Facebook is worth tens of billions of dollars. If its active users formed a country, it would be the third most populous in the world. The dramatized story of its founding (The Social Network, 2010), in which Harvard plays a significant role, was a critical and box-office hit.
According to a Kauffman Foundation study, “if the active companies founded by MIT graduates formed an independent nation, conservative estimates indicate that their revenues would make that nation at least the seventeenth-largest economy in the world.”
Certainly, these types of statistics are mostly just attention-grabbing ledes — they can’t and don’t really capture the state of an institution’s entrepreneurial culture. That being said, it’s unlikely you would hear similar stats about Yale being thrown around…
Make no mistake, Yale has had a number of entrepreneurial successes. FedEx (Fred Smith, ‘66), Meebo (Seth Sternberg, ‘01), Higher One (Sean Glass, ‘03), Justin.tv (Justin Kan, ‘05), and Aardvark (Max Ventilla ’06 et al.) are just a few of the companies that have been founded by Yale alumni. There are Yalies in important places in industry (e.g., the founders of General Assembly. Bing Gordon, of Kleiner Perkins). There are even more fledgling ventures on campus, in programs like the YEI Summer Fellowship. Four of the twenty four Thiel “20 Under 20” Fellows were from Yale.
However, despite these individual successes, Yale just doesn’t have the cultural clout of the entrepreneurial powerhouses — places like MIT, Stanford, perhaps even Harvard. Why not? What does it take to build an entrepreneurial culture?
Where do entrepreneurs come from?
In an opinion piece on the technology and startup blog TechCrunch, Vivek Wadhwa discusses whether entrepreneurs are born or made. He cites Fred Wilson, a prominent VC, who believes that “you can’t teach people to be entrepreneurs”. Wadhwa claims the opposite — that entrepreneurs aren’t born, but are made.
On an anecdotal level, many words have been blogged about what makes a successful entrepreneur. The characteristics seem to converge onto several recurring traits — things like determination, resourcefulness, and creativity, things that all sound pretty useful to have if you’re starting a company. Even if possessing these traits somehow didn’t predispose one to entrepreneurial success, these are the traits that the gatekeepers themselves profess to care about. By selecting founders with these traits, VCs and their ilk create a system in which possessing these traits is rewarded. Perhaps some people are born with a temperament that makes them more likely to be successful in entrepreneurial pursuits.
However, there are clearly more people who exhibit these types of characteristics than the number that pursue entrepreneurship, let alone pursue it successfully. People can be exposed to entrepreneurship, and through education, be given the tools to increase their chances of success — in this sense, potential entrepreneurs can be made into successful entrepreneurs. Not everyone given these resources will magically become a successful entrepreneurs; not everyone can or wants to be made into an entrepreneur.
Entrepreneurs are neither exclusively born nor made — perhaps more accurately, they are activated.
Entrepreneurial culture and communities
Brad Feld reminisces on his blog about his bright college years at MIT — specifically, about his experiences as a frat bro.
Clearly, it was a frat… But as he points out, it also spawned an incredible amount of innovation — the founders of iRobot, ATG, Bluefin Robotics, Harmonix, and VCs at Menlo and Accel, to name a few. As Feld describes it, “there was something in the water” (or perhaps, in the foam).
This culture isn’t unique to an MIT frathouse. The hope is that aspects of this community and its culture can be replicated, thus activating more entrepreneurs.
So, what are some significant characteristics of environments that effectively activate entrepreneurs?
- Network (geographic and knowledge networks). Geographically, startups congregate in places like Silicon Valley, New York, and Boston. Sociological researchsupports this strategy — “network support increases the probability of survival and growth of newly founded businesses”. A study on the geographic localization of innovation found that “small firms are tied into regional knowledge networks to a greater extent than large firms”. For a small firm, then, it makes sense to tap into the densest and most extensive knowledge network possible — which, practically speaking, tends to mean moving to an entrepreneurial hub.Unlike schools like Stanford (Silicon Valley), MIT and Harvard (Boston), Yale doesn’t have the advantage of a strong local culture of innovation and industry, and the accompanying network. Among the Yale success stories, few have chosen to stay in New Haven, choosing instead to relocate to one of the startup hubs. This dearth also makes it more difficult to pursue entrepreneurship while a student at Yale — it’s inconvenient to be located where many of the resources aren’t.
- Education. Help predisposed individuals recognize an interest in entrepreneurship. The few in-classroom opportunities (at least within Yale College) to learn and practice entrepreneurship on campus have been incredibly oversubscribed — Sean Glass’ Technology Entrepreneurship seminar had 130+ applicants for fewer than twenty spots. The Hack Yale initiative had hundreds of people register for the course, and even more indicate interest. Rather than balk at the more preprofessional nature of these courses, Yale should recognize that entrepreneurship is not out to destroy the liberal arts education. Rather, offer these types of initiatives the institutional support they deserve.
- Domain knowledge. It’s no coincidence that many of the entrepreneurial powerhouses are also technology powerhouses. Technological innovation drives entrepreneurial innovation. Let’s be honest, Yale isn’t exactly known as a tech powerhouse, either. Until the on-campus culture of technologists reaches a critical mass, Yale’s wantrepreneurs will all still be looking for technical co-founders, not shipping product.
So where is Yale’s Zuck?
If I knew the answer to that question, I would be on my way to a nice sum of money and a cameo in a David Fincher movie. What I can postulate, though, is that the likelihood of producing a Zuckerberg — by which I really mean the likelihood of producing ventures, specifically successful ones — is positively correlated with the strength of an institution’s entrepreneurial culture. A strong culture will attract entrepreneurially-minded innovators. It will also activate potential entrepreneurs who are already there.
It’s not that Yale inherently lacks the ability to produce the next Zuckerberg. There are plenty of smart people here. There are institutional resources. But when it comes to the key factors in creating an environment that activates entrepreneurs, we’re still playing catch-up. The current spike in activity on campus is encouraging. The next step, though, is to convert the interest into something shippable.