What student entrepreneurs can teach us about starting up
Surely by now you’ve heard the one about the Stanford wunderkind who starts a too-good-to-be-true biotech company and ten years later comes under federal investigation. Or maybe the one about the Pacific Palisades l’enfant terrible who hacks together a disappearing picture app for homework and then pivots into a multi-billion-dollar media company. Student entrepreneurs are popular in the public imagination, but they come with a fraught reputation. They’re PR tire fires.
But that’s not the whole story. Student entrepreneurs have a risk profile that makes them look like a feast-or-famine deal. But an occasional campus success story isn’t a fluke. It might just be something to bet on.
Academia has been slow to adapt to the growing trend of student entrepreneurship. Silicon Valley’s seductive calls to “drop out” have probably hampered the conversation. But increasingly, schools and academic partners are building an infrastructure to support, and even encourage, student entrepreneurs, whatever their situation. University students wanting to change the world is nothing new. Having a measurable path to success is.
I spoke with a couple of student entrepreneurs—founders who established their company while pursuing undergraduate or graduate degrees—and learned what the future of incubation might look like. More ambitious than your average startup and leaner out of necessity, these companies are creating a new wave of disruption.
Out of the dorm room, into the world
One player in the emerging student startup economy is Dorm Room Fund, a special arm of First Round Capital that focuses on student-run startups. The general partners are a group of student investors, funding batches of student operators.
The Director of Dorm Room Fund, Rei Wang, is fairly confident in the ability of students to not only be some of the most grounded entrepreneurs, but also some of the most ambitious.
“It’s really important to encourage students to take risks at an early age so that they develop that risk appetite and can do it again, over and over in their career,” Rei says. “When you think about the way that universities are teaching students these days, a lot of times it’s to follow a traditionally defined path, rather than forging their own paths. The standard career is to become a McKinsey consultant or an i-banker.”
But Rei acknowledges why the McKinsey path might be appealing. The decision to start a company isn’t feasible for all students—or even most students. With a large crop of inquisitive minds, why leave innovation to those who can afford to go ramen-broke?
“When First Round started Dorm Room Fund about four years ago, the tech ecosystem made it really difficult for a student to also start a company,” Rei says. “If you think of dropping out of school as being the precursor to starting a company, that makes starting a company very limited to a small set of students who have the safety net.”
Dorm Room Fund’s working theory about good entrepreneurship is that it’s found in more than just those daring enough to drop out (Dorm Room Fund requires at least one founder be enrolled at the time of applying, but is agnostic as to whether they ultimately drop out). Entrepreneurship’s endemic to schools. A lot of students have a will; they might not always have a way.
But Dorm Room Fund has more than an ideological stake. That alone wouldn’t be very shrewd investing. The fund truly believes that student entrepreneurs are uniquely positioned to create value for society and for investors. And it’s backed a lot of founders that vindicate this theory.
“College students tend to be idealists,” Rei says. “They’re in an environment where their job is literally to think of big ideas. That’s supported and nurtured. We definitely had a lot of Dorm Room Fund companies that almost seem like science experiments.”
Boiling the ocean
As high schoolers, Miranda Wang and Jeanny Yao visited a Vancouver waste transfer station. Staring into a trash pit three stories deep, twice the size of a football field, still just a fraction of a percentage of its eventual landfill, they realized they had a problem. For the young idealists, this amounted to something of an existential crisis.
“It was just really scary seeing behind the scenes of this amazing society we live in,” Miranda says. “There’s this huge problem and it’s under cover.”
Going away to University of Pennsylvania and University of Toronto respectively, Miranda and Jeanny continued trading notes. What could they do about non-biodegradable plastics? Eventually, they alighted on an idea that wouldn’t occur to most undergrads: genetically engineering bacteria to not only break down waste, but to also repurpose it.
“We’re basically hacking into the cell and making it so plastic pollution is no longer waste but a resource,” Miranda says. This idea was the germ of BioCellection, a fledgling company that’s going to boil the ocean.
“We’re developing a suite of in house chemical and biological technologies to transform recyclable polystyrene plastic—the number six plastic—into high value materials for textiles. We’re doing this using not only chemical reactions, but also genetically engineered bacteria.”
