Associate Professor Kelsey Jack and Professor James Sallee joined the faculty on July 1.
Two top-tier researchers whose work addresses pressing environmental, development, and public policy questions have joined the ranks of Berkeley Haas professors this semester. Two additional professors will join the faculty in January 2025.
“Our new faculty hires this year are leading researchers and teachers who will help to solidify our emphasis on sustainability,” says Interim Dean Jenny Chatman. “We’re so thrilled they are bringing their brilliance to Haas—and to the greater UC Berkeley community.”
“Our new faculty hires this year are leading researchers and teachers who will help to solidify our emphasis on sustainability. We’re so thrilled they are bringing their brilliance to Haas—and to the greater UC Berkeley community.” —Interim Dean Jenny Chatman
Associate Professor Kelsey Jack, whose work lies at the intersection of environmental and development economics, comes to Haas from the University of California, Santa Barbara, where she was an associate professor at the Bren School of Environmental Science and Management and the Department of Economics.
Professor James Sallee is already a familiar face around campus. As a faculty member in the Department of Agricultural and Resource Economics at UC Berkeley since 2015 and a faculty affiliate at the Energy Institute at Haas since 2016, his research focuses on energy, the environment, climate, and public economics, with a focus on public policy.
In January, Berkeley Haas will welcome Economist Martin Beraja of MIT will join the Economic Analysis and Policy group as an assistant professor, and Dr. David Chan, a health economist and MD now at Stanford University, will join the Economic Analysis and Policy group as a professor. Chan will serve as the new faculty director for the Robinson Life Sciences, Business, and Entrepreneurship Program.
Associate Professor Kelsey Jack, Sheth Sustainable Business Chancellor’s Chair
Pronouns: she/her Hometown: Van Zandt, Washington Academic Group: Business and Public Policy
Education:
PhD, Public Policy, Harvard University
AB, Public and International Affairs, Princeton University
Research focus: Environmental and development economics
Introduction: I am joining Haas from the University of California, Santa Barbara, where I was an associate professor at the Bren School of Environmental Science and Management and the Department of Economics. Prior to that, I was an associate professor at Tufts University. I also spent a year at UC Berkeley in 2013-14 as visiting faculty in the Department of Agricultural and Resource Economics.
I study questions at the intersection of environmental and development economics. In particular, I try to understand how low income households use natural resources—land, water, energy—and the ways that policy can help align short-run economic needs with longer-run environmental and health concerns. I’ve thought about this topic for a long time, since a family trip to Madagascar after my freshman year in high school; it’s remained the problem that interests me most in the world. For example, at the moment, I’m studying climate adaptation in Niger and clean energy adoption in Ghana. I have other projects underway in India, South Africa, Malawi and Ivory Coast.
“I try to understand how low income households use natural resources—land, water, energy—and the ways that policy can help align short-run economic needs with longer-run environmental and health concerns. I’ve thought about this topic for a long time, since a family trip to Madagascar after my freshman year in high school.” —Associate Professor Kelsey Jack
Teaching: I am creating a new course, tentatively titled “Sustainable Markets: Profit, Policy, and Corporate Responsibility”
Why you decided to join Berkeley Haas: Amazing colleagues!
Fun (nonacademic) fact about you: I spent two years after college living in Vientiane, Lao People’s Democratic Republic (Laos) working for an environmental organization and figuring out what to do with my life.
BA, Economics and Political Science, Macalester College
Research focus: Energy, the environment, climate, and public economics, with a focus on public policy
Introduction: I always knew that I wanted to be an academic, to research, write and teach. So I went more or less straight through to my PhD after college. I fell in love with economics towards the end of college because I saw it as a versatile tool that could be used to study a variety of important problems. In graduate school, I was studying tax policy, partly because it interested me and partly because that was where I found the best mentorship. But, I fell almost by accident into a dissertation topic that studied tax subsidies for hybrid cars. As I learned more about environmental issues, I became more and more interested, and my career has ever since drifted more and more towards the biggest environmental problems of the day. I now study topics ranging from retail electricity pricing reforms in California to the design of public policies to ensure equity in the energy transition. For the last several years, I’ve worked with collaborators in the Rausser College of Natural Resources and at Haas to launch a brand new master’s program called the Master of Climate Solutions, which will be an interdisciplinary professional program that equips students to help become change agents for the climate across industries and sectors.
