The Stanford Startup and the MIT Startup (2013) | Hacker News Reader

The Stanford Startup and the MIT Startup (2013)

fpgacomputing.blogspot.com

192 pointsmomofuku75 comments

The article strikes me as somewhat OK but overly critical of the MIT startup and overly forgiving of the Stanford startup.

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.

I went to school out East and work out west, and consumer tech is way more of a NYC thing than a Bay Area thing because the personas and professional networks are out there.

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)

Having gone to university in Boston at a few different institutions, this is completely true. It's in the water. I think a lot of people never get out of the mindset, either.

> throw a rock and you'll hit a Cafe Landwer

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.

They aren't that common (only 3 I think), but they're a very Israeli brand and the only other North American city with a similar number is Toronto (not even New York).

New York is fairly Jewish but not really Israeli, but in Boston the Jewish community is very Israeli.

> The elitism is rife to a level unlike in California.

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.)

> But I also see variations on that elitism around Stanford, Google, and some other Bay Area icons.

Absolutely! And no place is without it's elitism. It's just annoying that Boston's is based on a specific identity that cannot be absolved (where you went to school for elementary, high, then college) versus something that adults have some autonomy to define (Cambridge and Somerville was much more refreshing, but the same issues persisted underneath).

That said, everyone should cut people to size whenever any form of elitism arises. It's all bullshit, we make good money - what's the point about clinging to a specific identity.

honest question, what's wrong with the CIC?

It's been sometime since I was there, but it felt like it tried to be a South Park Commons style salon, but promising founders in the Software and Hardware space had plenty of better options like Engine or I-Labs, or moving out West to join YC or SPC.

I've noticed UAV/Autonomous/SpaceTech (UAE and Saudi are on a buying streak rn) and Biotech (unsurprising) startups do fairly well in the Boston scene.

I would say that MIT has jumped on the entrepreneurship train (for better and worse) much more wholeheartedly in the decade since this account of an even older (!) anecdote.

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.

> I would say that MIT has jumped on the entrepreneurship train (for better and worse) much more wholeheartedly in the decade since this account of an even older (!) anecdote.

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.

The article names its archetypes not entirely fairly, based on my experience at three MIT startups. Two were novel-tech academic spinoffs, and the third was alumni applying/integrating COTS tech driven by customer problem domain. Of those three, two were business-thinking much like the article's "Stanford" archetype. The other had, like the article's "MIT" archetype, a period to develop tech from the lab, and a challenging changing of gears to be cutting-edge product-driven.

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/

And Google is a pretty good counter-example to “The Stanford startup has developed no new technology”

AFAIK, the Markov chain page ranker existed before Google (Jon Kleinberg's papers, e.g.), what Google paper added were some smaller bells and whistles, like using the text description of the hrefs.

I don't think these archetypes apply to the mid-90s Stanford/MIT scenes

(Google is huge, and does real tech, i.e. advances in deep learning. The following only applies to their search startup phase.)

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.

SBIRs can be a good first set of funding. Some agencies go with $100k for six months, so win a couple of grants and you are doing pretty good. The problem is that some agenices have different criteria, forms, etc. so just because you jumped through the hoops for one funding source, it doesn't automatically translate (government does love their paperwork/processes).

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.

SBIRs can be useful, but they can also be a trap where a company just keeps going after SBIRs and never takes the technology to market.

There are entire companies in Boston/Cambridge area whose business model is to get perpetual SBIR grants back-to-back and never produce anything of commercial value. And they pad themselves on the back for being innovative companies. It is almost like there is collusion between these companies and grant-giving agencies.

Yup - “SIBR Mills” The Federal government has very complex and specific rules for buying things. It’s a big, important market but hard to crack. Thus the most successful players tend to be really good at selling to the government… regardless of whether they’re really good at what the government needs.

The government knows this and thus tries to create programs that streamline the process while retaining sufficient controls to steward tax payer funds effectively. SIBR is one such program. They’re useful, but not immune to exploitation by sales specialists.

The MIT startup is like a breath of fresh air - a company that is actually doing something!

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.

What about the tech economy hasn't worked out well? Americans and tech workers in particular have never been better off

The enshittification of the Internet? Search results overrun with SEO, internet-connected dishwashers, toxic social media full of dark patterns, discarded Juuls littering the streets, ads on paid streaming services that cut half their content because of mergers, meanwhile the planet is burning.

