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David Cheriton

Source: http://engineering.stanford.edu/sites/default/files/Stanford_Alumni_Innovation_Survey_Report_102412_1.pdf
David Cheriton

Video interview: http://www.youtube.com/watch?v=NCIiQoPDFjc

If entrepreneurship is a battlefield of David against Goliath, Stanford professor David Cheriton is battle-tested. Coming to Stanford from Canada was a culture shock for the computer science professor, serial entrepreneur and angel investor who found an exhilarating environment of people working in a university setting, then leaving to launch companies.

Cheriton was interested in finding solutions to “real problems—things that people actually cared about” and also in the “technology transfer process” in which ideas from the lab could be turned into solutions and products for the general public. This didn’t always happen in the research world, he found, where research papers, not products, were often the end result.

Cheriton has had experience moving ideas from academia to commercial reality. In 1995 he and Stanford alumnus Andy Bechtolsheim founded Granite Systems to build Gigabit Ethernet switches. In 1996, Granite was acquired by networking giant Cisco Systems. Five years later, the pair co-founded Kealia, which was acquired by Sun in 2004. Currently, they are working on their third startup, Arista Networks, co-founded in 2004 and a leader in high-speed cloud networking.

To succeed in their many ventures, Cheriton and Bechtolsheim needed to identify both cutting-edge research ideas and market opportunities. Cheriton advises that the entrepreneurial experience is not always linear and the ability to adapt and change is crucial to a market opportunity.
If you’re David going out into the battlefield with many Goliaths, you don’t want just one slingshot. When you start a company, you have to have at least one good thing going for you, but it’s a lot better to have two or three. You can’t have just one reason to found a company, you have to have several,” he said. “You need to know what the market is doing, the state of the technology, and something about the competition.”
As an example, Cheriton recalls Google creators Larry Page and Sergey Brin coming to him for advice shortly after Granite Systems had been acquired. “Their original interest was in licensing their software.” Cheriton’s advice was that licensing the software was the wrong approach. “I told them, ‘it’s your baby. Unless you raise it, nothing will happen.’ ”

Page and Brin worked on fleshing out their idea and came back a year later asking how they could raise money. He and Bechtolsheim both became early investors. “With Larry and Sergey, we met at the front porch of my house in Palo Alto and at that first meeting, Andy was the first person who wrote a check without any further deliberation. There was no business plan and Google was not even incorporated, but the idea of better search seemed to have potential.”
“I never would have guessed it would grow to this size and this level of success,” Cheriton admits. In fact, at the time it wasn’t even evident to him that it would succeed. A number of companies had tried to be search engine companies, and basically the conclusion was that that was not a business.

Fortunately, Page and Brin ignored that common wisdom. Cheriton said, “I recall some advice I got from a theater instructor years ago. He said ‘whenever anybody comes to me and asks whether they should be in theater, I say no because if they take no for an answer, then they shouldn’t be in theater. If they say screw you I’m going to go there anyway, then at least there’s some hope.”

Starting a business includes responsibility, said Cheriton. “I’ve seen a few companies where they’ve run out of money, they’re shutting down and people have put heart and soul in it. You just don’t go into this lightly. You really have to be committed to making it work. I think that’s the number one element.”
Another great challenge is building a team. The greatest way to reduce the risk is to bring in people you already know and work well with. There is a tremendous value in remembering that as you go through Stanford and use every opportunity to get to know people. I sometimes tell my students that one of the most valuable things you get out of a class is the people you meet in the class.”