As a sophomore at Yale, Paul Gu was impatient to do something “real.” Although he was working on several small entrepreneurial projects on campus, professional entrepreneurship seemed like a “distant dream.” Daniel Friedman, a classmate of Gu’s, also said entrepreneurship was rare on campus, and that there were very few people with whom they could brainstorm ideas.
That same year, 2011, professional entrepreneur Paul Thiel launched the Thiel Fellowship — a program that grants $100,000 to its winners to drop out of college and pursue their startup dream. Gu and Friedman saw this as an opportunity they could not pass up; the possibility of realizing their entrepreneurial ambitions while staying on campus seemed remote.
Both were selected as inaugural Thiel Fellows, and since then, each has founded his own startup.
Four years later, the fellowship continues to attract college students across the nation. But today, building a startup at Yale has become a much more feasible goal for student entrepreneurs, and some have succeeded in doing it. With the increasing efforts of the Yale Entrepreneurial Institute and the growing dominance of technology in startups, fewer Yalies have felt it necessary to leave campus to realize their entrepreneurial dreams.
Still, student entrepreneurs on campus have differing views on what exactly the formula for the “Yale startup” is — whether more importance is given to institutional support, tech skills or outside-the-box thinking.
LAYING THE PAVEMENT
Founded in 2007, the YEI has developed a significant presence in the Yale community by offering a series of mentorship and funding opportunities. There are currently 80 active YEI companies that have raised over $135 million dollars in funding and created over 350 jobs, according to YEI Communications Officer Brita Belli. However, much of the institute’s work involves not the immediate creation of companies and jobs, but rather the establishment of a support infrastructure for student ideas from a grassroots level.
The institute provides several levels of support, ranging from walk-in office hours with experts in the field to the Venture Creation Program — which involves access to mentorships and small grants to early-stage companies. Startups in more advanced stages of development are offered a chance at the YEI Fellowship. Selected fellows participate in a competitive 10-week summer program that offers up to $15,000 in grant money, as well as a support network of mentors, incubator space, workshops from expert speakers and the opportunity to pitch to investors. This structured support system has gained traction over the last few years, and this year, the YEI Fellowship saw a record number of applicants — 58 applications representing 138 applicants from across Yale, Belli said.
BATA, a startup that produces vegan and gluten-free chocolate snacks, is one student project that hatched under the guidance of YEI. Georgiana Wagermann ’15 said she and her co-founder Tess Maggio ’16 first attended some YEI workshops before taking part in the Venture Creation Program, where they received professional mentorship.
“Meeting with these mentors always challenged us to think in different ways, in addition to providing us with clear next steps,” Maggio said.
Wagermann and Maggio added that throughout the past year, they were able to run sale trials both in the undergraduate and the School of Management student bodies, which provided them with important data for improving the product. They will continue developing BATA as YEI fellows this summer.
During the summer after her freshman year, Olivia Pavco-Giaccia ’16 obtained the YEI fellowship. There, she said she learned how to get her startup LabCandy, which produces lab gear aiming to attract young girls to the sciences, off the ground by talking to hundreds of potential customers: young girls, mothers and women in STEM. By the spring of 2014, as a sophomore, Pavco-Giaccia was ready to officially launch her company.
TAKING THE ROAD LESS TRAVELED
While many fledging startups at Yale seek support from the YEI, student entrepreneurs have also found other ways to break through. The rising popularity and use of tech in startups, coupled with recent efforts to revitalize the Computer Science Department, have provided other avenues for student entrepreneurs. Tech tools and resources on campus have lowered the barrier of entry for student startups and lessened the need for fledgling entrepreneurs to go through the YEI.
In fact, several tech-based student entrepreneurs interviewed said YEI may not be the ideal place to begin a startup for everyone.
Rijul Gupta ’15, a co-founder of Hive, a geographically based networking application, said he has heard horror stories about students approaching YEI too early. He said that while the institute provides great advice for business plans and marketing, this may distract entrepreneurs from perfecting their product. Instead, Gupta and co-founder Jimmy Park ’17 took matters into their own hands.
Park said the Hive team has adopted a student-driven approach in both its strategy and funding. He said he and Gupta developed their trial-and-error plan by reading entrepreneurship textbooks and worked with minimal funding by cutting down on unnecessary expenses. While some startups spend thousands of dollars hiring contractors to design their application or develop marketing plans, Hive was entirely developed in-house, Gupta said.
Huddlr, another student-developed social media application, has also been a largely independent initiative. The nine-student team is completely in charge of the application design, marketing plans and software updates, according to co-founder Ivan Fan ’14.
Friedman said he believes the changes Yale is making in the computer science program have the potential of cultivating a more entrepreneurial culture on campus.
Fan said the Yale community may be even more conducive for developing a tech startup than that of more entrepreneurially oriented campuses, such as Stanford and MIT. Students at these universities are bombarded with new ideas and applications, he said, and they are less likely to be excited about new things. At Yale, many students have expressed excitement about new projects like Huddlr — because they are still novel and infrequent.
Further, the relatively small number of startups at Yale has made recruiting easier.
“Students are getting increasingly excited about working on startups at Yale, but there aren’t that many established ones,” Fan said. “The result is that there are a lot more people wanting to get involved than there are startups to soak up the talent.”
Still, the founders of both Hive and Huddlr said that more can be done to further support tech-based ventures at Yale and even in the New Haven area.
Gupta said the Yale administration does not actively cater to entrepreneurship — an attitude he called “creatively destructive” -— as much as some other universities. In particular, he listed MIT and Stanford as schools where there is significant top-down support of entrepreneurship. At MIT, the Media Lab has generated many startup ideas, while Stanford has made great use of its proximity to Silicon Valley, Gupta said.
Fan said funding opportunities in New Haven are more rigid and limited. He said there are only a few funding sources in the area, including the YEI, which often have their own agendas.
While several tech-based applications may not directly seek help from YEI’s support system, the institute has recognized the importance of coding and computer science and has been active in facilitating interest in this area, YEI board member Robert Bettigole ’83 said. The institute co-sponsored the first Yale Hackathon five years ago in order to promote interest in coding in the New Haven area, he said.
THE X FACTOR
And yet, Yale’s startup community has yet to catch up to those at Stanford and MIT in quantity and capital. According to a July 2014 Forbes article, more than 130 companies began at MIT, ranked second on the list, compared to the YEI’s 80 startups. StartX, a startup accelerator for Stanford students and alums, has supported 191 startups and raised $420 million by the end of 2014, outstripping YEI’s $135 million.
But Bettigole maintained that the strength of Yale’s entrepreneurship lies in the University’s liberal arts education.
“People come to Yale because of its liberal arts education,” he said, though he admitted that this was a generalization. “We have a special environment where many liberal arts majors are also interested in business and entrepreneurship.”
Several student entrepreneurs interviewed, including those in tech startups, echoed this sentiment. Fan said that while coding and tech skills are important, they are ultimately a means to an end. Yale’s liberal arts education provides decision-making skills and big-picture thinking, two crucial attributes of entrepreneurship, he said.
The YEI 2015 fellowship winners are an eclectic mix of ventures, ranging from a web application that sends children’s stories to parents via text message, to a home-cooked food delivery service.
Yong Zhao FES ’15, a YEI fellowship alum, explained why the fellowship attracts such diverse proposals.
“Technology is just one area of entrepreneurship, and there are many other gaps to be filled, including food and art,” he said. “Because Yale is a liberal arts school, people here aren’t as tech-oriented and think of all sorts of things to do.”