An expert in entrepreneurship, Toby Stuart has built his career studying networks while tapping his own impressive connections to create two blockbuster courses.By Ronna Kelly
“Does anyone take snake oil?”
Silence. Not one student in Haas Professor Toby Stuart’s MBA Entrepreneurship class raises his or her hand. Stuart is leading a case discussion about a biotech company developing a drug to stop aging, and he’s on a roll, posing all sorts of provocative questions as he bounds up and down the aisles like a talk-show host, a cup of Peet’s coffee always in hand.
While the snake oil question draws blank stares, one thing is certain: Stuart is a wildly popular teacher who is always on the move. He has reshaped the school’s full-time MBA Entrepreneurship course into what some students call their best class ever and created a star-studded, career-changing Silicon Valley Immersion Week for the new Berkeley MBA for Executives Program. When he’s not teaching Berkeley MBA students, Stuart may be leading an executive education course at Lawrence Livermore National Laboratory, meeting with Silicon Valley venture capitalists and San Francisco entrepreneurs, advising PhD students, or working on one of his half-dozen research projects.
“Among my problems in life: I’m easily bored. I like to switch up what I do,” Stuart admits. “I love my job because I do 20 different things in a typical day.”
Within that juggling act, however, there’s a theme that courses through most of his work: networks—a fortuitous focus given the emergence of social media. Stuart is best known for his research on how social networks contribute to the entrepreneurial process. But his wide-ranging interests also have led him in several other directions only loosely related to networks, including gender within organizations, communication silos, and most recently, which Chinese startups cook their financial statements.
One of the youngest professors to earn tenure at the University of Chicago, Stuart has won several awards, including the $50,000 Kauffman Foundation Prize for entrepreneurship research. Before coming to Haas in 2010, first as a visiting professor, he previously worked at both Harvard and Columbia business schools.
Ask Stuart where he’s from and he’ll answer, “That’s a complicated question.” After going to high school and skiing in Salt Lake City, he decided to study economics at Carleton College in Minnesota in part because it had the longest winter break among small liberal arts schools.
He was hardly destined to become a ski bum, however. His father was an academic and, like 70 percent of Carleton grads, Stuart planned to eventually get a PhD. His first taste of academia came when he landed a job at Harvard Business School, which hired recent grads from liberal arts colleges to write cases.
“That still may be the best job I ever had,” Stuart says. “It paid as well as a consulting firm, but instead of making spreadsheets, I traveled around the country interviewing CEOs and writing strategy cases when I was 21.”
After hearing Jim Baron, a Stanford professor at the time, present his work at Harvard, Stuart set his sights on heading west for his PhD. He had developed an interest in the evolution of technology as an undergrad, so Palo Alto was the right place to be—at exactly the right time.
“I came out to Stanford in 1991 and found myself in the heart of Silicon Valley with the chip industry in transformation,” he says. “By the time I finished my PhD, Netscape had gone public, the Internet was taking off, and I found it all very interesting.”
At Stanford Stuart connected with Joel Podolny, then a new assistant professor and social-networks researcher, who became Stuart’s adviser and guided his early work on networks. Podolny later became dean of the Yale School of Management and in 2008 was hired by Steve Jobs to become dean of Apple University, where he still is today.
After collaborating with Podolny on research related to patents in the semiconductor industry, Stuart went on to investigate new venture creation in biotechnology, the venture capital syndicate network, and patenting and company creation among scientists.
“One of the most important things we can do for students is not just teach them specific knowledge and skills, but help them match their interests to their career path.”
During his time in Chicago, a discussion on why the region doesn’t have more biotech firms led Stuart to study clustering in the high-tech industry. Later, at Harvard, Stuart began a series of projects on email networks, organizational structure, and career advancement in large companies. After examining more than 100 million emails of 30,000 workers, Stuart and his doctoral students were surprised to find how infrequently workers communicated across silos, and that women are more likely to do so than men.
These days, Stuart is wrapping up studies on the effects of scientific prizes and starting a project analyzing matching on a dating website.
“At every moment, websites with a social component generate reams of data about how people choose to interact and who they choose to interact with,” he says. “I’m now working on projects that are massive by the scale of my early work and weren’t feasible then.”
Stuart says he had no idea the Web would evolve this way when he began studying networks. “I was a little bit slow to become a believer in the social web. I’m still ambivalent,” he admits, wondering about the value of a relationship on LinkedIn, for instance, when he hardly knows many of his connections.
Stuart may have a point, but the power of his network has become abundantly clear during his time at Haas.
His MBA Entrepreneurship course has featured an impressive list of speakers, including venture capitalists from Silicon Valley’s top firms; startups such as CloudFlare, founded by Harvard MBA students, and TubeMogul, started by Berkeley MBA students; and even a billionaire investor who was promised anonymity.
But Stuart doesn’t just hand over the podium to speakers: He brings even more depth to the knowledge guests share in class. After Andreeson Horowitz partner Margit Wennmachers urged female students to learn coding, Stuart contended that limited experience with coding doesn’t fully explain why women are dramatically underrepresented in Silicon Valley and offered to hold a session outside of class to discuss gender and entrepreneurship further.
“He spent about two hours with us having a casual conversation,” says Kristen Duffel, MBA 15, one of a half-dozen students Stuart met with in the Haas courtyard. “Little things like that just showed that students are at the forefront of his mind and he really wants us to do well and teach us all that he can.”
Duffel, who is working on an early-stage startup, calls Stuart’s Entrepreneurship course “far and away the best class I have ever taken.”
