February 2000, Volume 68, Number 2

Stanford GSB Live! Students David Doctorow and Kasey Craig McJunkin with CNBC anchor Bill Griffeth. Photo by John Leschofs THEY MARVELED AT THE weather; they talked about the passion of the dot-com revolution; and they had breakfast at Buck's restaurant. Producers of the CNBC business news program "Power Lunch" were a little in awe of Silicon Valley as they set up shop on the Business School's new, landscaped plaza on a bright September morning for a live broadcast that included interviews with faculty, students, and alumni. Faculty members Irv Grousbeck and David Brady told host Bill Griffeth that the Business School enjoys a close relationship with the kinds of companies and individuals that have created Silicon Valley's current high-flying business climate. Second-year students Kasey Craig McJunkin and David Doctorow, both of whom had worked for online startups the previous summer, said they were excited about the career possibilities of electronic commerce but were thinking seriously about taking jobs in more traditional industries once they graduate. Management of information is changing both the worlds of business and education, Dean Robert Joss told Griffeth. "It's a different ballgame. Business will never be the same again," said Joss, adding that changes caused by new types of information are affecting startups and huge, established companies alike. The Greenhouse Effect—It's Hot STANFORD'S Graduate School of Business "has become a hothouse for aspiring Internet entrepreneurs," commented Time in a cover story titled "Get Rich.Com." "Entrepreneurs from this year's (1999) Stanford Business School class gather for a monthly working barbecue that is perhaps the most exclusive ticket in Silicon Valley," said the magazine, "so exclusive that the organizers had to take a vote on whether to invite entrepreneurs from the Class of 1998." The story described the startup dreams of GSB students from the MBA Class of 1999 including Steve Lombardi, Calvin Lui, Matt Hobart, Jessica DiLullo Herrin, Jenny Lefcourt, and Jeff Reed; Pratap Mukherjee, MBA '98; and Warren Packard, MBA '97. Relating the sense of urgency felt by those hoping to become the next eBay or E-Loan, Hobart told Time: "There's no such concept as sitting in a garage and starting a company anymore. If you have an idea, it's safe to assume that four or five people have the same idea. But it's not the person with the best idea who wins. It's the person who can execute quickly." Will He Fill Buckley's Shoes? WHEN WILLIAM F. BUCKLEY stepped down in December after more than 30 years of political banter on the PBS series Firing Line, the 74-year-old oracle of conservative thought took time to endorse a successor. Associated Press reported that Buckley is urging PBS stations to pick up the weekly public affairs program Uncommon Knowledge, hosted by former Reagan speechwriter Peter Robinson, MBA '90, who is a fellow at the Hoover Institution at Stanford. Robinson's series is seen on 75 PBS stations—although alums may know him better for his GSB-based memoir, Snapshots from Hell. The MBA Matters "MBA COURSEWORK IS LIKE a Chinese menu of delights: Interpersonal Dynamics, High-Tech Entrepreneurship, Business Strategy, and Brand Marketing," Steve Jurvetson, MBA '95, wrote in a column in the magazine Business 2.0, arguing that an MBA degree is indeed good preparation for aspiring Internet entrepreneurs. His piece was part of a package profiling Stanford and nine other business schools with strong educational programs that prepare students for e-business careers. "The Internet affects all of business, and it's changing business education," said Dean Emeritus Michael Spence, who is teaching a new e-commerce course this quarter with Garth Saloner, codirector of the School's new $20 million Center for Electronic Business and Commerce. "We want to be part of that change, not just keep up with it." Tougher Than You Think FACULTY MEMBER Joel Hyatt raised the ire of the American Bar Association in 1977 when he opened Hyatt Legal Services, dedicated to providing low- and middle-income clients with legal services for a fixed fee. He shook up the legal profession again when he won a battle permitting lawyers to advertise their services on television. Today, Hyatt is taking on new challenges as a lecturer in entrepreneurship at the GSB. Many students believe getting a good idea is the hard part of being an entrepreneur, Hyatt told the San Jose Mercury News. "The hard part is executing. The whole business of turning an idea into a reality and building it into a business is much tougher than students realize." Riding High in