The billionaire factory: Why Stanford University produces so many celebrated web entrepreneurs

What is it about Stanford that breeds the best web talent in the world?

By all accounts, Lucas Duplan is a born tech entrepreneur. The 22-year-old from Orinda, California, began selling iPod cases on eBay when he was still in short trousers. On trips to his grandmother’s home in Croatia as a teenager, he would rent out her Wi-Fi connection to the neighbours. More recently, as a computer science undergraduate at Stanford University, he invented a smartphone app called Clinkle, for which he generated seed funding to the tune of $25m (£16.5m).

That whopping investment round, announced late last month, was described by Clinkle’s PR reps as “the largest seed funding in Silicon Valley history”. Even Mark Zuckerberg could only raise $500,000 in start-up money for Facebook. But then, Zuckerberg went to Harvard.

Stanford has educated just one US President (Herbert Hoover, since you ask) to Harvard’s eight, but its leafy campus in the heart of Silicon Valley has probably produced more celebrated technology entrepreneurs than every other US college combined. Its recent graduates include the founders of the photo app Instagram, who sold their creation to Facebook for $1bn in April last year; and the team behind Snapchat, whose 18-month-old brainchild has been valued at $800m.

William Hewlett and David Packard, founders of what is now the world’s leading PC manufacturer, met as Stanford undergraduates in the 1930s. Subsequent Stanford alumni include the founders or co-founders of Cisco, Sun Microsystems, Intel, Yahoo!, Netflix, Paypal, TechCrunch, Electronic Arts, LinkedIn, YouTube and Mozilla Firefox. Oh, and Sergey Brin and Larry Page, the founders of Google. In fact, one in 20 Google employees is a Stanford graduate.

According to a recent study by business research firm CB Insights, between 2007 and 2011 Stanford-educated entrepreneurs raised $4.1bn in venture capital and angel investment deals (Harvard alums ranked second in the list of top US colleges with $3.8bn – but $2bn of that came from Facebook alone). Another 2012 study, conducted by Stanford academics Charles Eesley and William Miller, estimated that Stanford alumni and faculty members had founded 39,900 companies since the 1930s, creating 5.4 million jobs and generating annual revenues of $2.7tn. If Stanford grads formed their own country, it would have one of the world’s 10 largest economies.

Eesley, who teaches a course in technology entrepreneurship at the university’s School of Engineering, says that entrepreneurial spirit started with its founders. “Stanford was created by people who came to the Western frontier,” he says. “The settlers were community builders. They took risks by coming west and starting from scratch. But they also recognised that they wouldn’t succeed without building a broader community and lending a hand to the people around them.”

Duplan was among Eesley’s students two years ago. “Lucas arrived in the class with the idea for Clinkle already formed, which is rare,” Eesley says. “He was extremely confident about it.”

The Clinkle concept had occurred to Duplan on a visit to London. He’d forgotten his credit card, and was forced to walk around with fistfuls of pound coins “clinking” in his pockets. While details of the app remain sketchy, it is said to use high-frequency sound to turn a phone into a virtual wallet, enabling payments between a handset and other devices. In a blog, Duplan explained, “The way in which we transact hasn’t significantly changed in decades… [people] still rely on the same technology humans used centuries ago: paper and coins. So we’ve decided to do something about it.”

Stanford directly facilitated the app’s creation. Duplan found a ready-made group of co-workers on Eesley’s year-long course, for which 16 teams of five students apiece are each assigned a pair of experienced mentors from Silicon Valley. Eventually, he recruited more than a dozen fellow Stanford students to the staff of Clinkle, some of whom suspended their degrees to join him. Meanwhile, Eesley helped to persuade the dining halls and cafés on the Stanford campus to trial the app. Though the Silicon Valley mentors are banned from taking a financial interest in their students’ projects during the class, one of its guest speakers in Duplan’s year was Google board member Diane Greene, who later invested.

Was the confidence of Clinkle’s investors boosted by its creator’s Stanford pedigree? Most likely, seeing as several of them have that pedigree themselves, including Mendel Rosenblum, a Stanford professor of computer science; Bob Joss, former dean of the college’s Business School; Mehran Sahami, its associate chair of computer science – not to mention John Hennessy, the President of Stanford, a serial tech investor who also sits on the boards of Google and Cisco. Even the wife of tech mogul Marc Andreessen, another Clinkle backer, teaches philanthropy there.

Depending on your point of view, the faculty’s investment in their students’ projects represents either a serious conflict of interest, or a virtuous cycle that enriches everyone. The university’s unique relationship with Silicon Valley has direct financial benefits: thanks in part to the generosity of its alumni, Stanford set a record for fundraising in 2012, reportedly becoming the first US college to add more than $1bn to its endowment in a single year. Its biggest ever single donation was $400m in 2001 – from the Hewlett Foundation.

