Week 38: Condi, Internet Ads, Global Warming & Microbreweries

Stanford GSB Sloan Study Notes, Week 8 (38), Spring quarter

This week kicked off with Maker Faire, the ultimate geek fest of robots, drones, noisy machines, 3D printers, lasers and eco-conscious handicraft. I could picture tiny versions of this kind of events as a science faire in many technical universities around the world, but it is quite something to experience the scale of the creativity and crazyness unleashed once the event covers acres and attracts tens of thousands of tinkerers as it does in Silicon Valley. Just as one illustration, I’ll leave you with the Sashimi Choir someone has spent months of their life building for fun:


As a slightly more professional follow-up, we had a study trip to Flextronics this week to hear their story of how to design, develop and produce $30B worth of electronics a year with 200,000 people, and especially how to stay sane with $25B in materials and components travelling in just in time to make the supply chain miracle happen. We did see a solar panel manufacturing line in action, but were carefully kept away from stealth prototyping labs they run for many of their top name Valley clients.

Back on campus we got some face time with Professor Condoleezza Rice. She is more known for her stint as the Secretary of State, of course, but has had a respectable academic career at Stanford since getting her PhD at the age of 26 – and has many intriguing viewpoints on international politics, change management and diversity to share. See the notes below.

Covered in this issue:

  • Social networks in international settings
  • Display & search advertising optimization
  • Climate change
  • More on sales force incentives
  • Colorful range of startup cases: from batteries to microbreweries to lifestyle watches for surfers
  • Entrepreneur’s compass
  • Guests from: Gordon Biersch, Nixon, Carnegie Insitution, Envia

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Weeks 18-20: Innovation Economy, Debate Blunders and Creative Computing

Stanford GSB Sloan Study Notes, Week 8-10 (18-20), Autumn quarter

Not to worry, despite of the three week scope in title this is not a monster-length post. Between a lovely wedding, an unexpected funeral and Thanksgiving break in between my focus has temporarily shifted a bit away from school as this quarter concludes. Do enjoy the little there is to share below – and as special gift to reader A.M., yes there are more videos.

Marc & Bill

A notable off campus educational highlight  last week ago was an event at A16Z where  William Janeway (being interviewed by Marc Andreessen on the photo above) discussed his book Doing Capitalism in the Innovation Economy: Markets, Speculation and the State. Combining his 40 years in venture capital with a PhD in Economics, Bill has great insights into when, how and where governments should play any role financing tech innovation and where progress should be left for markets. And as a curious subtopic – the need for an occasional bubbles in the latter case.

Covered further in this issue:

  • How to avoid small groups polarizing towards extremes in debate
    • Kõrvalmärkusena Eesti lugejaile: jah, teadus teemal Reformierakond VS Väike Grupp!
  • Centralization VS distribution of control in global organizations
  • More history of Presidential candidates screwing up in public
  • Financial ratios and common size reports in accounting
  • Effective networking tips’n’tricks exchange with Sloan classmates
  • How computing changes human bodies and the definitions of creativity
  • How big internet players have changed hardware IP value chain

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Week 17: Economists Designing Orgs, Ethos of Problem-Making and Sick Bush in Japan

Stanford GSB Sloan Study Notes, Week 7 (17), Autumn quarter

This week will go down in history as the one that finally saw the portfolio of profiles of every single Fellow of the Stanford Sloans class of 2013 hit the public interwebs. Please meet my lovely class in its diversity, internationally and otherwise.

On other news, Americans re-elected Obama for their President (aka POTUS – didn’t know that one before) on Tuesday, which in the fair state of California sounded more like a sign of relief. And I, in turn, spent far too much time on Estonian blogs, chats and Facebook threads, tracking an insane sequence of judgement lapses by some party politics leaders back home. Between these two parallel world, I could not have had a better week to start a new class, Political Communications: How Leaders Become Leaders taught by a very experienced practitioner in the field, David Demarest.

Covered in this issue:

  • Why calling taxes “revenue enhancement” works
  • Why globalization and CxO executive titles should be taken less for granted than people think
  • How the classic forms of political communications, a speech and a debate, are constructed by the best
  • How 20-30 year old experimental art tends to turn into everyday products eventually
  • Necessary evils around good old software development: intangible assets, intellectual property, patents

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Presidential Tweeting

The President of Republic of Estonia, Toomas Henrik Ilves has had a Twitter account, @IlvesToomas since May 2012. Not one of the first adopters among heads of states in the world, he has nevertheless taken quite a freeform and experimental approach to using this communications channel, with a rant in response to Nobelist Paul Krugman’s systematic bashing of Estonia’s austerity measures and poking fun at his aviation-enthusiastic colleague in the East creating some public controversy before. You can agree or disagree with him (and he often engages with responders), but having an elected figure step out of the expected frames is noteworthy in itself.

