Science-led entrepreneurship is formidable, we can make it achievable

The Harvard MBA Indicator is a stock market indicator based on the percentage of HBS graduates taking jobs in finance. If the proportion is 30% or more, the signal is sell. If 10% or less, the signal is buy. In 2008, at the top of the housing bubble and on the eve of the financial crisis, the indicator hit a record high of 41%. The sentiment is simple: MBA graduates are drawn toward overheating sectors where the allure of near term success is strong.

My experience at Stanford supports this theory. I arrived on campus eager to start a company based on scientific innovation, hoping to find a technology developed in a professor’s lab. Determined to hit the ground running, I met a second-year MBA student who had worked in agricultural technology. He spent his first year learning everything there was to know on regenerative agriculture. Inspired, I thought this is exactly why I came to Stanford.

“Where are you taking it from here? Are you starting a company?” I asked.

“Nowhere. I dropped it. Now I’m building a FinTech.”

I was stunned.

Despite my original ambitions, soon I too felt the draw of the hyped sectors. I found myself attending events for FinTech, crypto, and Web3. As the Harvard MBA Indicator would have predicted, I gravitated toward what was trending. I wondered, if I don’t pursue these sectors, will I miss the next big thing? And in comparison, why does science-led entrepreneurship now seem so daunting?

In my experience, there are several factors that lead Stanford MBA students toward the latest hype cycle: the Silicon Valley culture and the social status of the “Entrepreneur,” the abundance of early-stage capital and relative ease with which it’s received, the school’s entrepreneurial courses that cultivate incremental innovation, and the overwhelming social pressure to be successful quickly.

Over the last 20 years, these structures have served Stanford well and have been reinforced by successful student-founded companies. Designing a website or mobile app was something that could be done relatively quickly by MBA students sitting in a classroom. Software ate the world and web, mobile, and social spawned society’s most influential companies, many of which were born right here on campus. However, these technology cycles are behind us, and the pace of associated innovation has dramatically slowed.

Times are different. I believe that the most influential companies of the next 20 years will come from scientific innovations in energy, artificial intelligence, quantum computing, biotech, and aerospace. However, the GSB is not prepared to help companies in these sectors succeed. To position itself as a leader for the impending technological inflection points, the GSB must break free from short-term psychology. It must adapt by prioritizing science-led businesses, even if returns are not immediate. If it doesn’t, I suspect its prestige and influence in the business world will fade.

The existing curriculum works well to assist MBA students in identifying problems and designing solutions with existing technologies. These approaches have produced massive companies including DoorDash and need not be abandoned. However, they are no longer sufficient. Starting a business in energy, biotech, aerospace, or any other science- and engineering-led field is fundamentally different and less easy for MBA students to build quickly. Typically, existing technologies are unable to achieve the envisioned solution, the required technical expertise to build a new solution is deeper, there is a physical component, iteration cycles are longer, and the capital requirements are higher. These challenges, amongst others, place additional burdens on students pursuing this type of entrepreneurship.

For non-technical founders and even those with technical undergraduate degrees or work experience, the startup cost required to build a technically-led business is daunting. To begin, one must build technical expertise, learn to speak the language, and develop the context to ask specific questions. Ben Kramer, GSB 2022, spent a year educating himself on synthetic biology, leveraging an internship, industry interviews, conferences, and an independent study. In his search for a technical co-founder, he took a leadership position at the university-wide Stanford Biotechnology Group. Ultimately, he met his co-founder, a Harvard postdoc, through Nucleate, a national organization that facilitates formation of companies in the life sciences.

Karen Baert, Ben’s classmate, arrived at GSB with an undergraduate degree in engineering and a master’s in renewable energy. Leveraging her technical background, she embarked on a year of intense independent study focused on the green hydrogen industry. Upon graduation, needing more time and wanting to stay close and contribute to the Stanford hydrogen ecosystem, she secured a part-time role at the Doerr School of Sustainability. Some six months later, she is building a company backed by Chevron Studio, a collaboration of Chevron Technology Ventures and the National Renewable Energy Laboratory.

Unfortunately, Ben and Karen are the exception. They took on unfathomable workloads on top of required courses and hustled to find essential resources outside GSB. Countless others struggle to meet a technical co-founder, fail to find these same resources, or simply run out of time and find that, upon graduation, the gap between what they have and what they need in order to raise capital is too wide to bridge.

Alongside our celebrity alumni who have built widely popular consumer companies like DoorDash and Nubank, we must celebrate entrepreneurs like Ben and Karen and reduce the barriers that prevent others from pursuing similar paths. Updating the existing structures to better facilitate and support science-led entrepreneurship will require a coordinated and significant effort from the administration, faculty, and student body. Here are a few places we can start:

Curriculum — Incorporate technological innovation and leading areas of scientific research into the required curriculum. Leaders of the future need to understand the technologies that will define it.

Community — Celebrate scientific leaders and science-led entrepreneurs from the GSB and beyond. Our community must be energized around scientific innovation.

Connections — Implement structures that drive cross-department connections between the GSB and other schools at Stanford. A challenge for GSB students and technical students alike is building relationships with potential co-founders.

In his widely viewed talk “You and Your Research,” acclaimed mathematician and professor Richard Hamming asserts, “If you do not work on important problems, then it is obvious you have little chance of doing important things.”

His words are a valuable reminder: as what is important changes, so must we.

Editor: Teresa Chen