Finance: Inside the Ivy League's new startup factory — the tech grad school trying to mint the next generation of Mark Zuckerbergs

Over Cornell Tech's six-year history, 40 startups have raised around $32 million in funding.

• Cornell Tech is a new graduate school in New York City that wants to "build a better digital future."
• The Studio Program, the school's core curriculum, helps students build a company from conception to prototype.
• Over Cornell Tech's six-year history, 40 startups have raised around $32 million in funding.

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"We are definitely not the startup school," Daniel Huttenlocher, the dean of Cornell Tech, said to me recently. One might be forgiven for thinking so.

Cornell Tech, a joint partnership between Cornell University and the Technion-Israel Institute of Technology, the oldest university in Israel, was born from a public competition launched in 2010 by then-Mayor Michael Bloomberg to develop an elite graduate school of engineering and applied sciences in New York City.

Bloomberg aimed to expand the city's growing Silicon Alley scene and develop the kind of virtuous cycle that exists between Stanford University and Silicon Valley. His administration estimated that the school would generate $23 billion in economic activity, 8,000 permanent jobs, and hundreds of new companies over the next several decades.

The school, now in its sixth year, is a new kind of graduate school — multidisciplinary, hands-on, and explicitly tech-focused — that is still building its reputation.

While it teaches a combination of graduate course heavyweights — business, computer science, law, and electrical engineering, among them — it also has newly-invented disciplines. Connective media, for example, aims to combine computer science with sociology and psychology to create "human-centric" engineers. Like all startups, it's nothing if not ambitious.

"Our core value is about building the future," said Huttenlocher. "We want to build a better digital world that has a focus on humanity and on the things that matter to people.”

For Cornell Tech, that future is dependent on bringing its vision of world-leading research on digital technology and innovative, impactful companies to fruition.

Last year, the school moved into its permanent home on Roosevelt Island, a gleaming campus of high-tech buildings. We visited recently to get an inside look.

Cornell Tech moved to its permanent location last year, a newly constructed campus on New York's Roosevelt Island. Prior, the school was housed in a temporary space in the Google Building in Manhattan's Chelsea neighborhood.

Like any startup, Cornell Tech is dealing with iterating and scaling its product. Each year, both the size of its classes and the number of degree programs it offers grows.

Over the last five years, the school has graduated slightly more than 300 masters and doctoral students with a faculty of around 30 professors.

In the coming years, the plan is to grow to more than 2,000 graduate students at a time and hundreds of faculty and staff.

Cornell Tech is still building its reputation. Its Ivy League-grounding is a head start, but in order to become a leading graduate institution, Huttenlocher says two things have to happen:

1. Its doctoral programs and faculty must produce ground-breaking research on digital technology and its economic and societal impact.

2. Its master's programs must produce graduates that get excellent tech industry jobs or produce innovative companies.

The Emma and Georgina Bloomberg Center, named after former mayor Michael Bloomberg's daughters, is the centerpiece of campus. It aims to produce as much energy as it consumes, housing more than 1,400 solar panels on its roof.

The Bloomberg Center is the school's primary academic building. Its sleek minimalistic aesthetic, casual huddle spaces, and colorful meeting rooms evoke the offices of Silicon Valley tech companies.

The school's nods to the tech industry go deeper than the white surfaces. Rather than have separate offices or floors for different departments, Huttenlocher and his team opted to have all the departments mixed together.

"We have a very open interactive environment," he said.

As if in a nod to startup culture, faculty offices are in an open-floor plan. The school wants its faculty to be connected to the tech industry, whether working on their own startup, consulting, or advising. "Most of them are not in their office more than a quarter or a third of the time," Huttenlocher said of faculty.

Rather than evaluate faculty solely on their teaching and research, Huttenlocher said faculty are evaluated in a third area — engagement. For some, that means developing their own startups or working with nonprofits or commercial ventures.

"I want our faculty to have a longer list of potential conflicts of interest than a shorter list," said Huttenocher, who was named to Amazon's board of directors in 2016. "We see those conflicts as evidence of what you are doing outside and we value that and reward that."

For example, Karan Girotra, a professor of operations and technology, is one of the founders of Terrapass, a social enterprise that works with individuals and corporations to offset their carbon emissions with funds for greenhouse gas reduction projects. Chief entrepreneurial officer Greg Pass was the first CTO and VP of Engineering at Twitter and is now an active advisor to numerous startups, including Medium.

In some cases, tenured professors are working as much as half-time at the school and half-time on other ventures.

While the school has an entrepreneurial bent, that only tells half the story. Huttenlocher has attempted to assemble an all-star faculty, whose research makes waves and draws students.

Huttenlocher's first hire was Deborah Estrin, a leading computer scientist in the field of small data who has won numerous accolades over her decades-long career.

Estrin designed the school's two-year Health Tech program, introduced in 2015, which combines study in computer science, information science, and health systems to find new ways to apply technology to healthcare.