“As I learned more about environmental issues, I became more and more interested, and my career has ever since drifted more and more towards the biggest environmental problems of the day. I now study topics ranging from retail electricity pricing reforms in California to the design of public policies to ensure equity in the energy transition.” —Professor James Sallee
Class(es) you’ll teach: Core microeconomics
Why you decided to join Berkeley Haas: I have always loved professional education because it feels impactful to help equip students who are going to jump back into leadership roles right after school. I like the back-and-forth with students who bring not just intellectual curiosity, but also a wealth of experience to the classroom dialogue. I like that professional students demand that material is relevant and practical. I was also drawn to the opportunity to push Haas as the leader in climate and sustainability. My research and policy attention has moved more and more towards the climate challenge in recent years, and I believe that business can and must drive progress on climate.
Fun (non-academic) fact about you: I spent most of my money and all of my energy outside of work taking care of my three daughters. I love to travel and enjoy cooking.
Professional Faculty
In addition to the new members of the ladder faculty, nine new lecturers will be teaching courses this fall. Several others will join in spring (with additions exepected mid-year). They include:
Top row: General Motors CEO Mary Barra (Sipa USA via AP); Amazon CEO Jeff Bezos (zz/Dennis Van Tine/STAR MAX/IPx); Oprah Winfrey, TV host, actress, and CEO (Brad Barket/Invision/AP). Center: Christine Lagarde, President of the European Central Bank (Arne Dedert/picture-alliance/dpa/AP Images). Bottom: Pop star Taylor Swift (AP Photo/Nati Harnik); Chinese President Xi Jinping and Russian President Vladimir Putin (Sergey Guneyev, Sputnik, Kremlin Pool Photo via AP); Warren Buffet, chairman and CEO of Berkshire Hathaway (Sipa USA via AP).
Russian President Vladimir Putin and pop star Taylor Swift have something in common as two of the world’s “most powerful” people, according to Forbes. But while Putin rose to power as the leader of the world’s largest country, Swift amassed status and wealth as a wildly popular singer and performer.
These two paths to prominence—through power and status—are deeply tied to gender stereotypes that shape how society views them, according to new research published in the journal Psychological Science. While men are more typically linked to power, or having control over valuable resources, women are more often associated with status, defined as being respected by others.
“We noticed there seemed to be a fundamental difference between Forbes’ list of powerful people and its separate list of powerful women, and we wanted to find out whether this was indicative of broadly held gendered associations,” says lead researcher Charlotte Townsend, PhD 24, who began the project as a doctoral student and is now a postdoc at Cornell University. “We found deeply held stereotypes in how we recognize leaders—whether they are leading a company or running for president.”
Townsend, working with Berkeley Haas Professor Laura Kray and Sonya Mishra, PhD 23, an assistant professor at Dartmouth’s Tuck School of Business, used Forbes’ lists to test how men and women are viewed differently in terms of power and status, and to examine the implications of these stereotypes.
In one experiment, the undergraduate student participants rated men on the Forbes list higher in power but lower in status compared to the women, while they rated the women higher in status than the men. What’s more, the men were more likely to be recognized if they were perceived as powerful, while the women were more likely to be recognized if they were viewed as having high status.
“The most powerful men tend to be household names, while for women it’s those with the most status,” says Kray. “We pay more attention to high-status women like Taylor Swift and high-power men like Jeff Bezos, and less attention to high-power women like General Motors CEO Mary Barra.”
In the experiments, the researchers measured power using statements about authority and control (e.g. supervising subordinates, administering discipline or rewards), while status was measured using statements about whether the person was admired, respected, and sought out for their opinions. The studies were done in 2020 and 2022, and used Forbes’ 2018 “Most Powerful People” list and 2019 “Most Powerful Women” list. (Note: Forbes stopped updating its “Most Powerful People” list in 2018 but continues to update its “Most Powerful Women” list).
Public attention
The researchers then collected data on media mentions and social media followers for the Forbes’ list members that had been rated high on power or status. The analysis found it was the “powerful” men who garnered more media mentions and social media followers, while “powerful” women had fewer. Conversely, the women rated as “high status” had more media mentions and social media followers compared with high-status men.
The fact that society gives more attention to powerful men and high-status women “aligns with past research finding that people are more likely to notice and recall information that confirms their stereotypes,” says Mishra. “These mental shortcuts reduce our cognitive load as perceivers.”
Deeply ingrained biases
To test whether gender stereotypes around power and status persist with people who aren’t household names, the researchers selected photos of lesser-known people from Fortune‘s “40 Under 40 Finance List.” They used an Implicit Association Test (IAT) to measure unconscious biases with another group of undergraduates, and again found strong associations between men and power, and women and status—supporting the idea that these gender stereotypes are deeply ingrained.
