February 2006

Newsmakers: Who's in the News

Bonus Time for Bag Makers

Timbuk2 Designs Inc., a San Francisco maker of stylish messenger and laptop bags, was in financial trouble when former Cisco marketing manager Mark Dwight lined up co-investors to buy it in 2002. By last March, Fast Company named Dwight, MBA ’89, one of its “fast 50” turnaround experts for raising sales from $4 million to $10 million and turning a profit in 2004.

But that wasn’t the end of the headlines. In May, Business 2.0 reported that Dwight nearly goofed by signing a contract to sell computer bags at CompUSA. The big retailer’s slim margins and high demand cost the company $50,000 before Dwight realized he was better off sticking to specialty retailers and expanding with products like yoga-mat carrying bags and iPod holsters, some of which would be made cheaper in China.

On Sept. 30, Dwight announced the sale of the company to new investors who could provide more growth capital. In an unusual twist, he announced that 40 employees, many of them sewers and warehouse workers residing in San Francisco’s low- and moderate-income neighborhoods, would receive $1 million in cash bonuses because the company’s previous majority investor, Pacific Community Ventures, had two bottom lines—making a profit for its investors and creating jobs with good wages and marketable skills in low-income California communities. According to a formula based on tenure, grade, and performance, one of the largest bonuses went to seamstress Hui Wu, who received $53,100, more than double her annual salary.

Since he is staying on as CEO, Dwight said, “I considered seriously whether people would quit, but ultimately my feeling was, well, fine if someone goes back to school or spends more time with their kids. Those are as important as any other goal.”

Entrepreneurial Advice

Fear is “healthy and warranted” for people launching their own businesses, advises Michael Hecht, MBA ’98, an assistant commissioner in Small Business Services, a mayoral agency in New York City. Hecht knows of what he speaks, having started a bar and two restaurants in San Francisco and now a company called NYC Business Solutions, which helps small businesses to launch and grow. People tend to underestimate the emotional investment in their own business, he told the New York Times, and often find they can’t sleep 6 to 18 months after launch. “You have to make sure you have the emotional fortitude to ride it out.”

Meanwhile, Tim Berry, MBA ’81, advises would-be entrepreneurs to write their own business plans rather than hire consultants, because it will help them “internalize” the plan’s lessons. Berry founded Palo Alto Software, which, according to Forbes, has 60 percent of the market for computer applications that help companies craft business plans.

Fossil Fuel Philanthropy

Jane Woodward, MBA ’87, makes money from fossil fuels and uses some of it to train the next generation of leaders to find more sustainable energy solutions, reports RMI Solutions, the newsletter of the Rocky Mountain Institute.

Woodward founded Mineral Acquisition Partners Inc. (MAP), a firm that acquires royalty interests in low-risk, long-lived natural gas accumulations onshore in the lower 48 states. As a consulting associate professor of civil and environmental engineering, she also teaches Stanford students about energy efficiency, renewable energy sources, distributed generation, and demand-side management.

Because of her involvement in education, MAP now also funds Sustainable Energy Fellowships that allow about 10 students annually to delve into energy issues while doing internships at energy-related nongovernmental organizations.

Making Waves in Eastern Europe

A new class of Polish executives seems “completely devoid of typical Polish/Eastern European reservations” and without “questionable experience of working for a state-owned company or in the confines of mom-and-pop firms,” says the Polish edition of Forbes that features Marek Sowa, SEP ’05, on its cover. Sowa, who once produced news and interviews for CBS and headed the first Polish satellite music station, is now vice president of UPC Polska, a subsidiary of Denver-based Liberty Global. He is set on making digital television a reality in Poland and has “led the media sector in key public debates” over taxes and carriage fees for satellite and cable providers.

A man about the world, he is equally comfortable, the magazine reports, discussing technology on the Stanford campus, enjoying soccer at a World Cup match in Japan, or partying in a “hellishly decadent” Moscow nightclub.
 

Breaking Through the Glass Ceiling

When she was 16, Penny Pritzker, MBA/JD ’85, recalls chiding her grandfather, A.N. Pritzker, for teaching accounting to the boys in the family but not the girls. “He said, ‘I was born in 1896. How am I supposed to know girls want to be active in business?’ If you thought about it, it was a perfectly reasonable thing to say,” she told the Wall Street Journal in an article about “women to watch.”

Pritzker oversees the non-hotel side of the Pritzker empire that includes the Hyatt hotels. She heads TransUnion, a consumer credit information firm that she is moving toward becoming a “business-information solutions provider.” In 1987, she founded Classic Residences by Hyatt, which runs 18 luxury retirement communities nationwide. Forbes magazine recently pegged her net worth at $1.6 billion.

On the Road with the Dalai Lama

“Most people, when they think about meditation, think about turning your body into a pretzel and zoning out somewhere,” says Adam Engle, MBA ’86, “but it is really just a word for mental training.”

Engle is chairman of the Mind and Life Institute in Louisville, Colo., an organization he co-founded with the revered Tibetan spiritual leader, the 14th Dalai Lama Tenzin Gyatso, to promote more scientific investigation of meditation. National Public Radio identified Engle as an entrepreneur and a Buddhist practitioner. He explained that “what we are trying to do is establish, if you will, a new subfield of science that will answer the question: How do you create and maintain a healthy mind?”

Scientists, especially neuroscientists, have taken more interest in meditation and related states of inner awareness in recent years, partly because the Mind and Life Institute has worked with some to study how the practice of Buddhist contemplation affects moods and brain chemistry. Last November the institute organized meetings between the Dalai Lama and prominent scientists at Stanford and on the East Coast.

Some scientists attempted to cancel the Dalai Lama’s speech before the Society for Neuroscience by claiming his appearance compromised the organization’s scientific objectivity and rigor. The Dalai Lama’s defenders disagreed and suggested the protests may have been initiated by scientists of Chinese descent for political reasons because the Tibetan leader fled his country in 1959 after the Chinese crushed the nation’s bid for independence.

Alumni to Know

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Global Fund Strategist

Tribe’s Tax Director Enforces Agreement

For three decades the state of Washington and the Puyallup Tribe have battled, first over Native American fishing rights, then over land use and gaming, and most recently over taxes on tobacco sales. In September, however, Chad Wright, MBA ’04, the Puyallups’ first cigarette tax director, sent a check for more than $1 million to the state, representing 30 percent of tax revenues collected from tobacco sales at 25 locations owned by tribal members.

The Tacoma News Tribune described Wright as a “peacemaker and builder” as well as the grandson and son of former tribal chairmen who battled the state. “With a law degree and an MBA, he has returned to serve the reservation where he was raised.”
By agreeing to collect some taxes for the state, the tribe can tax cigarettes at rates lower than other tribes and can avoid raids by tax enforcers. Wright said he plans to “do whatever I can with business ventures or economic development” for the tribe.

Time Warner’s Renaissance Man

Jeffrey Bewkes, MBA ’77, who was named president and chief operating officer of Time Warner in December, “has established himself as a financial executive who is equally at ease with numbers and artists and has a boundless intellect and curiosity,” according to the New York Times. Gary Goetzmann, the producer of a miniseries about President John Adams, for example, says Bewkes “knew more about the early presidents than anyone I talked to—and we’ve hired a couple of historians.”

At the same time, Bewkes is dealing with many technical issues at the world’s largest media company, the newspaper said. “He is consumed with issues like setting high-definition standards for DVDs, and he has backed a controversial strategy by Warner Brothers to sell cheap DVDs in China to combat piracy.”