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Week 7: Drugs, Perfect Competition and Rock’n’Roll

Stanford GSB Sloan Study Notes, Week 7, Summer quarter

Pages assigned for reading: only 108!

With the Negotiations crash course ending, due date and presentations of the group projects in Strategy Beyond Markets and all kinds of housekeeping for study groups and Winter/Spring quarter high demand class application “superrounds” and now a long Labour Day weekend ahead, this week turned out to be quite a gear shift down… But a few notes to take down still.

POLECON239 – Strategy Beyond Markets (prof Jha)

  •  “You can always trust the USA to do the right thing, once they have exhausted all other alternatives” – Churchill
  • The public pressure on AIDS drugs pricing in Sub-Saharan Africa made US government to stop pressuringdeveloping countries on pharma IP issues in 90s
    • Did not officially change their view on TRIPS and other international agreements – those still in force
    • Yet “closed” an eye so that Brazil, Thailand, South Africa, India could start producing cheap copies
    • US own GlaxoSmithkline put into substantially worse competitive situation
  • Class-triggered open question to self: what happens to the pharma IP dynamic in the context of medical singularity (e.g when less than a year of treatment can add more than a year to a human’s lifespan)?
    • typical conflict cases (pricing, access to drugs in developing world) to date seem to focus on medication that is intended to reduce suffering, fix diseases, delay death through sickness
    • how will the global relations and corporate VS public needs play out when the drugs are not about fixing diseases, but enhancing/prolonging healthy life? Read the rest of this entry »

Week 6: Torts, the Samurai and Dance of Joy

Stanford GSB Sloan Study Notes, Week 6, Summer quarter

Pages assigned for reading: 157

POLECON239 – Strategy Beyond Markets (prof Jha)

  • Tort anecdotes:
    • The famous 1992 case where jury awarded $2.7M to Stella Riebeck who was burned by McDonald’s coffee she spilled…
      • In class discussion: “This could not happen in Italy. a) espressos are smaller and b) when you spill coffee on yourself, you say “I am stupid” and move on”
    • A Batman costume manufacturer needs to add labels with: “Parents, please exercise caution, cape does not enable users to fly”
    • When Vespa scooters with a storage compartment under the seat are produced, only the ones sent to US market get a warning label: “do not store babies or pets under the seat”

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Week 3: Strong Cultures and Hello Regressions

Stanford GSB Sloan Study Notes, Week 3, Summer quarter

Note: as per feedback of longer notes (such as last week) becoming a bit random to read linearly, trying to group them by class this time.

Organizational Design Class

Pages assigned for reading: 255

POLECON239 – Strategy Beyond Markets (prof Jha)

  • Trade liberalisation creates new jobs in exporting industries. There still can be very active counter-lobby from concentrated minority interests fearing the potential harm: “jobs that will be lost are identifiable; the jobs that will be created are as yet unidentified” (Baron textbook)
  • Few random bits on ethanol business (Kellogg case):
    • Brazil stopped the sales of pure gasoline already in 2010 (20-25% ethanol component in all fuel sold).
    • There are four ethanol plants in Colorado which use waste beer as feedstock!
    • Booming ethanol fuel production has been tracked to raise food prices in the US for 10-15% in a 12 month period.
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Week 2: Explorers/Exploiters, Public Governance and Normals

Stanford GSB Sloan Study Notes, Week 2, Summer quarter

Pages assigned for reading: 310

  • Reminder: think of normals not in their absolute value, but as “how many standard deviations from mean” (Statistics)
  • After going through the theory and visualisations behind probabilities of standard normal distribution (Z) and t-distributions, I have a growing suspicion, that in 95% (pun intended) of real life business cases needing confidence estimates, we’ll be dealing with a simple constant: 2. (In case of 95% probability on standard normal distribution, Z=1.96 and in cases the sample size n < 30, you should technically use t but, it in reality tends to be so close, that all other uncertainties around sampling and data collection would rarely be less than the benefits of simplicity of multiplication by two) (Statistics reading + class discussions)

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Summer of Startups 2011

Spent almost a full day last week in Helsinki by invitation of Aalto Entrepreneurship Society (See also: #aaltoes & on FB) to speak to 10 teams of their Summer of Startups program. All-in-all it was a worthy time investment for me, and I hope for the teams too – after a lecture on the history and learnings from building Skype I could spend about 20 minutes in a mentoring session with each of them.

