Filming, Blogging, Novel-ing, and Ranjan has Died

Many of you have written me about not keeping my blog up to date since graduation from Stanford Business School back in June.

Thanks for your gentle nudges – I’m taking your advice and resuming my blog postings, starting with a very long one about what I’ve been up to since business school, and some very sad news I received today about an old friend and one of the biggest movers and shakers in the Indian software industry, Ranjan Das.

But first, what have I been up to?Read More Here...

Turquoise Makes the Wall Street Journal

As many of you know, I have a pretty strong interest in films and film-making (the two don’t always go together).

A few years ago I was an investor and Executive Producer of my first feature film, called Turquoise Rose, shot on the Navajo reservation in Arizona. For me, as usual, I stumbled into this role by helping an aspiring young, determined and talented film-maker, Travis Hamilton, create his first feature film.

Turquoise, shot on an ultra low budget (even by startup or indie movie standards) never made it onto the national circuit, so you probably didn’t see it. But, through the determination of the film-makers it was shown in limited theatrical release across the southwest.

It was a resounding success with its intended audience, Native Americans. It may have been the first feature film whose world premiere was on the Navajo reservation. Sometimes whole families would go to see it, multiple times. Of course, Hollywood rarely sees the merits of a little film like this, so we had to distribute it ourselves.

I also inadvertently found myself as one of very few investors in independent film who made a profit on my very first film investment. I know, Films are Risky Shmisky. So are startups.

So I’m now a member of a group of angel investors, called Film Angels, which invests in independent feature films and is located in the Bay Area. The idea is to use a Silicon Valley style of investing and bootstrapping to put out quality films at low budgets.

The Wall Street Journal wrote about Film Angels recently, and it turns out that Turquoise and my own investments were mentioned very prominently. Here’s a link:
http://blogs.wsj.com/venturecapital/2009/10/12/angel-group-likes-lights-camera-and-action-of-indie-films/

The full version of the article (on WSJ.com) which has to be accessed through Google News also mentions two upcoming films I’m involved with: Raspberry Magic, a small low-budget film about an Indian-American family (www.raspberrymagic.com) [look for it in 2010] and a big budget film series based on the Gap Series, a best-selling science fiction series from author Stephen Donaldson [look for it – well, I’m not really sure when yet].

Sid Searches for Enlightenment

One reason I haven’t blogged much this summer is that most of my writing energy has been directed to finishing a novel I’ve been working on - tentatively titled: “The Enlightenment of Sid: A Modern Quest For the Cure to Sickness, Old Age, and Death”.

It’s nominally about Spiritual Seeking, Buddhism, and Sufism, the mystical branch of Islam.

It follows the adventures of the main character, whose full name is Mohammad Siddhartha O’Leary (and who likes to be called, in fact insists on being called, simply Sid), whose parents were Pakistani and Irish, and who met at a Buddhist meditation seminar. Sid is going through a bit of a mid-life crisis, and finds himself compelled to go on a Quest.

The novel is inspired a bit by the famous novel Siddhartha, by Herman Hesse, about spiritual seeking, and a bit by the novel “The Lost Horizon” by James Hilton, which is about finding a Shangri La and was inspired by the Hunza region of Kashmir in Pakistan.

Sid takes place in the modern world and asks the question, is there really a literal answer to the questions that Buddha went to seek – i.e. is there a literal answer to the problems of Sickness, Old Age, and Death? If so, how would we find it today?

It also poses an important question: Do we need to turn to teachers to find our spiritual path – or is it something we can find on our own?

In the novel, Sid, while learning about the life of the Buddha and the Prophet Mohammad during his own search for enlightenment ends up in the mountains of Kashmir with a surprising dilemma.

There aren’t many books that are about both Buddhism and Islam – for good reason: at a simple glance the religions seem very far apart. But if you look closer, particularly in Pakistan, where tombs of Sufi saints are commonplace, you start to see similarities in mystical/experiential traditions.

Sufism, though not an organized sect of Islam, refers to many sects of Islamists which emphasize personal experience over simple ritual. Sufi sects were led by iconoclasts like Jalaladin Rumi (who is well known in the west for his poetry), Ibn El Arabi (who is not so well known in the west), and Lal Shabhaz Qalander (who is virtually unknown outside of Pakistan), among others.

Anyways, that’s what the novel is about. I felt compelled to start writing it last year when I took a walking tour in Ireland (what a beautiful country) and when I visited Pakistan during December of last year, the novel took an important turn. [Yes, both countries play a big role in the novel].

Now that it’s “done”, when should you expect to be able to read it?

Well, if there’s one industry that recognizes small, quality projects even less than the traditional film industry, and is even slower, it would be the traditional publishing industry...so keep your fingers crossed - i'm sure it'll happen within this lifetime.

Ranjan Is Dead … Long Live Ranjan!

Speaking of religion and Death, I received some news that struck me very hard today. I guess Facebook is good for something other than making money for app developers, since several of my old college friends sent me messages on Facebook.

One of my closest friends from my years at MIT, Ranjan Das, passed away suddenly today in Mumbai, India. I won’t say much about his career in my blog, though he had a very successful one, as outline by this article: http://business.rediff.com/report/2009/oct/22/tech-sap-india-president-das-passes-away.htm

I don’t know the exact situation, other than it had to do with a heart attack. In fact, I haven’t seen Ranjan in quite a few years, and didn't even know that he'd moved back to India.

Nevertheless, I still found the news devastating.

Why?

Not only because Ranjan was such a talented, smart, witty guy ( think about this: in 1992, only two students from the entire country of India, which had a population of some 800 million at the time, were admitted to MIT, and Ranjan was one of them).

Not only because he was a great friend during my college years. During those years, Ranjan was the informal anchor for a rag-tag social group of misfits that included, at different times during our four years at MIT, a Sri Lankan, a White Guy from Jersey, One or more Bangladeshis, Indians, Pakistanis, a Nigerian, a German, a Nepali, and even one ABCD (that would be me as the resident American Born Confused Desi of the group, even though technically I wasn’t born in America and never considered myself confused!).

And it hit me hard not only because I felt guilty that I hadn’t seen my old friend in years. When I moved to the Bay Are a few years ago, I had always planned to get in touch with Ranjan and spend some social time together – rather than only talking about work and software and startups. There were still so many things to discuss and laugh about.

How many other close friends from those years haven’t I seen in ages? How easy it is as we get caught up in our own lives, our careers, that we don’t make time for those who have added something to our lives.

Not only because he was in the same age and to use a cliché (something Ranjan, a creative writer in those days, would never want me to do), it makes us face our own mortality. All of us, my old classmates and I, are approaching that mid-life age of forty. Hearing about Ranjan has really made me pause and think about things.

If death can strike like a lightening bolt so quickly, so unexpectedly, then shouldn’t we make sure we’re spending our lives doing the things we really enjoy, the things we would regret doing if it were to happen to us?

Mainly, though, I was devastated because, though I hadn’t seen him in years, I can still see him so clearly in my mind’s eye that it doesn't seem real. Even though he was nearly forty when he died, I can still still see him so clearly as he was 20 years ago, when we were twenty.

