The future of entrepreneurship
Chuck Eesley, a professor of management science and engineering, studies entrepreneurship across diverse contexts – from refugee entrepreneurs in Uganda to semiconductor startups navigating U.S.-China economic policy.
His research on recent export controls revealed a counterintuitive outcome: rather than solely strengthening U.S. semiconductor innovation, these policies accelerated Chinese investment in its own domestic chip industry, boosting startups there as much as – or more than – here. This finding underscores how global technology markets are deeply interconnected: barriers can produce unintended consequences that accelerate innovation abroad rather than protecting it at home. Open technology trade and investment create larger markets for American innovations, strengthen collaborative partnerships, and demonstrate that interconnected markets drive progress for all participants. "Entrepreneurial talent exists everywhere," Eesley tells host Russ Altman on this episode of Stanford Engineering's The Future of Everything podcast.
Transcript
[00:00:00] Russ Altman: This is Stanford Engineering's The Future of Everything, and I'm your host, Russ Altman. I thought it would be good to revisit the original intent of this show. In 2017, when we started, we wanted to create a forum to dive into and discuss the motivations and the research that my colleagues do across the campus in science, technology, engineering, medicine, and other topics. Stanford University and all universities, for the most part, have a long history of doing important work that impacts the world, and it's a joy to share with you how this work is motivated by humans who are working hard to create a better future for everybody. In that spirit, I hope you will walk away from every episode with a deeper understanding of the work that's in progress here, and that you'll share it with your friends, family, neighbors, coworkers, as well.
[00:00:48] Chuck Eesley: It, it is quite important that we be thoughtful, uh, about AI regulation. Uh, and that it's not just people at the table that, that are the big players, uh, that are shaping those regulations, uh, in, in order to make sure that we're winning the AI race, not just with the current generation, uh, but also what creative, uh, innovative entrepreneurs are gonna do with AI in the future.
[00:01:18] Russ Altman: This is Stanford Engineering's The Future of Everything, and I'm your host, Russ Altman. If you wanna shape future episodes of the podcast, please write a review. Tell us what you think, and of course, give us a rating, we like 5.0 if we deserve it. So please rate and review, it helps the show. Today, Chuck Eesley will tell us that entrepreneurship is key for fueling the economy, but that it requires a context of support from institutions in regulation and in culture. But with those regulations and cultures, people with good ideas can succeed. It's the future of entrepreneurship. Today, we're continuing our feature called the Future In a Minute. At the end of my discussion with Chuck, I'll ask him a few rapid questions. He'll give us some short answers. Before we get started, a reminder to rate and review, that's a way to help shape future episodes. Tell us your thoughts.
[00:02:15] When we think about entrepreneurs, we often think about that single hero founder. They have a great idea, they build a big company and it's great. And of course they are heroes, but they require a context for the success of their companies, an institutional support through regulations that are beneficial, and through a culture that supports the creation and the growth of their company. Without that context, lots of entrepreneurs with good ideas will fail. Well, Chuck Eesley is a professor of management, science, and engineering at Stanford University, and an expert on the conditions under which entrepreneurship can thrive. He'll tell us what that context is and how he's studying it so it can be exported around the world to help create good businesses everywhere and help the economy of all nations.
[00:03:04] Chuck, why have you decided to focus your research on the conditions that favor entrepreneurs and entrepreneurship?
[00:03:12] Chuck Eesley: Sure. It's because entrepreneurs are really the drivers of the modern economy, uh, especially high tech, high growth entrepreneurship. Uh, and so that's why I've chosen this focus. I, I also think it's one of the most fascinating, interesting things you can possibly study, but of course I'm biased.
[00:03:30] Russ Altman: Great. So, um, I know that, uh, kind of a high level description of your work is, um, and that you even have written about, is the institutional environments and how they shape entrepreneurial outcomes. So that's a great reason for me to set some, um, kind of basics here, which is the first thing is, can you define for us, for people who don't think about entrepreneurship, how would you like us to think about it? What is it?
[00:03:54] Chuck Eesley: Sure. I, I guess there's, there's a broad definition and there's a more narrow definition that I tend to study. Um, you know, the, the broad definition is, is the pursuit of opportunity without regard to resources currently controlled. So I love that broad definition because it can apply to so many things. You, you can be entrepreneurial in a large company. You can be entrepreneurial in academia and government, and, and of course you can be entrepreneurial through starting companies. So, so that's the more narrow definition that, that I tend to study in my research, is someone forming a company, uh, often a high tech company, but, but not always. I, I also study entrepreneurship in emerging economy contexts.
