I just got to the Business Concept Competition, and walked into the second-half of a presentation on a ride-sharing service. Darden students are finding business opportunities by considering sustainability issues. I love it.
This team has their act together—they’re talking about how their internet-based ride-sharing service will give companies flexibility in arranging transportation for their employees and offer employees a way to reduce their environmental footprint. They claim that DC-area employers currently pay ~$60 in transportation subsidy for each employee, and that their service would help companies save money. If this catches on, it could be hot. Great idea, guys!
Unmanned Aerial Vehicles for Peace. An unmanned aerial vehicle collects data, delivers ‘packages’, and navigates autonomously . Usually I guess the ‘package’ detonates, but these guys want to build a company that employs UAVs in civilian activities as a communication hub.
UAV for Peace plan to buy, adapt and lease UAV’s for use in search-and-rescue, disaster recovery and search for survivors. These guys are thinking about of the box – they’re not just talking about planes but about using blimps as mobile communication platform that could host cellular networks, radio antenna.
It may be uphill getting this past the Federal Aviation Regulation, capturing a sustainable competitive advantage, covering that high capital cost. But no one’s doing it. The judges offered some useful encouragement and suggested that the team select one or two mission categories, and work the sensor issue and the deployment issue to better communicate the opportunity.
Clean India introduces their team, which is strong, two MBAs and a Prof. and researcher at Oregon State University in water treatment. The product: low cost waste water treatment using ponds and photo bioreactor to treat water used by industry. Dirty water goes in, is cleaned by algae, and is filtered out as industrial-use water and dry algae. The revenues come from both these outputs--the algae can be used for bio-fuels, animal feed, fertilizer; and the water can be sold back to industry.
Clean India are focusing on the textile industry (4% GDP of India), which requires a lot of water (1 MM liters daily) and is currently shipping it from great distances. My classmate Ravi runs through some solid-looking financials and opens up for questions. The judges are concerned about barriers to entry—but it sounds like this team has an edge both with the algae technology and with their photo-bioreactor/algae hybrid model. Good job, Ravi and Baij!!
Life Flow is a technology that support the left ventricle for the treatment of congestive heart failure . Another super strong team--the presenter is an MD/MBA candidate and he’s working with UVA engineers, doctors and people who want to apply this new technology in patients.
Life Flow runs through some of the existing technology – if one of the main alternatives is a heart transplant (scarce supply, pre and post transplant issues, higher incidence of mortality 5 years out), we (me, you and our baby boomers parents) need more options! Life flow may be an industry first. Its strongest points are that its sensor network and magnetic technology allow identification of thrombosis and its location without messing with the flow of blood. The judges and audience have a lot of questions about IP, the device, and the process that they are using to test this device (in vitro/in vivo). I think that short of winning the prize-money, the feedback from the judges here is the most valuable thing for these teams that typically seek to compete in future competitions.
I could listen to these young, motivated, extremely bright entrepreneurs for hours, but have got to take off. After all, it is a reading-day (read: day-off), Halloween, and I’ve got an octopus costume to finish putting together (photos may follow).
I didn't mention all the entrepreneurs by name and didn't cover all of the event, so for completeness here's a list of all the Business Concept competition finalists. Congrats to everyone who made it and got a chance to present today!
Consumer Goods, Services & General Category:
Clear Money – Kevin Royer (D ’10)
Jay’s Karaoke Lounge and Suites – Jacqueline Grace (D’ 10),
Melvin Pope
Ride Flow – Alexander San Andres (D ’10), Joanne Gotianun (D ’10), Mark Taylor (D ’10)
TeleMed Africa – Scott Emami (D ’09), Keith Florance (D ’09), Manoj Sinha (D ’09), Henri Van Canneyt (Darden Exchange Student)
Life Sciences & Hi-Tech Category:
UAVs for Peace – Thanh Dinh (D ’10)
LifeFlow – Amir Allak (D ’10), Alex Bailey, David Chen (D ’06)
Clean India – Ravi Yekula (D ’09), Baijnath Ramraika (D ’09)
Ganti MurthyBlade Energetics – Scott Kasen, Michael Iger, Adam Malcom
Friday, October 31, 2008
Wednesday, October 29, 2008
Sustainability and Renewable Energy Forum
As sometimes happens at Darden, I was so wrapped up in recruiting and interviews today that I missed the sustainability in marketing and general management panel, but luckily was able to make the networking event that concluded the forum.