Whether we were having late night conversations about Xeno’s paradox (umm, it’s a physics thing), working on problem sets late at night for differential equations (Ranjan made up his nickname for me when he discovered that while I was pretty good at taking tests, I was never very good at completing problem sets on time. “Hey scholar!” he called me for the rest of our years at MIT, “you can copy my answers for the problem set,” while we called 783-BIRD or Domino’s to order late night food), or taking the bus to Wellesley to try to meet some girls (umm, don’t think we ever really did meet many girls from Wellesley though) or when we were carrying our little brown suitcases filled with home-made computers for our Computer Engineering Class at MIT (6.004) to computer lab in the middle of a snow-filled night in Boston.

The suitcases housed makeshift computers that we built up during the semester – they were called “Maybe” machines. To this day, I can still hear Ranjan singing his rendition of some old song, as we trudged through the snow, hoping our “Maybe” computers would work when we got the lab, “Come on Baby…. Don’t say Maybe…”

At that time, I didn’t realize that Ranjan was a trailblazer who was inspiring me in way inspiring me in many ways.

Amidst a sea of engineers, he was the rare creative, wrote short stories in both his native tongue and in English. When I visited him in the Bay Area a few years after college, he told me about a writing group he was in. A few years later, when I was writing more seriously, Ranjan inspired me to start my own writing group.

Among a wave of scientists who didn’t believe much in religion, he investigated them using logic and clarity of mind, and even got me interested in Buddhism well before I did any exploration of it on my own and (even though he wasn’t a Buddhist).

In a time when I was appreciating only Hollywood blockbusters, Ranjan taught me to appreciate off-beat indie films and quality filmmakers (Barton Fink and Fellini, anyone?).

Of course most of these memories are from long ago and they go on and on. This makes me realize the biggest shame of all, is that though I knew Ranjan quite well as a young man, I didn’t know him in his thirties, a successful business executive.

Even so, I can see him more clearly than ever, in whatever dimension of reality he’s moved on to, amused that all of his old friends have suddenly come out of the woodwork to appreciate him on the news of his death. He would be standing there, making up nicknames for all of us and for all of his recent colleagues, as he sings some rendition of some old song, changing he words to amuse himself, and to comfort his wife and family to not be sad, that he’s OK…he’s just moved on to the next thing…

Ranjan has died, but Ranjan lives on!

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.

Read More ...

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 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 Business, Entry 15: The Last Class, Finals, and Clint Eastwood

We finished classes on Thursday of last week, and this week is Finals Week. It’s hard to believe that a third of the school year is already over, and very soon after we start back up in January, the program will be half over. I guess that’s both part of the upside and the downside of being in a one-year program: it goes very quickly.

The Last Day Of Class.
On the last day of class, we had Strategy (which was as short half-term class, which I enjoyed, unlike many of my classmates judging from their comments), Finance (which was perhaps too long of a class), and Economics.
I have to admit that I was sad to end our Economics class. We’ve had this class since the pre-term, and I think I’ve only missed it only once (when, for some odd reason, we had it at 8:30 am, rather than it’s usual 1:15 pm time slot). OK OK, if you read this blog, you’ll notice that at the beginning of the term, I wasn’t so hot on this class.

But it has grown on me, especially since we started discussing Macroeconomics. Given the events going on in the US and World economies, this class may have become (in my opinion) our most interesting class, and professor Flanagan seems adept at teaching us how to think about obscure concepts like the marginal product of labor, potential GDP, and the reserve requirements of the Fed, very clear. So much so that I think I’ll actually miss not having econ moving forward! Who would’ve thunk it?

Clint Eastwood rides onto campus.
On the evening after the last day of classes, many of the Sloans went to a local hockey game (the team was the San Jose sharks), organized by one of our classmates who’s a hockey aficionado. For many of our international students, this was their first time ever seeing hockey. I ended up not going because there was another event on campus that I found interesting: A showing Clint Eastwood’s film, Letters from Iwo Jima, followed by a discussion with Mr. Eastwood himself. I guess he doesn’t live that far away (Carmel) so it’s not too long of a trip, but this seemed like a pretty unique opportunity, not to be missed.

The movie itself was pretty dramatic– it was about the “defense” of Iwo Jima from the American invaders (and was a counterpart to Eastwood’s earlier movie, Flags of our Fathers). The movie was almost entirely in Japanese with English subtitles. Even though I speak some Japanese, I couldn’t understand a word and had to read the English.

Clint (may I call him Clint??) was introduced by a professor at Stanford who had written a book or two about history and the movies. This seemed like a good idea, but ended up being painful because the guy went on with a very lengthy introduction of Eastwood, while Clint sat there on stage, patiently waiting for his chance to well, say something.

This guy quoted lines from his Dirty Harry movies, and otherwise demonstrated his excellent knowledge of Clint Eastwood’s career. More than a few of us in the audience were thinking: “OK dude, so you’re a smart professor. Now shut it and let Clint Eastwood talk, which is why we came here tonight”.

In some ways, this event was a great example of what’s good and bad about academia. On the one hand, we had an Oscar winning director come to show his movie and discuss it with us. That doesn’t happen every day in the real world. On the other hand, we had a know-it-all professor who was trying to show how he “knew it all” and wanted to demonstrate his knowledge about the subject, when we, the audience, were primarily interested in the subject itself and not the professor’s take on it!
In his defense, the professor (I forget his name) did ask some good questions and eventually let Clint answer them, which was interesting. At the end of the discussion, the professor started to close down the event with: “Well, thank you Clint Eastwood for coming here to Stanford tonight.”

Clint smiled his one sided smile and asked, very calmly, in that soft but authoritative voice cut him off: “Well, don’t they have any questions?”and gestured at us, the audience. It was probably the defining moment of the night, and left the professor a little flummoxed. The good news is that we the people got to ask Clint questions; I asked him about the budget on Iwo Jima ($13 million) and how he funded it (He made a call to Warner’s and got his Japanese distributor to put up some money; the movie has brought in ) and advice of funding indie movies (find someone with money and pitch it to them; this last part wasn’t that helpful but technically accurate). It was definitely the highlight of last week for me.

Final Projects and Exams.
Early this week, we had two final projects due, and two final exams.
For our modeling class (another class that I’ll miss, particularly Professor Moore’s very vivid lectures), we had a final regression analysis project. My team’s project was an analysis of the variation of Linden Dollars (The virtual currency used in the online virtual world, Second Life) vs. US Dollar exchange rate, to see if it could be explained by a variety of other factors.

For our strategy class, each group had to do a “strategy audit” of a real company. The companies ranged from online travel to sports aircraft companies, and this was our first experience in reaching out to companies outside the b-school for a b-school project. Our team did a project on TCHO, a hip new chocolate company located in San Francisco (Yes, we did get free chocolate each time we visited them).

We had our first of two final exams on Monday: Economics. Even though I think I’ve gotten good at econ, this was a much tougher exam than I’d anticipated. The fact that it was Open Book didn’t help much; we’d spent much of macro talking about employment, inflation, and GDP, and almost no time talking about deflation, which ended up being a big part of the exam. Even some of my classmates who were econ majors in undergrad weren’t totally sure about their answers. Oops. Did I say I’d miss econ and I was sad that it was over? Let me reconsider that…

We now have only one more exam before the end of the term – Finance. This class has been a tough one for many of my classmates, particularly those who have never been exposed to financial or investing topics before. It must’ve also been a tough one to teach, because we have a variety of people ranging from finance experts (people who have traded options and worked for investment banks) to finance novices (who had no idea what a call or a put were before this class).