[00:04:33] Russ Altman: Great. And then the other term I want to define is institutional environments. Give, give us a sense of what you mean when you're looking at these institutions. Uh, what kind of institutions do you look like, look at, and what are the kinds of things, and this is gonna be the bulk of our conversation, what are the kinds of things that these institutions do that either promote or hinder successful entrepreneurship?
[00:04:54] Chuck Eesley: Sure. Yeah. I love the question. So you can broadly think about institutions in, in two buckets. Uh, there have been various classifications, but basically it boils down to policies and culture. Uh, and, and so the, the policies you, you can think about various levels of government. There's all kinds of policies that turn out to influence, uh, entrepreneurship. Uh, so we can talk a lot more about that. Uh, on the culture side, you know, people often talk about Silicon Valley as being this unique culture where failure is if not tolerated, even, even prized, uh, for the learning that comes out of it. So that tolerance for failure, that willingness to take risks and pursuit of opportunity, uh, is various, various dimensions, uh, on the culture side. Um, so, so both of these, uh, I've been looking at how they shape, not just the rate of entrepreneurship, but also the types of companies created.
[00:05:44] Russ Altman: Great. Great. Okay, so, um, let's get started in thinking about like, um, how do you approach these, this question, like these, these are huge questions. Uh, and the, so let's start out by saying like, what is a sample investigation that you might do, or one that you've done, that kind of, illustrates how all of these things come together to create interesting, new insights about entrepreneurship?
[00:06:09] Chuck Eesley: Yeah, sure. So I'm, I'm usually looking at one specific institution at a time. Uh, often a policy change. Um, so, so let's take, uh, a couple of examples that we can talk about. Um, you know, people often look at the barriers to entry. So that was a lot of the initial work, uh, on how institutions affect entrepreneurship. So the, the number of regulatory steps that it takes to start up a business, for instance, or, or the, um, financial barriers to entry that might be there in, in setting up a company initially. Um, so, so these are very important in determining the rate of entrepreneurship.
[00:06:48] But what I got more interested in was, you know, this kind of form of high tech, high growth entrepreneurship that, that we've pioneered here in Silicon Valley around Stanford. Uh, and how that was starting to spread around the globe is people started to catch on that, you know, this was again, the game for driving economic growth in the modern economy. So, so I got interested in, in barriers to growth, barriers to failure. So, so one example of barrier, a barrier to growth, uh, I, I got started collecting one of the first high tech, uh, databases of high tech startups in China, uh, in collaboration with some partners at Tsinghua University, uh, regarded as, as the MIT or, or Stanford of China.
[00:07:28] Um, and, and so China had some industrial policies, uh, that, uh, you know, this was going back to, um, the nineties that, that really favored, um, both foreign invested firms and state-owned enterprises, uh, and that put a disadvantage, uh, on private entrepreneurs. So, so they made, they made a reform, but this is going back to 1999, kind of, studying the early history of the creation of the Chinese startup ecosystems. Uh, they made some reforms to that, which put these different types of firms on more of a level playing field, uh, and made it easier to, to scale and to grow private, uh, startups.
[00:08:07] Russ Altman: So it's kind of pro competitive. Is that a, a fair way to kind of summarize it?
[00:08:12] Chuck Eesley: Yeah. A more level playing field. Um, so, you know, for example, people talk about antitrust these days. Uh, a lot of interesting work on that, around some of the big tech companies, um, or the dawn of the internet, being able to use the telephone lines, uh, to, for data transmission. So there, there's various institutions, various ways that, um, you know, large companies can capture regulatory institutions and, and put small startups at a disadvantage. Uh, and so if, if the regulators are, regulators are careful about this and set up the industrial policies in a way, um, where the private entrepreneurs are not at a disadvantage in growing and scaling their companies, then, then what we found was, uh, unsurprisingly you get more, more high growth startups.
[00:08:59] Uh, you also get more people from, uh, with more education from the more elite universities, uh, to get involved in entrepreneurship. Uh, because these, these folks have a high opportunity cost, uh, make a good salary at a big company. And so for them to justify taking the risk, uh, on starting, uh, an innovative new venture, uh, there's gotta be that reward at the end of the day where they can scale it up to, to a significant level and, and grow these companies larger. And, and so we were able to document that this kind of industrial policy change, uh, does result in more high quality, uh, more highly innovative startups being created.
[00:09:36] Russ Altman: So I do want to get to the other elements of your work, but let, but, but this is such a juicy one that I just want to pause. Because as you know very well, there's a very active debate right now about, um, innovation in AI because as you also know very well, uh, there are these big players who have right now seem to have captured a lot of, uh, the AI market. They, they, they've certainly captured a lot of the hardware, uh, the data centers and, and, and the talent. And so there's a question about whether we're in the, in a good place with respect to ambitious, you know, new entrepreneurs who have exciting ideas. Um, so this seems, uh, both for the entry and for the growth to be a very contemporary problem. So let me, is that a fair statement? And, and what are your thoughts about the current status of the institutional, both regulatory and cultural aspects? With respect to AI startups?
