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Elevating Ethics in Entrepreneurship Education

A new generation of aspiring entrepreneurs are demanding learning tools to create and apply ethical solutions at scale. This collection brings you three perspectives on achieving a new era of entrepreneurship education. Learn how students, faculty, and institutional leaders are equipping future entrepreneurs and innovators with the values and principles to help navigate ethical dilemmas. Learn more about STVP’s Principled Entrepreneurial Action and Knowledge (PEAK) initiative at stvp.stanford.edu/peak.

Tom Byers, Stanford University

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Innovation

Finding Our Values: A New Era of Entrepreneurship Education

Tom Byers, Stanford University

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9 minutes

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For the past few years, I have watched the news coming out of Silicon Valley closely. As someone who has spent the last four decades living, working and teaching in the San Francisco Bay Area, this might seem only natural. But as a former tech executive and entrepreneur who has taught entrepreneurship and innovation at Stanford University for almost 25 years, the news, especially the reports of scandals and wrongdoing, feels personal. Perhaps the news feels personal in part because I know some of the tech execs being written about. I have increasingly wondered what role I, as an entrepreneurship educator, play in this ecosystem as the news reports pile up and become so substantial that they can sustain book-length works.

To read such accounts about entrepreneurs shook me to a point of realization. For years, I have espoused the value of teaching every student to have an entrepreneurial mindset, and now, I must do better, as an educator, to help address the factors — both systemic and personal — that lead to these headline-making incidents.

In early March this year, I met an educator asking similar questions. At a UNC Chapel Hill business school lunch, philosopher and Professor Geoff Sayre-McCord introduced himself to a table of entrepreneurship educators and administrators by saying, “entrepreneurs face a moral liability: that they will become liars.” It was a bold remark to make in a business school setting, and I was intrigued.

What does principled entrepreneurship mean? Can it vary per entrepreneur? Are there any immutable principles for entrepreneurs?

For decades, I have taught my students how to dream big, secure funding, gather a team and entice customers and beneficiaries by crafting a promising vision of the future that is only tenuously based in fact. Certainly not all entrepreneurs are liars, Sayre-McCord clarified for me in follow-up conversations, but many of the incentives an entrepreneur encounters encourage deception.

Sayre-McCord’s point left me wondering: Is there a fundamental design flaw in the discipline of entrepreneurship education? Is believing in and selling a future vision all good or all bad for society? Is it time to shift the way we think about the role of ethics in entrepreneurship education?

As a faculty director of the Stanford Technology Ventures Program (STVP) since its inception, I have witnessed entrepreneurship education explode into a vast multitude of university-wide offerings. In terms of the pedagogy and content itself, entrepreneurship education has made great strides in the last three decades: educators have refined curricula based on empirical and theoretical research and broadened the discipline’s scope from early-stage startups to large organizations. Now, I believe it’s time for another shift for the coming decade.

With accumulating reports of wrongdoing, educators must take action to confront any systemic failings. We must equip our students, the next generation of entrepreneurial leaders, with frameworks for principled entrepreneurial action and knowledge – or more simply put, a tool kit for action-oriented practical ethics.

A Budding Discipline

For the last 25 years, I have been an advocate for expanding opportunities and offerings for entrepreneurship education intended for all college students. My passion for entrepreneurship education began with working in Silicon Valley in the 1980’s and early 1990’s after completing an MBA and Ph.D. at Berkeley. I had seen how new enterprises with new technologies could dramatically transform business-as-usual for the better.

During the formation of Symantec Corporation, I witnessed how software could safeguard sensitive information stored on the nascent personal computer and its networks. I eventually left Symantec after its IPO to co-found another venture producing software applications for early tablet computers with Dan Bricklin, an industry icon and highly principled inventor of the original spreadsheet program. In 1995 during the emergence of the Internet, I joined the faculty at Stanford’s School of Engineering full-time feeling quite optimistic about the power of entrepreneurship and technology to change the world.