For me, I’m somewhere in the middle – I traded options for fun many years ago so know what they are (and might I add am pretty good at losing money trading options which is why I don’t do it anymore). But I’ve had very little exposure to the theory behind them. And I definately don’t buy the finance class’s conclusion that taking on debt can be a good thing for the company. Isn’t that what got GM and other automakers in trouble in the first place? Toyota (to the chagrin of many Japanese bankers, and I would add to many b-school finance professors) has zero debt, and no one is talking about them going out of business!

Speaking of finance, the test is coming up in less than 48 hours. I really should have been studying rather than watching the Humphrey Bogart double-feature at the Stanford Theater in Palo Alto this evening. Oops. Too late to study now, will have to cram tomorrow for the test on Thursday.

Stanford Business, Entry 14: Nike, PACCAR, Boeing, Amazon and Costco: Our Northwest Study Trip

Keeping up with our breakneck pace, we had our first out-of-town study trip last week, followed by the Stanford Thanksgiving break. I think I like the Stanford thanksgiving break a lot better than I liked the MIT break during my undergrad days; at Stanford, we got the whole week off.

This was (no doubt) so that we could catch up on the work for our final projects, since there's only one week of class left in the Quarter before... (drumroll)... Final Exams.

Of course we all studied very hard during this break (Well, honestly, most people started their vacation last weekend and took the whole week off; now we're struggling to get caught up on everything by Monday morning).

In the case of the Sloans, we left for Portland the week before Thanksgiving (for our international readers, Thanksgiving is a very big holiday in the US, and occurs on the last Thursday of November). On Wednesday morning, we got up very early (pre-dawn), flew up to Portland, Oregon, where we visited the headquarters of Nike.

On Thursday, we rode in a bus from Portland to Seattle and visited PACCAR (originally stood for the Pacific Car and Foundry Company), and then on Friday we visited three companies in the Seattle area: Boeing, Amazon.com, and finally Costco. Many of us spent the weekend in Seattle, our first real break since the term started.

Study trips like this are, in my opinion, one of the more fun aspects of business school. OK well maybe it's not exactly fun to get up before dawn, get dressed up in business suits, and spend the whole day listening to corporate executives talk about how great their businesses are.

But relatively speaking, it's much more fun than being in a classroom talking about these same things. On the positive side, we (usually) get to meet with high level executives of (usually) well-known companies, they give us a schpeal about Leadership, with copious amounts of company history thrown in for color, and we (usually) ask them lots of (usually) intelligent questions. And that beats studying about the derivation of the Black-Scholes option pricing formula any day!

So here’s my brain-dump from what I recall of our Northwest Study Trip:

The Cult-ure of Nike

We were welcomed to Nike headquarters near Portland by a number of executives, including the head of Nike HR, a woman in charge of retail aspects of Niketown, and a guy named Nelson, who was one of the first employees of Nike when it started back in the 70’s. His official title is now something like “Keeper of the Nike Culture”; kind of a cool title – what it seems to involve, as far as I can tell, is displaying knick-knacks that he has collected along the way, and telling stories about Nike’s history, which he did with great aplomb and fanfare.

Nelson shared with us that you could understand Nike by looking at the primary personalities around which the company was built - Phil Knight (who was CEO for a long time, not to mention a Stanford business school alum; also a multi-billioinare who donated enough money to Stanford that the new GSB campus will be called the Knight Management Center); a very famous mid-distance runner in the 1970’s named Steve PreFontaine (known to the initiated simply as Pre), and Bill Bowerman, who was a legendary track and field coach for both Knight and Pre at the University of Oregon.

Does this history matter? Well from what I could tell, these stories reflect the culture of Nike quite well to this day; and of the companies we visited, Nike had the most in your face culture: Everyone at Nike seemed to be 1) passionate about sports, and 2) passionate about the history and culture of Nike, and 3) very, very competitive, as if business was sport.

I love Nike’s products and they’ve certainly developed one of the top consumer brands of the last 30 years, but the visit was a bit strange for me. It kind of felt like I was going on a guided tour of a Scientology shrine. I felt, I don’t know how else to put it, like I was one of the un-initiated.

But it’s probably because 1) I’m not a sports fanatic, and 2) Before our visit, I had no idea who Pre was, 3) I didn’t know that Coach Bowerman was a legend in the running world, and 4) I knew that the new Stanford Business School campus was named Knight, who must've been a very rich guy for Stanford to name a campus after him, but that was about it.

We also had the former head of Nike Golf give us a presentation about leadership. Speaking of Golf, did I mention the meeting was in the Tiger Woods shrine, er, i mean, building? This building is basically a memorial to Tiger's career, including some of his trophies, memorabilia, and a timeline showing everything Tiger has done in his career. For golf fans, this building must be like dying and going to heaven.

Many of the Nike buildings are named after famous athletes. At the moment I can’t remember any of them, except for Tiger Woods and Michael Jordan (probably the last Nike product that I know by name was the Air Jordan when it was introduced in 1984, and I was on junior high school basketball team).

Nike even had an athletes walk of fame – kind of like the Hollywood Stars. I could hear my colleague’s sounds of recognition as they saw the name of their favorite 70’s or 80’s football or baseball or basketball player.

It felt like a trip into the “Cult of Nike”; I don’t mean that Nike is a cult in a bad sense; the most effective organizations with the most passionate members usually have this kind of quality to them.

Another thing I noticed about Nike culture: I found them to be brutally honest. Maybe too much so, which I kind of appreciated.

For example, why did they start the non-profit Nike foundation? Honstely, because they were getting a lot of heat over bad working conditions in their off-shore factories. Why did they want us to go the Nike store? To spend lots of money on their products so their profits will go up. Why were they being so nice to us? Because they hoped we might want to work for Nike someday. What is Nike's biggest weakness today as a company? That they're a bunch of old white guys with very little diversity. Actually it was kind of refereshing to get such direct answers.

Of course, being ignorant about sports didn’t stop me (or my classmates) from spending at the famed Nike Store. I usually buy a pair of sneakers once every five years; I bought two pairs that day!

PACCAR: The Lexus of Heavy Duty Trucks

On Thursday, we visited PACCAR outside of Seattle. According to Wikipedia, they are the third largest manufacturer of heavy-duty trucks in the world. I hadn’t heard of them before the Sloan program (one of our classmates is from PACCAR), though I had heard of their truck brands – Kenworth and Peterbilt in the US and DAF in Europe. There’s a famous gun-battle scene in the movie Heat, which was one of my favorite movies of the 90’s.

Although I grew up in Detroit, I'd never been to an automotive assembly line, so this was fun for me to see. In fact, between Nike, PACCAR, and Boeing, it was fun to see companies that made actual things.

This might seem like a trivial point, but I was discussing this with another software guy in our class, and he remarked that we weren’t used to building actual physical objects – our products are usually just bits and bytes on a computer.

At PACCAR, we had a former Sloan and (currently EVP of something), give us a talk about the company and its history. Inevitably, the question about why GM and the other US car companies were doing so poorly and why PACCAR wasn’t in danger came up. The answer was interesting – having to do with being hamstrung by unions, quality of products, and providing what customers wanted.

