A Bold Venture
The old Winchester Repeating Arms factory sits just a block away from the Yale Divinity Quadrangle. Nestled in a new, modern industrial park, the recently refurbished space is the result of a concerted effort by the city of New Haven, the state of Connecticut, and Yale to create an industrial hub as vibrant as that of the factory’s heyday.
Known as Science Park, the 80-acre industrial complex hosts to over 23 companies, including Higher One, an entrepreneurial venture that spun out of Yale in 2000. Higher One, which manages financial services for colleges and universities, moved into a 150,000 square-foot remodeled space in 2012 in Science Park.
Higher One founders Sean Glass, TD ’02, Miles Lasater, SY ’01, and Mark Volchek, SY ’00, first developed the idea while they were undergrads at Yale. Post-graduation, they opted to build their business here in New Haven, and have since expanded their reach to over 1600 colleges and universities across the United States.
In the early stages of devising their business platform, the University climate was drastically different. There was no established form of support for entrepreneurial students; the Yale Entrepreneurial Institute (YEI) had yet to be established. YEI, which Lasater helped found, was created seven years ago to satisfy the need for an institutional resource of entrepreneurs at Yale.
Higher One has become Yale’s poster child for entrepreneurship, a clear example of undergraduates’ success in developing a publicly traded business anchored in New Haven. In his inaugural address, President Peter Salovey expressed that this model will be a key focus of the University going forward. “We will do more to nurture student entrepreneurs from every school and department and encourage them to contribute to the local idea economy,” he announced. “After graduation, they can remain in New Haven and play active roles as civic, arts, and business leaders.”
Just seven years after the founding of YEI, the seeds for an entrepreneurial community have begun to take root. But to compete with other top universities that are now associated with some of the largest tech ventures of the past decade—Harvard: Facebook, Stanford: Snapchat and Instagram—Yale has had to take active role to build up its entrepreneurial culture.
It’s not that Yale alums have not had entrepreneurial successes. Frederick W. Smith, JE ’65, would go on to create FedEx. Pinterest founder Ben Silbermann, YC ’03, was premed and majored in political science before going down the tech path. But unlike the legends of Facebook and Instagram, Pinterest and FedEx were not created on Yale’s campus by enrolled students; consequently, the University generally plays no role in the narratives of the ventures’ foundings.
Yale is a unique breed: it is firmly grounded in its liberal arts foundation, and it is located in a small city rather than a bustling metropolis or a tech hub. To address these unique circumstances, Yale created YEI.
In 2007, YEI was launched in response to the needs of students with entrepreneurial ambition to provide training on how to build and execute ideas, according to Alena Gribskov, DC ’09, current program director of YEI. Before it would become a year-round institute synonymous with innovation, the program was initially launched as a summer program. The YEI summer fellowship, which will enter its eighth summer in 2014, offers students financing, space, and mentorship in a 10-week program in New Haven.
This past summer, a YEI fellow, David Luan, TC ’13, entered the fellowship with Dextro, co-founder of Dextro, a company he co-founded before the summer started. Dextro creates robots that are able to interact with their surrounding environments. Luan said he and his co-founders, who continue to work out of the YEI offices on Whitney Avenue, knew the product was valuable from the beginning; when they first tested out their idea, they received positive feedback from various robotics blogs. However, they had little experience translating their technical prowess into marketable business. “The fellowship really pushed us to answer a lot of the questions on the business side,” Luan said. “We were used to pitching for a technical audience, and we can’t expect that all the time.
But for other fellows, the summer helps allows for the development of novel ideas into fully fleshed-out products. When Lab Candy founder Olivia Pavco-Giaccia, JE ’16, posted a picture of herself on her blog wearing bedazzled lab goggles, her email inbox flooded with responses from young girls, begging to know where she got them. At that moment, she said, she understood there was a market for lab equipment that would encourage young girls to pursue their interest in the sciences. Upon arriving at Yale, she sought out YEI to help her develop this idea. Pavco-Giaccia entered the summer fellowship in June 2013 planning to create colored lab coats and bedazzled goggles for high school girls. Through the program, she had the opportunity to meet with young girls, their parents, and science educators, and her product quickly began to change shape. Lab Candy now consists of a combo pack that features a pair of decorated goggles, a colorful lab coat, and a storybook. Girls in grades K-3 can read about their favorite Lab Candy characters’ science adventures, and then recreate these experiments using a recipe card found in the back of the book.
