Theo Baker’s Stanford Is Real. It Just Isn’t Most of Stanford.

What forty years of alumni data say about how representative the caviar-dinner version of Stanford really is.

My wife Lijie published a piece this week reacting to Theo Baker’s new book about Stanford. She made a point I won’t try to remake: that elite access is real, and the more important question is what people do with it. I’d encourage you to read her piece. She argues better than I could that service is the better return on the kind of access Stanford provides.

I want to add the empirical companion. Because I've been watching the press cycle around Baker's book with one question on my mind: what about the other 97%?

Baker is a real journalist. He earned a Polk Award as a freshman, broke the story that ended a Stanford president’s tenure, and has written a vivid book about what he saw during four years embedded inside the institution. The set pieces are sharp. An uncredited secret seminar taught by a Silicon Valley CEO. Freshmen courted with caviar dinners by venture capitalists. An “incubator with dorms” where talent is sniffed out at orientation. None of it is invented. The seminar exists, the dinners happen, the pattern is real.

To his credit, Baker doesn't claim this is most of Stanford. He's explicit that the freshmen flagged for unicorn potential — what he calls the Plucked — are a small subset, and part of what makes the access feel illicit is that it isn't widely distributed. The empirical question I want to add is what happens to everyone else: the rest of any given Stanford graduating class who don't get courted with caviar, who never see the secret seminar, and who are largely missing from both the press coverage and the policy imagination that runs off it.

I’ve spent fifteen years studying this. With the late William F. Miller, former Stanford Provost, I built a multi-decade dataset of Stanford alumni-founded companies. Every cohort, every venture identifiable, longitudinal data on outcomes. The aggregate numbers are familiar by now: roughly 40,000 active companies tracing back to Stanford, $2.7 trillion in annual revenue, the rough equivalent of a top-ten national economy if the alumni cohort were a country. The 40,000-company figure appears in Baker's book, where he attributes it to "a 2011 study." That study, with Miller, is the one I've been describing. The revenue and economy framings appear in roughly every press release Stanford has issued about its role in Silicon Valley over the last decade.

What the dataset also lets us see is the distribution. And the distribution doesn’t match the headline.

The average Stanford alumnus who became a founder started their first company roughly ten years after graduation. Not at orientation. Not as an undergraduate. About a decade out, typically after working somewhere else first. Most never appeared in any “secret seminar.” Most got their first investors through normal channels: a former classmate, a faculty contact, a Series A pitch against fifty other startups. Most worked for someone else first, sometimes for a decade, before founding anything.

About 8 percent of Stanford alumni founders started their first company within a year of graduation. About 28 percent started within five years. The remaining 72 percent waited longer than that. The average gap between graduation and first founding was roughly ten years.

The ‘quick founder’ archetype Baker writes about — the freshman or new graduate building a billion-dollar company — is the closest analog to his subjects. It’s also a small minority of an already-small subpopulation of Stanford alumni. Maybe two or three percent of any given graduating class. They’re the ones the press writes about. They are not most Stanford founders. They are an interesting subpopulation, not the population.

This matters because the policy stakes of getting it right are large. Every government on earth is currently trying to engineer a version of Silicon Valley. The Inflation Reduction Act, the CHIPS Act, EU innovation programs, China’s NEV subsidies, every American state’s “Silicon Valley of [X]” initiative. The mental model running through these efforts is something like Baker’s: elite institution plus ambient venture capital plus secret networks equals founders. If that’s right, the policy problem is to recreate the elite institution and the venture capital, and the founders will follow.

The data suggest something more specific.

In work with Yong Suk Lee, published in the Strategic Management Journal, we used a quasi-experimental approach to estimate what Stanford’s main entrepreneurship programs actually do. The Center for Entrepreneurial Studies at the Business School and the Stanford Technology Ventures Program at the Engineering School were introduced at different times in the mid-1990s, which let us compare cohorts who had access to each program against those who didn’t. The finding is counterintuitive in a way that almost no one expects.

These general programs do not appear to increase the rate of entrepreneurship. In some specifications, participation in the Business School program is associated with a roughly 35 percent decrease in the likelihood of starting a company. But the startups that do emerge perform better. Lower failure rates, higher revenues. The mechanism appears to be informational. Students learn enough about what entrepreneurship actually requires to figure out whether it’s a good fit for them. A meaningful share, having learned that, decide it isn’t. The remaining founders are better-matched, better-prepared, and produce better outcomes.

That’s a different story from “entrepreneurship can be taught.” It’s closer to “entrepreneurship can be evaluated,” and the institutional mechanisms that produce good evaluation are not the same ones that produce hype.

