It’s easy to see why much of America sees Silicon Valley as out of touch, even as we tap and swipe our devices with renewed vigor each time an entrepreneur churns out a new app. Exhibit A: Tech workers in San Francisco make news when they develop an algorithm that does exactly what the startup founders in the HBO comedy series Silicon Valley are pitching to investors.
As you might guess, veterans in the valley have a more nuanced view. Some liken seemingly frivolous apps to baby steps by young entrepreneurs, who could very well go on to launch more important and influential technological innovations as they mature. Others are trying to show the next wave of founders a different path.
The one that longtime entrepreneur and investor Mike Lyons wants them to take is more of an uphill climb. He currently chairs a cybersecurity company doing “converged infrastructure virtualization,” based on technology developed through a tech-transfer partnership with Pacific Northwest National Laboratory (PNNL).
In 2002, he founded SafeView, Inc., which originally licensed the millimeter-wave technology now used around the world in airport security screening systems. The technology was developed with government money at PNNL, and SafeView invented the imaging system for screening individuals.
So, while Lyons is passionate about entrepreneurship, he doesn’t get too excited about the next messaging or mobile-game app. “A lot of that stuff is just polishing the apple,” says Lyons, also a director of an Internet-of-Things company in the valley.
He wants to see technology taking on bigger, more complex challenges. And that’s why, since 1988, Lyons has taught the course Technology Venture Formation in Stanford’s Department of Management Science & Engineering (MS&E). Along with two other experienced entrepreneurial instructors, the class brings together graduate students — mostly from the engineering school and graduate business school — to work in teams on a technology that has “a critical innovative advantage that will provide sustainable differentiation.”
Among the more than 200 companies that the teaching team estimates alumni of the course have launched are a startup focused on crop science that champions economic and environmental sustainability, a company that provides open software-defined networking solutions, and Skybox Imaging, the micro-satellite maker acquired by Google for $500 million. Serious businesses.
“I don’t mind apps and things like that,” says Lyons, a consulting associate professor in the MS&E department. “I just think people should understand the difference between building companies that leverage a previously built, trillion-dollar infrastructure, and ones that are building technically significant products from the ground up, or that leverage such infrastructures in disruptive ways, like Uber.” Think wireless infrastructure, chip fabs, open-source and operating systems.
In regards to the lean-startup approach, which advocates for the development of a “minimum viable product” (MVP) and iterative product releases based on customer feedback and data, Lyons says it is a method that makes sense for technologically “light” projects. But he adds that the notion that a handful of engineers can build an MVP over a few weekends does not apply across all startups.
“If it’s one of these deep technology products, that’s just nonsense. That’s just not going to happen,” Lyons says. “The MVP could take two years to build.”
And those are exactly the kind of innovations he and the rest of the teaching team see in the version of Technology Venture Formation offered in Stanford’s Department of Civil and Environmental Engineering. Students from that class have launched ventures like PlanGrid, a construction app that digitizes blueprints and allows all team members to collaborate on a project via an intuitive interface.
Another startup, Mango Materials, aims to transform waste into affordable eco-friendly materials that are competitive with oil-based plastics through a microbial process involving the biogas methane.
Mango Materials CEO Molly Morse, who took an earlier version of the civil and environmental engineering course while working toward her Ph.D., says her company is currently getting paid for its products. But to have a meaningful impact in the world of plastics, Morse explains that her operations need to be at the “million-pound-plus scale.”
“When we started Mango Materials, we wanted to change the way people think about methane and the fate of plastics in the environment in a big way,” the biocomposites engineer says. “Impactful entrepreneurship to us, is not just creating a new business, it is critically thinking through how our technology can touch people’s lives and the planet.”
Other projects in the course have addressed housing and energy infrastructure in developing countries, while some teams have proposed ambitious infrastructure projects like sewage-treatment processes that would generate electricity to power a community.
“It’s fantastic because you’re not consuming – you’re net neutral on the grid. You don’t have to buy power to run the sewage-treatment plant,” Lyons said. “Students who really want to make an impact are turning towards this kind of entrepreneurship.”