Stanford Sloan, Entry 22: The Last Entry: Final Finals, Ethics in B-School, the World According to Pixar

Tis the eve of our final final (approximately 11pm when I stared writing this), and throughout the b-school campus, not a mouse is stirring. Well, that’s not entirely true – many MBA’s are out at the final FOAM of the season held at some club in Palo Alto.

As for Sloans, we have our final final exam tomorrow morning, our very last bit of academic nonsense (er, rather, I mean our last serious academic endeavor) during our Sloan year: the HR final exam. The HR class (as per my past post) is one of two Sloan required classes in our final quarter.

Today was officially our last day of class at the GSB, but like many Sloans, I didn’t have any classes today. While many of us were busy studying for our final tomorrow, I took a trip up to San Francisco to wander around a little bit.

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Our other Sloan required class, Non Market Strategy, had a professor who decided to give us our final exam last Thursday. In hindsight this seemed like a brilliant move, because it allowed us to enjoy the beautiful late May/early June weather without stressing about academics last weekend.

This also meant that two of my courses were officially finished last Thursday (the required class, Non Market Strategy, and my elective class, The Business World: Moral and Spiritual Inquiry through literature).

Yesterday (Monday, June 1st) I had my last session of the Leadership Entertainment Industry class (more on this, including our visit to Pixar and the visit of David E. Kelly later). Which means three out of four classes are done, and in less than 12 hours, my academic experience at the Stanford Sloan program will be complete!

As I sit here, I should be cramming for this final exam in HR, I can’t help but reflect what an odd class ithe HR class been. In this class, doing data regression about HR was often emphasized more than actual HR strategy, and cases that we wrote about our co-workers companies seemed much more interesting than the “official cases” from Harvard and Stanford Business School that we were supposed to be learning from. Oh well, learning from our peers has been one of the keys to making business school worthwhile, so I guess this shouldn’t’ surprise me!

Ethics and Morality in Business?

One component of the our Non-Market Strategy class that came up over the past few weeks was the “ethics” component. Despite being a little philosophically abstract (Kantian vs. Utilitarian, anyone? I think I’d rather debate Tastes Great vs. Less Filling!), there was some valuable self-reflection this class forced us to do, at least for a few minutes.

In the wide world, MBA’s aren’t generally perceived to have any ethics, really. Just a constant stream of number-crunchers coming out of business schools who calculate the path to maximum profits with the least weighted average cost of capital, and always recommend the path of most borrowing at the least interest rate, regardless of the long term consequences.

Case in point: our recent financial crisis.

Well, I can’t really argue that this isn’t what business school teaches us. It actually is, for the most part, what we learn in our finance classes. But, there are bright spots of moral reflection in our other classes too, which shouldn’t be overlooked.

In our Non-market class, we were presented with some ethical dilemmas and asked our opinion.

Our professor called it Trolley-ology. A trolley is coming down the track and it is very likely to kill 5 people who are on the track. You have the option to change the track the trolley is on, to another track where only one person will get killed.

What do you do?

OK next step. Forget about the second track. Suppose you are on a bridge overlooking the trolley that is rolling towards killing 5 people. There is one person on the bridge with you. You could push that person off the bridge, which would kill them, but would stop the trolley, and with certainty save the lives of the 5 people down the road.

What would you do now?

Hmmm. If you’re like me, I don’t know that these hypothetical ethical dilemmas about Trolleys really impact our day to day decision in the business world, however much they do help illuminate how we think about ethical issues.

I’m sure that most MBA’s who were involved with institutions that spear-headed the financial crisis (as well as earlier excesses like Enron and Worldcom) probably had ethics classes like this one, but it’s not clear that they did any good.

More interesting and impactful on my long term view though, was my Moral and Spiritual Inquiry Through Literature class. This class, which was taught in seminar format, put a much more textured and personalized spin on these kinds of moral dilemmas.

By reading a fictional story (a novel a week, mind you) of a character who, for example, is staunchly anti-corruption at the beginning of the novel, but succumbs to taking a bribe by the end of the novel, we move beyond platitudes and abstract philosophy and hopefully gain some insight into human nature.

When Ivan Ilyich, described as a career corporate ladder climber in mercilessly accurate prose by Tolstoy, is about to die prematurely and reflects on what was missing from his materially oriented life, it’s not much of a stretch to see the comparison between this late 19th century Ruppy (Russian upwardly mobile professional) and the corporate climbing business school student of the twenty first century!

By being forced to discuss the nature of ethics and the role of religion and spirituality in our lives (and our work), we get, I think, to a much more personalized view of how we as human beings with vying impulses including greed and self-sufficiency might act in a materially obsessed world.

Moreover, by writing a 4000 word essay on how these books had an impact on my own views on morality and spirituality in the business world, I was forced to think through these issues at a deeper level than even trolleys would allow.

For those of my readers who wonder why I’m taking a class on Literature in Business School, I can only say that I wish everyone who had gotten an MBA over the past 10-20 years had to take this class (Moral and Spiritual Inquiry Through Literature), since it’s taught me more about reflecting on what’s important in life and business than all of my other classes combined.

The Law Acccording to Pixar

As always, I like to write about my Entertainment Industry class. Why? Not only because it’s a fun class, but because everyone likes the movies.

Last week, we went on a class visit to Pixar, which is, as we’ve learned the only major studio which has not had a box office failure. The visit was very eye-opening, not just because there statues of one-eyed monsters in the lobby (from Monsters, Inc), but because it made me (and the rest of the class) think about creativity, business, and the importance of modifying stories (whether in business or entertainment) until we get them right.

Pixar is a very creativity driven place. This comes across from the conversations we had with the CFO of Pixar, and from Andrew Stanton, who was the writer on the Toy Story movies, and the writer/director of Finding Nemo and Wall-e.

The first thing that strikes you when you walk into Pixar these days is that it’s all about one film: Up, the new movie that was just released this last weekend. I loved this movie, and it looks like it’s going to be a commercial success, despite analysts ravings that a movie about “a grumpy old man and a fat kid” has limited market appeal and no toy merchandising possibilities.

The thing about this focus is that for much of its history (going back to Toy Story) the folks at Pixar focused almost exclusively on one film. This is contrary to what we learn at business school and contrary to what almost every major studio in Hollywood says – that you need a diversified portfolio of films every year because you never know which of them are going to be successful.

But, as Andrew described to us their process – it can take 4-5 years to produce a Pixar film, one of their reasons for this success became apparent. Pixar is a mixture of Hollywood and Silicon Valley (Steve Jobs was the CEO and investor for many years, and Pixar grew out of Lucasfilm, and was a technology company for most of it’s life). They focus incessantly on the story for the first 2.5 years of this time – recording the whole film using hand drawn sketches and only when/if they get the story right, do they invest in the very costly 3d animation for which they are known.

They also allow for a certain amount of honest creative tension. While the director has the final say, the Pixar brain trust watches early screenings (of hand-drawn sketches with employee-recorded voices) and they “duke it out” with each other for ideas on how to make the story better. According to Stanton, after some painful disputes, they almost always emerged with a better story, which really has been the key to Pixar’s success I think. I could continue writing about Pixar forever, since it's such an interesting company, but will have to leave it at that!

We also had David E. Kelley visit our Entertainment Industry class. He was the creator of such hit television legal dramas as The Practice, Ally McBeal, and the more recent Boston Legal.

