Justin's Blog

Viral Video Production Company: Connective Productions

2008-10-16T10:03:00.000-07:00

Connective Productions is a company that I and a few of my friends started in business school. We connect advertisers with online filmmakers to create product integration online. Here is the first video that was created through our marketplace, Wrestler. Check it out and forward to your friends if you liked it!

Is Swoopo a scam?

2008-09-24T11:56:00.000-07:00

Winner's curse? Try winner's and loser's curse. Swoopo is the self-proclaimed "home of exciting, fast-paced auctions on the internet." The prices on the site are significantly lower than on other auctions sites such as eBay, but there is a catch: bids are made in $0.15 increments and cost $1 each.

For example, as you can see in the picture below, an Apple iPod Touch just sold for $95.40, $133 below market price. The winner, Jannlotz, also bid 35 times, which cost him/her an additional $35. So the total savings was about $100. But what about all of the other bidders? According to Swoopo, the auction price for all items starts at $0.15. For a winning price of $95.40, that would mean 635 bids were made on this item (600 of which were NOT by the winner). In a 10 minute span, I saw at least 100 bids placed by bidders that eventually lost the auction. So even though Jannlotz was the auction winner, the real winner was Swoopo ($600 in bids - $100 loss on the item for a total of $500!!). And I'm sure there are situations where the auction winner ends up paying more than the value of the item (because of the sunk cost of bidding). For example, say that you have made 100 bids on an item worth $100. If the price is still below $100, it is worth the $1 marginal bid to buy the item for under market price.

In conclusion, Swoopo is not a scam but rather an auction site for those with very high risk tolerance. Bid wisely...

Trip to Amsterdam

2008-08-07T09:03:00.001-07:00

Caitlin and I arrived in Caitlin late Monday night. We stayed at The Crooked House (above), a great little hostel in the southern canal area. Tuesday we wandered around the city and met up with my friend Laura from Stanford. On Wednesday we went to The Rijksmusem--the building itself is a piece of art. It was built by Pierre Cuypers, who also has exhibits in the museum. Most of the museum is actually under construction right now, but they moved the masterpieces to the section that is open. They have a great Rembrandt section--the most famous piece is below:

Wednesday evening we went to the Anne Frank museum, which was very sad and moving. I had been unable to see it my first time to Amsterdam and was glad to see it this trip.

On Thursday we went to the Van Gogh museum, which has over 200 paintings from the short-lived artist's life.

Next in our trip is a one day stop in London, before heading back to the States on Sunday.

Our trip to Prague

2008-08-03T08:30:00.001-07:00

We arrived in Prague on Friday morning after a 4am flight from Athens, and were very happy to find out that our hotel room was ready when we arrived. After a morning nap, we went out to discover what Prague is all about--cheap beer and food :) We had a delicious roasted chicken leg and a 0.5 liter of Hoegaarden (yes, I realize its not Czech, but it is one of my favorite beers) for less than $10 each. We were then off to the castle (see picture above), walking across the famous Charles Bridge into the Little Quarter. The castle is one of the largest in all of Europe, and also the best preserved because it avoided Nazi bombs during WWII. While the views outside are spectacular, the tour probably isn't worth the price of admission--it was only a couple of rooms and nothing to special. After a delicious dinner and 2 liters of beer for less than $15, we wandered the streets of Prague and headed home for a good nights rest.

The next day we did some shopping and sight-seeing in the Old Town, starting at the Old Town Square and off to the Havelska Market before seeing the Museum of Communism. Old Town Square is the location of the Jan Hus Memorial, as well as Tyn Church and the Astronomical Clock (see the pictures below for more detail).

The communist museum was very interesting, as it outlined the 40 year history of Soviet rule over Czechoslovakia until the Velvet Revolution in 1989. The Soviet propaganda posters were probably the most alarming artifacts in the museum, and the video at the end of the Communist Party riot police beating students (including women) that were non-violently protesting. As an aside, the museum is located above a McDonalds and next to a casino--talk about a change from 20 years ago.

On Sunday we spent the afternoon at the Jewish Museum. The museum is located in the Josefov (Jewish) quarter, and has many sites. The first we visited was the highly emotional Pinkas Synagogue, which contains the names of the approximately 80,000 Czech Jews who were sent from here to the gas chambers at Auschwitz. On the second floor the Terezin Children's Art Exhibit displays the drawings of the the almost 10,000 children imprisoned at the Terezin Concentration Camp. Only a few hundred of these children survived the holocaust.

After walking through the Old Jewish Cemetery (the only burial grounds allowed for Czech Jews from 1439 to 1787), we entered the Maisel Synagogue, which was contained many Jewish history exhibitions. This was actually the place where all Jewish artifacts were stored during WWII, as the captive leaders of the Terezin Ghetto convinced Hitler to create a "Museum of the Extinct Jewish Race." Quite an emotional afternoon.

Statue on the Charles Bridge

Memorial of Jan Hus, overlooking the Tyn Church in Old Town Square. Hus was burned for condemning the corruption of the Roman Catholic Church (100 years before Martin Luther)

The 15th century Astronomical Church strikes at the top of the hour

Four statues surround the clock. A figure staring into a mirror represents vanity, a Jewish moneylender is greed, a Turk playing the mandolin stands for hedonism. All are reminded by death that these are only worldly goals. When death tips his hourglass, the 12 apostles pass by the window above, the rooster crows and the hour is rung.

Beautiful Art Nouveau building in Old Town Square

And here are a few more fun pictures :)

An And1 slam dunk contest in Wencelas Square

The signs on the bathroom doors

Caitlin amazed at the size of her $3 beer at our first lunch

Wine tasting in Santorini

2008-08-01T10:26:00.000-07:00

Today we went wine tasting in Santorini with our friends Rob and Hannah from DC. Our hotel manager recommended that we check out Santos winery and Antoniou. After a few wrong turns, we made it to the ridiculous views from Santo Wines (see below).

Rob, Hannah and Caitlin at Santo Wines

At Santos we tried 6 wines (starting from right)

Assyrtico—a very nice, dry white wine which wasn’t too bitter or too sweet. My personal favorite.
Nykteni—this wine was ok; Rob and Hannah liked it more than the first
Ageni rose—a semi-dry rose wine that was one of our favorites
Voudomato—we found that the red wines from Santorini were not very good—this was definitely the worst
Imiglinos—a very sweet white wine; Caitlin didn’t care much for it but I thought it was good
Vinsanto—Santorini is famous for its unfortified dessert wine. It tastes very similar to port, and is made by drying white grapes out in the sun for 2 week

After a 20 min tour of the winery facilities, we headed off to Antoniou, a cute little winery with three tastings (white, red, vinsanto) for 5 euro.

View from Antoniou patio

We finished the wine tour by driving to the Santorini Wine Museum. For 6 euro per person, we got a tape recorded tour of the museum as well as 3 tastings. The museum is extremely cheesy—it felt like a guided walk through a 1950s carnival ride (see video below). It was interesting to learn that the island used very old-fashioned wine making methods because there was no electricity until 1970.

For dinner that night we drove out to the last taverna before the lighthouse in Akrotiri—our hotel manager Kostas recommended it as a great place to get fresh, cheap fish. He was definitely right—we had two lobster and a cod-like fish for 28 euro. Our waitress took us to the back of the restaurant to choose our fish (see mine below). Her father catches the fish that day and prepares it himself. No question this was one of my favorite meals in Greece.

Nea Kameni – Santorini Volcano

2008-07-30T09:22:00.000-07:00

For our first day in Santorini we took a day cruise out to Nea Kameni, the most active volcano on Santorini Island. It was created in the 18^th century, with its most recent explosion less than 100 years ago. The island itself has had a very active past—one of the largest volcanic explosions in the history of the planet created the beautiful cliffs (known as the caldera) around 1650 BC. Ash from the explosion was found in South America, and would have been heard on the Western coast of France. It is believed that this explosion is what wiped out the great Minoan culture on Crete. Since then, earthquakes and other volcanic explosions have created the beautiful views on the island.

We took a wooden sail boat which looked like a pirate ship out to the volcano, and then climbed up to the peak, which had ridiculous views of the island. Afterwards we took the boat out to Palia Kameni to swim in the hot springs that spew into the Aegean sea. Then we had lunch in Thirasia, which was separated from the main island in 236 BC. That evening we watched the sunset from Akrotiri, and then drove the rental car (a tiny red Peugot) to have dinner and drinks with our friends we met in Mykonos.

Justin at Nea Kameni Port with the Caldera in the background

View of Hotel Mathios from our balcony

The pirate ship we took to the volcano

Sunset from Akrotiri

Mykonos

2008-07-26T16:28:00.001-07:00

Today is our last day in Mykonos before we head out to Santorini. Here's a quick recap:

We left for our ferry around 4pm, which got us into Mykonos around 9. If you are ever taking a trip to Mykonos, make sure you have arranged for a ride! It was a madhouse. Another ferry had arrived later than expected... imagine 1000 people + 50 cars leaving two boats onto a road 4m wide. To say the infrastructure here isn't that developed would be an understatement :)
Caitlin and I finally found a cab after about an hour, and we drove down into Mykonos town. Most of the streets are so small that you can't actually drive on them. The whole town is a maze, which is really cool. It was developed that way because this was an island hide away for Pirates!

Our hotel (Hotel Philipi) is awesome--its a little place right in the middle of Mykonos town, with a beautiful garden in the patio. Location couldn't be better for the price.

Friday night we met a nice couple from DC at dinner and grabbed drinks on the water in Little Venice. Cait and I then finished the night at club down in Taxi Square. Saturday was a day of drinking at Paradise Beach. Now we're off for lunch at a gyro stand before boarding our ferry to Santorini. I'm excited because I heard the views from the ferry are great.

Windmills in Mykonos

View from the bus

Paradise Beach

Caitlin and Justin at Paradise Beach

Ruins in Athens

2008-07-24T06:33:00.000-07:00

Caitlin and I arrived in Athens yesterday after a long day of traveling. We are staying at the Pan Hotel, which is a nice, small boutique hotel in Syntagma Square. While the room is small, the location is amazing--we are literally 15 minutes from the major ruins in Athens.

We started our day at the Acropolis at 9am, which was good because we just beat the huge tour crowds. First we entered through the Temple of Athena Nike, which is currently under construction. Next we walked by the Erechtheion, which contains the famous six Caryatid scupltures. Then we were off to the Parthenon, the most impressive ruin in the Acropolis. Inside stood the greatest sculptural feat from the artchitect (Phidias): a 12 m gold and ivory statue of Athena. Unfortunately, the statue was destroyed many centuries ago.

The next ruins site we visited was the Agora, the marketplace of ancient Greece. Here stands the best preserved Greek temple, Hephaesteion.

We then trekked up Philopappos Hill, to get the best views of the Acropolis. On the way we passed by Socrate's prison.

We finished the day by visiting the temple of Zeus. Unfortunately, only 15 of the 100+ columns from Greece's largest temple remain. Now we are off for drinks and then dinner, before heading out to Mykonos on Friday.

