Sunday, September 15, 2013

Haroon Zaidi: In response to "Stanford to Invest in Startups"

To preface I respect the opinion of the individual who made the original post, they many valid points and also some points I disagree with, if they have any disagreements with what I say in this post, they can feel free to challenge me, as I am only human and thus fallible to mistakes.
Okay with that out of the way, lets start:

First of all I agree with the individual, that we at Stanford have a culture that is over obsessed with starting startups at Stanford, just last year I’ve been made aware of several startups.  None of these was one I interested in joining, because either they weren’t up my alley, or the idea seemed to lack passion.  At times it seemed that the individual was just founding a startup, for the sake of claiming that one had started one.  So, yeah we definitely have a problem here.

However, that does not mean we do not need organizations that help foster startups.  At the risk of over simplification I  would like to say that we have two types of startups those that require relatively little initial cash investment and can start becoming cash positive in a matter of months.  A few examples are online companies or programs, where a group of students can sit together make an office in their room and code away.  However then there are other startups, such as biotech or chemical which need dedicated space, time, and employees to perform research and perfect the final product.

Now yes you are correct to say that venture capitalists will be interested in the startups if they are financially sounds, and you are also correct in saying that our university seems to be going down an industrial path.  However, VC’s are far more mercantile than a university even if that University is flirting with industry.  And admittedly by the nature of citing this upcoming example, I will cede to you that engineers are more likely to reap the benefits of such a program.  Last year I was sitting in my intro chemical engineering class, when my professor, Chaitan Khosla (a serious boss), asked why must you be damn certain on how much money you need, having talked with other kids in the dorm and among my circle of friends who were in or trying to enter the startup culture, the guess I ventured was “It shows a strong amount confidence and certainty and will thus reflect positively on you, thus allowing you to incur more funding”, or something similar to that, yes I realize in retrospect how obnoxious that answer sounds and I cringe, although you should seriously hear some of the other students in the class.  To this “Absolutely, positively… not” my professor exclaimed (at this I was crestfallen, in my defense the absolutely positively was quiet misleading) .  His explanation was, the first dollar you raise is the most expensive dollar you will ever raise, because your idea is not proven yet, you do not have that societal verification of your company succeeding.  If this amount if money is too high the venture capitalists will say no or it also entirely possible that the stipulations that come with this funding too restrictive or vindictive, which would be enough to sufficiently cripple or even end in its infancy, what might have been otherwise a successful startup.  Stanford, instead can help nurture that project.

Yeah in this age you do need computer people and programmers to get you basic systems running, but you also need science people, business people, humanity majors, etc.  All types of people to help you and to me it seems like there is no reason that a humanity major could not come up with a great idea, he or she would just need the help of other people to push that along.

I feel that we are at the brink of a revolution of how business is done, and this revolution is spearheaded by Silicon Valley in a large part due to the efforts and achievements of Stanford.  So why, as university and also in some sense the stewards of this revolution, should we not form a mutually beneficial relationship.  As for a humanities student, yes I’ve admitted that he or she probably will not be able to directly tap into the benefits of this program, as much as some other individuals, however the financial returns to the university will aid them indirectly in the long term in addition to the say engineering students.

I think as Stanford students we live in a unique environment, where we have the ability to try to make our vision a reality, with the expertise and help of several professors and members of the industry, if we choose to.  If this is a curse and blessing is still uncertain, in my opinion perhaps it is a bit of both.

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