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
Stanford GSB Sloan Study Notes, Week 3 (33), Spring quarter
Head down in two inches of readings for this week and a fresh flow of first written project deadlines, like a two-degrees-deep analysis of your friends and advisors social graph or a set of regressions to be run on profitability data of a bank who has no clue if there is any connection between the demographics and profitability of their customers.
For a little different entertainment in the Sales Orgs class we are running a simulation game where you need to manage yourself through the pipeline as a sales rep of a medical devices company. Four virtual “years” in four weeks. After a miserable first year (I hit merely about a quarter of my quota – should have read the manual before I tried to just figure the game mechanics out for 2 “quarters”) I look forward to the Tuesday class from a much more comfortable position after “year” 2. I guess the hours spent as a teen with Civilization and the likes can sometimes pay off?
GSB hosted a fun networking event this week called “Fewer than 300” – bringing people in from over 30 companies who are about to grow out of their startup phase (but are yet to break 300 employees), but have raised money and shown traction and still are just burning of enthusiasm about what they are doing. Think of the likes of Uber or Nest or Visual.ly. Good people and good conversations.
Covered in this issue:
- Analysing network centrality measures and deriving composite relationships from simple a matrix
- Using Bass diffusion models for new product adoption predictions
- Handling variability in processes (from job shops to continuous flow)
- Economics of selling SaaS subscriptions and merging sales teams after M&A
- More team-first entrepreneurial models
- History of Sloan Program at Stanford
- Data Science learnings from LinkedIn and other Greylock companies
- Guests: Vinod Khosla, Mark Leslie & part of Veritas exec team, Corey Leibow, Eric Botto, George Parker, DJ Patil
Stanford GSB Sloan Study Notes, Week 1 (31), Spring quarter
For some weird reason the GBS classes after the Spring break kicked off on… a Thursday. Just 2 days of classes gave a glimpse into what is to come – some very brief notes (and a few good book links) below. Posting anyway, to avoid letting the routine die before I get to finalize the half-finished East Coast study trip report draft sitting in Evernote…
On other news, we are throwing an orientation event for the incoming Class of 2014 already this coming weekend – really feels like yesterday when we were on the receiving end… T-10 weeks. Tick tock.
Covered in this issue:
- Unbelievably profitable bootstrapping of McAfee
- Introduction to Social Network Analysis
- A flashback of statistical regressions, now applied to marketing data
- Operating a Japanese show-restaurant
Stanford GSB Sloan Study Notes, Week 10 (30), Winter quarter
Originally planning out March I was quite sure that next week will be a complex one, after all, it is still labelled in calendar as the “exam week”. In reality, the Winter Quarter pretty much culminated today, with the last Finance class where the entire Sloan class was together in the same lecture. We do have one more core in Spring, but it will be in sections, so between all electives and split schedules, it will be mostly social when we meet from here on.
This week was mostly about delivering papers and presentations. With one team we built a business plan and pitched a crowdsourced service for proofreading and language learning feedback to dyslexics, foreign students and white-collar immigrant workers. With another team, we designed an elaborate proposal for taking a real public company private, shifting their product portfolio for higher exit multiples, levering up the non-existant debt, restructuring operations (yup, the founder’s private jet and golf tournaments need to go) and getting out at 10X of our money in 5 years. With third group, we pre-analysed and went through 6 real startup pitches along with a real VC mentor and decided to maybe just to give money to one of them.
Despite of the chaos of trying to schedule ~20 people into these different groups at conflicting times, I really enjoyed actually doing stuff (as opposed to just discussing in class) with my MBA peers. The ease and breakneck speed at which almost anyone in this school can deliver complex quant models and high quality analysis still amazes me. And then you can pull pretty much anyone on stage with a 5 minute heads up to present the outcome with coherent, engaging story line.
I have jus two final exams this quarter, three hours of Entrepreneurial Finance (cap tables, term sheets and anti-dilution math) done last night and Core Finance (WACC, optimal portfolios, options and bonds) to be done next week. Then onto the East Coast study trip and the saddening final 10 weeks here.
Study notes covered in this issue:
- Alternative equity markets filling the IPO gap
- More Exit talk, especially Mergers & Acquisitions
- Real pitches from real startups
- Hunting for the Thunderlizards
- Guests: Barry Silbert of SecondMarket, Peter Currie, Louis Elson from Palamon, Mike Maples of Floodgate
Stanford GSB Sloan Study Notes, Weeks 8-9 (28-29), Winter quarter
So there: it takes about 28 weeks in Stanford to finally have someone mention Europe in any other context than a semi-joke about Greek macro environment in the short term. And these two weeks suddenly opened the floodgates: there was the first European company case this far, we spent some time on the (quite miserable) comparative venture financing stats between the continents and – most importantly – the rotationally geography-themed Sloan TGIF parties finally turned to the European night (affectionately dubbed as the “Estonia & the Rest of Europe” evening). Relieved with a sigh with my Swedish, Dutch, German, Swiss, French, Italian etc classmates: we have not entirely disappeared from the world map as seen from the West Coast yet, and will keep working on that threat.
Partially supported by the annual Stanford Entrepreneurship Week, the last weeks were super-exciting for the flow of external speakers – there is a separate post summarising those you should not miss. And we did do the Final View presentations of the LOWKeynotes program, including your’s truly’s 9 minutes on how hard it has been to adjust to somewhat surprisingly lacking digital living infrastructure here, coming from Estonia – videos for which will be online in 1-2 weeks. Stay tuned.