A lively event (maybe because of the glass of white wine in my hand), I ended up in a small circle of students/speakers/Darden faculty with Patty Fogelsong, Pres. of Net Impact, Mike Lenox, head of the Batten Institute, and John Stern, a representative from Chevron's renewable energy R&D group.
The range of discussion was interesting -- Patty talked about her internship with the Park's Service in Death Valley and some of the Park's attempts to becoming more economically self-sustainable, which sounded difficult when they do things like only charge car manufacturers in the two digits (as in $100, $200) to road-test their cars in the park. I regaled everyone with stories of my internship in Bali and Mike questioned me on issues of 'additionality' in the carbon market. (It's a tough issue, but lucky for you Adam Stein at Grist published a great four part series on it.)
I also had the opportunity to talk to Stern about where Chevron is making investments in renewable energy. It turns out they are doing a lot in Indonesia. Why? Because it's hot. It's not only hot, it's volcanic hot. I also think Chevron is in geothermal because it gets it--their core business translates well into this new area.
The event flowed nicely into my Business and Sustainability seminar. Today we're doing a fascinating case on BP's sustainability initiatives (from its internal carbon trading program to its Beyond Petroleum marketing campaigns) that will be led by Lenox.
I'm going into class so that's all for now, but I'll be back on Friday to blog about the Darden Business Concept Competition.
A lively event (maybe because of the glass of white wine in my hand), I ended up in a small circle of students/speakers/Darden faculty with Patty Fogelsong, Pres. of Net Impact, Mike Lenox, head of the Batten Institute, and John Stern, a representative from Chevron's renewable energy R&D group.
The range of discussion was interesting -- Patty talked about her internship with the Park's Service in Death Valley and some of the Park's attempts to becoming more economically self-sustainable, which sounded difficult when they do things like only charge car manufacturers in the two digits (as in $100, $200) to road-test their cars in the park. I regaled everyone with stories of my internship in Bali and Mike questioned me on issues of 'additionality' in the carbon market. (It's a tough issue, but lucky for you Adam Stein at Grist published a great four part series on it.)
I also had the opportunity to talk to Stern about where Chevron is making investments in renewable energy. It turns out they are doing a lot in Indonesia. Why? Because it's hot. It's not only hot, it's volcanic hot. I also think Chevron is in geothermal because it gets it--their core business translates well into this new area.
The event flowed nicely into my Business and Sustainability seminar. Today we're doing a fascinating case on BP's sustainability initiatives (from its internal carbon trading program to its Beyond Petroleum marketing campaigns) that will be led by Lenox.
I'm going into class so that's all for now, but I'll be back on Friday to blog about the Darden Business Concept Competition.
Monday, October 27, 2008
1st Darden Trash Audit
Earlier this month, I led an intense day-long event. Eleven Darden students came together to sort through about 460 pounds of trash. What were we thinking--digging through garbage?
Well, I think Darden needs to be more conscious about what it is sending to the landfill and do a better job recycling. The first step is recognizing that we have a problem, measuring the extent of the problem (we found about 67% recyclables by volume and 54% by weight), and sharing the results so we can start to do something about it.
I didn't blog about the event itself, but my friend and classmate Hugh Liang did. Check it out:
http://dardennetimpact.wordpress.com/
Well, I think Darden needs to be more conscious about what it is sending to the landfill and do a better job recycling. The first step is recognizing that we have a problem, measuring the extent of the problem (we found about 67% recyclables by volume and 54% by weight), and sharing the results so we can start to do something about it.
I didn't blog about the event itself, but my friend and classmate Hugh Liang did. Check it out:
http://dardennetimpact.wordpress.com/
Thursday, October 16, 2008
Unsolved Business Mysteries
First a shout out to Christof Meyer for putting together and moderating today's presentation of faculty research. Darden's faculty was recently rated #1 for teaching by Princeton Review. I love case discussion at Darden, but I have to say it's a nice change to get out of the classroom and hear professors present on the current research they are working on.
Ron Wilcox (author of Whatever Happened to Thrift and my two-time marketing professor) shares, off the cuff, what interests him academically. Wilcox comes to marketing by way of economics and his interests lay at the intersection of these two fields. For the past two plus years, he's been working on the uplifting topic of the debt cycles of US households.
