So a bunch of people have asked me about how I prepared for the GMAT, so here is some of my advice:
Give yourself at least a couple months to prepare if you're gunning for a top score--I spent at least an hour a day preparing (thank you BART public transit), while also spending a sporadic 2-3 hour time period to take a practice exam.
I didn't take any classes, and from what I have heard they really are only valuable in two cases:
1. If you need extensive work on your quantitative skills (more than review)
2. You need to be forced to study
However, if you're not taking a class, it is useful to have someone to study with, if at the very least to keep you honest. A coworker of mine also studied for the GMAT at the same time I did, and while we rarely sat down and studied together, we would quiz each other on some of the more difficult quant questions that we came upon.
Kaplan and Princeton Review are NOT the same. From my observation, and those of others I have talked to, Kaplan is much more difficult in math. Princeton review might be a little more difficult in verbal, but overall the scores I got from Kaplan were significantly lower than my actual score (Princeton Review was about the same score on average).
One thing I recommend for those who are starting the studying process is to download the PowerPrep software and take one of the two GMAT tests early on. Then a week before you take the actual exam, take the second practice test. I think most people agree that this test is the most accurate descriptor of your score (for me, I scored exactly the same on the real test--even the same on the verbal and quant sections!).
The test is not as important as I thought it was--do not compare it to the LSAT (which combined with gpa can predict acceptance remarkably well--I don't even know why they ask for essays!). What is much more important for business schools are the essays, and depending upon how many schools you apply to, you will probably spend more time on them than studying for the GMAT.
If you have any other questions, I'd be happy to talk!
Justin
Sunday, November 26, 2006
Business in Iowa
I met up with 2 bankers this past week while I was home in Iowa for Thanksgiving break. The first was Adam Claypool, and investment banker for BDFS. I didn't even know there were I-bankers in Iowa until I spoke with my mom about a company she had invested in through him. His bank works with small to medium sized companies ($5 - 500 million). They specialize in providing very hands-on service, and work only 12-15 deals a year (though they turn down a few hundred a year). I really have no idea how this compares to other midwest investment banks (say Chicago), but I assume they are much smaller. One very interesting thing I learned is that Acuity Ventures, a venture capital firm in San Jose, has worked with BDFS to move a few of their startups to Des Moines. One of the companies they have moved is Gcommerce, a provider of supply chain management software. Basically they have created a web-based software program to connect contractors with distributors, and distributors with suppliers, to reduce lag times and implement just-in-time manufacturing (think MIT's beer game). A couple of observations:
1. I thought this already existed, so I'm wondering how much competition they have (Adam said they are currently only a few million dollar company so they are just getting started) .
2. The move to Des Moines has it obvious benefits (cheap rent, cheap labor, closer locale to many manufacturing plants), but one major problem with Iowa is the amount of brain drain it is going through--the best engineers and scientists born in Iowa are moving away, so there is a lack of technically skilled people for Gcommerce to hire.
My second meeting was with a commercial banker in Ankeny. He is one of the founders of the bank, which is obviously much smaller than Wells Fargo or Principal, but is still one of the largest banks in Ankeny with over $100 million in deposits. Some of the items we discussed:
1. Can't compete with Wells Fargo on price (loan interest rates), so instead focuses on speed--he can authorize a million dollar loan same day, where other banks may take a few weeks for processing to go through.
2. While they have internet banking, they focus on their brick and mortar service, which he acknowledged is not efficient. However, for a bank in Iowa, the personal touch of a bank is very valuable.
3. He was amazed how easily it was for me to get student loans online--that it did not really even matter to me what bank I got them from, and that I never had to physically sign a document.
4. Basically this very profitable bank is afraid of innovation--they did not implement online services until a competitor did, they did not offer ACH transacting until one of their major clients forced them to, and the banker I talked to still used an adding machine!