Since the first summer fellowship, YEI has expanded into a year-round program. Last year, YEI established a year-round incubator, the Venture Creation Program (VCP), to increase the number of ventures coming out of YEI. Different from the summer opportunity, which works to further develop entrepreneurial ventures, VCP takes in ideas while still in an early stage of development.
In its first year, VCP advised 30 nascent ventures, and they expect the numbers to increase this year, said Simran Dua, who runs the VC advisers program. However, Dua said,last year each of the groups in the program lacked sufficient guidance. To fill this void, YEI organized a team of VC advisers, School of Management students who serve as informal contacts for the entrepreneurs and ideally track the teams’ progress.
Beyond helping to select students who already have ideas and to engage other curious undergrads, YEI hosts speakers multiple times a week. And in addition to these talks, its employees, like lead venture mentor Wes Bray, CC ’74, and Gribskov, hold open office hours to encourage students to explore their ventures within YEI’s nurturing environment. The offices are currently located at 55 Whitney Avenue, past Timothy Dwight College, making each journey to YEI a small trek. Seemingly aware of this, YEI has just acquired office space at the center of campus on the corner of York and Elm, less than a block from over half of the residential colleges. Its soon to be more central location is a concrete manifestation of its attempt to extend access to its programming. YEI has planted its roots.
Since its inception, YEI has played a role in developing Yale’s entrepreneurial community. Zach Rotholz, MC ’11, whose senior thesis project creating cardboard furniture has turned into the local New Haven furniture store Chairigami, remembers the lack of entrepreneurial spirit among the student body just six years ago. “When I was a freshman, there was [no culture],” he said. Rotholz, whose store is currently located next door to the YEI offices on Whitney Avenue, was a Yale undergraduate when YEI was first founded, and attributes much of the community’s growth to YEI’s programs.
Other organizations also noticed the dearth of programs to help develop growth of entrepreneurial interest on campus. Thirteen years ago, six years before YEI was founded, Yale Entrepreneurial Society (YES) was created by the founders of Higher One. Still around today, YES aims to expose students to the more general atmosphere surrounding entrepreneurship, even if a participant doesn’t necessarily yet have a business venture in mind. “[YES] focuses on education through exposure, rather than education through starting your own business,” said YES president Peter Cohen, CC ’14. However, unlike YEI, the organization is not affiliated with the University.
While YEI and YES are both committed to developing ideas and creating an entrepreneurial culture on campus, the Center for Engineering, Innovation, and Design (CEID, pronounced “seed,”) was founded as a resource to help students tangibly realize their ideas. The space buzzes with inspired young engineers, programmers, and entrepreneurs, but also with the hum of the latest technology: 3-D and laser printers, as well as other tools to manipulate raw materials to build prototypes. Previously the dark, run-down engineering library, the open, well-lit space on the first floor of the Becton Center looks out onto Prospect Street; a massive glass window creates a transparent barrier between this area and the outside world, which in itself encourages student curiosity, allowing them to peek in and imagine. Brian Loeb, SY ’14, a mechanical engineering major who spent last summer founding and developing IntaBeta, a website that allows communities with common interests to gather and rank links, said the space has helped him to translate concepts of theoretical engineering from his studies onto the real world. To understand the freezer in the CEID, for example, Loeb had to use his understanding of theoretical thermodynamics. “Learning the hands-on skills comes from the [CEID],” Loeb said. “I think the space has the potential to be pretty empowering.”
While the glass, shiny surfaces, and high-tech machinery behind it may pique the interest of students hustling up to Science Hill, some feel that the entrepreneurial community on campus is still not fully visible. Pavco-Giaccia admitted that there is an entrepreneurial community on campus, but only “if you know where to look.” Pavco-Giaccia, who came to Yale with an idea in hand but no impulse to develop it, said that, without first seeing a flier for YEI office hours, she wouldn’t have pursued her idea. “I don’t think it’s as present as it could be,” she said, in reference to Yale’s entrepreneurial community. “I think it’s up and coming, and it’s up to those of us in the community to support it.