Of course, the world wide recession was affecting them too – demand for trucks was down considerably, their plant was running at less than maximum capacity.

The first thing that struck many of us about the assembly line was that it was spotless; as one of our colleagues from Japan told us, just like Japanese assembly lines, you could eat food off of the floor (No not literally!).

The second thing was how automated the whole process was – PACCAR was a poster-child for efficiency. Each piece of the assembly had it's own barcoding and in some cases RFID so they could track exactly where the parts or the assembled trucks were.

In fact, PACCAR is one of the few companies that Toyota allows to use one of its internal suppliers, notably the Lexus supplier for interiors, PACCAR trucks are known as the high end of trucks, often called the “Lexus of Trucks”.

When we sat inside the cab of one of their finished trucks, I could see why. As the owner of three Lexus vehicles (the only car I’d ever owned before buying a Honda hybrid a few years ago), I can confirm that the interior looked and felt kind of like I was sitting in a Lexus!

The Bigness of Boeing

On Friday we visited Boeing – this was fun. One of the EVP’s (also a Stanford Sloan alum) gave us a talk about Boeing’s line of aircraft, including the new model of the 747 (which is being used for freight primarily) and the new 787 dreamliner, of which lots of airlines have ordered, but which is behind schedule.

Of course the conversation naturally turned to Airbus and Boeing’s recent rivalry – the A380 (the very large plane that Airbus released recently) vs. the 787 dreamliner. Airbus’s plane is bigger. Does that matter? On any visit to Boeing, the conversation inevitably turns toward size.

We saw brand new 747’s being produced on the assembly line and all I can say is that they are BIG. We visited the BIGGEST building in the world. It’s so big that it has it's own fire-station, birds live in rafters, and Boeing employees hunt the birds now and then to clear them out. The building can house something like 70 football fields. The engines of the Boeing 767 are so big that it’s the same size as the fuselage (i.e. the body) of the 737 (which is the airplane that airlines like southwest use for point to point flights).

How does Boeing feel about Airbus plane being bigger than theirs? Boeing makes the point that they tried to go out to sell a larger plane, but came back with a different set of customer requirements - more fuel efficient planes. Boeing says that the two new planes are not really direct competitors – the A380 was meant for a hub and spoke model, where large numbers of passengers are going from hub to hub. The 787 dreamliner, a much more fuel efficient plane, is meant for point-to-point travel and so Boeing will sell alot more of them.

Like PACCAR, Boeing seems to be affected by the recession. Unlike PACCAR, they seem to have a very large union workforce. Unlike PACCAR, you can’t order a plane from Boeing before 2015, because all of the planes coming off the assembly line are already accounted for by “firm orders” from airlines around the world. Why would the recession affect them if planes are full until 2015? Don't know but they were certainly of the opinion that the recession would be bad for them.

We then drove by Boeing’s own little airport, which is just outside this building. When the planes are built, they are then flown off to the ordering airlines right from Boeing field. Oops...did I say "little" airport? I stand corrected. The Palo Alto airport is a little airport. Compared to this, the Boeing field is freaking huge.

Kindlin at Amazon

We then shuttled off to Amazon.com, to meet a GSB Alum who is in charge of corporate development. For me personally this was a fun visit, because of the internet angle (the lobby with articles from the nineties was like a trip down memory lane back to the dot com boom). It was also fun because as writer, I’m all into books. One of the things he spent a lot of time talking about was the Amazon kindle e-book reader.

The Kindle has been under development for a while – as it seems have many other non-successful ebook platforms. This one, though was endorsed by Oprah, who gave away kindles to all the members of her studio audience recently. And, just like that, Amazon sold out of all of it’s kindles.

With over 200,000 books available on it, this might be the ebook reader that actually works. What makes this one different? The Power of Oprah.

Costco-land

We ended our visit with a trip to Costco. The CFO it turns out is also a Stanford GSB Alum, and he came prepared with lots of slides about Costco’s past and future performance.

Speaking of cults, Costco is fascinating not because of the cult-like nature of employees, but because of the attitude of customers. It turns out I was the only US resident in the audience who’d never been inside a Costco. I remember last year, when I was part of a California company that was being acquired by EMC (which is a Massachusetts company). During the HR question and answer session (in California), the only question that the employees seemed to care about, really care about, even in this age of inflated health care prices, was whether the new company was still going to pay for employee’s Costco membership cards!

When I moved to California about a year ago, I happened to be going to a store which shared a parking lot with a Costco on the weekends. It was a madhouse… with kids and entire families jumping with excitement as if they were going to Disneyworld! There was an electricity there. Think of a 21st century version of the Brady Bunch dressing up in their sunday best to go to Sears.

We learned a lot about the history of Costco; about the founding of the company; they did close to $100 million in their very first year. They’re the third largest retailer in the industry (after Walmart and Target, I believe). The founders are still around, and the culture is very no-frills, keep costs low kind of culture.

The bottom line: Costco sells a lot of stuff at very low, wholesale prices. In fact, the CFO showed us all manner of pics and figures of the amount of various products they sell, ranging from hot dogs to diamond rings.

One dynamic that he mentioned was that Dads who spend time with their kids on weekends and aren’t sure what to do, take the kids to Costco. The kids pig out on the sugary sweets and greasy food (well he didn’t say that exactly but he did say that Costco wasn’t into healthy food) while the Dad shops, the perfect win-win situation.

Unlike PACCAR and Boeing, though, Costco doesn’t seem to be suffering from the downturn. Even more people are looking for ways to save money. In fact, he said that many "premium" brands who would not even talk to Costco in the past are now approaching Costco to get rid of excess inventory. Soon we may all be dancing in the Costco parking lots looking forward to seeing Mickey Mouse!

Stanford Business, Entry 12: Midterms, Negotiations, and Sarah Palin

I’ve missed a week (or maybe two) in the blog because of two crazy busy weeks, which concluded this last weekend with our midterm exams and Halloween parties both on and off campus. Here are my top observations about the last two weeks:

Taking tests was both easier and harder than I thought it would be.

Our midterms were our first real academic challenge since we arrived at the Stanford Graduate School of Business program two months ago. This is no small point, given that many of us in the Sloan program have been out of school for more than 10 years (!).

I think it’s safe to say that many in our class were stressed out about the Finance exam. and preparing feverishly over the past week (when we had time to study, which was cut dramatically short by our Negotiations class – see point below).

While a few of our classmates worked in finance before (so the class is pretty easy for them), for many of us, the concepts are completely new. Some of us didn’t even know what selling stock short was a few short weeks ago. I can confess that I didn’t really grasp the differences between NPV, IRR, despite being exposed to both concepts in my career. And I have to confess that I knew very little about the CAPM (Capital Asset Pricing Model) or market-efficient portfolios when I arrived on campus just a few weeks ago. Come to think of it, I’m not quite sure that I buy into the CAPM or market efficient portfolios even now, but I hope like hell I got the questions right on the exam!

Conversely, many of our classmates did not seem so stressed out over our Economics exam. This was a surprise to me, since I find Econ to be a little bit subjective and was probably more stressed out over it than I was about finance.

Not surprisingly, no one seemed to be stressed out over our OB exam, which was either a 3-hour take-home exam or a final paper.

So, what’s it like to take an exam at Stanford GSB?