The study also confirmed that participants viewed men as having more societal power and status overall, even though women were more strongly associated with status.
Self-perceptions
A final experiment tested how men and women view themselves. (The study samples included too few participants who identified as neither a man nor a woman for a separate analysis.)
They found that women, in particular, tended to associate themselves more with status than with power. When asked directly about themselves, women reported feeling less powerful than men, but more status-oriented.
Yet when asked about what they wanted, both men and women reported similar desires for power and status.
So while women might not necessarily be shying away from power, they might be aware of the backlash they’d incur from wanting power, the researchers suggest. Townsend noted that they have preliminary findings for a follow-up paper showing that women expect less backlash for seeking status than power.
Backlash
This builds on prior research on how women’s fears of backlash shape their behavior, such as highlighting their accomplishments in an interview, Another recent study by Mishra and Kray found that women who are seen as going after power are more likely to face a backlash than those viewed as seeking status in addition to seeking power.
“Power-seeking women experience backlash because they are seen to violate feminine stereotypes,” Mishra says. Although women might have more leadership opportunities today compared to 20 years ago, seeking and possessing power still convey more masculine stereotypes than feminine stereotypes.
It will be interesting to see how this phenomenon plays out in the 2024 presidential election, the researchers note, since Vice President Kamala Harris became the presidential candidate somewhat by default after President Joe Biden stepped aside. This could be an advantage.
“It could be that Harris is perceived as less power-hungry, and as a result, she might encounter less backlash compared with a candidate like Hillary Clinton, who campaigned heavily for her candidacy,” Mishra suggested.
And while both power and status are important in social hierarchies, they come with different expectations. Social status tends to be more fragile than power, and more easily taken away, says Kray. And those with status are more often expected to be fair and kind, which can limit their ability to use their rank effectively, and limit them to roles with less control over resources, she adds. “Unfortunately, this further entrenches the stereotype that women’s power must be limited to being highly respected while men’s power encompasses tangible control over resources,” Kray says.
The researchers note that the study involved mainly college students and U.S. adults, so may not be applicable to everyone. But what’s clear is that achieving full gender equality will require continuing examination of—and challenges to—these deeply held stereotypes.
Key takeaways:
Men are often linked with power, women with status.
This stereotype affects public recognition and self-perception.
Despite being respected, women’s association with status can limit their control over resources.
To err is human…and in the age of AI, it may be humanizing.
A study co-authored by Associate Professor Juliana Schroeder found that people view customer service agents that make typographical errors—and correct them—as more human and sometimes even more helpful.
“For decades, people worked to make machines smarter and less prone to errors,” Schroeder says. “Now that we’re living through real-world Turing tests in most of our online interactions, an error can actually be a beneficial cue for signaling humanness.”
In a paper published in the Journal of the Association for Consumer Research, Schroeder and colleagues from Yeshiva University, Stanford, and the University of Colorado Boulder developed their own chatbot—named Angela—and conducted five studies involving over 3,000 participants. Across all studies, participants rated agents that made and corrected typos as more human than those that made no typos or left typos uncorrected. They also viewed them more warmly.
The effect was strongest when participants did not know if the agent was a bot or a human, but interestingly, it held even when participants were told this information. “Seeing an agent correct a typo led people to expect the agent would be more helpful,” Schroeder says.
Prior research dating back the 1960s—dubbed the “Pratfall Effect”—showed that under certain conditions, making mistakes can increase a person’s likability. But other studies have shown that communicators who make typos, spelling mistakes, or grammatical errors are seen as less intelligent or competent as those who don’t. Schroeder and her co-authors suggest it’s what happens after an error is made that can make the difference.
“We suspect that correcting an error is humanizing because it shows an engaged mind,” she says. “It’s a sign that the communicator cares about how they’re perceived.”
The researchers, who include Shirley Bluvstein from Yeshiva University, Xuan Zhao from Stanford, Alixandra Barasch from the University of Colorado Boulder, do not suggest that companies intentionally program their chatbots by inserting typos—which could be seen as manipulative and raise ethics questions. Recent policy efforts in some states require bots to disclose their identities or companies to watermark AI-generated content. Yet, if a genuine mistake is made and the chatbot (or person) has the wherewithal to address it, this may impress customers.
Overall, the findings suggest that it may be possible to improve chatbots by implementing humanizing cues— such as fixing mistakeswhile still being transparent to consumers. These cues, the researchers say, “can signal a company’s dedication to connecting with consumers, potentially offsetting the impersonal and dehumanizing nature of text-based interactions.”
The Pendleton Act of 1883 shielded U.S. civil service workers from politics for the first time. A new study shows how this protection increased government efficiency and effectiveness.
