Some of today’s greatest tech companies, young and old, were started by college students: Microsoft, Dell, Facebook, Snapchat. In each case, their founders (Gates, Dell, Zuckerberg, and Spiegel) started working on their companies while in school, and then dropped out to pursue their ventures full-time. So is school a good place to start a business?
The advent of cheap hosting and other outsourced infrastructure has brought the costs of starting a software company down dramatically. Now more than ever, students are building companies from their dorm rooms. This was especially salient for my cofounders and me at Stanford, where, in the last 18 months, we experienced much of the optimism and many of the resources that the university has become well-known for. Here are other things that student founders have going for them.
“How do I find a cofounder?” is the single most common question asked of Paul Graham, and yet the hardest question for him to answer. PG’s answer is that he can’t find you your cofounder, because the best candidates are folks you already know. My cofounders, Mike and Alden, entered my life at Stanford. I met Mike through our shared interest in organizing founder meetups around campus. Mike and Alden met through Stanford’s CS classes. It’s cliche but in my opinion very true: Cofounders need to be respected and trusted peers first, and colleagues second. College is a fantastic mixing ground because it’s a place where people have natural flexibility, shared interest, and an objective of getting to know each other.
Starting a company while at Stanford, we were able to iterate our concept quickly in classes designed to “test the entrepreneurial waters.” In the d.school’s “Launchpad,” we were asked to create a working prototype in one week, have a paying customer after two, and constantly iterate our product according to user feedback. Over at the Graduate School of Business, Professors Barnett and Rachleff taught us how to find “product-market fit.” In both cases, the school environment helped stimulate us to think about our ideas in ways that are hard to reproduce outside of school. Outside of Stanford, many startups now adopt the “Lean Startup” Methodology championed by Eric Ries and taught at many forward-thinking universities around the world.
Mike, Alden, and I focused many class projects and presentations on our own startup, garnering help and feedback from smart classmates while enabling us to refine our business plan and pitch in a low-risk environment. In school you can pick up a project, work on it with a group of people, talk to potential customers, fail, and do it all over again, without the risks that would come later in life; having to leave your job to try something new, supporting a big family, etc.
People will almost always extend a helping hand to students–even when they might not have helped that person outside the context of school. It’s much easier to learn from and get to know future partners, colleagues, or competitors while you’re still in school and they feel an intrinsic desire to help you.
So with all those benefits and resources, shouldn’t every entrepreneurially minded student be starting a business in school? Notwithstanding all the benefits of starting a company in school, there are challenges and risks that I came across the hard way when founding LifeSwap (the predecessor to my current startup–here’s our pivot story). Consider these disadvantages:
Some of the startups founded in school arise through class projects where a group of students proactively seek to uncover and develop a business opportunity. This goes against the belief that true innovation stems from authentic and unique insight into a problem. When students come up with business ideas that are inauthentic to their own experience, or lack deep insight into a pain point, there’s a risk that the idea is more of a vitamin than a painkiller, and thus less likely to be a necessary solution.
Less-than-great ideas, rather than dying quickly, stay alive due to falsely positive feedback from others. Affirmative feedback from surveying classmates is too often taken as confirmation of a use case, when it is a result of people’s inclination to be supportive. We learned this lesson with LifeSwap: People loved the idea of experiencing another job for a few hours! But our classmates weren’t our target market… so make sure you get “out of the building” to test your product with your real customers.
Amidst that echo chamber of excitement about your startup, and positive reactions from those around you, many student founders experience an escalation of commitment. Before I knew it, I was working on LifeSwap in lieu of a summer internship, and being asked if I was planning to “drop out” before graduation. I considered it, as did a number of classmates of mine. With hindsight, I’m relieved that I decided to stay in school. My chances to start a business didn’t dissipate, while the experience of attending graduate school and building a valuable network would have been hard to replicate later on. One question to ask is whether deferral is an option.
After graduating in June and joining Mike and Alden to work on our startup full-time, it’s become abundantly clear to me that perhaps the biggest disadvantage of working on a startup in school is that it’s really hard to meet your full potential while also pouring time into school. Being a part-time team member increased our team’s email volume and delayed our product decisions, because I wasn’t there to have the quick debates and make the fast decisions that a startup needs to build, iterate, and be successful.
Having said all that, I’m finding the relationships built and insights garnered through my startup experience while in school to be invaluable in my current day-to-day startup rollercoaster. School is often the best place to meet cofounders, build working relationships with them, and get excellent feedback from smart people. I’d encourage other startup-hungry students to make the most of the resources around them while inflicting a healthy dose of skepticism on themselves and making sure not to mistake approval within the classroom for product-market fit!
Bastiaan Janmaat (@bastiaanjanmaat), Mike Dorsey (@mikedorsey) and Alden Timme are cofounders of DataFox, a private company analytics tool that allows users to discover and track high growth companies, based at StartX in Palo Alto. Check out their other FastCoLabs posts here, visit their blog, or follow them on Twitter at @datafoxco.
[Image: Flickr user Cuboulderalumni]