I won’t say much about his visit, except that it was also very insightful about the creative process in general and how television works in particular. Two things he said that surprised me?
1) that James Spader didn’t want to work with William Shatner at the beginning of Boston legal (though this changed quickly when they started working together), and
2) the head of the TV network programming (I think it was ABC) thought that the show ‘Lost’ was the “biggest piece of shit” he’d ever seen and he only let it go on the air because he had to contractually (the same executive later happily took credit for what became one of the biggest successes in the networks history).

Sign Off: The Last Entry

This is probably my last entry of the Sloan academic year in this blog. It’s been great fun writing this blog, even when it’s done in the middle of the night before an important exam.

I’d like to remind everyone for posterity that these have been my own personal impressions and rants of a thirty-something software entrepreneur who decided to go back to school and relive his high-school dream of attending Stanford University.

Several of next year’s Sloan’s have told me that they heard about the program or decided to join the Sloan program at Stanford because of my blog (or maybe it was despite my blog?? – just kidding!). For those of you who’ve been reading it regulary, I thank you and feel free to drop me a note any time.

From now on, I’ll be heading back to the world of work, dipping my toe in Venture Capital, and continuing to work on my organization, BayView Labs.

As for the blog, I’m going to go back to writing about entrepreneurship, zen, personal growth, and of course, the movies!

So what did I learn about succeeding in the business world in business school?

Well, speaking of the movies, perhaps the best way to sum up what I learned in business school is also in fact the best way to sum up my class about the Entertainment Industry.

This line, which was quoted to us by both David E. Kelley and our professor (Oscar winning documentary filmmaker Bill Guttentag), was from the book “Adventures in the Screen Trade”, by William Goldman.

Goldman summed up his own experiences in Hollywood with the very simple line: “Nobody knows anything!”

Stanford Sloan GSB, Entry 21: The Spring Quarter, Star Wars, and the Class of 2010

The Class of 2010

We just met members of the Stanford Sloan Program class of 2010, who are having their orientation this weekend, as I write this. We gave them a “welcome” presentation (“The opening ceremonies for the class of 2010”, as our Master of Ceremonies, Tim, Tim, described it), in Bishop auditorium, the main auditorium at the GSB.

In the words of Darth Vader from Star Wars (more on the Star Wars theme later in this blog post): “The Circle is Now Complete”.

It’s hard to believe that it’s been a year since we sat in Bishop, watching the Sloan class of 2008 give us their wacky and informative presentation about what life was like in the Sloan program, amidst the MBA's at the Stanford Graduate School of Business.

I can remember sitting in the theater, with my then future-friends/classmates, watching these guys and wondering: “Wow, these guys seem to be such good friends and having such a good time – I wonder if our class is going to gel like that?”

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I remember the 2008 class members, with their private jokes about texting each other at night and hurrying to a restaurant, bar, or social gathering in Palo Alto. It was clear they were having a good time, and I doubted whether we'd be like that in under a year's time.

I sat with my own personal combination of excitement, anticipation, and even anxiousness, about how I’d fit in to the Stanford GSB. I wondered if I’d like taking classes again (it had been 15 years since I’d been to school), wondering if I’d get along well with my classmates, and more importantly, whether I’d be able to relate to any of them personally.

The Sloan program, after all, consists of a very diverse group of people, from a large number of countries, at very different stages of life (from single Sloanies to families with 4 kids) and stages of work (from entrepreneurs to unemployed to Employed for Life).

As I sat in the audience yesterday, that question was finally answered. We have gelled as a class and it was funny to see in our skits and videos just how well we’ve gotten to know each other (and the faculty and administration, who several members of our class played during the skits). Particularly hilarious was our classmate Bree’s imitation of the director of the Sloan program, Marie – who knew we had such a good impersonator in our class?

The experience turned out to be more emotional for many of us than we expected - Of course our first priority was to welcome the new class with open arms and to give them a preview of what they might be like a year from now – which we did. But it also brought forth the realization that we have come full circle and our year at Stanford is almost over! In fact, there are only 4 weeks of classes left, only one big Sloan party left (The Latin party), and then finals, and finally graduation in June.

Many of us are going on the international study trip to South America, though some of us are more concerned about what we’re doing afterwards, with the job market and economy as it is and won't be attending.

What a year it’s been and what great friendships we’ve formed. I find it funny that even those classmates who I didn’t always get along with, or those I didn’t relate to very much during the school year - have become trusted friends that I’m looking forward to seeing sometime after graduation.

The Spring Quarter
Several of the new members of the class told me they’d been reading this blog regularly (one even said that was how he learned about the program), and asked why I hadn’t written any entries lately.

Honestly this last semester has been really busy – not so much with academics, but since it’s my last semester at Stanford, I’ve been trying to meet with as many interesting folks on and off campus, and figuring out exactly what I might be working on next that academics have fallen to a “lower priority”.

Which leads to a piece of un-asked for advice that I’d give to the new class: Think about why you’re coming to Stanford and what your priorities will be. Of course, there will always be academic, social, and professional aspects of your year here, and in the fall quarter they will be all mixed together. But come January, I would suggest it’s important to have a sense of what you’d like to get out of it – is it more experience with Finance? Is it to meet a team (MBA’s, Engineers) that you’d like to start a company with after the program? Is it to get to know professors that you want to keep in touch with? Is it to break into a new industry? Is it to socialize?

Whatever it is, you've got to focus on what's right for you!

Spring Electives
So to give our future Sloanies and others who are interested in classes at the Stanford Business Schoool, here’s the low down on the classes I’m taking this quarter.

I decided to take only four classes this quarter. There are two required core classes (as part of the Sloan curriculum). I took two electives this quarter, which should (fingers crossed) give me the right number of credits to graduate. I intentionally took a light load this quarter (I had 5 classes in the winter quarter, several of which were very demanding). Again, this gets back to priorities – one of our classmates is taking 6 classes this quarter, because it’s our last quarter at Stanford and he wants to take as many classes as possible.

The core classes:

•Non-market strategy.
This was a term that I hadn’t heard before. The idea of this class is that while most business focus on the “market strategy of a firm” (what are competitors doing, what is my product strategy, m&a, marketing, etc.), many firms (particularly big multi-nationals) have to deal with things that are not directly market-related. What things? A big thing called the government is a good example – many firms are in industries that are regulated, that might face environmental issues, that are attacked by citizen groups, and on and on.

As an example, our first case was about Shell and greenpeace and the media. More recently, we spoke about patents, trademarks, and intellectual property protection. Last week we did simulation based on the Microsoft anti-trust case – where one study group (my study group) played Microsoft and another study group played the Department of Justice and we argued whether Microsoft had violated anti-trust laws or not.

The best thing about this class? It makes me think about things I really don’t think about much. The worst thing about this class? It’s at 8:00 am in the morning – I call it my “sleep killer” class.

• HR class.
This class is about HR-related issues and how to structure personnel and compensation based on the strategy of the firm. Some cases we studied include Southwest Airlines, the Portman hotel, and InfoSys, to name a few.

I like the general theme of this class, because I don’t always think about HR issues as being strategic, but rather operational. However, contrary to my expectations, all the assignments in the class are data regressions, which has cause more than one of my classmates to wonder: “Is this a class about financial modeling, or Human Resources?”.

It seems like many professors here at the GSB in what I would consider “soft subjects” (HR, organizational behavior, marketing.) really want to hammer in the point that business-school in general and their field in particular is about data analysis and quantitative techniques – i.e. that it’s not really touchy feely, but rather quanty-crunchy.

I remember our negotiations instructor, when someone said "negotiation is more of an art than a science". She got very upset and yelled at him: “what have I been teaching you? This is a science, not art!” Of course anyone who’s done complex negotiation in the real world knows that it is as much (if not more) of an art involving personalities as it is a science, so I ask you: what gives?