A USPS mail carrier in Fullerton, Calif. (Image: Matt Gush/AdobeStock)
A report on New York City’s post offices in the 19th century described the “incompetency, neglect, confusion, and drunkenness” of postal staff. Hundreds of bags of undelivered mail were scattered throughout one building, including a book addressed to the vice president of the United States.
It was a time of political patronage when civil service workers were offered jobs in exchange for partisan donations and allegiance. The passage of the Civil Service Reform Act in 1883—better known as the Pendleton Act—changed that by replacing discretionary appointments with rule-based hiring and abolishing mandatory political contributions.
New research by Berkeley Haas associate professor Guo Xu, with Abhay Aneja of Berkeley Law, demonstrates how these protections improved the quality and efficiency of the post office, particularly by dramatically reducing turnover.
“The introduction of civil service protections really works to limit political interference,” Xu says. “That in turn helps improve the quality of public good provision.”
While the research is historical, it offers lessons today as former President and presumptive Republican presidential nominee Donald Trump calls for rolling back civil service protections.
Fewer errors, faster delivery
The postal service expanded rapidly in the 19th century, serving as a central clearinghouse not only for personal communication but also economic transactions, with businesses advertising and completing transactions by mail. By the 1880s, postal workers constituted 34% of the entire federal workforce.
Xu and Aneja looked at personnel records of federal government workers to understand what kind of people were recruited and hired by the U.S. Post Office before and after reforms. They also gathered information about delivery errors from the postmaster general. Because the Pendleton Act was rolled out in two phases—large cities in 1883, smaller cities in 1893—the researchers could study before-and-after pictures at two different times.
Comparing places that were covered by the new rules to places that were not yet covered, they found two key outcomes. Cities where the Pendleton Act was rolled out experienced a 22% reduction in delivery errors. At the same time, mail carriers, on average, increased the volume of mail they carried by up to 14%, which implies a more efficient postal service.
“We looked into what happened as the U.S. government moved away from a traditional patronage system based on discretionary political appointments,” says Xu, an economist and economic historian. “Nowadays, most governments consider civil service protection as a necessary firewall between politics and administration, yet there has been surprisingly little research on whether this policy improves the conduct of everyday government business. Our study confirms civil service protections as a good governance tool.”
“Nowadays, most governments consider civil service protection as a necessary firewall between politics and administration, yet there has been surprisingly little research on whether this policy improves the conduct of everyday government business. Our study confirms civil service protections as a good governance tool.”
Reduced turnover increases performance
Xu and Aneja expected going into the project that any improvements they saw would likely result from hiring more qualified employees, since the Pendleton Act required civil service workers to take competitive entry exams. The personnel records, however, told a different story: employees looked similar before and after the reforms, but turnover dropped dramatically, particularly during election cycles.
“In every election year before 1883, a large number of postal employees were replaced by new appointees,” Xu says. “Once reforms rolled out, these political cycles essentially vanished.”
The researchers also examined how the Pendleton Act influenced local politics. They used newspapers, which were largely partisan in the 19th century, to measure the strength of local political parties. They found that in a given city, the Pendleton Act reduced the number of partisan papers and increased the number of politically independent newspapers. Though Xu acknowledges newspapers aren’t a perfect proxy for local party power, this finding points to an important double dividend from civil service protections: Separating politics from the administration of a rank-and-file bureaucracy not only improves performance but also helps weaken the stranglehold of local partisanship.
A lesson for modern politics
Today, political appointees make up less than 1% of federal service workers, but this ratio is not a given as the civil service has come under renewed political scrutiny. In October 2020, the Trump Administration issued an executive order to reduce civil service protections—commonly known as Schedule F. While this order was subsequently rescinded by the Biden Administration, the question of civil service protections is likely to re-emerge again. “We will pass critical reforms making every executive branch employee fireable by the president of the United States,” Trump said at a recent rally in South Carolina.
Efforts to roll back civil service protections raise two concerns. First, appointments to top positions are already fraught and lengthy processes; expanding the pool of political appointees could lead to even more delays and vacancies in the federal government.
Second, hiring political loyalists to conduct the day-to-day work of government appears to be bad business. Within the post office, at the very least, history suggests this would make services both costlier and less effective.
“Reforms to limit civil service protections are typically proposed with the idea that it’s hard for politicians to control an independent civil service, and that’s often true. But the flip side is that having no civil service protections risks creating a bureaucracy staffed with yes-men who are replaced each election cycle. That means the bottom line for overall performance has so far been theoretically unclear,” Xu says. “On this question, we can contribute a partial answer: Better protections have direct consequences for personnel dynamics and, more generally, the performance of government.”