In the mid-1990’s, entrepreneurship courses were confined to business schools as second-year electives for MBA candidates. Our mission at Stanford became to ensure that entrepreneurship courses would be available to every student, regardless of their major or school of study. So we founded STVP, an academic center for developing and spreading entrepreneurship education to all students at Stanford by operating within the Department of Management Science and Engineering.

The next two decades were exhilarating. To foster a community of teachers and scholars focused on entrepreneurship and innovation, Professor of the Practice Tina Seelig and I organized almost 50 roundtables on five different continents. We became allies with entrepreneurship educators at other universities to bolster our fledgling discipline. Accomplished scholars and esteemed practitioners including Professor Kathy Eisenhardt, Professor Bob Sutton and Adjunct Professor and serial entrepreneur Steve Blank joined us to develop curricula to teach the skills and behaviors of an entrepreneurial mindset. We saw students harness their creativity, critical thinking skills and technological capabilities to build new products that were helping solve the world’s most challenging problems. We worked continually to improve our teaching methods and curricula, making our discipline deeply grounded in empirical and theoretical research as well as expanding our lessons beyond small startups to large enterprises in business, education and government.

The message caught on even more quickly than we and our peers had expected it would. In about two decades, entrepreneurship education moved from a few MBA elective courses to a core university offering, both nationwide and around the globe. And entrepreneurship, especially entrepreneurship in the technology industry, has seen a similarly swift rise to prominence in all facets of society and the world’s economy. Venture capital investments in early-stage companies has increased nearly sixfold in the US during that period, and according to a recent industry analysis, the American tech sector employs over 11 million people and contributes an estimated $1.6 trillion to the US economy. The result of tech’s rise has been many spectacular services and products, and sadly, the numerous scandals we have seen play out in recent years.

Room for Growth

Today, Stanford entrepreneurship faculty teach well over 100 courses per year. We educate thousands of students in every corner of the campus, teaching them the essence of an entrepreneurial mindset. We cover things like the importance of adaptability, opportunity recognition, resilience, leading teams and creativity. We give them frameworks that help ground debates about when to take risks. We train them to gather data like a scientist doing lab experiments. We push them to practice again and again to get comfortable with failures. We encourage them to be solution-oriented in the near term and opportunity-minded in the long term in order to scale their creations for maximum impact. We consider concepts like product-market fit and how to create business models that will entice investors and attract customers and partners.

Sometimes, though, students are interested in discussing the more personal, less positive aspects of entrepreneurship. Perhaps compelled by the same news stories that leave me feeling so concerned, they ask about how they should navigate ethically difficult situations in the future when working at a startup, when investors bear down on them, when founders breach ethics and when a colleague behaves in an unprofessional manner. With questions like these, I always find myself searching for better answers.

Because of classroom situations like this, I along with a few dedicated colleagues have spent the past year researching how values and ethics can be better taught in entrepreneurship courses. I am encouraged by the existing models for mission-driven organizations available in the field of social entrepreneurship. I am emboldened by the comprehensive scholarship and teaching of ethics programs that serve all students. I find further confidence in the conversations we’ve had with ethicists at law, medical, business and engineering schools. Those specialties in professional graduate schools began offering ethics courses long ago.

Our mission at Stanford became to ensure that entrepreneurship courses would be available to every student, regardless of their major or school of study.

Our goal is to create classroom environments that encourage students to establish their own principles-based worldview. What if each student creates their own personal mission statement, to define for themselves the values that will guide them? But to do that I have first have to ask questions of myself as an educator. I must find some approximate answer to questions like: What does principled entrepreneurship mean? Can it vary per entrepreneur? Are there any immutable principles for entrepreneurs?

A Different Kind of Value Creation

When teaching ethical behavior in my own classroom, I have found success using role-play simulations with students. For many years in the first course of our Mayfield Fellows Program at Stanford, the source of our simulation was the “Randy Hess” case study, based loosely on the MiniScribe fraud case of the 1980s and developed by the distinguished author Jim Collins. Students prepare by reading the case and during class, a student would volunteer for the role of “Randy Hess”. While some other students took on the role of other employees at the startup and its audit firm, I played the role of of the unethical CEO.