Caitlin in front of the Parthenon

Ancient Theater of Dionysus

Facebook Social Advertising Part II

2008-04-16T22:07:00.001-07:00

I asked Khalid today if he was aware of his name and picture being used to advertise for Veritas on Facebook. To my surprise, he said no. He became a "fan" of Veritas to get a 10% discount on their GMAT prep courses. My gut reaction is that people will not be too pleased to see that they are being used in advertising without being compensated (and I don't think he sees the 10% discount as comp). The better question is: how much would be ample compensation? Will we see "Facebook celebrities" in the future? This could get really interesting.

YouTube pays out $1 million to users

2008-04-16T14:50:00.000-07:00

http://newteevee.com/2008/04/16/youtube-pays-users-1-million/

A couple VERY relevant quotes:

Break a Leg's Yuri Baranovsky said he’d collected $1,600 for more than 2 million views on YouTube.

YouTube partner videos are the only ones on the site for which YouTube shows overlay ads, which it says it tries to sell for a $20 CPM.

So, let me get this straight... YouTube receives $20 CPM for overlay ads, yet pays its partners $0.80 CPM. The scary thing is that this is probably a better deal than what the users are getting on Metacafe, which pays a $5 CPM but has 1/20 of the pageviews of YouTube (see below).

Facebook Social Advertising

2008-04-16T01:13:00.001-07:00

I couldn't help but notice the following ad on Facebook today. My friend Khalid recently signed up to be a fan of Veritas GMAT Prep, and is now being featured in a Facebook ad.

Last Lecture Series: Joel Peterson

2008-04-09T20:51:00.000-07:00

Today at Stanford we started the Last Lecture series, where the most popular professors give a one hour lecture to the departing second years. Joel Peterson, who taught my Managing Growing Enterprises class, gave an excellent presentation today (see here for a video of Joel presenting at the E-Conference this winter). Here are the notes I took from the lecture.

One of Joel's lessons to live by is to always ask yourself: What is winning for you? For this lecture, he decided to ask himself: What is winning in life? The answer... happiness. But how do you define happiness? He says that happiness can be attained in 3 different ways: Pleasure, Joy and Peace. If you were to graph these, Pleasure would be on the farthest left and give you the least happiness. Pleasure is about meeting your needs now, but is not fulfilling. One of life's problems is that many people stay at this level. Next is Joy; all of us would agree that joy is something that has more meaning than pleasure alone. And finally, there is peace. Peace is something that is self-actualized, and is most difficult to achieve. Money and fame will not give you peace (and at best probably will only give you short-term pleasure). The key to peace and happiness? Strive for a person to be, a person to love, and a work to do.

A Person to Be
How do you discover who you are? Joel suggests:
1. Read; at least a book a week. Not TV, not movies, but reading. Read on planes, read if you can't sleep. Reading allows you to see the world through others eyes.
2. Memorize quotes, and notice which ones you actually remember. You'll learn a lot about yourself.
3. Write down your goals. Operationalize them, and let other people know. Make them memorable. For example, Joel will never forget one of his student's goals to "run a marathon at age 35 faster than at age 25." People will always be reminding you of these types of goals, which will help you accomplish them.
4. Write your own obituary. Or a six word story about yourself. Example: "For sale: baby shoes, never worn" by Ernest Hemingway.

Finally, to learn what your core values are, look at where you spend your most valuable resources: time, money and mindshare. The difference between these and what you believe are your core values is in fact a lack of integrity.

A Person to Love

Loving another is hard work. Marriage is about making a commitment
We love what we sacrifice for.
Learn to listen. Ask good questions, and follow up with more questions. Joel would ask his children "Tell me about you." Be willing to accept silence and eventually people will open up.
To truly love someone is to be able to freely exchange feedback. Thank people who give you negative feedback; this is the hardest to give.
Laugh--you are not the center of the universe

A Work to Do

Being in business is just as noble an endeavor as becoming a doctor or researcher, because running things is very hard to do well.

To be successful in business you need 6 qualities:
1. Hardworking
2. Smart
3. See beyond what is obvious
4. Build great teams--resist the temptation to be a pleaser, you will eventually be abandoned or betrayed
5. Communication
6. Be trustworthy--help others achieve their dreams

Not the most pleasant portrayal of my friend Ash

2008-04-09T13:31:00.000-07:00

My friend Ash was just quoted in a Newsweek article on "How to Get Rich Being Green" (see article here). The article starts off as "Ash Upadhyaya is no tree hugger," and then goes on to protray him as a money grubbing MBA student who drives a gas guzzling Porsche. While I had to remind Ash that he does drive a Boxster, anyone who doesn't know him would think he was a complete ass hole from this article. In our Managing Growing Enterprises class we spent a day on how to talk to the media, and this serves as a real world example of how difficult it is to give an interview; the writers will get the angle that they want.

NY Times Article about Yahoo!'s Display Ad Exchange

2008-04-08T17:03:00.000-07:00

Yahoo! has begun to publicly talk about the display ad exchange that I heard about while interning there this past summer. They are calling it AMP, though the article doesn't mention when it will be launched. I wrote in an earlier blog post that this advertising project will basically determine the future of Yahoo!, and it is probably a major reason why the board has been reluctant to accept Microsoft's offer.

Facebook Monetization Talk

2008-04-07T22:51:00.000-07:00

Two GSB alums, Tim Kendall '06 and Megan Marks '07, met with us today to discuss monetization strategies at Facebook, as well as give general advice around joining startups. Tim has been with the company since it was an 80 person startup (now Facebook employees around 600 people).

First I would like to briefly discuss some advice he gave the group surrounding startups. The first is the importance of engineers; while it may not seem that important who the first engineer is that you work with to develop your site, if that person stays on then they (along with the founder) will drive the culture of the company. So don't make that decision to quickly.

Second, think about joining startups that are in the 50-100 employee stage with $50 MM in revenue. According to Andy Rachleff (who is a lecturer at the GSB), these companies have mitigated a significant amount of risk yet are still growing quickly enough that there is a lot of upside in joining them.

Now on to the Facebook specific conversation. Tim identified three areas that need to go right for Facebook to be "the franchise company of this decade." They are:

1. increase user base (currently around 70 m)
2. develop a better product
3. figure out how to make money

Not a ton of insight at the macro level here, but he did dig deeper into all of these areas. For the first, he discussed how growing internationally has been a huge focus, and that the app platform has actually made it very easy for the company to internationalize because the apps are being created by the local developers. Additionally, Megan mentioned that it has been easier to acquire older demographics outside the US because the Facebook brand is not associated with being a college website.

As for the second point, clearly the app platform was developed in part to address this issue as well, though some people argued that it might hinder the product given the clutter and confusion surrounding the multitude of applications out there. Additionally, Tim talked about how reducing latency is a major goal for Facebook, and that they have observed a huge increase in engagement for only very small (millisecond) improvements in latency. Finally, one area where there has been a lot of innovation that I was unaware about is the algorithm behind the News feed. It actually looks at your social map and interactions between your friends to predict what info you are most interested in receiving. Therefore, even as you add more friends, your news feed shouldn't change significantly over time. I am wondering how long it takes for the algorithm to learn, however, given that I am still receiving a lot of info about friends of mine that are only acquaintances at best outside of Facebook.

For the third point we talked about the growth of advertising revenue over the past 3 years; $10 MM in 2005, $50 MM in 2006, and $150 MM in 2007. This growth hasn't even come close to user growth, however, so there is still a lot of room for improvement (which goes without saying if they truly are valued at $15 billion!). So what are some of the creative ways that Facebook is starting to grow revenues? The most obvious is taking advantage of the social graph--a great predictor of the products and services you are interested in is your friends. A couple examples that Tim mentioned (one actual and one hypothetical) is from the Wall Street Journal and Amazon. Supposedly, you can actually go to the Wall Street journal and click on a link that says Most Read Articles and see what articles have been ready the most by your friends (in aggregate). A similar example could be a Barack Obama page on Amazon, where you are able to read only the reviews that your friends or network have written. Clearly there are a lot of privacy issues surrounding these ideas, but the monetization potential really can't be argued with.

Another monetization problem Facebook currently is suffering from is the revenue share with third party applications. Currently, third party apps drive a very large proportion of total pageviews throughout of the site. Yet, Facebook can only show ads on a very small portion of the app's page (the canvas area is reserved solely for the use of the app). Tim mentioned a very large BMW campaign that was launched last week by Federated Media (a third party app advertising agency), Microsoft (who has an agreement with Facebook to provide ads on the site), and Graffiti (popular third party app). The problem: Facebook saw exactly $0 in revenue from the campaign. What does Facebook do about this? Clearly it is a conflict of interest given that third party apps allow Facebook to accomplish 2 of the 3 goals mentioned above, yet hinder goal number 3. While we came up with some minor suggestions (sell more targeted ads for BMW, for example), we couldn't come up with a great answer in the short time we had today.

Leaving Stockholm

2008-04-01T02:00:00.000-07:00

We're a few hours from leaving Stockholm... sad. But I'm definitely looking forward to not living out of a suitcase and being back in PA. Our last day in Sweden was fun, we visited Ericsson, Koenigsegg (see picture above of me and the fastest car in the world... yours for only $2.2 million!!), EQT and the confederation of Swedish Industries.

I'll be sure to post more pics and notes when I get back to the States.

Weekend in Sweden

2008-03-30T13:56:00.000-07:00

Just finished up a great weekend in Stockholm with a dinner at the Opera House--finally got some authentic Swedish meatballs. Also finally tried some herring; they love this stuff out here, but its a little to much for me. Today we recovered from a night out at The Village, the "hippest" club in Stockholm according to my Swedish friend. Surprisingly, drinks were not that much more expensive than at every other bar we've gone to (but still in the $15 range). I was also one of the youngest people there (and recognizably so given that everyone I talked to asked me what my age was). I think we showed the Swedish 30 year olds how we like to party though!

So after a couple hours of sleep we left for a river cruise of Stockholm and then went to an awesome museum that holds an authentic 17th century battle ship. It is impressive how large the ship was... I had never really thought about that until seeing one up close. The ship has a great story behind it as well--it sank 20 minutes into its maiden voyage! The king of Sweden ordered that the ship have 2 levels of cannons, which placed too much weight on the top half of the ship and basically it just fell over into the Baltic Sea. We were told that Sweden spent 2% of its GNP to build it too. Talk about an embarrassing moment for Sweden!

Tomorrow is the last day of the study trip, and then i fly back to the U.S. on Tuesday. Then off to class on Wednesday to begin my last quarter at the GSB--I cannot believe how quickly it has gone by!

Denmark Business Trips Day 1

2008-03-26T10:17:00.001-07:00

The first day of business trips started for us on Tuesday morning. We visited four companies today: Vestas, Carlsberg, Maersk and Saxo Bank. We also spoke with the US Ambassador. Here are the notes I took on the meetings.

Vestas
Peter Brun, SVP of Government Relations

Vestas is the world's largest supplier of wind turbines (23% of market).

They believe that the effective price of wind energy (taking into account the environmental costs of CO2) is actually on par with coal. However, I don't think they they have taken into account the costs of variability for wind; he mentioned that on days when there is no wind, plants can run gas generators, but the cost of these generators is significantly higher than coal and oil power plants, and should be included in the total costs of operating a wind turbine.