It’s practically a ritual: As soon as we sit down on the bus or get in line at the post office, we pull out our phones. Studies show average Americans check their phones almost 100 times a day, spending more than five hours daily staring at that pocket-sized screen. While scrolling through social media or checking sports scores may seem like a good way to kill time it may come at a social cost, according to a new study by Sandy Campbell, PhD 24.
“When I was younger, growing up in New York I’d see people on trains chatting with each other while they read the newspaper,” says Campbell, now a post-doctoral researcher at the University of California Los Angeles. “Now everyone is plugged in and looking down.”
In a novel laboratory experiment, Campbell and Uri Gneezy of UC San Diego’s Rady School of Management found that being on our phones instead of connecting with other people can affect our trustworthiness. “Trust is so fundamental to society,” Campbell says. “If you look at someone else, you see them and smile, and that might lead to a connection with them.”
For their experiment, published in the Journal of Economic Psychology, they brought groups of six students into a laboratory and had them wait together for 20 minutes. Some groups were allowed to use phones as usual. For others, they confiscated the phones and made them wait without them. They then broke the students up into pairs to play a simple trust game that gave them the chance to earn more money back by sharing up front—if they trusted the partner to split the final pot rather than pocket it, and if their partner actually did send back money.
Those who didn’t have phones and who also interacted with other people in the waiting room tended to share more up front than those who didn’t interact. Even more significantly, the partners without phones also gave back more than those with phones—and more than they’d received. Campbell attributes this generosity to the trust engendered when people connect with one another. “If you are not looking someone in the eye, you’re almost treating them as less than human—it’s just money,” she says. “But if you’d looked up and smiled and chatted, then you’d developed more of a sense of who this person is. They are no longer a blank slate.”
While our phones undoubtedly connect us to loved ones far away, they can also distance us from strangers close at hand, she concludes. People might look at their phones in social situations for a number of reasons, including boredom, shyness, or a feeling like others might not want to talk to them. Campbell suggests, however, that by putting away our phones around strangers, we might feel more of a sense of trust that could enrich everyone’s lives.
Children could learn more social skills by giving up their phones during the school day or at summer camp. In a business context, managers might foster a sense of trust by limiting phone usage at certain times, such as orientations, when new hires could be encouraged to drop their phones on the way into the room and pick them up on their way out.
“Obviously, our phones are immensely valuable, but in some situations, it may be more valuable to chat to the person next to you,” she says. “You might be surprised to find they want to chat with you too.”
Use of funds differed dramatically between nonprofit and for-profit hospitals, with for-profits funneling much of the windfall to payouts for execs and shareholders
Image: AdobeStock
A new study reveals details on how U.S. hospitals exploited a loophole in the Medicare outlier payments program, reaping billions of dollars in excess revenue.
Published as a National Bureau of Economic Research working paper today, the study adds new evidence to a headline-grabbing Medicare scandal, finding that for-profit hospitals funneled much of the windfall to executive compensation and shareholder payouts.
From 1998 to 2003, an estimated 180 hospitals engaged in “turbocharging” by rapidly increasing the list prices they charged patients to inflate Medicare payments—many more than believed at the time. The hospitals that exploited this loophole gained about $3 billion in excess payments, said Ambar La Forgia, an assistant professor at UC Berkeley’s Haas School of Business.
“Medicare was warned about the loophole as early as 1988, and failing to close it had significant fiscal consequences 15 years later,” said La Forgia, who wrote the paper with Atul Gupta of the Wharton School and Adam Sacarny of Columbia University.
The researchers also found that the consequences of the scandal reverberated through the health care system. “This scheme also drove up costs for other insurers because their hospital payment systems had similar loopholes,” noted Sacarny.
For-profits vs nonprofits
Importantly, the study highlights significant differences between how for-profit and nonprofit hospitals utilized this extra revenue—and the impact on patients. For-profit hospitals, predominantly driven by Tenet Healthcare Corporation, used the windfall to dramatically increase compensation for their highest-paid executives.
“(Tenet) also engaged in stock buybacks, which resulted in millions paid to shareholders. Back-of-the-envelope calculations suggest that roughly a billion dollars were funneled toward their executives and shareholders,” according to the researchers.
In contrast, the nonprofit hospitals allocated the excess Medicare funds to operating costs such as inpatient care, which the study found was associated with modest improvements in quality, including a reduction in patient mortality rates.
