In May 2012, 30 business and engineering students from the Hinman CEOs entrepreneurship program and the College Park Scholars program at the University of Maryland traveled to Silicon Valley to experience firsthand the area’s culture of innovation. Over the course of five days the students visited 16 companies ranging from recently founded startups to mature companies such as Google and Cisco. Established by Mark Wellman -- Distinguished Tyser Teaching Fellow at the Robert H. Smith School of Business and director of the Business, Society and Economy Program -- the innovation experience helped students better understand how firms compete and use innovation to create sustainable competitive advantages. Jason LeGrand, director of the West Region in University of Maryland’s University Relations department, assisted in developing and managing the innovation immersion experience. James Green, director of the Hinman CEOs entrepreneurship program; Jaclin Warner, coordinator for the Entrepreneurship and Innovation Program; and Rick Weedon, associate director of employer and business development at the Robert H. Smith School of Business also attended and helped plan and facilitate the trip. As a result of their experiences, many students expressed a change in their post-graduate aspirations, with several planning to either join a startup or start one themselves.
Read about their trip in an account by 2012 University of Maryland graduate Jeff Williamowsky.
Students met with Vinod Peris, a VP of Engineering and Maryland alumnus who has been with Cisco for twelve years. Peris spoke about his experiences at Cisco and also offered the students pertinent career and life advice. Cisco’s multiple business units collaborate frequently but can also act independently when needed, which allows Cisco to rapidly develop innovative products despite its large size. Two exciting technology trends he spoke about were the “Internet of Things” and the increasingly popular “Bring Your Own Device” (BOYD) corporate technology policy. The “Internet of Things” refers to the idea of connecting not just people and organizations to the Internet, but also devices such as appliances. This interconnectivity will one day allow our various devices to fluidly interact with our lives. For example, an alarm clock may one day be able to dynamically adjust its user’s wake up time based on an overnight email that changed its user’s morning schedule. The BOYD policy increases employee satisfaction as employees can use their preferred technology brands, but it also creates headaches for IT managers who are tasked with keeping internal networks secure, he explained.
Students also had the opportunity to tour the facility and witness some of Cisco’s exciting technologies. One such technology was Cisco StadiumVision, which is a networked display device used in stadiums to display concession prices, advertisements, and other media. The main selling point of the device is the ability to dynamically change content across multiple displays. For example, if a stadium is missing its revenue target for a game, managers can change concession prices on the fly and display promotions for certain items stadium-wide. Perhaps the highlight of the tour for many students was experiencing Cisco’s TelePresence video conferencing systems. TelePresence’s advanced software and its use of several microphones, speakers and displays creates an immersive, lifelike video conferencing experience.
The visit to Electronic Arts (EA) began with a tour of the campus, which resembled a college campus and was exactly what one would expect from an innovative company in Silicon Valley. EA employees enjoy an on-site gym and cafeteria, large fields for playing sports at lunch or after work, and even an arcade. Such amenities foster creativity and collaboration and were common among the various companies visited on the trip.
The first speaker was a project manager involved in the Sims franchise, and he spoke about his experience at EA and answered several student questions. One of the interesting concepts he spoke about was the “layers in a cake” model EA uses to attract and retain customers across different demographics. By having a multitude of products among various gaming genres, EA can target all demographics of gamers, from hardcore teenage gamers to the casual, mobile gamer. As teenagers age and become more casual gamers they simply become another layer in the cake.
The next speaker was Brad Margolis, the director of executive development and organization effectiveness, who graciously met with the group for nearly two hours. He spoke at length about various organizational psychology and innovation concepts and gave students a hands-on approach to the problems he faces with teams and the solutions he implements. The students were tasked with finding the correct path through a life-size electric maze as a team, without talking and within a time limit. The activity demonstrated the importance of communication and having a plan. During the students’ first attempt, communication was poor and there was no system in place to identify and remember the correct and incorrect paths. However, after discussing their errors with Margolis, crafting a systematic approach to the maze, and developing non-verbal communication methods the students succeeded.