The plan all along was to save the world, but Miranda didn’t conceive the startup route until after taking entrepreneurship classes at Penn. If the past 50 years of environmentalism have proven anything, it’s that a groundswell of support does little to move the gridlock. Student activists have been trying to save the Earth for a while, to little avail.
“We really looked into how do we tweak this technology so that it generates value,” Miranda says. “It doesn’t just break down the plastics with carbon dioxide and water and stop there. How do we do it so that the microbes can actually generate value?”
BioCellection’s charter is ambitious, and beyond the science itself, there’s real business acumen, too.
“We’ll be starting out with smaller pilots, potentially with big plastic manufacturers, just to figure out what kind of polystyrene plastic is easiest for us to break down, and figuring out what is already in it and then moving to recycling mines.”
But Miranda and Jeanny are still very focused on what’s feasible to accomplish in the near future.
“There are a lot of hurdles for the sort of work we’re doing because we always need a wet lab,” Miranda says. “We also ended up making an arrangement where we actually keep all of our IP and the university has no stake in it. All that took a lot of work and it was definitely very challenging.”
The challenge, Miranda hopes, is an invitation, rather than a deterrent, for like-minded upstarts.
“The message I would like to share with others is that I see biology as a hugely growing field, especially with the new types of tools that we have,” she says. “This is not sci-fi anymore. We had to work really hard. Sometimes we got lucky, but it is doable.”
In talking with Rei at Dorm Room Fund, I asked how student entrepreneurs could, in approaching big ideas, even start to define success. In the face of something that sounds like sci-fi, how could pre-seed entrepreneurs get off the ground?
“We always tell our companies, we want to hear that you have a big grand vision, but we also want to see that you have identified a sharp end of the wedge that you could focus on first,” Rei says. “It’s really figuring out what is the one thing that you’re really, really good at, before you expand to changing the world as a whole.”
Sharp end of the wedge
Antoine Balaresque was a student when he hatched the idea for his company. While on vacation, he recognized a problem more familiar to most than number six plastics: His mom wasn’t featured in any of the family photos. She was always busy holding the camera.
Some people create self-timers or selfie sticks. Others descend into the basement of Berkeley’s robotics lab and engineer something else entirely.
Securing funding from Dorm Room Fund, as well as a rather large Series A party round, Antoine’s company Lily has graduated from the undergrad robotics lab. Back of house, at its South of Market headquarters, there’s a staging area, where its autonomous cameras fly about, droning through the air. It is here that these little, black hamburger machines are being tested for single points of failure, in a netted canopy above rows of engineers.
The autonomous cameras Lily creates are more than flying machines, however. Equipped with the mechanical vantages of a drone, they also possess the artistic intelligence of a photographer. Using computer vision, they’ll be able to “see” and make smart judgments.
Antoine and his co-founder Henry Bradlow knew as undergrads that they would be entering a market with large, rich, fully-scaled competitors. The intelligence of their drone would be the key differentiator in their product.
But loftiness itself isn’t a competitive advantage.
“Some of our competitors are much larger companies,” he says. “It’s easy to prototype, but it’s really hard to get to market.”
Still, as students, the Lily team had certain factors on its side.Their interest in this kind of technology coincided with its rise in popularity; meaning, they were able to get in on the ground floor and be fairly nimble.
“When we were in college, we could hack together a drone to go follow someone,” Antoine says. “That technology was available to college students in 2013.”
Being in an exploratory setting was perfect for trying to define an emerging technology. But this alone wouldn’t displace competitors with large labs and headcounts of 3,000. To get its drones off the ground, Lily had to choose a wedge of its ambition to focus on. And that was the camera’s autonomy.
“Henry was doing research in robotics and a lot of computer vision at this time. He was really building the core tracking algorithm,” Antoine says. “It’s funny, but when you start a company like this, people take things that are really hard for granted. We took a lot of components of our system for granted, because another company had done it. We really focused on the core innovation in the beginning.”
The decision not to build all the contingent features just yet may have been one of economy. It was also the kind of strategic focus a pre-seed company needs. Leaning on the technical achievements of its competition, Lily could worry about prototyping the stuff that made it superior. Being a team of two, Lily couldn’t be expected to deploy all the features a large robotics laboratory would at first.