In the business school, which has the potential to be the site of much entrepreneurial activity, an entrepreneurial community has yet to fully blossom. The underlying interest is certainly there—one of eight YEI summer fellow teams was composed of exclusively School of Management students, and a second was a collaboration between a School of Management student and a Yale undergrad. Although there is interest, Neil Carr, SOM ’14, who has had some experience working with YEI—though not as an official YEI summer fellow—said that the culture has yet to fully reach SOM. “I feel like there’s a real culture that values entrepreneurship,” Carr said. “There are a lot of people who talk about entrepreneurship and love the idea of it, but at the end of the day, but all the while, they’re interviewing at all these different places. They aren’t willing to take the risk.” Carr estimated that there were fewer than 10 entrepreneurs in his class of 250.
As Carr postulates about the hesitancy to fully enter the world of innovation, both Loeb and Cohen, entrepreneurial leaders on campus, are themselves planning to work in banking after graduating this spring. Loeb and Cohen each thought banking was the best place to start their careers, but both clarified that they maintain hopes to return to entrepreneurship in the long run, possibly at a venture capitalist firm, which invest money in companies in early stages of development.
However, Dua, head of the VC advisers program, disagrees with the notion that students are still tentative about fully committing to working as career entrepreneurs. “I’ve seen a lot of people that are willing to take risks, that are willing to step out of their comfort zones in one way or another,” she said. She recognized that this cultural shift has yet to fully manifest itself as exemplified by a lack of Yale businesses. But she is hopeful that this will soon change. “People are hungry for it, so I think it’s about getting more resources, more synergies across the [University].”
To help facilitate these “synergies,” the University through YEI has begun pushing for cross-campus collaborations, merging the sciences and SOM. YEI has recently launched a new program that matches leading biomedical and mechanical engineers as well as scientists in the Yale School of Medicine with students in the School of Management, in the hope that business school students can help scientists develop businesses from their scientific discoveries.
The University has created this model to mirror the success they have witnessed occurring more organically in the past. Yale has proven to be successful in cultivating biotech start-ups, launching over 30 since 2003. Moreover, many of these companies have remained in the Elm City, capitalizing on the talent, funding, space, and research resources Yale offers to biotech start-ups. And this in itself is a model that Yale is looking to further.
Again in the YEI Summer Program, Sean Mackay, SOM ’14, who founded Isoplexis with Kara Brower, YC ’13, has partnered with Assistant Professor of Biomedical Engineering Rong Fan, to market a technology Fan has developed. Fan’s product digitizes cell analysis, allowing doctors to better understand their patients’ reactions to drugs and to offer a more individualized drug directive based on the patients’ specific cell makeup. Mackay said he is fairly certain he will continue to build up his company in New Haven after graduating from SOM. “There’s a lot of lab space, he said. “We’d be closer to our cofounder, Rong, and there are a lot of great people involved in the Bioscience space. It’s a really well-developed area for that.”
New Haven is so able to support a vibrant bioscience community because it has the talent. Over 80 percent of the University’s research focuses on the biosciences, according to Jon Soderstrom, managing director of the University’s Office of Cooperative Research (OCR). Founded in 1982, the OCR helps the University, its faculty, and students patent and commercialize discoveries made at Yale. However, Yale aims to expand the strategy beyond the biotech field, where it thrives, to include more disciplines across the University. “We demonstrated that we could create an entrepreneurial ecosystem that could support primarily biotech companies,” Soderstrom said. “In the biotech space, we’ve done fairly well, but the issue has always been, can we do more, more to diversify the economy. There are lots of other exciting areas.”
Ventures in biosciences might not immediately come to mind when you hear the word “start-up; Twitter, Facebook, Instagram, and Snapchat might be more readily associated. Each of these Internet-based start-ups requires talented computer programmers. But Yale is struggling to produce the creative individuals with the programming abilities to make a serious contribution to this list of tech giants.
While Lasater of Higher One said they have been able to attract good programmers in New Haven, even if there are less of them, companies like Panorama Education, which creates comprehensive surveys to evaluate public school performance, have fled New Haven for communities better known for dense populations of computer engineers—in Panorama Education’s case, Boston. Part of the reason for this lies in Yale’s computer science department, which focuses on theoretical computer science, preparing its graduates to write their own code rather than run a tech start-up. A historically small program, it has not been able to churn out the critical number of programmers necessary to jumpstart a tech-based economy. “We need to do better,” Soderstrom said. “We need to support and build up the faculty, we have to bring in the talent.” But he is optimistic that this all of this is changing, citing the young, talented professors that the computer science department have attracted in recent years.
