By Tom Garland, MBA 15
- The company’s free cash flow has been negative since 1994, owing to poor sales and a highly capital-intensive industry
- Significant declines in ROIC
- Opaque ownership and incentive structure
By Tom Garland, MBA 15
Moses Lo, MBA 15, has lived a border-spanning life. Born in Singapore to a family with roots in Malaysia, Indonesia and China, he spent his early years in a one-room house with a bucket shower before moving to Australia—and indoor plumbing. For a time he had a business selling custom suits made in Thailand and China. He has studied in Sydney, New York, and now at Berkeley-Haas; he worked at the Boston Consulting Group and Amazon.
It was this global existence that inspired Xendit, an cross-platform app that lets anyone transfer cash around the world in seconds, for a fraction of the cost of established services like Western Union—or even upstarts like Transferwise and Xoom. The funds can go directly into a bank account, or even to a post office or convenience store where the recipient collects it.
“I grew up in one world, and moved to another, and I’ve gone between different worlds all my life,” says Moses, Xendit’s CEO. “I know first-hand how difficult it can be to move money across borders, especially for people who are outside the traditional banking system.”
The startup team includes COO Vivek Ahuja, MBA 15, a U.S. Navy veteran who spent five years on a nuclear submarine; Casey Lord, MBA 15, who worked at Paypal and in impact investing, and is serving as head of Asia; as well as as CTO Bo Chen, EECS 13 and Lead Engineer Juan Gonzalez, CS 13.
The group has made quick progress: they won the Andreessen Horowitz’s Bay Area Bitcoin Hackathon last November, coming in first among 200 competitors. They took 2nd in last week’s LAUNCH startup competition, and Xendit was a finalist at the Global Social Venture Competition in April. The team has recently been funded by one of the most prestigious names in the Valley and will spend the next few months preparing for a public launch.
Xendit is focusing first on Asia, a massive market. Remittances from the U.S. to Asia alone are estimated at $50 billion, according to World Bank estimates; transfers within Asia are billions more.
Xendit’s user interface couldn’t be simpler. Simply choose a contact’s email or phone number, choose a currency and amount, and hit “send”. The app displays real-time exchange rates, and the cash is transferred in seconds. Within seven clicks, you’re moving money across the globe.
The back end is a bit more multifaceted: The cash moves through a combination of traditional bank channels and crypto-currencies like Bitcoin and Ripple. Xendit has already negotiated relationships with banks and non-bank cash-out locations in Asia and moved $35,000 in a six-week pilot.
For bank-to-bank transfers, fees are between 1 and 2 percent. For a non-bank transfer—to someone who does not have an account and may be picking up cash at a 7-Eleven in Malaysia, for example—fees are considerably higher, because of extra service charges along the chain. Xendit is aiming to keep the fees about half of what current competitors charge.
It’s that market that gives Xendit a social-impact component. Moses says he has met many low-wage immigrants over the years who lose thousands of dollars annually to send support back home. He describes Thomas, a friend in Australia who was a South Sudanese refugee. His father died during the civil war, he arrived on a UN passport and with a scholarship to study in Australia. He was always working two jobs to put himself through school, and paying 15 percent fees to send money to his family in a Ugandan refugee camp.
“Banking is unjust. It’s simply inefficient and too expensive to serve these markets,” Moses says. “I believe that a business worth pursuing should add value to our world.”
Moses says he came to Haas specifically to build an entrepreneurial venture. After taking time to build a team that spans Haas and the engineering school, he and Vivek have been able to leverage their 2nd-year MBA coursework this year to strengthen Xendit. They took Entrepreneurship with Toby Stuart and Rob Chandra, then Workshop for Entrepreneurs, offered through the Lester Center and taught by lecturers Nancy Kamei and Doug Galen.
“Startups are about the right team, the tech talent and access to funding networks,” he says. “Berkeley is the place to be for all of that.”
By Karen Sorensen, guest blogger
Haas startups Xendit and Optucourse were among the four teams to take home $50,000 in prize money Thursday at the annual finals for LAUNCH—the Berkeley Startup Competition.