Characteristically to being just in the middle of a 10-week intense effort of forming their products in such an early seed stage it is far too early to tell which one of them will actually fly as a company. It could be well just 1-2 companies and I have my hunches to which one(s), if any – won’t reveal that before their final pitches on August 10th though. Nevertheless that same hunch tells me that out of the people present the ratio of future success will be much higher, and even if their current concept fails they will find a new idea and potentially a differently formed team that will help them succeed in the future.
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Estonian State Budget Visualized

Garage48.org guys had another one of their weekend hackathon events, returning to homely Estonia (after Helsinki and before Riga and Stockholm events – check them out) to focus more narrowly on building working apps that address some public service need.

There has been some fair coverage already, on the high quality output from the event (see the project list here) and some of the impediments the event revealed about things like government providing access to data freely for all kinds of app developers. (if you speak Estonian make sure to read Teller and Memokraat).

But more specifically I wanted to share a few thoughts on a special prize I got to hand out – for the state budget visualization app MeieRaha.eu (OurMoney in Estonian):

MeieRaha.eu

Why do I think it is important to visualize something seemingly as boring as a state budget?

First and foremost, it is definitely one set of data any country has to have that while touching every single person in a country is almost completely detached from any comprehension by those people. The reasons are multifold:

  • access to data – frequently checking some spreadsheet files on Ministry of Finance webpages as a pasttime, anyone?
  • volume of data – apparently the 2011 budget of relatively tiny Estonia is about 500 pages
  • bureaucratic structure and terminology – regular people have mental models derived from their own life (kids/health/work…) rather than government structure or department responsibilities (different ministries, state vs municipal, etc)
  • just too large numbers – a normal person can freely count money in the scale that they receive monthly on their own bank account, and maybe avoid major mistakes in the range of their annual income. (To argue for anything beyond look at consumer behavior before your average mortage crisis). For too many a million, 100 million or a billion blend together into abstract “a lot of money” that they are not able to grasp pragmatically, let alone have a comparative discussion around.

Understanding the dynamics of our budget, keeping it balanced, the relative scale and interconnections between income and expenditure items becomes double important before the elections (such as the ones we are in right now, to close this Sunday). Every party pays top dollar to put forward oversimplified promises in heavy pre-election advertising – but it is very hard for a voter to understand what the real cost (or alternative cost) of “free higher education for everyone”, “4-lane road from Tallinn to Riga”, “higher pensions for mothers” or rather silly “citizen salary for everyone” would be.

Taking the above thinking and some recent examples by New York Times Budget Puzzle or The Guardian’s Spending Review or Where Does My Money Go? (really, all worth checking out!), we were chatting with a few friends about a month ago on how to create something similar in Estonia before the March elections. As a citizen and technologist I am a huge supporter of anything that creates more transparency, better understanding, less populism and ultimately – more educated decisions in democracy. But as usual, everyone in that particular Skype chat though feeling very much the same played the always handy “I’m really busy this week” card and while at it I also added that if someone gets it done I’m happy to put some money in.

Though Garage48 events are never about the prospect of pay I was extremely glad that some people (namely Rene Lasseron, Tanel Kärp, Helena Rebane, Konstantin Tretjakov, Martin Grüner, Reigo Kinusar, Hegle Sarapuu, Henri Laupmaa – let me know if I’m missing someone!) came along with the idea and actually made it happen – and I got to keep my promise.

The site today works showing the actual approved 2011 budget for Republic of Estonia. You can fold items apart and together, resize the bubbles to see cross-dependencies, drag in comparison items (those gray bubbles on the bottom) and attempt to push the budget out of balance (the scales in the middle). Yes, there are a bunch of glitches here and there, but hey: what was the last piece of working software you delivered in a weekend?

On this baseline I hope at least part of the team will stick together and leverage some more organized support from research bodies like Praxis, one of the most prominent policy thinktanks around here (disclaimer: I happen to sit on the board there). There is a bunch of obvious improvements to prioritize and deliver now:

  • translations to Russian, English and other languages
  • automated and ordered data exchange with the government to manage updates (both budget changes inside a year as well as annual regular updates)
  • improved engine for budget item interdependencies, to answer questions on what could happen if unemployment rates change and thus the actual tax collection goes up or down inside a year
  • support for budget item “bundles”, for example to layer a number of budget item changes (like a certain party’s promises all together) on top of the baseline
  • figure out the social possibilities on top of this data – how do people want to customize, record and share their versions of budget changes created by a tool
  • tools for mainstream media to use this tool as a standard way to illustrate the impact of any ongoing public policy discussion
  • … — please do leave more ideas in the comments!