Students currently attempting to start businesses in the tech arena have had difficulty finding the necessary resources here in New Haven. Carr came to the SOM with a background in event design, looking to launch a website that could analyze design preferences of clients; he remarked that his company, Wedlum, has struggled to get off the ground, citing a lack of tech and design talent. He ultimately outsourced to the University of Illinois, where he found his company’s co-founders. He admitted that his venture is currently on hold, and its future is uncertain.
“Talent acquisition is very, very hard in New Haven, especially for any tech based product,” Carr said. “If there aren’t jobs here, you aren’t going to have talent, but the jobs aren’t going to move here as long as there’s not talent. So it’s a cycle. Someone has to be willing to stay.” To help address the lack of local tech talent, YEI launched its first ever tech boot camp this past summer, which trained Yale students to code in a non-competitive environment. Similarly, Hack Yale was started to teach students practical computer coding outside of the theoretical courses offered by the computer science department. This grassroots approach offers student-run lectures in web development, introductory programming, and design.
But a lack of tech talent is not the only obstacle to starting a tech business in New Haven. New Haven does not offer the same caliber of venture capital firms as those found in New York, Boston, or San Francisco.
“New Haven is not really an industry center that can build business partnerships. There’s not a lot in the city,” said Yulia Khvan, SOM ’14, who has partnered with a Yale School of Medicine professor to market a zinc-based antacid, known as TummyZen. The drug helps to relieve long-term acid reflux pain and is the brainchild of John Giebel, vice chair of surgery and professor of gastrointestinal surgery and cellular and molecular physiology at Yale School of Medicine.
At first, the founders of TummyZen were not convinced that New Haven could support their growing business. “We were pleasantly surprised,” said Khvan. The company is entirely funded by New Haven and Connecticut based investors, which Khvan acknowledged, is rare. But although TummyZen has been lucky, Khvan is skeptical that New Haven is ready to support a bustling entrepreneurial community. “There is a high concentration of investors in Connecticut,” he said. “We’re hoping to tap into those resources—but the mechanism of allocating those resources across different start-ups is not in place.”
The university is not alone in trying to revolutionize New Haven’s economy. Although Yale certainly provides much of the talent and funding for the budding entrepreneurial community, the city has launched some of its own initiatives. A year ago, Derek Koch, Founder and CEO of Independent Software, a start-up that helps other entrepreneurs launch their business, was approached by the State of Connecticut’s “Innovation Ecosystem” program to build a start-up incubator in New Haven. In response, Koch led a team to create The Grid, a virtual organization that connects entrepreneurs in New Haven, much in the same way that YEI helps Yale students form connections within the University. The Grove, located on the corner of Chapel and State Streets, serves a similar purpose to CEID—a physical collaborative space for entrepreneurial-inclined individuals to share and develop ideas.
New Haven also hosts a yearly Start-Up Weekend, which, this year, will take place November 15-18. The 52-hour long pseudo-entrepreneurial retreat is designed to identify problems and seek solutions for attending New Haveners without previous venture ideas.
Although seemingly abstract, the weekend has led to some success—SugaTrack, the winner of the 2011 Start-Up Weekend, syncs Diabetic teens’ glucose meters with an app on their phone, allowing them and their parents to track their sugar levels; the company recently incorporated.
Soderstrom, who has worked for Yale for over 15 years, says he sees the efforts of the city as entirely compatible with those of the University. “I see everything coming together,” he said. “We’re not going to have to complain that we’re not Boston or New York, we’re not going to have to complain about the lack of businesses, we’re not going to have to apologize for what isn’t here. When that happens, all bets are off.”
But Boston is more than a tech hub; it is America’s college town, hosting more than 50 colleges and universities, including the entrepreneurial center that is Massachusetts Institute of Technology. Similarly, Stanford University, which boasts one of the most dynamic undergraduate communities of entrepreneurs in the world, is located only 15 minutes from Silicon Valley, the historical center of the Internet revolution and home to the some of the largest and most successful venture capital firms. What these towns have that New Haven has yet to refine is an underlying entrepreneurial culture that permeates beyond just one isolated institute or student-run group.
