Also prior to the mid 1990s it seems like the Stanford startup thing really hadn't begun yet. You look at the old guard of SV companies and they operated much more like east coast culture. To me it seems like the modern "Stanford startup" culture arose from VC money from the investors who made tons of money in the first .com boom.
As someone who has spent my entire career in the Boston area (but have worked for SFBA HQed companies too) my perception has been that the MIT influence and the general cultural difference has some of the following elements:
- East coast is much more conservative in business approach
- Fake it till you make it is far less common here
- For a long time it was unheard of for a Boston area company to try and go public or seek an exit without showing a sustainable, profitable business model
- Companies here are basically never founded on breaking the law and hoping you become too big to fail and the law has to be changed
- Way less focus on consumer tech here
- Way less adtech influence (but that has grown)
- Way less tech businesses based on trying to ruin traditional jobs and way less focus on trying to convert people to gig jobs.
Some of the sports betting tech is here which is a black eye on the area IMO.
There is some stuff in the Theranos vein that just seems like it would be very hard for it to have happened on the east coast.
But over time now the east coast is being influenced by the Stanford culture and things are getting a little less conservative and a little more likely to be get-rich-quick and/or shady.
West Coast is also enterprise or business tech driven, but those founders aren't as media friendly or sexy despite being the majority (hence the Musks and increasingly Altmans hogging the limelight).
Boston has potential, but it honestly isn't leveraging it. The elitism is rife to a level unlike in California. A NU, BU, or UMass Amherst founder isn't going to be in the same circles as the Harvard and MIT founders who can leverage the I-Lab or Engine and HBS+Sloan resources, but in the Bay Area, a UCB, UCSC, SJSU, and Stanford kid will all be in the same professional circles. CIC tried, but they are trash. At one point, most startups in Greater Boston were basically Israeli companies using it as a US HQ because of the El Al direct and the large Israeli diaspora (throw a rock and you'll hit a Cafe Landwer).
Everything is tied up to elitism and old structure institutions out East (where did you study) while out West it's much more output driven (where do you work).
Works well for it's biotech innovation space though, which Boston is known for.
(ironically, I liked DC except the humidity - way less stick up their butt, but they also have a bohemian streak)
Awhile ago, to students at MIT, I mentioned suspiciously "MIT shop" companies, and said that, if you don't think there's people at Northeastern who could hold their own, then recalibrate worldview.
There's absolutely a lot of elitism around certain NE schools known around the world, agreed. Those schools actively promote it, and it's evident in some post-graduation things, including companies.
But I also see variations on that elitism around Stanford, Google, and some other Bay Area icons.
One difference between the elitism I notice most commonly around MIT, and around Bay Area, is that MIT's version is often about having survived a trial by fire, and being uniquely stronger due to that (not that I fully agree). Bay Area versions more often come across as less-secure reaching for and clinging to symbols of status, and nurturing artificial frat-like exclusivity. (Clinging to Leetcode hazing rituals is just one example.)
Of course, on an individual person level, you'll find a lot of smart and thoughtful people who don't subscribe to the elitism -- maybe the majority of people who could claim the same exclusive club as the elitists. And some of the smartest people are the most humble in thought and manner. But elitism does seep into a lot of things.
I suppose that club elitism might also be involved in some of the more arrogant actions you see affecting large swaths of society, separate from money/power motivations. The Bay Area sure does have a lot of that arrogance, sometimes labeling it "disrupt". (But maybe most often "disrupt" is more about grabbing money/power, than a genuine but arrogant belief that one can and should make decisions for society. Maybe all that matters to some is that they can, and anything else, like "changing the world [for better/worse, who cares]" is rationalization that's been blessed as virtuous.)
Are those new to the area? I don't live there anymore, but I spent a decade in Greater Boston and have never heard of this.
That's not to say that the startups aren't doing hard tech and they're still different than west coast startups. However, scientists are perfectly fine at using the scientific method for business development once you explain it to them and are much smarter about getting initial revenue and market validation and know perfectly well it's important -- if you mentor them even a little bit.
MIT started working much harder to explain this in the mid '00s when it truly was much more like what this story says.