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.

That all sounds dramatically preferable to an economy that follows what you suggested and companies like Google, Facebook, Netflix, Salesforce, etc etc don't exist because we haven't solved desalination yet

Wanting Salesforce rather than clean drinking water is a rare take, I'll give you that.

I almost can't tell if you're trolling. If we look at quality of life metrics like the percentage of work hours required to rent or buy housing, then it takes about 1.5 times more hours worked to live today than it did in the 1990s when I was a young adult:

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.

For like 20 years. The job market for tech workers is hell right now and is only gonna get worse

The Stanford startup looks AMAZING for five years, and then, after getting hundreds of millions in investment, they realize they are only making tens of thousands in revenue, everyone starts fighting, friendships and money are lost.

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.

I'd love to see the cumulative collective market cap of MIT founded companies vs Stanford companies.

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).

MIT companies in aggregate don't add up to a Google. ChatGPT did a pretty good job with these prompts and renders a pie chart with outdated valuations. Chat sharing doesn't work with the embedded pie charts, here are the prompts:

"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 remember this article was extremely eye opening for me as a recent grad in 2013 Boston.

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.

And here we are 11 years later with people cargo-culting all those things. I once overheard someone seriously suggest building a MVP for a game in an established genre.

This actually works though. Pre-Alpha games get limited releases on Steam and can raise millions that can be used to finish and polish the game.

As an avid gamer, I can tell you that early access games that are too early don't do well unless they're made by someone famous. Early access works well with games that are released in a semi-polished state - Hades is probably the poster child for a well executed early access.

As an east coaster the MIT startup hypothesis tracks very well. It's not just MIT but most startups out here i've been involved with. They're generally moonshots of tech, "guaranteed" to sell bc you have to buy bc the tech is superior. :)

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.

Marketing, sales, market testing, and doing what customers want are inherently messy processes. I think people who spend too much time immersed in purely technical work start to think that messy processes are inherently wrong, because there are no definitive right answers.

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.

That comparison ignored the part where MIT (the University) screwed the deal.

Things are changing, but startup in MA are playing hard-mode and don't get any extra points for doing so.

Don't get it twisted—the MIT Startup is still based in SFBA

Discussed at the time:

The Stanford Startup and the MIT Startup - https://news.ycombinator.com/item?id=6715864 - Nov 2013 (85 comments)

As true today as it was back then. At MIT the atmosphere is around hard tech startups. That's even what the MIT accelerator specializes in https://engine.xyz/

Author. Anantha Chandrakasan mentioned this essay at a launch event for The Engine. He was my boss when I was a TA :)

Does the article draw on “worse is better” ? https://www.jwz.org/doc/worse-is-better.html

There's also the corollary East Coast Lisp / West Coast Lisp dichotomy.

https://news.ycombinator.com/item?id=39583305

[...]

Leaning hard into the IDE (or ChatGPT these days) because your language design is flawed is a hella/totally stereotypical "West Coast" thing to do, as described in "Evolution of Lisp", "Worse is Better", and "History of T", and exemplified by Interlisp and Warren Teitelman's "pervasive philosophy of user interface design" and implementation of "DWIM".

https://en.wikipedia.org/wiki/DWIM

https://www.techfak.uni-bielefeld.de/~joern/jargon/DWIM.HTML

https://escholarship.org/uc/item/6492j904

If your language isn't terribly designed, then your IDE doesn't have to be such a complex non-deterministic Rube Goldberg machine, papering over the languages flaws, haphazardly guessing about your intent, "yelling at you" all the time about potential foot-guns and misunderstandings.

As you might guess, I'm firmly in the "East Coast" MacLisp / Emacs camp, because that's what I learned to program in the 80's. I can't stand most IDEs (except for the original Lisp Machines, and Emacs of course), especially when they keep popping up hyperactive completion menus that steal the keyboard input focus and spew paragraphs of unexpected boilerplate diarrhea into my buffer whenever I dare to type ahead quickly and hit return.

But my point is that you can have and should demand the best of both coasts, unless you start off with a Shitty West Coast Programming Language or a Shitty East Coast IDE.

[...]

The problem is that west coast programming languages/ides are easier to sell. It genuinely pains me how accurate the original worse is better essay is.