Now in its 17th year, the event featured a start-up expo, fast-paced pitches from five finalist teams to a group of judges, VCs, and a live audience of more than 300 people, as well as plenty of B-School related jokes from Dilbert creator Scott Adams, MBA 86.
This year’s LAUNCH competition, organized by Berkeley MBA students and hosted by the Lester Center for Entrepreneurship, attracted more than 100 entries, each with a required UC-affiliation.
The 15 semifinalists, working on everything from healthcare to financial tech to electronics, participated in a new, rigorous four-month accelerator program—complete with training, networking, and mentorship.
Event organizers said they were amazed by how accomplished the finalists are this year.
“Investors have been clamoring to meet with the teams,” said Dan Schoening, who co-chaired the competition with Franklin Russell, both MBA 16.
The new LAUNCH format is part of a move at Haas to shift entrepreneurship programs to a new accelerator/lean-startup model.
“From hackathons to Lean LaunchPad to LAUNCH we can teach and support our entrepreneurs from the idea stage all the way through to where they can credibly talk to angel investors,” says Andre Marquis, executive director of the Lester Center for Entrepreneurship.
In true Dilbert fashion, LAUNCH keynote speaker Scott Adams—a supporter of Berkeley’s Skydeck accelerator—offered a contrarian view of success, reviewing his “36 business failures.” His final comment—making fun of the students’ attempt to solve all sorts of problems, including toe fungus asthma—drew roars of laughter. “I’m really happy I came here, not just because I got to meet great folks, but because I have asthma, toe fungus, and I snore.”
Grand Prize ($25,000): Transcense, which has created a mobile app that allows people with hearing-impairments to understand and participate in group conversations. The company’s founder and CEO, Berkeley engineering alumnus Thibault Duchemin, MEng, 14, was mentored through Haas Lecturer Steve Blank’s Lean Launchpad course. Transcense plans to launch its product next month and is currently working on seed funding. The company attracted $30,000 of pre-orders within just six days, Duchemin says.
While participating in LAUNCH, Duchemin said, the focus on customer interviews helped the company refine and improve its product from a transcription device into an easier-to-use, more intelligent “personal captioner” for the deaf, Duchemin said.
Transcense now uses speech-recognition technology to deliver what’s being said into multiple users’ phones at a given moment—and shares all parts of the conversation with a deaf person, he explained.
Runner Up ($15,000): Xendit, which has built an app to transfer money around the world at a fraction of the cost of established money-wiring services. The team includes Moses Lo and Vivek Ahuja, both MBA 15; and Bo Chen and Juan Gonzalez, both EECS 13.
Moses Lo, MBA 15, co-founder of Runner Up award winner Xendit, said the help of LAUNCH mentor Philip Inghelbrecht particularly helpful. Inghelbrecht is co-founder of music app maker Shazam, “He helped us do the right things faster.”
Audience Choice ($5,000): Optucourse, which aims to improve online learning via live online discussions. The team includes Jonathan Heyne, MBA 15; Armando Fox, PhD Computer Science, 98
Faculty Choice ($5,000): DeviceFarm, which has built a medical device to cure fungal nail infections. The team includes Jeffrey Roe, PhD Bioengineering, 89.
UPDATE: The campaign wrapped up May 8 with $6,000 raised! Many thanks to all who went beyond themselves—after already contributing to other C4C campaigns throughout the year. The organizers will keep donors informed on which organizations receive the funds.
MBA students who traveled to Nepal last year with the International Business Development program, and with Challenge for Charity (C4C) leaders, have spearheaded a crowdfunding campaign for earthquake relief in the devastated country.
Launched on Tilt, the campaign funds will target non-governmental organizations on the ground in Nepal. Student organizers are working with international contacts in their networks to quickly identify the most high-impact organizations, and will keep all donors apprised of how the funds are distributed.
“It’s a very, very scary situation over there,” says Jackie Laird, MBA 15, who was part of Team Beauty for Ashes in Kathmandu last June. “We are trying to get funds there sooner rather than later.”
Jackie says she and other students have been in touch with the women they worked with, and all of them are OK—but their families are not. They are not only trying to get help to their relatives, but they are fanning out throughout the city on foot—the only way to get around at this point—trying to help others in need, especially children.