Rated against the rest of the developing world, the US has the lowest savings rate. He thinks that the current financial crisis is predicated on this. Running up to the crises, many people went out and bought things that they could not afford. But buying things we can't afford is nothing new--Ron says that historically Americans like debt--he cites Thomas Jefferson and GIs coming back from WWII (towns like Leavitt Town were built from Sears Roebuck with their debt).
So why all the problems now? And why can't we save? Two reasons: US is a good place to store money. People from all over the world funnel money to the US, keeping interest rates low, and returns on savings are low (oftentimes below rate of inflation.)
Second, in terms of the psychology of nations--Denmark is the happiest; US is the most optimistic -- we always think tomorrow is going to be better than today. And if you believe it, you don't save much.
Ron's most recent research delves into marketing and psychology of the American consumer. People handle money in strange ways using mental accounting. One of the crazy ways people do mental accounting is, if they've already spent a lot, it's easy to spend a little bit more. Think of the extras you end up shelling out for when you buy a new car, or how much you'll pay for a parking space in the Darden garage after paying thousands for your education.
He also looks at the psychology of debt, and in particular student debt (which with my debt from student loans, is frighteningly personal). In recent years, he says, there have been exponential increases in student debt. I look around the room and people are smiling nervously (I am, too). Wilcox further asks if getting into other forms of debt are easier for us? Credit card debt? Car debt?
To provide an example, albeit a pretty absurd one, Wilcox once played poker with Darden students (it was an item in the Building Goodness in April Auction). He wondered, "Where in the hell are these people coming up with this money--(I can't and) I'm employed!" But he realized that if you are 50G in debt, what's another $100 in a poker game? For a society massively in debt, this has pretty big implications that aren't all worked out yet. This is Ron's unsolved mystery. So he's a marketing teacher by day, and by night tries to think of ways to get people to save money.
Casey Lichtendahl discusses his joint work with another Darden faculty member, Sam Bodily (second year Mgmt Decision Models). He'll be talking about the subject of one of his recent papers, 'Preferences for Consumption Streams.' He gets started pretty quickly and it gets complicated FAST.
According to Casey's presentation, a major objective in life is to increase one's consumption in each year of remaining life. In order to plan, we have to think about preferences for uncertain consumption streams (uncertain because we all die).
Lichtendahl relates expected consumption to NPV. I thought NPV was all about the present value of future cash flows. According to Lichtendahl, it's an additive utility model for income over multiple periods. This explains some of the difference in the way me and Casey think. I believe that Casey thinks, in general, a lot more than I do.
Lichtendahl says that previous work has not researched all additive forms and properties, such as scale of variance. Are you are indifferent betw 50K this year and 50K this year, and $40K this year $63 next year? Let's say you were indifferent, then I scaled both up by 10%. Would you still be indifferent? If firms or individuals use NPV, it should stay the same.
By this time, I would posit that I knew about 10-20% of what Lichtendahl was talking about, but let's keep going. Here's two scenarios -- Scenario A: you get 50K this year, scenario B: there is a 50% chance of 50K+delta and 50% chance of 50K-delta/2. If delta was $10,000 one student from the audience would prefer getting $50K now because of the risk of losing in Scenario B.
Now lets look at same deal. Same scenarios A or B, but you get a guaranteed 40K in year two no matter what you do in year one. If this changes your mind, it means you cannot have separable preferrences, which leads to needing -- a model with multi-variant risk aversion (which I guess is what Lichtendahl is attempting to do in his research).
You thought that was it. It's not, it gets even more complicated. Now you have to choose between two scenarios that each have two distinct probabilities. The expected monetary value is equal between the two, except in one there is a chance that the value you get will be reduced by an unknown amount.
The main result--a multiplicative function allows for the expression of uncertainties (the most common ones: death and taxes). Casey provides an example of one 30-year old's (let's call him John Darden) consumption plans under mortality risk, and shows how the model changes if it incorporates multi-variate risk.
Thankfully, one of my classmates inquired about the practical applications of this research. It aims to help people deal with risk seen later in life, and helps insurance companies advise people on preparing for retirement. Christof points out that current models suggest saving early, while Casey's model puts this into question and suggests that one can consume more earlier in life if one saves at the right time/amount later. As Christof puts it, "so, we get more pleasure with your model. That's great!"