Also, a lot more west coasters (like me and my peers) started coming out to Cambridge for school this past 10-15 years after Stanford, USC, UCLA CS/Anderson, and Berkeley EECS/Haas became increasingly difficult to get admission into.
I have plenty of Harvard and MIT friends who were rejected by those 4 programs despite being Californians.
> if you mentor them even a little bit.
MIT started working much harder to explain this in the mid '00s when it truly was much more like what this story says.
Yep! Programs like Engine helped, and I-Labs across town at Harvard as well, and YC ofc had its origins in Cambridge.
Also, a fourth MIT startup, which I recently almost co-founded, even before I joined the nascent team, the inventor-CEO had already done impressive customer-oriented legwork, and found Bay Area advisors, more like "Stanford" in the article.
> The team has 9 PhDs and just hired an MBA to start finding customers.
This is a problem, if none of the PhDs happen to have non-academic strong experience in product, nor in industry team engineering.
An academic environment will tend to make people think they know more than they do, about things academia doesn't know.
Also, academic degree and career paths in some ways reward the opposite of how I think people in a startup, or other effective company, should be thinking. (Unless the startup is more the VC growth investment scheme kind, which can be mostly about appearances.)
One MBA (even if very experienced) probably can't, by themself, counterbalance all those experience gaps, nor those lessons to unlearn.
> The MIT startup has no sales to customers, but possibly a DARPA grant to develop their technology.
I don't know about the more involved DARPA grant-writing, but SBIRs do seem to be popular seed-ish funding: https://www.sbir.gov/
Some programs are specifically designed for commercialization and want to see a product available at the end. There was a big shift to that post 9/11 (sometimes called "little 'r', big 'D'": less research, more development.
PageRank was innovative, and had great "market fit" (or "user fit", prior to ad revenue), but wasn't very deep as technology goes.
Google's (original) business success came from leveraging that into a three-way network-effect as the middleman connecting web content users, web content providers, and web advertisers. Even today, PageRank's successor algorithms appear to be aimed more at ad revenue optimization than improving search as a technology.
Likewise. Netflix, Facebook, Expedia, Spotify, Uber, Airbnb, ... use tech as operations, it is not the product. Their primary defenses are not unique technology, but network effects, customer information lock-in, and other market-side moats.
They have great technical people doing great work. But a high proportion of their innovation is aimed at their own operations, customer engagement, etc., not creating and offering new technology.
--
Technology first companies typically end up as part of a supply chain.
nVidia is a good example They have become huge, but are still a parts maker in a lot of ways. They have created a sticky ecosystems, but their primary work and moat remains keeping up a relentless technological cadence.
Another example was Amazon. They started by adapting others' tech to create an online store. But instead of simply optimizing that, they fully developed distributed computing as a service, and spun that out as its own business. Now they are a provider in other companies' supply/resource chains.
Stanford style startups are a way better way to make money - but I wish people would just stop making them. Filling the economy with parasitic middle men hasn't worked out too well for us.
Yes, there's a burgeoning middle class of engineers who design those Juul pods and build those ad networks, but imagine if all those people were hard at work engineering desalination plants and better batteries. Imagine if that paid better.
https://www.motherjones.com/kevin-drum/2018/05/raw-data-rent...
https://www.manausa.com/blog/wage-inflation-home-affordabili... see "Wage-Adjusted Monthly Mortgage Payments" section
Because housing costs keep going up while median wages have been stagnant since the turn of the millennium:
https://www.cbpp.org/blog/census-income-rent-gap-grew-in-201...
The last affordable years were around 1994 before the internet arrived, 2012 during the middle of Obama's terms and maybe 2020 during the pandemic.
But we've had so much corporate greed inflation to save the rich from losing any money for the 2 years that workers took off during covid-19 that any income gains by labor have been completely wiped out. $15 hourly wage? What a joke.
Sure, we have fancier video games, smart phones and even passable AI. But I can tell you straight up that in 1994 we had no concept for the level of anxiety that people live under today. I feel awful for young people born after that who think that whatever all this is is how it always was.