“The way the hospitals work in Nepal is that you don’t get anything for free—including water. Your family and friends have to bring it to you,” she says. “Hospitals are way underfunded. Many of them only have one bathroom.”
Jackie says her team’s experience in Nepal was eye-opening. “Nepal was far worse than I expected, in terms of how destitute it is. If that’s the way it was like in good times, I can’t imagine what it’s like now,” she says.
With monsoon season looming and tens of thousands without shelter, the situation is critical. The 7.8-magnitude quake that rocked Nepal last Saturday killed more than 5,500 people, and injured at least 12,000. The death toll continues to rise, with many remote villages still inaccessible.
MBA students will be in the courtyard from 11 a.m. to 2 p.m. Monday (with baked goods!) to raise awareness for the campaign. If you have any questions, please reach out to the C4C organizers: Marisa Johnson, John Maus, and Sara Oon, all MBA 14. You can also contact Jackie Laird with questions.
The first-ever business forum at Berkeley focused on the world’s second-largest continent—and second-fastest-growing economic region—will take place at Haas on Saturday.
MBA students organized the Africa Business Forum to fill a gap at the school, where students have long held regional business conferences focused on Asia and Latin America.
“Our vision is to make Berkeley-Haas the premier destination for the development of innovative business solutions to Africa’s challenges, and a home for visionaries who want to develop these solutions,” says Oseyi Ikuenobe, MBA 15, one of the event organizers.
They chose the theme, “Africa: The Next Frontier For Mobile Technology,” to resonate with the larger Berkeley community.
“We didn’t have to look far to find our theme,” says Serge Ouedraogo, MBA 15. “Mobile is where everything is happening in Africa—when you talk about access, it’s through mobile devices. As a business school, we should not be missing this emerging market.”
The forum is not only a first for Haas, but for the larger Berkeley campus as well, organizers believe. Conferences and panels have focused on politics and policy, development, and advocacy, but never business. But given the growth forecasts for the continent, that’s likely to change.
A few stats:
In the face of such rapid growth, what will Africa look like in ten years? That’s the central question of the symposium, to be explored by entrepreneurial speakers and panelists who are pioneering a range of innovative ventures, as well as in a hands-on business-model-design session for attendees.
Sophia Bekele, founder and CEO of DotConnectAfrica—which has advocated for .africa domain names—will give the keynote address. Panelists include Shashi Buluswar, co-founder and executive director the Institute for Globally Transformative Technologies at Lawrence Berkeley National Lab; Stephen Ozoigbo, CEO of the African Technology Foundation, Sarah Kunst, venture partner at Future Perfect Ventures; Twitter developer advocate Bear Douglas, who will talk about Twitter’s Digits—a free mobile app authentication framework suited for emerging markets; and Kevin Schuster, growth director for VOTO Mobile, a Ghana and U.S.-based enterprise working to amplify disenfranchised voters’ voices through mobile phones. See the full speaker list.
Organizers expect a crowd of about 70 people, including students from Haas and other schools, and working professionals. The group has also been marketing the event at meet-up groups focused on African business.
The event will be held from 8:45 a.m. to 3:30 p.m. May 2 in the Wells Fargo Room. Click here to register. Follow the forum on Twitter: @HaasAfrica.
By Nick Wobbrock, Chad Reed, Leigh Madeira, and Zach Knight, all Full-time MBA 15
The Win: First place in the Morgan Stanley Sustainable Investing Challenge, at Morgan Stanley’s London Headquarters on April 17.
The Team: (left to right) Nick Wobbrock, Chad Reed, Leigh Madeira, and Zach Knight, all full-time MBA 15
The Field: The challenge began with 380 students, on 127 teams, from 78 graduate schools, based in 20 countries. The final round included 10 teams from 10 top graduate business schools.
The Pitch: Our team, Blue Forest Conservation Notes, pitched a financial structure that would allow investors to help California and the Western U.S. alleviate historic droughts and catastrophic forest fires, all while earning competitive returns. Blue Forest Conservation Notes utilizes pay-for-success contracts to monetize the shared benefits of proactive forest management among water and electric utilities, as well as the US Forest Service. We defended our investment thesis in front of a panel of industry leaders, including both impact-focused investors and more traditional institutional asset managers.