“In particular, we find that nonprofit hospitals appeared to increase quality and admit sicker patients, while for-profits admit healthier patients with no detected improvements in quality,” they wrote. “These results highlight that payment loopholes can influence quality and reallocate patients across hospitals.”
On average, hospitals that gamed Medicare by turbocharging obtained nearly $17 million in excess outlier payments, which translates to a 10% increase in total Medicare inpatient revenue between 1998 and 2003. At the peak of the episode in 2002, turbocharging hospitals raised their effective Medicare payment rates by 22%.
The research also found that the financial impact extended beyond Medicare, with a similar increase in payments from other payers, which include private insurers. Hospitals increased their “chargemaster rates”—a list of prices for services—which are used in negotiations with private insurers. This strategy had long-term implications, as the study found persistent increases in hospital charges even after the loophole was closed in 2003.
In the aftermath, the Department of Justice sued dozens of hospitals and hospital systems for fraudulent billing under the False Claims Act. Tenet agreed to pay $788 million to settle the allegations. While federal agencies called turbocharging fraud, the researchers point out that hospitals claimed it was “flawed public policy, not fraud or illegal activity.”
“This dispute, therefore, perfectly illustrates the type of ‘gray’ area frequently encountered in government contracts, which is exploited by firms to their advantage. Given the legal uncertainty, federal agencies mainly sued hospitals where whistleblowers stepped forward with evidence of payment manipulation. In the analysis that follows, we provide systematic evidence that the scope of gaming went far beyond the hospitals that were sued,” the researchers write.
The findings underscore the need for stronger contract design and oversight in government-funded programs to prevent exploitation and ensure that funds are used to improve patient care rather than enriching hospital executives.
Even though AI assistants such as Apple’s Siri and Amazon’s Alexa have been in widespread use for years, the release of ChatGPT in late 2022 was astonishing. The bot’s advanced language understanding and human-like responses opened the public’s eyes to the rapid pace of AI development, set off a wave of excitement and apprehension, and ramped up competition among tech giants and upstarts to deploy new AI technologies. Apple joined the race this week with the announcement of Apple Intelligence, which will put a powerful AI chatbot into the pockets of hundreds of millions of iPhone users worldwide.
Professor Zsolt Katona, who holds PhDs in both computer science and marketing, began using generative AI in 2019 to write scripts for his Berkeley Executive Education course. That year, Katona also developed and began teaching the Business of AI course for MBA students, and he continues to teach the AI for Executives course. He has recently focused his marketing research on AI as well.
We talked with Katona, the Cheryl and Christian Valentine Professor, about misconceptions, business applications, and how AI is influencing marketing.
Berkeley Haas: Right now, what do you think are the biggest misconceptions about AI?
Zsolt Katona: I guess one of the biggest misconceptions is just the word ‘generative’ because people are applying it to everything—that’s the hype—and definitions aren’t clear.
“…One of the biggest misconceptions is just the word ‘generative’ because people are applying it to everything—that’s the hype—and definitions aren’t clear.”
Tell me more, because I could be one of those people.
People use generative to mean that the application generates something. But many of the uses people are familiar with are more like a kind of search. And in terms of beliefs about how valuable different applications are, the family of generative AI is overestimated. Most of the applications that are the most lucrative are not generative in nature.
I read an article that said Mastercard uses generative AI for fraud detection. But it turns out that they use a transformer model—these are (neural networks) behind language models. Transformers were originally designed for generative applications, but they have nongenerative uses, and Mastercard’s use was nongenerative. It really is just a tool that detects outliers, suspicious transactions.
Other than confusion about terminology, the biggest misconception is beliefs about the ability of these things to work fully autonomously. That’s essentially nonexistent in most applications. What you have to do for pretty much every application is figure out how to make the AI portion and the humans work together.
I’ve heard it said that we’re still in the hype phase, and many companies are still trying to figure out lucrative commercial applications.
They’re figuring it out, and it’s just a matter of time. Some of the fancy stuff is not there yet because companies are having problems with getting their data infrastructure ready. Their data is messy, it’s not in a format that allows them to easily use simple AI applications—or they might not even own the data. But it’s the nonflashy stuff that’s most lucrative. For example, using cameras in a factory to detect manufacturing defects. There’s nothing generative AI about it—it’s just looking at little differences in those pictures.
Image: AdobeStock
What’s an example of something businesses are doing well, or a significant change, in marketing?
That depends on whether you mean something that’s widely used versus something that’s flashy and innovative. I like the ones that are useful, such as all the personalization that’s happening on a large scale. For example, customized videos for each product where somebody explains exactly what the product does. It’s happening on Chinese ecommerce sites, but it’s coming to Amazon very soon. It’s just impossible to do something very personalized to the consumer without this kind of technology.
