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How Universities Should Prepare Founders

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Re: How Universities Should Prepare Founders

#291

Post by roncesvalles »

>Startups succeed or fail based on how much customers like the product.

It's always been that simple yet founders these days tend to believe success is predicated on all the things but the product. "Build it and they will come" is mostly true. No amount of sales, marketing and growth hacking can save a product that simply isn't very good.

This article is refreshing because it's not saying "the way to train startup founders is by teaching them business" like a lot of universities believe. You need to be willing and able to build.

Re: How Universities Should Prepare Founders

#292

Post by zdragnar »

Juliate wrote: post #194
dofm wrote: post #179

Earlier quoted context omitted.

Right but what percentage of people doing any given class end up specialising in it? It's not their job to "inject" it but universities are going to have to grapple with the notion that if they want to keep admitting students, then there aren't enough jobs in any market for the students on their courses. So some truly functional support for self-employment, startups, small business working generally seems inevitable.…

> then there aren't enough jobs in any market for the students on their courses. That has always been the case, because the purpose of universities is not feeding the market with workers or founders, it's feeding society with educated people. Which is incidentally an excellent basis for both founder and worker roles.

That is the aspirational purpose, not the functional purpose. Universities have long advertised job placement rates for the majors in their departments- I recall a lawsuit against a university I was going to by alumni with the allegation that the numbers were artificially padded to the point of false marketing (I don't recall the outcome, though).

Even if we were to accept the premise that universities exist to feed society with educated people, we should then question the value of the education students are getting, given the significant grade inflation over the last 20 or so years.

Re: How Universities Should Prepare Founders

#293

Post by tyre »

antonvs wrote: post #290
nixonaddiction wrote: post #277

can vc money just fund basic research? im slowly getting confused on what founding a company even is. i am in grad school right now. a lot of funding and opportunities come from guys who are like "we need you to innovate we need you to act like a startup." its honestly kinda annoying. i just want to do basic research. i dont want to sell anything. i just want to build things. but the way this article frames it- is fo…

What you’re running into is the trend away from investing in basic research, in which almost everything (in the US) is now centered around a supposed path to profitability. As a result, in a sense, founding a company can be getting funding for a research project. A good example is nuclear fusion. There’s no nuclear fusion company, or research institute for that matter, that’s within even 50 years of having a commerci…

> There’s no nuclear fusion company, or research institute for that matter, that’s within even 50 years of having a commercially viable end product.

How could anyone know that? I’m guessing the same could have been said about what LLMs can do today, 20 years ago. If you’d asked scientists in 1925 how close the world was to a nuclear bomb, almost zero would have any idea what you were talking about (in the sense of how to go about building one.)

Predicting innovation is inaccurate enough to be silly. Investors are betting that someone figures it out on a shorter time horizon.

Re: How Universities Should Prepare Founders

#294

Post by jeffreyrogers »

I guess one thing universities have to decide is how important having founders is to them. PG talks about how Harvard has more founders than Yale and Princeton, but I don't really see that as a good or bad thing for any of those schools. There probably aren't infinite good ideas that can be successful at any one time. If you encourage more people to become founders then they aren't going to go into other places where their skills might be better suited.

YC's founders also skew heavily towards a certain type of person and business. The returns of VC in biotech for example are much lower than the returns in B2C and B2B software. It's just a harder, more capital intensive, and more uncertain industry. Over optimizing for the YC archetype means you get less of the people who succeed in other areas.

Also, although PG disdains finance and management, many large problems are better addressed through people with skills in these areas IMO, since often the returns are not sufficient to attract VC interest but the financial and human resources that need to be coordinated to address them are substantially beyond the ability of a small, undercapitalized group.

Re: How Universities Should Prepare Founders

#295

Post by antonvs »

nixonaddiction wrote: post #284
sillysaurusx wrote: post #280

Earlier quoted context omitted.

> im slowly getting confused on what founding a company even is. > i dont want to sell anything. i just want to build things. These are incompatible. If you start a company, whether you're CTO or CEO, you'll need to sell things. Both founders have to focus on the product, since it's being sold to people. And people refuse what they don't like. Which means your most valuable feedback mechanism comes from trying to sel…

well. to an extent. one always has to sell themselves. view selling as "convincing people to give me money." that i feel is pretty similar regardless of if i am applying for academic grants or applying for vc funding or running political fundraisers. (the latter being my area of experience.) theres kinda no way to avoid "selling" when you have an novel idea you want executed. what i mean is less the goal being making…

> what i would be selling would be my research topic to venture capitalists, instead of a product to people. (obviously making some mentions of "well um this could be a sellable product one day" and like, a halfassed marketing campaign in order to better sell my idea to vcs.)