The Clincher: The judges cited the timeliness of the problem, and our team’s convincingly innovative financial structure, which they believed would bring investors and stakeholders together to take a step forward in solving California’s two most pressing environmental issues.
It’s a common student dilemma: you’ve got a full-time offer post-graduation, but you still have several more months to finish your degree. And you’re facing the up-front costs of relocating—before your first paycheck or signing bonus hits your account.
What do you do? Often, your only option is to pile more credit card debt on top of your student loans, and bite the bullet on the high fees.
Enter WeFinance, a crowdfunding startup co-founded by Willy Chu, MBA 15, that launched last week. Though crowdfunding is becoming a crowded space, Chu acknowledges, WeFinance is the first platform focused on truly peer-to-peer loans.
“Many students are paying seven to 8 percent on their student loans—even higher if you’re international—and they have living and moving expenses,” Chu says. “They’re low-risk borrowers but their credit scores don’t reflect that, and they can’t refinance until they have more credit history. Meanwhile, a peer lender in these students’ network could earn four percent or more on their extra savings.”
WeFinance launched with two critical resources. First, it has a software platform built by co-founder and CEO Eric Mayefsky, a Stanford econ PhD grad and ex-Facebook product manager who spearheaded the concept. This platform fully automates disbursements and repayments between borrowers and lenders, allowing both parties to rest easy that payments are made on time. Second, WeFinance has been tested by Chu’s network of fellow Haasies, a dozen of whom have signed on as guinea pigs seeking funding.
“My classmates have been incredibly supportive, willing to try out the product,” he said. “Faculty members have provided core guidance.”
Ton Chookhare, MBA 14, used the platform to refinance some of his higher-interest student loans, raising $5,000 in just a few weeks and lowering his interest rate from 8 percent to 4 percent. He already had accepted an offer with Kaiser Permanente, and was working on a side project involving custom suits made in his hometown of Bangkok, Thailand. “I think many people will be surprised at how willing people in their network are to offer financial support, especially when they’re getting much better returns while supporting someone they know and trust,” he says.
Chu says when he came to Berkeley-Haas, he thought he might end up working for a startup—but had no intention of launching his own. His thinking evolved while taking Entrepreneurship with Prof. Toby Stuart and Lecturer Rob Chandra. His new path began last summer when a Stanford MBA friend saw an email from Mayefsky seeking help with the venture. After a few months of working well together, Chu—who previously worked at Credit Karma and Kiva—became a co-founder. He’s focusing on marketing, partnerships, and growth while Mayefsky develops the technological infrastructure.
“I’ve benefitted from starting this in my second year, after I had a strong base, and I’ve been able to piggyback on my coursework and lessons learned from my peers who launched businesses last year,” he says. “In particular, New Venture Finance with Asst. Prof. Adair Morse has been useful.”
Chu’s goal is to expand WeFinance to 40 schools within a year, beginning with Stanford, Harvard, and Wharton. In addition to MBAs, the company will focus on law and other top master’s and undergrad program students.
Read more about WeFinance in TechCrunch.
By Kim Girard
When Antoine Bruyns, MBA 16, arrived at Haas last year, he was already addicted to the power of Big Data.
A native of Belgium, Bruyns and several friends had started a mobile data-crunching company in Tanzania in 2010. The company, Real Impact Analytics, has since grown to 70 employees and recently helped track the spread of the Ebola virus using anonymous data.
But the draw of Silicon Valley’s entrepreneurial culture led Bruyns to leave the growing startup for Haas.
“The way I see it, Silicon Valley is like Italy during the Renaissance,” he says. “It’s like being among the Medicis, among all of these great minds. That’s why I came.”
In Berkeley, Bruyns immediately jumped into his passion. He connected with the Berkeley Institute for Data Sciences (BIDS), a five-year, $38 million collaborative effort established to promote data-driven scientific breakthroughs, and to the AMP lab, which focuses on the intersection of three trends: machine learning, cloud computing, and crowdsourcing.
