How Universities Should Prepare Founders

August 2026How should universities prepare students to start startups?
Y Combinator is in the perfect position to answer this
question, because we get them next. We're like grad school.
And because YC has had 20 years to refine its model of what
a promising founder looks like, you probably won't find a
better target.What do the YC partners look for? It's surprisingly simple.
They want people who are good at building things and have a
habit of doing it.The hard part of startups is product: knowing what to build,
and being able to build it. And that kind of knowledge comes
from studying computer science or mechanical engineering or
molecular biology, not management or finance.
[1]So the way to prepare undergraduates to become successful
founders is not to give them some new curriculum focused on
"entrepreneurship". It's to do what universities already do
best — to teach them computer science and mechanical
engineering and molecular biology.
[2]Indeed, preparing students to start startups is closer to
the ideal of liberal education than preparing them for
almost any other kind of career. Startups succeed or fail
based on how much customers like the product. Customers
don't care what the founders studied in college. So founders
are free to study whatever they want, as long as they get
good at building things.But building should be understood in a very broad sense. It
doesn't mean all would-be founders have to study some form
of engineering. Almost any kind of expertise that could be
described as building or creating could be useful. It was
useful to Steve Jobs to have studied calligraphy, for
example; it was one of the reasons Apple dominated desktop
publishing. So while math and science and engineering and
design tend to be good bets, I would not want to draw a
sharp line around them, because I can imagine other
forms of building that could be useful. And of course you
don't have to major in something to be good at it. Mark
Zuckerberg was good at programming, but he was a psychology
major, not a CS major.The best way to describe what would-be founders should study
is that they should seek out powerful ideas. But smart
people are naturally attracted to powerful ideas anyway. So
as long as departments teaching powerful ideas exist, the
sort of people who'd make good founders will find them.
[3]In fact there are only two things universities need to
change to be perfect at preparing founders: they need to
make students feel that starting a startup is something they
can do, and they need to encourage them to work on their own
projects.At the moment, the belief that it's possible to start a
startup is very unevenly distributed. YC now gets so many
applications that our application data is a reasonable proxy
for interest in startups at different universities, and
Harvard alumni, for example, apply at about twice the rate
of Yale and Princeton alumni. Presumably Harvard students
aren't that different from Yale and Princeton students; the
reason Harvard students go on to start more startups is just
that it's more customary there. Which in turn implies that
merely by making their students feel that starting a startup
is a viable option, Yale and Princeton could at least double
the number who do.Once a university has a culture of starting startups, you
don't have to convince students that it's a viable option.
New students learn that from older ones. But at a university
that doesn't have much of a startup culture yet, there are
things you can do to help this realization along. The most
effective is probably to show students examples of people
who've done it.Until you've seen some founders in real life, you tend to
think that starting startups is something done by other
people. Seeing them pops that bubble. In fact seeing
founders in real life is doubly inspiring: they seem
impressive, but they also seem human. Especially when they
talk about the early years, when they were clueless and made
lots of mistakes. So strangely enough seeing founders in
real life makes being one seem simultaneously both desirable
and accessible. It makes students think "I want to be like
that, and I could."How inspiring founders are to students is a function roughly
of how rich and famous they are divided by how much older
they are than the students. So it's not essential to bring
famous billionaires to campus. Founders in their mid
twenties who are 3 years into a startup with a valuation of
a couple hundred million will do as well; they may only be a
twentieth as rich and famous, but they're twenty times
easier for students to identify with.________________
It's obvious why universities that want their students to
start startups need to make them believe it's a viable
option. But why is it so important for students to work on
their own projects?There are four reasons. The first is simply that it's a
great way, possibly the best way, to understand a subject
really deeply. The excitement of creating something new is a
much more powerful motivator than the fear of doing badly on
an exam.Second, working on projects together is the best way for
cofounders to discover one another. The most successful
startups tend to have multiple founders, and the only way to
tell for sure if someone will be good to work with is to
work with them. Apple and Microsoft were just the last of
many projects their founders had worked on together.Third, a startup is a project, so starting one will feel
natural to someone who's used to working on projects of
their own. It won't seem weird that there's no teacher or
boss telling them what to do. They're used to telling
themselves.Fourth, and perhaps most surprisingly, random side projects
are where the best startup ideas come from. The best startup
ideas tend to seem so implausible at first that anyone
consciously looking for startup ideas would reject them.