[00:10:28] Chuck Eesley: Yeah, great question. And, and there is actually some evidence out there that's making people concerned that, that the rate of entrepreneurship is potentially declining, uh, as a result of, um, these kind of factors that you're talking about with access to large data sets, uh, access to compute resources, uh, and so on that large companies have that, that might be resulting in this kind of not level playing field in, in the AI arena.
[00:10:55] Um, so, so I think that's why it, it is quite important that we be thoughtful, uh, about AI regulation. Uh, and that it's not just people at the table that, that are the big players, uh, that are shaping those regulations, uh, in, in order to make sure that we're winning the AI race, not just with the current generation, uh, but also what creative, uh, innovative entrepreneurs are gonna do with AI in the future, uh, so that we're getting talent to flow in, into the startups that are gonna create the next generation of AI technologies.
[00:11:28] Russ Altman: So in terms of this very interesting dichotomy you set up about institutions as either regulatory or cultural, um, do you see one or both of those as the main opportunities for kind of getting us out of this potential fix and, and, and what are the kinds of things that might be considered. And I, I know that this is, you know, complex and people have to, there's gonna be a negotiation aspect to it. And, uh, but, but what are the kinds of things you might imagine being done, uh, based on either historical precedent or just your experience that would, would, might help this situation?
[00:12:01] Chuck Eesley: Yeah. Well, you know, I, I think the, the original dot com boom is a great example of doing some things right and, and carefully. Uh, you know, the FCC at that time, uh, was carefully thinking about the fact that, you know, uh, the large telecom companies were at an advantageous position in, in terms of the, the telephone lines and, and access to the technologies of the day for, for data transmissions. Uh, and they put in place, uh, thoughtful regulations that, that made it more level playing field, that, that enabled all those dot com startups to, to be able to access those phone lines for data transmission, uh, as well. Um, and so we need to be thinking about, you know, what, what are the comparable things these days, uh, for AI and for the current generation, uh, of technologies. So, you know, some things that come to mind, um, you know, so social network data portability across platforms. Um, so, so there's one, you know, thread throughout my work that that looks at how platforms may be the new regulators.
[00:13:03] Russ Altman: Yeah.
[00:13:04] Chuck Eesley: A lot of that early work was, was looking at, you know, the government regulation, but these days we can think of platforms as the new regulators. They, they, um, they're algorithmic rules are kind of the equivalent of policies, the, they're creating the markets, you know, ad placement or, or, um, search engine rank algorithms. Um, they, these can unintentionally sometimes, uh, if, if we're not thoughtful about the regulations and how these are set up, can reinforce, uh, some of the either socioeconomic inequalities or, or reinforce the, um, uh, unfair monopoly position of large tech companies.
[00:13:43] Russ Altman: When you talk to leaders of these big tech companies, do they understand why it might be in their interest to encourage, uh, kind of these smaller players? Or are they all about like eating their young?
[00:13:59] Chuck Eesley: It really varies. Uh, you know, go, going back to the culture thing, there's, there's a different culture, different organizations, um, you know, Intel was famously very thoughtful about this, that they wanted to be growing the overall ecosystem because that was gonna drive demand for their semiconductors. Uh, and, and so they consciously realized that, you know, they were early setting up a corporate venture capital group and, and things like that. Um, and, and, and so I think some of the companies are thoughtful about it, but it's very tempting when you have a platform, when, when you start to understand the network dynamics and, and the data advantages on a platform, it's very tempting to, to start to, um, uh, uh, make the playing field unlevel and, and start to do anti-competitive actions. Uh, and so I, I do think there's some role for, for executives to, to be informed about playing a long-term game. Um, but there's also an important role for regulators as well.
[00:15:00] Russ Altman: And I'm struck when, when I am exposed to some of those leaders that they're really more worried about the competitors. Like, you know, like, uh, you know, like, OpenAI is worried about Anthropic or, or Gemini and Google. And so when you talk about level the playing field, their first thought is not let's help spur innovation in the little guys. It's like, is that gonna give an advantage to my big competitors that allows them to kind of dominate.
[00:15:24] Chuck Eesley: Yeah, exactly. And that's why you can't just rely on the market forces.
[00:15:28] Russ Altman: So, so the third area that I know you're looking at and, and we can talk about, I want to talk about a little bit, is that, um, this issue of misinformation and, and trust and, and policies that, um, kind of, that are kind of little, a little bit like connected in ways that people might not expect. And you've written about this, so, so tell me about how, um, uh, uh, companies might be, um, uh, involved in misinformation and not even realize it, or not even be in control of it.