I remember going to a conference at Stanford and I overheard more than one group of students talking about Sam Altman. Around Cornell I hear a lot of conversations of students who, on the other hand. think getting ahead is getting ahead in academia. I definitely find grad students are interested in hearing about adventures in startup land but they aren’t steeped in that the way Stanford students are.

I don't know why, but as a non-American, this seems to be more of a Nerd vs Jock kinda thing. Am I correct in my interpretation?

Yes.

A 10% projected improvement in a bulk chemical process isn't that useful unless you're already in the industry. It's not enough to justify entering the industry. 2x, though...

The real company that this was based on probably projected beating the cost of the equivalent Haber-Bosch industrial setup but ultimately couldn’t reduce the nanoparticle production costs and pivoted to selling nanoparticles. I think the best “carbon free” ammonia is still 50% more expensive than the cheapest ammonia, but there seems to be continuous research into promising methods. I’m not a chemical engineer though, and do not know how to qualify research, but this recent article from a Stanford group was intriguing: https://news.stanford.edu/stories/2023/04/ecofriendly-ammoni...

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

Total world silicon production for ICs isn't that big. It's about 9 million metric tons / year. Steel production is around 2 billion metric tons / year.

There has been some recent work from KAUST calling the Stanford work into question.

It was also "no environmental impact", though.

There are major cultural differences between these schools that the article doesn't touch upon. Having presented business/product ideas to classmates & colleagues at both schools, here's a gross simplification of responses I've experienced:

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.

The average thing I (as someone in the academia) hear about MIT is their press office exaggerating the importance of some research finding. The average thing I hear about Stanford is a controversy in mainstream news. To an outsider, MIT culture seems to be more about conventional nerds. Stanford culture seems to attract more than its fair share of political weirdos.

Me: I will write software to help salesman plan their route when they travel.

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

There's another type: the Stanford Startup that can't find product-market fit so it markets itself as an MIT Startup.

My insomniac brain automatically filled in "prison experiment" after Stanford, and then I started to think, what if startup-VC-founder-unicorn culture is all an elaborate psychology experiment?

shhhh don't say the quiet part out loud

Sorry, Dr. Zimbardo.

Has anyone seen stats on the cumulative collective market cap of MIT founded companies vs Stanford companies?

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.

You don't need to do any research. Just look at Google. It should dwarf all MIT startup companies combined.

Avoid being a cliche by hustling and bring something awesome with tech too. The two aren't mutex.

Intellectual property generated at universities that accept any taxpayer funding whatsoever should belong to the taxpayer, meaning any US citizen should automatically have access to that IP under a free non-exclusive license.

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.

> Intellectual property generated at universities that accept any taxpayer funding whatsoever should belong to the taxpayer

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

Bell Labs, with all its ground-breaking, Nobel-winning research—from the transistor to UNIX and the cosmic microwave background to information theory—is an extreme outlier because, outside of rich governments themselves, only the unlimited resources of a government-sanctioned monopoly could fund basic research that, at the time, would have no obvious utility. Though the fruits were smaller in scale, Xerox PARC is another rare example.

Funny how MIT sounds like europe in this example..

Europe is east of the east coast, culturally too.

What is (maybe better left) unspoken are the kinds of errors attributable to both strategies. The really great tech that never makes it to consumers and is lost, only to be rediscovered years later--MIT. Garbage software that consumers are tricked or forced into using--Stanford.

Might as well called Stanford B2C and MIT B2B. Yeah, B2B needs more capital since they are building a plant while B2C is really about sourcing materials, packaging and marketing. Completely different businesses, different CapEx and OpEx models, different risks and different investors.

I thinks it’s more hard tech vs traditional startup.

Yes, it’s apples to oranges, I don’t really see much value in the analysis.

I find this kind of rhetorical device tiring to read when it goes on and on like this. Once I read the conclusion I felt like I'd be cheated and it could have just said that in the beginning.

Wow so finance school startups and engineering school startups are different?

Don't @ me I went to a SUNY

Stanford isn't a finance school. CS and Human Bio/Pre-Med have been the 2 biggest undergrad majors on campus for a decade+ now.

Finance is an East Coast and Chicago thing placement wise, because West Coast High Finance collapsed in 2008.

Reply on news.ycombinator.com