Bruyns found kindred spirits among his classmates, and joined forces to increase Haas students’ access to Berkeley’s top-flight data science resources. He and fellow MBA 16 students Scott Crider and Samy Merzgui co-founded the Haas Data Science Club last fall, as a spin-off of the Haas Technology Club. Classmates Claire Bianchi, Pete Dillon, Dale Alejandro Robinson, and Peter Jordan joined soon after the first meeting, and the group enlisted Assist. Prof. Tom Lee as their faculty advisor.
In tandem with the students’ work, Prof. Greg LaBlanc says the MBA curriculum is changing to reflect industry changes. Data analysis has become much more sophisticated since he began teaching his Data and Decisions course five years ago with Assoc. Prof. Lucas Davis.
“We realized that business was being transformed through data-driven decision making, and companies were engaging in experimentation—moving away from decision by gut,” he says. “So we reconfigured the class to be more about understanding data and inference and not just about statistics.”
This quarter he’s introducing a new course, Data Science/Data Strategy, centered on how big companies build strategies around data, and exploring data science techniques and business models built around data. The class is already full, with 60 full-time and 60 part-time MBA students enrolled.
Two years ago, Asst. Professsor Minjung Park also launched a Marketing Analytics course, which focuses on understanding and using Big Data in marketing.
In addition, LaBlanc is working with Data Science Club members to organize a speaker series this fall, inviting executives from Wells Fargo, IBM, Facebook, and Walmart to discuss how they use data in business. The goal is to give students the tools they need so they can leave Haas with the confidence to immerse themselves in a data project.
“When they walk into a meeting with a team of engineers they can’t come in cold,” he says. “They have to bring something to the table.”
The Data Club, which is open to IT, engineering and business majors, is also organizing technical workshops run by companies that show students how to use different data tools.
Big Data can be difficult for business majors who lack a technical background, but Bruyns says he knew they were on to something when more than 60 people showed up for an data visualization event last fall with Tableau software.
Bianchi, MBA 16, says the club was exactly what she wanted as part of in her MBA program. She has worked as a senior database marketing analyst at Hotwire and as a manager of customer relationship management at UniversityNow. Those experiences taught her that deep-data knowledge is crucial for any MBA working with engineers, analytics experts, or business intelligence managers.
“You’re at the mercy (of others) if you don’t understand data,” she says. “At Hotwire, the people who didn’t have that background struggled. They might think that the data someone pulled for them was pulled incorrectly, but they don’t understand why and they’re not able to have a conversation with that person.”
On Feb. 27, a group of 20 Berkeley-Haas MBA students from the Investment Club trekked to Omaha, NE, to meet Warren Buffett. Every year Mr. Buffett invites students from MBA programs around the country to tour some of the Berkshire Hathaway portfolio companies and participate in a two-hour Q&A followed by lunch.
In a guest blog post, two students share what they learned from the legendary Mr. Buffett.
By Ben Ferrara and Sulaiman Al-Bader, MBA 2015
If we had to choose our Top 5 favorite nuggets from the many that Warren Buffett shared with us, it would be these:
#5. Some people go back and relive their youth by finding old Playboys; I buy old Moody’s reports.
#4. Risk is losing purchasing power—NOT volatility.
#3. Always surround yourself with people better than you are.
#2. Study success and failure through the biographies of leaders like Sol Price and Sam Walton, who didn’t care about money but about being the best and winning.
#1. Success comes from thinking and by creating time to think without meetings, committees and PowerPoint.
But there’s so much more to say…
It’s a brisk 8 degrees Fahrenheit and far from California 20 Berkeley MBAs are embarking on an adventure in Omaha. This special day includes company visits at Nebraska Furniture Mart, Borsheims, and Oriental Trading Company. Yet all of us are laser-focused on catching a glimpse of, inspiration from—and yes, a group photo with—the Oracle of Omaha. Warren Buffett is one of the few living and actively working legends in the game of finance.
En route to Berkshire Hathaway headquarters in Kiewit Plaza, we actively prepare for our Q&A with Mr. Buffett. We gather in a room with 160 MBAs—from Canada, Boston, and Austin—where a deep appreciation of capitalism and opportunity is brewing. When Mr. Buffett (and his world champion bridge partner, Sharon Osberg) enter the room, there is silence—and then, a feeling of warmth and familiarity when we see Mr. Buffett’s contagious smile and ever-present Coca-Cola product (which happened to be Cherry Coke).
