Don't Hate Stanford Because It's Rich

Stanford University in Palo Alto, Calif. Photograph by David Paul Morris/Bloomberg

Over the past year, the New Yorker has turned ragging on Stanford University into its favorite hobby, outside of publishing cartoons. Ken Auletta questioned the school’s zeal for business development in a feature entitled “Get Rich U.” last year. More recently, Nicholas Thompson, a Stanford grad no less, took aim at the university in a pair of blog posts—“The End of Stanford” and “The Trouble With Stanford.” All the stories ask if Stanford’s computer science-driven, start-up championing culture has gone too far, whether students, professors, the school’s leaders and trustees are chasing technology billions at the expense of developing well-rounded kids—or worse, at the expense of their ethics.

Good question. Stanford president John Hennessy has long been one of the most connected men in Silicon Valley. More recent stories have pointed out the extent to which Stanford professors act in a dual role as investor-instructors. Regarding this, the New Yorker‘s Thompson asks, “Does the student who let the professor put money in expect a good grade? What if the company falters? What if the student doesn’t want the professor to invest?”

To such questions, I would reply that these are wonderful quandaries to have. I’m sure Dartmouth has a fine philosophy course on this very topic.

For some reason, Stanford’s critics seem eager to present the university’s startup mania as a new thing. It’s not. Stanford wasn’t much by way of an academic powerhouse until Frederick Terman arrived as professor of engineering in 1925. To build Stanford’s program, he tapped a vibrant radio and electronics startup scene that included Lee De Forest, who had done pioneering work around the vacuum tube near Stanford; Cyril Elwell, a Stanford grad who pushed long-distance radio transmission technology; and Philo Farnsworth, who sent the first TV transmission from a San Francisco lab.

“In the 1930s Terman’s graduate course in radio engineering included visits to some of these firms,” recalls David Packard, co-founder of Hewlett-Packard, in The HP Way. Many were run by self-taught hobbyists fighting the conventions and slow paces of giant East Coast corporations. Packard writes: “I remember Terman saying something like: ‘Well, as you can see, most of these successful radio firms were built by people without much education,’ adding that business opportunities were even greater for someone with a sound theoretical background in the field.”

Terman encouraged Hewlett and Packard to start their own venture. In the 1940s, Terman convinced Stanford to free up some of its unused land and lease it to budding companies in the area. Varian Associates showed up first, and dozens of companies followed. Students no longer had to go to the Midwest or East Coast to find work but could get good jobs right by Stanford. (If you’re interested in learning more about this, may I suggest this fine book.)

The tales that follow this arrangement are just epic. Sun Microsystems, Cisco Systems, Yahoo!, Google, and so forth all came out of hallway conversations at Stanford. The school has largely been smart enough to encourage these ventures, rather than trying to slow them down with onerous restrictions around intellectual property rights, or acts of revenge against students or professors who leave for a while.

Glenn Kelman, chief executive officer of real estate site Redfin and a graduate of University of California, Berkeley, has thought about this topic at length. He sums up the situation this way:

You can’t run the world’s most entrepreneurial university, in the world’s most entrepreneurial place, without being entrepreneurial yourself. The people who want Stanford to be like the Vatican, standing apart from society in its own walled city-state, forget that computer science has never been a purely academic or religious undertaking. It’s a creative, practical field that begins to die the moment it loses contact with real-world problems. The whole reason no one has been able to create Silicon Valley anywhere else is because we can’t create Stanford—or the sense of freedom Stanford gives its students—anywhere else. Stanford students walk around Silicon Valley like they own the place, because they do. We shouldn’t fence them in.

Kelman has often complained to me that the Ivy League schools seem to have done themselves a great disservice by not emphasizing their computer science programs and venture culture enough. Just try to name a technology powerhouse that has come out of Dartmouth, University of Pennsylvania, Yale, or Cornell. (No cheating with Google or Yahoo or any other Stanford invention.)

Were it not for Bill Gates’s and Mark Zuckerberg’s one-year stints at Harvard and Jeff Bezos’s B.S. from Princeton, the Ivy League would have a terribly grim technology history.

So perhaps it’s not that Stanford has gone too far, but that these other schools have not gone far enough. Yes, Stanford can look like a glorified ITT Tech at times. I’m just not sure that’s such a bad thing at this point in our history.

Editor’s note: For the record, Ashlee Vance graduated from Pomona College.

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