November 2005

Who's in the News

Dudes of Summer

As part-time jobs go, Len Herzstein’s is pretty easy and pays accordingly. Since 1993, the retired Skyline College statistics and calculus teacher has worked summers as a ball dude for the San Francisco Giants. Flouting the tradition of hiring kids to chase down foul balls, the Giants hire senior citizens with a flair for hamming. Herzstein, MBA ’50, dances for the crowd and signs autographs between innings. For this, he told the San Francisco Chronicle, his salary is equivalent to that of baseball superstar Barry Bonds, divided by $1 million, which translates into $15. Where did he get that “fancy math”? Why, Stanford Business School, of course.

Delphi’s Oracle

Robert S. Miller, MBA ’68, who has made a career of stepping in to fix or close troubled companies, took over as chief executive of struggling auto parts maker Delphi in July. The company was spun off from General Motors in 1999 and is experiencing financial difficulties just like Ford Motor Co.’s parts spinoff, Visteon. Analysts quoted by the New York Times said both companies needed new leadership from outside the auto industry. As an experienced leader of stressed companies, said one analyst, Miller is “an ideal person for twisting GM’s arm” for assistance.

How Green Is My Silicon Valley?

Northern California may be known for its environmental organizations, but that’s not why Silicon Valley venture capitalists are tinting themselves green, according to the New York Times. “The reason we’re allocating dollars to [alternative energy companies] is we think we can deliver an attractive return,” said Ira Ehrenpreis, MBA/JD ’96, a venture capitalist at Technology Partners in Palo Alto.

He and other venture capitalists say they are driven partly by high oil prices but also by the unmet demand for power in India and China.

Still, clean-tech startups garnered less than 3 percent of venture capital in 2004. One investor, Vinod Khosla, MBA ’80, said, “I have the sense that there are a lot more niche-sized startups out there than big ones, but some great opportunities do exist.”

What Will Mom Say?

When the Business School put together a panel on franchising for MBA students, a large crowd turned out to hear alum franchisees including Jim Yang, MBA ’97, who opened a Cold Stone Creamery. “Neither my wife nor my mom was pleased with the whole thing because they were embarrassed,” he warned students.

John Zoglin, MBA ’84, who left Hewlett-Packard to open a Sylvan Learning Center, added: “My mom is like yours. She loved me being at HP; she didn’t want me off being a tutor. But I was so much more proud to say I had my own thing.”

Franchising may be considered low-tech and déclassé by some, but franchise companies are raising the financial standards of who can get in and attracting some MBAs, according to the New York Times. In reality, said Yang, who is a director of product management at Yahoo!, his wife also was interested in the couple operating their own business.

Getting in can be tougher than getting into the GSB. Of the 2,900 applicants for Cold Stone franchises last year, 1 percent were accepted.

A Horse Not Named Sally

Garrett Redmond, SEP ’74, of Paris, Ky., is suing the Jockey Club for rejecting his application to name his thoroughbred racehorse Sally Hemings after the slave reputed to be Thomas Jefferson’s mistress.

Redmond said the name was appropriate because the filly’s mother is named Jefferson’s Secret and the sire is named Colonial Affair. The Jockey Club, which regulates the naming of thoroughbreds, rejected the name, according to the Associated Press, on the grounds that it might be offensive to “persons of African descent and other ethnic groups.”

According to court filings, the club initially said Redmond would have to get Hemings’ written permission to use the name.

Redmond wrote back, “I will gladly get her permission if you can dig her up!”

Viral Marketing to Health Care Pros

When two Stanford MBAs, one with a medical degree, link up, you might expect them to know a thing or two about viral marketing. Whether they had it all plotted out in advance or not, Jeffrey Tangney and Dr. Richard Fiedotin, both MBA ’99, scored big when they put a comprehensive drug guide online in 1999 and emailed 300 physician friends. Within six months with virtually no spending on marketing, their Epocrates service had tens of thousands of registered users.

Today, according to Business 2.0, the guide is the clear leader with health professionals who save time and mistakes by tapping medical information on handheld digital devices. The company reported an income of $23 million in 2004 and said labeled advertising on the website had come to dwarf revenue from 470,000 health care professionals.