In your recent research, you looked at whether market researchers can replace human participants with ‘synthetic respondents’ generated through a large language model (LLM). What did you find?
We only tried a couple of product categories, but it worked pretty well. We had just three variables—age, gender, and income. There was 75% to 90% agreement with human data.
Are we almost at the point where market researchers can accurately use AI for product research?
They’re already doing it. Our paper was about validating that this works, and for that, you still need human data to compare. The promise of these ‘synthetic respondents’ is that you can get very specific types of responses that would be otherwise hard to get from humans, and at a much lower cost. Let’s say, a person who earns a million-plus dollars and lives in a fully electrified home and drives a cyber truck. You can ask the AI to pretend to be that person and answer questions about perceptions about cars. You’ll get a response, but it’s still hard to validate because you have to find that human to compare it to.
“The promise of these ‘synthetic respondents’ is that you can get very specific types of responses that would be otherwise hard to get from humans, and at a much lower cost. Let’s say, a person who earns a million-plus dollars and lives in a fully electrified home and drives a cyber truck.”
So the more specific you get, the less accurate it might be because it would be hard to create a sample of people like that.
The question becomes, how bad it would get? Would it be totally random, or would it give you some idea?
How would this work with a new product—such as a brand-new car brand with no information from humans on the internet, or a really innovative product that doesn’t exist yet?
In theory, if you can accurately describe the new brand or new product, the language model could make those inferences. For example, you can tell AI to create an image of a cat with a mask on, right? You don’t need examples of cats with masks on. You need examples of cats, and examples of masks, and examples of some kind of human or animal with a mask on so that it understands these three things.
How does AI do in coming up with new products?
We actually have a working paper on creativity for product ideas with humans versus AI. We do find that AI is better, but if you look only at the top answers, the difference is much smaller. And again, it’s more of a human data problem because, with the AI, we can get the best models to generate ideas, but we can’t ensure the most creative humans are going to be in our pool of human participants. It’s still very likely that if you somehow managed to get all the humans in the world to participate in our study, the best ones would be better than AI.
You teach the business of AI to MBA students and through Berkeley Executive Education. With things moving so fast, what skills do managers working with AI technology need?
They need to understand the fundamentals of how it works. That’s the No. 1 thing. It’s even better if they have some coding skills, and I do make them go through an exercise with code, so they have at least a feeling for what it looks like and for the building blocks. Obviously, anyone who studies engineering will understand it in great detail, but for nontechnical people, just understanding how it works helps them a lot. Other than that, they need to understand how to manage technology, which is not that specific to AI. If you put together those skills with some understanding of how the specific technology works, it’s tremendously helpful.
Can nontechnical people learn enough to be effective?
My marketing colleague who teaches marketing analytics likes to say that it’s easier to teach managers analytics than to teach data scientists to be good managers. I share that thought, and again, they don’t have to be as technically advanced as the engineers. But they should understand how the data goes in and how it results in a desired outcome.
My advice is that managers should learn enough about how it works to talk to the people who make these things, especially with respect to the data needs. What I call the “objective function” of the model is what it should do. That’s just an equation, but translating that equation to the business objective is a critical task that somebody has to do, and it’s not going to be a data scientist. It’s rarely going to be the engineer.
Is that pretty much the same as for technology management in general?
Well, the difference is in how AI works, and specifically that it learns from examples. So you have to think hard about what those examples are, and you have to think hard about how you train it. How should the so-called error or loss function be specified? What are you aiming for, and when do you say it’s good enough?
Will there be jobs for marketing managers without engineering backgrounds?
I think there will be. Marketing is such a subjective topic that it’s hard to evaluate all the things AI needs to do. It comes down to a lot of human judgment. If AI can do every job in the world, then yes, marketing people will be replaced as well. But it’s very hard to show that a machine can do the work better than a human.
“Marketing is such a subjective topic that it’s hard to evaluate all the things AI needs to do. It comes down to a lot of human judgment.”
Because of all the different aspects of it?
Yes, it’s a very complex type of work. And then, because of the complexity, you need a lot of people who know how to use these tools. So, their jobs might change, but they will have jobs for sure. Everybody was saying a few years ago how the blue-collar jobs would be replaced, and now they are instead talking about all the white-collar jobs. But neither is happening, really. Some tasks are being replaced, yes, but people will still have jobs—although they will be different.
When we believe that members of another group have beliefs about the world that are at odds with what most others believe, we consider them less human.
