"When it came time to leave the university we realised that we didn't really want to be in big companies," Spencer says. "We didn't want to be in jobs where we felt we didn't have much impact."
Three summers on, Spencer, aged 24, is sitting in the recently opened European headquarters of Excite, the navigation network that he and his five friends founded as the result of one of those brainstorming sessions over cheap burritos. Much impact? Excite has taken the Internet world by storm in the past year, rising from nowhere to rival Yahoo! for supremacy in the highly competitive market.
Spencer's casual attire - T-shirt, trainers - sets him apart from the rest of the dressed-for-business people moving about in the sparsely furnished office tucked away in a courtyard near Regent Street. In fact, put a backpack on his shoulders and a copy of Let's Go Europe in his hand and he'd have no trouble blending in with all the other young Americans who descend on London at this time of year. But Spencer, the company's chief technology officer, isn't here to "do Europe" as much as conquer it. Excite's navigation services are expanding into the UK as well as France, Germany and Sweden. The way the company has grown in the past year, the chances are he won't be spending much time in youth hostels when he tours the Continent.
Three years and a day ago, Spencer and his partners formed Architext Software Inc. "We thought it would be fun to start a company. We had no idea that it would mean working hundred-hour weeks for a year. So we got together and started talking about ideas.
"Because Stanford has traditionally been a very wired university - everybody has 10Mb of ethernet in their room - we were all familiar with the Internet," Spencer recalls. "At that point in time there wasn't really a Web, but we knew about FTP sites with electronic library text. We knew about Usenet newsgroups.
"We saw that there would be more and more text available on the Net and we also felt there was a big gap between the average consumer user and the information retrieval tools that had been designed for knowledge researchers over the past 30 years. We thought that gave us a window of opportunity."
Following that great Silicon Valley tradition, they locked themselves into a garage with nothing but their brains and some hardware salvaged from the university dump.
"We got into the garage and started writing information retrieval tools. We were very poor at the time. We scrounged $15,000 from friends and family and that was our salary for the six of us for a year.
"We rescued from the dump a bunch of terminals and some ancient Sun hardware. We wired that up and started programming. At the end of a year we had what we thought was a great technology but no business plan and no idea how to make money from it."
The next step was to shop their technology around to venture capitalists in Silicon Valley. "Most of the VCs told us it was a great technology but come back when we had a business plan that we can work with," he says. "We finally got in touch with Kleiner Perkins [Caufield & Beyers]. Kleiner is fairly famous in the Valley because they finance a lot of risky but ultimately great payoff companies - companies like AOL Netscape, Compaq, Lotus and Marimba.
"So we met with Vanod [Khosla] and instead of asking us for a business plan, the first thing he asked us was "will your technology scale?" We told him we didn't know because we couldn't afford a hard drive big enough to test it. Within 10 minutes he ordered us a $5,000 hard drive. That sort of attitude - very aggressive, willing to spend money if necessary, very willing to take risks - was very compelling to us."
Before their company was even off the ground a competitor, Verity, was expressing an interest in taking it over. "After a lot of soul searching, we decided to go with Kleiner Perkins and take that investment and try to build the company ourselves."
And build it themselves they did, and very quickly, entering into exclusive distribution agreement with Microsoft Network and Netscape. In March 1996 Architext changed its name to Excite and the following month raised $43m in a stock market flotation. More deals were made with the likes of AOL, becoming the giant online service's exclusive search and directory service. Last year, a big advertising campaign was launched in America and Excite saw its market share soar. From a staff of six in 1995, the company now employs more than 200 people with annual revenues of $15m last year.
Apart from expanding Excite's services around the globe, Spencer thinks the company has a big role to play with the coming of "push technology", which will deliver information to the desktop without users having to search the Net for it. "I don't limit ourselves to just searching the Web. We're perfectly willing to explore other ways of doing that navigation. In fact, we've been probably the most aggressive of our competitors of actually going out and doing that. So we signed a deal with WebTV to be their exclusive search and directory partner. We provide the channel guide for the Marimba network. We recently signed a deal with Pointcast to be their exclusive partner. All of those deals help extend Excite out of the Web space into other areas."
But the rapid rise of Excite hasn't put a strain on the company's six founders. "We're all still really good friends," Spencer says. "We're all going off to Hawaii in a few weeks. Ever since we founded the company we kept saying at each milestone that once we finally get venture capital, we'll take a trip, once we finally go public, we'll take a trip and we never have." And when he ceases to be excited by his current job, Spencer says he isn't likely to take early retirement on a tropical island. "I'll probably go back to school to get my PhD."
Bill Gates is reported to be considering funding a new computer research centre at Cambridge. But seeing what Graham Spencer and his friends have accomplished with Excite makes you think that what Britain could really do with is a few Silicon Valley-style garagesn