It seems to me that teachers of soft subjects want to portray their subject as “real science” in order to get “academic respectability” from their peers and of course, to get tenure (can't say I blame them). I remember our Organizational Behavior professor’s grading of our final papers, refusing to acknowledge that the case that he laid out for us had more than one way to come up with a “right answer”.

Oh well what can you do? How about running a data regression on it and see if what I say can be backed up with empirical data LOL!!

Best thing about this HR class? The case discussions. Worst thing about this class? The data regressions, and the fact that it’s a “3-day weekend killer” class – it’s on Friday afternoon and Monday afternoon.

My two electives:
Of course everyone has taken different electives this quarter. I’ve taken two classes that I really like and help me to branch out in my own thinking:

• The Business World: Moral and Spiritual Inquiry through Literature.
It might seem funny to be taking a literature class in business school. But this class has been hailed by many MBA’s as a class to take in your last quarter of business school because it provides a good way to “cap” your experience and to think about larger issues of life, purpose, and where we’re headed in our lives and our careers.

I can’t agree more. Each week we read one book, and then we have our three hour class session on Thursday to have a discussion/debate about the book and the themes that were raised by the book, and how/if they have any relevance in our own lives and careers.

We started off by reading F. Scott Fitzgerald (the Last Tycoon) followed by two well known US plays about salesmen – Death of a Salesman by Arthur Miller, and Glengarry Glen Ross, by David Mamet. We then read a novel that had very strong elements of Jewish-American culture post WW II in it – The Ghost Writer, by Phillip Roth. Then we read a novel about post WW II Japan – An Artist in the Floating World. We’re now reading a spiritual novel about a Japanese characters who travel to India on a spiritual quest – Deep River, by Endo. We have a few more international readings, ending a Tolstoy story..

This class might seem like a lot of work, because we’re supposed to read an entire book every week. But, the books are all pretty small (especially compared to the 800 page Tome we have in Non-Market Strategy) and very easy to read. In fact, I can honestly say that this is the only class in my entire business school experience for which I expect to do 100% of the readings – Why? Because they’re all classic works of literature and all very well written.


• Leadership in the Entertainment Industry.
My final class this term is about the entertainment industry – yes – film-making and TV. Given my interest in the film industry (I have been an executive producer and investor on a few indie film projects in my spare time), this is one of my favorite classes. It is taught by an Oscar-winning documentary film-maker (it was cool to go to Blockbuster after we’d started the class and see Professor Guttentag’s name on a movie there).

Each week, we have speakers from the entertainment industry come by and give us a talk, after which we pepper them with questions. This is definitely the fun part of the class. For example, we had the head of Fox TV channel come by and talk about the issues facing the entertainment industry as it goes on line (they funded Hulu for example, but haven’t figured out how to make advertising profitable online). He talked about the history as well. I tried to get him to tell us if Fox was going to renew “Terminator: The Sarah Conner Chronicles” but he was mum on the subject, since he hadn’t even told the producers yet.

We also had Alexander Payne, the director of the film Sideways come in and talk about directing and his experience in the film industry. He was particularly terse in his answers. It kind of made me laugh when one of us would ask some high-minded artistic question and ask his opinion of it and he’d just stroke his chin and say “I don’t know. Never thought about it. Next question.”

Of course the class has more than speakers – it has field trips, which are particularly fun.

The House that Lucas Built
Last week we went to the Presidio in San Francisco and visited Industrial Light and Magic, the company built by George Lucas after the success of Star Wars.. There are actually several companies housed in this gorgeous complex built on a very large park area on San Francisco Bay.

Anyone who is a fan of movies know about the Star Wars films and George Lucas. It was incredible to be able to go the company and see how people work and how the offices are laid out. We were told that they don’t generally do public tours, so we were very lucky to have gotten a tour. The hallways are lined with artifacts from movies that ILM has worked on. This of course, included props and costumes from the Star Wars films – including Stormtroopers, Darth Vader, Yoda, C3PO, and even Han Solo in carbonite!

ILM also did the special effects for the Indiana Jones movies, and (unbeknownst to many) the Star Trek movies, among many many others. In fact, they did all the special effects for the new Star Trek movie that’s coming out next week. There were artifacts from all these movies strewn throughout the hallways - it was so cool! My favorites turned out to be the Matte paintings that were used as backdrops for scenes in the film. Needless to say a classmate and I "got lost" on this tour, and had to be picked up and led back to the tour!

The complex actually houses several of Lucas’ companies – ILM (the special effects company), Lucasfilm (which is the film production company which owns the Star Wars films), and LucasArts (the video game company). We got a private Q&A with the heads of these companies, which was great. One thing that was interesting to me was the key role of the video games in this entertainment empire as it moves forward.

Since this trip wasn’t listed in the syllabus it came as a surprise to all of us, and definitely contributed to making this one of my favorite classes at the GSB.

We have one more field trip scheduled in the Bay area, which also relates to George Lucas in a roundabout way:

'In the 1980’s Lucasfilm/ILM had developed some animation rendering technology which was spun out as a separate company and was funded by a famous Silicon Valley entrepreneur. That company worked on 3d animation and rendering technology, and eventually used that technology to make animated 3d films. I’ve heard that they don’t give public tours either, but we’re going to visit them the week after next. The company? Pixar!

Now who says Business school isn’t cool?

Stanford GSB, Entry 20: 9 and 1/2 weeks, Google, CitiBank, Fannie Mae, Big Brother, and Keeping the Talent Happy

Only Ten Weeks Left. Wow. This year has moved quickly.

We just started (on April 1st) the Spring Quarter, the third of our three quarters in the Sloan program at the Stanford GSB. I guess that means only 9 and half weeks left.

It seems just yesterday we were sitting on the fourth floor of the GSB wondering how long it was going to take us to get used to being in school again, and how/when we might meet some of the MBA students.

And now, already there is talk of Graduation (ordering your caps and gowns, making sure you have enough units to graduate, and oh yeah, did you apply to graduate?).

Not only that but we’re already making preparations for the Orientation at the beginning of May for the next Sloan class – the Class of 2010.

I guess that’s the nature of a 1 year program, but it’s strange to be talking about next year’s class when we’re not done with this year’s class ☺

A lot has happened since my last blog entry. I’ll fill you in on whatever I can fit in: Read More

Eric Schmidt, Google, and the arrival of Big Brother

Before the end of the winter quarter, Eric Schmidt, the CEO of Google came and spoke at the GSB. Now, he’s already a guest lecturer for one class here, so it’s not that big of a deal, but it was one of the most highly attended talks I’ve seen since Steve Ballmer came to visit.

Bishop Auditorium, where the bigwhigs usually speak, was full and many of us had to go to an overflow classroom, which showed Eric talking on a big screen in the front of the room.

Now, generally speaking, I’ve been a fan of Google, and they’ve been the anti-establishment company for a long time now (Eric is also the only big company CEO who’s attended Burning Man, for example).

But I have to say, Eric’s talk creeped me out, and I wasn’t the only one.

He spoke about the future of Google, and how they can use the intelligence gained from what you’ve searched for to link to mobile devices and let you know when you’re passing a shop that has something in it you might have searched for.

Only with your permission, he slipped in, perhaps noticing that there might be some privacy issues being raised there.

Moreover, Google can monitor what search terms are coming from an entire community. So for example, if a community starts to have an above-average numbers of searches for “flu”, Google could take action, alerting the government that there might be an epidemic there.

Of course, he slipped in, very casually and almost as an after-thought, Google would only do these things with your permission.