As that CEO, I would try to persuade the student playing Hess, a member of the finance department, to remedy a revenue shortfall with an illegal “adjustment” to the accounting records. Coming into the class, students were certain that they could not be compelled into doing something they know to be wrong. Then the roleplay would begin. As the CEO, I would use various negative influence techniques. If necessary, I even threatened (falsely) to give the student a bad grade in the course. The environment in the class would become tense, and more often than not the “Randy Hess” student relented. We would stop the case and talk about ways to protect yourself from the negative forces of influence and persuasion. They understood the importance of the conversation. The students had just seen how most everyone, even in role-play simulations, has a breaking point.

Role playing is the method I choose, but the material about motivation and persuasion comes from the work of psychologist and Professor Robert Cialdini. In his bestselling book Influence, Cialdini lists the six factors of influence: reciprocity, scarcity, authority, consistency, liking and consensus. In the Randy Hess role play, I would offer to do something nice for the student playing Hess and then ask for adjusted books in return (reciprocity). I would tell the Hess student that everyone does things like this sometimes (consensus). I’d appeal to the idea of Hess’s personality and sense of duty, suggesting that adjusting the books would make sense since “he’s the kind of guy who would help his company in a hard time” (consistency).

This exercise in teaching applied ethics, though, focuses more on not doing something unethical than envisioning a positive set of values. Though this model may not map perfectly onto secular educational contexts, I am intrigued by how students are urged to define and form their own codes of conduct within the entrepreneurship school at the University of St. Thomas, a Catholic school in Minnesota. There, Professor Laura Dunham and her colleagues promote the value of “practical wisdom” — essentially, pursuing entrepreneurial projects while considering how a given project will affect its consumers and stakeholders. For Dunham, entrepreneurship isn’t amoral and at St. Thomas, entrepreneurship is taught as a way to create value beyond the financial kind.

A mindset like the “practical wisdom” framework taught by Dunham can be crucial for first-time entrepreneurs entering the current venture environment, where the perceived need for “speed” in building a new company can outweigh the need for building stakeholder trust. For startup founders looking to deliver on proposals made to financial backers, it can be easy to consider very little besides developing the product, without articulating a core set of principles and the company’s relationship to its clients and community.

I see this same kind of desire to consider entrepreneurship contextually in the venture capitalist Chi-Hua Chien. Chien uses a model called the “five critical risks of entrepreneurship”: market, team, technology, product and business model. But after using this model for several years, Chien has suggested that we add a sixth risk: values. As someone who leads a fund that invests in early-stage companies, he believes that venture capitalists benefit when they consider founders’ guiding principles. Sussing out principles can give investors a better sense of how founders will act in difficult, murky situations.

These aren’t one-size-fits-all recommendations, but I share them because I believe these models illustrate a way of thinking through the problem of how to teach principles and entrepreneurship. It seems to me that creating new teaching materials will mean teasing apart a few entwined threads:

First, we must consider what it means to have values and teach them in a secular, nonpartisan way.
Second, we must look at what methods best teach students about themselves in particular and entrepreneurial projects in general.
Third, we must consider the unique aspects of the entrepreneur’s environment, from a variety of investment structures, methods for experimentation and growth, and the cultural norms within different geographies.

Is it time to shift the way we think about the role of ethics in entrepreneurship education?

Re-Defining Entrepreneurship Education

Spending the past year researching applied ethics pedagogy has felt surprisingly similar to the first few years I spent at Stanford in the 1990’s, helping greatly expand the reach of the university’s entrepreneurship offerings and encouraging educators at other universities to do the same. As in those early years, I’ve had numerous conversations with others. More or less, I go to each asking the same question: Do you think ethics-related teaching materials can and should be improved in the entrepreneurship courses? The answer I receive is overwhelmingly a resounding yes.

In these conversations with educators, administrators, industry leaders and students, I feel an emerging groundswell — so many want to see innovation in the way educators teach entrepreneurial values. I hope that every educator, student, current and aspiring entrepreneur will join me in working to re-define entrepreneurship education, because it is crucial that students are equipped with the awareness, knowledge, skills and principles required to confront complex ethical challenges. Together, we must consider what educators haven’t yet done and what they can do to address this shortcoming in our incredibly vital discipline.

