February 2005

Who's in the News

Looks Like a Boot, Feels Like a Sneaker

As a consultant in the late eighties, Beth Cross, MBA ’88, helped athletic shoe companies push the latest materials such as gel padding, carbon fiber, and air pockets into their footwear. After Business School, she and Pam Parker, MBA ’89, started Ariat International to bring foot comfort to the equestrian set. Today Union City-based Ariat rings up $80 million per year in sales and owns about 17 percent of the U.S. market for Western wear, according to Business 2.0 magazine.

Without an advertising budget at first, Cross told the magazine, they gave away their boots to up-and-coming riders at horse shows and rodeos, which prompted others to want the boots. “There’s no better way to get a retailer to stock your product,” Cross said, “than to have people start calling for it.”

Teen Tours Totally Techno-Free

Do you know a teenager who can get along without a cell phone, MP3 player, and email for 24 days? If so, he or she probably doesn’t need 3D Life Adventures, the experiential education organization founded by Jerry Casagrande, MBA ’96. In the growing outdoor education industry, 3D is unusual because it mixes outdoor adventure activities with historical and social experiences and has high participation rates from ethnic minorities, according to the Washington Post.

On 3D’s two summer expeditions—“Carolina Immersion” and “Appalachia to Atlanta”—students travel in vans and are encouraged to read from a library of books covering subjects such as new immigrants, natural history, and field guides to areas they are exploring in groups of 7 to 10 with two or three adult guides.

Electronic amenities of modern life are not allowed, although the guides have cell phones for emergencies. Perhaps this is not surprising from Casagrande, who once went to an Amazon.com job interview at the Business School thinking he would be “doing something cool with native people” floating down the Amazon River.

Web Court Coverage Has Hollywood Edge

While in Business School, Louis Goldberg, MBA ’02, and Michael Breyer, MBA ’01, came up with a plan for an Internet business: wireless Internet access to courtrooms so lawyers could retrieve files and emails on their laptops during trials. Last fall, the entrepreneurs switched the direction of the information flow: For $200 a day, their company, Courtroom Connect, offered Hollywood glitterati and Wall Street investors a chance to eavesdrop on the dirty laundry being presented inside a Delaware courtroom where Walt Disney shareholders were suing the media company’s directors over the severance package of former CEO Michael Ovitz.

Webcasts of trials have been offered before, but this was the first with Hollywood-level production values, such as multiple camera angles and split screens to show the evidence while witnesses squirmed, according to the Wall Street Journal. For those needing gossip material on a budget, the company offered delayed viewing of each court session for $10.

Digital Pacifiers

Trip Hawkins, MBA ’78, has started his third game company, this time offering inexpensive mind candy to run on cell phones.

Hawkins founded Electronic Arts, now the biggest videogame publisher in the world, according to the San Francisco Chronicle. His next venture was 3DO, a company that made consoles for games before filing for bankruptcy in 2003. Hawkins’ third company, Digital Chocolate, hopes to capitalize on a new market for killing time using cell phones. Describing one of his offerings, Hawkins said, “For the child, it’s a digital pacifier, but for the parent, it’s digital aspirin.”

Mystery Shoppers Cover the Globe

Byron McCann, MBA ’78, manages spies of a specific sort: They descend on shopkeepers, call centers, and websites with the sort of needs only consumers can dream up. Known as “mystery shoppers,” these are folks who report back pronto on any flaws in service. McCann, president and CEO of Service Intelligence, a leading mystery shopping service in North America, was recently elected president of the International Mystery Shopping Alliance, according to Excite.com’s Money section. McCann said the alliance was created to “support global brands and help them meet their customer experience objectives” on five continents. Training shoppers to be consistent worldwide is apparently one of the management challenges.

Too Big for the Nest

Too much success can be a problem if, like Salt Lake City-based Wasatch Funds, you offer some of the best-performing small-company investment packages. CEO Samuel Stewart, MBA ’69, PhD ’70, told BusinessWeek that some of the companies in Wasatch’s six U.S. diversified small-cap funds had grown too big to be called small cap. The solution: Wasatch opened its first growth fund for mid- and large-size companies. The fund includes small-cap graduates such as medical device maker Medtronic.

Contrarian Ratings More Valuable

While there was money to be made off analysts’ recommendations during the recent bull market’s rise and fall, investors would have had a better chance if they had some additional inside information on the analysts’ employers, the Associated Press reported in a story citing research coauthored by Business School professor Maureen McNichols.

“From 1996 to 2003, the best analyst stock recommendations were those that went against the grain of the securities firms issuing them,” the wire service reported. If an analyst’s call was contrary to the overall bearish or bullish stance of the recommendations issued by his or her firm, investors had a greater chance of making money on the analyst’s advice.

Alumni to Know

Faculty

Newsmakers

Decorated Soldier’s View of Sacrifice

Combat teaches soldiers to “appreciate what we’re given, because people give up everything they might have become for us,” retired U.S. Army Capt. Paul Bucha, MBA ’67, told Yale students last fall. One of 129 living recipients of the highest military award for valor, the Congressional Medal of Honor, Bucha was campaigning for presidential candidate and friend Sen. John Kerry.

During the years following his Vietnam service, Bucha said he realized war has lasting, harmful effects on those involved and their families, but little attention is paid to the consequences. “We have learned to place a burden on people, and as long as it’s out of sight and out of mind, we don’t care,” he said, according to the Yale Daily News.

His solution for Iraq: Have the U.S. Army recruit 600,000 regional units from around Iraq, and with the help of allied nations, train them to maintain peace.

A Family’s Journey

In 1990, venture capitalist–winemaker Garen Staglin and his wife Shari came home from Europe to find their only son locked in a psychiatric hospital. A National Merit Scholar, Brandon Staglin, at 18, had suddenly developed the symptoms of schizophrenia, a thought-processing disease that strikes about 1 percent of Americans, usually in early adulthood.

“At one point, things were so bad that Brandon was ready to kill himself,” said Staglin, MBA ’68. “I said, ‘There is hope. We will figure this out.’” Brandon is better now and is working for the family winery.

The Staglins have not only helped their son find the best treatment available but have raised millions for schizophrenia research, partly through an annual music festival at their Napa Valley winery, the San Francisco Chronicle reported.

Researchers also say the family’s willingness to talk about their experience has gone a long way toward decreasing the stigma of the disease and offering other families hope.

Sharks Outflank Terrorists

Howard “Butch” Kerzner, MBA ’91, is “defying conventional wisdom that 9/11 changed travel forever,” says Forbes magazine. Taking over as CEO of Kerzner International, the casino resort company founded by his South African father, Solomon Kerzner, the younger man is leading a $1.1 billion joint venture to build the 2,000-room Atlantis in Dubai and a $230 million casino project in Morocco. The company’s hit destination now is the Bahamas, where tourists take an acrylic tube through a shark tank in a resort designed to resemble Mayan ruins.

While most resorts hunkered down after the 9/11 attacks, Forbes said, Kerzner issued a straight-to-video movie featuring its Caribbean resort and a rebate program. According to Howard Kerzner, “Post-9/11 was our best year.”

More Finger Prints for Tighter Security

Studying only two fingerprints when screening at U.S. borders to prevent entry of known terrorists can be expected, at best, to properly identify only three out of four people. This is according to press reports of a study by Business School professor Lawrence Wein, who testified before the House Select Committee on Homeland Security. Ranking committee member Congressman Jim Turner (D-Texas) discussed the study in an Oct. 15 letter, according to the Washington Post. Turner wrote to Homeland Security Secretary Tom Ridge to complain that the government had not moved faster to implement a better 10-fingerprint system.