A few of us in the overflow room started shifting in our seats. The big talking head at the front of the room was telling us that he knows what we’re thinking, what we’re buying, what our neighbors are thinking, and he has the ability and technology to alert the government to this.

Hmmm. I looked over at a classmate of mine, and his expression was as puzzled as mine. “Did he really just say what I thought he said?” Was this the twenty-first century equivalent of “I know what library books you’re checking out" ?

Now it’s funny, because when we think of “loving-to-hate” a nerdy looking, very wealthy white guy on a big screen in charge of a monopolistic technology company that may have grown too powerful, a different image usually comes to mind.

There’s a great TV mini-series, Pirates of Silicon Valley, from a few years ago, which tells the story of Microsoft and Apple (among others) in the early days of the PC revolution. At the end of the mini-series, Steve Jobs is speaking at MacWorld, and behind him, on the screen, in streaming video is Bill Gates head (oversized) smiling and looking down through his glasses at Steve. Microsoft has just rescued Apple from the clutches of bankruptcy, and Steve is grateful.

The last scene was meant to evoke the image of “Big Brother” from George Orwell’s 1984. It was also meant to evoke the image of Big Brother in the famous Apple commercial from 1984 (when IBM and Microsoft were Big Brother). Big Brother had arrived, and his name was Bill Gates, the mini-series seemed to be saying.

I couldn’t help but feeling, as I sat in that room at Stanford, watching an oversized talking head telling us he know what we’re thinking that maybe reports of Big Brother’s identification were greatly exaggerated.

In fighting the old Big Brother by supporting companies like Apple and Google in Silicon Valley, we (meaning myself and many other well-meaning consumers) may just have created an opportunity for the real Big Brother to arrive.

To quote another George Orwell novel, Animal Farm, about what happens when power shifts from one powerful group to the ones that overtook them: Four Legs Good, Two Legs Better.

Finals and End of Winter Quarter

Just after that interesting experience, we had our final exams and papers for the Winter Quarter. Our two Sloan core classes, Marketing and Accounting both had final exams, while two of my elective classes had final projects. One other elective class, finance, had a final exam as well.

As I sat there, getting ready for the our East Coast Study Trip (which happened during Spring Break), I was trying to get a handle on how to calculate net present values in two different countries using various exchange rates, interest rates, and discount rates. I think that was the moment I decided it’s probably better not to take a finance class in my last quarter at the GSB.

Grading at the GSB continues to mystify me. Classes that I thought I might not do well in, I did very well in. Classes that I thought I was doing really well in, I did only OK in.

Go Figure. Oh well - I still stick firmly by the anonymous assertion (which I repeated in my last blog entry) that grades in the GSB are guaranteed to be accurate, but with a plus/minus margin of error of two letter grades.

East Coast Study Trip

After finals we had our “Spring Break”.

I put “Spring Break” in Quotes because it wasn’t really a break. We had our East Coast Study Trip to Washington, DC and New York City. Because the Sloan Program is a one-year program it feels like we have a lot of mandatory stuff crammed in.

Despite having to dress up in a suit and tie (every single day), and despite having to get up to board the bus by 7:15 am on most days, and despite being herded around like sheep from place to place, the trip was actually quite interesting.

I always get asked what we do on study trips. Well, other than get up early, dress in a suite and tie, and get herded around from building to building like a flock of sheep, we usually get a talk by a senior member of the company we’re visiting. In some cases, it’s the CEO of the company, which is very cool. They give us a little lecture, and then we are able to ask questions of them.

So here are some people and places we visited, and some random things I remember about the visits:

• Smithsonian. We had a talk by the head of the Smithsonian. I found this to be one of the more interesting talks, mainly because I didn’t know much about the Smithsonian (other than they run a great Air & Space Museum, which I visited). Turns out they run 19 museums and have collected something like over a 100 million scientific specimens over the years. There was a British guy in the 1800’s (Smithson) whose will said that if his only surviving heir (his nephew), didn’t have any heirs, then the money should be donated to the “United States of America” for the "Establishment for the increase & diffusion of Knowledge among men". That’s a pretty vague mission statement, and the government (under Andrew Jackson) they really didn’t know what to do with the money, until they established the Smithsonian as a scientific quasi-governmental organizations. Other things I didn’t know: that on the Board of Directors of the Smithsonian are both the Chief Justice of the Supreme Court and the Vice President. Memorable Quote: “When raising money for a non-profit, you still have to have a sales pitch”

• Senator Kent Conrad and the Capitol. We had a tour of the Capital Building visited the office of Senator Kent Conrad (D), of North Dakota, who was in the charge of the Senate budget committee. He only had a few minutes with us, because that week he was on TV a lot, and was overseeing the senate’s work with President Obama’s budget. Obama won’t get everything he wants in his budget, said the Senator to us, and then alter that night many of us saw his name being referenced again and again by the talking heads on TV. Little Known Fact About the US Capitol: there is a room called the crypt, which was meant for the Tomb of George Washington (he wasn’t buried there, he was buried at Mt. Vernon), and there is a compass on the floor of that circular room, which is the point from which all addresses in Washington DC get their name. Little Known Fact about me: I lived in North Dakota for a few very formative years, even started high school there – Mr. Conrad might have been my senator! Memorable quote: “I have to go meet with the Obama administration in 15 minutes. Now in the 14 minutes I have left… Now in the 13 minutes I have left, I’d like to talk about… Now, in the 12 minutes I have left, “

• Postmaster General of the United States. We met the postmaster general of the United States of America. He started off as mail clerk in Boston and is now in charge of one of the largest organizations in the US. He reminded me of the guy on Cheers (the mailman) a little bit. His biggest challenges: How to make the US Postal Service profitable when the volume of mail has been decreasing every year. They are required by law to have post offices in every single zip code, even if those zip codes have something like 100 households in them. Little Known Fact: the Postal Services biggest customer is its biggest vendor is its biggest competitor: Federal Express. Memorable Quote: “If there’s one thing that everyone has a strong opinion about – it’s the mail!”

• Chairman of the Federal Reserve. We were supposed to meet with Ben Bernanke (who used to be a professor of Economics at Stanford), but who had to go testify in front of Congress that day. Why? The AIG bonus scandal (more on this later). Instead we met with Kevin Walsh, who is the youngest of the 12 members of the Board of Governors of the Federal Reserve. Q: How did he get his job so young? A: He was a protégé of Bernanke so BB pulled him in on his coattails. He seemed like a pretty smart guy (also a Stanford alum). My question for him (hey here’s one thing I learned in my last finance class): With all the talk of the Fiscal bailout, there isn’t much talk about the monetary bailout underway –with the Fed buying up trillions of dollars in assets, and increasing the available money supply, aren’t they worried about devaluing the currency or inflation?”. His answer: “Under Chairman Bernanke, We’ve been aggressive about buying up assets; but that means we have to be equally aggressive about selling those assets when things stabilize.”

• CEO of the NY Stock Exchange. We met with the CEO of the NYSE in New York. What struck me most about this meeting was just how “calm” this guy was in the middle of one of the biggest financial crises in the past 50 years. In fact, he was a little too calm. The NYSE has been around a long time, he seemed to be saying with his demeanor, and has weathered other storms and it’ll weather this one too. But then we learned the real reason for his equanimity: “When stocks go up, I don’t necessarily have a good day. When stocks go down, I don’t necessarily have a bad day.” The unspoken message: He makes money either way, as long as there is a lot of share volume. Wow- nice business model, dude! Other memorable quote, when the first two questions asked were from our two Russian classmates, “Are there any questions from students who aren’t from Russia today?”