“He’s so energetic and engaging,” she says. “You just walk out of the classroom every Tuesday thinking that it was the best three hours of the week. I loved it.”
Students say Stuart has an unparalleled mastery of case method teaching, which he infuses with unexpected humor. In the case of the biotech company searching for an elixir to end aging, Stuart jokingly shows slides of the firm’s “board of directors” before and after its Series A round of funding—and they go from senior citizens to small children.
He peppers students with questions about the firm’s chances of success, poking fun at its tests on roundworms and asking whether it should pursue the nutriceuticals market. Along the way, he revises a hockey-stick shaped probability curve to visually illustrate the company’s odds of meaningfully extending lifespan, which he estimates start well below a tenth of a percent.
But, Stuart asks, if the company succeeds at slowing down aging, how big is that? “Huge,” one student answers.
“Toby really drove home to us the idea of the hockey-stick growth model in early-stage companies,” says Bill Blaustein, MBA 15, who is opening the Brazilian market for Uber this summer but hopes to eventually start his own business. “He talked about a number of companies that get stuck in the dip of burning cash, and that what investors look for are companies that can prove they can get out of the dip, as demonstrated by numbers like customer lifetime value, customer acquisition costs, and other such metrics.”
Stuart doesn’t hesitate to put students on the spot, either. Take the class about a Zipcar case.
“Who likes Zipcar?” Stuart asked, and several students raised their hands, recalls Vivek Ahuja, MBA 15, a former Navy submarine officer. Then he asked, “Who really likes Zipcar?” and some students lowered their hands. Then Stuart asked, “‘Who really, really likes Zipcar?”
“I still had my hand up,” Ahuja recalls. “He said, ‘All right, go to the front of the class and pitch everyone.’”
“I was nervous and my heart rate started to go up a little bit, but my next thought was, ‘I’m just going to do it,’” Ahuja adds. “At the end everyone was applauding me.”
And so Ahuja experienced pitching a business idea firsthand. Overall, students say Stuart’s class gives them a much deeper understanding of the myriad challenges faced by entrepreneurs and the many forms entrepreneurship can take. “Entrepreneurship can come in a more corporate setting. It also can be your garage-based startup and anywhere in between,” says Duffel. “It’s not just what you read on TechCrunch.”
Such takeaways are intentional. Before Stuart arrived at Haas, the Entrepreneurship course focused on helping students develop a business plan. Stuart disagreed with the notion that the course should be geared to students who already have a startup idea and removed the business plan requirement. He restructured the course to serve not only future entrepreneurs but also students less certain about their career paths, bringing in guest speakers and discussing cases on everything from how to divide founders’ stock, to what’s in a term sheet, to how to exit a company.
“One of the most important things we can do for students is not just teach them specific knowledge and skills, but help them match their interests to their career path,” explains Stuart. “Entrepreneurship is not part of the required curriculum, but I hope most students want to take the course.”
The course is now consistently over-subscribed, and Stuart and co-instructor Rob Chandra, a Cal alumnus and member of Forbes’ Midas list of top tech investors, received the Cheit Award for Teaching Excellence for the Full-time Berkeley MBA Program in May.
Bringing in outstanding, highly accomplished instructors like Chandra is also strategic, Stuart notes.
“I’ve been spending a lot of time trying to bring on board very successful, well-connected adjunct faculty who are not only superb teachers but can also help place students into the most exciting companies, introduce them to investors, and help them hone their pitches,” he says.
Stuart also tapped his network to develop the first Silicon Valley Immersion Week last fall for the new Berkeley MBA for Executives Program. In addition to teaching students in classrooms at Google, Facebook, and Airbnb, Stuart helped arrange small group visits with about 35 startups in Silicon Valley and San Francisco.
“I spent a lot of time calling friends and Haas graduates, persuading founders and CEOs of some of the region’s most interesting companies to host a group of students,” Stuart says.
The effort paid off: Students were blown away by the experience.
Joe Inkenbrandt, an engineer in the program, said visiting so many diverse entrepreneurial environments and hearing the passion of so many founders was “eye-opening” and “inspiring”—so much so that two months later he quit his job to work full time with a friend on a 3D-printing security startup.
“Going into the week, I was a little skeptical about what I would learn. Man, was I wrong,” says Inkenbrandt. “That week changed my mind: I went from ‘I can maybe help someone’ to ‘I can do this,’ and I literally turned around and did.”
Inkenbrandt was just one of at least a dozen students who said the week inspired them to consider an entrepreneurial path that they never before thought was possible.
“That’s what we mean by a transformational experience,” says Stuart. “If I can facilitate this process, there is no more fulfilling teaching experience than that.”
Professor Toby E. Stuart
Leo Helzel Chair in Entrepreneurship & Innovation
Silicon Valley Immersion Week
Classes on entrepreneurship at Google, Facebook, and Airbnb. A venture capital panel on Sand Hill Road. Founders or C-level hosts at about 35 of the Bay Area’s most interesting companies. That sums up the Silicon Valley Immersion week for the new Berkeley MBA for Executives Program, but it doesn’t quite capture the months of work that Haas Professor Toby Stuart put into creating the impressive lineup of companies. Nor does it capture how transformational the week was for students. “I thought being an entrepreneur was for 22-year-old kids with nothing to lose. But what I found from going through this immersion week was there are approaches I can take to minimize my personal risk and still become an entrepreneur,” says Neal Fornaciari, a student who works at Sandia National Laboratories. “It really helped me understand how the culture of Silicon Valley fosters and enables successful startups like nowhere else in the country.”