Since Stanford is one of the few Universities with a formal honor code, teachers don’t proctor exams in the classroom. No TA’s either. Just us chickens, er I mean students.
Our teacher, Professor F., after handing out the exam, wrote his office phone number on the board, told us to call him if we had any questions, and left for the day.

Really. There was no one monitoring the exam, and we are expected to keep our own time, not do anything that’s not allowed, and hand in the exam in to the appropriate location before the deadline has passed.

This means that there isn’t that much difference between an in-class exam and a take-home exam, especially since they’re both completely open book and open notes. The in-class exams had time limits of 1.5 hours, and the take home exam (which we had a whole week to complete) had an honor-code-bound time limit of 3 hours.

Oddly enough, this honor code thing probably made us more conscious about making sure we didn’t do anything wrong than a more traditional exam type of environment.

So how did I do? I don’t know – we haven’t gotten the results yet… so I’m rushing to get this blog entry up before we get the results.

Cramming in an extra class is both a good and a bad idea.

The one thing that complicated our exam schedule (OK it wasn’t the only thing, but the biggest thing) was that during the week before our midterms, we had an extra class. Not just an extra hour or two, but 15 hours of a normal ten session elective class, Negotiations, every night from 5 to 8 pm.

What was it like? We would show up to class and immediately get instructions on the negotiation exercise for the day. Before the lecture, We’d usually go out and conduct a fictional negotiation.
We’d work hard to try to get the best deal in the negotiations that we could (sometimes not reaching any agreement whatsoever), and then head back to the classroom where the teacher put up our scores in front of the whole group, so we could make fun of those of us who didn’t do so well. Haha, no just kidding about that last part. Actually the negotiations where one party didn’t do well were the ones where we learned the most.

In one week we did: a two-party negotiation where one person was trying to buy a plant from the other party and had to agree on a price; a three party-negotiation where each of us represented a company and we needed to figure out which two of the three were going to work together, or if all three were going to work together (this one was a bit of a mindbender, if you do the math, it naturally leads to all kinds of Machiavellian behavior); a multi-division group negotiation (where each of us was on a three-person team that had to negotiate with another three-person team – this one proved to be the most difficult believe it or not); and finally a six-party negotiation with representatives from six different organizations (this one kind of reminded me of the six-party talks between the US and North Korea, with everyone trying to get their little piece of the pie – it was about as successful too).

As I said in my last entry about OB, for some of my engineering friends, it might seem that we’re just playing parlor games . And OK, I have to admit, these exercises are a bit contrived, but the experience of going through them is, in my opinion, probably going to stay with us longer than the derivation of the CAPM from our class.

All Hallow’s Eve

It was Friday, and Exam week had come to an end. The students were dressing up as ghosts and ghouls and vampires. This is Halloween. This is Halloween. Halloween, Halloween! (honor code note, src: Tim Burton’s the Night Before Christmas).

Actually I was so tired of both negotiations and exams that I went to three Halloween parties this weekend – a Graduate Student Halloween Party on Friday (which was in Rains, a Stanford Graduate Dorm), a Sloan Fellow’s party on Saturday (which was for our class and partners, held at one of our colleague’s house in Palo Alto), and the MBA Halloween party (which was at a local nightclub in Palo Alto). This is the benefit of being on campus – honestly I don’t think I’ve even been to three Halloween parties over the past three years, let alone in one weekend.

For many of our international friends, this whole Halloween thing was a bit of a spectacle. Why were we dressing up in funny costumes? Why were we putting in so much effort to dress up in funny costumes? Did they have to wear costumes to come to a Halloween Party or could they go in normal clothes? If Halloween is supposed to be scary, why were there people walking around dressed as politicians?

Of the three parties that I went to, the Sloan Halloween party was by far the most fun. Which is funny because we definitely had the highest average age of the three parties. We had classmates dressed as everything from Arab Oil Sheiks to the Grim Reaper and the Incredible Hulk (actually we had two Hulks at our Sloan party alone, growling at each other every chance they got).

But what was the most popular costume on campus this Halloween? Without a doubt, it was Republican Vice Presidential Nominee Sarah Palin.

While I did see one Hillary, one Bill Clinton, one Barack Obama, and one John McCain. I counted at least 10 Sarah Palin’s. Most of them were dressed up in suits, with hair adorned like the veep candidate and matching glasses to boot. If that wasn’t enough, one of them was dressed in a bikini swimsuit with a beauty-contestant sash. And once I ran into two Sarah Palin’s travelling together who looked slightly different –one was Sarah when she was Mayor of Wasilla, Alaska, and the other was after her national makeover. Now that was scary.

Return to Normalcy

Even scarier? On Sunday night, I found myself suddenly without anything to do. No more exams. My take-home paper was done. My take-home exam was done. There were no more Halloween parties. No GSB events or Sloan activities to attend. No required Leadership workshops, prep sessions, or Seminars to dress up for. No last minute study group meetings for assignments due on Monday morning.

Wow. After two months of non-stop activity, I suddenly found myself not knowing what to do with myself. I tried hard to remember what it was like to be a normal person again.

Then I recalled that we had lots of reading to do for this upcoming week, and I breathed a sigh of relief. Since the OB class was over, we also had a new Strategy class that started at 8 am and there was no way I was going to make that unless I got some sleep this week. Somehow the large amount of reading (which I hadn’t done yet) and upcoming assignments (which I hadn’t started yet) hanging over my head had become comforting.

I found that a little bit disturbing. Instead of doing any reading that night, I rented a science fiction movie and watched it guilt-free.

SPECIAL DISCLAIMER: the opinions and experiences recounted in these blog entries about my year at Stanford Business School for the Sloan Program are my own personal observations and ranting. This blog is not endorsed by either the Stanford GSB and definately not by any of my fellow Fellows

Stanford Business, #11, Glad To Be Here...

Last week marked the first full moon on campus since the term officially started. For the Sloans at the Stanford GSB, this means we’ll have been here two months next week. As usual, we had a jam-packed week.

Glad to be Negotiating?

A few weeks ago we saw videos of the Blue Angels starting (and ending) their briefing and de-briefing sessions with these words “Glad to Be here”. The members of the Sloan GSB class have taken them to heart, often starting meetings (or even emails) with: “Glad to be here”.

Ok maybe sometimes it’s said with a knowing smile and little bit of gritting of teeth, especially when we learn that we have even more reading to do for our classes, while we have midterms rapidly approaching.

We’re now entering our “busy” period: this week, every single evening after our normal classes finish, we have our 5-session intensive negotiations class from 5:15pm to 8:15pm. Which leaves us with plenty of time to study for our midterms, doesn’t it? Did someone mention something about a speed-reading course? That would be useful right about now…

For me, I’m just glad that it’s at 5 pm in the evening (which I can make) and not 5 in the morning (which I probably wouldn’t make it to).



Two Parties, Who Wins?
Even before our intense negotiations class started, we got a taste by doing a negotiation exercise last Friday in our OB (“Organizational Behavior”) class. This exercise was called a “two-party multi-issue negotiation”).

For each pair of students, one of us played the part of a proprietor of a family-owned Latin American food processing company; the other became a representative of a big international conglomerate that was going to acquire the company.