Sonia Sen, a computer scientist, told Business Insider that she applied to the health tech program shortly after finishing undergrad at the University of Arizona because Estrin was leading the program.

Sen had never thought of grad school before that, primarily because she wanted to get away from theory and start building technology.

"I realized that this program was everything I wanted to do," said Sen. "It's not just about building technology for technology's sake, but about building technology that people can benefit from."

Sen, who graduated last spring, is now the head of product at Datalogue, a Cornell student-started company that uses artificial intelligence to automate data preparation for Fortune 1000 companies. The company raised $1.5 million in seed funding last February.

One of the school's main goals is to build a bridge between high-tech industries and academia. The Tata Innovation Center "is intended to be the embodiment of that mission," Kate Bicknell, a senior vice president at Forest City New York, the developer of the building, told Business Insider.

The Tata Innovation Center is divided between Cornell Tech, a co-working space for early-stage companies, and offices for larger corporations. Housed in the building, Cornell's Studio program forms the core of all degree programs, from engineering and computer science to business.

The Studio curriculum is the foundation of the school's philosophy: education should be experiential, hands-on, and full of trial and error.

In the fall, students take a class called Product Studio, where Cornell brings in around 80 or 90 organizations like Citi, Verizon, and investment firm TwoSigma who come up with "product challenges" for multidisciplinary student teams to complete.

In some ways, it's preparation for the spring semester's Startup Studio, a mandatory class in which students collaborate to produce a business plan and a product within 14 weeks.

Students are encouraged to form teams across disciplines so that engineers, MBAs, and law students, among others, can combine their backgrounds to solve problems more effectively.

"Someone with a business background can be a really effective addition to a team of engineers thinking about how to create a computer vision or machine learning product," David Tisch, the head of Startup Studio and a major Silicon Alley venture capitalist, told Business Insider.

For many students, the Product Studio class was their primary reason for entering the program, a place where they could launch their long-gestating startup idea in a supported environment. For others, it's a way to learn the entrepreneurial process.

Tisch, Huttenlocher, and Pass, the former Twitter CTO, built the concept from scratch after experimenting in Cornell Tech's initial years to fulfill the school's goal of students turning theoretical knowledge into practice.

The curriculum, according to Tisch, is a combination of the program he developed at Tech Stars NY, a rigorous tech accelerator program in New York he co-founded, the program used by elite venture capital fund Y Combinator, and several startup growth classes given at the Stanford Graduate School of Business

"We want to give students an entrepreneurial mindset," said Huttenlocher. "Entrepreneurship is about seeing things differently. It’s a way of thinking."

Like the rest of the school, the Studio curriculum has been iterated. Each year, according to Tisch, the curriculum of the Studio changes about 20%, meaning by now, it's fourth year, it's mostly a new curriculum.

For example, Cornell changed how it sourced projects for its Product Studio because companies were submitting ideas that were too narrow. The school now sources "product challenges" that are broad enough that a multidisciplinary team can tackle it, not just a software engineer.

"Product challenges" now tend to start with an open-ended question. A 2016 challenge from Weight Watchers asked students: How might we tackle teenage weight loss without teens feeling like they are on a program?

Meanwhile, in the first years of Startup Studio, students had to generate an idea and build the business in a single semester. That proved to be too much ground to cover.

Now, Tisch teaches a mandatory Startup Ideas class in the fall where he introduces different ways students can generate ideas, including personal pain points, market analysis, and translating existing concepts to new markets (i.e. Uber for X).

In some cases, the tie between Product Studio and Startup Studio has grown stronger. Noshin Nisa, a 24-year-old student in the one-year Master in Computer Science program, is using a computational learning tool for kids she developed for a TwoSigma product challenge as her business project in Startup Studio.

Before Startup Studio can begin, students must form teams and apply with an idea. The windows of the studio where student-companies meet to work on their projects is littered with post-it notes for business ideas.

Tisch said that he looks for ideas that are commercially viable, scalable, and realistic enough to be executed in some capacity in four months.

Tisch has a reputation among students for being blunt, brutal, and brilliant. The kind of professor who doesn't suffer fools lightly.

Shortly after I left a Startup Studio class he was teaching about how best to approach VCs, he used me as a cautionary tale.

My offense, I believe, was asking what he did prior to Cornell Tech. The lesson for students: When you only have a few minutes to meet an important person, don't waste time asking something you could have researched beforehand.

"He's the kind of person you want to impress," Carolina Peisch, a 29-year-old student in the school's Dual Master's Degree program in Connective Media, told Business Insider. "He's a little intimidating.”

Trends emerge among the student ideas, frequently based around the buzzier techs in the news that year. One year saw a swath of machine learning and chat bots, the next augmented and virtual reality.

This year, enthusiasm for blockchain technology became so prevalent that it became a widespread joke amongst the class, John Quinn, a 30-year-old student in the one-year Johnson Cornell Tech MBA program at Cornell Tech, told Business Insider.

