Course on Technology, Leadership and Innovation Leads to a Better Place

Michael Martin, MBA 09

This course was a blessing, one that was unexpected. I read that it would involve a real-time case study with Better Place, a startup company with a big goal—ending oil. I had seen the founder and CEO Shai Agassi speak earlier in the year about his vision for a world without oil and the role Better Place would play in achieving such a goal. I was sold.

I had high expectations for the course as I assumed that Better Place would not commit to anything less than that which was of the highest-quality, innovative, and involving the best and the brightest. Amazingly enough, my expectations were surpassed. I was the lone MBA on a team that included five PhD and Masters of Engineering students. My teammates were geniuses, but as humble as can be.

My role on the team was to manage that genius. We researched the technical and business aspects that need to be dealt with to develop an electric sports utility vehicle and bring it to market. The project required a great deal of effort, but from what I could tell the end result, which involved a detailed break-even analysis based on collaboratively developed assumptions by my team and Better Place, ended up being awesome.

Better Place employees with expertise in batteries, policy, public relations, automobile manufacturing, venture capital, and engineering assisted us every week. They were in the classroom, and were regularly available via email, conference calls, or face-to-face meetings. This company has a mission, and I feel so fortunate to have played a role that will lead to change that, while gradual in speed due to its behemoth stature, will be a change for the better.

If you’re Serious about Staying, Better Ditch your Old School Pricing Tactics and Show me some Capacity

Amr El Meleegy, MBA 10

One of the academic highlights of my first year Berkeley MBA experience was the core Strategy class. I was fortunate to have Rui de Figueiredo as my strategy instructor. Besides his polished academic pedigree, Rui brought with him several years of management and strategy consulting experience at one of the big strategy consulting firms. Because of his background, Rui was skilled at tying together both real life experience and academic theory in the class.

An important component of the strategy class was the “Competitive Strategy Game” or CSG, as we used to call it. The CSG was played over the entire 7 week class. Cohorts were divided into groups of 5-6 that had to compete in 4 different markets. Each market had its own characteristics in terms of price sensitivity, fixed and marginal costs, and entry costs. In addition, each team had its own unique competitive profile that was drawn from a random normal distribution.

Some teams had marginal cost advantages in specific markets while others had entry cost advantages in other markets. At the end of each period each team received an income statement outlining its sales, revenues and approximate market share. The team with the largest cash balance at the end of the simulation won.

I found the CSG to be a very innovative way to learn about competitive strategy and market dynamics. The game demonstrated how incumbents use prices as signals to competitors and potential entrants. These signals are not necessarily price war threats but could also indicate accommodation intentions.

The CSG also illustrated that price cuts, because of their inherent short term effects, are not always the most credible way to deter competitors. Instead, building additional capacity could do a better job in signaling a firm’s long term commitment in a market and die-hard intentions to protect their market share.

The main takeaway of the CSG is that the way players interpret each other’s moves in a market are as important as the old school competitive advantages such as cost structure, switching costs, and brand loyalty.

A Venture Capital Perspective on Healthcare

Matt Holman, MBA/MPH 09

Haas offered a new elective this past spring called “Innovations in Healthcare” that typifies the Haas style of learning for me. We did not learn about innovations by reading a case or listening to a lecture, but instead had a different startup CEO in class each week to “pitch” their business to us.

The students, in turn, peppered these leaders with tough questions in an open and free-flowing way. After every three class sessions we were required to make “investment decisions” on the most recent group of company presentations and crystallize the insights gained and lessons learned from them.

Students in this class were broken into five-person “venture capitalist investment teams” and we were given $18 million in “funds” to invest across all of the companies pitching to us. We were tasked with strategizing whether to spend a large amount on early pitches or later ones without knowing how compelling the upcoming ventures would be.

In this way the class stayed true to the reality for venture capital funds, which must make decisions on deals as they come with limited resources going forward as funds are allocated. This dose of reality highlighted the tough strategic decisions that must be made in such a role, since we had to decide to invest in opportunities as diverse as pharmaceutical vending machines, microscopic hearing aids, and online “consumer health” portals.

The class was co-taught by Kristi Raube, a Haas professor who focuses on the health care sector, and Jeff Rideout, a doctor-turned-entrepreneur-turned-venture capitalist. In moderating class sessions together they were able to meld research theory and business reality together in a balanced way. We were able to learn about some really fascinating real-world ventures, and analyze them through many of the frameworks we have learned in our core MBA courses.

At the same time we worked in cross-disciplinary student teams where finance whizzes helped model, marketing experts considered commercial viability, and the whole nearly always added to more than the sum of the parts. To me, this class exemplified the Haas experience as it was challenging, collaborative, innovative, and thoroughly enjoyable.

Understanding Energy Markets

Oliver Strutynski, MBA 09

I had no exposure to the energy industry prior to coming to Haas. Yet, energy markets are all around us: We are affected by energy markets as consumers; companies depend on functioning energy markets to fulfill their energy needs; and energy companies are attractive employers to many MBA students.

My Energy & Environmental Markets class gave me a good understanding of energy markets, their underlying economics, and current trends in the industry. The class covered both traditional markets (oil, natural gas, electricity), as well as renewable energy sources, and helped me understand the many issues in these markets.