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Culture

Teaching Principled Entrepreneurship

Luke Sykora, Stanford University

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7 minutes

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When Cloudflare founder and CEO Matthew Prince visited their classroom to discuss his company’s interaction with neo-Nazi trolls and the resulting media firestorm, the students in Stanford Engineering’s “Principled Entrepreneurial Decisions” course had a jump start. The week before, they had each defined individual principles that could guide their own future leadership decisions. They’d been spurred along by Ray Dalio, founder of Bridgewater Associates and author of the bestselling book Principles, who spent hours of class time working one-on-one with students as they tried to capture actionable guidelines for their future personal and professional behavior. (The principles in Dalio’s own book range from “Be radically open-minded and radically transparent” to “Never allow the idea meritocracy to slip into anarchy.”)

Before Matthew Prince spoke a word, instructor Jack Fuchs walked the class through a written case study he’d developed based on prior interviews with Prince. The case described how Cloudflare, an internet security company, attempted to remain content-neutral though a series of interactions with controversial online material. It then explored why Cloudflare stopped providing services to the neo-Nazi outlet The Daily Stormer in the wake of a particularly repugnant blog post, one that viciously mocked Heather Heyer, the Charlottesville counterprotester who was run over and killed by white supremacist James Alex Fields, Jr. in August of 2017.

The big question: Even in the most flagrant cases of incendiary speech, should a single person in charge of a single internet infrastructure company be able to effectively decide whether a company deserves to be on the Internet?

Watching the students engage with the Cloudflare case and the issues it raised about free speech, democracy, and the responsibilities of the various layers of internet infrastructure, Fuchs felt something click.

“They were reflecting on their own assignment and on their own values and principles,” says Fuchs, a lecturer in Stanford’s Department of Management Science and Engineering who has held numerous leadership and board roles at growing technology companies. “As they were talking about the Cloudflare case they were bringing their own principles in and using that framework to discuss what decision they would make if they were in Prince’s position. That was when I really started to feel I was onto something.”

“You want to have protagonists who are willing to learn, who are willing to expose themselves and have three-quarters of the group disagree with them — and love it.”

—Jack Fuchs

Initially, Fuchs had envisioned a course focused simply on the tough, pragmatic decisions that need to be made when you’re running a growth-driven entrepreneurial company. At the same time, his colleague Tom Byers — faculty co-director of the Stanford Technology Ventures Program — was spearheading a new effort to emphasize applied ethics in entrepreneurship education. They started brainstorming how the two ideas might come together, and Fuchs ended up developing a course that examined not just the decisions business leaders make but also the principles that underlie those decisions. To do so, he created a series of unique case studies about a wide range of leadership issues that he debuted during Stanford’s winter 2019 quarter. He has since developed cases for European entrepreneurs as well, teaching them at ESCP Europe and at the Technical University of Munich.

As he prepared to teach a second iteration of his Principled Entrepreneurial Decisions course in Stanford Engineering in early 2020, Fuchs stepped back to distill a few strategies for entrepreneurship educators who want to help students think beyond firm survival or growth, toward the principles and values that make a venture worth pursuing and that make leading a company truly meaningful.

Find self-reflective case study protagonists

Fuchs was determined to bring the protagonists of the cases he developed into the physical classroom for a live discussion — so much so that, when he taught a version of this course to German executives, he actually developed five German case studies so that he could deploy this method overseas.

As he decided who to bring into the classroom, he was intent on finding the sorts of leaders who would be especially open to criticism and dialogue. In the end, that meant he wrote up 13 cases, and only used 9 in the class. In situations where a leader seemed intent on editing out the most heightened moments of tension, and portraying their decision as the “right” decision, he anticipated unproductive class sessions.

“You want to have protagonists who are willing to learn, who are willing to expose themselves and have three-quarters of the group disagree with them — and love it,” Fuchs says.

