Thursday, May 14, 2009

MIT, Stanford and Silicon Valley

On Sunday, the Merc published a long article claiming that Stanford has for 100 years been the center of entrepreneurship in the Bay Area if not the whole universe. I immediately started writing a rebuttal, but when I was done I decided to post it to my blog on engineering entrepreneurship.

Stanford and the Silicon Valley are unique in the world, and it’s understandable why so many people look here for a model as to how to encourage tech entrepreneurship. However, I think the reporter exaggerated the case for effect’s sake — although local boosters are also prone to exaggerating too.

To boil down my rebuttal arguments, the first point was that there were not a lot of significant Stanford tech spinoffs until the banner year of 1982 (Cypress, EA and Sun). Stanford didn’t even have an entrepreneurship policy until the 1950s, and that was driven by a need to raise money. Yes there was HP, but one company does not a trend make. (I’m grateful to Silicon Valley historian and native Stephen Adams for helping me with the details).

The second point was that there was an acknowledged home for electronics-based entrepreneurship in the US for more than 50 years: it's called MIT (yes, my alma mater). In the early 20th century, MIT created some of the most durable models for industry-university collaboration, as documented by Henry Etzkowitz. MIT also provided the founders for companies from Raytheon and TI to 3Com and Qualcomm, as well as educating some of the key technologists who created Silicon Valley. (OK, now who’s sounding like a booster?)

If you believe the rankings, MIT is still the top electrical engineering program in the country — a position it has held for a century. (This year it’s tied with Stanford and Berkeley in one ranking, which certainly seems plausible given the strength of all three schools).

What’s different is the environment: Massachusetts was a good place for creating tech startups in the 1960s, but it fell dramatically over the succeeding decades. On the Left Coast, there’s no disputing that the transformation of the Peninsula over the past 30 years has made the Valley a much better environment for launching a high-tech business.

So to a large degree, Stanford benefits from what’s in its backyard — the firms and infrastructure created by the industries that grew here in the 1960s-1990s. Some of these firms were by Stanford alums, some were not. In fact, MIT alumni have been taking jobs in the Valley for 30 years, and today I’m among MIT alumni coaching other alumni who want to launch tech startups here.

When did Stanford pass MIT as the top hub of tech entrepreneurship? I’m guessing the evidence would point to sometime in the 1980s, when many successful Silicon Valley firms were created and IPOs demonstrated the advantages of working for a startup.

Since the data is too messy come up with an exact date, any further efforts to nail it down is fodder for a two-beer argument. Anyone want to share a pitcher and come to a definitive answer?

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