One of the important teachings of this activity was the value of failure, a theme echoed by many of the companies on the visit. When students encountered an incorrect path they reacted with disappointment, a natural human reaction to failure. However, Margolis explained that this was an incorrect way to react since doing so made team members hesitant to try a new path and cost the students valuable time. In the real world, companies that have negative consequences for failure stifle innovation as employees become apprehensive to try new ideas. Instead of groaning or sighing whenever the team encountered an incorrect path (forcing students to go back to the beginning of the maze), students should have reacted positively to the progress that was made in narrowing down the solution to the maze, Margolis explained. This activity is one of the ways he communicates the value of failure; as long as the failure can be learned from and is not careless, it should be valued, not punished.
At Genentech the students met with Gary Lifchus, a finance and accounting Maryland alumnus who works in the finance side at the pharmaceutical company. Lifchus first educated students in the difference between biotech and molecular pharmacology. Biotech pharmacology, Genentech’s area, refers to the use of naturally occurring biological substances and processes in the fight against diseases. On the other hand, molecular pharmacology deals with engineered molecules that are unnatural to the body. Biotech pharmacology is more favorable due to the significant decrease in side effects through the use of naturally occurring substances and mechanisms. Silicon Valley is a hotbed of biotechnology, and Genentech is considered the founder of the industry.
He also explained the drug patent process and the difficult decision of when to apply for a patent. As soon as the drug company applies for a patent the 20-year-patent window begins to expire. However, wait too long to file and companies run the risk of a competing company discovering the same drug. In addition to discussing Genentech and his career, Gary compared the East Coast to the West Coast, having lived in both places extensively. One of the major advantages of the West Coast, Gary explained, is the vast amount of opportunities available. Because of the large amount of innovation along the West Coast, things tend to be more fast-paced, which creates opportunities for skilled professionals.
Knowledge is Power Program (KIPP)
Students visited the KIPP Bridge Charter School in Oakland to explore innovation in education. The school is part of the Knowledge is Power Program (KIPP), which “is a national network of free, open-enrollment public schools dedicated to preparing students in underserved communities for success in college and in life.” KIPP schools utilize longer school days and school years with an emphasis on character development and college preparation.
University of Maryland students participated in a Q&A session with KIPP students and faculty and were also given a tour of the school and KIPP classes in progress. KIPP students are immersed in an atmosphere that fosters character development and college aspirations, with character promoting phrases and college banners lining the hallways. The class experience also encourages student participation, and a non-verbal system of receiving student feedback for teachers keeps class disruptions to a minimum. As a result of the KIPP approach, the percentage of KIPP students who complete four-year college is greater than the U.S. average and more than three times the average for low-income students.
The visit also served a dual purpose as students were able to witness the use of the Khan Academy program, a self-learning online library of thousands of lessons on everything from arithmetic to physics, finance and history. The program allows students to learn at their own pace and explore their interests and also provides useful data to their teachers. KIPP students enjoy using Khan Academy, and their teacher praises the program’s ability to create individualized lesson plans for each student.
Amazon Lab 126
Lab 126 is the hardware R&D arm of Amazon where devices such as the Kindle were born. Students met with a UMD alumnus who spoke about his career path and experiences living and working in Silicon Valley. Though the lab was highly secretive and the speaker could only speak in generalities, students gained great insight into the product development process for large innovative companies such as Amazon. The speaker also discussed employment NDAs and the difficulty companies face in enforcing the agreements in California. This has resulted in a lot of turnover between Valley companies and makes it challenging for innovative companies like Amazon to protect their intellectual property. One interesting concept the speaker brought up was the idea of co-opetition, which is pervasive among today’s leading technology companies. The relationship among these tech companies is complex, and they often collaborate on certain projects while fiercely competing in other areas. For instance, Apple’s A5 processor is manufactured by Samsung despite the fact the two companies remain in a bitter patent dispute.