• Fannie Mae and Citibank. I put these last two together, because as those of you following the financial markets will know, both of these institutions had to be bailed out using billions of dollars of US Government money (i.e. our money, the taxpayers). At Fannie Mae, we met with two people: the CEO (relatively new) and the Chief Economist. At Citibank, we met with Vikram Pandit the CEO of Citibank. These meetings were very surreal – it felt like these guys were living inside bubbles (called their companies in particular, and the financial services sector in general) that were pretty disconnected from the rest of the world.

The other thing that these two organizations had in common? They were both upset about the AIG bonus scandal. Now, let’s get this right, they weren’t upset that AIG, which took billions of dollars in aid from the Federal Government was paying multi-million dollar bonuses to its management team members. They were upset that th taxpayers and the government would have the audacity to ask for it back!

They were of the opinion that the bonuses being paid by institutions like themselves were necessary for “retaining the talent” and that the Government has no business meddling in the internal affairs of these companies.

All I have to say is that both were pretty out of touch with how the US Public was feeling that week, when this was the biggest story in the news and individual taxpayers were upset about the million dollar bonuses.

One more thing that both CEO’s said, almost verbatim: “The People that were part of the problem are gone; the people that we have left here are part of the solution, not part of the problem”. It was so verbatim that I wonder if there was a “federal bailout CEO phrasebook” that they shared.

This of course begs the question, where did those people, who were part of the problem, go?

Moreover, the CEO of Fannie Mae said that he’d agreed to pay bonuses last year to his senior people, including some 7 figure bonuses. Let me repeat that, 7 figure bonuses were paid by Fannie Mae after being bailed out by the Federal Government. If they didn’t pay these 7 figure bonuses, he said, the “talent” would leave and go elsewhere.

Which brings up my next question: “What bank or insurance company has a mortgage business that has so much money that they are willing to lure away Fannie Mae executives by paying them 7 figure bonuses?”

I can only think of one: AIG.

Stanford GSB, Entry 19: Rainy, Foamy, Fuzzy, and Right-Wingy: Profs, Secretaries, Do-gooders, and criminals

Wow it’s been a while since I’ve written. I guess I got so caught up in winter quarter stuff that I haven’t really been keeping the blog up to date – so there’s a lot to write about.

So what’s been going on? Well for one thing, we are almost completely finished with the winter term – only one week of classes is left!

It seems like it was just yesterday that I was taking my accounting and my finance midterms. How did I do? Well, the engineering background continues to pay off; since they were both based on solid concepts which can be taught (and learned), I did pretty well.

So what does the end of the winter quarter mean at the GSB?

For one thing, rain. So much for the illusion that attending Stanford means going to school in “Sunny California”! It’s been raining almost non-stop for the past month (or so it seems). Today the sun came out for a few minutes, which was nice.

Yes I know, California is suffering from a drought, California needs rain, so I shouldn’t be complaining, but couldn’t it rain, like every other day, instead of every single day?

It’s enough to make my thoughts turn to Southern California. Or maybe Arizona. Or maybe even Las Vegas. Ahh, to feel the sun shining on my face again…

Which reminds me - Vegas FOAM is next week. FOAM, for those of you following the blog will know is the Tuesday night partying done by the MBA’s (joined by an occasional Sloan or two), since we don’t “officially” have classes on Wednesdays at the GSB. It stands for Friends Of Arjay Miller (Arjay Miller Scholars are the ones who get good grades).

Usually, Tuesday night FOAMs are held at a local establishment, but next week everyone (well not everyone, but many) will be flying to Vegas after classes on Tuesday, spend the night partying there, and flying back on in time for the non-existent Wednesday classes, or at the very latest, in time for Thursday classes.
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Fuzzy Logic

The other two things that end of the term means are “Final Exams” and “Final Projects”.

The thing about group projects in Business School that I find odd (and perhaps a little bit scary), is that in our fuzzy classes, a very large percentage of our grade (in some cases up to 50%) is based on the final project.

This week, I had thee final project due for my entrepreneurship and VC class, taught by Professor G., a 30-plus veteran of the Venture Capital industry. In that class, we had to write a 20-page business plan); I think we wrote a pretty good one about using iPhones for building communities based on popular TV shows.

How do I know that it was good? I’ve written a plan or two before and it seemd OK.

On the other hand, we also had both a final project and a final exam for our Marketing class.

I can say that I honestly have no fracking idea what the professor was looking for in our final paper, and even worse, many classmates feel like the final exam is going to be a complete mystery. (Any science fiction-oriented readers will will recognize the Battlestar Galactica reference there – for the rest of you, never mind!).

Which brings me to the subject of fuzzy grading. Fuzzy can be a good thing, as in “warm and fuzzy”. More often than not, at least where the GSB is concerned, a fuzzy class is one where the grading is “arbitrary, capricious, and highly subjective”.

There’s a joke around the student body that in many GSB classes (at least the fuzzy ones), your grade is guaranteed to be accurate within 2 letter grades of what you actually get – up or down! (do the math – it basically means that grades in fuzzy classes are pretty meaningless). I have one classmate who got an H, the highest grade possible, for participation in a class where he felt he didn’t participate that much at all – go figure! Good thing Stanford has a policy of not disclosing grades for MBA’s!

Doing Good

Speaking of classes, especially here at Stanford, grades certainly aren’t everything. In fact, there are quite a few things set up to help local charities. A few weeks ago, we had the White Party, which held an auction for everything from Dinners with famous VC's to yaching with groups of MBA1 girls, with all the proceeds going to charities.

Several of my classmates set up a website for their Social Technology class, which aims to use the web as a vehicle for helping out needy causes.

The site, Education Dream Lab, will help educational projects raise money online using the power of Web 2.0 social networking technologies. (See http://educationdreamlab.org/blog/). For their first project, they are helping students at the Phoenix academy in East Palo Alto (which is generally thought of as being more economically needy area than Palo Alto) with a scholarship fund.

Way to go guys!

Right-Wingy

In the past few weeks, we’ve had a number of illustrious visitors and it’s always fun to give the outside world a glimpse of who we get to see.

This Monday, Colin Powell gave a talk on campus. It was a big event – tickets were sold out I think. (Due the rain, though, not everyone came; the seats weren't quite as full as you might expect for such a famous guy).

In person, Mr. Powell was pretty engaging and articulate, and even came across, dare I say, passionate. Which is pretty different from his TV persona.

He told quite a few funny stories. For example, he told us one about when he was National Security Advisor and took his then 21-year old son to buy his first car. As a negotiating tactic, he picked up his brick satellite phone (remember those?) and said things like “Yes, Mr. President, I’ll be right there, Mr. President”, even when the President wasn’t on the phone. Why? To show the car dealer he was ready to walk away and they’d better settle on a deal very fast!

Unfortunately, Powell, who came across very as very likable during this talk, avoided the tough questions – no students were allowed to ask questions. California in general and Stanford in particular is a pretty liberal place, and I couldn’t wait for someone to ask him about his “performance” at the UN convincing the nation to go into the military adventure in Iraq.

Speaking of Iraq, guess who also arrived on campus this week? In fact, her first day was the same day that Colin Powell gave his speech.

Who else but his successor as Secretary of State, Condoleeza Rice. She got her PhD here at Stanford, was a professor and a provost here (I have no idea what a provost is, so don’t ask), before she was recruited by one called “W.” to make the trek up to Washington.

Thus far, no speeches on campus from Condi (though she did give an interview to the Stanford Daily). Now that she's back on campus, I’d be happy to interview her for this blog! I’ll keep you posted.

