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The "David" of Startup Founders

As CTO and VP of engineering at the San Francisco-based e-commerce company Teespring, Lee Edwards is often interviewing candidates for his team; as an Open Scout with Bloomberg Beta, he’s always searching for promising startup investments and as an Olin graduate he likes to hire fellow alums and invest in their startups when he can.

So it's perhaps not surprising that Edwards started to wonder how Olin’s startup statistics stack up against the Goliaths like Stanford. So he analyzed the data and published a blogpost with his findings. Before he could get to it himself, a friend posted it on Hacker News, the computer science and entrepreneurship news site run by Y Combinator, deep in Stanford territory. The headline ran, “Olin College Produces Founders at 5 Times the Rate of Stanford.” The reception was pretty harsh. The Olin name is still finding its way into Silicon Valley familiarity, and the idea that a little-known school with 900 alums had outpaced Stanford in startup success drew fire. “But a lot of people hate-shared it, and the hate-sharing just got it even more views,” Edwards says.

In his analysis, Edwards found that of Olin’s alumni body of 902 graduates, 37 have founded 28 startups, 17 of which have raised $198.8 million in venture funding. In other words, 2.77 percent of its alumni have successfully founded a venture-backed startup, he writes. That amounts to “more than five times the rate of Stanford (0.51 percent), MIT (0.75 percent), Harvard (0.28 percent), or any other undergraduate institute for which data is available.”

That statement landed with a thud in Silicon Valley, where Olin can have spotty name recognition, Edwards says. He spent some time listening to his critics and ultimately published follow-up articles to clarify his methodology and look deeper at diversity. But he stands behind his findings. He pointed out, for example, that while Stanford has about 220,000 alumni and MIT has 120,000, Olin’s sample of 902 graduates is still significantly significant. “Especially when you’re comparing the percentage of founders in our population with the percentage of founders in theirs, using a Chi-squared analysis.” The P-value is less than 0.0001 when comparing the startup density at these institutions, he says.

Granted, the number of Stanford alums to have exited, IPO’d, or sold their companies is far greater than those from Olin. (Which is two.) “A big investor might say this portfolio is worth nothing right now,” Edwards says, “but it’s all about the potential.” He points out that Olin startups are assembling a nice list of top tier angel investors, including former Yahoo! CEO Marissa Mayer (and, ahem, a Stanford alum).

Just as importantly, Edwards points out, there are critical differences in student populations: Places like Stanford and MIT will annually graduate thousands of biological or social science majors, for example, who are not inclined to the entrepreneurship track. Olin is both highly selective and self-selecting: “If you’re going to be successful at Olin, you’re a person who’s totally comfortable taking a class that no one’s ever taken before,” Edwards says. “The professor might tell you on day one, ‘Hey, we’re trying this out, and it may or may not work.’” At least this was his experience as a student; some things have changed.

What hasn’t changed is the school’s do-learn focus, culture of calculated risk-taking, and the faculty’s emphasis on education over research, among other factors. “Olin is unlikely to produce a huge number of Ph.Ds, but I think we are going to produce a lot of startup founders,” Edwards says. He fully expects to see these numbers go up in the next few years, given that the average age of an Olin alum is 28. The average age of a founder is 40. He points to a wave of IPOs in the not-too-distant future—AirBnB, Uber, Slack: “All were founded by people in their late 30s or early 40s, on their second or third company. So we have a while to go before we peak,” he says.

At the end of the day, Edwards acknowledges there’s a self-serving aspect to his analysis, given the seal on his own diploma. But when he sees Stanford alums pitching to VCs, particularly in California, they always include the Stanford logo on their deck. “That makes a startup much easier to fund, because there’s a huge bias toward Stanford out here. And that’s well deserved. It’s a great school” he says. What Edwards hopes to see more and more is the Olin logo presented in a pitch. The numbers suggest he just might.