SAN JOSE, California - Friday, in a grand Spanish-style building in Silicon Valley, a cluster of MBAs from the top business schools in the country got an eyeful of their potential future. As part of a "matchmaking" event put on by The Enterprise Network (TEN), a Silicon Valley business incubator, tie-wearing students were introduced to khaki-trousered budding entrepreneurs. The goal, according to TEN, is to entice fresh business minds to promising, but struggling, start-ups - and to have the start-ups give experience back to curious students.
"This is an incredible show of interest from the managers and executives of tomorrow," enthused TEN CEO Joe Boeddeker to the gathering. And for the students, "it's a rare opportunity to sit down and talk to an entrepreneur and ask, 'What have you been through?'"
The Enterprise Network is the key project of Joint Venture Silicon Valley, a nonprofit organization founded in 1993 as a collaboration between government, industry, and labor to improve the business environment of Silicon Valley, and is intended to nurture the small start-up environment that the Valley is built on. As a joint venture with NASA Ames, TEN built a business incubator that would let new businesses turn government technologies into commercial ventures. Several years on, the incubator is now open to all kinds of high-tech start-ups that need support.
In that Spanish building - complete with fireplace and vines growing up the stucco walls - over 20 tiny high-tech start-ups toil; each business has just a handful of employees and is in the early days of building products and finding funding. In order to get in to the incubator, the start-ups have to submit a sophisticated business proposal to an advisory board of Silicon Valley "rock stars." Once they pass, TEN gives them cheap rent, secretarial support, office supplies, industry advice, and a panel of high-profile mentors from established companies and VCs in the Valley.
Over 300 MBA students from Yale, Harvard, Stanford, and Santa Clara were expected to visit the incubator today. Start-ups that demonstrated their wares included College Club, creators of technology enabling college students to pick up email via telephone; 3DM, which enables realistic behavior for 3D models; and Red Creek Communications, an Internet security company. Besides watching half-hour presentations, the students were free to roam the building and consume mountains of bagels while soaking up the environment.
Start-ups have become immensely appealing to grad students - to the point where programs like Stanford's Technology Ventures internship program have been flooded with students dying to get experience at a start-up. As Henrique Perel, a Harvard MBA attendee of the TEN event attests, "Definitely the bureaucracy of a large company, the way they move, makes me sick. I like the agility, the level of responsibility, at a start-up."
But although TEN's companies are guaranteed to have promise, they face stiff competition for those MBAs. This stop wasn't the only ones on the students' agenda: The Harvard students, for example, have flown out from the East Coast to visit over 80 start-ups this week. And as one of the TEN entrepreneurs - himself a recent Harvard MBA grad - points out, the buzz about start-ups among students doesn't always extend to taking the job after graduation.
"It's a lot more talk than action," says Francis Tapon of SIGHTech, a eight-month-old company creating self-learning machine vision systems. In his class at Harvard last spring, only a tiny percent of 900 students became entrepreneurs. "A lot of students come out of business school US$50,000 in debt. The idea of jumping into a start-up is not an economic reality." Tapon's salary, for example, is currently nonexistent.
Students quietly loitering in the halls agreed. While some said that the money issue was a "cop-out," others felt the TEN incubator companies were in such infancy that they could be too much of a risk.
"I think you need to believe in the people here.... Most don't have any funding, and you could be stepping in quicksand," commented Craig Fairchild, a lanky Harvard MBA. "For us just coming out, the best place to go is where they are experienced managers who have done it before. Companies with, like, 50 employees - it's less risky, but you still get the entrepreneurial environment you want."
But even if the MBAs don't take full-time jobs at a TEN company, the creators of the event hope that the students could be convinced to take on work with a start-up as a class project, for their thesis, to pad their résumé, or simply for a bit of extra cash. The creators of start-up ASL, for example, selling "intellectual property" to technology companies, believe their business strategy is so unique that a student could be convinced to write a business plan as a challenging thesis project.
And as Susan Barich, the TEN event coordinator, points out, the students still need the experience at smaller start-ups on their résumé before they can move on to those stabler businesses with bigger salaries. "Companies are looking for the 'start-up type,'" attests Barich. "Big company experience is so different from a start-up, that if you don't have any start-up experience, you're not attractive."