Points (“payouts”) were awarded to each side depending on how well they negotiated their position on each of the four issues we had to deal with: 1) amount of cash paid up front vs. paid later, 2) years of non-compete that the entrepreneur will have after the acquisition, 3) number of family members of the entrepreneur that would still be employed after the acquisition, and 4) which party would take on potential liability. Each issue had its own payoff structure, and we weren’t allowed to see the other party’s payoffs.

When I told an engineering friend of mine about our OB class recently and the exercises we do, she asked why we were just “playing games” every day in business school rather than studying!
I can assure all of my engineering friends that these games are actually serious academic exercises designed to teach us well-researched techniques. That they are also fun is beside the point!

The results ranged from shark-like (one party walked away with the store) to moderate (both sides ended up with about the same number of points). We quickly learned who the sharks and the pushovers were in the class (though that’s likely to change rapidly in the new negotiations class).

You might be thinking that this scenario is a little contrived. After all, in the real world, there aren’t any explicit points awarded for negotiating issues. But by being so explicit with the payoffs, it was possible for both parties to review each other’s payoff schedule after the exercise was done.

It was eye-opening. We realized (too late) that some issues were more important to the entrepreneur and not important at all to the conglomerate (Damn! You mean I could’ve negotiated more and the other side would have given in?). Some worked the other way around. And some were, rather counter-intuitively, such that both parties actually wanted the same outcome!

Turns out that by understanding the other side’s priorities, both parties could have gotten higher payoffs rather than negotiating each issue as if it was a zero-sum game.

How to do that? In a multi-issue negotiation, you can simply ask the other side to rank the issues by importance. You’d be surprised how many people are willing to answer that question since it’s innocuous enough.

To my chagrin, I didn’t ask this to my partner in the exercise, and he didn’t ask me, so we ended up with a run of the mill 50/50 compromise. Acceptable but as our modeling professor would say, sub-optimal.

Study Trip to the Valley

This week, we had our first Study Trip, to prominent Silicon Valley Companies. Study Trips are sort of like field trips in elementary school, except they’re for b- school students and we don’t get to go to any museums.

We visited three companies on our trip this week: LinkedIn, Google, and DCM. Our bus left at 8:30 am sharp (Yes, I made it on-time, believe it or not!) and drove all the way to Mountain View (where the first two companies are located) and then back to Palo Alto on Sand Hill Road where the third (a venture capital firm) is located. So what was it like?

LinkedIn. Our first meeting was with the CEO of LinkedIn, a well known business/resume/social networking company: Dan Nye. He told us a little bit about the history of the company. It was started by a number of founders, including one of the founders of PayPal (Reid). Dan was at an enterprise software company before taking over as CEO of LinkedIn, and he spoke about the differences in running a high-profile web 2.0 company vs. his previous jobs. Unlike some companies where the founders left when professional management, at LinkedIn the founders still work closely with the CEO, which has made it a great experience.

Dan wasn’t present at the founding of LinkedIn, but he did tell us one obligatory Silicon Valley “startup” story – on the first day he joined LinkedIn, they were still in an old office in Palo Alto with a leaky roof and there was no one to call for maintenance so they had buckets set up to catch the water. Needless to say, they don’t have that problem today – their offices are quite plusch in a class A building in Mountain View just down the road from Google..

As an interesting aside, he mentioned that his brother worked for Bain Capital in Boston – turns out I pitched my last company to his brother a few years ago with my last company. They didn’t fund us, but as I remember, they gave us some pretty good feedback and advice…small world.

Google. The second company we visited was Google. I would really like to tell you what we saw and heard at Google, but they made us sign an NDA so I can’t tell ya nothin.

HINT: Both of the speakers were women, and both were among the first 20 hires at Google (no we did not meet with Larry or Sergei, the founders). One of the speakers, who spoke about innovation in general and how they innovate at Google in particular, looked a lot like, and spoke like the woman in this video (though the woman we saw had the presence of an in-command corporate VP, rather than the uber-geek presence in this video):
http://www.youtube.com/watch?v=soYKFWqVVzg&feature=related.

Kidding aside, the talk about innovation was actually pretty inspirational, and the stories of how Google iterated from just search towards its final model of "search, see ads, click, and ka-ching!" was pretty interesting.

We also got to eat lunch at the much-vaunted Google café, and even saw Spaceship One, which one of the Google founders bought after it won the X-prize in 2004. Google also added its own version of this prize, which involves giving $30 million to anyone who can launch a satellite to the moon and send a signal back.


DCM. In some way, this was the most interesting of the three stops for me. We met with David Chao, Cofounder and General Partner of this well-known leading Venture Capital firm. He told us how he started to invest in China and Japan in the nineties when people thought he was crazy for doing that and not investing in dot coms. He told us his thoughts about leadership, which seemed to be the result of a lot of professional reflection and self-awareness (something I have to admit I don’t see a lot of with Venture Capitalists; Wonder why that is?).

He said that to be a leader (especially an innovative one), it means that at some point you are going to get lonely. There is always that point when you are out front, going to have to be out front at some point, by yourself, when people are not following you. Eventually (after one day, one month, a year, or 10 years) people will eventually catch on. It can be quite lonely during that time.

He also talked to us about how he used his intuition to help guide decisions. As an example, he mentioned how an entrepreneur once showed him a spreadsheet that listed all the factors they were looking for in a VC. He said that probably wasn’t the right way – you had to go with your gut feeling of who you’d work best with. He also talked about “signs” – little things in the environments that inspire you in some way to follow a course of action. It could be a song you overheard on the radio, or some conversation you overhear that speaks to you. I found this intriguing enough since I had never a VC talk in these terms before. I believe that intuition is the most overlooked factor in making professional decisions which define an innovator and have started writing a book on it. Stay tuned for that.

Full Moon Over Stanford
In my brief year here, I’ve vowed to try to keep up with some of the undergraduate traditions at Stanford. This can be difficult, since graduate students are explicitly not invited to said undergrad traditions. And Sloans are even older than your typical graduate student. A few weeks ago I witnessed the “Band Run” (see earlier post on that). One of my friends who attended Stanford Undergrad, thinks it’s hilarious that I’m trying to re-live her freshman year. For the record, I’m only observing the undergrad traditions, not trying to be a freshman again!

One of the more famous (infamous?) traditions is Full Moon On The Quad, referred to by the student body affectionately as “FMOTQ” (yes Stanford students like acronyms, as does the faculty).

This long enduring Stanford tradition, started probably a hundred years ago, was historically a way for Senior boys to welcome the Freshman girls by giving them a rose and getting back a kiss on the cheek. Since then it has evolved (devolved?), becoming a way for undergrads to cut loose and get over their inhibitions at midnight by making out with other students when they are relatively new to campus.

A few business school students sneaked into the Quad to see what was happening around 11:30 pm. There wasn’t much happening, though there was clearly some anticipation in the air. Bands were playing on a make-shift stage, with groups of students dancing a little and otherwise enjoying being with friends. But no kissing.

I asked some undergrad girls nearby about what was going on – both of them, one of them a senior, one a sophomore (both of whom looked like they might have been straight A students in high school) said that they’d attended FMOTQ each of the previous years but hadn’t kissed anyone. They looked a little nervous about the whole thing but seemed determined to get over their trepidation this year!