For more multi-variate fun or to make sense of all this, check out: http://faculty.darden.virginia.edu/lichtendahlc/research.htm
Now for something completely different. Sean Carr is one of director of Darden's Batten Institute, currently in the doctoral program at Darden. Carr worked with Bruner on 'Deals from Hell', a book on why some M&A deals failed. This led them to think, what else fails and why? Well, according to Carr, financial systems do (and we all know it's true). Carr's background as journalist covering finance and economy for CNN and ABC News was useful in forming narrative for his more recent joint-effort with Dean Bruner, 'The Panic of 1907,' which provides valuable lessons for anticipating crisis and which I wish more people in Washington read, earlier.
It was really fascinating to listen to the reasons that Carr stipulated were behind the crisis:
Growth. The US was emerging economy, GDP growth 7.4% following waves of consolidation 1800 firms into 94 companies. Hot markets are incubators for crises -- sharp increases in trading, this time it's different attitudes, rising prices leading to over-valuation, etc.
Macro-economic Complexity - In 1907, the financial system was not quaint - it was already fairly complex, and global -- 16,000 financial institutions (~7500 today).
Inflexibility - tight linkages in such a complex system.
Cognitive Biases Are Amplified -- I took this to mean that people are jittery, they don't know what's going and so respond to rumor badly.
Adverse Leadership-- TR was president. As a trust-bsuter, he used words like malefactors and pointed fingers. Carr argues that TR created more uncertainty. Like our current President, he also decided to take a lot of time off around the crisis. He was off somewhere hunting bear when 1907 happened.
Exogenic shock - April 1906, massive earthquake and ensuing fires destroyed SF. They had earthquakes in SF, we had Katrina, tsunamis, and more.
Failure to Organize Collective Action -- JP Morgan was in semi-retirement, and, at first, refused to take control. When he finally did, apart from injecting his personal funds, he compelled heads of other institutions to do something.
Today's crisis, Carr argues, also smacks of an ability to pull together. But ultimately, there is no silver bullet, or one thing to explain how we got in this mess. There needs to be a wider range of explanations, moving parts that on convergance lead to crisis, and while the past does not predict the future, I believe there is a lot we can learn from past crises.
Ron Wilcox (author of Whatever Happened to Thrift and my two-time marketing professor) shares, off the cuff, what interests him academically. Wilcox comes to marketing by way of economics and his interests lay at the intersection of these two fields. For the past two plus years, he's been working on the uplifting topic of the debt cycles of US households.
Rated against the rest of the developing world, the US has the lowest savings rate. He thinks that the current financial crisis is predicated on this. Running up to the crises, many people went out and bought things that they could not afford. But buying things we can't afford is nothing new--Ron says that historically Americans like debt--he cites Thomas Jefferson and GIs coming back from WWII (towns like Leavitt Town were built from Sears Roebuck with their debt).
So why all the problems now? And why can't we save? Two reasons: US is a good place to store money. People from all over the world funnel money to the US, keeping interest rates low, and returns on savings are low (oftentimes below rate of inflation.)
Second, in terms of the psychology of nations--Denmark is the happiest; US is the most optimistic -- we always think tomorrow is going to be better than today. And if you believe it, you don't save much.
Ron's most recent research delves into marketing and psychology of the American consumer. People handle money in strange ways using mental accounting. One of the crazy ways people do mental accounting is, if they've already spent a lot, it's easy to spend a little bit more. Think of the extras you end up shelling out for when you buy a new car, or how much you'll pay for a parking space in the Darden garage after paying thousands for your education.
He also looks at the psychology of debt, and in particular student debt (which with my debt from student loans, is frighteningly personal). In recent years, he says, there have been exponential increases in student debt. I look around the room and people are smiling nervously (I am, too). Wilcox further asks if getting into other forms of debt are easier for us? Credit card debt? Car debt?
To provide an example, albeit a pretty absurd one, Wilcox once played poker with Darden students (it was an item in the Building Goodness in April Auction). He wondered, "Where in the hell are these people coming up with this money--(I can't and) I'm employed!" But he realized that if you are 50G in debt, what's another $100 in a poker game? For a society massively in debt, this has pretty big implications that aren't all worked out yet. This is Ron's unsolved mystery. So he's a marketing teacher by day, and by night tries to think of ways to get people to save money.
Casey Lichtendahl discusses his joint work with another Darden faculty member, Sam Bodily (second year Mgmt Decision Models). He'll be talking about the subject of one of his recent papers, 'Preferences for Consumption Streams.' He gets started pretty quickly and it gets complicated FAST.
