From the New Yorker:
Get Rich U.
There are no walls between Stanford and Silicon Valley. Should there be?
HT: LongreadsStanford University is so startlingly paradisial, so fragrant and sunny, it’s as if you could eat from the trees and live happily forever. Students ride their bikes through manicured quads, past blooming flowers and statues by Rodin, to buildings named for benefactors like Gates, Hewlett, and Packard. Everyone seems happy, though there is a well-known phenomenon called the “Stanford duck syndrome”: students seem cheerful, but all the while they are furiously paddling their legs to stay afloat. What they are generally paddling toward are careers of the sort that could get their names on those buildings. The campus has its jocks, stoners, and poets, but what it is famous for are budding entrepreneurs, engineers, and computer aces hoping to make their fortune in one crevasse or another of Silicon Valley.Innovation comes from myriad sources, including the bastions of East Coast learning, but Stanford has established itself as the intellectual nexus of the information economy. In early April, Facebook acquired the photo-sharing service Instagram, for a billion dollars; naturally, the co-founders of the two-year-old company are Stanford graduates in their late twenties. The initial investor was a Stanford alumnus.
The campus, in fact, seems designed to nurture such success. The founder of Sierra Ventures, Peter C. Wendell, has been teaching Entrepreneurship and Venture Capital part time at the business school for twenty-one years, and he invites sixteen venture capitalists to visit and work with his students. Eric Schmidt, the chairman of Google, joins him for a third of the classes, and Raymond Nasr, a prominent communications and public-relations executive in the Valley, attends them all. Scott Cook, who co-founded Intuit, drops by to talk to Wendell’s class. After class, faculty, students, and guests often pick up lattes at Starbucks or cafeteria snacks and make their way to outdoor tables.
On a sunny day in February, Evan Spiegel had an appointment with Wendell and Nasr to seek their advice. A lean mechanical-engineering senior from Los Angeles, in a cardigan, T-shirt, and jeans, Spiegel wanted to describe the mobile-phone application, called Snapchat, that he and a fraternity brother had designed. The idea came to him when a friend said, “I wish these photos I am sending this girl would disappear.” As Spiegel and his partner conceived it, the app would allow users to avoid making youthful indiscretions a matter of digital permanence. You could take pictures on a mobile device and share them, and after ten seconds the images would disappear.
Spiegel needed some business advice from campus mentors. He and his partner already had forty thousand users and were maxing out their credit cards. If they reached a million customers, the cost of their computer servers would exceed twenty thousand dollars per month. Spiegel told Wendell and Nasr that he needed investment money but feared going to a venture-capital firm, “because we don’t want to lose control of the company.” When Wendell asked if he’d like an introduction to the people at Twitter, Spiegel said that he was afraid that they might steal the idea. Wendell and Nasr suggested a meeting with Google’s venture-capital arm. Spiegel agreed, Nasr arranged it, and Spiegel and Google are now talking.
Spiegel knows that mentors like Wendell will play an important part in helping him to realize his dreams for the mobile app. “I had the opportunity to sit in Peter’s class as a sophomore,” Spiegel says. “I was sitting next to Eric Schmidt. I was sitting next to Chad Hurley, from YouTube. I would go to lunches after class and listen to these guys talk. I met Scott Cook, who’s been an incredible mentor.” His faculty adviser, David Kelley, the head of the school of design, put him in touch with prospective angel investors.
If the Ivy League was the breeding ground for the élites of the American Century, Stanford is the farm system for Silicon Valley. When looking for engineers, Schmidt said, Google starts at Stanford. Five per cent of Google employees are Stanford graduates. The president of Stanford, John L. Hennessy, is a director of Google; he is also a director of Cisco Systems and a successful former entrepreneur. Stanford’s Office of Technology Licensing has licensed eight thousand campus-inspired inventions, and has generated $1.3 billion in royalties for the university. Stanford’s public-relations arm proclaims that five thousand companies “trace their origins to Stanford ideas or to Stanford faculty and students.” They include Hewlett-Packard, Yahoo, Cisco Systems, Sun Microsystems, eBay, Netflix, Electronic Arts, Intuit, Fairchild Semiconductor, Agilent Technologies, Silicon Graphics, LinkedIn, and E*Trade....MUCH MORE