By midnight, there still wasn’t much happening. There was one dorky looking guy walking around with roses handing them out to undergrad girls, who smiled sweetly but as far as I could tell, he wasn’t getting anything in return; the girls would take the rose and wander closer to their girlfriends, who were typically dancing next to some of the frat boys, who were clearly not handing out roses but were obnoxiously bragging about how they were going to kiss more girls that night than they had the previous years.

After 12;30, things started to change, slowly. A small portion of the student body was mingling and bumping into each other in the middle of the well-decorated and grandiose Stanford Main Quad, eyeing each other to decide who would get a kiss and who wouldn’t.

By about 1am, things had changed radically. Let’s just say that there was an even smaller subset of students (mostly undergrads with a few shady grad students who sneaked in, I’m sure) out on the floor, doing some serious making out with their fellow students.

At some point, I don’t remember exactly when, the nudists arrived (yes, there’s a group of about 80 nudists at Stanford who I’m told run around campus naked on special occasions like this one). They didn’t actually look like they were naked, since they were covered with body paint that in the middle of the night looked like it could have been clothes. Plus it gets really cold in Palo Alto after midnight, so it would be really stupid to run around campus with no clothes on, or so I thought. When one bumped by me, I took a closer look. Yup, they were definitely naked…no doubt about it.

Now who would have thought Stanford students, among the most academically minded geeks in high school, would be out kissing random strangers on the Quad under the first full moon of the school year? Krutos.

We left shortly thereafter, but I’m sure that for the ambitiously minded, the party continued well into the night! No, I didn’t participate, but as I walked back with some of my classmates I was clearly thinking maybe, just maybe, it might have been more fun to be an undergrad at Stanford than at MIT!

What’s Your Type?
Speaking of a totally different type, on Friday, we had as part of our leadership series, the MBTI personality test and workshop, which stands for Myers Briggs Someting Something. It’s basically a personality test, where you answer questions (used to be on paper during the time of two people named Myers and Briggs; now they’re online) about your preferences in life.
Here are some examples (not real questions, just what I remember being on the test):
Do you like to have your schedule planned out to the minute or do you like to wing it?
Are you flexible with time or do you like to have everything planned out?
Do you get annoyed with people who are flexible with time or do are you like them?

The eventual goal of the test is to classify you into various quadrants of the MBTI graph (are you introverted or extroverted? Are you more likely to be thinking or feeling? Are you perceptive or intuitive?).

The workshop started at 8 am on Friday after a very busy week. Needless to say, since I thought it was an optional workshop, I missed it.

Honestly, I have never been a big fan of categorizing people into buckets, since in my humble opinion, each person has very unique characteristics and doesn’t always fit nicely into one bucket or another. Throughout high school and even college, there are some people who, believe it or not, would classify me as clearly introverted, while others would have clearly said I was extroverted. So, which am I? An E or an I? To quote our accounting professor, It Depends.

Categorizing reminds me a bot of Astrology (I’m a Sagittarius, what’s your sign?) or numerical types in the Enneagram (I’m a 3, what number are you?). Now there are certainly people who swear by these categories, and maybe they’re right. I just tend to have an initial skeptical reaction to them (though I’m willing to be convinced).

By about 10 am that Friday, I was facing the by-now familiar Engineer’s Dilemma – do I go to the workshop, having missed the first half, or do I just wait until it’s over? I decided to get some work done and show up to the next item in our jam-packed schedule – a brown-bag lunch during which some classmates were making presentations, followed by our OB class all afternoon.

Turns out that my MBTI type was “ENTP”, a fact which the teacher shared with the class. Apparently, people in this category, as far as I’m told, are very flexible with time and may even occasionally show up late to things.

The teacher was looking for an example of someone in this category and (as I’m told) called my name. I wasn’t there. A fluke?

Since I wasn’t there, she went to the next name of a classmate whose answers to the test also fit him into the ENTP category. Characteristically, it turns out he wasn’t there either! Only 50% of the four people in this category had bothered to show up for the workshop… which proved to be instructive in its own right.

Hmmm… that's a pretty big coincidence. Maybe there is something to this MBTI thing after all…


SPECIAL DISCLAIMER: the opinions and experiences recounted in these blog entries about my year at Stanford Business School for the Sloan Program are my own personal observations and ranting. This blog is not endorsed by either the Stanford GSB and definately not by any of my fellow Fellows

Stanford Business, #9, I Have a Dream... of Approaching Midterms and Dysfunctional Study Groups

Time is flying fast, and we are almost to our midterms – only two weeks to go. This is no doubt raising some concerns and fears within the business school in general, and the Sloan program in particular (more on some of the rising tensions later).

So, what’s our week like?

Monday is our Excel day (we have two class-dose of financial modeling with Microsoft Excel). Tuesday is our “hard science day” – with Finance in the morning and Economics in the afternoon. I say hard science, but honestly I personally have some concerns about whether economics is such a hard science and not really a social science disguised as a hard science. Sometimes, when i'm not sure what direction the supply and demand curves should go, it kindof seems like a social science ("anthropology?") that's basically concerned with an imaginary tribe of people called “rational” people (rumored to exist?), an imaginary group of producers, called "profit-maximizing firms" (also rumored to exist) , and what these two groups might do in an imaginary place called "the free market".


On Wednesday we usually don’t have any official “classes”. You might think we have the “day off” – but not really. Usually there is a dizzying array of activities planned for us on Wednesdays – some of it by the Sloan GSB program itself, and some of it by our study groups (speaking of study groups, I think we are starting to see some real drama in the study group realm– see later in this post). Last Wednesday we had the lunch with the CEO of Skype. There is usually a Career Development Workshop on Wednesdays for self-funded Sloans, and those of us in study groups usually work on our finance assignments, which are due on Thursday. Next week we have our Silicon Valley Study trip on Wednesday.

On Thursday, it’s Finance and Economics again. And on Friday we have what I like to think of as our touchy feely day. On Friday, we have two doses of our OB class. I’m not even sure what the class is called in reality; we just refer to it as OB.

So, what is OB, really??

OB stands for Organizational Behavior. At Stanford, this seems to be the “discipline” (or rather, the umbrella) under which all so-called soft stuff – leadership, interpersonal dynamics, communication skills, teambuilding, HR – gets dumped. It's just OB.

I like to think of it as a way for academia to talk respectably about interpersonal dynamics and touchy-feely stuff without actually calling it that. By calling it “Organizational Behavior” instead, it lets Stanford GSB still maintain that everything is being researched rigorously and thoroughly as a “field of study” rather than a bunch of interesting ideas about how people behave in groups.

In some ways this has been the most “fun” class thus far. Last week, we watched video clips from the movie, 12 Angry Men (the old one, with Henry Fonda). We were discussing influence and how, in the movie, the jury starts out as 11-1 for a guilty verdict. He gets them, through many techniques, one by one to reconsider, and by the end it is 11-1 on his side for a non-guilty verdict. I won’t tell you what happens at the end (If you haven’t seen this movie, it’s a great one to watch). Basically the whole movie takes place in the jury deliberation room. Henry Fonda’s character is masterful in how he unfolds his doubts about the case to the rest of the group.

I Have a Dream … of an iMac?
This week our OB class sessions were about goal-setting and effective communication. On this second point, we watched the complete video of Martin Luther King’s “I have a dream” speech from 1963. It is interesting, says Professor F., who teaches the class, that many of us know the last few minutes of this speech, but few, if any of us, have watched the speech in its entirety. I don’t think there was anyone in the room who had read or seen the whole speech.

