Stanford business
student Greg Yap hopes biotech will be the next investment
frenzy
Looking Beyond
The Dot Bomb
With the Internet bubble burst, students turn ‘back
to reality,’ building new business models based on hard
science
By Karen
Breslau NEWSWEEK
April 30 issue —
As signs of the times go, this one was hard to miss. At Stanford’s
Graduate School of Business last week, nearly a third of the companies
that had signed up to recruit graduating M.B.A.s at the annual Growth
Company Career Forum didn’t bother to show up. A few dozen GSB students
wandered around a half-empty room at the Charles Schwab Center, the M.B.A.
dormitory, poking through the rubble of the Internet economy. There wasn’t
much left: an anti-hacking software firm seeking product managers, an
online publisher looking for a digital-content guru and one hardy dot-com,
a Web site for expectant parents, with an opening for an experienced
software manager. Even the recruiting trinkets had a downsized flavor:
there were Hershey’s Kisses, glowing balls printed with one company’s logo
and souped-up paper clips. “It was depressing,” says student David Maltz.
“The one company that I was interested in wasn’t even hiring.”
WHAT A DIFFERENCE A YEAR—and
a few thousand points on the Nasdaq—make. At last year’s Growth Company
fair, more than 50 start-ups flush with venture capital rushed to the
academic cradle of the New Economy to lure M.B.A.s with dot-com riches and
fame. But for the class of 2001, last year’s trendy business models have
taken on new definitions: B2B stands for “back to banking” and B2C means
“back to consulting.” The class of 2001 entered the M.B.A. program in
1999, at the height of Internet mania. Now everyone, it seems, knows
someone who worked for a dot-com that flopped—or who left grad school
midcourse for a fistful of stock options. This year’s class even includes
a few “third-year M.B.A.s” who tiptoed back to Stanford after the market
crashed. A larger than usual proportion of this year’s 360 graduates have
sought safety by going the traditional route—and with good reason.
Starting compensation for Stanford M.B.A.s at top investment banking and
consulting firms averages about $135,000 a year. For those determined to
work on the next frontiers of business and technology, the path is
riskier. “It definitely hit home that I will have to do some real
searching,” says Maltz, 33, who specializes in product design. “It is
unlikely that a job is going to fall in my lap.”
Maltz, a student
in Holloway’s class, has decided to combine his M.B.A. with a master’s in
manufacturing systems engineering. He hopes eventually to carve out a
career in nanotechnology: assembling objects at the molecular, even
atomic, level. Nanotechnology is likely to have revolutionary implications
for medicine (imagine a “nanobot” no more than a few atoms in size,
programmed to deliver chemotherapy drugs directly to a specific cell).
There are also major implications for computing. Molecular electronics
involves building computer circuits that are a fraction of the size and
millions of times faster than today’s silicon-based technology. But
profitable business models based on tinkering with atoms and molecules
could be more than a decade away. “Most nanotech companies that exist
today are in the research-and-development phase,” says Maltz. “They are 99
percent Ph.D.s and they aren’t looking for anyone to do business
development.” For now, Maltz plans to
continue as a product designer—before grad school he helped create
everything from joysticks to handheld e-mail devices—perhaps in the
automotive industry. He will stay an extra quarter at Stanford to complete
his dual degree in engineering. He’s mulling a job with BMW in Munich,
helping develop BMW’s information personalization project, a manufacturing
process that lets companies customize products from clothes to
cars.
She’ll help the company streamline
its drug-development process. “It’s not enough to know biology,” says
Lee-Karlon. “You have to know how to manage digital information. People
with interdisciplinary skills will be in high demand.”
That’s especially true in genomics, where biotech companies
are trying to make sense of the huge stack of data generated by the Human
Genome Project. Greg Yap, 27, spent two years before business school
working for Affymetrix, a Silicon Valley biotech company that makes DNA
chips, a diagnostic tool that allows researchers to study the genetic
origins of disease and develop better drugs. Last summer, Yap, who studied
molecular biology as an undergraduate, worked for Bay City Capital, a San
Francisco venture firm specializing in life sciences and health care. He
liked the venture world but decided to go back to a company. “I’d rather
build stuff than give other people money to build stuff,” he says.
In
Prof. Rod Kramer’s course “Power and Politics,” a GSB favorite, students
each year are asked to write their own obituaries. This year, of 131
students who did the exercise, only five defined their future lives in
terms of business accomplishments. The rest described how they used their
skills to create social change—starting foundations, teaching,
volunteering. The bottom line may be as tough as ever, but the class of
2001 seems to be reaching for its own frontier.
Looking Beyond The Dot Bomb (Newsweek Magazine, 28 April 2001)