[00:15:56] Chuck Eesley: Yeah. Well, so this is a fascinating phenomenon and, and it's only being fueled even to the nth degree by generative AI and the advances in AI technologies that are, you know, making it dramatically easier to create misinformation. Uh, it's gonna be very difficult, and if not in the present, in the very near future to distinguish, you know, video, audio, uh, of, of course text.
[00:16:21] Russ Altman: Yes, I'd like to, I'd like to, uh, assure any listeners or viewers that this is real and that this is really Russ and really Chuck, you'll just have to believe me.
[00:16:30] Chuck Eesley: We promise.
[00:16:31] Russ Altman: Yeah.
[00:16:33] Chuck Eesley: So, so we started to see this coming a few years back. Uh, and I've gotta give a lot of credit to my collaborators. Uh, current PhD student, Wajeeha Ahmad, uh, she was coming out of, uh, computer science, math background at MIT and was interested in misinformation and, and starting the PhD program here. And, and I sort of said, you know, and in so many words, hey, I, I study entrepreneurship. Like, you know what, what do I know about, um, you know, misinformation and identifying misinformation? And so she said, well, let me go back and think about it a bit. And, and, you know, it was this interdisciplinary kind of, um, collaboration that really drove the insight.
[00:17:10] And so she had the insight initially that, hey, a lot of these misinformation, uh, sites are, are really like little mini entrepreneurs that, uh, many of them don't care about politics. They're putting stuff out on all sides of the political spectrum, but just for the economic incentive because they can make a buck off of it. Uh, and so we started talking about, well, what data could we gather to actually take a look at this? And so, so this resulted in a Nature publication that, that came out around June of 2024. Um, and, and what we did was we gathered one of the first large scale databases, uh, of what ads are appearing on what kinds of news sites.
[00:17:48] Uh, we matched that up with a great collaborator, NewsGuard, uh, nonprofit organization created by journalists across the political spectrum. They rate news websites on a set of nine journalistic criteria. Um, we, we brought in a couple of other collaborators, uh, here at Stanford, Erik Brynjolfsson and, and Ananya Sen. Um, and, and so we started to analyze, okay, who, whose ads are appearing on misinformation websites and whose ads are appearing on trustworthy news sites. And, and what we found was shocking because like 80 plus percent of companies across industries, uh, including many universities that we hold dear, are actually placing ads on misinformation websites, essentially sending advertising dollars to incentivize the creation of, of this bad content.
[00:18:35] And we're not talking here about shades of gray on the political spectrum. Like with these nine journalistic criteria, we're able to isolate things that are demonstrably false, you know, negative impact on society. We all know from, you know, the, the pandemic and from misinformation about climate change and so many other things, how damaging this can be. So we took it a couple steps further. We, we then wondered, okay, we see how prevalent this is. Uh, we see how many, how much an advertising dollars are going to these bad actors on the internet. Uh, and we wanna know, do customers actually care? Are they gonna punish brands potentially?
[00:19:11] Russ Altman: Who appear, who appear. Yeah.
[00:19:13] Chuck Eesley: Whose ads appear on these sites. 'Cause you know, these things get shared across social media. We know that misinformation from previous research is shared faster and deeper across social networks and it spreads more quickly because it's more controversial. It's more salacious than accurate coverage.
[00:19:29] Russ Altman: It's more juicy.
[00:19:30] Chuck Eesley: More juicy. Yeah. So, so, um, and when we talk to folks, you know, in addition to the quantitative work that we did, we also did a number of customer interviews. And it's like everyone's pointing fingers at each other. Like the advertisers say, oh, the platforms handle this problem for us. And then you talk to the platforms and they say, well, you know, the brands don't really care. And you go back and talk to the brands again. They say, well, the consumers don't really care. And so everyone's, it's such a disintermediated, disaggregated, um, supply chain for digital ads. It's just a mess. So we did a survey experiment, instead of compatible survey experiment with the consumers, offering them gift cards, uh, and then giving them information, uh, accurate information, uh, about whether those brands ads appear on misinformation sites and the role of the platforms.
[00:20:17] Uh, and we found that it's, it's like having a product recall or an environmental disaster. Customers are, are willing to punish brands for this. They don't like brand's ads appearing on misinformation websites. They recognize it's harmful. They're willing to give up about a third of the gift card value for, for,
[00:20:35] Russ Altman: $8.
