Fostering A Taste For Disruption At NYU Stern

Williams lecturing to NYU students

Williams lecturing to NYU students

Let’s look into the future of the Berkley Innovation Lab and the Stern entrepreneurship program as a whole. What are two or three of the biggest developments that we can expect in the program in the next few years?

Innovation entrepreneurship is such an exciting time for anyone working, particularly for the education innovators and entrepreneurs at the moment. I believe we’re where marketing was 50 years ago, where there were a lot of people putting a lot of effort into codifying best practices, principles, frameworks, and methodologies for marketing. As a result, today I believe we have far more people who are competent in marketing than are competent as innovators and entrepreneurs.

If our objective is, as I said before, looking at 450 students and saying, ‘How can we give each of these 450 students the confidence to know that they can come up with groundbreaking and mind-blowing insight that’s going to lead to a groundbreaking insight or idea? Too many business schools send a directive to their students that incremental change is safe and that disruptive change is fraught with danger, when in fact the opposite is true. When students start believing that their fundamental purpose is to alter the status quo, rather than preserve it, their motivation and mindset starts to change. They begin to see opportunities beyond what others have defined as limits. They begin to rethink who they are and what they might become. As the Innovation Lab, it’s up to us to make those transformative moments possible. If we don’t give them that creative confidence at school, no one will give them that in the marketplace.

We have to codify the best practices, principles, and frameworks for innovative thinking and entrepreneurship in a way that again puts the emphasis on thinking as a skill and not a set of personality traits. So the future for us is we want to create new thinking tools, techniques and methodologies for 21st Century innovation and entrepreneurship. Now, that is quite ambitious.

At the moment, we’ve seen through Stanford and Steve Blank with lean entrepreneurship techniques a lot of success in people starting to codify new ways of approaching entrepreneurship. These days, it is easier, faster, and cheaper to test new recipes and new ideas than ever before. We have all the resources that students possibly need to try something new, like a website, smartphone app, product prototype, simulation, business model, whatever. All these things are available now as pay-as-you-go services or inexpensive open source software. Basically, you can get all the computer power and digital storage online. For most students, it only takes a couple of days or a week to create a markup or a pilot. So we’re at the point now – and I really believe for the first time in history of entrepreneurship and innovation – where Ideas require more insight than money.

2015 winners of Stern's Entrepreneurs Challenge

2015 winners of Stern’s Entrepreneurs Challenge

If you look at the way entrepreneurship is taught in most schools, you’ve got 21st century business ideas that students are coming up with being evaluated by 20th century management process – all built on top of a 19th century education model. I mean, it’s ridiculous. The challenge for everyone involved in innovation entrepreneurship education is to build a new blueprint. Codify new thinking tools and methodologies for 21st century innovation and entrepreneurship. That’s what we’re passionate about. That’s what we’ve committed to. And this is what our next three years is all about.

Let’s think about the big picture. What are two or three trends emerging in entrepreneurship — and how will they impact both aspiring Stern entrepreneurs and the larger business ecosystem? 

There are certain trends in process…We’re seeing a big trend in fintech at the moment, students thinking about combinations of financial services in a different way. What you’ll normally find is, whenever there is a major shift in consumer behavior, there is a normally a lag in the products and services. And that reveals a gap. The entrepreneurs who can spot the gap are obviously the ones who can fill the void. The first move is to sort of capitalize or to start to shape changing consumer behavior.

Often when your ideas are pitched, they’re rejected because the people evaluating these ideas are evaluating them in the old paradigm. A classic example is Airbnb. They were rejected by 15 A-list venture capitalists. Everyone thought the idea was absolutely ludicrous. Paul Graham from Y Combinator is quoted as saying, ‘This is crazy. Nobody would do this. I would never do this.’ And he obviously became their first investor after a while. I mean, the only thing that saved them was coming up with the promotional stuff with breakfast cereals. And that convinced Paul Graham, who still didn’t like the idea, that these guys had enough mojo to actually get something off the ground. But now, of course, this shift in consumer behavior has now been named. A new category is created, which is called the “sharing economy,” which has completely changed the concept of ownership.