Colorado SILICON VALLEY ISN'T THE only hot spot for online entrepreneurship. InfoNow, headed by Michael Johnson, MBA '90, was ranked first in the Denver Post's annual list of the top 100 Colorado companies based on past performance. The firm, which includes Fortune 500 companies among its clients, monitors Web sites for customer queries and then directs the information seekers to the appropriate dealer, distributor, or other source. InfoNow is just moving into the public view as its client base is growing. "Part of being a stealth company is going out and grabbing the good clients before someone else does," said Johnson. Two Drivers Steer Auto Joint Venture THE BUICKS ROLLING OUT OF the Shanghai General Motors plant in the Chinese city win praise for their low number of manufacturing defects. They are being built by a joint venture between U.S. auto giant GM and Shanghai Auto Industry Corp., China's largest auto manufacturer. The operation's success is partially the result of a strong working agreement between two men: Hu Mao Yuan of the Chinese operation and Philip Murtaugh, Sloan '85, the GM manager. Hu admits that while both men have strong managerial skills, both also have bad tempers that sometimes flare. The two credit their agreement to do their arguing behind closed doors with setting the stage for a very successful operation. "To export, we have to be better in quality than anybody else because there's a strong perception that China produces poor products," Murtaugh told Fortune. "We can export only on the basis of the venture's ability to produce vehicles that are competitive in price and quality." The firm has the quality portion in hand, Murtaugh said. Now they're working to reduce the price. Remember When WHEN THEY GOT TOGETHER with Fortune to reminisce about their friendship that began as Harvard undergraduates, Bill Gates and Steve Ballmer, MBA Class of '81, also recalled the graduate economics course they took together that galvanized that friendship. Their teacher was GSB faculty member Michael Spence, then on the Harvard faculty. The two lacked the prerequisites for the class, and Ballmer recalled that his busy social schedule interfered with his class attendance, but he and Gates decided to go for broke and bet their entire grade on the final exam. "We camped out in this conference room at the dorm for four days reviewing the midterm exam questions," recalled Ballmer. The questions on the final were about "a refrigerator that had a certain probability of failing, and you had to figure out the value of the refrigerator." The friends also recalled that they eventually earned two of the highest grades in the class—Gates got a 98 and Ballmer a 99. Just Like Avis, He Tries Harder IT'S NEVER BEEN A SECRET. Throughout his career, Barry Rand has worked toward the goal of becoming the chief executive of a Fortune 500 company. In November Rand reached that goal, being named chairman and CEO of Avis, a firm he says he plans to shepherd from being a car rental agency into a transportation services company. "The issue is managing change, not products, and I've always been a change agent," Rand told the New York Times. Rand, Sloan '72, had spent 31 years at Xerox, rising to the rank of executive vice president for worldwide operations and managing $18 billion in revenue before leaving the company last winter. Colleagues at Xerox have no doubt he will make the transition smoothly. "Barry was one of the most loved and respected leaders here, and not just because he succeeded against the odds as an African American," Xerox executive vice president Anne Mulcahy told the Times. "He had a way of getting people to their feet with excitement and spontaneous applause and engagement that I've never seen anywhere else in corporate America." Mickey's Bottom Line THE WALT DISNEY corporate world is in flux these days as the entertainment giant looks for ways to keep the Magic Kingdom on the leading edge in an era of changing demographics and recreational tastes. The efforts are getting a boost from Disney chief financial officer Thomas Staggs, MBA '87. Fortune reports Staggs is "reworking Disney's compensation system so that executives will be evaluated on cash flow and return on equity as well as on reported earnings"—a move to encourage more efficient use of capital. Disney is also consolidating its Internet assets, buying Info-seek to combine with ABCNews. com, ESPN.com, Disney.com, and other holdings. "This is to consolidate the Internet assets so we have them under common management with one agenda and one vision," Staggs told the magazine.

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