[00:20:36] Chuck Eesley: Second choice. Yeah. So the consumers do care. The, then we did a survey experiment with the executives to figure out, do, do they hold accurate beliefs about whether company's ads are appearing on misinformation sites are, are they doing this intentionally? Um, and are they interested in solutions because, you know, technologies could be developed and, and are developed to keep companies ads off of these bad sites. But, but, um, what we found was unfortunately there's a lot of misinformation about misinformation amongst the executives that are in charge of making these marketing decisions. And only about 20% thought their company's ads were appearing on misinformation sites when the actual number was about 80%. And when we give them accurate information, they do become interested in, in solutions.
[00:21:24] Russ Altman: So, so just so I can kind of make sense of this, is what happened, I, I can imagine that this is what's happening. Tell me if this is right. I wanna get my products and services, uh, my advertisements, in front of as many eyeballs as possible. That's the whole goal. And, and the platform says, yep, we can do that. We'll get you guaranteed eyeballs. Then there's algorithms that really don't worry about the content of the websites. They're more just saying how many eyeballs on this website.
[00:21:52] Chuck Eesley: Exactly.
[00:21:52] Russ Altman: And then as you said, the juicy stuff gets a lot of eyeballs. So, of course the way to deliver on that promise to the advertiser is to put it on these sites. And so every, as you said, it's disintermediated, but actually everybody is doing exactly what they promised they would do. It's just that when you step back, it wasn't what people were expecting.
[00:22:11] Chuck Eesley: Yeah, that's right. So, so lemme go layer deeper if, if we, if you're interested. So, um, you know, the people want the lowest cost per click. That, that's understandable. Um, and, and as you say, they want as many eyeballs, uh, as possible. But, you know, AI is increasingly, machine learning is involved in these algorithms. If you're, if you're a big brand, you're advertising across 10,000 sites on the web, you're not gonna go and negotiate a contract with each of those. So AI algorithms are algorithmically placing these ads where they're gonna get the highest ROI.
[00:22:43] Um, but brands do also care about brand safety. You know, if you're a telecom company, you don't want your ads appearing on a site claiming that 5G causes cancer. Various things like that. So brand safety is important to them, and, and they would be willing to sacrifice some cost per click, many of them, uh, in order to preserve brand safety. Uh, and, and, and so if the platforms, uh, realized that there was this economic incentive, they could develop these tools or regulators, just, just like we have information transparency on food labels to know what's in your food.
[00:23:18] Russ Altman: Right. So they could capture that value. So there, that creates an incentive for the platform to have new services that are like the cleaner version of, uh, you know, you'll pay more per click, but the quality of those clicks will be exceptionally good.
[00:23:32] Chuck Eesley: Yeah. The wonderful thing is this is a market-based mechanism, so what nobody wants with misinformation, nobody wants the platform owners policing, what's, what's misinformation, what's not.
[00:23:43] Russ Altman: And those experiments have not been that successful.
[00:23:45] Chuck Eesley: Those experiments have not been that successful, reminding people to double check the accuracy, you know, the, the demand side solutions have not been that successful. Nobody wants the government regulating what's misinformation, what's not. So the nice thing about this is an information transparency intervention, just like food labels or miles per gallon on automobiles, could create, could fill those gaps, uh, and create a market based solution that would dramatically reduce. I mean, this, we're talking about like out of every $2 and 16 cents that's sent to legitimate news websites, a dollar is sent to these misinformation platforms. That's the estimate.
[00:24:21] Russ Altman: This is The Future of Everything with Russ Altman. We'll have more with Chuck Eesley next. Welcome back to The Future of Everything. I'm Russ Altman. I'm speaking with Chuck Eesley from Stanford University. In the last segment, Chuck told us about entrepreneurship and the critical ingredients for success of entrepreneurs. In this next segment, he's gonna tell us specifically about the race in the semiconductor industry and some of the unexpected fallout in terms of the effects of that CHIPS Act on entrepreneurship in the US and entrepreneurship in China. He'll also tell us about taking his ideas globally to places that are not traditionally associated with successful entrepreneurship, but where his methods and his findings are having an effect. Don't forget, at the end of the episode, I'll ask Chuck our Future In a Minute questions. It'll be a few questions and he'll give us a few answers.
[00:25:23] I wanted to start out in this segment asking you about some recent work you're doing on semiconductors. This is very much a race. It's a race between the US and other countries, in particular, China. And I'm wondering, um, and, and I think of it as a big settled industry. So the idea that as somebody who's an expert on entrepreneurship is looking at this is very interesting. Tell me why entrepreneurship play into this big battle in, about semiconductors.
