The secrets of the two “factories” of successful entrepreneurs: Stanford and Harvard

Training programs on entrepreneurship, contacts between investors or a financing vehicle startups own are some of the factors that turn two of the most famous universities in the United States, Harvard and Stanford, into authentic machines for producing company founders and executives, in general, who succeed in the technology sector.

Bill Gates was admitted to the Harvard University in 1973 to study Applied Mathematics. It only lasted a couple of years. Paul Allen managed to convince him to leave classes permanently and together they founded Microsoft. Mark Zuckerberg He also left Harvard in 2004 to launch Facebook.

Both magnates are part of the extensive list of technology entrepreneurs who have been successful (and amassed fortunes) without graduating. But, no matter how much we talk about it, it is not the general trend in Silicon Valley: 94% of Fortune 500 CEOs have gone to college. Most to an elite one.

The most famous names among these institutions that are so reputed to be prolific in the training of billionaires are two: the eternal rivals Harvard and Stanford. Since the last century, both faculties have been fighting to occupy first place in the rankings of universities that generate the most founders of technology companies.

The string of famous entrepreneurs who have passed through the classrooms of the university located in Massachusetts is long and legendary: Michael Bloombergwho entered Harvard in 1966, founded the business giant that bears his last name just over a decade later. Steve BallmerGates' roommate, graduated from the same university in 1977 to join Microsoft in 1980. Paul Grahampioneer of SaaS ('software as a service'), and Scott McNealy promoter of the giant Sun Microsystems—bought by Oracle in 2010 for more than $7 billion—are two other magnates from their classrooms.

For its part, Stanford was already beginning to bake pioneers such as William Hewlett and David Packard in the 1930s., founders of HP, one of the largest computer manufacturers in the world, who met in the hallways of the university. A few decades later, two more engineers were in the engineering school: Leonard Bosack and Sandra Lerner, the co-founders of the multinational Cisco Systems.

Two professors from the institution, located in the heart of Silicon Valley, analyzed in 2012 the economic impact of the production of such brilliant students. They estimated that, from its beginnings, Stanford University students and members had founded 39,000 companiescreated 5.4 million jobs and generated annual profits of 2.7 trillion dollars (about 2.2 trillion euros).

But in the era of startups, the production of successful executives is measured in investment figures. Every year, the research firm in venture capital Pitchbook publishes a ranking with the universities that have graduated the most technology entrepreneurs based on the financing obtained by their companies. Its latest report, for last year, reveals that the situation has not changed much since 2016: While Stanford tops the list in graduates, Harvard does so when considering graduate degrees..

If we investigate among the founders of unicornsthose startups Valued at $1 billion or more, the two universities are once again at the top of the charts. At least from the one prepared by the British company Sage, which places Stanford over Harvard in number of students who have become executives at the head of these juicy technology companies.

To mold the brightest (and wealthiest) minds of Silicon Valley, Stanford and Harvard promote entrepreneurial culture from the first years of training. The courses and programs on innovation and creation of startups They are taught both in the engineering and computer science studies themselves and independently. Both universities are also responsible for establishing contact networks between students and between them and investors and venture capital funds.

The Massachusetts institution inaugurated the first course on management of new companies in 1947, aimed at workers who wanted to become their own bosses, thus beginning a long succession of programs of this type that have been adapted to new times.

The key to Harvard currently producing so many technological magnates in its graduate degrees is in the Harvard Business School(HBS) and its Arthur Rock Center for Entrepreneurship. Big names have come from there, such as Tony Hsieh (CEO of Zappos), Meg Whitman (CEO of HP), Scott Cook (founder of the financial software company Intuit) and Jeremy Stoppelman (founder of Yelp).

In 2015, 9% of HBS students ended up in a startup and 84 founded their own company, 37% in the technology sector. The curricula invite students to immerse themselves in an environment of entrepreneurship and innovation. In the first year alone, they have a mandatory course that requires them to conceive and launch a new business as a team. They can submit it to the competition that the school organizes annually and which rewards the winning project with a good pinch.