Speaking of former Secretaries of State, we (the Sloan class) had a private audience with George Schultz, who was Reagan’s Secretary of State in the Eighties a few weeks ago. Speaking of eighties, Schultz is in his late 80’s (89 if I’m not mistaken), but was in very good form for our event.

He sat on a very old-fashioned chair in front of our class, spoke a little bit about wanting to rid the world of Nuclear Weapons, and then proceeded to answer every one of our questions. Come on Colin and Condi, if an 89 year old guy can take questions from students, so can you!

Schultz told us some stories of his days with Reagan, and meeting the leaders of foreign countries. One of the most memorable was about Deng Xiopeng of China.

“People in that part of the world, “ said Mr. Schultz, when asked his impressions of Deng, “sometimes get a reputation of beating around the bush and not being direct. Well let me tell you, Deng did NOT have that problem. He was probably the most blunt person I’ve ever met - He told you exactly what he was thinking without wasting any time.”

In other words, he wasn't Fuzzy at all!

Crazy Eddie

One of our more entertaining speakers thus far came to our accounting class. Yes, you heard that right, I said accounting.

We had Sam Antar, the former CFO of Crazy Eddie’s, which was a well-known electronics retailer in the New York / New Jersey area which went public in the 1980’s. I had never heard of Crazy Eddie’s, but it turns out it was one of the hottest stocks when it IPO’ed, well before the dot com boom, climbing from 8 to 80 very quickly based on it rapid earngins growth.

The only problem was that it turned out to be one of the biggest securities frauds to hit Wall Street up to that time. Sam and his cousin Eddie, the company's founder, had been skimming money off the top, falsely reporting inflated earnings, laundering money, and doing all kinds of unsavory things to defraud investors and keep their stock climbing.

Sam is a convicted felon, and he explained some of the schemes they used in duping the IRS, his auditors (KPMG), and the public. He also explained how white collar crime was usually about making people comfortable so they overlooked the details - it was more about distraction than obstruction, he said.

With the recent Madoff scandal on everyone’s mind, this made for a very colorful presentation.

But do you know what the real crazy thing is? While Eddie went to prison and the Antar family had to pay like $90 million back to investors and to the government, Sam got off scott free – no civil or criminal penalties against the millions he’d made as the deceptive CFO of the now defunct electronics retailer.

Not just that, but he got to keep the $20 million or so he’d made from stock during that period, and now he’s giving talks at Stanford Business School!

Wow. Now that’s pretty crazy...

Stanford GSB, Entry 18: Mid-terms, Sticky Ideas, and Governor Meg Whitman?

Mid-Terms and Socializing

On Thursday of this week I lifted up my backpack and found that it was lighter than it had been in a long time. What was missing?

It was “Libby, Libby, Short”. Or to be more precise, it was our 800-page accounting textbook, written by the accountants who bore these three odd-sounding names.

Yes, we had our accounting midterm on Wednesday, and after carrying the very thick textbook around campus with me for the last week, I was glad to finally have “Libby, Libby, Short” off of my back! Literally!

This was our first and only midterm of the quarter for the required Core Classes in the Sloan program (there are two required classes – Accounting and Marketing). Since I had skipped more than one accounting class (surprise, surprise, given that this is my 8 am class!), I figured I had better study hard and do well on the exam to make up for my morning somnambulism (that's a word I learned for my GMAT when applying to business school, hopefully I used it correctly!).

How did I do? Read more...

I’m not sure – the results will be handed back on Monday, but we received an email from the professor that the average score was something like 26 out of 30, which is pretty good. That's great news for the class ("All for one, and one for all") but I’m still trying to figure out whether that’s a good or a bad thing for any if us personally, given that we’re all graded on a curve?

Unfortunately, I have one more midterm coming up. My next mid-term is called something like “International Financial Management” – but I just call it my “currency trading class” because that’s what it’s effectively about.

Along with mid-terms, the busy Sloan social calendar marches on. Last night (Friday) we had one of our first international parties – this one was themed on India. Many classmates bought Indian outfits and there was Indian food as well as Indian dancing and culture. I ended up not going (No, not because I’m Pakistani and there are India-Pak tensions in the air these days LOL), but because of family and other commitments. I’m looking forward to the next international party, though.

Making Ideas Stick

At some point this quarter, I’d like to write about each of my classes so you can get a sense of what they’re about. One of my more fun classes is called “How to Make Ideas Stick” and it’s taught by Chip Heath, one of the authors of the book, “Making Ideas Stick: Why some Ideas survive and Others Die” ( the other author is his brother, Dan Heath).

The basic premise of the class (and the book) is that in the human world, some ideas are memorable and persist on their own, whether they are true or not, while others do not. For example, urban myths persist on their own – you only have to hear them once and then don’t have to worry that you’ll forget them. Not only are they easily remembered, but they are repeated again and again virally, with no effort from the people that started the myths (if we could even track down).

Some ideas have persisted across cultures – for example the saying “An apple a day keeps the doctor away” is not only repeated here in the US, but as a quick survey of our very international class of Sloans and MBAs found, has its equivalent in many, many other cultures, ranging from Japan to South America to Europe. Whether the idea is true or not seems to have very little to do with whether it survives in people's minds.

The idea of the class is that brilliant marketers, speakers, and writers use this knowledge of how and why some ideas “stick” to their advantage – either knowingly or unknowingly. And that many of us, who will have to make pitches or market products in the business world should have practice in making ideas more memorable, likely to be repeated - i.e. to “sticky”.

The formula the brothers Heath have found for these ideas is abbreviated SUCCES – Simplicity, Unexpectedness, Concreteness, Credibility, Emotional, and Stories.

The way to learn to do this is to practice it, which we do in almost every one of our classes, focusing on a different aspect of this formula. As an example, this week our group had to come up with an example or pitch that would make sense out of whether the following was possible or not: In 2002, Venture Capitalists raised something like $204 billion of capital. In order to justify an 18% return (which is a historical benchmark for VC’s) they would have to return some $1.3 trillion in market value over 10 years.

Our intuition was that this wasn’t very likely. But our group (and others) struggled with a way to make these big numbers (Particularly the $1.3 trillion) “sticky” to an audience of financial investors, etc. Finally I remembered from my Entrepreneurship and VC classes that there were something like an average of 100 IPO’s per year during the height of the go-go 90’s. And in 2008 there were less than 7 total IPO’s, and in the last few quarters of 2008 there were exactly zero.

I also vaguely recalled that there was something like $100 million returned per successful IPO (we looked it up and Google told us it was something like $120 milion returned per IPO).

So we came up with the idea: For this to be possible, there would need to be 3 IPO’s per day, on average, every single day for the next 10 years for the VC’s to return this kind of result! How likely is that given the IPO rates we’ve seen in the past (even in the best VC years there were 100 or so IPO's per year)? Not very likely.

We took a big number, made it concrete, unexpected, and compared it with a yardstick (the 1990’s) that they would all know, and this was a good way to “present” this idea. The class is really about how to “present” ideas to make them more sticky. You can see why it’s fun too!

Meg Whitman – the next governor of California?

One of the entrepreneurship classes at the GSB had a very well known visitor this week – Meg Whitman, the former CEO of eBay. Meg spoke to the class and then stayed afterwards while the students had lunch for an informal Q&A. Even though I wasn’t in the class, I was able (with the professor’s permission) to slip into the class to hear the end of her talk.