Who'd expect to start a huge company by creating a student
directory? So the way to discover the best startup ideas is
not to look for startup ideas but just to work on whatever
random projects seem interesting. Because in fact such
projects are far from random: young people who are good at
building things are technological bellwethers, so any idea
that seems interesting to them is disproportionately likely
to lead somewhere valuable, even if they themselves don't
realize it yet.Now it should be clear why the YC partners care a lot about
the projects that applicants have worked on and not at all
about their GPAs. Projects are the best source of knowledge,
the best source of founding teams, and the best source of
startup ideas.But encouraging students to work on their own projects may
be difficult for universities. It will mean giving the
students more free time, and universities may not like to do
that.Microsoft and Meta have something in common that few people
realize. They both got started during reading period at
Harvard. Reading period is the gap between the end of
classes and the beginning of final exams. It's called
reading period because students are supposed to spend it
preparing for exams. But reading period also turns out to
have the unique combination of qualities that make it
perfect for starting new projects: the students are all on
campus, and they don't have anything due the next day. That
latter constraint, especially, is a huge drag on the most
ambitious students. Merely eliminating it for a few weeks
resulted in two trillion dollar companies. Imagine what the
US GDP would be if reading period at Harvard were twice as
long.Universities will tend to resist the idea of keeping
students less busy with coursework. Partly because
administrators feel that if they want to achieve something,
they have to do it by taking active measures. Achieving
something merely by leaving students alone is alien to their
nature.And they should be left alone. These things should be the
students' own projects; the university should resist the
temptation to make them official. Partly because students
will be more excited to work on a project that's entirely
their own, and partly because many projects wouldn't survive
official recognition, because they break some sort of rule.
Bill Gates and Mark Zuckerberg both got in trouble with the
Harvard administration over projects they worked on as
undergrads. Bill broke university rules by bringing Paul
Allen, who wasn't a student, into the computer lab with him
to work on Altair Basic. Zuck got in such trouble over
Facemash that he was put on disciplinary probation. And
their cases are probably more the rule than the exception.
Universities have lots of rules, and novel projects are
often untidy things.Right now there are students flying drones out of line of
sight. Turn a blind eye to it.Another reason it will be hard for universities to keep
students less busy is that they'll worry that without some
kind of oversight, most students will just waste whatever
free time they're given. And they will! The price of giving
the most energetic students room to do even better is that
it leaves the least energetic ones room to do even worse.
But that's a price that's worth paying, because if the most
energetic students do better they could do a lot better,
whereas the laziest students already learn so little that
there's not much room for them to do worse. So giving all
the students some of their time back could improve the
average outcome a lot, even if it doesn't move the median.
[4]It may seem a bit excessive to change the whole schedule of
the university just to encourage would-be founders. They're
never going to be more than 10% of the students. And it
probably would be excessive if this change only helped
founders. But in fact giving the students some of their time
back would help all the most energetic and ambitious ones.
They'd all explore new things of one type or another if the
pressure of work were relieved for even a week or two.________________
Now that I've explained how universities should prepare
founders, I should explain how not to. One thing
universities can't do is actually teach students how to
start startups. Starting a startup is one of those things,
like chemistry or painting, that you have to learn by doing.
Which means a properly run class on how to start a startup
would have to be a lab class: the students would actually
have to start startups. And I know exactly what a class of
this type should look like, because YC is it. But YC is very
different in structure from a university, and if you tried
to cram it into an undergrad degree program, it would become
a joke. Are the students supposed to start these companies
without any funding? Are they supposed to run startups,
which notoriously take every moment of your time when done
properly, while simultaneously taking three or four other
classes? And what if, despite these handicaps, some of the
startups actually take off? Are the students just supposed
to abandon them? Because it's either that or drop out.Running a startup is incompatible with being a full time
student. The only way to learn how to start a startup is to
do it. Those two statements are so obvious that they're
practically truisms. And yet so many people manage to remain
in denial about what they imply. You can't teach students
how to start startups.One common response to this inconvenient truth is to pretend
to teach them how to start startups, for example by
organizing business plan competitions. The students
collaborate to come up with a startup idea, which they then
pitch to simulated investors. This kind of exercise is not
merely useless but positively misleading. It trains founders
to think that fundraising is the essential step in starting
a startup — that the core of starting a startup is to
create a story that appeals to investors. As an investor, I
can tell you that's not true. Fundraising is merely a
necessary evil. The people you need to impress are users,
not investors, and the way you impress them is with
prototypes, not words. The core of starting a startup is not
creating a story that appeals to investors, but creating a
product that appeals to users.