Carlsberg
Alex Myers, SVP of Western Europe Operations

Founding of the company
-JC Jacobsen discovered stable yeast, a process that is still used today by every brewer
-Did not patent the technique but instead freely gave out the IP

Why Not US?
-Chose to focus resources on Russia (BBD)

Culture
-focus on being the best, not the biggest (currently the 5^th largest brewery in the world)
-okay to make mistakes, as long as the same mistake is not made twice
-lots of internal debate, but once a decision is made it is supported country wide (this is a characteristic we have seen in many Danish companies)
-KISS: try to keep things as simple as possible

Organizational Chart
-the company is broken into four functional areas (Group Sales & Marketing, Communications, HR, Supply Chain) and four regions (Nordic, Western Europe, Eastern Europe, Asia)

Private, Public Company
-the company is 49% public and 51% owned by a private foundation, another characteristic common among Danish companies

Product Mix
-80% of the beer sold at Carlsberg is not under the flagship brand name
-The #1 sold beer at Carlsberg is actually a Russian brew

Strategic Mission
-Identified 4 key value drivers for future growth:

1. Improve earnings in Western Europe
2. Grow sales in BBH and Eastern Europe
3. Build a platform for long term growth in Asia
4. Develop valuable real estate (move production to less expensive real estate and create offices, restaurants, etc)

-Decided to not push one big global brand, but instead have multiple brands (some specific to certain regions)

-Local
-Power
-Premium
-Super Premium

-Have consolidated acquired local brands and built national brands out of a select few
-Belief that 70-80% of beer consumption is local consumption.

Specific challenges within Western Europe
-Powerbrands are being attacked from above and below
-Need to innovate and Premiumize due to no market growth (-1% growth of beer overall in Western Europe in 2007)
-Margins are being squeezed due to increased competition
-Material prices have increased dramatically

Scottish & Newcastle (S&N) Merger
-Currently have a 50/50 Joint Venture with S&N
-The acquisition will be a major consolidation in the BBH region

Maersk
Knud Pontoppidan, EVP Group External Relations

Company Overview
-100,000 employees in over 130 countries
-Moller family foundation has voting control
-By far the market leader (2x market share as closest competitor)

International Labor Force
-Maersk negotiates with unions from each individual country
-For example, Danes are paid more than Filipinos for same job

US Recession
-Had to lay off 3,000 employees in LA port
-However, shipping doesn’t necessarily decrease with a recession because people substitute purchases for cheaper goods (but the overall number of goods that needs to be shipped doesn’t change dramatically)
-Additionally, China has been doing well (and 1/3 of all containers touch China)

James Cain
US Ambassador to Denmark

One of 30 non-professional ambassadors appointed by the President. Eisenhower initiated this method after WWII, believing that he needed to have people he had worked with previously and could trust in key strategic areas of the world.

Three differences that he has witnessed between Denmark and U.S.

Life-work balance (Danes work on average 350 less hours per year)
Healthy, outdoor loving
Less sensitive to race and religion (Mohammed cartoon for example)

Typical day:
8:30 AM Starts with Security Briefing (only 4 major Danish threats since 2005)
9:00 AM Meetings with Ambassador Heads
1:00 PM Bilateral and Multilateral meetings with businesses and other orgs
7:00 PM Various dinners

He has initiated a bike ride throughout Denmark to meet “the normal people”
When a Dane rides with him, James always asks this person three questions:

What are the first words that you associate with the U.S.?
What would you show a U.S. visitor?
Rate from 1-10: How close is Denmark to the U.S.? Does it matter?

James has discovered that the answers to questions 1 and 3 vary from adults to youth. Danes older than 35 tend to associate patriotic words with the U.S. and believe that Denmark is close to the U.S. and that it matters. Those younger than 35, however, associate cultural images with the U.S., and do not believe that Denmark is close to the U.S., nor that it matters.

James has identified two negative attitudes that many youth feel about the U.S.:

Political issues that are tied to President Bush

Iraq
War on Terror
Global Warming

Cultural Images

Movies, TV, Food, Fashion
Images of America as a violent and materialistic country
Religion

How to change this opinion?

He believes that the first attitude will eventually fade away, but the second issue is critical to address. Various methods he has tried include visiting schools within Denmark, bringing guest lecturers from the U.S., and increasing the college exchange program.

Role of Ambassador

His role is to be a by-partisan representative of the U.S., and definitely not defend President Bush. However, sometimes he does need to clarify U.S. actions, such as America’s recent reductions of CO2 emmissions.

He also does not impart his personal opinions on domestic policy in Denmark, though he does have strong opinions about health care. His belief is that universal health care has reduced terminal and end of life care in Denmark, because the government does not want to pay for expensive medical procedures. For this reason, Denmark has the lowest life expectancy of all European countries.

Saxo Bank

Saxo Bank produces a foreign exchange (FX) trading platform, that is provided both as a commercial product and as a white label alternative for large commercial banks such as Citibank.

We met with the COO and the Head Trader. The Head Trader was an interesting guy—he showed us Saxo Bank’s predictions, but couldn’t really explain their reasoning. One poignant example is when he predicted that the growth over the next 10 years will be flat at best because the economy has been operating in 17 year cycles since 1953. However, he number 17 is easily influenced by when you begin the index, and clearly there are multiple crests and troughs within these cycles. Additionally, when we pushed back by asking how technology and a global economy has affected these cycles, he really had no response.

They believe in the values of Ayn Rand and Jack Welch, and actually gave us Atlas Shrugged as a gift. They are a truly meritocratic company, as they fired 15% of their work force last year (150 people), and yet are hiring over 50 people per month.

Here we also discovered that certain ex pats can receive a significant tax reduction (from 65% to 30%) for a three year period in Denmark.

Expensive City!

2008-03-24T16:41:00.001-07:00

Just got back from dinner and drinks in Copenhagen. We went to the Madklubben, which means Food Club in Danish. We had spectacular food--salmon with watercress salad for appetizer, steak and beets for the main course, 4 different types of cheeses (including danish brie) and a pudding topped with pear sauce for dessert. Luckily the dinner was included in the trip price, so we didn't have to pay for that (well, better put we already paid for that...). However, I definitely know that drinks are expensive. Two bottles of the cheaper wine for the table... $90. One beer... $10. And for the cab ride home, the meter starts at $12 (you can imagine how quickly that bill grows). Definitely feeling the weak American dollar :(

Denmark Day 1

2008-03-24T09:58:00.000-07:00

Today was our first official day of the Scandinavian study trip, in Copenhagen. Because it is Easter Monday, we had no meetings and instead spent the day sight seeing. First on our tour was the Kronborg Castle, one of the most famous castle's in Europe.

The castle is also known as Elsinore, the setting for William Shakespeare's Hamlet. In the picture below is a portrait of Amleth, whose story was told by Saxo Grammaticus in the 13th century and later retold by Shakespeare.

The castle also has a statue of Olgier the Dane, the great Danish King that sleeps here until needed for protection of the country's people. However, we have discovered that the Danish are quite fatalistic given their history of losing many wars to the Swedish (there appears to be a fun rivalry between them, as has been demonstrated from our Danish and Swedish classmates).

For the afternoon we took a canal tour of downtown Copenhagen, where we saw the house of Hans Christian Anderson (who wrote The Ugly Duckling and The Little Mermaid), the new opera house (which was donated by Maersk), and a battle ship that was recently retired because it accidently shot a missle at a summer house--luckily no one was home at the time!

Now we are off to dinner to meet a Danish Sloan alum, and then a little relaxation before our first business meetings tomorrow morning.

Iceland

2008-03-22T13:22:00.000-07:00

Finally made it into Iceland after a one day delay. Spent the afternoon at the Blue Lagoon, one of the famous geothermal spas just outside of Reykjavik. The water is a really cool blue, and about 104 degrees F (see picture below).

Afterwards we grabbed some dinner by our hotel and started planning our evening festivities. We discovered that Icelanders don't actually start partying until after midnight, so we did some pre-partying at our hotel and went to a bar called the Apothecary around 1am. Icelanders definitely like to party late, as we didn't get home until around 6am! Overall it was a fun night of drinking and dancing with the locals. Now we're off to Copenhagen tomorrow morning for the start of our study trip.

Beginning to Iceland trip...

2008-03-19T19:26:00.001-07:00

Not so good. Flight to JFK was delayed, so I missed my flight to Reykjavik. Had to buy a new ticket for tomorrow... not cheap. Here's hoping tomorrow works out!

For more info on my trip, check out this blog frequently--I'll try to keep everyone updated as much as possible.

Carlsberg

2008-03-05T22:25:00.000-08:00

I gave a presentation on Carlsberg today in preparation for the Scandinavia study trip. They are quite an innovative brewery and I am very excited to meet with one of their Senior VPs, Alex Meyers. See below a quick overview of the presentation.

Carlsberg History

Founded in 1847 by J.C. Jacobsen (after the name of his son Carl)
Public company with over 30,000 employees and $10 billion (US$) market cap
Merged with Orkla ASA in 2001, becoming the 5th largest brewery in the world

Carlsberg Brands

Carlsberg Pilsner (4.6% ABV)
Carlsberg Light (2.7% ABV)
Carls Porter (7.8% ABV)
Carls Hvede (5.8% ABV; interesting because until recently wheat beer was illegal in Denmark!)
Tuborg (4.6% ABV)
Tuborg Easter Brew (5.7% ABV; seasonal beer that will be released while we are in Scandinavia)

Financial Outlook

Steady growth in volume over last 5 years
Strong growth in EBIT (30%) because of "innovation and strong presence of international brands Carlsberg and Tuborg" -- CEO Jorgen Rasmussen

EBIT and Stock Price Growth over last 5 years

International Growth

Clear market leader in Russia (38% market share)
25% increase in volume in Asia

Merger with Scottish & Newcastle

Carlsberg and Heineken launched a joint bid to break up UK's Scottish & Newcastle in 2007
$15.3 billion US (50% premium over share price)
Carlsberg would gain sole possession of Baltic Beverages and S&N's French, Greek and Chinese Operations
However, the European Commission announced this Monday (3/1/08) that it is postponing its review of the merger until April of this year

World's Most Expensive Beer

Introduced Jacobsen Vintage #1 on Jan 25, 2008
Costs 2,008 DKK (~$400 US)
600 bottles of the 10.5% ABV beer will be released in 2008
Plans to release 2,009 and 2,010 version as well

"Probably the best beer in the world"

Carlsberg Advertising slogan
See the embedded online video about Carlsberg below:

Ignoring my blog

2008-03-02T17:54:00.001-08:00

So I have been seriously ignoring my blog for the past few months, so I figure I better start with a recap of my life today :)

1. I have a job after b-school (always a good thing) at McKinsey in LA. I am also not starting till late October, so if you have any great ideas for what I should do over the summer let me know!
2. Just finished a very successful Entrepreneurship Week at Stanford, including the E-Conference which i helped out with as the Student Program Director. I met some great people there and hope to keep in touch as I consider pursuing a startup in the future.
3. I am going to Scandinavia for a study trip in 2 weeks. I am sure I will be doing a lot more posting while I am out there to keep everyone updated.
4. My pro bono consulting project with the San Francisco Playhouse is almost complete--we have our final presentation with the Board of Directors a week from Monday

Those are the big things so far... I also had a great time today at the Special Olympics basketball clinic here at Stanford. Everyone had a great time and I hope to see them again this spring in other Special Olympics events.