[00:25:49] Chuck Eesley: Yeah. Well, semiconductors are so important. I mean, the, the future of AI, um, the, the race to, uh, develop all these cutting edge technologies that increasingly have not just commercial value, but also national security implications, uh, rests on the, the future and the pace of innovation, uh, around semiconductors. And so that's why I got so interested in it. Uh, I, I've been doing work on entrepreneurship in China as well as entrepreneurship in, in the US. Uh, and of course, being here in Silicon Valley, uh, the, the state of the semiconductor industry is of interest.
[00:26:25] So the, the CHIPS Act came along, uh, uh, as one of two key policy tools, uh, that the US has been, um, exploring to, uh, try to onshore more manufacturing of chips, uh, so that we can, you know, have a secure supply chain. Um, and, and so I started to wonder, you know, what, what impact was this, was this having. As we were talking about the beginning, you know, slanting the playing field towards the, the big incumbent companies, you know, the, the nascent semiconductor industry was developed by the startups, uh, right here around Silicon Valley or around Stanford. Uh, and, and so I saw the CHIPS Act, um, uh, as mainly benefiting these large incumbent players, uh, and perhaps that's necessary.
[00:27:10] You know, there's different perspectives on this I, I acknowledge. Uh, and so, you know, the, the big, the Intels of the world, the, the big massive companies do have an important role to play in, in manufacturing chips. But this is not, this is a moving target. You know, there's continuous innovation still going on. Um, and other people, you know, maybe you, other, others of our electrical engineering colleagues know better than I do. You know, the, the chiplet technologies, the various things that are being developed at the cutting edge of,
[00:27:39] Russ Altman: They're doing amazing things. It's in three dimensions instead of two dimensions. And,
[00:27:44] Chuck Eesley: It's incredible. It's absolutely amazing what these folks are doing. Um, and, and so I started to wonder, you know, is this, uh, having the intended effects and, and are we being too shortsighted, uh, in looking at the existing manufacturing technologies? Uh, and so I started on a research project to look at, you know, is, has there been any impact? 52 billion, almost 53 billion was allocated, uh, to subsidize, um, US semiconductor manufacturing, uh, and these large companies, even if they're gonna be the main beneficiaries, uh, which is not what I would prefer as an entrepreneurship professor, but they're gonna buy a lot of components.
[00:28:22] They're gonna buy a lot of parts. And so perhaps that gives an opportunity to startups. Uh, and then we might expect that VCs, uh, the venture capitalists that invest in these startups, might be more attracted to, to start to invest into semiconductor startups that are gonna be supplying all the various components and technologies that, that are gonna go into, uh, the, these factories. So, so that's one side of the story. We started to look into that. Uh, and you know, this is early stage work, uh, but we've got some preliminary results, uh, that at least the impact on the venture capital community and on startups was fairly minimal and fairly short-lived.
[00:28:59] Uh, so, so there was not a lot of spillover to see increased investment. Uh, it was very short-term blip, um, uh, to, to have increased US venture capital. And this was part of the selling point, was that the government subsidies, the government funding was gonna attract more private capital. Uh, and so, you know, I think we need to be learning from these first round, these first attempts at industrial policy to stimulate, uh, onshoring and innovation and semiconductors to design better policies going forward.
[00:29:30] Russ Altman: Yeah, and it strikes me, it's, it sounds like it's important that in that CHIPS Act, hopefully there are some knobs that, uh, policy makers can turn if like they're compelled by your results and they say, yeah, we need to do something. Hopefully they're not locked in and unable to make these changes.
[00:29:48] Chuck Eesley: Right. Yeah. The whole idea is to better inform a more data-driven future policy. The, the second half of it involves the China side of the equation. Um, so as you mentioned, this is a race with China for these advanced semiconductor technologies. Uh, and so the export controls, uh, have been the other side of the equation in, in our policies to, to try to make sure that the US maintains a, a lead in these critical technologies. So we started looking, you know, what, what's the impact? I was traveling in China, uh, I started hearing the Chinese perspective, uh, that these export controls were cutting off their access to critical, uh, chip technologies.
[00:30:26] Uh, and I started to see that as a result, they're gonna start focusing their investment in, into these technologies, uh, in order to break free from, from the bottleneck, from, from the US supply chain. Uh, and so we, that led to the research question, you know, what's the impact of the export controls on Chinese investment, Chinese venture capital firms investing into these exact areas of semiconductor technology. Uh, and what we found is that, you know, the export controls, uh, while they're well intentioned, may potentially be shooting ourselves in the foot, and that they're actually increasing the amount of investment from Chinese venture capital firms into exactly these areas of semiconductor technologies.
[00:31:09] Russ Altman: So the entrepreneurs in China may have benefited more than the entrepreneurs in the US from the chip side.