1. I thought this already existed, so I'm wondering how much competition they have (Adam said they are currently only a few million dollar company so they are just getting started) .
2. The move to Des Moines has it obvious benefits (cheap rent, cheap labor, closer locale to many manufacturing plants), but one major problem with Iowa is the amount of brain drain it is going through--the best engineers and scientists born in Iowa are moving away, so there is a lack of technically skilled people for Gcommerce to hire.
My second meeting was with a commercial banker in Ankeny. He is one of the founders of the bank, which is obviously much smaller than Wells Fargo or Principal, but is still one of the largest banks in Ankeny with over $100 million in deposits. Some of the items we discussed:
1. Can't compete with Wells Fargo on price (loan interest rates), so instead focuses on speed--he can authorize a million dollar loan same day, where other banks may take a few weeks for processing to go through.
2. While they have internet banking, they focus on their brick and mortar service, which he acknowledged is not efficient. However, for a bank in Iowa, the personal touch of a bank is very valuable.
3. He was amazed how easily it was for me to get student loans online--that it did not really even matter to me what bank I got them from, and that I never had to physically sign a document.
4. Basically this very profitable bank is afraid of innovation--they did not implement online services until a competitor did, they did not offer ACH transacting until one of their major clients forced them to, and the banker I talked to still used an adding machine!
Monday, November 13, 2006
Why has eBay been so successful?
1. Serves the long tail--there was no existing market for many of these products (beanie babies, collectible cars). Contrary to many online sites which just mirrored the offline world, this sector was too fragmented to exist offline--it could only exist on the internet.
2. Network effect business--I can not stress how valuable this is for growth. First mover advantage is huge. Once competitors have the ability to imitate, the competition is over.
3. Community of users--first three years of growth, management was hands-off and let the community lead management to correct strategic decisions. Interesting to note that Meg (see below) eventually had to take control of management decisions as the company grew--best examples are acquisitions and removal of illegal and harmful items (guns, etc).
4. Meg Whitman--I visited a class at Harvard last winter, and the discussion was on whether Meg Whitman was lucky or good. I think she was good. The argument against her was that she just happened to be at the right place at the right time, and nobody was going to stop the growth of eBay. I disagree; she was intelligent enough to realize that she needed to take a hands-off approach to management. She knew that other than the user community, Pierre Omidyar (founder) was the most important part of eBay. Yet she still offerred a different opinion, and at times vetoed the engineers decisions because she knew how to take the company from where it was to where it was going. I find it very similar to Eric Schmidt (CEO of Google), who was in the same position with Sergey and Brin--he was almost like a baby-sitter, but they needed a baby-sitter, one with passion and vision for where the company was headed.
Where hasn't it been successful?
1. China -- Taobao
2. Japan -- Yahoo! Auctions
3. Korea -- GMarket
Why? Not the first mover, and had not listened to the community. When they first created sites in Asia, the currency was still in dollars, auctions ended at U.S. local times, etc. Gmarket is interesting as well because eBay had dominated the Korean market until GMarket entered with less auctions, and more fixed price sales for in-season products. They also featured real-time price negotiations between buyer and seller (something eBay may be attempting to do with their recent acquisition of Skype).
New areas of growth:
-Real estate
-International sites
-Different auctions
-Localized auctions (think craigslist)
-Mobile alerts, mobile interface
2. Network effect business--I can not stress how valuable this is for growth. First mover advantage is huge. Once competitors have the ability to imitate, the competition is over.
3. Community of users--first three years of growth, management was hands-off and let the community lead management to correct strategic decisions. Interesting to note that Meg (see below) eventually had to take control of management decisions as the company grew--best examples are acquisitions and removal of illegal and harmful items (guns, etc).