Had wages kept up with inflation and trickle-down economics not happened, so that the wealthy paid their fair share of taxes and we had the government services we're due like free public education and healthcare, the inflation-adjusted median US income would be twice what it was in 1994 and 3-4 times what it was in the 1970s. Well over the $70,000 mark where happiness peaks and more money provides diminishing returns. In other words, we could work for 3 months of the year and more than afford everything we have now, including savings and retirements. But the wealthy keep us down and divided because the highest profits come from struggle and war.
The financialization of tech under the Stanford model widens wealth inequality. I can't even imagine how many things would be fully automated and approaching free by now had the MIT model kept the pace of true innovation at 1960s and 1980s levels in areas like pharmaceuticals, genetics, miniaturization and other pure research. Instead we have 2 day shipping and privatized space travel, which are cool and everything, but people are homeless and dying of starvation all around the world and on our watch in proxy wars. Words like travesty don't even begin to capture how far astray we've gone.
Meanwhile, the slow growing MIT company discovers a tangential product while developing their technology. They release the pivot product which slowly grows revenue. They build under revenue, never take investment money, and share revenues. Everyone gets rich and stays friends, and the VCs get nothing.
My guess is that Stanford founded companies would win.
I'm an MIT grad myself. But I've noticed the incredible productivity of startups coming out of the Bay Area.
Though, not sure how much of that is Stanford grads specifically as opposed to other schools in the area (as well as graduates from schools around the country who flocked to the Bay Area).
"Can you produce a pie chart of the top 10 most valuable MIT companies?" <followed by some corrections and clarifications "Google is not an MIT founded company">
"Can you produce a pie chart of the top 10 most valuable Stanford companies?"
(Elon Musk went to Stanford for two days so it counted Tesla.)
I think it's hard for people to understand today how much less the ideas like lean startups, Paul Graham essays, customer validation, etc had penetrated software engineering mindset in early 2010's, at least outside of SFBA.
Since following HN years back i've been trying to speak up at these companies with ideas like building a brand, market test-fit, etc and been given the cold stare. Thanks to this article I now see it's cultural. Typically these founders have relevant experience in their field, so they "know" there's a fit without testing and prefer to remain in stealth mode until the big reveal.
Probably the best thing to do would be, at the university level, to give engineers more business experience and marketing/sales types more concrete-problem experience. But that would be vocational, and I think universities systematically dislike seeing their work as vocational training.
Things are changing, but startup in MA are playing hard-mode and don't get any extra points for doing so.
The Stanford Startup and the MIT Startup - https://news.ycombinator.com/item?id=6715864 - Nov 2013 (85 comments)
A similar area with a ton of interesting research is sustainable production of silicon where current smelting uses carbothermic reduction of silica in an arc furnace
Me: I have an idea for "foo"
MIT reply: "Here's a list of 10 reasons why that won't work"
Stanford reply: "That's neat, and here's 10 reasons you should work on it"
One might see the Stanford response as unrealistic or patronizing, but one of these creates a culture of positive ideation (and hustle-culture startups) while the other leads to a lot of discouraged entrepreneurs.
MIT: the travelling salesman problem is NP-complete so your idea is impossible
Stanford: you should build an MVP that just randomly sorts the destinations and see if that's good enough first, then pivot to what customers really want
I'd love a database of companies and their public valuations, tagged by the schools of the founders.
My guess is that the market cap of the Stanford founded companies would beat those of the MIT founded companies.
I'm an MIT grad myself. But I feel, given MIT's prominence as a tech institution, the cumulative market cap of MIT founded companies would be surprisingly small.
If you don't like this, tell the billionaires to go back to funding private research centers (e.g. Bell Labs) and they can own all the IP generated there outright.
Otherwise, it's just a ripoff of the taxpayer by state-subsidized 'entrepreneurs' which makes a mockery of the whole free-market capitalist competition system they claim to support. Ultimately, we end up with a system of aristocrats gambling at casinos who are given government bailouts every time they make a stupid bet - which is not sustainable over the long run.
Not everything generated at a university that takes tax money is government owned, but everything the government funds is available to the government.
> private research centers (e.g. Bell Labs)
Companies like Google or Apple have been funding tons of research. I worked for a government research lab doing medical research. The research being done for the Apple Watch was miles better than ours, because it had way more funding.
Further reading: https://en.wikipedia.org/wiki/Bayh–Dole_Act