Controller Westly Joins Governor’s Race

California State Controller Steve Westly, MBA ’83, announced in June his run for governor in the 2006 election. The former eBay executive also donated $10 million to his campaign account.

Westly, a Democrat, toured the state with Gov. Arnold Schwarzenegger, a Republican, in 2004 to support restructuring California’s debts. Since then, Schwarzenegger’s popularity has fallen. Polls conducted in May showed Westly to be somewhat less well known to Democratic voters that State Treasurer Phil Angelides, another announced candidate for the Democratic nomination, but either would beat Schwarzenegger in hypothetical election matchups. “Obscurity allows Westly to shape his own image,” the Los Angeles Times said.

Habitat for Humanity Chooses Reckford

Habitat for Humanity International, one of the country’s most successful charities, has selected Jonathan T.M. Reckford, MBA ’89, as its new chief executive. Reckford, who most recently was executive pastor at Christ Presbyterian Church in Edina, Minn., was picked to lead the charity partly party because of his business background that “will help Habitat navigate the economy and business climate,” said former U.S. President Jimmy Carter, who served as honorary chair of Habitat’s succession planning task force. Reckford’s resume includes Goldman Sachs, Walt Disney, Circuit City, and Best Buy companies.

Alumni to Know

Faculty

Newsmakers

She Shops for Shop-a-Phobes

After running a market research firm for two decades, Julie Kaufman, MBA ’82, applied her experience to consumers who hate markets—women for whom clothes shopping is a nightmare. Kaufman goes through clients’ closets, assesses what they need, takes pictures of what they should keep, and takes them shopping, according to the San Jose Mercury News. For those overwhelmed by shopping, she suggests off-hours visits to small shops.

Khokhryakov Holds Russian Press Card

Russian newspapers recently reported the expansion of media ownership by PromSvyazCapital Group, a Moscow-based publishing and news distribution company whose president and CEO is Pavel Khokhryakov, MBA ’04. The group expanded from 50 to 100 percent its ownership of the national newspaper Trud. It also owns more than 75 percent of Argumenty i Fakty, a leading weekly newspaper, and has a controlling stake in the publishing house Media-Pressa.

Wheeler Dealers Takes On

Barrett Comiskey, MBA ’04, had the idea of turning a myth into a reality, which appears to be paying off in—of all places—China, says Business 2.0 magazine.

“People think everything is made in China already, but many things are still made in America,” Comiskey told the magazine’s correspondent, who interviewed him in the rooftop garden of Shanghai’s Peace Hotel. With an American business partner and a Taiwanese wife who is more fluent in the language than he is, Comiskey is busy “brokering deals with Chinese factory operators for American manufacturers of offbeat things like, say, vending machines and hearing aids.”

Comiskey’s business, says Business 2.0, “bespeaks a little-noticed aspect of China today: The hard-luck stories of failed fortune seekers have done nothing to slow the stream of American entrepreneurs into China, and each wave of new arrivals learns from the mistakes of predecessors.”

India’s MBA Interns

The hottest summer internships for MBA students from top-rated schools this summer were not on Wall Street or in Silicon Valley but in India, according to the New York Times. “India has come to symbolize globalization and I wanted to participate in the workings of the global economy,” said Caton Burwell, a second-year MBA student from Stanford, who was interviewed while interning at Infosys Technologies, an outsourcing firm with a campus in suburban Bangalore. “Being here is a powerful experience; it is impossible not to think differently,” Burwell said. “To come here, meet these people, and to return home and turn your back on outsourcing is hard.” Infosys received 9,000 applications for 40 intern spots at its Bangalore headquarters.

Tax Benefits of Employee Discounts

“This is not your father’s Oldsmobile. It’s your cousin Gilbert’s employee discount,” General Motors told Americans last summer, and a sizeable number of consumers went for it.

What makes the idea of an employee discount more attractive than a plain old end-of-year sale? Psychologists might say envy, but Business School economics Professor Paul Oyer told the Washington Post about another benefit: a smaller tax bite. At least in the case of big-ticket items such as cars, hotel rooms, and university tuition, he said, giving employees a discount, rather than increasing their salaries, saves the employees income taxes. Employees—or for that matter, customers—also might not mind a discount expiring as much as taking a pay cut, Oyer said. Extensive research shows losses loom larger than gains in most people’s minds.