Selective, pre-venture programs look different again, and this is where the strongest causal evidence now sits. In a paper currently under review at Management Science, my co-authors Stefan Weik, Michael Fröhlich, Aaron Defort, Isabell Welpe and I study the Center for Digital Technology and Management — CDTM — a selective pre-entrepreneurship program in Munich that admits roughly 25 students per cohort from several hundred applicants. CDTM ranks applicants by composite interview scores with a sharp capacity cutoff. Candidates just above the cutoff get in; candidates just below mostly don’t. Their interview scores are nearly identical. The design lets us compare what happens to functionally equivalent people on opposite sides of an arbitrary line — the cleanest test currently available of whether selective programs cause high-quality founding or merely select the talented who would have succeeded anyway.

Three findings matter for the present debate. First, program participation more than doubles the founding rate, and the entire effect is concentrated in high-growth ventures. The probability of raising $10 million or more in venture capital rises from 0.7% in the control group to roughly 9% among participants — an order-of-magnitude shift. There is essentially zero effect on low-growth or lifestyle ventures. Second, the mechanism is not what most people guess. Program grades do not strongly predict whose ventures succeed. What predicts success is the thinness of a participant’s pre-existing network: engineering and computer science students, who arrive with fewer entrepreneurial connections, benefit substantially; business students, who arrive better connected to the relevant capital and talent pools, show essentially no treatment effect. Third, roughly 73% of participant co-founding relationships form across cohorts rather than within them, and 23% of participant founders receive early funding from program alumni acting as angel investors. The program is functioning as a multi-year matching market, not a curriculum.

Two pieces of context matter. CDTM operates in Munich — outside the Bay Area, outside the established VC ecosystem. The mechanism transfers. And the mechanism itself isn’t ambient Silicon Valley magic. It is a specific, designed institutional structure: competitive admission, cross-disciplinary cohorts, sustained multi-cohort alumni networks that act as both co-founder pools and informal capital. Stanford’s Mayfield Fellows Program shares these features. The Instagram co-founding story — Kevin Systrom and Mike Krieger from different Mayfield cohorts, connected through the program’s network — is the same cross-cohort matching pattern the CDTM data identifies more rigorously. Two independent settings, with very different identification quality, point in the same direction.

The Stanford effect, in other words, is not produced by ambient ecosystem magic. The Stanford effect, to the extent we can measure it causally, appears to be produced by specific, identifiable, replicable institutional mechanisms.

There’s also a timing problem with Baker’s account that I think gets undersold. Baker was a freshman in fall 2022. His four years at Stanford coincided exactly with the most extreme AI funding cycle in technology history. The pattern of VCs paying freshmen to drop out, courting eighteen-year-olds with model dinners, treating Stanford as a unicorn-spotting frontier intensified dramatically during the GPT-3-to-GPT-5 window. It’s real, but it’s also a peak-moment phenomenon, not a steady-state condition. Cohorts from 2008, or 1998, or 1988 had different experiences because the environment around them was different. The Stanford the press is currently scrutinizing is partly Stanford and partly the AI boom that happened to coincide with Baker’s enrollment.

This is the kind of distinction the longitudinal data and design-based evidence make legible and journalism mostly can't. A journalist describes the Stanford he saw. A researcher with forty years of cohorts and a regression discontinuity can say which features of that Stanford are durable institutional patterns and which are products of the specific moment in which the journalist observed.

None of this is a defense of the seminar, or the dinners, or the broader pattern Baker is right to find unsettling. It’s not a defense of Stanford either. It’s the longer-horizon version of the same observation. The reason most Stanford alumni who became founders don’t look like Baker’s subjects isn’t that Stanford lacks the elite-access world he describes. It’s that the elite-access world is much smaller than the headline implies, and most of the institutional work that actually produces founders happens elsewhere. In less photogenic places, on longer timescales, through mechanisms that don’t make for vivid scene-setting.

Baker has written the book about the part of Stanford that's easiest to see. With the data and the causal evidence, we can also describe the part that's harder to see but does more of the work. Both are true. Both are worth understanding.

If you’re interested in which institutional mechanisms, at Stanford and elsewhere, actually move the needle on who becomes a founder, I’ll be writing more about that here over the coming months. Lijie and I are also working on this through our Foundation, applying what we’ve learned to settings where the resources are scarce and the leverage is high. If you want to follow that work, her piece is the place to start.

Stanford is real, the access is real, and the question of what it's for is the right question to ask. The evidence suggests that most of what Stanford produces is built through more ordinary institutional machinery than the press cycle implies. And that's actually the more useful finding. Ordinary machinery is something other institutions — in Munich, in Hsinchu, in places without caviar dinners — can build.

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General-program findings drawn from Eesley & Lee, "Do University Entrepreneurship Programs Promote Entrepreneurship?" Strategic Management Journal, 2021. CDTM findings from Weik, Fröhlich, Defort, Welpe & Eesley, "Pre-Entrepreneurship Programs and the Quality of Entrepreneurship," working paper currently under review.