During the Q&A session, she not only talked about her experiences at eBay, but also her future career plans. There has been a lot of speculation (on and off what the republicans call the Internets) that Meg Whitman will be running for Governor of California in the upcoming campaign as a republican. She did after all spend most of the last year working on John McCain’s campaign.

Well, in front of a group of Stanford GSB students, she told us definitely whether she will be running for governor or not, even though a formal announcement has not yet been made. She also said that an announcement would be made formally on Monday, so far be it for me to spill the beans on my little Stanford GSB blog, but it’s kind of fun to at Stanford and at least in this case, to be “in the know”.

Check out www.megwhitman.com on Monday and you’ll be in the know too!

Stanford GSB, Entry 17: Winter Networking, The Revolving Door, and Sundance

My experience with classes this quarter is VERY different from my experience last quarter. How so, you ask?

On the one hand, I have more classes than I had last quarter; but on the other hand, I find myself with a little more free time.

How is that possible? First, I was smart enough to select classes in such a way that I have only one class on Monday’s and Friday’s (in the morning) – this means I’m free all afternoon on both days. (Actually I wish I could really claim to be that smart – it just kind of ended up that way by accident, but now I see the wisdom of it). Secondly, the GSB doesn’t have classes on Wednesday, which means that I’m free that whole day (except for an occasional test like the Accounting midterm, which is coming up next week!). So three out of five days a week, I have mostly free days.

This comes in handy because part of the benefit of going to Stanford GSB comes from networking, and I didn't do any real networking last quarter at all. OK, OK – I’ll admit it- I’m sure I’m not the first GSB student to say this publicly – networking is not just “part of the benefit”, it’s probably the “main benefit”; the real reason why we’re shelling out so much of our own cash to go back to school is mostly because of the contacts and relationships we hope to make, academic and business.

This includes not only the relationships we develop while we’re here, but the very impressive (… drumroll please …) Stanford alumni network. As current students (and alumni), we have access to the GSB Alumni database, which includes management from pretty much every company in California. In my industry (software, VC, internet) this is what Maverick would call a “target-rich environment’ (Yes, I’m quoting from the movie Top Gun!)

Since we arrived in the fall, we’ve had several alumni of the program tell us that we should take advantage of this resource while we’re at Stanford. Lars Delgaarde (more on him later), a very successful Sloan alumnus, told us that almost all GSB alums will take a meeting with us while we’re students, but maybe not once we’ve graduated. Another alum told us to “use the student card” as much as possible, ‘cause we won’t have it for long.

Tick-tock. Amidst this background, I realized recently that the Sloan program is half-over, and I hadn’t contacted a single alumnus in the fall quarter. I'm starting to hear the academic clock ticking, ever so slightly off in the distance.

Slowly, the MBA2’s (second year MBA’s) are starting to get job offers and making plans for what they’ll do next. Though even in the MBA community there is some anxiety nowadays because of the weak job market. The management consulting and investment banking jobs that MBA’s jet off to in droves every year are suddenly much diminished in number, or not to be found at all! Tick-tock for them too.

For company-sponsored Sloans, this clock just means they’re getting closer to a promotion or some other job back in their companies. For the self-sponsored Sloans, many of whom have no source of income lined up after the program is over, it’s like a horror movie where you gradually realize that there’s something creepy out there watching you, and it’s gaining on you. Tick-tock, Tick-tock.

OK LOL, it’s not really that bad, yet. We are still having fun and I am enjoying my classes. But there is some strange sound in the background that I haven’t really been paying attention to that seems to get a little bit louder every week. Tick-tock.

The Revolving Door

What also makes this quarter different is that the classes are more interesting. That doesn’t mean that classes last quarter weren’t interesting in their own way (Economics turned out to be very interesting, and I learned more in Finance than I thought I did, and Modeling turned out to be kind of fun by the end).

But it seems like we’re talking more about real business issues than we did before. Or maybe I just think that’s the case, since I got to choose which classes I’m taking this quarter.

In my undergraduate days at MIT, I skipped classes pretty often. I’ve had that temptation here at Stanford many times, especially the early morning classes. But each time, I have to remind myself that the classes are interesting enough that I usually don’t want to skip them.

OK that’s not entirely true: I have skipped our 8:15 am Basic Accounting Class once or twice (hopefully the professor is not reading this blog!).

I've been thinking about it and maybe one of the reasons why the classes are more interesting is that we have a LOT of guest speakers.

Many of the professors themselves have led interesting lives (Eric Schmidt, the CEO of Google, teaches a class here at the GSB, and my VC and Entrepreneurship teacher, John Glynn, runs a VC firm as his “real job” – Glynn Capital) before teaching classes here at Stanford.

Recently, a Stanford alum told me about the “revolving door” here. A Stanford alum, upon leaving campus, usually gets a job, moves up in their organizations or starts a company, does well, makes lots of money, and then if he or she’s lucky, starts teaching a class here at Stanford (usually in the GSB), ending up right back where they started.

Speaking of revolving doors, this last week has felt like a revolving door of guests in all of my classes. I almost felt like I was at a conference, not at school. Since Last Friday, here is a sampling of the guest speakers that visited my classes:

• David Placek, CEO and founder of Lexicon Branding, who visited our “How to Make Ideas Stick” class. I had never heard of Lexicon, but we read a case about them first. To put it simply: They chose names for things. What kinds of names? Intel hired them to find a name that could be trademarked for its chips (names like 486 and 386 could not be). They eventually came up with “Pentium”. Similarly, P&G needed a name for a new dry mop – Lexicon came up with “Swiffer”. The list goes on and on of popular names that we’ve all heard of (and some we haven’t). I found it interesting that this (naming and branding) was pretty much the only thing the company does. They have an entire process for brainstorming and choosing names – which includes things like phonetics and how different sounds affect consumers. Different. And Interesting.

• David Burke, Makena Capital – who used to be one of the key players managing Stanford’s endowment. Stanford’s endowment is one of the largest in the country (at something like $8 billion, second only to Harvard’s endowment, if memory serves), which means they are one of the largest investors in the country. He spoke to us about how Stanford (and now Makena, which he started with with colleagues from Stanford) makes decisions about investing in Venture Capital funds (since this was for my Entrepreneurship and VC class).

• Naveen Chopra, VP Corporate Strategy at TiVo – In our marketing class, we had a case on TiVo and how it could position its products in the marketplace when they first came out with their innovative product. Today of course they have fierce competition from cable operators like ComCast and have to adjust their strategy. After discussing the case, our professor introduced Naveen and he talked about some of the challenges that TiVo has faced and how they’re being addressed still today.

• Rick Arney, Barclay’s Bank. In my class on currency trading, we had the managing director of investment strategy for Barclay’s Global Market Strategies Group – i.e. their currency trading group stop by. He talked to us about the currency markets. One interesting fact that I remembered: The currency markets are completely unregulated. There is no SEC. Another: the currency markets today are in a state of turmoil that is off the charts.

• Speaking of the SEC, in our accounting class we had our first visitor this week: Julie Erhardt, Deputy Chief Accountant at the Securities and Exchange Commission. Not only is she a Stanford alum, but Julie was in the Sloan program,which made for an interesting discussion. Much of her role consists of working with other countries SEC-equivalent agencies.

• Lars Delgaarde, CEO, SuccessFactors. Lars is a CEO of SuccessFactors, a software company he founded after graduating from the Sloan program a few years back. When he started the company and bought some existing technology, it had been difficult for him to get VC’s to invest in his idea; after a few years he built SuccessFacstors up to over $100 million in sales and one of the most successful software IPO’s over the past few years. Lars spoke about culture and what kind of culture he built at SuccessFactors.