[00:31:15] Chuck Eesley: Exactly. They, they got access to a much broader market, you know, suddenly they, they were competing against, uh,
[00:31:20] Russ Altman: And it becomes as the same existential threat that we perceive, they perceive. And, and so, and you could argue, and I don't wanna overstate it, that we did them a favor by making it a very clear decision, easy to make, that we need to, um, now what about the decision China could also support their large industry. So why was it that they decided to support entrepreneurs or was it not a decision? Was it very organic?
[00:31:46] Chuck Eesley: I, I think it is, it isn't all of the above. Um, and, and, and so, you know, I'm, they're supporting the large companies, uh, as well as the small ones, but, but they're in more of a position where they need to develop these cutting edge technologies from scratch. Uh, and so they've been, you know, doing, uh, industrial policy at a large scale with collaboration across academia, government and, and the entrepreneurial sector, uh, for, for many, many years now. Um, and so I think this is another thing where, you know, we need to think very carefully, have data-driven policies, uh, analyze these initial policy attempts for whether they're working or not, uh, so that we can design more thoughtful policies in the future and, and make sure that we stay in the lead in the semiconductor race.
[00:32:31] Russ Altman: Really interesting in, in the last couple of minutes, I did want to ask about another area that I know you're very active. It's also global, but it's not about China. It's about, um, emerging entrepreneurs in countries and cultures that we don't think of as the source of big, new entrepreneurship, uh, ideas. So tell me about that work and like what motivates it and, and where are you?
[00:32:52] Chuck Eesley: Yeah, so, so I've been doing work in a number of, uh, emerging economies. Uh, Uganda is one that we'll circle back to, to talk about more. Um, but what motivates it is, you know, this style of high tech, high growth entrepreneurship that we've pioneered in Silicon Valley and, and at Stanford, uh, has spread around the globe. Uh, and so startup ecosystems are emerging all over the world. Uh, right, so, so, Japan, Taiwan, Thailand, Uganda. Um, people are catching on that this is the way to drive economic growth and, and improvements in quality of life, uh, the way to solve important problems.
[00:33:30] Uh, and so, how to train those entrepreneurs and, and how to get really a, you know, it's a win-win for everyone. If, if a greater percentage of the world's population is innovating, is starting new companies, we're all gonna be better off because this is gonna grow the pie. Uh, and so, so that was my motivation, that we don't want just a small sliver of the population, uh, creating the technologies of tomorrow and, and capturing the economic benefits. And, and so I also started to think about entrepreneurship, uh, as a tool for addressing important problems, uh, around society. Uh, so for example, the refugee crisis. Uh, so as a result of climate change, wars, conflicts, the, the number of refugees, uh, keeps growing.
[00:34:13] Uh, and, and so those refugees, the conversation is usually, uh, around we need to support them, but, uh, people worry that they're taking jobs from, from domestic citizens. Uh, and so I saw entrepreneurship as one potential part of the solution, uh, to, um, show that many times these immigrants, these refugees are starting companies and contributing to, to the economic growth, creating jobs. Uh, and if refugees could start companies, they'd likely hire other refugees into their businesses. Uh, and this might start to both, uh, improve the economic growth in host countries, uh, and be a way to, um, not have them need to rely just on aid.
[00:34:55] So we started working with some local partners, uh, one of the universities in Kampala, Makerere University Business School, a local NGO, Challenges, Uganda. Uh, we got some support from the King Center for Global Development here at Stanford in the Stanford Social Impact Labs. Uh, and we started running cohorts, uh, uh, in the summer. Uh, we'd recruit refugees, uh, both from in the city in Kampala. These are folks coming from Syria, from Ethiopia, from all the neighboring regions, Congo. Um, and for them, you know, even just making $5 in a week or $20 in a month is a significant improvement in their quality of life.
[00:35:34] Russ Altman: They don't need it to be a unicorn.
[00:35:36] Chuck Eesley: They don't need it to be a billion dollar unicorn. They don't need an IPO. Um, you know, it's, it's little textile businesses, it's battery recharging, um, it's all kinds of things. Um, but, but we saw that getting them to have more creative ideas and not to all be competing against each other, selling the same exact same handcrafts, competing on price, uh, was, was a way to, um, potentially address the refugee crisis. So we're really excited about the results that we've been seeing so far. Very high percentages are actually starting these companies. Um, you know, we're really seeing the impact firsthand. Uh, and, and so we're excited to do more especially about the potential role of, of AI, uh, and using these digital technologies for entrepreneurship education amongst these vulnerable, marginalized populations.
[00:36:26] Russ Altman: And, and I'm guessing that when you meet a, uh, an entrepreneur, even in Uganda, I'm guessing that they have a lot of features that remind you of the same types of entrepreneurs that you meet in Silicon Valley.