Two years ago Stanford started offering several of its courses over the internet. One class, an introduction to Artificial Intelligence, was taken up by 160,000 students around the world. But while future online students may benefit from Stanford’s teaching, they’ll never savour the benefits of being on campus, where tech investors cram into the Venezuelan-themed Coupa Café in search of the next big thing, and where at any moment you might bump into a senior Google or Facebook or Twitter exec, on their way to address a class.

Clinkle also benefited from the assistance of StartX, an accelerator programme founded by a Stanford student which offers shared office-space, legal advice and mentorship to Stanford start-ups. StartX also helped 30-year-old Brendan Marshall, a Stanford MBA, when he and two fellow alums founded Kitchit, their online platform for professional chefs to sell “food experiences”. Marshall says the college’s thriving start-up ecosystem is not an official aspect of the institution, but “an organic by-product of Stanford and its culture”.

Google employee Raymond Braun agrees. Braun, who is 23, graduated from Stanford last year and is now on the YouTube marketing team. “There are lots of similarities between the Stanford culture and the Google culture,” he says, “which may explain why so many people from Stanford want to work here. Stanford is always looking towards the future, and it pushes students to take an entrepreneurial attitude to their own education.”

“There are so many brilliant minds at Stanford,” says Marshall, “and they’re all trying to invent the future.” That lofty aspiration is shared by Lucas Duplan, who completed his degree earlier this year and moved his firm to Mountain View, half a mile from Google HQ. Clinkle is expected to be available to consumers in the autumn.

“This isn’t the next social app,” Duplan told the Wall Street Journal. “Clinkle is a movement to push the human race forward by changing how we transact.”

Lucas Duplan

Clinkle

Lucas Duplan, 22, is the founder and CEO of Clinkle, a new mobile payments application which aims to replace cash and credit cards using some sort of high-frequency sound technology. The details are still under wraps, yet in late June Duplan secured a record-breaking $25m (£16.5m) in seed funding from some of Silicon Valley’s most successful serial investors, including PayPal founder and fellow Stanford graduate, Peter Thiel. Duplan graduated from Stanford earlier this year.

Mike Krieger & Kevin Systrom

Instagram

The world’s favourite photo-based social network was founded in 2010 by a pair of Stanford graduates, Kevin Systrom and Mike Krieger. Instagram allows people to share smartphone images, filtered to resemble tatty old Polaroids. In 2004, Systrom turned down an offer from Mark Zuckerberg to join the team at Facebook. He accepted Zuckerberg’s next offer, though: 15 months after Instagram was founded, Facebook bought the company for $1bn.

Evan Spiegel & Bobby Murphy

Snapchat

Snapchat is a photo-sharing application in which the photos being shared self-destruct after 10 seconds or less. The app started as part of a class project by Stanford students Bobby Murphy and Evan Spiegel, and was formally launched from Spiegel’s father’s sitting room in September 2011. More than 200 million images are snapped using Snapchat every day; the company operates out of a beachside cottage in Venice, California, and was recently valued at $800m.

Sergey Brin & Larry Page 

Google

The search giant was a research project by two Stanford PhD students, Larry Page and Sergey Brin. In 1998 they invited John Hennessy, then dean of the engineering school, to test their creation by Hennessy typing in the name Gerhard Casper, Stanford’s president (whom he succeeded). The era’s dominant search engine, Altavista, delivered results for Casper the Friendly Ghost, but Google offered links to Stanford’s Casper. Hennessy now sits on the Google board.

News
people
News
John Rees-Evans is standing for Ukip in Cardiff South and Penarth
news
Arts and Entertainment
Bianca Miller and Katie Bulmer-Cooke are scrutinised by Lord Sugar's aide Nick Hewer on The Apprentice final
tvBut Bianca Miller has taken on board his comments over pricing
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
Elton John and David Furnish exchange marriage vows
peopleSinger posts pictures of nuptials throughout the day
News
in picturesWounded and mangy husky puppy rescued from dump
Sport
David Silva, Andy Carroll, Arsene Wenger and Radamel Falcao
football
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs Student

SThree: Graduate Recruitment Consultant

£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...

FDM Group: Business and Technical IT Consultants – London, Manchester, Glasgow

21,000-24,000: FDM Group: Kick-start your career and join FDM’s award-winning ...

FDM Group: Business and Technical IT Consultants – Birmingham

21,000-24,000: FDM Group: Kick-start your career and join FDM’s award-winning ...

Ashdown Group: Trainee / Graduate Helpdesk Analyst

£20000 per annum: Ashdown Group: A highly reputable business is looking to rec...

Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'