"Well um this could be a sellable product one day" is not likely to go over well as a sales pitch. VCs review hundreds or thousands of business ideas. If your idea is "if we do enough basic research it might turn into something," they're likely to say "come back when you have a business plan."

To reuse the nuclear fusion example I gave in another comment, those companies didn't go to investors saying "we need more money for basic fusion research." Instead, they typically presented a business plan with a very clear end goal - commercially viable fusion reactors - along with a development plan with milestone dates by which certain critical stages would be completed, ending up with a projected date for bringing a commercial fusion reactor online.

But then they went away and started doing the research, because for sure nothing is going to happen without that.

If all this makes you think "ok so writing a business plan is like writing a grant proposal with extra steps," just keep in mind that you'd be going into a relationship with misaligned goals - investors are going to want to hold you to account, see progress towards the goals you've defined, etc.

Part of the reason you're hearing so much about this approach is because the investors are trying to make money, and they need fresh blood who's going to do the hard work of making it for them. In most cases they're not going to sit around letting you do research in peace.

Re: How Universities Should Prepare Founders

#296

Post by PennRobotics »

I am in a startup with three other full-time engineers and a strong intern team. We all have advanced degrees, but more education and better ideas wouldn't help us at this point. So much of our time is spent on non-engineering tasks: quote requests, documentation, marketing, hosting visitors, packaging, CUSTOMS, coffee machine cleaning, assembling office furniture, ordering components, labeling components, asking vendors for part modifications, customer support. It's difficult finding the perfect office manager, so we do everything.

I also took an entrepreneurship sequence in grad school. In agreement with PG, we were taught not to hand off large chunks of the business to the MBAs. In contrast with PG: we learned that between team, funding, and product, product is least important while team is most important. If that wasn't true, why would large companies "acqui-hire"? (In fairness, PG didn't say product is the most important thing at a startup, just that it's "hard", and this is true.)

These few courses were also the first taste most students (esp. non-graduates) had of calling subject matter experts and potential customers, meeting real investors for a mock pitch, the various mechanisms/strategies finance professionals use to separate a founder from their profits and/or build an efficient revenue machine, determining actual pre-realized product demand so you can haggle for bulk discounts from suppliers, setting appropriate product margins. These are the tasks I find I'm often doing in between PCB layout and product assembly, so I'm quite glad I took an entrepreneurial curriculum in school rather than a few more ergonomics or RF courses.

Re: How Universities Should Prepare Founders

#297

Post by jeffreyrogers »

cushychicken wrote: post #228

What about the status quo is broken? YC seems to be serving its function perfectly well, if you think of it's function as: "start many venture funded SaaS businesses, with the goal of a small number achieving Unicorn or bigger exits". Stanford, Harvard, and other elite schools seem to be filling YC's applicant pipeline really handily with smart undergraduates. In a sense, YC is kind of like biz school for startup fou…

There's a trend in top MBA programs called entrepreneurship through acquisition (ETA) where you raise money to buy a business that you acquire through a mixture of debt and equity. Basically lets MBAs skip the building phase of building a small business and go right into operating it.

I run a small business on the side, and although I did a ton of preparatory reading and learning not much of it was useful in retrospect. Most of it you learn by doing and it's not that hard to learn. The top three things that were useful to me to learn were sales, basic accounting and how to read financial statements, and what metrics to track/manage with. You can learn the basics for all of those in less than a month.

My advice is just start. You are probably wrong about what the market wants unless you are selling a product or service that you know there is already demand for. Figure out what it is you're offering and try selling it to people. If they want it you figure out how to make it better, if they don't you try something else.

Edit: I had wanted to start a business for a long time. I thought I needed some tricky new idea to be successful. That's really hard to come up with since most new ideas are bad or are too hard to sell/explain to people. In my case it was also a form of procrastination since I had to wait for the right idea. Things got easier when I just picked an existing problem/industry and decided to do that with my own proprietary software to make it easier for me. I know a guy making a couple million a year from owning multiple tanning salons. There's a lot of opportunity out there that doesn't require any special insight.

