- In your opinion, why are alumni from some universities much more prolific than alumni from most universities when it comes to starting companies? E.g. what are some things that MIT and Tsinghua have rightly put in place to nurture and engage their students/alumni to bloom into successful entrepreneurs? Is it the entrepreneurial and innovative culture of these universities, or do other factors come into play?
The first is top quality, cutting-edge research. It is these breakthroughs that form the basis for new products and sometimes, whole new industries. While MIT and Tsinghua have both emphasized basic research, the faculty have also had to find outside, non-government sources of money which gives them some interaction with industry and knowledge of what problems need solved. High-tech entrepreneurship, at it’s heart is about using technology to solve real-world problems. Students become exposed to these elements of technology breakthroughs and industry problems in the research lab and in the classroom. The second element, which is important, but hard to replicate is a university that is known for entrepreneurship and so attracts students who have entrepreneurial inclinations. At MIT, the percentage of entrepreneurial alumni who say that they chose to come to MIT because of its entrepreneurial reputation has increased from 12% in the 1960s to 42% in the 1990s. Finally, entrepreneurial universities provide role models to students in the form of successful entrepreneurs who generously come back to campus and give talks or mentor students, explaining to them that they were once sitting where the students are sitting before they created their successful companies. So the most important elements in my mind are cutting-edge research, a reputation for applying technology to solve problems, and entrepreneurial role models.
- In the context of Q1, then what are some things that universities should perhaps be looking at doing (or not doing), if they want their alumni to be more entrepreneurial?
Consistent with these three elements, the university should Invest in recruiting entrepreneurial faculty who are doing high quality, cutting-edge R&D in their labs. Recruiting materials sent out to prospective students and admit weekends should include information about successful entrepreneurial alumni. Alumni programs and entrepreneurship classes should seek to engage with recent and older alums to come in and give talks on campus or mentor students and alumni interested in starting companies in their industry. Universities should not be encouraging that everyone needs to be an entrepreneur, but rather to expose students to entrepreneurship so that they can decide whether it’s for them. Also, universities should seek to encourage intellectual risk-taking. At MIT, this takes the form of the celebrated culture of “hacking” (clever, benign, and amusing pranks – http://hacks.mit.edu). Universities should also not focus exclusively on faculty spin-offs. Far more startups are created by alumni entrepreneurs.
- Is there any matrix to measure the impact of alumni entrepreneurship?
In the MIT Founders survey we measure the economic impact in a number of ways including the number of companies currently active, the number of jobs created and the worldwide revenues generated. For MIT, we find that these numbers are 25,800 currently active companies, 3.3 million jobs and almost $2 trillion in annual world revenues. However, these are not the only ways to measure impact. Many entrepreneurs start a company to produce innovative new technology, to change the world in some tangible way, or to improve society through social innovation. All of these are valid and important impacts. There are many ups and downs in starting a company and so it’s very important to be doing it for some reason beyond simply to make money. It’s the passion that allows you to get through the hard times.
- In your research findings on trends and patterns in entrepreneurship among the alumni of elite research universities, how important is tertiary education to an entrepreneur? Is tertiary education the key differentiating factor that sets apart a good entrepreneur and a great entrepreneur?
Tertiary education is very important. Don’t be fooled by survivor bias and the anecdotal examples of Bill Gates, Mark Zuckerberg, etc. Research shows that on average for technical founders, Master’s degree holders have the highest performance on average. Tertiary education provides skills, a social network, and a backup plan for if your venture fails. I wouldn’t call it the key differentiating factor. But being a quick learner certainly helps. Many would agree that the key is probably something more intangible, some optimal combination of initiative, optimism, paranoia, persistence, and smarts. However, research shows that there is no one personality type for the entrepreneur – they come in all shapes, types and sizes.
- What’s your advice for a team of budding entrepreneurs who has a viable business idea but has two more years of university studies to complete?
First of all, realize that the idea is only a small, small part of it. Every entrepreneur believes they have a viable business idea. However, even the ones who do often lack the ability to execute on it. My advice would be to talk to as many potential customers (who aren’t your friends) as possible and try to really, truly listen to what feedback they are telling you. Try not to hear what you want to hear but what they’re actually saying. Try to figure out what the big problems are that someone is willing to pay for. Use your years of university studies to develop your business, hone your independence of thought and your critical thinking skills, to learn as much about your industry and to meet as many people as possible. A university is full of opportunities and open doors. Use it to your full advantage in creating your business. Only leave if you are picking up so much traction in the market that you can’t possibly keep up with both schoolwork and your exploding number of customers.
- How has your tertiary education at Duke and MIT changed or shaped your outlook about entrepreneurship?
What I owe to Duke is the ability to break away from the traditional path, to take the initiative and strike out on my own. I learned that there is a way to both do good for society and do well to support your family. To realize that the only way to never work a day in your life is to free yourself to follow your passion and to solve whatever you see to be big, important problems in the world. Time on this Earth is limited. In the words of Steve Jobs, it’s not worth it living someone else’s life.
From MIT, I learned that entrepreneurship is about more than just being passionate and working crazy hours. That there is a way to be smart about it, or at least to increase your odds of success. In addition, I learned through many late nights of problem sets that even if a problem appears to be impenetrable, that if you chip away at it, little by little, you can make progress and solve even the most complex problems. In many ways, creating a business is nothing more than a series of problems that must be solved as quickly as possible. MIT was a training ground that big problems represent big opportunities when tackled step by step.
- What is the most interesting experience you had in teaching Technology Entrepreneurship in Stanford?
Each year the most fascinating part to me is seeing the creative ideas my students come up with and the incredible feeling it is to see the teams work like crazy at all hours throughout the quarter and then how happy I feel when they thank me for the experience afterwards. I got into teaching because I had a failed startup in my first experience and I wanted to help more of my students to experience the incredible joy of a successful startup, rather than the frustration of a failure. I felt like I could leverage my time more by helping my students to be successful, rather than doing my own startups one at a time. I almost can’t believe they pay me to do this!