"Whenever someone has a question they can't answer, someone will just say, 'the blockchain can fix it,'" Quinn said.

A recurring trend seems to be startups that have a social impact in healthcare. Healthcare, according to Tisch, has become a consistently growing area of student focus, perhaps unsurprising given that the school has made the industry a key place it wants to innovate.

Examples include ThreadLearning, a data platform for autism students that raised $300,000 last May, and SpeechUp, a software that gamifies speech therapy to make it more accessible.

SpeechUp emerged from conversations between co-founders David Cheng and Luis Serota, who both grew up going to speech therapy classes that were expensive and difficult to keep up with.

"It's awesome when you see students coming in with a passion around a mission that they can combine with an actual product," Tisch said.

The class's final exam is unique: pitch your company to the class and show off the product. Most business schools, Tisch said, stop at the business plan. Cornell Tech wants its students to build the prototype and put the business into action.

The hands-on aspect of the curriculum is what drew Cheng, of SpeechUp, to the program. He used to work in tech consulting and coded small side projects in his spare time.

"It's all baked around students learning by doing things and building technology. Then you work on productizing them. That resonated with what I enjoy doing and what I believe in," said Cheng.

"To get to spend a year learning like this, it's the equivalent of a lifetime of doing side projects."

For the students serious enough about taking their idea to market post-graduation — about 20% of the class, said Tisch — Cornell offers its annual Startup Awards, judged by Huttenlocher, Tisch, other members of the Studio team, and industry VCs.

The best ideas, so far around five each year, receive pre-seed funding and a year of office space in a co-working space in the Tata Innovation Center.

That money, which has grown from aroun $40,000 initially to $100,000 last year, ideally provides enough run time for a nascent startup to pitch VCs and obtain capital within a few months, said Tisch.

That timeline has proved ambitious thus far.

One of the most successful Cornell Tech companies to date is Uru Video, a software using computer vision and machine learning to place ads in the background of existing videos. One of the May 2016 winners, Uru secured $800,000 in pre-seed last January.

Meanwhile, SpeechUp, a 2017 winner, has chosen to bootstrap for the time being and will begin seeking funding at the end of March, according to Cheng, who graduated in 2017 along with co-founders Serota and Steven Chen. The company's other co-founder, Eliza Bruce, completed a master's degree at the Parson's School of Design over the same time.

But Cheng said he isn't worried.

"We've been able to get a meeting with any VC in New York because of the wealth of connections [Cornell] provides in its network," Cheng said. " Come time to raise, there's a huge amount of resources we're ready to tap into."

Tisch, and the Cornell Tech team, are trying to introduce new ways to strengthen the links with the Silicon Alley venture capitalist network he and others at the school have long been a part of.

Twice a semester, around 100 industry insiders come to the Cornell campus to critique student projects.

This year, for the first time, Tisch will host a VC Day, when around 40 VCs come to meet the teams that want to spin out, find the companies that intrigue them, and track their progress.

"The hope is to bring the right investors around the table, meet the students early, see their growth, and get involved," said Tisch.

In addition, the school has full-time staff whose job it is to help Cornell start-ups spin out with legal advice and connections with early investors, according to Huttenlocher.

The Tata Innovation Center was designed to further the school's engagement with industry. While the bottom floors are for Cornell, each floor above it progressively adds companies and investors that want to be engaged with the school.

The idea, according to Bicknell, senior vice-president at Forest City New York, is to have the building filled with companies across various industries and at various stages of their life cycle (pre-seed, growth, established) and then encourage them to mix.

"It's not just about office space. It's about what the opportunity of being here means that you couldn't get anywhere else," said Bicknell.

Cornell and Forest City New York hope that the common amenity spaces, like this one, encourage further mixing between student startups and established companies.

The third floor of the building is the co-working space where the Startup Award winners work out of, among other early-stage companies trying to get off the ground.

In the floors above, TwoSigma has established its Collision Lab for its research engineers to tackle difficult problems, Italian chocolatier Ferrero SpA has established a new office for its Open Innovation Science division, and Citigroup established an office to work on emerging technologies like blockchain and machine learning. The offices also provide the companies with a permanent recruiting presence on campus.

The school isn't finished developing. The Verizon Executive Education Center will have space for large classes, academic conferences, and workshops. It will be connected by a large hall to the adjacent Graduate Roosevelt Island Hotel, a 195-room hotel. Both are due to be completed next year.

Source: CurbedNY

The school plans to turn all of this open space into buildings by 2043. But, of course, that relies on the school developing into the academic and industry powerhouse it is striving to become.

As of this year, the school has launched 40 companies that have raised around $32 million and are currently employing more than 170 people. In October, a Cornell Tech-launched company was acquired for the first time.

But building a reputation that results in behemoths like Instagram and Snapchat being launched from the school, as has happened at Stanford, takes time.

"Cornell Tech is a startup and startups take a while to figure themselves out," Tisch said.

Over Cornell Tech's six-year history, 40 startups have raised around $32 million in funding. Read Full Story