Till next time...

Cool Huip

2008-01-14T12:15:00.000-08:00

A classmate of mine just informed me that this 15 sec clip on Cool Whip was the most successful advertising they had received all year! I wonder if they even paid for it...

Recruiters do not like us

2007-09-19T00:24:00.000-07:00

The Wall Street Journal's annual survey of corporate MBA recruiters has ranked Stanford #19 nationally. Other "top tier" schools such as Harvard and Wharton also rank low, at #14 and #11, respectively. Reasons for the low ranking, according to the article are "students' inflated egos and excessive expectations." The article continues to note, however, that "their [Harvard and Stanford's] graduates still end up landing some of the highest paying jobs."

While I don't find the ranking itself to be that alarming--it doesn't appear to reflect recruiter's willingness to interview/hire Harvard and Stanford MBAs--I do think there is some insight to be gained here. While getting into a top business school is definitely an accomplishment, it does not guarantee success at any level (nor a job after b-school). The people we work with do not care where we got our MBA, and some will actually be hostile towards us because we have an MBA from a top school. As the recruiting season for MBA2s begins in about a month, hopefully we will all take this article as a reminder that we are not entitled to anything.

My last week in South Africa

2007-09-18T04:47:00.001-07:00

Its pretty unbelievable to think that I only have a few more days left in South Africa before I return home to start my second year at Stanford! I have definitely had a great time here, and there is still much left for me to see--perhaps another trip in 2010??

Here are some more photos of my adventures here:

This is me at Blythe Canyon, which is the third largest canyon in the world. We visited this on the return from Kruger Park. As an aside, I heard on the radio yesterday that 4 lions broke out of Kruger Park Sunday night--one of them was hit by a train and died but the other three are still on the loose. And just in case anyone reading this blog ever runs into a lion :), the experts suggest that you DO NOT back down or run away--try to look as big as possible to scare them away. Lions love to play cat and mouse games, and will pounce on you if you try to run.

This is the entrance to the Sterkfontein caves. This is where the oldest human fossils have been found, as well as the oldest man-made tools, and the first recorded use of controlled fire. It was discovered by miners in the late 1800s--unfortunately for them (but fortunate for paleo-anthropologists), no gold was discovered, and scientists were allowed to investigate the caves.

Behind these gates is where Little Foot was found--the first complete Australopithecus skeleton. It has taken over 14 years to to excavate the fossil; the calcium that encases it is actually harder than the bones. Out tour guide believes that it will be placed on exhibit sometime next year.

Everyone I have spoken too has recommended that I go to the Apartheid museum--after visiting here I now know why. I don't think its possible to describe the emotions you feel as you walk through the different exhibits--it was unbelievable to think that a regime like this still existed in the early part of the 90s. All South Africans were classified according to their race (White, Black, Coloured or mixed race, and Indian were the most common racial groups). The groups were then separated from each other into different regions of the country. This forced many families to abandon their homes, or worse, to be split apart during the classification, as parents could be deemed a different race than children.

This occurred to protect the white South Africans who were worried that they were losing control in the major cities. Only Whites were allowed to vote, and they received superior public services. The education system for blacks was designed to keep them in the lower working class--one of the Prime Ministers during Apartheid justified this system by asking: why would you teach a black man arithmetic when he'll never need to use it? Utterly sickening.

Thankfully, international pressure and country-wide rioting made it almost impossible to maintain the Apartheid system. However, I was disappointed to read that the U.S. was actually one of the last countries to apply sanctions against South Africa; government officials viewed South Africa as an important stronghold against communism. Only when it was clear that the cold war was ending did Congress override President Reagan's veto to pass the Comprehensive Anti-Apartheid Act.

Unfortunately, the effects of Apartheid are still apparent in South Africa, especially in Johannesburg. Everyday on my way to work I see white South Africans comfortably driving in their Porsche's and BMW's, while 15-20 black South Africans are packed into 8 passenger "taxis". All street peddlers are black, all menial jobs are held by blacks, and according to a 2004 U.N. report, the life expectancy of blacks is only 51, compared to 69 for whites.

South Africa has a long way to go before it can claim a better life for all.

The Rest of the Big 5

2007-09-12T05:28:00.000-07:00

By Saturday morning we had seen 40% of the Big 5: leopards and elephants. We were guaranteed by our guide to see buffaloes (good), but told that there are only 3 rhinos that live in the North side of the park (bad). So that left us with one... the lions. Nobody in our camp the previous night had seen any lions that day, and everyone we ran into that morning confirmed this depressing fact. But we continued, and I refused to give up hope even though I knew that our chances were dwindling as the morning cool turned into the afternoon heat. At around 11:30, we happened upon some giraffes, so we stopped to take some pictures. After watching them for a few minutes, we realized that something was not normal... the giraffes were frantically looking around, and were very easily startled. Our guide agreed that something was not right, so we spent some time looking through the grass. Not finding anything, we drove away disappointed; something had to be scaring those giraffes. Just as I was thinking this, I saw some movement in the distance underneath a bush. I couldn't believe it; I had been waiting all day for this! I screamed out: LIONS, LIONS! Sure enough, underneath a bush lay a lioness and three cubs. I was very excited :)

After taking about a hundred pictures of the lion in the same position (they don't move much during the day), we drove off to our next camp for lunch.

That evening we went on a sunset safari with one of the park rangers; I was expecting some cool sightings since most of the predators are nocturnal and this would be our only opportunity to be outside of camp after sunset. Unfortunately, our new guide drove insanely fast, which made it almost impossible to see anything (even with the spotlights). A couple times I saw some eyes reflect of in the distance, but by the time I could yell to the driver to stop we would have already traveled a few 100 meters. So in the end we didn't see anything cool that night, but I wasn't too disappointed given the amazing viewing we had earlier in the trip.

We woke up early the next day to ensure we were the first out in the park; our guide knew where a few hyena dens were and we wanted to get there before they got back from their hunt. Sure enough, they were arriving just as we got there. Unfortunately they never came close enough to get a proper picture, but it was interesting to learn about them from our guide: female spotted hyenas are actually larger than males and dominate them. They also have the strongest jaws of all mammals and eat their prey in entirety (bones and all).

Next we drove by the area where we saw the lions the previous day. Willem told us that they tend not to move much during the night, so we might be able to find them again. We drove up to a pack of cars and there they were--two lioness and three cubs. But they were even farther away, so none of the pictures turned out. Oh well, at least we had found them.

Now we were on the lookout for some buffalo. Yesterday we had been told about a breeding herd of about 100 crossing the Letaba river; unfortunately we had been there too early and missed the sighting. But today we were much luckier, as we ran into two breeding herds not more than a kilometer away from each other. The animals basically behave like cattle, but with an unpredictable aggression that makes them the deadliest of the Big 5; they will charge without warning. So I'm hoping they don't get too angry at us as we drive in the middle of their herd :)

At this point I am pretty pleased with our safari; we saw four of the Big 5, including both of the large predators. It would have been cool to see a male lion and a rhino, but you can't get everything. At least so I thought :)

About an hour after our buffalo excursion, we see a car stopped by the side of the road and an old man pointing towards something in the bush. We drive up, but all we can see is the grass moving. Our guide thinks that maybe we've ran across some hyenas; I'm thinking maybe I'll get some pictures this time. Then we see the animal get up--that's no hyena, that's another lion!!! And much closer this time, maybe only 2o feet away.

So we are happily taking pictures, and Adriana is filming the lioness walk around, when all of a sudden another lion pops up from the grass:

I can't believe our luck! Three lion sightings, plus the king. What a beautiful animal too. Below is some footage of the lioness and the lion (notice how easily the lioness blends into the grass when she lays down at the end of the video).

So now I think our safari is complete; sure, we didn't see a rhino, but at least we saw lions up close. As we are about to leave the park though, our guide hits the brakes and points out to the distance: "I can't believe it, I got you your rhino!"

It was definitely far away, but we did manage to see a rhino (he's drinking at a watering hole next to a buffalo). I think our guide might have been more excited than we were. What a weekend--all of the Big 5, plus hyenas, zebras, giraffes, impalas, ostriches, baboons, hippos... the list goes on and on. It goes without saying that I highly recommend our tour guide, so if you're looking to book a safari in the near future, contact Willem Pieterse at +27 11 894 5406 or check out their website at www.outlook-lodge.com/safaris.

Kruger Park Day 2: Elephants

2007-09-11T01:56:00.000-07:00

Day 2 started off early in the morning (5 AM), so we could get to the entrance of the park when the gates open. Early morning and late evening are the best time to see the predators (most are nocturnal), so I am really hoping to see some lions this morning. Unfortunately, we don't see anything (literally no animals) for about two and half hours. You definitely have to be patient during a safari.

However, around 9AM we run into a breeding herd of elephants on the side of the road, one of which is a little baby elephant.

As we continue to drive down the road we run into a couple of juvenile male elephants. This was really cool because our guide knew how to interact with them. We drove up to the elephant, which did not please the bull. However, Willem knew that the bull would not actually charge us because his ears were spread out--he was trying to make himself look as big as possible before his mock charge. So we stood our ground and sure enough he made a fake charge at us (see video below). Pretty sweet.

A little later in the day we ran into two of the biggest elephants we would see. Both of these guys were full grown male bulls, weighing between 5 and 6 tons. The picture below of the first one really shows how big these animals are. He walked right next to our car, which was kind of scary, but Willem assured us that he wouldn't charge. At this point in time I was glad we had a guide :)

Our interaction with the next bull was pretty sweet. Willem drove up to him, and when he approached us on the road, we started backing up. When the elephant saw that we were retreating, he got really excited and started charging toward the car faster. But then Willem stopped, and the elephant was not pleased (he was really enjoying demonstrating his dominance). So then he walked past us and let us know he wasn't too happy (see video).

In the end we saw so many elephants that we wouldn't even stop the car to take pictures. But for me, they weren't even the coolest sighting of the day. That would be the lions...

Safari in Kruger National Park: Day 1

2007-09-10T05:00:00.001-07:00

This past weekend was easily one of the best experiences of my life. I can't believe how many animals I saw in such a short period of time! Here's a recap of day one of the weekend:

It started Friday morning at 7am with our guide Willem picking Adriana and I up at my apartment. The guide was really nice, and has lived quite an interesting life. He has been a safari guide since 1994, and before that he was a police officer. When the apartheid government was overturned, many of the public sector jobs were reallocated from whites to non-whites, and his job was one of the positions identified. So he took a job in an anti-poaching team, and eventually began guiding safaris.

After 5 hours of driving we arrived at Kruger in one of the north entrances. In fact, Willem had asked us when we booked (Tuesday of that week), because normally safaris begin in the south where there is much more diverse wildlife--this is where you are most likely to find the big predators (lions, leopards, hyenas). North is elephant and buffalo country. Unfortunately, there were no accommodations available in the south, so we had to stay at Letaba and Shingwedzi. Needless to say, I wasn't exactly happy to hear that we were going to have a difficult time finding the big cats.