So this is where entrepreneurial trends begin. Now, all of a sudden, this new category has been created along with this new concept of ownership – meaning you don’t have to own a car. So now we’re getting a lot of business concepts trying to capitalize on the sharing economy or the gig economy. This is where you get a lot of “Me Too” products and ideas and this is where the trends are coming from.

We often joke now that everything is a Warby Parker of something or other, fill in the blank at the moment – It’s a Warby Parker of bedsheets – whatever the hottest startup is. There are definitely industry trends that happen. Part of our job is to try to break those trends. At the start of this, we’re trying to encourage disruptive thinking with innovative entrepreneurship. So part of that is trying to get them to break away from the trends.

There is a trend in process at the moment, which comes from lean entrepreneurship, which is getting away from business plans and getting much more into prototyping your product rather than just getting caught up on just writing exhaustive plans. Another trend in process is early validation. So the catchphrase often is, ‘Get out of the building. Go and talk to customers.’ I come from a design background and obviously graphic research and design is very important, but I find [that catchphrase] fairly simplistic. In a business school, that is quite a revelation still. Again, just telling people to get out of the building and go talk to customers – there’s a big part missing there. What we’re working on is much more specific methods for going out and talking to customers and observing them. This is what we’re introducing into our programming – a lot more on ethnographic research and [finding] the right or best way to actually get out and asking the right questions and making the right observations.

The New York startup scene has really taken off in recent years. How has Stern capitalized on this growth? And what has turned New York City into such a Mecca for new ventures and funding?

I started my work experience in America in Silicon Valley. This was 2001 and I was reading about all the things that were happening with Silicon Valley with first dotcom boom. I was sitting there in Australia reading about it and they were describing it as the Florence of a new Renaissance. It just sounded amazing. I was thinking, “Well, I’ve got to go to the Florence of the new Renaissance. This is where I’ve got to be. So I got the job at Frog in Silicon Valley. When I got there, I could not believe it. I didn’t know what I’d been imagining. I got there and there were giant highways. Everyone is driving in their own cars. They’re getting into these massive office buildings. They’re all isolated within the building only with the employees of their company. The whole place looked like one giant car lot. And I couldn’t believe this was the hub of innovation for the new economy.

Contrast that when I moved to New York 10 years ago. [Think of] the amount of density in New York, where you have so many things close together. You have so many people here. You have a mix of so many different industries. So the potential for these collisions and serendipitous connections to happen is just so phenomenal in this city. When my friends on the west coast come here, they are just amazed that we can fit like 6-8 meetings into one day because it’s very easy just to quickly walk around or get the subway. It’s a very easy city to get around. Whereas in Silicon Valley or San Francisco, they can often only do 2-3 meetings  day because they have to drive so far.

So there’s something about the density in New York City that encourages this sort of collision of ideas and perspectives. I know that’s not new. The reason the ecosystem has exploded is a major component of what was missing until, off and on, maybe 8-9 years ago. We didn’t have the financial backing for a lot of the ideas. And the digital building blocks weren’t in place for people to experiment as they can  do today with whatever new ideas they come up with. It started with Union Square Ventures, I think, when Fred Wilson came to New York. All of a sudden, a whole lot of VCs started coming and started building that critical part of the ecosystem. So the funding and backing was there. People knew they could get opportunities in New York. People stared experimenting with new ideas to we’ve seen the growth of the ecosystem.

Obviously, NYU is committed to being a major part of that ecosystem, particularly given our downtown location and being right in the mix. One big initiative recently has been the NYU Entrepreneurial Institute…which was started three years ago to basically foster the entrepreneurial ecosystem within the NYU community and its role in the broader community. We often refer to NYU as a global network university. There are 18 schools in the network. And every school has something entrepreneurial happening. So the institute actually strives to connect all of those different schools. And through the Entrepreneur’s Challenge, which is one of the initiatives here, we’ve also made it pan university so we get 250 teams typically from anywhere from 16-18 schools. So we get business school students working with law school students or med school students working with art school students. So the mixing and this diversity are very important.

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