[5]In fact would-be founders should be doing exactly the
opposite of what students do in business plan competitions.
Instead of thinking about startups without building
anything, they should be building things without thinking
about whether they'll turn into startups.Probably one of the reasons universities are tempted to
organize bogus things like business plan competitions is
that if they actually took the optimal measures to prepare
students to start startups, it would look too quiet. Imagine
if a university were doing everything right. Students would
be getting a deep knowledge of how to build things in
classes they were taking out of genuine interest, and
working eagerly with their friends on side projects that had
nothing to do with school. The students would graduate with
exactly what predicts success in founders: the ability to
build things and a habit of doing it. Plus a significant
number of those side projects would be incipient startups.
And yet it would look to parents and prospective students as
if the university wasn't doing anything. Where are the
classes on "entrepreneurship"? Where is the Innovation
Center?And indeed this is another great thing about the optimal
plan for preparing startup founders: it costs nothing extra.
You don't have to hire any deans of entrepreneurship or
build any new buildings. In fact if you do, those things
will tend to drag you down; there's no need for them, so if
they have any effect at all it will tend to be for the
worse. If you have spare money, give it to the people
teaching computer science or mechanical engineering or
molecular biology.
[6]But if the optimal route looks too quiet, the solution is
not to avoid it. The solution is to stand firm, knowing that
you're doing the right thing, and eventually the results
will speak for themselves. If you can develop an organic
startup culture among your students and there are multiple
students in every year who go on to start successful ones,
this will soon become evident to anyone paying attention.
Notes[1]
Should students still study computer science if AIs
will write most code? Definitely. CS is an interesting
subject in its own right and also a great way to understand
problem solving in general. And even if you have AIs writing
all your code for you, you're still in the position of an
engineering manager, and good engineering managers should be
able to do the work of those working for them.[2]
One reason I always put "entrepreneurship" in quotes
is that it's a misleading word to use to describe starting
startups. "Entrepreneurship" simply means starting one's own
business, and startups are a microscopically small subset of
that world in which the rules are completely different. So
conflating the two is asking for trouble.[3]
Of course all departments will claim to be teaching
powerful ideas. But false claims of this type don't seem
much of a danger. The sort of people who'd make good
founders wouldn't even need to see through them; they simply
wouldn't be interested enough in the classes taught by such
departments to have much of their time wasted by them.[4]
There's an interesting parallel here to variation in
income. The bottom of the income scale is anchored firmly at
zero, because there are some people who are either incapable
of working or just not interested in doing it at the moment.
If you let there be more variation in income, it won't
affect the income of the people at this end of the scale; n
times zero is zero; but at the other end of the scale you'll
see enormous change.[5]
Presumably one reason these competitions lean toward
impressing investors rather than users is that it's the only
way to have a single set of judges. Investors can be treated
as interchangeable, whereas the users of each product might be
different. But if it's impractical to measure the right
thing, that doesn't mean the solution is to measure the
wrong one.[6]
Another thing that will tend to draw universities away
from the optimal path is business schools, if they have
them. Business schools were not designed to train founders.
They were designed to train the managerial class of the
large industrial companies that arose in the early 20th
century; they're the West Points of industrial capitalism.
That's why their official name is usually the School of
Management. But while the skills they teach might be useful
in running companies beyond a certain size, they're not the
critical ingredient in founding them. And the skills that
are are already taught by other departments. So to the
extent business schools affect their parent university's
strategy for preparing founders, it can only be by adding
error.Thanks to Trevor Blackwell,
Daniel Diermeier, Jared
Friedman, Diana Hu, Michael Kotlikoff, Jessica Livingston,
Robert Morris, Harj Taggar, and Garry Tan for reading drafts
of this.