We drive into the park and one of the first animals we encounter are impalas. Whats funny is that we probably spent 5 minutes watching these guys; throughout the weekend we ended up seeing them hundreds of times more.

But the next animals we saw were much cooler: zebras. They are absolutely magnificent; it was quite the experience to see them up close. An interesting note we learned from our guide: they can be domesticated, but that their backs are too weak to ride or carry cargo. Definitely one of the coolest animals we saw this weekend.

After driving around for about an hour and not seeing anything, we discovered another of Africa's most interesting animals: the giraffe. These guys blend in surprisingly well given that they are the tallest animals on the planet. They also were very helpful the next morning, when they alerted us about an incoming predator (more on that later).

After about 3 hours in the park we had seen zebras, giraffes, a few elephants from very far away, and a lot of deer like animals (impala, bushbuck, steenbok). However, I still wanted to see what eats these animals. At one point in time we saw a vulture flying overhead, which I was hoping was there because lions were about to leave a fresh meal, but our guide told us that there needs to be more than one vulture before anything good is happening below.

However, at about 5:00 PM that evening (an hour before the park closes), we hit the jackpot. A car was waiting by the side of the road looking at something in the distance, so we decided to check it out ourselves and sure enough, there was a leopard sitting about 20 meters away from the road. But by the time I could turn on my camera, she got up and walked behind a bush, which blocked our view. We kept driving back and forth trying to find a good view point, but nothing was great enough for a photo. So we waited. And waited some more. And after 30 minutes and all the others cars that had stopped to see the leopard had left, the female leopard got up and started rolling around, which is how female leopards signal to male leopards they are ready to mate. And sure enough, we saw the male leopard start approaching from the distance. Unfortunately no mating occurred, and the female leopard stood up and starting walking towards our car! I was freaking out it was so close. And then out of nowhere a juvenile who was hidden the whole time got up and started following her! Willem told us that he had never seen this many leopards in one viewing: they are solitary animals and very difficult to spot.

What a great way to end our first day in Kruger!

Week 2 in SA

2007-09-06T02:01:00.000-07:00

It's been a couple days since my last post, so I thought I would give a quick update on my travels. Not a lot has happened this week, though tomorrow morning I am leaving for Kruger Park (check out my itinerary) to go on a "true African adventure." I have probably heard the words "true African adventure" or "true African experience" 100 times while I have been here--just about every promotion on the radio is described this way. But hopefully my safari this weekend will actually be an African experience (I'm crossing my fingers that its not worse than last weekend). I have heard mixed opinions on safaris during the winter; some people have said its good because their isn't a lot of cover to hide the animals (winter is the dry season); others have said sometimes its difficult to see the bigger predators because they travel north of South Africa towards Mozambique during the winter in search of prey. It would be nice to see all of the Big 5 (lions, elephants, rhinos, leopards, buffalo), and the camp that we are staying at the second night is close to Mozambique so hopefully we will.

As for Johannesburg, I am definitely more used to the hectic driving out here. South Africa's department of transportation has a lot of work ahead of them for the World Cup in 2010. Every day there is a new traffic light that is out of order, street signs are barely visible (especially at night), and taxis literally stop in the middle of the street to drop passengers off (with no warning). Another thing I found annoying driving back from the airport on Sunday is that the interstate is not labeled by direction (N, S, E, W) but instead by the city it goes to... this wasn't really helpful when I was trying to get onto N3 westward and my options were places I had never heard of like Soweto and Benoni. Might consider fixing that when an estimated 3 million visitors show up in a couple years.

Cape Town: Swing and a Miss

2007-09-03T02:17:00.000-07:00

After hearing from many people that Cape Town is one of the most beautiful cities in the world, I was very excited for this weekend. Unfortunately, the gods of fate had other plans.

The trip started off harmless enough--my friend and I arrived late Friday night, and took a cab to Long Street to meet a few of our fellow classmates. The place was pretty chill, had a few drinks and actually met an undergrad from Stanford (I believe her name is Ariana) that knew about half of the b-school second year class. Pretty small world.

On Saturday we planned to visit Robben Island, the prison where Nelson Mandela was held for almost 30 years. Unfortunately, the tour was canceled due to the weather. So we wandered around the Waterfront (remarkably similar to San Francisco), saw some seals, and then met our friends for lunch in the Bo-Kaap district. That afternoon we were planning on taking the cable car up to the top of Table Mountain, but the weather hadn't improved and the mountain was completely covered in fog :-( So we drove around a bit, and decided that for dinner we would go to Bloemendal, the "traditional African experience" according to our friend's boss. This would turn out to be a HUGE mistake, because 1.) it wasn't much of an African experience (more British in my opionion), and 2.) two of us got horrible food poisoning from the food there (I don't recommend the Greek Salad).

So Sunday was spent with frequent trips to the bathroom, and falling in and out of consciousness while watching the movies Pocahantas and JFK from the TV in my room. Not exactly what I was envisioning for my visit to Cape Town; I think next time I'll plan on going during the summer and being a little more careful of what I eat!

Here are a few of the pictures from my trip:

This was my room in the B&B we stayed at. I spent a little more time in here than anticipated :)

Here's one of the seals we saw at the waterfront.

Not the best weather in Cape Town on Saturday.

Here's me, Gabe and Lemar outside of the market. I got a pretty good deal for a Djembe ($60)

This is the view of Table Mountain from my B&B--this was the first time I saw the mountain (literally an hour before we left for the airport)

Some pictures from South Africa

2007-08-29T01:26:00.000-07:00

Here are a couple pictures of where I am living and working--more interesting stuff to come for sure after this weekend, when I fly to Cape Town. I haven't had much of a chance to do any site seeing so far, but now that I have gotten myself situated I will be venturing out more. Not much happened yesterday, I joined a gym (which is really nice: indoor pool, indoor track, 3 floors of workout equipment, timed circuit system, and a cool personal training device where you stick your keycard in the machine and it tells you what you lifted previously, and how much you should lift today).

This is my car. It has the worst acceleration in the world, but it gets me by! I think I have finally gotten used to entering on the right side, though I always grab to my left for the seat belt (its funny how automatic things become after you've done them thousands of times).

This is a picture of outside my office--nice building for a startup.

Here is the outside of my apartment. All of the housing complexes around here have gates in the front, though I have been told that security guards are not that reliable (in fact, I believe the quote was: "they're either gone half the time or stoned").

Here's my bedroom. Queen sized bed, my own bathroom; I definitely can't complain.

This is the living room. We get ESPN, so I still get my dose of SportsCenter in the morning (late AM in the U.S.).

This is the upstairs loft, though there isn't anything up there except for two long tables.

Here's the kitchen. I've cooked most of my meals so far--South African's are very much carnivores. I couldn't even find chicken at the local Woolworth's (all beef and lamb).

Cyest

2007-08-28T04:57:00.000-07:00

I can't believe that today is only Tuesday! It seems like I've been here a week. Yesterday was my first day at Cyest, the startup that I am working for. I had a couple meetings with Andreas Cambitsis, who is one of the co-founders. We discussed the mission of Cyest (perfect creation of technology to build business), what current products are in existence (they are involved in many different businesses, though mining makes up ~60% of their revenue), and what projects they think I might be able to tackle. We have decided to first focus on the pricing of a mining product that they have created--it is a cross between Excel and SQL, but more powerful than Excel and more user friendly than SQL. They had created the product for one of their clients, and now believe that it solves a problem that exists in every mining company. The question is what should the licensing fee be? Currently there exists some competition at $6000 per seat, but most companies are still using Excel for their scheduling/financial modeling.

The company has 75 employees, though not all are on site. It is next to Sandton City, which is a huge shopping mall in Jo'burg. The office building is very nice, though yesterday there was a power outage (not sure if this is a regular occurrence or not). I'll post some pictures of the office, as well as my apartment, sometime this week.

Monday Morning

2007-08-27T01:37:00.000-07:00

Talk about an interesting morning! So as some of you might have guessed, people in South Africa drive on the left side of the road (being a former British Colony and all). This was hard enough when I was in Cambridge, and I only had to look the opposite direction when crossing a street. Now I actually have to drive on the ‘wrong’ side of the road! :-) So I keep thinking to myself: left, left, left, on right turns stay left. When I come to my first turn, which happens to be a right turn, I naturally look to my left to make sure there are no cars coming. I make sure to pinpoint exactly where I am going to go—left of the median—and start to approach when (can anyone guess what I forgot to do?) a car on the right of me drives by. So I hit the brakes, swear profusely at myself for trying to set a world record in “Least Amount of Time an American Has Taken to Get Into an Accident Driving on the Left-hand Side of the Road” (I literally had been in the car 2 seconds), and continue on my way.

Cyest (the startup I am working for) is located a couple miles away from where I am staying, and is literally only 3 turns from my apartment, so of course I somehow manage to get lost. Which normally wouldn’t be a problem, because I would just: a) stop the car, and b) use google maps to figure out how to get to where I’m going. I don’t have google maps here in South Africa (I don’t even have a phone number yet), but I do have a map, so it should be simple, right? Well, not exactly. Crime prevention hasn’t been a real priority here in Johannesburg (or if it has it hasn’t been very effective), and the first thing I was given to read when I arrived was a manual on how NOT to have your car hijacked. Number one way to prevent being hijacked: you guessed it—don’t stop your car on the side of the road and pull out a map to figure out where you are going (you might as well trade someone directions for your car keys). So is this suburban white boy being a little paranoid? Maybe, but if you read this manual, and then heard that only 1 out of the last 3 GSB people to stay in Johannesburg has had their car broken into while they were in it, then you might feel the same way. So I drive around, and luckily find the main road that I am looking for, and manage to get to Cyest.

And I haven’t even started work yet :-)

First day in South Africa

2007-08-26T09:04:00.000-07:00

Well, after 24 hours of traveling from San Francisco to DC to Johannesburg, I have finally arrived in South Africa! The flight over here was actually pretty uneventful; I read Freakonomics on the flight to DC (I had already heard a lot of the stories from the book but figured i should read the whole thing). Upon arriving in DC i discovered that i was assigned a center seat even though i reserved an aisle--this didn't make me too happy but luckily the flight was not full so i found an aisle seat with nobody next to me. I'm not great at sleeping on planes, but i managed to get a couple hours of sleep in between watching Shrek 3, 300, Blades of Glory (which had its moments, but wasn't great--I had a very similar response to Ricky Bobby as well).
Upon arriving in South Africa, the cabbie that picked me up had no idea where we were going, so I got a free one hour unplanned tour of Johannesburg while he kept asking me where it was (I don't he understood that i had no idea, just an email with the address). But eventually we got here--its a pretty nice complex, though the guy with a rifle outside of one of the entrances wasn't exactly reassuring. Tomorrow I'm off to my first day, and I'm sure I'll have more to write about then.

Advertising: The Future of Yahoo!