According to Casey's presentation, a major objective in life is to increase one's consumption in each year of remaining life. In order to plan, we have to think about preferences for uncertain consumption streams (uncertain because we all die).
Lichtendahl relates expected consumption to NPV. I thought NPV was all about the present value of future cash flows. According to Lichtendahl, it's an additive utility model for income over multiple periods. This explains some of the difference in the way me and Casey think. I believe that Casey thinks, in general, a lot more than I do.
Lichtendahl says that previous work has not researched all additive forms and properties, such as scale of variance. Are you are indifferent betw 50K this year and 50K this year, and $40K this year $63 next year? Let's say you were indifferent, then I scaled both up by 10%. Would you still be indifferent? If firms or individuals use NPV, it should stay the same.
By this time, I would posit that I knew about 10-20% of what Lichtendahl was talking about, but let's keep going. Here's two scenarios -- Scenario A: you get 50K this year, scenario B: there is a 50% chance of 50K+delta and 50% chance of 50K-delta/2. If delta was $10,000 one student from the audience would prefer getting $50K now because of the risk of losing in Scenario B.
Now lets look at same deal. Same scenarios A or B, but you get a guaranteed 40K in year two no matter what you do in year one. If this changes your mind, it means you cannot have separable preferrences, which leads to needing -- a model with multi-variant risk aversion (which I guess is what Lichtendahl is attempting to do in his research).
You thought that was it. It's not, it gets even more complicated. Now you have to choose between two scenarios that each have two distinct probabilities. The expected monetary value is equal between the two, except in one there is a chance that the value you get will be reduced by an unknown amount.
The main result--a multiplicative function allows for the expression of uncertainties (the most common ones: death and taxes). Casey provides an example of one 30-year old's (let's call him John Darden) consumption plans under mortality risk, and shows how the model changes if it incorporates multi-variate risk.
Thankfully, one of my classmates inquired about the practical applications of this research. It aims to help people deal with risk seen later in life, and helps insurance companies advise people on preparing for retirement. Christof points out that current models suggest saving early, while Casey's model puts this into question and suggests that one can consume more earlier in life if one saves at the right time/amount later. As Christof puts it, "so, we get more pleasure with your model. That's great!"
For more multi-variate fun or to make sense of all this, check out: http://faculty.darden.virginia.edu/lichtendahlc/research.htm
Now for something completely different. Sean Carr is one of director of Darden's Batten Institute, currently in the doctoral program at Darden. Carr worked with Bruner on 'Deals from Hell', a book on why some M&A deals failed. This led them to think, what else fails and why? Well, according to Carr, financial systems do (and we all know it's true). Carr's background as journalist covering finance and economy for CNN and ABC News was useful in forming narrative for his more recent joint-effort with Dean Bruner, 'The Panic of 1907,' which provides valuable lessons for anticipating crisis and which I wish more people in Washington read, earlier.
It was really fascinating to listen to the reasons that Carr stipulated were behind the crisis:
Growth. The US was emerging economy, GDP growth 7.4% following waves of consolidation 1800 firms into 94 companies. Hot markets are incubators for crises -- sharp increases in trading, this time it's different attitudes, rising prices leading to over-valuation, etc.
Macro-economic Complexity - In 1907, the financial system was not quaint - it was already fairly complex, and global -- 16,000 financial institutions (~7500 today).
Inflexibility - tight linkages in such a complex system.
Cognitive Biases Are Amplified -- I took this to mean that people are jittery, they don't know what's going and so respond to rumor badly.
Adverse Leadership-- TR was president. As a trust-bsuter, he used words like malefactors and pointed fingers. Carr argues that TR created more uncertainty. Like our current President, he also decided to take a lot of time off around the crisis. He was off somewhere hunting bear when 1907 happened.
Exogenic shock - April 1906, massive earthquake and ensuing fires destroyed SF. They had earthquakes in SF, we had Katrina, tsunamis, and more.
Failure to Organize Collective Action -- JP Morgan was in semi-retirement, and, at first, refused to take control. When he finally did, apart from injecting his personal funds, he compelled heads of other institutions to do something.
Today's crisis, Carr argues, also smacks of an ability to pull together. But ultimately, there is no silver bullet, or one thing to explain how we got in this mess. There needs to be a wider range of explanations, moving parts that on convergance lead to crisis, and while the past does not predict the future, I believe there is a lot we can learn from past crises.
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