Josh McFarland was itching to get out of Laramie. A sophomore majoring in marketing at the University of Wyoming, he spent vacations driving a gargantuan dump truck around an open-pit coal mine for $10 per hour. Despite his 3.9 grade-point average, McFarland worried about his future. "The thing about Wyoming," he says, "is that there isn't a whole lot going on other than mining, ranching and a few local industries."
He had bigger plans. In early 1997, he was accepted at Stanford as a third-year transfer student. There were just two problems: he wasn't sure he'd cut it at one of the nation's top universities, and he didn't know if he could afford it. Thumbing through a copy of Fortune, he came across an article that helped him make up his mind -- and would change his life.
The story described a new Stanford program that was capitalizing on the University's pervasive connections with Silicon Valley. Students in the program -- a select group of seniors -- take a class in the spring, spend a summer interning with a start-up company, then return for another quarter of coursework on the way to a master's in engineering. Sometimes, the article said, the companies offer these interns stock options: "If a company takes off, things get interesting." McFarland remembers being mesmerized by that article. "It was like reading about Hollywood," he says. By the time he stopped underlining sections, he'd decided that, whatever it cost, he couldn't afford not to be at Stanford. Even if he couldn't get into the highly selective program he'd read about, he figured he would "get a job at a restaurant where all the big shots hung out," he says. "I could get one of their business cards and really impress someone."
Two years later, in the summer of 1999, McFarland found himself at a board meeting of Riffage.com, an Internet music start-up in Palo Alto. He listened intently as half a dozen Silicon Valley veterans brainstormed ways for the four-month-old company to build traffic on its website, raise a second round of financing and -- they hoped -- go public as soon as possible. CEO Ken Wirt, MBA '82, introduced McFarland as Riffage's "czar of community," responsible for building the company's visibility among college students.
Though just a summer intern, the Stanford senior had been charged with conceptualizing, developing and distributing a back-to-school promotional compact disc aimed at a quarter-million college students, one of the music industry's most important markets. The $200,000 project was "every product manager's dream," says Page Murray, Riffage's VP of marketing. How did 22-year-old Josh McFarland land this plum? Not by picking up business cards while waiting tables at Il Fornaio. He ended up at Riffage as a Mayfield fellow, a participant in the program he'd read about in Fortune. "I had no idea how many doors would open when I got here," he says. "It's uncanny how my life has followed that article."
At 6-foot-3, Tom Byers might remind you of a young Jerry Brown. He has the zeal of a little league coach who can't bear to see his team lose. When he arrived at Stanford in 1995 as an associate professor of industrial engineering, the former Silicon Valley executive wanted to take what had long been in the air at Stanford -- entrepreneurship -- and put it in the classroom. Along with some like-minded engineering faculty, Byers, 46, designed a curriculum that would teach a select group of students "the soft skills: the ability to negotiate, to synthesize tangible and intangible data," Byers says. "This is stuff you don't normally teach -- but it is absolutely critical for success in the entrepreneurial economy."
The University already was famous for its entrepreneurial graduates and professors. William Hewlett and David Packard, of course, started here. Sun, Cisco and Silicon Graphics were launched from campus. More recent alumni went on to found Internet phenoms Yahoo! and Excite. Stanford students had a reputation for catching the start-up bug through simple exposure. Yet the only place to get formal entrepreneurial training on campus was the Graduate School of Business.
Byers was convinced that entrepreneurship could and should be taught alongside nuts-and-bolts engineering. That lesson came from his years as a high-tech executive. Before joining the Stanford faculty, he spent more than a decade working in Valley start-ups. He was executive vice president at Symantec, a successful software company. He also served as CEO of Slate, a high-tech venture that didn't survive. The young engineers he'd hired over the years simply weren't equipped to thrive in the world of high-growth companies. They weren't prepared for the risk-taking ethos, didn't grasp the importance of interpersonal skills and knew little about venture capital funding. Today, his Mayfield fellows are learning all this. Many of the program's alumni now work at Valley start-ups.
Students start the nine-month program in spring quarter with a class devoted to the theory of high-growth companies. The abstract is made real by regular visits from some of the country's most successful entrepreneurs (Sun Microsystems founders Vinod Khosla, MBA '80, and Andy Bechtolsheim, Gr. '82, were recent presenters). In the summer, fellows take the plunge into the real world as interns with Silicon Valley start-ups handpicked by Byers. In the fall, participants return to Stanford for a final Mayfield course, where they analyze their experiences.
Meantime, the fellows continue coursework toward a master's degree in engineering. And they stay in close contact with the three mentors assigned to them -- one from their start-up internship, one from a venture capital firm and another from the pool of Mayfield alums (there are 45 so far).
The program has been a hit with students. In fact, getting a spot in what organizers like to call the White House Fellows of Technology has become increasingly difficult. In 1999, about 100 students applied (seniors and co-terminal engineering students are eligible). Only 12 were admitted. Applicants don't have to have perfect academic records, but Byers requires them to write an essay describing their creativity and "entrepreneurial spirit." Not one student offered a place since 1995 has turned Byers down. "I would have died and gone to heaven to have been one of these students," says Mike Levinthal, '76, MS '77, MBA '81, a general partner at the Mayfield Fund, the venture capital firm that in 1998 endowed the program with a $1.5 million gift. "But the program didn't exist when I was at Stanford."
