MIT returns to Silicon Valley
This past week, 70+ students and faculty in MIT’s Entrepreneurship & Innovation (“E&I”) program returned from the annual Silicon Valley Study Tour. A tradition dating back over a decade, the tour embodies the very spirit of MIT and entails visiting some of the most innovative companies across the Valley to learn about entrepreneurship through immersive experience. This year’s list of companies included the likes of Airbnb, 23andMe, Robinhood, Instacart, Impossible Foods, Coffee Meets Bagel, Allbirds and more. These names represent some of the world’s most valuable “unicorns” (a term coined by MIT alumnus and Cowboy Ventures Founder, Aileen Lee) as well as up-and-coming startups seeking to build the industries of tomorrow.
First, a bit of history. The Silicon Valley Study Tour was initiated in 2007 with the introduction of the E&I program. Ed Roberts, who began the MIT Entrepreneurship Center (now known as the Martin Trust Center for MIT Entrepreneurship) in 1991, chaired the task force that created the E&I program and envisioned the study tour as part of its original design. As he described to me, the purpose of the trip was threefold: 1) strengthen the bond amongst E&I students 2) get a series of intimate glimpses of early stage firms and associated VCs and 3) provide perspectives on Silicon Valley while nurturing future career opportunities. He believes these three points are as “viable and important” today as they were at the start of the program. This year’s trip was focused on the founder’s journey in particular.
Airbnb may be valued at $31 Billion today, but the company had very humble beginnings. When Brian Chesky and former RISD classmate, Joe Gebbia, could not afford to make rent, they decided to rent out space in their San Francisco loft. Along with an air mattress came the promise of “wireless internet, a small desk space, and breakfast each morning.” The rest is history. From his fascination with Disney, Brian always wanted to create “magical” experiences. He initiated project “Snow White” with the hopes of capturing the emotional moments that comprise an Airbnb stay using techniques similar to that of storyboarding. Airbnb even hired a Pixar animator to produce final copies of the host process, the guest process, and the hiring process. These storyboards now hang in Airbnb’s beautiful SoMa district headquarter office, which itself was created with the look and feel of iconic Airbnb properties (including Brian’s own apartment). In its early days, Airbnb would send professional photographers free of charge to profile host homes, vastly increasing bookings while building trust and brand loyalty. Today, Airbnb allows you to “book unique homes and experiences all over the world.” What’s the next chapter in their storybook? Some suggest Airbnb has ambitions to create its own airline one day. This was prompted when Brian asked his followers on Twitter: “Let’s say you could wave a magic wand and have the perfect flying experience, what would that look like?”. Only time will tell.
Stanford classmates, Vlad Tenev and Baiju Bhatt, founded Robinhood almost by chance. Their previous company, Chronos, offered tools for hedge funds and banks to build automated trading strategies. They realized that firms placing millions of trades per day at effectively no cost was essentially the same as having millions of customers placing singular trades from a technological standpoint. Today, their beautifully designed brokerage service helps over 4 million customers invest in publicly traded companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission. The decision to introduce cryptocurrencies to the platform earlier this year helped them add 1 million customers essentially overnight. Only days prior to our visit, they closed their latest round of funding at a valuation of $5.6 Billion, a fourfold increase from the year prior. Robinhood is on a mission to inspire a new generation of investors and believes that everyone should have access to financial markets. The name fits.
Behind great founders are great ideas that seek to improve the lives of others. Divvy is “housed” out of HVF Labs, Max Levchin’s (Co-Founder of PayPal) startup studio, and seeks to make home-buying affordable again. The idea is simple. Select any home in your area. Divvy negotiates the lowest price for you and leases it back to you, passing on the savings. Unlike a typical lease, however, every monthly payment contributes to building your future home equity. Lease for 3 years and they will even provide your down payment. They are also addressing a huge market inefficiency. The US has some of the highest transaction fees in the world and Divvy effortlessly removes both the buyer’s and lister’s agent. Most importantly, the company actively seeks to provide credit to those who might not be approved for homes elsewhere and can report monthly payments to credit bureaus to help customers establish a pattern of timely payments. Divvy provides a new route to home ownership, making it accessible to segments of the population that have been excluded for generations.
For many of us, this trip was only the beginning of what will become our very own founder journey. We were encouraged to take chances, follow our dreams, and pursue a life of meaning. The very last night of the Silicon Valley Study Tour, we had the opportunity to hear from a panel of esteemed MIT alumni in the Bay Area, including Gus Tai. As a General Partner at Trinity Ventures, Gus specializes in funding early-stage companies and supporting entrepreneurs at the time of company formation. He has been recognized by Forbes as one of the top technology venture capitalists, earning his place on the renowned “Midas List”. Gus embraced a meditation practice in 2001 amidst personal loss and shared a fascinating perspective on how mindfulness provides a means to developing an authentic point of view as a founder. His parting words to all of us on this journey: “stand for something and people will be attracted to your vision, draw upon your values, cultivate them with wisdom, and you will live a life that is more nourishing and fulfilling.”