Covered in this issue:
- Bootstrapping, venture debt and swimming against the tide in Europe
- Exit planning and IPOs in venture deals
- Thinking like a limited partner, structuring PE deals, operational turnarounds and the visible future of Private Equity
- Derivatives and options – both financial and real
- Academic research on VC compensation and incentives
- Guests from: The Foundry, Avik Ventures, AngelList, Astia, Makena Capital, TPG, TSG Consumer Partners, Sierra Ventures, YouTube, Trulia, OpenLane, Fayez Sarofim, Accel, Meritech Venture Partners…
With the end-of-quarter groupwork frenzy I am behind on posting the academic lecture notes – hope to get to that this weekend. But meanwhile, as the flow of new thoughts from extracurricular guest visitors in just last seven days has been mind-blowing I’ll post them for your enjoyment.
See further for tips, startup plugs, book recommendations and videos from:
- Jonathan Abrams (founder of Friendster, Socializr, Nuzzel, Founders Den)
- Peter Halacsy, Peter Arvai (co-founders of Prezi, Hungary)
- Peter Vesterbacka (Mighty Eagle, Rovio)
- Andy Dunn (CEO and co-founder, Bonobos)
- Tim O’Reilly (O’Reilly Media, O’Reilly Alphatech Ventures)
- John Doerr (Kleiner Perkins Caufield & Buyers)
Stanford GSB Sloan Study Notes, Week 7 (27), Winter quarter
After the public holiday last Monday (which I realized could not have been more eclectic between sick kid babysitting, running, building a unit economics model for a startup business plan assignment and babysteps in hacking social graph analysis in Mathematica) there was no breathing room throughout the rest of the week.
Eric Schmidt taught his legendary IPO class, we took a bunch of convertible note based seed financing setups apart and put them back together, the original mad-scientist-turned-CEO Art Levinson shared his thoughts on scaling innovation, we discussed how different can be the approaches to seemingly similar private equity investments, I finally made it over for a long-overdue visit to Stanford Technology Ventures Program and there was a fun reunion with ever-joyful Meg Whitman whom I hadn’t seen since the good old pre-politics and pre-HP days of her more regularly hanging out with us at Skype, in Tallinn and elsewhere.
When I was walking towards the study rooms on late Friday afternoon to get at least a bit of the two different finance group projects due Monday on the way, ahead of the expectedly busy Estonian Independence Day weekend, I got rerouted in a room where Craig Barrett, long-time Intel chairman & CEO was having a candid small class discussion about navigating global business structures despite of government interventions. Only in Stanford. Good news: what he figures competitive nations are supposed to do is pretty much aligned with where the 95-year-old birthday state of Estonia is heading.
Covered in this issue:
- How and why Google ended up running an unusual IPO process
- Changing landscape of seed & angel investing + rare data on performance
- Scaling innovation from startups to large public companies
- Inner workings and different flavours of Private Equity partnerships
- How defaulting and going bankrupt is different between US and various EU markets
- Practical guide to managing through international trade barriers
- Guests: Meg Whitman (eBay/HP), Art Levinson (Genentech/Google/Apple), Craig Barrett (Intel), Google Ventures, Snapchat, Private equity partners from General Atlantic, TA Associates, Francisco Partners
Stanford GSB Sloan Study Notes, Week 6 (26), Winter quarter
The picture reflects the exact view I have from where I’m sitting posting this. When you live in Northern Europe, “good snowy ski weather” usually means you have to give in on other things (such as clear skies and light). Not in Tahoe – and that’s why a mission of Sloans have landed here again for a long Presidents’ Day weekend.
But no play without hard work, right. There were quite a bit of extra-curricular activities on campus (I made it to several BBLs even!), some long-planned and inspiring 1:1 coffees with MBA colleagues, a few guests I would bucket in “personal heroes” category. And a fun roleplay of 8am termsheet negotiations, with lawyers at each table and all.
Covered in this issue:
- Differences in financing with debt vs equity – and some irrationalities caused by taxation
- Seed financing – how to survive until Series A
- Intricacies of convertible note structuring
- European startups: plasma drilling in Slovakia and why you should move to Berlin
- When and why founder CEOs get fired
- Introduction to Private Equity
- BBLs on Crowdfunding and Big Data
- More guests from: Geothermal Anywhere, Soundcloud, Intellicap, Twitter, Benchmark Capital, Hellman & Friedman, PubVest, LinkedIn
Stanford GSB Sloan Study Notes, Week 3 (23), Winter quarter
A large group of Sloan Fellows honoured Martin Luther King Jr on his day by driving up to Lake Tahoe. It was great to find out that snowboarding is like riding a bike – fun even despite of the ~7 year break I had.
The classes on free Mondays are not cancelled at Stanford, just moved to normally “open” Wednesdays. As a result, the past four working days were just insanely busy at school, but I fortunately still managed to make it to a visit to Dropbox HQ and attend a demo days preview at 500 Startups.
Covered in this issue:
- Nuances of valuing bonds and stocks
- Venture capital pipeline sourcing and screening
- Avoiding the pitfalls of pattern recognition in picking VC investments
- Managing a venture portfolio through economic crisis
- Pitching tips
- Creating a consumer brand of tech components and using social media
- Eric Schmidt was back in his co-teaching class + many guests from Illuminate Ventures, Highland Capital, Accel, Intel, Klout, Gilt, Edelman