Consider your terminology

“Rightly or wrongly, ‘ethics’ often has a connotation of right and wrong,” says Fuchs. “‘Values’ tend to be idiosyncratic to individuals and organizations. Values can and should differ among organizations, and there is no right and wrong, per se. ‘Principles’ are more actionable rules of conduct that inform decisions, and those principles are very much specific to a person or to a company.”

Principles are tradeable currency. They can be written down, debated, prioritized, dismissed or adopted.

For his purposes, focusing on principles seemed to make the most sense.

Principles are tradeable currency. They can be written down, debated, prioritized, dismissed or adopted. By clearly articulating a principle — “It’s always wrong to lie to customers” or “Social media companies are responsible for all their users’ content” — it’s easier to step back and look at the idea objectively. Where might the principle help guide a decision? Are there situations where that principle is less important than a conflicting principle, or is there a need for principles to evolve?

“I want principles that are explicit enough to inform decisions,” Fuchs says. He gives the example of the cliché “the customer is always right” as a poorly stated principle. “It doesn’t inform decisions. What if the customer is being unreasonable?” he asks. A more actionable principle, and one he brought up in the class, comes from Aperia Technologies, a truck tire inflation company founded by two Stanford engineers: “When we set an expectation with a customer, we own it.” One can imagine a leadership team actually using that principle in a debate about whether to approve an expensive accommodation for a customer with a valid complaint.

None of this is to say that the terms “ethics” and “values” are best kept out of discussions of entrepreneurship, but rather that the concept of “principles” can give students a tool to approach complex decisions without presupposing a universally correct answer or ethical system.

Go beyond crisis management

When one thinks of the role of principles in decision-making, crisis moments like the Cloudflare case spring to mind — controversial, high-stakes, very public decisions that need to be made in the heat of the moment. And yes, principles can be very useful in those circumstances. “By developing your principles in advance, you will make better decisions during a crisis,” Fuchs finds. “Your principles will not necessarily dictate a clear answer, but rather they will allow you to debate and resolve a crisis through the language of principles, prioritizing them within the context of the crisis.”

But Fuchs was careful to present cases that were less dramatic as well. “Principles can be as fundamental as how a leadership team is formed and how it runs, or how a company interviews and recruits. Principles can be related to how your company deals with operational situations, organizational approaches (broadly defined) and external relationships with customers, partners, investors, and the community at large.”

“Principles can be as fundamental as how a leadership team is formed and how it runs, or how a company interviews and recruits.”

—Jack Fuchs

One case he developed focused on how a pharmaceutical CEO balanced commitments to investors, employees and patients participating in clinical trials during the 2008 economic downturn, while another explored how a sales executive navigated a series of career-defining moments as she took on roles at several enterprise technology companies.

In the former case, says Fuchs, the principle that helped the CEO prioritize among competing stakeholders was: “Our company exists to serve patients.” Thus, the CEO sacrificed both investor and employee interests to preserve the patients’ access to medicine in the clinical trial.

Cast a wide net for students

To provide the broadest possible range of perspectives and individual principles, says Fuchs, it adds to class richness to include students outside of the usual business-friendly arenas. In his case, that meant drawing in not just MBA candidates and engineering graduate students, but education graduate students and humanities undergrads.

“We had people who came to the class with deep skepticism of business,” he says.

As long as they demonstrate a self-reflective attitude, having some students who aren’t “business-friendly” can be an asset. That skepticism can help surface alternative principles that might not be considered by the business and entrepreneurship boosters in the room.

Model respectful yet pointed debate

“I had one student say that if he was on the board, he would have fired the CEO for the decision that he made,” Fuchs recalls.

While it may have been an intense moment, Fuchs didn’t find it inappropriate. After all, he’d selected his class guests to optimize for personalities that could handle this sort of exchange.

“It’s totally fine if most people disagree with the CEO; that’s great,” Fuchs continues. And often, he takes the lead. “Whenever there’s an opportunity for me to criticize the person in some way I want to make sure I do, because I want the students to feel comfortable,” he adds. “I learned early on at Berkeley [where he also lectured for a decade] that I need to model the willingness to have confrontational behavior, but to be respectful in that confrontation and allow the class to mirror that balance.”