4. Meg Whitman--I visited a class at Harvard last winter, and the discussion was on whether Meg Whitman was lucky or good. I think she was good. The argument against her was that she just happened to be at the right place at the right time, and nobody was going to stop the growth of eBay. I disagree; she was intelligent enough to realize that she needed to take a hands-off approach to management. She knew that other than the user community, Pierre Omidyar (founder) was the most important part of eBay. Yet she still offerred a different opinion, and at times vetoed the engineers decisions because she knew how to take the company from where it was to where it was going. I find it very similar to Eric Schmidt (CEO of Google), who was in the same position with Sergey and Brin--he was almost like a baby-sitter, but they needed a baby-sitter, one with passion and vision for where the company was headed.
Where hasn't it been successful?
1. China -- Taobao
2. Japan -- Yahoo! Auctions
3. Korea -- GMarket
Why? Not the first mover, and had not listened to the community. When they first created sites in Asia, the currency was still in dollars, auctions ended at U.S. local times, etc. Gmarket is interesting as well because eBay had dominated the Korean market until GMarket entered with less auctions, and more fixed price sales for in-season products. They also featured real-time price negotiations between buyer and seller (something eBay may be attempting to do with their recent acquisition of Skype).
New areas of growth:
-Real estate
-International sites
-Different auctions
-Localized auctions (think craigslist)
-Mobile alerts, mobile interface
Sunday, November 12, 2006
First Blog
I see this blog as a way for me to somehow organize the amazing amount of ideas that are being created here at Stanford Business School. I have been here only 2 months and have met some of the most fascinating people. Right now, my thoughts have been centered on three career paths/industries: entrepreneurship, e-Commerce, and sports. Ideally, I would like to combine all three, following a path similar to Eric Baker's (GSB '01), when he formed StubHub.com.
One idea I am throwing around is college recruiting software--I have spoken with a classmate of mine who is an assistant coach for a women's soccer team, and there is a lot of room for improving the current software that they use. I am also meeting with the AD of USF (not UCSF, which I mistakenly used in an email to her--oops!), to discuss my idea. One potentially huge issue I have to address is the size of the market for college recruiting software. I spoke with a VC over lunch (he is in the executive education program here at Stanford and also graduated from Carleton in '94), and that was his first concern--while this may be a good idea, the market is probably too small for a VC firm to be interested. Also, how will I be able to convince teams to allocate resources away from their current budget to my software. So this may or may not be a path to pursue, but the great thing about Stanford is that there are so many opportunities that I feel the only limiting factor for me is time.
I'm sure I will be commenting more on this topic after my meeting Wednesday, but I also want to outline other ideas I would like to post in the near future:
-Takeaways from my Paths to Power class
-My research paper on local search
-Microfinance through Prosper.com
-What I learned at the Roads to Innovation Conference
-Tips for applying to business school, as well as studying for the GMAT--since I spent almost a year of my life doing it, I might as well share some insights :)
Cheers,
Justin
One idea I am throwing around is college recruiting software--I have spoken with a classmate of mine who is an assistant coach for a women's soccer team, and there is a lot of room for improving the current software that they use. I am also meeting with the AD of USF (not UCSF, which I mistakenly used in an email to her--oops!), to discuss my idea. One potentially huge issue I have to address is the size of the market for college recruiting software. I spoke with a VC over lunch (he is in the executive education program here at Stanford and also graduated from Carleton in '94), and that was his first concern--while this may be a good idea, the market is probably too small for a VC firm to be interested. Also, how will I be able to convince teams to allocate resources away from their current budget to my software. So this may or may not be a path to pursue, but the great thing about Stanford is that there are so many opportunities that I feel the only limiting factor for me is time.
I'm sure I will be commenting more on this topic after my meeting Wednesday, but I also want to outline other ideas I would like to post in the near future:
-Takeaways from my Paths to Power class
-My research paper on local search
-Microfinance through Prosper.com
-What I learned at the Roads to Innovation Conference
-Tips for applying to business school, as well as studying for the GMAT--since I spent almost a year of my life doing it, I might as well share some insights :)
Cheers,
Justin
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