[00:36:37] Chuck Eesley: Exactly. It's amazing.
[00:36:38] Russ Altman: This is, this is a, what we call in medicine a phenotype. It's a, it's a, it's a way of acting and thinking that is kind of very recognizable.
[00:36:46] Chuck Eesley: Yeah. Yeah. There are definitely some things about the way that we train entrepreneurs at Stanford and Silicon Valley that we've gotta adapt to the local context, but there's many problems that are similar. You know, making sure that you're finding a, a real need, an unmet need in the market. Uh, a pain point for the customer. Uh, understanding the market size, understanding the unit economics and the business model. Um, these are kind of basics that are transferable in teaching entrepreneurship across these contexts.
[00:37:14] Russ Altman: Before we end of our, our conversation, I, I wanted to move to our new feature, the, uh, Future In a Minute, uh, where I ask you a couple of rapid questions and you give us kind of short, sweet answers. Um, are you ready to give that a try?
[00:37:26] Chuck Eesley: Sure. Let's do it.
[00:37:27] Russ Altman: Alright, first question. What is one thing that gives you the most hope for the future?
[00:37:32] Chuck Eesley: So, the democratization of entrepreneurship, uh, as we were just talking about, you know, through, through technology and education, uh, I've seen firsthand, you know, I, I taught hundreds of thousands of students through my online course. We're working with these refugee entrepreneurs in Sub-Saharan Africa. Uh, I've seen what, you know, lowering, uh, the, the barriers to entry, barriers to growth, providing the knowledge and the tools. Um, people, entrepreneurial talent exists everywhere. And so that's what really gives me hope for the future.
[00:38:02] Russ Altman: What is one thing you want people to walk away from this episode remembering?
[00:38:07] Chuck Eesley: So the, the context matters profoundly in entrepreneurship, you know, we celebrate these individual founders and heroes and, and, you know, the, the innovators, the entrepreneurs, they truly are heroes. Um, but the same person with the same idea in a wildly different context, surrounded by different policies and different institutions is gonna have very different outcomes because of the support structures around them. Uh, and so the universities, the support system, the ecosystem that they create, the policymakers, the educators, uh, thinking about that environment, that shapes who, who gets access to entrepreneurial opportunities and what types of firms get created is incredibly important.
[00:38:49] Russ Altman: Aside from money, what is the one thing you need to succeed in your research?
[00:38:54] Chuck Eesley: So access to, to interesting context. Um, so to access to real entrepreneurs in the field, uh, access to platform data. So some of my best insights have come from spanning geographies, you know, from Silicon Valley to China to refugee communities. And this has all been done through partners in, in the research work. So I, I, I need that access to be able to run field experiments, follow entrepreneurs over time, um, gather data in different institutional contexts. So you, you can't study entrepreneurship just sitting in your office. You, you gotta be out there in the messy reality.
[00:39:29] Russ Altman: If all goes well, what does the future look like?
[00:39:33] Chuck Eesley: So, uh, if all goes well, we'll have cracked the code on, on equitable inclusive entrepreneurial success. You know, not just how to create more startups, but the right support systems and university environments, institutional environments, so that people from all backgrounds, you know, first generation immigrants, rural communities, uh, can translate their ideas, uh, their, their creativity into ventures that are solving problems. Uh, and so for me, success, uh, would be that, you know, universities, worldwide policy makers have learned how to power this true engine of innovation to, to, uh, improve society.
[00:40:14] Russ Altman: And finally, if you were starting over again and you needed to get your degree or certification in a different discipline, what would it be?
[00:40:22] Chuck Eesley: Oh gosh. I'd probably say computer science or, or AI. Um, you know, not just because of the current work that I'm doing on algorithmic governance, but also because these methodological tools coming out of computer science, uh, are really transforming social science research as well. Uh, and, and the entrepreneurs that I'm studying are increasingly using AI, not, not just as part of their product, but, but to develop as part of the prototyping process as well. So really understanding those technologies at a deep level. I'm, I'm happy I started in neuroscience. And, and made the transition to where I am now because, you know, this is, uh, complex adaptive systems, uh, they're fascinating to study.
[00:41:02] Russ Altman: Thanks to Chuck Eesley, that was the future of entrepreneurship. Thank you for listening to this episode. Don't forget, we have a huge number of episodes in the back catalog, and you can listen to all of 'em for hours if you're interested. Thank you very much for listening. We hope you will share this with people you care about so that they can also learn about The Future of Everything. You can connect with me on many social media apps, including LinkedIn, Bluesky, Threads, and Mastodon. I'm @RussBAltman, or @RussAltman. You can also follow the Stanford School of Engineering @StanfordSchoolOfEngineering, or @StanfordENG.