Squeezed between the front door and the office manager's area, Prashant Mehrotra's desk at TimeDance is pretty much in the place where a potted plant would look good. Still, if you're a Mayfield summer intern who wants to watch an Internet company get on its feet, this may be the best seat in the house. TimeDance -- "the hassle-free way to schedule with everyone" -- opened its website to the public in mid-June, just five weeks ago. Now the downtown Redwood City office is hopping. In the cubicle next to Mehrotra, '99, sits Stuart West, the VP for business development. Mark Lazar, '82, MBA '86, the company's CEO, sits in the next cube over -- well within eavesdropping range.
Lazar has set aside about an hour a week to meet one-on-one with the intern (companies in the program must agree to spend considerable time with their charges). For the most part, though, Mehrotra has been soaking up the company's daily business as executives trade ideas over cubicle walls. Today, he's talking over changes to TimeDance's website with Walter Colsman, company co-founder and VP of marketing. At the same time, he can overhear conversations about building user traffic, protecting against trademark infringement and dealing with technical glitches.
Colsman has been putting in long hours for weeks. Surrounded by empty 20-ounce paper coffee cups, he looks exhausted. If Mehrotra decides to go the start-up route himself, he will have few illusions about the hard work involved. "It's not all easy decisions and glory," he says.
Get to know Tom Byers, and doors can open. He has a fat Rolodex -- from his years as a high-tech executive and from the dozens of companies he's invited to participate in the Mayfield fellows program. He's also on the boards of three companies (Visio, Netcentives and AlphaBlox) and consults for Interval Research, the think tank co-founded by Microsoft founder Paul G. Allen. Then there's his older brother, Brook, MBA '70, who happens to be the Byers of Kleiner Perkins Caufield & Byers, one of Silicon Valley's preeminent venture capital firms.
So the director of the Mayfield program is keenly aware of the frenzied atmosphere surrounding Silicon Valley companies -- and among ambitious Stanford undergraduates. In the face of the hype, Byers works to convince his students that entrepreneurship is hardly synonymous with instant wealth. The Mayfield program isn't about learning how to get rich, he says; it's about developing leadership skills. Yes, getting rich may be a side effect, but he tells his students to have patience: "chill a little. Pursue something else. Don't be in such a rush."
Someday, one or more of the program's alumni may start a company that makes it big. None has so far -- although most have gone on to first jobs with start-ups, and several have cashed in as employee-stockholders of companies that were acquired or went public. "This is an experiment. We don't know all the answers," Byers says of his program. "We'll see five or 10 years down the road what impact it's had. I do know it will enhance the students' chances for success, because knowledge is power. But being an entrepreneur is a mindset. It's a way of living your life. It's being obsessed with thinking about opportunity. And it's understanding what it takes to go from an idea to a business."
Alumni who took that step without benefit of Byers's program sound envious when asked about it. "It's really a useful tool for connecting students into entrepreneurship," says Joe Kraus, '93, who founded the Internet portal Excite with five fellow alums in 1993. "I remember thinking 'How on earth do I ever get hooked up with this whole thing?' I would have loved a program like this."
One point is clear: Mayfield fellows who go on to start a company -- or just work in a start-up -- know exactly what they're getting into. That was a theme that came through in July when the current fellows converged on Filoli Gardens in Woodside for a daylong retreat-cum-networking session with Mayfield alumni and a slate of high-tech heavyweights. During one panel discussion, Amar Goel, the 23-year-old who founded online golf retailer Chipshot.com from his sophomore dorm room at Harvard, sounded a cautious note for would-be start-up CEOs. "It's very sexy to be an entrepreneur right now," Goel said. "But at the end of the day, a lot of people aren't cut out for it. People forget how much hard work it is -- and not every company is successful."
With his sun-bleached hair, it's not surprising that Nathan Eagle, '99, is a surfer. What is surprising: the 22-year-old also is a rocket scientist. A real rocket scientist. He studied astronautics at Stanford and has a résumé studded with internships and jobs at NASA, Boeing Space and Defense, and the top-secret Phantom Works. But when he took Byers's introductory course on high-tech entrepreneurship, the trajectory of Eagle's career suddenly shifted. "I was pigeonholing myself in aerospace," he says. "At a big company, you're doing stuff that's not critical. You're on this huge boat. Everyone is paddling but no one sees your contribution. I really wanted to get out and do the Silicon Valley thing."
Eagle spent last summer as an intern at Zowie Intertainment (yes, it's spelled with an "i"), a start-up in San Mateo. Zowie's products include Redbeard's Pirate Quest and Ellie's Enchanted Garden, games that link small plastic figurines and a three-dimensional "playscape" with a virtual world that exists only in a personal computer. In his first six weeks on the job, Eagle helped dream up a new (still secret) strategy-action board game.