“Keep the discussion on the level of principles,” he advises. “That, ironically, makes it less personal. You’d think that just discussing whether or not to do a product recall wouldn’t be personal, but that can get personal.”

Asking students to weigh in on the principle that informed a product recall, rather than the product recall itself, helps keep the debates productive, and students can speak their minds without cornering each other and the guests into argumentative postures. (This approach to debate works just as well in company meetings as in classrooms, Fuchs has found. “If principles are explicit, communicated, owned and followed by a company, during debates about difficult decisions, the discussion is informed by thoughtful debate about those principles, rather than by arguments about which specific decision to make,” he adds.)

The goal is that students leave the course with a framework of values and principles that are unique to them, a value system that feels chosen rather than imposed.

For his own part, in the classroom Fuchs tries to interrogate principles proposed by both the guests and the students, while avoiding putting his own thumb on the scale too much. “I want to make sure that I am not somebody who says: This is something that worked for me once, so you should do it that way all the time,” Fuchs says. “If I’m nuanced in how I’m portraying things, it allows the class to also be nuanced.”

The goal is that students leave the course with a framework of values and principles that are unique to them, a value system that feels chosen rather than imposed, and one they can rely on whether they ultimately become entrepreneurs or find themselves tasked with very different sorts of professional decisions.

“I try not to use words like ‘never’ and ‘always,’” says Fuchs. “I strive to help students and entrepreneurs find what works for them.”

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Culture

The Student Role in Shaping Entrepreneurial Ethics

Maurice Chiang, Stanford University

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8 minutes

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When I arrived at Stanford as a first-year student in 2015, the mythos of Stanford dropout-turned-CEO Elizabeth Holmes pervaded campus. With over $400 million raised from names like Rupert Murdoch and Betsy DeVos, and with a valuation of over $9 billion, her company Theranos seemed indestructible. They were revolutionizing blood diagnostics. However, just one month into my freshman year, John Carreyrou’s iconic exposé dropped, ultimately leading to the dissolution of Theranos.

Stories of Silicon Valley’s ethical lapses continued to pile up during my years as an undergraduate. There were the controversies at Uber during former CEO Travis Kalanick’s tenure, and serious privacy lapses at Facebook under Mark Zuckerberg’s watch. Just this September, uBiome – a microbiome-focused startup I’d been following – filed for bankruptcy amid a federal investigation of its insurance billing practices. That news has further reinforced my sense that the problem doesn’t revolve around a few bad actors. Rather, it is something more systemic, stemming from the lack of attention tech company founders are giving to questions of principles and values.

Stories of Silicon Valley’s ethical lapses continued to pile up during my years as an undergraduate.

Over the past two years, as the president of ASES – a Stanford-led global student entrepreneurship organization – it also became clear to me that ethical dilemmas don’t end with the Silicon Valley elite. When teaching how to pitch investors, for example, many entrepreneurship groups emphasize providing a polished vision of a product that may not in fact be ready. This “fake it till you make it” approach that student entrepreneurship organizations teach has its advantages, allowing you to get a feel for user and investor interest, but it also raises questions. When pitching investors, for example, when does optimism cross the line into misrepresentation? And how can startups hold onto core values while being open to investor and market feedback?

These and other observations forced me to ask how my own generation of entrepreneurial leaders might be better prepared to brave ethical dilemmas. This year, while working as the Teaching Assistant for the Mayfield Fellows Program with professor Tom Byers and Management Science and Engineering lecturer Ann Miura-Ko, I discovered that they, too, were asking similar questions about the role of ethics in entrepreneurship. I soon joined Byers’s Principled Entrepreneurial Action and Knowledge (PEAK) initiative, which aims to embed applied ethics into the core of entrepreneurship education.

Given that much entrepreneurship education takes place outside of the classroom…I wanted to find out if students were interested in learning about principled decision-making in their groups and initiatives.