At the core of the class were two simulations that really fostered my understanding of energy markets. While I don't think I will ever run an oil cartel, the OPEC simulation was a great way to really understand international commodity markets. And in the electricity markets game, teams of MBA students bid for generation portfolios and then made production decisions in different regulatory environments. When offering our electricity for sale, we had to think about our own and our competitor's cost structures, demand patterns and fluctuations, environmental regulations in the form of carbon credits, and competitive behavior.

Speakers, lectures, and cases in the class provided me with a solid understanding of the issues in energy markets. The simulations allowed me to apply my new knowledge in a risk-free environment and helped me to really get the dynamics of those markets.

Pricing to Move Premium Shirts

Helen Ip, MBA 09

Teck Ho's Pricing course is one of the most popular electives. Although I was always struggling to get to the morning class on time, I looked forward to the weekly discussions, simulations, and games. We learned to always bring dollar bills to class because most of Teck's simulations and games required everyone to chip in $1.

The pooled money (usually matched by Teck himself) went to the winning teams. I unfortunately had a negative cash flow by the time the semester ended, but I learned many important "punch lines," as Teck likes to call them, from participating. And I did make 50 cents from auctioning off a beach umbrella during one of our last classes.

The highlight of the course for me was the group project. We independently formed four-person teams to work on a project of our choice. One team studied the East Bay BART station parking fee and recommended a price increase; another team explored the profitability of a new half-day pass for a nearby ski resort. I was on a team with a trio of Berkeley MBA students that recently launched the premium shirt company Marine Layer. We decided to look at bundling options for the various types of Marine Layer shirts.

Helping my classmates’ startup through a class project conveniently fed into my own entrepreneurial yearnings. It allowed me to make contribution to a real business while satisfying a course requirement. Our objective was to increase customer order size by offering bundles (discounts for buying multiple shirts). The project coincided with the company's introduction of long-sleeve shirts and we capitalized on that timing. In the end, the data we collected through actual customer orders showed that the bundling option we offered increased the average order size significantly. Although this did not directly translate into increased profitability, it was a good start. And I keep my fingers crossed for Marine Layer’s continuing success and fast growth, long after the end of our last Pricing class.

Consulting on Social Sector Solutions

By Ryan Drake-Lee, MBA 09

The timing was perfect: The David Brower Center would be opening in May 2009, and our class project for the Social Sector Solutions consulting class was scheduled to finish in May as well. Social Sector Solutions is a class offered through the Center for Nonprofit and Public Leadership that gives student teams the opportunity to conduct a consulting project with a local Bay Area Nonprofit Organization. The class is co-led by a Partner from the McKinsey & Company office in San Francisco. Teams of five are selected via application and led by a student who plays a leadership role in managing the team, acting as the main contact and client liaison and ensuring client impact.

I was team lead for the consulting project with the David Brower Center on developing an operating strategy to support the 50,000+ sq. ft. office, conference, and theater space in a new LEED Platinum certified green building in downtown Berkeley, just west of campus. The David Brower Center’s goal is to become a meeting place of ideas and action focused around environmental stewardship and thriving nonprofit program execution.

This class gave me the opportunity to put my leadership and problem-solving skills to the test in real time, with a real client that depended on our recommendations to help them launch a new building and organizational structure. Our classroom meetings allowed us to learn from each project team’s issues and solutions and engendered discussion about classic NPO management issues like board responsibility and involvement, staff structures, fundraising activities, and mission statements relating to Theories of Change. Our client interactions forced me and my team to be prepared for impact driven conversations, which meant asking tough questions in an effort to uncover new issues and new solutions.

The Social Sector Solutions class relied on a collection of skills learned and reinforced while at Haas. These included leadership, analytical processes, and a focus on new methods and innovative models—which could impact not only new businesses and organizations being built in our local community, but also apply to a larger scale and environment.

Leading an Interdisciplinary Team

By Gabriel Jinich, MBA 10

In spring 2009 I had the pleasure of taking Drew Isaacs’ Opportunity Recognition class. Professor Isaacs is executive director of the popular Management of Technology program (MOT), which brings Berkeley MBA students together with Masters and PhD students from the College of Engineering and the School of Information. The class is a core MOT course for those students interested in pursuing the MOT certificate while at Haas, and is taught through a combination of case studies, guest speakers and a final group project.

As part of the final project, we (the MBA students) were asked to lead a team of four engineers in developing an opportunity and marketing assessment for a new technology. My team consisted of two computer science students, one mechanical engineer, and a student from the School of Information. We decided to analyze the market potential for a project that our teammate from the School of Information was working on, and spent the better part of the semester understanding the technology and evaluating potential business applications.

While the marketing assessment portion of the project was extremely interesting, for me the real learning experience came from working with a truly interdisciplinary team. Although the Haas student body is extremely diverse, business students are in many ways more similar than they are different, so it was both a challenge and a breath of fresh air to work with students from outside of Haas. My teammates also challenged many of the preconceptions I had about working with engineering students.

For example, it’s easy to forget that PhD students spend five to six years at Berkeley, so it turned out that some of my teammates had already taken many more MOT classes than I had! Not only did I learn about technology from my teammates, but I probably ended up learning more about business from them than they did from me.

In the end, the class proved to be a fantastic learning experience and a great example of the Leading through Innovation ethos at Haas.