Now that Lily’s moving toward market, there are some growing pains in technical feats. “Low-level drivers or sensors, calibrations, heat dissipation issues, waterproofing—all of these components are extremely complex,” Antoine says.
Regardless, it was a smart maneuver.
“Being able to demonstrate the concept of a flying camera through a demo was really important for us,” he says. “We spent a lot of time in the lab building the product and demonstrating the algorithm.”
With that innovation accounted for, Lily can begin broadening its scope and achieve a product-market fit.
A certain kind of synergy
On the other coast, a different kind of computer vision startup is at work. Joe Ellis and Dan Mozoroff are two rogue Columbia PhDs building vidRovr, a multimodal computer vision and machine learning system that can ingest hours of video, understand the content, and index the videos accordingly.
It started with a prototype, called NewsRover, aimed at finding some meaning in the madness of television. It wasn’t supposed to be a company, just a side project for the new PhDs to work across disciplines (one was studying machine learning and computer vision, the other neuroscience).
“NewsRover was effectively a system trying solve the problem that television news viewership has been steadily declining for the past ten years,” Joe says. “We wanted to build a system that did aggregation, understanding, and searchability for television. We built and recorded a hundred hours of television news a day, directly from cable, took an hour or thirty-minute program and chopped that up into coherent topic segments.”
Search is one of the most well-developed technologies the industry has—but only when constrained to text. Video, which is encroaching on more and more of text’s monopoly, is still quite arduous to accurately surface. And so after building an algorithm for doing just that, Joe and Dan realized the potential they were sitting on top of. What began as an experiment in computer vision could be a very valuable processing tool for large collections of video.
At the doctoral level, neither founder is exactly lacking in experience. But to go out and start a company countervailed the traditional path in academia. Ten years ago, two Ivy League grad students would focus more narrowly and narrowly until finding an institutional niche too obscure for mass consumption. Now, there was an opportunity to sell something valuable to large media corporations.
But where did Columbia fit in?
“Especially with PhD students, it’s important for your advisor to be supportive of what you’re doing,” Joe says. “It was a lot of late nights thinking about how we can build a company with vidRovr as well as doing our research and working really hard on accomplishing our research goals with Columbia.”
At this juncture, the university did something interesting. Instead of dissuading its students from breaking away and following their startup ambitions, Columbia attempted to accelerate it.
“Columbia is expanding the infrastructure to allow students who are interested in entrepreneurship to really seize on that passion and develop companies,” Joe says.
The Columbia faculty understands that the innovation born of entrepreneurship can be a companion to research, instead of a deterrent; it was Columbia that applied for vidRovr’s patent. Despite the fact that the company’s founders are now on leave from the university, they’re never far from its influence. vidRovr is currently housed in the Columbia Startup Lab, a SoHo WeWork that the university is renting for student startups.
BioCellection has a similar relationship to one of its alma maters. By the time Miranda was a senior at Penn, she and Jeanny probably could’ve taken their startup on the road. Miranda had just spent the summer taking meetings in the Valley with investors. She had grants and press and a lot of attention. But as a student, she felt she had access to something more valuable.
“We chose to finish senior year because we knew we needed to get Wharton-backing,” she said. “There are also a lot of really good resources from Wharton entrepreneurship in terms of grants, coaching, and also networks that we can tap into.”
Universities may even bring a level-headedness to startup incubation that is sorely lacking in certain venture capitalist circles. Just as student entrepreneurs are combining ambitious goals with lean methodologies, so too are schools. This is just the beginning.
In just four years, Dorm Room Fund has seen the number of similar funds grow.
“House Fund just launched out of Berkeley,” Rei says. “They’re investing in Berkeley students, PhDs, professors. Cornell has one too called Red Bear Angels. Harvard has one. MIT has one. I just got off a call with Carnegie Mellon; they want to do something there too. UT Austin is trying to start something. A lot of these schools now are realizing, We actually have all this incredible talent on campus. We should start funding them.”
The fund is also receiving (and accepting) more and more applications from outside of startupland’s main outposts. With the infrastructure for student founders growing, it might finally catch up to their ambitions. Instead of bankrupting students, universities are thinking about bankrolling them. If the trend continues, student entrepreneurship may become less of a moral panic, and something closer to a syllabus item.