As the PEAK team explored what could be done, we first looked at the current landscape. We identified some great movement within the individual technology disciplines themselves towards ethics education. On the Stanford campus, classes like Data Privacy and Ethics and Ethics in Bioengineering are providing crucial resources for students. However, technology-specific discussions will inevitably miss many ethical questions related to the process of funding, scaling and managing a rapidly growing company, questions that cut across all technologies and disciplines. In response, Byers has been exploring how principled decision making can be integrated into the entrepreneurship classroom. Courses like Management Science and Engineering lecturer Jack Fuchs’s Principled Entrepreneurial Decisions, meanwhile, have begun modeling what a more introspective, principles-driven approach to entrepreneurship education might look like.

Given that much entrepreneurship education takes place outside of the classroom, though, I wanted to find out if students were interested in learning about principled decision-making in their groups and initiatives. To answer that question, I interviewed dozens of students and student leaders around the world, connecting with local ASES-affiliated groups in places like the Philippines, Australia, Greece and India, as well as other entrepreneurship organizations on the Stanford campus.

The Status Quo

As I spoke with fellow student entrepreneurship leaders at Stanford and around the world, their responses brought two points into focus.

Ethics has been a back-burner issue.

When asked if our ASES programming integrated an appropriate amount of values-based education, the global ASES-affiliated leaders I spoke with indicated that we did so poorly, rating our efforts 5.2 on a scale of 10. One of our former directors put it bluntly, stating that “ethics are not something that we focus on in our organization.” The general sentiment was that we were doing a “below average” job at catalyzing conversations about principles in entrepreneurship – despite many of our members indicating that they often “think about ethical tensions” in their work.

From the Young Entrepreneurs Society in Sydney to the Entrepreneurship Cell in Delhi, the international student group leaders we surveyed indicated that teaching principles and values in entrepreneurship was crucial.

Students recognize the need for engaging with ethical questions.

Despite admitting that the current efforts were inadequate, our ASES members at Stanford indicated, when polled on a 1-10 scale, that values were important to them in entrepreneurship (9.3/10). Leaders of other major entrepreneurship organizations at Stanford responded similarly: The Stanford Social Entrepreneurial Students Association, the Stanford Pre-Business Association, the Business Association of Stanford Entrepreneurial Students, and Stanford Women in Business all indicated that they’d like to, among other things, “place a greater focus on educating their members,” “focus on ethics programming,” “engage in discussion about ethics,” and “set an example for best practices.” The feeling is not limited to the United States, either. From the Young Entrepreneurs Society in Sydney to the Entrepreneurship Cell in Delhi, the international student group leaders we surveyed indicated that teaching principles and values in entrepreneurship was crucial, giving it an average score of 8.5 out of 10 in terms of importance.

Filling the Gap

Our initial outreach indicates that there’s an obvious gap between student interest in the ethical aspects of entrepreneurship, and actual programming to address that demand. How might student groups and initiatives fill that gap? So far, I’m particularly optimistic about five strategies that seem likely to make an impact.

Develop or adopt plug-and-play tools for applied ethics education

Imagine teaching calculus without a textbook – it’s possible, but without clear, structured course content, it would be a lot more difficult. That’s the situation student leaders are facing today. Almost all student groups I spoke with indicated they didn’t have “formal” ethics programming. I would like to see students work with educators to create tools and frameworks that enable student leaders to more easily catalyze these conversations.

There are tools that educators have created in the past – Mary Gentile’s “Giving Voice to Values” being one of the more prominent – but none that I know of have successfully implemented a unifying framework for principled entrepreneurship.

Almost all student groups I spoke with indicated they didn’t have “formal” ethics programming.

Such a framework (whether taking the form of a book, manual or digital resource) would guide students through the process of formulating and executing an entrepreneurial venture, raising questions at each juncture about how values and principles should play a role. These tools could leverage the power of engaging case studies to stimulate interactive discussions and focus debate on real-world problems. Student entrepreneurship groups might even co-create these tools with educators, ensuring that they serve as versatile, teachable, contextually flexible “how to” guides.

Emphasize the strategic advantages of ethical entrepreneurship

To disrupt the way things are currently done, students must have a strong reason to adopt new paradigms. One strategy to encourage adoption would be to reframe values-based entrepreneurship as a competitive advantage.