Another of the secrets of the HBS is its Innovation Lab, opened about eight years ago, which brings together students from both undergraduate and graduate programs to collaborate and share new ideas and points of view. And thanks to the program Rock Venture Capital Partnersstudents also have the opportunity to receive advice from important investors, who will advise them on “their ideas, test plans, activities to obtain financing and more,” explains Jodi Gernon, director of the Arthur Rock center.

This summer, HBS will launch a new graduate program together with the John A. Paulson School of Engineering and Applied Sciences, which will combine knowledge of business, engineering and design. According to Professor Thomas Eisenmann, one of its leaders, “Almost everyone who signs up will want to launch a company in the medium or long term”.

In 2015, 9% of HBS students ended up in a startup and 84 founded their own company, 37% in the technology sector. The curricula invite students to immerse themselves in an environment of entrepreneurship and innovation. In the first year alone, they have a mandatory course that requires them to conceive and launch a new business as a team. They can submit it to the competition that the school organizes annually and which rewards the winning project with a good pinch.

Another of the secrets of the HBS is its Innovation Lab, opened about eight years ago, which brings together students from both undergraduate and graduate programs to collaborate and share new ideas and points of view. And thanks to the program Rock Venture Capital Partnersstudents also have the opportunity to receive advice from important investors, who will advise them on “their ideas, test plans, activities to obtain financing and more,” explains Jodi Gernon, director of the Arthur Rock center.

This summer, HBS will launch a new graduate program together with the John A. Paulson School of Engineering and Applied Sciences, which will combine knowledge of business, engineering and design. According to Professor Thomas Eisenmann, one of its leaders, “Almost everyone who signs up will want to launch a company in the medium or long term”.

The students of Stanford They only have to look out the window to find inspiring examples: the campus sits in the heart of Silicon Valleyconsidered the cradle of the startups. But, just in case you can't see it, you can look at the borders of former students. There are the names and surnames of the founders of Instagram, Snapchat, Netflix, Paypal, LinkedIn, YouTube and Mozilla.

Some point to the engineer Frederick Terman, considered one of the fathers of the valley, as the promoter of this innovative environment focused on the development of viable technology with market possibilities. Graduated from Stanford, this pioneer observed how his university was falling behind in electronics research for military uses—which was the future in the 1940s.

After World War II, Terman brought together the institution's best students to carry out a series of projects in war technology that promoted engineering and innovation on campus. He was also the precursor of the Stanford Industrial Park, currently Stanford Research Parkbuilt in 1951, where companies such as Xerox and General Electric.

After several decades, the culture startup permeates the entire university ecosystem. Beyond the entrepreneurship programs of the Center for Entrepreneurial Studies in its Business School and the Technology Ventures Program in its engineering school, Stanford hosts a business accelerator baptized as StartX and launched by Cameron Teitelman, a student at the university. It is a completely independent entity that provides advice both to those students who want to found a company and to entrepreneurs who have already embarked on the task.

Although StartX does not acquire shares of the companies it participates in, it has partnered with the university to invest in them. The result is the background Stanford-StartX , an investment vehicle that offers to finance up to 10% of a round whenever the startup meets a series of criteria. Since its launch in 2013, the entity has added more than 140 million dollars (about 114 million euros) in investment in more than 260 firms.

The close relationship that the university maintains with Silicon Valley has a direct impact on the coffers it allocates to investment: largely thanks to the generosity of its alumni, Stanford broke a record of financing in 2012, becoming the first American educational institution to inject more than $1 billion (just over 815 million euros) to their companies in a single year. However, he had received the largest donation to date in 2001, of 400 million dollars (about 326 million euros), from the Hewlett Foundation.

Thus, the financial muscle is part, along with the entrepreneurial tradition, contacts and an exhaustively designed educational program, of the recipe to prepare a student body willing to take on the world at the controls of a startup. And don't let the cases of Gates and Zuckerberg because, since last year, they They are also Harvard graduates.