Zoosk is an online dating website with a social networking element, which the company calls “social dating.” Students met with co-founder Alex Mehr, a Maryland alumnus. Interestingly, the name Zoosk was chosen because many successful tech companies have two o’s in their names (Facebook, Yahoo, Google), and “Z” and “X” are considered sexy letters, Alex explained. Also, because the name means nothing in any language it can be used internationally. One of the important ideas Mehr spoke about was the concept of minimum viable product (MVP) and the importance of getting a product to market and testing it before worrying about perfecting it or adding a multitude of features. Continually testing MVPs allow developers to gain valuable insight that can be used in future iterations and also enables developers to be more agile in the product’s development.
Similar to the concept of MVP, he explained how segmenting the customer base can be one way to test new features or pricing schemes on a small scale. When exploring the viability of switching from a free to paid service, Zoosk first tested the idea on its Australian customers. By segmenting the customer base to a geographic region, Zoosk was able to test its new pricing strategy while limiting the possible backlash from having two different prices for its service. After the switch to the paid service in Australia was deemed successful, Zoosk rolled out the new pricing model worldwide. Facebook is another company that regularly segments its users by beta testing new features among randomly selected users.
Mehr also spoke about the importance of entrepreneurs being able to “pivot” their product since markets captured by startups are usually fast evolving. The founders originally released a Facebook app that simply allowed users to rate each other’s “hotness” before they transitioned to an online dating website. After encountering the paradoxical problem of users canceling their membership once they found a partner, the founders pivoted their product to include an element of social networking. Zoosk now allows couples to profile their relationship and share with friends and family, and they are retaining more couples as a result.
During one of the most highly anticipated visits, students met with Pedro Canahuati, a site reliability engineering manager. The job of a site reliability engineer is self-explanatory – ensure the reliability of the Facebook site and mobile app. With nearly one billion active users, any downtime results in a large number of frustrated users and lost advertising revenue, so the job of site reliability is extremely important.
Students were also granted a limited tour of the building. Graffiti lines the walls in an effort to spur creativity, and phrases like “move fast and break things” are prominent. Canahuati explained how Mark Zuckerberg’s philosophy is to roll out new features in beta form so engineers can gain valuable feedback quickly; it doesn’t matter if the features have bugs. The culture is fast paced and is exemplified by the “move fast and break things” quote that emanates from the company’s hacker culture. Facebook regularly hosts hackathons in which engineers spend all-night devising new features and ideas before pitching them to the company. Engineers are instructed to work on something other than their day-to-day responsibilities and many great ideas result from the short periods of intense collaboration. One interesting observation several students noted was supply of basic toiletry products in the company’s bathrooms, such as toothbrushes and razors. The culture and expectation at Facebook is clearly that employees will work hard.
Students met with Rajeev Batra, a partner at the venture capital firm. With over $3 billion assets under management, Mayfield is a prominent player in the Silicon Valley venture capital space. Batra detailed his journey from an undergraduate electrical engineering student at Maryland to partner at Mayfield, and he focuses on companies in the enterprise software, SaaS, analytics and consumer sectors. Mayfield’s tagline is “investing in relationships,” and he explained how the company is more interested in investing in the entrepreneur as opposed to the idea, using the analogy of investing in the jockey and not the racetrack. He gave students a brief overview of how the venture capital industry works and explained its cyclical nature tied to the tech industry. It can take up to ten years for an investment in a startup to fully appreciate in value, and this long cash cycle creates challenges in the industry; VC funds are almost always looking to obtain new capital.