Eagle has worked in Fortune 100 companies, but, he says, "this is the first job I've had that's really creative." At Zowie, which bills itself as "the smart toy company," Eagle had a separate budget to pay for the specimens he bought at Toys "R" Us for "proto-chopping." He would disassemble the toys, then mix and match the parts to create new prototype products. His work area looked like Texas Chainsaw Massacre meets Babes in Toyland. Every surface was strewn with toy arms and legs, solder wire and rubber wheels. The experience helped him see the importance of fresh, untried approaches in business. "I now know what entrepreneurship is," he says. "It's a mindset. It's not 'Let's go start companies.' It's more of a risk and reward system."
Mehrotra, the TimeDance intern, is still buttoning his shirt and doing his tie when he pulls into the Sand Hill Road parking lot of Institutional Venture Partners. He is supposed to meet his mentor, A-list venture capitalist Geoff Yang, at 9 a.m. Arriving late is not the way to impress a guy said to book his calendar in five-minute intervals. Mehrotra is looking forward to a rare opportunity: shadowing Yang, MBA '85, and listening in as the VC, who has been an early investor in dozens of dot-com launches, fields funding pitches from entrepreneurs. It is a chance to peek behind the heavily curtained world of a venture capital firm.
Though he thinks he knows a few things from his previous two summers working in investment banking and corporate consulting, Mehrotra is determined to keep his mouth shut. He has heard that Silicon Valley and the VC community are small and incestuous. He doesn't want to put his foot in his mouth before he gets it through the door. He spends the entire day listening and observing as a series of entrepreneurs make presentations to Yang and the other partners.
A few weeks later, Mehrotra says that what surprised him most about the day with the VCs was that "there are only a few key things they are looking for. Usually they already believe the business being proposed is possible. But the next question is: how big could it be? Would it be a big enough 'play'? To these guys, the difference between $1 and $2 million is nothing. But the difference between 1 million and 50 million is interesting." He also learned that as much as the financial prospects, the venture capitalists are interested in the quality of the entrepreneurs themselves.
If the entrepreneurs only knew what the vcs were looking for, their presentations would be very different, Mehrotra found himself thinking. Several of the supplicants went on far too long talking about their own qualifications -- as if they needed to justify their presence. They didn't realize that if Institutional Venture Partners were going to take the next step, they would check out the entrepreneurs on their own. As the IVP partners discussed the inadequacies of one prospective management team they saw, Mehrotra decided his tight-lipped strategy was the right one. He may have a business plan of his own to present someday. "You don't want to burn too many bridges," he says, "because it will come back and haunt you."
Over the summer, McFarland and Wirt, his mentor at Riffage, became close -- and not just because the intern dreamed up and then won the company's "decorate your cube" contest by turning his work space into an extravagant barbed-wire protected sanctum. Wirt, the CEO, tried to recreate for McFarland the internship experience he had 18 years earlier, as an MBA student. His mentor at Atari "took me everywhere," he says. Wirt wound up working full time for Atari while a second-year graduate student and has been in high-tech marketing ever since.
"Seething envy" is what VP of marketing Murray feels when he sees the kind of exposure McFarland got. "Josh was sitting down and talking to people who pull the strings on the venture business in Silicon Valley," Murray says. "After a summer of doing this, his Rolodex is going to rival that of people who've been in the business for years."
He also got his hands into the details of designing and marketing a new site. The promotional computer CD he developed and produced cleverly mirrors Riffage's website. As users click through the CD, they learn how the music website works -- how to search for favorite bands, share gossip with other fans and download music directly to their computers. "When I'm in my cube, it's down-in-the-trenches type of stuff," McFarland says. "But then I go into a board meeting and I can see what's going on and understand things on a more global plane. Instead of being a part of the puzzle, you get to see how the puzzle is laid out. Plus you go in there and see that your best guess might be as good as theirs."
In the fall, the current crop of Mayfield fellows came back to campus for the wrap-up Mayfield course. But not everyone will be returning immediately for a master's degree in engineering. Eagle has decided to take the plunge in a different Valley -- the Kathmandu Valley in Nepal. He'll be building suspension bridges while on a Fulbright scholarship. "The only time I can afford to do this is now," Eagle says. "I don't see myself working for five years and then going to Nepal. There's been hype about the net for the last four years. I have the feeling that Silicon Valley will still be there when I get back."
Eagle's summer roommate, McFarland, is taking a different route. Not only did he decide to go to work as a regular employee for Riffage in the fall, but he also has taken a leave of absence from his master's program in industrial engineering to concentrate on the start-up (he still finished the final Mayfield course). His new title at Riffage: "product manager extraordinaire." "I got to pick it myself," he says with a smile. "I feel like I'm in the right place at the right time. Even if Riffage is a total washout in six months, I'd still feel it's been extremely valuable."
Of course, Byers would like to see McFarland, Eagle and the other Mayfield fellows finish their master's degrees. But if exposing students to the allure of Silicon Valley puts him in danger of losing some, it's a risk he's willing to take.
Robert L. Strauss, MA '84, MBA '84, is a business consultant and freelance writer in San Francisco.