2007-07-23T11:39:00.001-07:00

I met with Chris Jaffe today, who runs the Advertising User Experience Division here at Yahoo!. We talked about where he thinks the best opportunities are at Y!, and where the future of Y! lies. Not surprisingly, he believes that advertising is the place to be, and admits that in the past Y! placed it's B level engineers in advertising (with A level in product development). Now he is seeing this trend reverse as Yahoo! enters its "teenage years." In his meetings with Sue Decker, they have both agreed that the future of Y! is moving away from its owned content (yahoo.com) and into advertising partnerships with content owners (Ford, P&G, NBC).

One area that he believes Google is much farther behind than Y! is in TV advertising--currently advertisers on TV barely know what demographic is watching their ad, and in the near future Yahoo! will be providing data that is just as detailed as what is available for online ads.

Chris also discussed the area where he believes Google is still killing Yahoo!: scalability. All of the advertising tools at Google are automated--they just need to feed the "Adwords fire" and the auctions will take care of themselves. Y! still has a large salesforce, and in his opinion 3/4 of these people are un-needed (saving only the people who deal with Fortune 50 companies). Hopefully I will be able to discuss this in more detail with Robi Ganguly, who is also on my team and working in the division focused on improving scalability.

I believe that Chris truly agrees with the vision of Sue and Jerry here (he said that he has turned down multiple offers in the last 8 months), but he is concerned that they may not be able to deliver in time. In his opinion, if APEX hasn't launched in 18 months and blown away the competition, then Yahoo! is toast. And looking at Panama, this is a legitimate concern.

As for me, he believes that right now is the time to start a company or move into technology--the internet space is established but still moving very quickly, and there are very smart people who have figured out how to be successful (he mentioned Meebo as a great example). He also believes that you can move into consulting at any point in time, and that the experience you get working in the Valley will make you a more intriguing candidate for any job.

Google Q2 Revenue Down

2007-07-19T14:52:00.000-07:00

Shares have dropped 8% in after hour trading.

I can hear people celebrating around my cube :)

Yahoo! Q2 Results

2007-07-18T13:34:00.000-07:00

Today we had an all-hands meeting at Yahoo! to discuss the Q2 results and what is in Yahoo's future. Jerry Yang focused on how to change Y! three years down the road. His vision of Y! is a deep, active marketplace of consumers, advertisers, and publishers/developers. The opportunity exists in turning data into insights, which can then be turned into revenue generation. The problem is that Y! has become too separate from the Web. One change that he would like to make is rid Y! of its "closed garden" mentality--allow users to access content that is not on the Y! network. Additionally, he would like to change the company's focus away from deals with advertisers and content providers, to becoming partnerships. He has given himself 100 days to buy alignment with leadership, and evolve the organizational structure.

So, what do I think is wrong with Yahoo!?
-Decisions take too long to move through the organization--Y! needs a flatter hierarchy
-Culture is "9-6 job"; people are not enthusiastic about working here--changing this needs to start at the top
-People are protective of their turf within Y!, but do not necessarily make decisions that are in the best interest of the entire company

This last point is best illustrated through an example I heard yesterday. Someone within the division I work in (SDS) found out that a group of 100+ engineers were being laid off due to downsizing at their company. SDS moved in to interview as many candidates as possible, and was interested in many of them to hire. Realizing that other divisions at Yahoo! might also be interested, SDS told them about the opportunity as well. Now these divisions are angry at SDS because they were not informed earlier, and SDS has gotten the "pick of the litter." My guess is that in the future, if another opportunity like this ever occurs, there will be no communication between divisions for fear of being ostracized. Not a great thing when Yahoo! is trying to focus on "hiring the brightest people and placing them in areas where they will add the most value," as Jerry Yang mentioned in the all-hands meeting this morning.

Meeting with Bradley Horowitz

2007-07-09T10:03:00.000-07:00

On Friday, I had a meeting with Bradley Horowitz, Head of Advanced Development Division at Yahoo!. Bradley had given a talk for the Executive Speaker Series the first week of my internship, and I was very interested in his role as 'innovation leader' at Yahoo!. We discussed the difficulties of maintaining an entrepreneurial culture at a company the size of Y!, which are exacerbated by how quickly Y! has grown. One major problem that I have seen is that Y! has no platform--there are very little best practices across the network, and products/business units are still verticalized with little communication. Bradley mentioned that fixing this problem is one of Jerry Yang's priorities, and that very soon he will implementing a major change to address this problem.
I also asked Bradley how a company like Y! can keep its best employees; what stops them from leaving for startups or starting their own companies. Bradley runs Brickhouse, which addresses this problem, but he agreed that there is nothing Y! can do (or should do) if an employee has a great idea and wishes to pursue it outside of Y!. However, if the employee chooses to pursue his/her idea within Y!, than instead of a 1:1000 chance of success, it will be more like 1:100 or 1:50. So basically it comes down to people's risk tolerances--starting your company at Y! will never make you a billionaire, but it can make you a millionaire.

Human Tetris

2007-07-08T11:37:00.000-07:00

Check out this new Japanese game show where humans act like tetris pieces. Perhaps a new Wii game?

Jerry Yang new CEO at Yahoo!

2007-06-18T14:09:00.000-07:00

Quite the first day at work for me at Yahoo! It was just announced that Terry Semel has stepped down at Yahoo! to take a non-executive role. Jerry Yang, one of Yahoo's original founders, has taken his place as CEO. Sue Decker, who was believed to be in position to take the CEO role, has been named President. All three will be discussing at a company wide meeting today at 5:00. Couldn't have imagined a more exciting first day for me!

Why is online poker illegal in the U.S.?

2007-06-01T19:49:00.000-07:00

Last fall a bill passed through Congress that caused poker sites such as Partypoker.com to turn around all of its U.S. customers--why?? And more importantly, will it be illegal forever?

Short History of Online Poker

Free online poker was first played over the IRC chat network in the late 1990s. Planet Poker was the first online cardroom to offer real money games in early 2000. ParadisePoker.com grew to become the internet’s largest online cardroom, and was acquired by Sportingbet PLC in October of 2004 for $340 million. Today, "Online Poker" is the single most searched term on the Internet.

Unlawful Internet Gambling Enforcement Act (UIGEA)

On October 13, 2006, the Safe Port Act was signed into law. Attached to the Act was a provision that deemed any online bet or wager illegal if the bet was unlawful under any law in the State at which it was initiated or received. This outlawed financial transactions between online casinos and American banks and credit card companies. Accordingly, many poker rooms stopped taking deposits from U.S. customers and their stock prices crashed. Sportingbet sold all of its US-facing sportsbetting and casino businesses to a group of investors for $1, and an assumption of $13 million in debts.

HR 2046 -- Internet Gambling Regulation and Enforcement Act of 2007

This bill was introduced into Congress on April 26, 2007 by Rep. Barney Frank (D-MA). It argues that internet gambling is a $13 billion industry worldwide, and licensing and regulating gambling in the U.S. would provide an increase in tax revenues. The bill establishes the steps required to receive an internet gambling license, arguing that through this procedure the U.S. could reduce underage gambling, compulsive gambling, and money laundering.

Will this bill pass?

Poker Players Alliance (PPA), an interest group for poker players, has formed to help support this bill. The group has 500,000+ members, and recently announced that former Republican Senator Alfonse D'Amato is the new chairman of the board. Through the website group members have the ability to send a letter to their representative congressman to support HR 2046. Last year, PPA spent $560,000 in direct lobbying efforts, a 100 percent over what was spent in 2005.

There has also been an increase in international pressure, as UIGEA is viewed as anticompetitive. In March of 2007, the World Trade Organization “ruled that America's online gambling ban has unfairly closed U.S. markets to offshore casinos.” The U.S. tried to argue that the act was needed to protect ‘American morals.’ However, the WTO noted that online horse betting was granted an exemption from UIGEA. This ruling opens the door for online gaming countries such as Antigua and Barbuda to file lawsuits against the U.S.

Finally, Academia has also begun to investigate whether poker should be classified as gambling at all. The Wall Street Journal recently published an article on May 5 entitled “Harvard Ponders Just What It Takes To Excel At Poker.” Harvard University Law School Professor Charles Nesson invited a group of poker professionals, game theorists, law students and gambling lobbyists to, as Nesson put it, “legitimate poker.” One of the attendees, Jay Kadane, has pitched to sponsors a project to show statistically that poker is a game of skill. University of Chicago economist Steve Levitt has already begun a similar project entitled Pokernomics.

Legalizing poker could bring well needed tax revenues to U.S. states. Most likely, states that already allow poker (such as California) will be the first to allow poker. For poker to be legal, it will have to be permitted under the laws of the customer's place of residence and the operator's. It will be very interesting to see how tax revenues are shared between the operator's state and the customer's state.

Prediction Markets at Google

2007-05-17T10:37:00.000-07:00

Bo Cowgill (Stanford Public Policy '03) presented in my E-business and Data Mining class on Monday about how Google use of prediction markets. Here is a summary of his presentation.

Prediction Markets at Google

Origins, Objectives and Implementation

Objective:

Empowering average employee
Improve awareness
Quantify unquantifiable
Improve morale

25 markets per quarter for 2 years.

Markets about:

Product launches (number of Gmail users)
Office/position openings (will this important position be filled on time)
Employee quality of life (when will gym re-open)
Competitors’ actions
Fun markets (who will win the NBA championship)

Implementation

Continuous double auction with limit orders
Alternative would be with market makers.
People can not see each other’s position.

Growth and Usage

Market stats

Number of shares and number of trades has grown over time (due to added liquidity and more participants)
Approximately 68,000 trades had occurred by the end of 2006, through a total of 2000 trade accounts
Long tail distribution:
One participant has made 3100 trades in 1 year 8 months (~5 per day)
Approximately 400 participants have made 2 or less trades
A little more than 50% of trades are made by engineers (but this reflects the overall structure of the company).
People that are higher up (closer to CEO) and have a long tenure at Google are more likely to participate.

Individual performance

Geography was a better predictor than job function of success
Finance and software engineers have done better (best explained by bots?)
"Batting Average" increases slightly with market participation (evidence of learning or do individuals who are not good quit?)
Success for certain individuals has been consistent from quarter to quarter

Market set up:

Typically 5 “options”
E.g., when does a certain project launch: Jan, Feb, Mar, Apr, May or later

Analysis of Predictiveness

Average winning price 0 weeks before closing was $55; average losing price was $15
Some predicted better (close to $100 the week of closing), whereas others like the Bush v Gore election was still 50/50 on election day

Rewards

Money earned through trading is used to buy raffle tickets
Prizes are then awarded through a random drawing
Financial rewards seem not as strong as ‘Reputation’

Further Research

Robin Hanson, professor of Economics at George Mason University (see webpage)
Paper on presidential outcome prediction by Paul Rhode and Koleman Strumpf
Research on the 2004 presidential race by Justin Wolfers and Eric Zitzewitz

Del.icio.us Founder

2007-04-23T19:03:00.000-07:00

Josh Schachler, founder of del.icio.us, visited my E-Business and Data Mining class this week. He discussed the evolution of his company, how he decided to develop certain features versus others, and how del.icio.us has grown and why he believes it will continue to grow.

