A Stanford state of mind

Sept. 29, 2011, 3:02 a.m.
A Stanford state of mind
(SERENITY NGUYEN/The Stanford Daily)

Entrepreneurial ferment a draw for Danish visitors

“Innovation” is a quintessential Stanford buzzword — after all, it’s the alma mater of countless entrepreneurs over the years. The research generated by its intellectual ferment has been one of the largest driving forces for the Bay Area’s high-tech industry. Not to downplay its significance, establishing a comparable environment is no easy task, and the word serves as a beacon for those who dream of similar academic and economic successes.

Denmark’s Science Minister, Charlotte Sahl-Madsen, with a group of Danish  university presidents and administrators, visited Silicon Valley this summer. They spent their visit touring Stanford, meeting with BASES leaders, visiting StartX, an organization that helps young Stanford-affiliated entrepreneurs get off the ground, and hearing from management science and engineering lecturer Steve Blank.

The Danes’ goal was to learn how to sharpen the focus on entrepreneurship and innovation at their universities, according to a statement by the Ministry of Science, Technology and Innovation.

In Silicon Valley, “we’ve been drinking the Kool-Aid,” Sahl-Madsen said, keen to bring the mindset back to Denmark. “We all share the vision to inspire and promote the entrepreneurial mindset.”

“The young entrepreneurs, they produce growth both personally and financially,” she added — a potential boon for the unremarkable Danish economy.

But how are these “young entrepreneurs” created in the first place? Blank, a serial entrepreneur, offered his take.

“I will contest that Silicon Valley is a state of mind,” he said in remarks to the Minister and her associates. “The real thing we make here now is innovation.”

To sustain innovation, Blank pointed to the need for “disruptive innovations,” which redefine a market and are most often the product of start-ups.

“In a large company, they execute,” he said.

“No one ever uses the word ‘innovation’ with Microsoft anymore,” he added.

Even Facebook or Google, which are still considered by many to be on the cutting edge of software technology, aren’t “disruptive” start-ups anymore — both have established themselves as semi-permanent fixtures in the local and world economies.

Blank defined a start-up as a temporary vehicle in search of a scalable business model.

“Start-ups need a business model, not a business plan,” Blank said. “No business plan survives first contact with customers — they’re just hypotheses.”

“Outside Stanford,” he added, “they’re actually called guesses. Most start-ups are wrong on day one.”

And “founders are not everybody,” he said. They’re “artists” or “composers” who create something from nothing. And the infrastructure is here to support them. According to Blank, a 22-year-old with the right presentation can get $4 million from a venture capitalist — a comment that seemed to surprise the Danes.

But what about failure? In Silicon Valley, a failed entrepreneur is experienced, Blank said. Among circles of failed entrepreneurs, the question is always, “What company are you doing next?”

After hearing from Blank, Sahl-Madsen and the rest of the group moved on to AOL’s headquarters on Page Mill Road. There, they heard from StartX founder Cameron Teitelman ’10 and then from venture capitalist Vinod Khosla.

In many ways, Khosla struck a tone similar to Blank’s.

“My willingness to fail gives me the ability to succeed,” Khosla said in prepared remarks to the Danish group, the StartX and community members in the audience.

He added that innovation is irreverent, in a way, taking an unusual or underappreciated approach to a problem, which was why disruptive innovations take markets by surprise.

“The inability to predict innovation causes these forecasts to be wrong,” Khosla said.

“I truly believe process depends on unreasonable people,” he added.

A Stanford education, among other things, is designed to equip graduates with the skills to find the “right” way to both follow the founder’s vision and market a viable product — the key is “to inform an artist’s opinion,” Blank said in his remarks, and to give Khosla’s “unreasonable people” a framework for building and pushing their ideas.

Soon, maybe Danish educations will do the same.

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