Stanford's startup culture stronger than ever

When a hot startup called Cooliris began searching for a home base, location was a top priority.

"If you're not in easy biking distance of Stanford," said Cooliris CEO Soujanya Bhumkar, who founded the Web "visual navigation" company with two recent Stanford grads, "you're in the wrong location."

Stanford's 100-year tradition of entrepreneurialism, which has spawned such tech giants as Hewlett-Packard, Cisco Systems and Google, has been recognized as a catalyst to Silicon Valley's emergence as the globe's pre-eminent tech hub.

Even now, with the economy staggering, "The Farm" is sprouting business ideas and talent as never before — largely because it is teaching entrepreneurship as never before.

"Entrepreneurship is a philosophy. It's a way of looking at the world," explained Randy Komisar, an entrepreneur-turned-venture capitalist at Kleiner Perkins Caufield & Byers. Komisar, author of the dot-com era best-seller "The Monk and the Riddle," teaches part time at Stanford and sits on Cooliris' board of directors. Viewed as a philosophy, Komisar said, entrepreneurship "dovetails nicely with a liberal arts education."

Stanford is building on a track record of tech innovation that has quietly marked a centennial. In 1909, 18 years after Stanford first opened, recent grad Cyril F. Elwell established himself as the valley's first high-tech entrepreneur when he founded Federal Telegraph and Telephone in Menlo Park

helped by an investment from David Starr Jordan, Stanford's first president.

"He's the first angel investor I can find in the record," said Bill Miller, the former Stanford provost.

The university is better known for its prominent role in the creation of the Internet, as well as such cutting-edge companies as HP, Varian Associates, Sun Microsystems, Cisco, Silicon Graphics, Netscape, Yahoo, Google and VMware.

Stanford, to no one's surprise, ranked No. 1 in a recent global "Top Ten" of university startup communities by YouNoodle, a firm that analyzes startups. Rounding out the top five were the Massachusetts Institute of Technology, the University of Cambridge, UC-Berkeley and the Indian Institutes of Technology.

"It's built into the DNA of this place," said professor Thomas H. Lee, who earned his doctorate a MIT and in 1994 founded Stanford's Microwave Integrated Circuits Laboratory.

When he arrived at Stanford, Lee laughed when colleagues said he'd have to do a startup. But there is, he said, a kind of peer pressure at a campus where professors like John Hennessy, now Stanford's president, had prospered as founder of MIPS Computer Systems, and Jim Clark launched Silicon Graphics before teaming with Marc Andreessen on Netscape.

As for Lee, he co-founded Matrix Semiconductor in 1998 and last year launched ZeroG Wireless, aimed at building what he calls "the Internet of things." Several other professors are also involved in startups, as founders or investors.

Stanford business sensibilities are on display at events like the annual Entrepreneur Week, held in February and organized this year by 17 distinct campus entities. One of them, called BASES — for the Business Association of Stanford Entrepreneurial Students — was founded in 1996 and claims more than 5,700 active members and alumni involved in more than 400 startups.

This year's business plan competition attracted 235 entries — more than double the peak of the dot-com era.

Students regularly crowd into a weekly class called Entrepreneurial Thought Leaders that is organized by the Stanford Technology Ventures Program, led by professors Tom Byers and Tina Seelig in the School of Engineering. In January, the National Academy of Engineering honored Byers and Seelig with the prestigious Gordon Prize expressly for advancing the teaching of engineering.

Last Wednesday, the class was moved to Stanford Memorial Auditorium to accommodate a talk by Microsoft CEO Steve Ballmer. About 700 students and visitors filled the hall.

In introducing Ballmer, Seelig emphasized that he and Bill Gates first became friends at Harvard — ''so look at your fellow classmates and think, who am I going to do the next big thing with?"

Another recent talk featured Jen-Hsun Huang, co-founder and CEO of Nvidia. About 300 students, including visiting groups from Asia and Latin American, listened as Huang talked about the importance of a big vision and fostering a culture of innovation. The encouragement of risk-taking, Huang explained, requires a tolerance for failure.

To valley technologists, such observations are often taken as gospel. But concepts like the value of "failing fast" — to quickly learn from setbacks — can be enlightening at a elite university where students are often overachievers. Seelig has her students prepare a "failure resume" to illustrate how they should learn from mistakes.

Komisar said he and Byers use a Socratic method in class, constantly questioning students and encouraging dialogue. "In Silicon Valley," he said, "we've created this culture that is sort of self-perpetuating, a culture that attracts the sort of people who prosper in ambiguity, innovation and risk-taking."

On a less lofty note, Seelig points out that students also learn the business value of networking — that the student in the next seat could become their partner, employer, employee or investor. A grad student in environmental studies tells of how he arrived at Stanford to prepare for an academic career. Then, through a relationship in a tennis class, he became involved in a clean-tech startup.

Networking is key to the story of Cooliris, which has developed new ways to navigate the Web through images. The startup was founded in 2007 by Bhumkar with recent Stanford grads Austin Shoemaker and Josh Schwarzapel. Shoemaker, 25, was recognized as a prodigy when he began writing code for Apple at age 15. Schwarzapel, 24, came to Stanford on a volleyball scholarship and majored in communications.

Sidelined by a back injury, he found himself drawn into the entrepreneurial culture — an outlet, he suggests, for his competitive nature. (Shoemaker, meanwhile, competed on Stanford's champion crew team.) Their friendship, Schwarzapel said, was forged when a professor tabbed them in class for an impromptu mock employment negotiation.

Separately, Schwarzapel had gotten to know Bhumkar after participating in a focus group for Bhumkar's previous startup. ''He's very hungry, very determined," Bhumkar said of Schwarzapel. "He wants to conquer the world."

Bhumkar, a 40-year-old graduate of University of Chicago, had noticed how Stanford grads dominated previous startups he worked in. When he had the idea that became Cooliris, Bhumkar contacted Schwarzapel, who in turn introduced him to Shoemaker. The startup was incubated at Kleiner Perkins, with Komisar transitioning from a teacher of the Stanford students to an investor and company director.

While Shoemaker focused on technical matters — his title is chief technology officer — Schwarzapel works with Bhumkar on the business side, including recruitment. Early on, Cooliris had about 10 full-time employees — and nearly 40 interns. Now it has 32 full-timers and 35 interns — and many intern applicants are turned away.

Cooliris is off to a promising start, recording more than 12 million downloads of its "visual navigation" Web tools. It has won raves for delivering a more "cinematic" experience that admirers say could enhance online advertising and e-commerce.

One recent day, the "party team," the company's term for its interns, broke out soft drinks and chips to celebrate two teammates who had been selected for an elite fellowship for the intensive study of entrepreneurship. Their Cooliris experience may have helped Chris Anderson, a sophomore, and Rohan Bhobe, a senior, join 10 other students out of more than 100 applicants for the Mayfield Fellowship, whose 2007 class included Schwarzapel.

Anderson, a symbolic systems major from Maryland, said he felt no entrepreneurial itch when he arrived at Stanford: "I guess I knew this was Silicon Valley, but I didn't really connect the dots. Then you come here and everybody is talking about some small tech startup."

"There's definitely something infectious going around," Bhobe said.

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