Over the next two hours, the 84-year-old Buffett shares his wisdom on how to pick winners (both companies and people), personal models of success, how to develop a contrarian viewpoint, trends in income equality and philanthropy, and more. What makes the most impact on us is the importance he puts on picking “first-class human beings.” Mr. Buffett shares a story of meeting a Holocaust survivor who told him that whenever she makes a new acquaintance, she hears her internal voice asking: “Would this person hide me?” Her story provided a life lesson to Mr. Buffett, and now to us. He sums it up like this: “If you’re 70 years old, even wealthy, but you don’t have people in your life who would be willing to hide you in that scenario, you have not succeeded in your life, no matter how other people see you.”
Our Omaha adventure does not stop there: Mr. Buffett generously invites us to join him for lunch at Piccolo Pete’s, where we socialize with other MBAs. The two of us have the tremendous good fortune to sit with Mr. Buffett at his table, where we enjoy a plate of steak and fries, along with more of his pearls of wisdom in this intimate setting. One of these pearls is Mr. Buffett’s sharing his self-proclaimed favorite investment: GEICO. He says investing in the insurance company was a turning point for his career, and positioned Berkshire Hathaway for long-term success. He also encourages us to challenge the status quo by avoiding shortcuts in finance—for example, relying too much on third-party analyst reports—and thinking for ourselves, citing an example of exciting South Korean companies he found from a paperback book on equities.
“You’re unlikely to get great ideas from others,” Buffett tells us. This is a recurrent theme for him: thinking for yourself and following your own path, surrounded by gracious and giving people, is the recipe for success. It’s hard to argue with the sweet success of the Oracle of Omaha. As we finish our root beer floats, and leave that afternoon for Berkeley, we feel we have gained not only a renewed sense of purpose, but also inspiration about the endless possibilities we have to make a difference in this world over the course of our entire life journeys.
When organizers of the Women in Leadership Conference began planning this year’s event, the impact of empowering the next generation of women felt tangible. Some of the organizers are in the Full-time MBA Class of 2015, whose work with admissions helped boost the percentage of women in the Class of 2016 to 43 percent. Energized by their record-breaking class, the first-year students are building on that work in what they are calling the Haas Gender Equity Initiative.
The conference theme, “Empower Me: Invest in All,” reflects those experiences, says Co-chair Carmela Aquino, MBA 15. “This came about exactly because we were seeing the momentum at Haas around these ideas,” she says. “We wanted this year to embody the positive drive we were seeing, so attendees walk away feeling empowered to go beyond themselves in their respective paths and do more to help other women aspiring to leadership.”
The 19th annual conference, organized by the Women in Leadership club, is expected to attract more than 500 business leaders and students to the Haas School from 8 a.m. to 6:30 p.m. on Sat, March 14. Click here to learn more .
The primary goals of the conference are to help women gain concrete skills for advancing in their own careers, connect with others, and get inspired, says Co-Chair Libby Hadzima Perkins, JD/MBA 15. But that’s not to say it’s geared exclusively toward women. In fact, “manbassadors”—as the male student actively involved in gender equity are calling themselves—have been key.
“Without the support of men in the workplace, there is only so much we can do to help promote more gender-equitable outcomes,” Hadzima Perkins says. “That’s why we wanted our theme to focus on the benefit that investing in women lifts everyone up, and provides a benefit to society as a whole.”
Keynotes: The morning will kick off with Ann O’Leary, Director of the Children & Families Program for Next Generation and former Legislative Director to Hillary Clinton, in conversation with Prof. Laura Tyson. In the afternoon, Donna Morris, Sr. Vice President, Global People and Places for Adobe will be introduced by Asst. Prof. Kellie McElhaney to close out the conference.
Leadership Stories: For the lunchtime session, attendees will get “an intimate look into the cycle of confidence and failure in leadership” from four leaders in diverse fields.
Invest in All Alley: This new addition to the conference is a space for companies, organizations, and entrepreneurs to exhibit their products or services, to showcase their dedication to gender equality, and to raise their brand awareness.
Panels will focus on tangible skills, from mastering difficult conversations in the workplace to taking control of finances for the future.