For MIT, much of the school’s entrepreneurial spirit hearkens back to the school’s motto, “Mens et Manus,” which translates mind and hand. The Martin Trust Center for Entrepreneurship, MIT’s equivalent to YEI, works with around two to three thousand students each school year, as estimated by Kyle Judah, the center’s program director. Similarly to YEI, the Trust Center runs a summer intensive program known as the Guild Accelerator. “We consider ourselves an accelerator, and not an incubator, because in an incubator, you can coast along until you’re old,” he said. “If they’re just seeing this slow, linear growth, we want to force our students to acknowledge that something wasn’t right, and feel comfortable going back to the drawing board.” To facilitate this open learning environment, the Trust Center forces all mentors to sign a written agreement that they will not invest in any student ventures until after the student has graduated. “It remains that safe space for students to experiment and fail and learn without the pressure of venture capitalists or investors peering over their shoulders,” Judah added.
Meanwhile, at Stanford, the entrepreneurial opportunities are so vast that they cannot be conglomerated into one organization like a YEI or the deeply rooted and vastly expanisve Martin Trust Center, which was founded in 1990. Rather, the Stanford Entrepreneurship Network (SEN) facilitates communication among the 30 entrepreneurial organizations, eight to 10 of which are entirely student run. “It’s not one program, but many different programs,” explained Anais Saint-Jude, special products designer for the Stanford Technology Ventures Program and also involved in SEN. “Entrepreneurship is just everywhere, you can’t get away from it. It’s like a garden. New things just keep popping up.”
But part of what sets these universities apart from Yale is that they are nestled in two of the nation’s major hubs of entrepreneurship. “It’s an embarrassment of riches,” Saint-Jude said of the Silicon Valley community. “It’s the air that we breathe.” She said that the school has also begun to incorporate the San Francisco venture capital community into its immediate network of resources, expanding the already abundant resources offered to students. And up in Boston, MIT students have the resources of Boston entrepreneurs and venture capitalists at their fingertips. “Boston makes it easy for our students to go find the right kind of mentors,” Judah said. Most of the major capital firms in the country have offices in Boston, Judah added, facilitating relationships with possible investors.
But none of this should come as news to anyone with some knowledge of the U.S. News and World Report College Guide. Boston and Silicon Valley will forever be resources that benefit students at those universities. And the truth is that Yale is not moving anytime soon. Richard Florida, founder and editor-at-large of Atlantic Cities, and one of the leading scholars on demographic trends relating to technological innovation, calls Yale an “anchor institution” for New Haven. “Yale is tied to its community,” Florida said. “And it can have real effects on its local community, not only by creating an ecosystem, but by the way it purchases goods and services locally and interacts with the local community.” In his research, Florida has found that college towns tend to cultivate entrepreneurial centers and create unique environments that facilitates the growth of businesses. “If positioned right within their communities, universities can really serve as catalysts for them [to grow],” he said.
Take Boulder, CO, buried in the Rocky Mountains at the center of the country. Certainly not an industrial center like San Francisco or Boston, Boulder has emerged as a hub for tech start-ups over the past five years. “It’s about this ecosystem,” Florida said. “Universities have to create this ecosystem, this environment that’s attractive. If done properly, you can leverage the investment the university makes to help move the respective city forward.”
Back at Yale’s Office of Collaborativee Research, Soderstrom said students are looking for the resources like those offered in Boston and San Francisco but facilitated by the University. He said students want more graduate and undergraduate courses in entrepreneurship, and that he has been working with Ted Snyder, newly appointed SOM Dean, to begin devising a curriculum in the tenets of entrepreneurship. “It’s one of the transformative moments that we are starting to think like this,” Soderstrom said.
But at its heart, Yale is a liberal arts institution. It prides itself on providing its students with a rich and balanced education that is in no way pre-professional. However, a liberal arts education does not necessarily have to be at odds with an entrepreneurial mindset. After hearing undergraduates’ present their ventures to the Yale Corporation to show them the products of the University’s new programs, former board member Len Baker CC ’64, Managing Director of Sutter Hill Ventures in Silicon Valley, told Soderstrom that the proposals of Yale students were markedly different than those of other college students that he had observed. He noted that students at Yale had identified major problems that required solutions rather than offering solutions to problems that maybe didn’t even exist.
“That’s what grows out of a Yale education, an appreciation for what the problems are, and seeking solutions to those problems,” Soderstrom said. “These are big problems, and a liberal arts education is a great place to start.”
This liberal arts approach to entrepreneurship could be Yale’s niche offering, differentiating it from Stanford, Harvard, and MIT. And hopefully YEI and other future resources will play to Yale’s unique inherent strengths as the program continues to grow. If Yale pulls it off, it could change the face of entrepreneurship as we know it.