• Matt Harris, co-founder of Village Ventures. We learned of a group trying to innovate the long-unchanged world of Venture Capital. They started with a very small fund in Williamstown, MA, and came up with the idea of supporting VC funds in non-traditional places -i.e. not Silicon Valley and not Boston. Since then, they've established relationships with 16 funds in different cities across the country and the UK, espousing their unique strategy. I found this interesting because I've been thinking about the VC industry myself and wondering if there aren't other models than the popular Silicon Valley model. This is an interesting one.

All of these speakers came in a single week, and in just the classes that I’m taking. Granted, this was a particularly busy week (we don't have this meany speakers in our classes every week), but even half of these speakers would still make for some interesting classes.

And this doesn’t include the numerous optional speakers and presentations that were going on during this same week at the GSB, which always has a lively calendar of events! Now you have a glimpse of what it's like taking classes here at the GSB.

Sundance and other events

I was going to write about the GSB trip to the Sundance film festival two weekends ago, and the Chinese New Year’s party we had last weekend, both of which I attended. I should also mention the Australia day events (the GSB is an international place), the Sloan Ski Trip to Tahoe this weekend, both of which I didn’t attend.

But it’s getting late, and guess what, I haven’t done any networking in the past few days…so it’ll have to wait until the next entry.

Tick-tock. Tick-tock.

Stanford Busines, Entry 16: Winter Quarter, Report Cards, and Musharraf

The Winter Break
After scattering to different parts of the world for Christmas break, we finally started our second quarter in early January. While I travelled to Boston and Pakistan, some of my colleagues travelled to India, Japan, Europe, Kazakhstan, and to various countries in South America.

A few stayed on campus and explored the San Francisco area; some went skiing at Lake Tahoe, which is a very popular thing to do in the Bay Area. There is a Sloan ski trip scheduled there in a few weeks .

Many of the MBA’s went on organized trips to different parts of the world. It is part of their requirements that they take an international study trip at least once a year; some of them fulfilled that requirement over the Winter Break, going to places like India, Vietnam, Malaysia, and several countries in Africa. Some of the MBA’s are going to do their trips over Spring Break. The Sloan program has it’s own study trip during Spring Break – our East Coast Study Trip.

Report Cards.
Over the winter break, we got the grades for our classes from the Fall Quarter.
Grading at the GSB doesn’t consist of a normal A-F grades, nor even numerical grades.

It consists of the following: H (rarely given, stands for Honors, I think; for students who do extremely well; I think it’s up to the instructors discretion whether anyone gets this grade; HP (High Pass; for those who do well in a class; typically I think this ends up being something like 20% of the class), P (Pass; for those who pass the class, this is 50% of the class), LP (Low Pass; this is for the bottom 20% of the class), and a failing grade (I don’t remember the letter, but it’s not F). From what little I know, the H is rare, but the failing grade is even more rare. I.E. if you completely *#!!-up, then you might fail a class.

In the Sloan Program, many of us haven’t been “graded” by a teacher in over 10 years, so this was a novel experience. Still, it didn’t stop us from approaching our professors when we thought we’d gotten a grade less than what we deserved. I heard that we became known as the class that quibbles with professors over grades.
How did I do? Well, I like to think of myself a poet-quant hybrid, able to do well in quantitative and qualitative subjects, but I was up for a rude awakening. In my quantitative classes (Finance, Financial Modeling, Economics: all of which were our “core” 4 unit classes), I did very well! I guess my engineering background paid off after all.

In the “softer” classes which were less quantitative, I did not so great. These were generally our 2-unit classes, which lasted less than the whole quarter such as: Organizational Behavior, Strategic Leadership, Negotiations, etc.
The biggest surprise to me were the embarrassingly low grades I received for my papers in these soft subjects. This was even more surprising (and embarrassing) since I haven’t done a single math problem since college, but have basically been a writer and a leader in the years since – having written several books, lots of articles, and led multiple organizations!

As Scooby-Doo would say, Yikes!

In the fall, we had sessions to help the poets learn the quantitative subjects, called: “Finance for Poets, Modeling for Poets”. These were mostly about how to think about doing the problems that the professor was likely to ask in exams and problem sets. Maybe we need a “Writing papers for Quants: How to think like a Stanford professor’s grading assistant”. I’ll be there!

The New Quarter.
We started the Winter Quarter at the beginning of January. The academic school year at Stanford consists of three quarters (plus the summer quarter, which is optional for most grad students). From what I can tell, the Winter quarter is actually the shortest quarter, going for only 10 weeks.

Coming back to campus felt a bit like a homecoming. It didn’t take long to get settled in again after our brief several hour orientation on the Monday after New Year’s Day.

This quarter is very different for the Sloans. This is because we’re not spending all of our time in a single classroom with our fellow program members. We only have two core classes (Accounting, with a beginner and advanced version, and Marketing. As a result, we are only fully together as a class in Marketing.
The rest of our classes are electives, and these are the classes that make Stanford what it is. We take our classes with other Sloans and with MBA2’s (second year MBA students). None of the first year MBA’s are allowed to take electives yet so we haven’t had any classes with them.

Electives that I’m taking this quarter include Entrepreneurship and Venture Capital, How to Make Ideas Stick (about marketing messages which are sticky), and International Financial Management (about currency trading). I know some classmates who are taking all entrepreneurship-related classes (there are a lot at Stanford), and some who are taking all Finance-related classes, but most have a mix of the two.

The Sloan program is structured so that most of us take 5 classes this quarter and then 4 classes in the final quarter, or vice-versa. Many of us decided to take 6 classes this quarter, but quickly discovered that the amount of reading and work associated with 6 classes probably wasn’t worth it – most of us who did that ended up dropping one of our classes.

Classes with MBAs
The main difference in taking classes with MBA2s? The professors expect us to be more prepared and to have always read the cases. There’s a lot more cold-calling in MBA classes than Sloan classes. By cold-calling, I mean when the professor just calls on someone randomly and asks them about the reading. The way to avoid being cold-called is to hold up your hand, volunteering to discuss the case. Of course, that supposes you’ve read the material!

I think the most useful skill for me at business school has been the ability to read very fast – rather skim and get the key points of a case. Many of the cases are 12 pages long – of course you don’t need to know every detail of the case, just the broad strokes, and this usually suffices as long as you have the case with you during classes.

Much of the non-financial classes are case-based. Stanford offers a mix of case-based classes (which was pioneered and is in vogue at Harvard) and lecture-based classes (which tends to be done at many other business schools). Many of our classes combine case and lecture, which is pretty effective method overall.
In any case, it’s nice to finally get to take classes with the folks that we’ve been wandering around the corridors of the GSB with.

Musharraf Visits
Former Pakistani president Pervez Musharraf visited campus this week and gave a talk. I wasn’t able to stay for the whole thing, but they did say it was unusual for a former foreign public official to speak on campus so soon after leaving his post.

He spoke primarily about terrorism and extremism, based on his understanding of Pakistan and the region. He compared it to a Tree, with terrorists being the leaves on the tree, and terrorist organizations being the branches. Simply getting rid of the leaves, or trimming the branches, won’t get rid of terrorism. The roots, the root causes, which include poverty, illiteracy, political alienation, and extremism, all need to be addressed. He gave a history of Afghanistan, particularly over the past 20 years and spoke about how the traditional structures that held it together as a nation disintegrated during the 10 year jihad that Pakistan and the US started and fueled there against the soviets during that time.

He went on to answer questions from a professor and subsequently from the audience. I didn’t stay for this part, but do like the fact that we’re getting people like him coming to campus regularly.