stanford that becomes a non decision. You simply suspect your Ph.D studies and if the startup fails you simply resume. One of the founders of google did just this.

Now image you’re the parents of an undergraduate student who is two quarters away from obtaining their under graduate degree. You’re paying a small fortune for them to attend and one night receive a phone call. Your student wants to join other students in a startup. At another school that conversation would be an “either / or” conversation. At Stanford you merely suspend academic studies and resume later, or possibly continue at a much slower pace. The work the student has put into the degree to date is not being risked.

The MSE (Management, Science, and Engineering) Degree

This is a one year program (after your graduate degree) that is part of the School of Engineering. One of the founders told me it’s one of the most popular majors at Stanford.

According to him it provides an excellent grounding in how to take ideas into the marketplace. He described it as his most valuable year at Stanford.

The Office of Technology Licensing

Does your idea involve intellectual property that needs proper protection? Do you know what’s involved in protecting your IP?

Stanford students, faculty, and employees are “covered” (if that’s the right word) by the Stanford University Office of Technology Licensing. It’s not so much that they’re there to help protect your IP. It’s that they own it.

Stanford puts their resources behind the protection of IP developed by their students, faculty, and employees. The OTL then licenses that IP to companies that are founded to commercialize it.

Did you know that google does not own the PageRank algorithm that caused them to produce significantly better search results than other search engines? Stanford University OTL does. It’s then been licensed on an exclusive arrangement to google.

Stanford does that for every invention and startup that has commercial potential.

Organizations Who Exist for the Exchange of Ideas

And there apparently are many, a few of which are identified below.

Stanford Entrepreneurship Network

The SEN acts as a single point of contact for entrepreneurship at Stanford. They are a federation of over two dozen entrepreneur focused campus organizations some of which are mentioned below.

BASES: The Business Association of Stanford Entrepreneurial Students

As the name implies it exists within the Engineering School and includes:

BASES Challenge An entrepreneurial competition where startups present to industry leaders. Includes $100K in prize money and mentorship.

ETL Entrepreneurial Thought Leadership is a weekly speaker series, co-hosted by BASES and the Stanford Technology Ventures Program.

Stanford Technology Ventures Program

This is part of the MSE program mentioned above is both a liaison into the startup ecosystem of Silicon Valley for students enrolled in Engineering and MS&E courses.

While BASES seems more focused on student entrepreneurial activities, STVP seems more focused on entrepreneurial networking but within a fairly formal framework.

In Closing

While as a center for innovation and entrepreneurship Stanford has an enormous head start over every other University on the planet (at least it seems that way to me) I see no reason other schools can’t implement some of the mechanisms which work so well at Stanford.

Re-inventing the wheel is not productive. What works very well for Stanford can (at least in a scaled down version) be replicated elsewhere.

Sources for the Article

I wish to express many thanks for the following individuals who gave me their time and the benefits of their experience as I researched and wrote this article.

Colin Evran, Stanford Graduate and CEO of Yard Club (www.yardclub.com)

Warran Packard, Stanford Graduate and CEO of Thuuz Sports (www.thuuz.com)

Kevin Smith, Stanford Graduate and CEO of SeedChange (www.seedchange.com)

Matt Harvey, Managing Director of the Stanford Technology Ventures Program

About the Author

Kevin Carney is an expert in Inbound Marketing, who teaches and writes on the topics of Inbound Marketing, SEO, and WordPress. Kevin founded and runs Inbound Marketing University, the online school and community where people learn how to attract their desired audience to their website and convert website visitors into prospects. Kevin can be followed on social media at @kevinbcarney, +KevinCarney, and LinkedIn, and contacted on the Inbound Marketing University Website.