How Stanford Cultivates Its Startup Culture

As faculty director of CES, Zenios also encourages collaboration between MBAs, engineers, lawyers, and medical school students. A recent “Finding Your Team” social mixer drew 250 people from different Stanford programs, who discuss what they’re working on and, if all goes well, get together to form startup teams, Zenios says. Students can apply to take the course with a need in mind as a team of at least two or as individuals willing to work with others. Each team meets in class twice per week and follows a structured and systematic iterative process with weekly deliverables.

Meantime, Startup Garage student Duane is trying to connect graduate students online, particularly MBA students who are always searching for computer scientists to help build a product. “They’ll go over and hang out at the engineering department with a pizza,” Duane jokes.

PIVOT, PERSEVERE OR PERISH

The Startup Garage course at Stanford is held in a bright, modern space called the CoLab, which is meant to resemble a garage, if it was filled with white Ikea-style furniture and many whiteboards. This past September, 100 students applied. Zenios accepted 70 students with ideas for a new product or service that addressed a customer pain point. More than 20 students are gathered today for a panel on hiring, team formation and equity splits among founders at startups.

Many business school electives use real-world business cases to teach – and MBA grads move on to start a company two, three years later. Startup Garage, a second-year elective, asks students to build out an idea for a company, using, in part, the lean startup model, Eric Ries’s method of developing and rolling out products or services quickly to avoid costly failures. “You become your own case,” Zenios says. Today’s assignment was to do a competitive analysis, defining rivals’ business model and a “unique point of differentiation” for the student’s business. With the quarter ending soon, teams have already uploaded a 12-month operating plan.

A FLIPPED CLASSROOM FOR THE STARTUP GARAGE COURSE AT STANFORD 

Last year, Zenios revamped Startup Garage by flipping the classroom, an idea that’s gaining traction at Stanford. Instead of using precious classroom time for lectures, a flipped classroom asks students to watch recorded lectures with instructors ahead of time. Student teams watch lectures and file their assignments online so they can spend class time applying what they’ve learned.

Of 25 teams that began the Startup Garage course at Stanford in fall, 12 are left. A few have pivoted. One team that started with an idea for the new car market and ended up switching to a petsitting B&B service in Brazil. Another ditched an idea in the medical market. “They bump up against something (and discover) the economics will never work no matter what we do, but they can apply the same learning to the new space they’re exploring and move really quickly,” Zenios says.

Teams progress by interviewing potential customers, other businesses in their space and industry experts – hitting the pavement outside of class. At the end of the first month, students identify their user, the market need, and a unique insight that makes them believe they can address a customer pain point in a new way.

FOUR INSTRUCTORS PROVIDE CONSTANT FEEDBACK

If the first prototype brought in front of potential customers doesn’t work, it means “you don’t understand their pain point – there are five or 10 things you are not addressing,” Zenios says. The students go back and revise.

At the core of the course is constant review and feedback from the Startup Garage team of four instructors, which includes Siegelman, and fellow venture capital investors Saar Gur and Richard Lin, who move from team to team during class. Gur is a general partner at Charles River Ventures. Lin, a Stanford MBA, is a former research scientist at the UCSF School of Medicine and Harvard Medical School, and a partner at Three Arch Partners.