California’s Stanford University is to Silicon Valley what the University of Waterloo is to this region: A magnet for bright young minds that feeds top engineering talent into a surrounding ecosystem of technology companies.
So, when Stanford president John Hennessy visited UW to give a talk about online education on Friday, I was curious to hear his thoughts on Stanford’s relationship with the Valley, and what Waterloo Region might learn from it.
The chat was brief but illuminating – and ultimately, encouraging – as Hennessy explained the key components of that relationship. (In Stanford’s case, it’s one that helps explain the record $1.035 billion in donations the institution raised from donors this past year.)
Hennessy’s comments should carry a ring of familiarity for anyone who has been paying attention to the growth of Waterloo Region’s tech ecosystem, which has added an average of 1,000 jobs per year since 2001 and sees the birth of new startup each day.
Q – The tech community surrounding Waterloo’s universities often looks to other places for examples of what works, and obviously Stanford is the world’s largest example of an innovative university surrounded by a huge technology-based business ecosystem, namely Silicon Valley. What do you think Waterloo can learn from Stanford about interacting with the ecosystem that has formed around it?
A – In the case of the Valley-Stanford ecosystem, first of all, it has evolved over a long period of time, and I think it’s important to understand it didn’t happen overnight.
It’s stabilized in a way that there’s a role both for new startups as well as for large companies, and the training ground for the next generation of, not necessarily the founders, but perhaps the management team of most of these companies, are those bigger companies that generate the middle managers and the upper-level people who go on to become the CEOs and the vice-presidents at the startup companies.
That’s an important piece of it.
Having a place where people really want to live makes an enormous difference.
You look at the efforts that have been made in the U.S. to kind of create the clone of Silicon Valley, whether it’s Austin, Texas or Research Triangle Park [in North Carolina], and they’ve worked okay, but they’re not home runs by a long shot.
So, in trying to pull apart what worked, for Stanford a big issue is that we are a giant importer of talent, and it’s not just undergraduates. For example, it has a very large master’s program in engineering. It imports talent from around the world and most of that talent stays within 50 miles.
So, you’ve got to have the talent base. You not only need the inventions and the discoveries, the Sergeys and Larrys who go and find the Google search algorithm, but the next 50 people who come from Stanford with PhDs or master’s degrees who go to Google actually are critical to the future of the company.
So, getting that supply of talent is absolutely crucial over time.
Q – We’re seeing that here; obviously no one has it on the scale of Stanford and the Valley, but this is happening in the Waterloo ecosystem.
A – Yes, and one of the nice things that happens over time, as you grow this, is that people feel comfortable coming there, because even if their startup doesn’t work out, there are 100 other companies they can go and work for.
So you know that, if you’re a tech person, you can come to the Valley and it’s no problem. There are jobs there; the price of houses is a little crazy, but that’s the price you pay.
The weather helps.
Q – Absolutely, though it can be distraction from all the hard work you need to do, can’t it?
A – No, no, no, no. This is what people think; they come and say, ‘People are never going to be able to work here because the weather’s too good.’ The truth is, the weather’s good most of the time, so you don’t have to worry about whether it’s going to be good tomorrow if you worked today.
Q – Do you think it’s going to get easier for other communities to emulate what’s happening in Silicon Valley, due to the lower barriers to entry for startups around the world?
A – Sure. There are lower barriers to entry, and some of the infrastructure issues in the Valley just make it harder, over time, to grow the Valley. And house prices certainly [are an issue].
Then the question is, who can be the next Silicon Valley, or even, who is in the running to do that?
There are lots of them; New York City would like to be in the running to do that, and other places would.
I think [it means] putting together all the ingredients and making it work, and giving it time. It takes time; it takes sustaining over time to make it work.
But I think Waterloo has a lot of the key parts, and I think giving it time, and nursing it and growing it, that’s going to be key.