Why You Need to Climb the Ivory Tower

Stanford billionaire-academic David Cheriton on the optimal relationship between companies and universities

Written by Murad Hemmadi

Photo: University of British Columbia

David Cheriton made his first billion with a few strokes of a pen. The Stanford computer science professor has a penchant for investing in technology companies, with the early-stage cheque to Google‘s founders which catapulted him into the billionaires club being the most successful example. Coupled with his own ventures, those stakes have made him one of the wealthiest Canadians in the world.

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An academic who seems singularly unconcerned with his net worth, Cheriton has made significant contributions to his alma maters—a $25 million donation to the University of Waterloo (where he did his PhD) in 2005 to support graduate studies and research resulted in the School of Computer Studies being renamed in his honour.

In November last year Cheriton gave $7.5 million to the University of British Columbia (UBC), where he received his undergraduate education. The gift will endow the David R. Cheriton Chair in Computer Science and support a new first-year course in computational science, a field that applies computer science concepts and theories to problem solving.

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“I don’t think the job of university education is to teach people facts; it’s to teach people how to think and problem-solve,” he says. “I don’t profess to have all the answers there, but I think the computational thinking course is trying to push in the direction of what I think a 21st century education should look like.” It’s not the first contribution he’s made to innovative teaching at UBC—in 2010, he contributed $2 million to the Carl Weiman Science Education Initiative.

He may have departments and chairs named after him, but Cheriton is more interested in results than recognition: “I like to have impact as opposed to fame and glory.”

Cheriton discussed his successful investments in the tech sector and the interaction between business and academia:

You have an impressive track record of founding, investing in and working with successful tech companies. What do you look for?

In terms of the companies I invest in, there’s no big secret—I look for things that make sense. I never invest in anything I can’t explain to my mother, and that’s a basic principle. I look for people who are passionate about making a difference in the world, as opposed to people who are too focused on money. I have this curious belief that you’re more likely to fail if you’re focused on the money, whereas if you’re focused on building a great product or service the world will reward you for that.

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Is there a need for more interaction between educational institutions and business?

I think it’s wonderful to have a good working relationship between industry and academia. There are great ideas and students developed in academia that should be great value to business. On the other side, I always tell people here that I’m Canadian or conservative on this subject: I think academia benefits a lot from understanding the problems that business is dealing with, so that the research and courses reflect some of the big concerns and technologies that businesses care about. I think that to some degree helps keep academia honest, so that it’s educating people for the world we live in, not some fantasy world that doesn’t exist.

It’s practical education but it’s not necessarily focused on the here-and-now. I’ve had people in business tell me, “I don’t need you to train people for what I need today, because I train them for what I need today, and I’m not revealing what I need today. I need you to train them so that they can deal with the problems of tomorrow.”

What’s amazing to me, even after all these years, is the interaction between Stanford and all of Silicon Valley. We don’t teach to company requirements, and companies don’t expect us to, but there’s an ongoing conversation about the problems they’re dealing with and the directions they want to go. Then there’s the other direction of ideas that are coming up at Stanford, things that people want to explore. In some cases there’s incredibly synergy between those two, and great things come out of it—sometimes companies.

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What’s the next big thing in the tech scene?

We’re only part way into the process of far greater automation: there’s opportunities for home automation; for security; for energy management at the home, building and grid level to improve dramatically with further automation. As we build these systems the other element that fascinates me is that the complex failures that come with these complex systems. There’s an opportunity to build things that are doing automatic diagnosis of problems and even predicting when there are going to be failures.

In this rush to automate we’re building systems that are more complicated than people can reasonably be expected to understand and that in many cases can degrade or fail in more complex ways than people can understand. So the next challenge is to build systems that when they’re not feeling well, can diagnose why they’re not feeling well.

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Has your company ever collaborated with an academic institution? What benefits did you receive? Let us know using the comments section below.

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