Cube makes cloud-based point of sale software that works across many devices and platforms, including Windows, Mac, Android, and iOS. The Y Combinator company was founded in 2011 and offered students the unique perspective of seeing a startup in its beginning phase; the company had less than 10 employees and operated out of a house at the time of the visit. Students met with Maryland and Hinman CEOs alumnus Charlie Pinto, one of the co-founders, and several other Cube employees who spoke about the history of Cube, the VC funding process, and in general about working in startups compared to large corporations. One Cube employee recounted his two year stint at a large tech company and spoke about the slow pace and the insignificance of being just one employee at a company so large. He recalled spending several hours one afternoon just to decide whether to move an icon four pixels to the left. At Cube he is making a large impact on the product on a daily basis. His story helped persuade many of the engineering and computer science students away from the oft-followed large corporation path.
AccelOps provides integrated datacenter monitoring and business service management software delivered as a virtual appliance or software-as-a-service (SaaS). Students met with Partha Bhattacharya, co-founder, CTO and VP of engineering, also a University of Maryland alumnus. Bhattacharya began his career at a large tech company and decided to leave after feeling like his work was having little impact on a company so large, a theme echoed by many of the trip’s speakers. After selling his first startup to Cisco, Bhattacharya founded Accelops. One of the challenges he spoke about was attracting and retaining talent. With so many high tech companies in the area that offer employees endless perks, it is difficult to compete for talent.
Students met with Jimmy Lyons and several other Google employees at the company’s Mountain View headquarters. Adding excitement to the visit, the Turkish president was visiting that day, and he and Google co-founder Sergey Brin ended up walking right by the class. Lyons and his colleagues spoke about their journey to Google, the company’s now famous 20 percent time, the high level of autonomy offered to employees, as well as some of their current and past projects. One of the important concepts Lyons spoke about was the idea of creating a high quality product first, then figuring out ways to monetize it, a strategy Google has used extensively. This idea was also mirrored by Alex Mehr, co-founder of Zoosk, who began the online dating site as a free service.
Students were also able to tour the vast campus and observed firsthand many of the perks offered to employees. There are large fields where employees can play sports and relax, Google bicycles to ride around campus, on-site and free cafeterias, among many other things. These amenities increase employee morale, foster creativity and collaboration, and increase productivity, and many students remarked about the general air of happiness and collaboration evident on the campus.
WePay is an online payments processor that targets groups, non-traditional merchants, and individuals. The company’s developer-friendly API allows merchants to accept payments directly on their own site, and the low fees for bank payments (just 1% + 30 cents) are attractive for individuals. The students met with Rich Aberman, COO, who co-founded the company with his friend Bill Clerico, CEO, in 2008. Aberman gave students a highly transparent presentation on their journey as founders and how the company has progressed over its four years of existence, which included a presentation from a recent VC fund pitch. He touched on the pivoting concept students had been exposed to at several of the earlier visits as well. Initially, WePay focused on fraternities and individuals collecting group payments but has shifted much of its efforts towards non-traditional merchants, which he believes offer a higher revenue potential.
Interestingly, Aberman attributed much of their success to their arrogance in the beginning stages. Few people would have quit NYU law school and an investment banking job, and many would have given up after making little traction after a year, but Aberman and Clerico were determined. They both grew up on the East Coast and founded WePay in Boston, so Aberman’s perspective on East Coast versus West Coast entrepreneurship culture was informative. Like some of the previous speakers, he spoke about the lack of resources available for entrepreneurs on the East Coast as well as the reputational gamble he and Clerico took by straying off the beaten path; almost all of their peers started careers in finance, consulting, and law.
The highlight of the trip for many students was the special, after hours visit to Pixar hosted by VP of finance and strategy and Maryland alumnus, Marc Greenberg. Students were treated to a guided tour of the awe-inspiring building and its numerous displays and artifacts from the award-winning films, and Greenberg generously stayed late into the evening answering student questions. His talk about his role at Pixar was insightful and gave students a great glimpse into the machinery that works behind the scenes to make the films possible. One of the more impressive facts was the amount of computer power necessary to process the films’ complex scenes, some of which require hours of computing time just for a single frame. Part of his job is to make sure the studio’s employees have the necessary resources for such large undertakings and to prevent the finance side of the business from getting in the way of creativity and art.