A couple factoids that he shared with the class:

2 million users as of February 2007
The median user creates 30-40 bookmarks/week (with 2 tags/bookmark)
90% of bookmarks are unique, with 1/2 million URLs added per day (compared to a couple thousand for Digg)
The most popular sites are google, slashdot, yahoo! and amazon

We also discussed the site's dynamic behavior over time. Andreas mentioned that in e-commerce, the second purchase is extremely important as it sets a pattern--this is clearly true in del.icio.us as well. In the beginning, Josh said that 1/3 of users who signed up bookmarked one URL, and of those, 1/3 used it again a week later. However, after 2 weeks there was little drop off.

The intended users of del.icio.us are definitely people who swim in lots of information; they are unable to keep track of URLs strictly through their homepage and bookmarks on their web browser. The site works so well because the cost of saving items is very low (this helps grow the network effect). Del.icio.us eventually has developed into a very light weight blog in this sense.

Josh has definitely made strategic changes to curb the social networking portion of the site. For example, there currently is no mechanism for messaging between users; his reasoning for this is to avoid negative interactions such as edit wars at wikipedia. He also was against the "hotlist" and other types of high score lists as they encourage strong negative second order effects on the system (ie. gaming).

We also discussed how similar del.icio.us is to other bookmarking sites like digg. Those sites tend to be more discovery oriented, whereas del.icio.us is intended to be more of a human-driven search engine. One statistic that demonstrates this type of usage is that only 8-10% of tags are on the most popular URLs; the tail of this distribution is very, very long. Josh also mentioned that Kevin Rose, the founder of digg, also uses del.icio.us.

In addition, Josh mentioned how he grew del.icio.us, and his reasoning for the Yahoo! acquisition. He said that they placed RSS on every page, created an application that easily migrated the bookmark of the day to a user's blog, and offered API for individuals to build functionality on top of the system. Del.icio.us can also import and export bookmarks very easily. Yahoo! provided the scaling technology that has allowed del.icio.us to grow at such a tremendous pace (from 300 thousand users in December of '05 to 1 million users in September of '06, and another 1 million users in the past 5 months).

One interesting aside is how Josh got the idea to create a bookmarking site. He was a trader for Morgan Stanley before starting del.icio.us, and built the site to create an interesting dataset to analyze. His says that his first focus was on the individual user, and the social aspect of the site was only a secondary concern. Del.icio.us itself is one of many sites that Josh purchased when the .us domain became avaiable in 2001. He wrote a program to determine what are the most common suffixes that end in 'us', and 'icious' was the winner.

E-Business and Data Mining Class

2007-04-19T18:18:00.000-07:00

I am currently taking a class on E-Business and Data Mining from the former Chief Technologist at Amazon (Andreas Weigend). The class has been extremely interesting--so far we have analyzed search, including web crawlers, PageRank, and the economics behind Adwords. For my homework assignment, I am keeping track of how many people click on the following link using Google Analytics:

http://www.weigend.com/Teaching/Stanford/

Nano City

2007-01-23T15:43:00.000-08:00

Today I attended a talk by Sabeer Bhatia, who is taking on the impressive task of founding an entire city in India. He is a serial entrepreneur here in the Bay Area, with his most notable accomplishment being the founding of Hotmail (which he sold to Microsoft for $400 million in 1998). This pales in comparison to the estimated cost to build Nano City--approximately $5 billion in its currently planned stage.

Bhatia envisions Nano City as the new Silicon Valley--the future breeding ground for scientific dicsovery. He is trying to address many of the problems that currently exist in India that are precluding this type of innovation. They include:
-Lack of proper infrastructure (a seven minute drive in Bangalore at night takes 3 hours during rush hour!)
-Non-reliable sources of energy
-Fragmented and unsustainable growth in urban areas
-Lack of reasonably priced, modest homes for young professionals

Even with these barriers, India has had impressive growth since it became a democracy in the late 80's. Here are a few statistics:
-3rd largest pool of scientists and engineers (trails only U.S. and China)
-2nd fastest growing economy (and will most likely overtake China in the near future)
-Extremely young--50% of the population is under 25
-2nd largest consumer market
-It is a democracy

Bhatia's goals for the city center around an education system that he describes as being "the finest education in the world: kindergarten through PhD. He is working with Berkeley and Stanford to make this possible. He also envisions Nano City as a model to the world in sustainable development (both economic and environmental). His goal is to start by attracting youth (25-40), in hopes that companies will then establish themselves there. He sees this process as something similar to the evolution that has occurred in Austin, TX over the past 25 years--it has grown from a college town to arguably one of the top three producers of IP (intellectual property) in the U.S.

The city itself will be about half the size of San Francisco, with construction beginning at the end of this year. The best guess of when people will first inhabit Nano City is at the end of 2010. Bhatia believes the population of the city eventually will be in the 250.000 - 500,000 range.

For more information on Nano City and Sabeer Bhatia, I suggest reading the following article from forbes: http://www.forbes.com/business/forbes/2006/1030/156.html. A couple of questions I have about the city are: How much development can actually be planned? How do you coordinated development? What political risks exist that may delay and/or stop the construction of the city? How many services should be privatized vs. provided by the Indian government?

Apple iPhone

2007-01-09T13:01:00.000-08:00

The news is in from Macworld 2007--Apple, Inc. (no longer Apple Computer) is releasing a new cellphone in June of 2007. The iPhone is a combination of an iPod, phone and internet mobile communicator, according to Steve Jobs. See the link below for more information:
http://www.engadget.com/2007/01/09/live-from-macworld-2007-steve-jobs-keynote/

A few of the highlights:
-uses "multi-touch" instead of a stylus
-runs on OS X
-syncs with iTunes
-has a 3.5" screen with 160 ppi
-only has one button
-is a ridiculous 11.6mm thick, which is thinner than the Q and Blackjack
-has a 2 megapixel camera
-contains visual voicemail (so you can select which vmail to listen to)
-has WiFi and Bluetooth 2.0
-free push IMAP email (Yahoo!)
-5hrs of talk battery life, 16hrs of audio playback
-will be released by Cingular, $499 for 4GB and $599 for 8GB

This looks like a ridiculous phone, though it will be interesting to see how easy it is to use a qwerty keyboard that appears on the screen. Call quality may be another concern, but this appears to be superior to the Treo. Not very good news for Palm.

By the way, Apple's stock is up 8.5% as of 1pm today :)

Pictures from China

2007-01-09T11:05:00.000-08:00

This is a picture of Ash and Ash (yes, there were two Ash's on the trip) at the Mongolian Hot Pot restaurant were we had dinner on the first day of the trip in Beijing.

The following are a couple pictures from the Great Wall:

One difference between China and the U.S. are the toilets. Needless to say, some people didn't feel quite as comfortable using these facilities.

These are soldiers marching outside of the Forbidden City.

Here is an interesting advertisement for KFC in Zhu Jia Jiao (a water town an hour dirve from Shanghai)--chicken is very popular in China! Over half of the menu at McDonalds is chicken sandwiches as well.

This is a picture of the TV tower in Shanghai. The next picture is from the Urban Planning Museum--they have planned out all the construction through 2010.

The following is a picture from the silk "factory" that we visited. This was the only machine in the room, and I'm pretty sure they stopped after we left the room. This was by far the most expensive place we visited!

Here is an example from the Yu Garden of some of the translation issues you run into all the time.

On our trip from Shanghai to Hong Kong we rode on the fastest commercial train in the world. It cost $1.2 billion dollars to build an 18mile track. The train travels a top speed of 268 mph and the ride is about seven minutes long. Interestingly, a train from L.A. to Las Vegas using maglev technology has been recently proposed.

Because gambling is illegal in China, Macau has become a huge tourist spot and many people believe it will be the world's next Vegas within 10 years. The Wynn opened up just three months ago, and the whole city is under construction (The Venetian and the MGM, among others, are expected to be finished this year). The gambling revenues in Macau have already surpassed Las Vegas, but one important thing that hasn't is the ambiance. There is nothing resembling The Strip in Macau, which makes it almost impossible to travel from casino to casino.

The last few days of our trip we spent in Hong Kong. This city is absolutely amazing--it is a combination of New York, San Francisco and Miami and I would definitely consider living there.

Homestay in Shanghai

2007-01-03T19:18:00.000-08:00

For the last night we spent in Shanghai, we had homestays with local families. I stayed with Cynthia Shen, a fellow classmate at Stanford. Her mother and father cooked dinner for us--it was a ridiculous amount of food for 5 people. We had spicy dried duck (like beef jerky but REALLY spicy), chicken (with the head, though nobody ate it), boiled spinach, soy glazed baked fish (the whole fish, head to tail), prawns (to eat them you rip the head off first), fried bamboo, soy and cilantro soup (same consistency as egg drop soup), BBQ pork, and chicken stir fry. Cynthia told me it took her parents 4 hours to cook dinner, and that spending that much time is pretty normal for dinner! To drink, we had tea, water, wine, and a traditional yellow rice wine that was 103 proof! And for dessert we had rice, and kiwi slices. I couldn't believe how much food we had.

After dinner we walked around the Bundt, which had ridiculous views of Shanghai--this city has an amazing amount of skyscrapers, and they are all lit up with neon colors. Finally I met with Cynthia's friend from AT Kearney, and slept at her place so I could experience a traditional home in Shanghai. It was very modest, but not too different than a house in any other major city.

A couple of my observations from the trip:
-We haven't eaten nearly as much rice as I thought we would--I've only had it for 3 or 4 meals.
-I have been served way more food than I thought I would--it seems like the dishes never stop coming out. Even the lunch boxes served at the Chinese film studio had a lot of food, and that was a normal lunch for them.
-I met a foreign investor relations manager who had a Master's in Economics from Brown, and informed me that only investment vehicle other than saving is houses. People will buy two or more houses as investments.

Next on the trip is Hong Kong--we are taking the Maglev train to the airport. The train can go as fast as 270 mph!! After a couple days in HK, we are flying back to Beijing and then to SF on the 6th. There is a lot of stuff I hope to post in the near future--internet has been available only sparingly but I have a ton of cool pictures to post.

New Year's

2007-01-01T06:08:00.000-08:00

The internet finally works now so hopefully I will be able to post more often. We traveled to Shanghai today from Beijing, and took it easy before beginning our New Year’s Eve festivities. We ate dinner at a very nice restaurant, though the first half hour was a little awkward because the dinner conversations were pretty serious and intense—not exactly what I was expecting as a pre-party for New Years. For dinner we had a lot of food; some of my favorites were the squirrel fish, frog soup, and fried jellyfish.

After dinner we left for Attica, one of the hottest clubs in Shanghai. The party was great—I’ll post some of the pictures when I get back to the U.S. Our group had three tables reserved and maybe 7 bottles of alcohol. What we didn’t have was mixers, and a can of coke was 40 RMB ($5) at the bar. This on top of the $150 for cover and VIP access made the night pretty expensive, but it was definitely a lot of fun. Too bad we couldn't find a 24 hour KFC early the next morning! (By the way, I definitely did not expect to see so many KFC's here in China--it is probably the most common American fast-food restaurant I have seen here).