Re: How Universities Should Prepare Founders

#298

Post by antonvs »

tyre wrote: post #293
antonvs wrote: post #290

Earlier quoted context omitted.

What you’re running into is the trend away from investing in basic research, in which almost everything (in the US) is now centered around a supposed path to profitability. As a result, in a sense, founding a company can be getting funding for a research project. A good example is nuclear fusion. There’s no nuclear fusion company, or research institute for that matter, that’s within even 50 years of having a commerci…

> There’s no nuclear fusion company, or research institute for that matter, that’s within even 50 years of having a commercially viable end product. How could anyone know that? I’m guessing the same could have been said about what LLMs can do today, 20 years ago. If you’d asked scientists in 1925 how close the world was to a nuclear bomb, almost zero would have any idea what you were talking about (in the sense of ho…

I'll respond to that, but it doesn't really matter to my basic point: that nuclear fusion startups are all, without exception, in a research phase with no clear path to a commercial product. In other words, investors are currently funding basic research, whether they realize it or not.

But to answer your question:

> How could anyone know that?

By studying the basic physics and engineering involved. The same way we know we aren't going to be doing interstellar travel in the next 50 years.

> I’m guessing the same could have been said about what LLMs can do today, 20 years ago.

It's not comparable. LLMs didn't require dealing with a plasma ten times hotter than the core of the Sun, without the benefit of the Sun's gravitational pressure and density. Commercially viable nuclear fusion power is so far beyond the capabilities of current, and possibly even future, engineering that it's not even funny.

A better comparison would be if there were a bunch of interstellar travel startups, giving dates for when they plan to reach Proxima Centauri. Why don't those exist? Because nobody would believe them, for the kinds of reasons I've already mentioned. But with fusion power, we could theoretically do that here on Earth, leading gullible investors to say, "So you're saying there's a chance!"

> Predicting innovation is inaccurate enough to be silly.

Innovation is what happens after the basic research has pointed the way. We're not at that stage with fusion power.

> Investors are betting that someone figures it out on a shorter time horizon.

Investors who haven't done good due diligence, or who foolishly trusted founders, are betting that.

A couple of references:

"Fusion power unlikely to become competitive" - https://www.nature.com/articles/s41560-026-02022-9 : "Policymakers should not rely on, or fund, fusion power as a core pillar of future clean energy systems unless designs with different characteristics are developed."

"Notes on the Recent Hype about Imminence of Commercial Fusion Energy" - https://www.belfercenter.org/research-analysis/notes-recent-... : "I think it’s fair to say that the scientific and technological problems that must be solved on the road to a practical fusion reactor—beyond energy breakeven in sustained operation—are not much easier than the breakeven problem itself, which is still unsolved after 70 years of costly international effort."

"Fusion reactors: Not what they’re cracked up to be" - https://thebulletin.org/2017/04/fusion-reactors-not-what-the...

Re: How Universities Should Prepare Founders

#299

Post by strangattractor »

jeffreyrogers wrote: post #294

I guess one thing universities have to decide is how important having founders is to them. PG talks about how Harvard has more founders than Yale and Princeton, but I don't really see that as a good or bad thing for any of those schools. There probably aren't infinite good ideas that can be successful at any one time. If you encourage more people to become founders then they aren't going to go into other places where…

There are so many VC's and so much money today the demand for "Founders" is high. One way to increase supply is to manufacture what you need - much like Korean K-Pop bands. Band members start in a Bootcamp. They learn to dance and get a vocal coach. As their fan base grows they start to disrupt and displace older bands that are aging out. The industry as a whole does well but individual band may or may not. Do they produce new and innovative music? - meh. Let's face it - a "Founder" with the right fan base can get valuations over a trillion:)

Re: How Universities Should Prepare Founders

#300

Post by hobo123 »

alistairSH wrote: post #230
neomantra wrote: post #222

I am more interested in the question of how Y-Combinator has changed Stanford over the last two decades rather than the question of how Stanford should change to accommodate Y-Combinator. Notice there is no mention of ethics, philosophy, or human connection, except maybe Zuck being a psych major. Do we really want the future of education to be an incubator pipeline? That said I wholehearted agree with the second half…

I had a similar thought... starting a business is risky. And health insurance (among other things) is expensive. Once the VC class starts pushing for health care reform (among other things), maybe I'll take what they want seriously.

Funny how the US produces many more and more successful startups, while in Germany health insurance is like 200 bucks a month (if you have no income) and I think even free if you're unemployed.
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