Greenberg also spoke about Steve Jobs’ impact on Pixar, which was especially interesting to many students. Jobs had tremendous influence on the construction of the studio’s building, and his goal in the design process was to foster as much collaboration and creativity as possible. The building has a giant atrium in the center with a cafeteria, gift shop, coffee shop, and restrooms because Steve wanted the artists and computer geeks to work together, and forcing them to mingle was one way to ensure this. Jobs even went so far as to require the steel beams inside the building be bolted by hand instead of welded so that the studio would have more of a handmade feel; Jobs argued that since the movies are handmade, the building should be as well.
Greylock Partners was founded in 1965 and is a venture capital firm with $2 billion under management. The firm is well-respected in the VC industry and was an early investor in LinkedIn and Facebook. Greylock’s strategy is to look for driven and passionate entrepreneurs building disruptive consumer and enterprise software and services. Students met with UMD alumnus Jeff Markowitz, Talent Partner; Tom Frangione, COO; and Julie Deroche, Director of University Talent. All three had interesting career paths to share with students. Frangione began his career in consulting before co-founding two venture backed startups and ending up at Greylock. Markowitz majored in accounting and worked with Deloitte and Touche early in his career before moving to the venture capital industry. Many of the students on the trip are interested in pursuing careers in consulting and public accounting, so Frangione and Markowitz were able to offer great perspectives on long-term career options in those fields. Deroche was previously head of college recruiting for Mozilla and is continuing that role at Greylock. She was able to offer the students excellent advice in obtaining jobs at high-tech companies.
Yammer creates an enterprise social networking platform that is used by more than 200,000 companies worldwide. The platform allows employees to collaborate across departments and geographies by creating an environment that makes communication and content collaboration seamless. Students met with Maria Ogneva, a University of Maryland alumnus who is head of community at Yammer, as well as several of her colleagues. Ogneva spoke about her journey to Yammer and explained the value Yammer offers to corporations. She was actually hired by Yammer as a result of a blog post she wrote, and she spoke about the opportunities that come from having a strong social media presence. After a Q&A session with Ogneva and her colleagues, students were given a tour of the office. Yammer had perhaps the most lenient rules for employees out of all the companies visited on the trip, with employees bringing pets to work and having wine and liquor at their desks to unwind. She told the students Yammer’s next steps would be to expand its product into business data applications such as CRM and ERP. Interestingly, Microsoft agreed to acquire Yammer for $1.2 billion soon after our visit to integrate it with its enterprise offerings.
LaunchSquad is a public relations and marketing firm for small businesses and startups. The company “helps high-growth companies build awareness, grow their business and become market leaders through a full suite of public relations and social media services,” and was co-founded by Jason Throckmorton, a University of Maryland alumnus, who spoke to the class. Throckmorton spoke about the work he does with LaunchSquad and how it enables small businesses to grow their business. He also echoed Maria Ogneva’s advice about maintaining an online presence. When hiring new employees, Throckmorton regularly Google’s the applicants name to check their writing quality in blogs and other social media. Since it is difficult to distinguish applicants based on resumes alone, those who have a strong online presence get the edge. Students also noted that WePay is a client of LaunchSquad, and Throckmorton explained how the firm was behind the highly successful prank in which WePay dropped off a 600 pound block of ice with hundreds of dollars and the words “PayPal freezes your accounts” locked beneath the surface at a PayPal Conference in 2010.
“This class will likely be the most useful one of my undergraduate career. This was the only class that I was able to have a hands-on experience with innovation and entrepreneurship. This class was incredibly helpful in learning more about my career goals. It has inspired me to be more entrepreneurial and has given me an idea of how successful ventures are formed." – Vinayak Sachidananda
“After taking this course and reflecting on my experiences, I really believe that this course has not only educated me but has also changed my life. I think that the opportunity to see entrepreneurs and life in the Silicon Valley is something that I could never get from another course at the University of Maryland." – Vighnesh Sachidananda