Although nascent, there is a growing body of evidence to suggest that non-monetary values and principles can provide a competitive edge. In 2015, for example, research by Yung-Ming Shiu and Shou-Lin Yang published in the Strategic Management Journal indicated that a legacy of corporate social responsibility activities can provide “insurance-like effects” when a firm faces a negative event.

One strategy to encourage adoption would be to reframe values-based entrepreneurship as a competitive advantage.

As a direct case study, we can also look to the competition between Zenefits and Gusto. Zenefits grew at all costs (in fact becoming the fastest growing company in Silicon Valley), going so far as to allow unlicensed brokers to sell health insurance to consumers. It ended up in trouble, facing regulatory investigations and angry investors and customers. In the meantime, Gusto grew more slowly, but prioritized ethics and values; when Zenefits later faced regulatory settlements and layoffs, Gusto continued on a steady path of growth, and was able to pick up former Zenefits customers.

Experiment with various institutional supports

At Stanford, the PEAK team has worked with a student leader committee to get a pulse on how institutional changes might encourage student entrepreneurship groups to actively discuss ethics. Although we’re still in the early stages, I believe that rethinking institutional support may be a key part of the narrative. Institutional involvement could mean, for example, tying engagement with principled entrepreneurship to certain funding sources. Another approach might mimic something like the Fair Trade certification, allowing groups that adopt a set of ethics-related training practices to benefit from positive acknowledgement by a parent institution. Student committees and school administrators might also look at recruitment incentives. Could schools offer early access to new member recruitment or priority at club fairs to groups that offer ethics programming?

Incorporate applied ethics into pre-existing programming

In many cases, the most effective way to elevate principles and values is to simply incorporate those concepts into events and programs that are already taking place. In the Mayfield Fellows Program, for example, we frequently leverage the power of student-designed, real-world case studies to teach entrepreneurial strategy, breaking the class up into two groups to debate opposing viewpoints. This year’s teaching team integrated more ethics-related questions into the case studies. It proved a remarkably efficient way to reframe business decisions as, at times, ethical dilemmas.

In many cases, the most effective way to elevate principles and values is to simply incorporate those concepts into events and programs that are already taking place.

Interactive experiences that take place in accelerators and bootcamps can also be adapted this way. A main part of the ASES Bootcamp – a program for Stanford first-years and sophomores – involves groups of students building a business and mock-pitching to real investors. Should the evaluation criteria for their businesses and pitches include some measure of principles and values? If so, members of the program would be incentivized to think carefully about those issues.

Engage with emerging technologies

While the ethical implications of new technological innovations are already being addressed in many classrooms, student initiatives can play a complementary role. Student-run debates around emerging areas of tech venture creation, such as artificial intelligence, blockchain, genetic engineering and autonomous vehicles, could frame these issues in ways that are practical rather than simply academic, directly exploring the roles and responsibilities of tech company founders. For example, how should a founder in the autonomous vehicle space think about their responsibility to drivers and pedestrians? How should they engage with government regulators? How might they establish principles that allow them to prioritize human safety, while also driving innovation and staying ahead of competitors? These sorts of debates could be as engaging as they are instructive.

Bringing Entrepreneurial Ethics Beyond the Classroom

Unlike many other disciplines, entrepreneurship is learned as much outside of the classroom as in it, and student entrepreneurship organizations and student-led initiatives play an outsized role in training the next generation of innovators. While many useful discussions can happen in the classroom, they need reinforcement from the larger student community.

Students I speak to want a different future, and some are demanding change, even if they sometimes feel ill-equipped to create it by themselves.

Given the role that student entrepreneurship groups play, institutions of higher education have an obligation to rethink how they allocate and deploy resources through these organizations. Student leaders, meanwhile, would be well served by focusing on how to ignite an engaging, action-oriented conversation around principled venture creation.

Students I speak to want a different future, and some are demanding change, even if they sometimes feel ill-equipped to create it by themselves. I expect the mandate for change to only grow stronger as PEAK and other like-minded efforts engage with students and entrepreneurship educators in the coming years.

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