The next morning Eric and I woke up at 9 am (I don't know how), just in time to make it to the bus for today’s visit of Shanghai. We traveled an hour outside of the city to the suburbs. We had lunch and also got a tour of the city through a canal. After lunch we went to a silk “factory”—in reality it was a tourist trap for very expensive silk items (about ten times as expensive as the silk in the Silk Market in Beijing). The building had a couple rooms where people were spinning silk, but it was very apparent they were there for the tour only. It was very similar to the trip the official group took in Beijing to a pearl house—they said it was pretty apparent that the trip was a kick back to the tourist agency.

Tonight looks to be pretty chill as most of us are extremely tired from partying the past couple of days. Tomorrow we are going to a GM factory in the morning, and in the afternoon we are meeting with our homestay families—I am really looking forward to learning more about Shanghai from someone who is from the area.

Beijing Day 3

2007-01-01T05:30:00.000-08:00

Today was definitely the best day of the trip so far. We went to the Great Wall this morning, which was really beautiful because it was snowing. On the bus ride up we played 15 person liar’s poker with wilds, so bids got as high as 38, with 36 7’s winning one hand! After visiting the Wall, we went to a noodle place for lunch which was ridiculous—we had so much food and the Pi Jiu (beer) was only 3 RMB (approximately 50 cents). My favorite was the sweet and sour chicken, which tasted more like caramel corn than the American version.

After lunch we went to the Forbidden City, which was HUGE. Our tour guide told us there are over 8,000 rooms. We met a group of Penn students who were traveling the area after singing in Beijing a couple of days ago—they sang an a cappella version of a Radiohead song for us.

Our final stop of the day was a massage parlor—the whole group got foot and head massages for about 200 RMB. They were very relaxing, and after taking a quick dip in the pool in the hotel we went to Suzy’s Club, which is one of the newer clubs in Beijing where a bunch of ex pats go to party.

“First-time Customer; I Give You Best Price”

2006-12-31T13:11:00.000-08:00

I spent my second day in Beijing shopping for 5 hours in the Silk Market, a very popular tourist bazaar. It is in a one and half year old building with 6 floors (before that the shops were on the street).

I bought the following items: Prada shoes (150 RMB), Louis Vuitton tennis shoes (200 RMB), 2 Polo Shirts (45 RMB total), Armani dress shirt (40 RMB), 2 Cashmere Burberry Scarves (90 RMB total), and a stocking cap (20 RMB). Ash bought very similar items, as well as two silk bed sets for 400 RMB.

My first experience in the shop was pretty ridiculous—Ash, Avik and I walked in and immediately we were bombarded with question from the merchants: “Would you like Polo shirt?”; “Nice bag for your girlfriend?”; “You want shoes?” I was pretty overwhelmed at first—I don’t really like talking to salespeople in the U.S., but this is much more intense. If you stand still for more than a few seconds you are guaranteed to have someone grab your arm and drag you to their store.

When you finally find something you want, then you have to start bargaining. For something like shoes, they will start off with a price of about 800-1000 RMB. Then they will ask you for a price, and in general it is safe to knock off between 75-90%. They will then stare at you and tell you that you must be crazy, that it’s not possible, and ask you for your “real price.” The key is to stick with your original price while they bid themselves down. Most likely this will require walking away from the shop, because there are so many shops with the same gear that they will drop their price to keep you. Once they are in your general range then you can raise your bid to come to a compromise. Ash and I would do this once for an item, and once we figured out the general “best” price, we would use this to negotiate with other merchants. We got some items for so cheap that other merchants we spoke to that day didn’t believe we bought them for so cheap.

Ash and I got lunch in the Silk Market and met two women from Britain, one of which recently gave birth to a baby girl. She told us that she is going to move from Beijing soon because the pollution is so bad. She told us that on Stage 4 days children are not allowed outside, and on Stage 5 days no one can go outside. The government actually decides which days will be “blue sky” days—days when no factories will run to cut down on pollution. For the Olympics, no cars will be allowed in the city for a month, and all construction will be stopped.

Later that night the group went to a club which was okay, but afterwards I got to play the drums at another bar.

Beijing Part 1

2006-12-29T15:24:00.000-08:00

Beijing has been crazy! We just got internet to the rest of our world restored yesterday because of the Earthquake in the south. Hopefully I will have more time to discuss what has happened and post some pictures--we're leaving pretty soon for the Forbidden City and the Great Wall. Yesterday we met with Motorola, MTV China, the largest Chinese film studio, and Sina.com, China's largest portal. I'll have more time to post tonight.

Cheers,
Justin

My Visit to Palm

2006-12-20T13:52:00.000-08:00

I went to Palm's headquarters in Sunnyvale on Wednesday, December 20 for an MBA recruiting visit. They recruit MBAs from all over the West Coast for their internships in Business Development, Program Management and Software. During the summer an MBA would work with the product manager, who essentially "owns" the product, software or device. An intern works with engineering, sales, support and marketing to research market trends and determine the end user scenarios.

Palm's number one priority is user experience--in fact, the software product manager who ran the recruiting session emphasized that Palm is not a tech company, but instead a consumer company. And even though they produce the best smartphones (PDA+phone), they focus on the phone first. Another significant difference between Blackberry and Palm is that Palm tries to design their phones for end users instead of IT technicians.

Some of the projects interns have done in the past include:
-Macintosh strategy
-WiFi/Bluetooth sync
-DRM (digital rights management) strategy
-How to target new customers
-Web browser strategy

An intern performs a variety of functions from deciding whether to build or acquire, to analyzing what aspects of the value chain Palm should control. Fifty percent of an intern's time is spent on this type of strategic work, with the other fifty percent spent assisting the product manager (creating market research reports, etc.).

A couple of issues that I brought up that have not been sufficiently resolved include: Motorola's recent acquisition of Good Technology (Good is used on the Treo for email exchange, but Motorola is obviously a major competitor with Palm); the manufacturer of the actual Palm handsets has also become a competitor with Palm; Palm has not pursued a WiFi strategy, and in fact I got the sense that they won't until "they have to."

This is one theme that really drove home from my meeting with Palm; they are not focused on technology, and it seems that they wait until consumers ask for a technology before focusing on it. This is an issue because by the time the majority of consumers want to adopt a technology, a major competitor probably will have introduced it on their smartphones. Palm can only rely on their own brand name for so long, and even that has begun to erode with the introduction of the Blackberry and the Q.

Music Industry

2006-12-06T20:54:00.000-08:00

I had a very interesting meeting with Dwight Wardlaw, a friend of mine in the Sloan program, who started his own record label. He invited me and a few other MBAs to talk about his experiences in creating the record label and working with the associated companies in the music ecosystem. His major artist is Gary Kyle (checkout video at youtube: http://www.youtube.com/watch?v=oKlCDaF7_nE).

First we discussed the ecosystem. Normally there are three major players: Record Label, Publishing, and Management.

Record Labels are run very inefficiently (no surprise!); an example is how they recoup their initial investment in a band. Typically they will pay for all recording costs upfront, as well as give the band an advance. Recording costs are approximately $250,000 for a major record label, with an additional $50,000 for the advance. The band doesn't receive a penny until the record label has recouped these investments. From here it is easy to see how to game the system--allocate as much cost as you can to the recording expense. This is exactly what the record labels do. They charge as much overhead as they can to the "recording costs", and the bands get practically nothing. For example, Dwight was able to professionally record his artist for a fourth of what a major record label would have charged.

Next is publishing, and basically the big mistake a band can make is lose their publishing rights--a friend of Dwight's is unable to release her album (it has been ready for over a year!) because of making this mistake.

Management covers a lot of different aspects of the band--personal manager, publicist, and distribution. Obviously, distribution used to be much more difficult than it is now, with digital music download sites like itunes, but it is still essential to sell albums (through commercial sites and at concert venues). All album sales are reported to sound scan, which is used by Billboard to rank the top albums and singles. This is the most common way for a band to build the credibility needed to "be discovered."

The rest of the meeting we discussed the innovations we see occuring in the music industry. For example, the website www.pandora.com is leading the way in music discovery for consumers. Another site, www.platinumblueinc.com, analyzes songs to determine the probability of them becoming a mainstream success. For $10, you can analyze a single song and receive a report within 5 days. Another interesting site is www.sellaband.com; from here you can purchase equity in a band in $10 increments. Once the band has raised $50,000 they can record an album with professional equipment, and every one who invested in the band receives a CD. From there the songs are downloaded from the site for free, with ad revenues from site traffic shared between the band and shareholders. It's a nice little Web 2.0 version of the record label industry.

MySpace has obviously changed the way bands build fan bases, but a very interesting development is occuring on a more radical social networking platform: Second Life. Real bands such as Duran, Duran and Talib Kweli have played to virtual audiences in the online world (http://www.wired.com/news/technology/internet/0,71593-0.html). For those unfamiliar with Second Life, you should check out a podcast created by one of my classmates: http://iinnovate.blogspot.com/. Search for the interview with Philip Rosedale, Founder of Second Life. Don't believe that an online virtual game has monetization possibilities? Check this article out: http://www.businessweek.com/the_thread/techbeat/archives/2006/11/second_lifes_fi.html?chan=search

I know Stanford will be hosting a panel of music industry experts in January--it will be interesting to see what they think lies ahead for the future of music.

Fantasy Basketball

2006-12-03T02:07:00.000-08:00

So I've noticed that I spend an inordinate amount of time playing fantasy basketball... and a few of my fellow GSBers have asked me for some advice on how best to run a team. Here are a couple of my thoughts:

Scan the box scores every day
-This takes only a couple minutes, but is essential for understanding who is getting playing time, who is starting, and who is putting up significant numbers.

Research the draft
-Not really going to help anybody right now, but the single most important part of the Fantasy NBA season is the draft. Middle to late round sleepers make or break your season.

Watch basketball games
-Silly, but a lot of fantasy players don't actually watch the games. This is especially important in the first week of the season--most of the breakout players I have picked up from the waiver wire in the last couple of years have been immediately after a game or while I was watching the game.

Predict who will get Center eligibility
-I have used this tactic so often in my leagues that managers who have played with me for awhile will actually not make trades with me because they know if I want their player, he very well may be center-eligible soon. Keep track of who starts, and learn the eligibility rules for your league. Centers are extremely valuable (though not as much this year as in previous years).

Try to make "two-for-one" trades
-Two for one trades are great because you can't play everyone on your team everyday--depending on the league, you will have at least a couple bench spots, so I'd rather have a superstar I play everyday, then 2 mid level stars that I spot start. There are a couple ways to accomplish this--the traditional two-for-one, which most managers are reluctant to make now because they have learned that two-for-ones aren't the best moves, and the two-for-two, that involves the other teams worst player. Essentially these are two-for-ones, especially if there is a player on waivers that you are looking to pick up anyway.

I'm sure there will be some future posts on more strategy involving Fantasy, but I definitely welcome any opinions on this matter, or if you disagree with my post.
Justin

GMAT Prep

2006-11-26T09:57:00.000-08:00

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

Business in Iowa

2006-11-26T09:00:00.000-08:00

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!

Why has eBay been so successful?

2006-11-13T00:38:00.000-08:00

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

First Blog

2006-11-12T14:36:00.000-08:00

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