He gave us a transcript of the speech and we watched Martin Luther King deliver it. I don’t have to tell you that it was a masterful speech; but afterwards we analyzed it to see what techniques he used in his speech that made it very effective. Here’s some of what we found:

· Analogies. MLK used analogies and metaphors very effectively, talking about the manacles of segregation and the chains of discrimination. He also spoke extensively about the metaphor of a check being given to the African American community when the Emancipation proclamation was issues in 1860’s by Abraham Lincoln, and how that check was bouncing. There were many, many more.

· Integrating the Setting. The speech was given in front of the Lincoln Memorial in Washington DC at a very large rally. MLK did a very good job of integrating this setting, starting by talking about Lincoln, alluding to the famous Gettysburg Address, and mentioning the Emancipation Proclamation (for our international readers, this was the proclamation at the end of the US Civil War made by President Lincoln which freed the slaves in the south). He also brought in the US Declaration of Independence and Constitution indirectly, quoting “life, liberty, and the pursuit of happiness”, and “we hold these truths to be self-evident, that all men are created equal”, all the while with Washington DC as his backdrop.

· Identifying a Common Purpose. One of the things that MLK did in his speech was to talk about racism as not a problem just of the “south” (technically, southeast) but of all Americans. There were lots of references to the North and states which were not part of the south (California, Colorado, New Hampshire) in an effort to cast light on the speech as affecting an American issue and not just a regional issue.

· Repeating Key Concepts. MLK repeated certain phrases over and over again, which made them stick. In fact, Professor F. pointed out, that a few of his repeated lines basically captured the whole speech, including the progression of the speech: “100 years later”, “Now is the time”, “Never be satisfied until”, “I have a dream”, “Let Freedom Ring”.

· Building Momentum and Creating a Sense of Urgency. The speech started out very logically, and with MLK speaking softly and slowly. As the speech went on, as the metaphors became more colorful, we saw him speed up and start raising his voice.

After watching the MLK speech, we watched another example of effective communication, this time of Steve Jobs when he rejoined Apple computer. It was a precarious time for Apple, and as usual, Jobs did a masterful job of presenting the iMac as being better than most, if not all, computers out there.

He focused on the issue of speed. First he showed a chart comparing the speed of iMac vs. a Compaq PC. Then he presented a slide showing the speed of iMac in relation to other Pentium computers out there. Finally, to hammer the point home – he showed a demo of an animation running head to head on a Compaq PC and on an iMac. Let’s just say that the demonstration was pretty effective -- the Compaq computer was limping along with the animation barely moving, while on the iMac, the animation was blazing along.

Now as I said the demo was pretty effective communication, though perhaps a bit contrived. As a software guy, there could have been any number of reasons why a particular animation ran slowly on the PC rather than the Mac. If some of those conditions had been reversed, it could have been the Mac that was running painfully slow compared to the PC. That’s what marketing is all about, I guess.

Those of you NOT in business school will probably see right away the irony of showing and evaluating these two pieces of effective communication one after the other. One was about a social issue of staggering importance, while the other was pretty much only of staggering importance to the shareholders of a given corporation, albeit an iconic one. One was about social justice, while the other was about technological prowess.

Don’t worry, those of us in Business School see this irony too (at least I hope some of us do!) Or maybe we don’t. Maybe to b-school students, these are both, well, simply good examples of OB.

Midterms are Approaching

As the midterms are approaching very quickly, I can sense a general level of nervousness in the class rising, particularly as we struggle with finance, modeling, and even economics – have we learned enough to pass the midterms? Are our study groups being effective? What is a Net Present Value, anyways, and why do I care?

We’ve started having “Modeling for Poets” sessions (aka remedial modeling) and “Finance for Poets” (aka basic finance) sessions each week. The finance sessions are scheduled very conveniently at 8 am in the morning.

Inspired by our discussion of goal-setting in our OB class, I think I’ll set a goal related to these early morning sessions. I will set a goal to make it to at least one of these “Finance for Poets” sessions (yes, the 8 am ones) sometime this term.

Speaking of OB, my goal is what Professor F. would label as a SMART goal, a popular acronym for goals which are set in a “good” way. S is for Specific: one session of Finance for Poets is specific enough– nothing vague about it; M is for Measurable: Well, so far I’ve made it to zero sessions so this is easy to measure; A is for Achievable: Yes I have occasionally gotten out that early so it is possible; R is for Realistic: well, not sure about this one- we’ll see; T is for Timetable: I have a clear timetable in this goal, by the end of this term.

Study Group Drama

Yes, I think as mid-terms approach, tensions are definitely heating up, and not only in our study group, but others as well. Tensions between morning and evening, all of whom have to agree on a time to meet. Between married, married with kids, and single Sloans, all of whom have to pay the same class dues, and who often have radically different schedules trying to coordinate a time to meet. Between those who think finance (or economics, or modeling) is easy and those who think it (they) is black magic and extremely difficult. Even between those who think certain classes are not being well taught and those who don't.

I have also heard from several people that their study groups are not working well. I originally posted the specifics of an incident from my own study group.


-----Incident Transcript and Interpretation Deleted-------


I've taken it out because it proved too controversial since it involved my taking serious offense at comments directed to me personally from a member of my study group about why our study group wasn't functioning so well.

The reactions from my classmates to this blog entry were perhaps even more interesting than the incident itself - ranging from:


· encouragement ("a little dirty laundry can go a long way", "thanks for saying what some are thinking but not saying", RESPONSE: thanks)

· genuine concern about our relationship ("Hope you and this other guy are going to get along", RESPONSE: we're going to get along fine; we had a very heated discussion today that did a lot of good for us both and will hopefully lead to a productive relationship over the next eight months of the school year)

· logical admonishments ("you really should have discussed it with your classmate before putting it in your blog", RESPONSE: thanks, a very good point in general)

· offense ("I'm shocked. can't believe someone would say that to you!", RESPONSE: neither could I at the time)

· censorship ("Please don't put anything in your blog that might make the GSB look bad or hurt recruiting for the Sloan program or that those recruiting from the Sloan program might read online"), RESPONSE: Call me crazy, but I think Stanford GSB's reputation is strong enough to be able to handle it; if it can survive a book called "Snapshots from Hell", my little blog isn't certainly going to tip the scales...

· a serious case of cold-shouldering from some of my previously very friendly and warm GSB Sloan classmates ("If I don't look at Riz today and don't say hello to him, maybe he'll know that I don't approve of him putting stuff that happens between him and his classmates into the blog"). WARNING TO FUTURE BLOGGERS: yes, this is part of the joy of personal blogging, especially if, like me, you don't always follow the party-line that everything is always hunky dory... I read one blog that took place at a prominent business school (!) from a few years ago; the blogger quit in October, because "it was just too controversial" to continue. We'll see how long this one lasts - even this revised entry is likely to generate its share of controversy!

Interestingly, the most encouraging and helpful reaction was from our study group. The incident and our subsequent discussion led us to one of the more open and most productive study group sessions we've had in a while, with broad agreement about how to move forward.

So, ironically, our study group at least, is likely to be well prepared for the approaching mid-terms!