Photo by Jakub Porzycki/NurPhoto via AP
Some of human history’s greatest atrocities—genocide, slavery, ethnic cleanings—are rooted in our ability to dehumanize people from other social, political, or cultural groups.
Whereas prior research has traced dehumanization to the belief that others think or feel less than we do, new research co-authored by Haas professor Sameer Srivastava shows that our tendency to dehumanize can also be influenced by how we think others view important facets of the world. The greater the difference between our perceptions of an outgroup’s worldview and those of a “typical” person, the more we tend to dehumanize them.
“The act of dehumanization appears to be at least in part driven by what we refer to as ‘imagined otherness’: the belief that an outgroup perceives of something that one cares deeply about differently than one assumes most other people do,” Srivastava says.
Measuring the space between us
With Austin van Loon from Duke University and Amir Goldberg from Stanford University, Srivastava used the sociological concept of “schemas” to explore this effect. Broadly speaking, schemas refer to the ways in which people categorize the world, as well as the associations that they have between these categories. For example, a conservative in the U.S. might associate freedom with economic independence and lack of government intervention, while a liberal might associate it with civil liberties and the freedom of expression.
In the first of two pre-registered experiments, the researchers recruited self-identified Republicans and Democrats in the U.S. to report on their schemas related to the concept of “America.” Participants chose four words—from a set of eight—that they thought best defined America. Two of these sets contained positive words (e.g. strong, innovative), two contained neutral words (e.g. constitution, western), and two contained negative words (e.g. dangerous, unequal). After articulating their own associations, participants were instructed to characterize the associations that they thought would be made by a prototypical member of their own political party, a typical member of the opposing party, and a typical person.
The researchers then asked participants to report on the extent to which they blatantly dehumanized members of the opposing party. In the first experiment, the researchers found that self-identified members of one party were more likely to blatantly dehumanize members of the opposing party when they thought that group’s worldview about America was very different from what they ascribed to a typical person.
“Of course, the causal arrow could go also go in the opposite direction: The more one dehumanizes an outgroup, the more one might perceive that outgroup as holding views that diverge from a typical human’s,” Srivastava said. To get a clearer understanding of causality, the researchers ran a second experimental study.
In this experiment, Republicans and Democrats were randomly shown one of two sets of fabricated results. One set showed that people in the opposing political party viewed America similarly to the “typical” person. The other showed opposing political party members holding very different schemas from those of the “typical” person. The researchers found that dehumanization was significantly stronger in the latter condition, thereby corroborating results from the first experiment. (Participants were informed about the deception in the experimental design at the end of the study.)
Toward a more humane politics
Srivastava notes that a wealth of research in the past decade has looked at what is called “affective polarization”, or how warmly or coldly we view our political opponents. But this new research gets at something different: “When people view the other side as less than human, we should worry about such negative consequences as political violence,” he says. “If we can start to understand where this perception comes from, it gives us one more lever to combat it.”
He described two potential approaches to reducing how much we dehumanize members of the opposite political party. The first is a simple intervention to correct misperceptions that Republicans and Democrats might have about how the schemas of the other group deviate from those that are typically held. There may be differences, of course, but they may not be as large as people believe them to be.
The second idea would be to use the schemas that partisans hold to craft messaging that both resonates with their worldview and helps them humanize the other side. “The method we developed surfaces the terms that are most strongly associated with the tendency to dehumanize or, conversely, humanize the outgroup,” Srivastava says. “This raises the possibility of strategically avoiding—or proactively using—such terms in messaging that aims to tamp down the dangerous tendency to dehumanize people from the other political party.”
Ann Harrison will step down as the dean of the Haas School of Business on July 31, 2024, remaining a half-time faculty member. The decision will allow her to spend more time with her New York-based family and focus on her research, she said.
“It has been an incredible honor and joy for me to serve as dean of Haas,” Harrison said in a note to the Haas community sent this morning. “I am proud of what we have accomplished together.”
Harrison has served as dean of Berkeley Haas since January 2019, the second woman to lead the school. Her deep ties to UC Berkeley—where she earned her bachelor’s in economics and history and served as a professor in the College of Agricultural and Resource Economics for 10 years—have allowed her to make far-reaching changes in a short time, said Ben Hermalin, Executive Vice Chancellor and Provost for UC Berkeley, who announced the news today.
“We thank Dean Harrison for her incredible leadership and numerous accomplishments during her term as the dean,” Hermalin said. “For anyone who has had the pleasure of working with her, Ann is wonderful to partner with. She is full of innovative ideas that go beyond Haas; hence, not only has she made Haas better, but she’s also made the campus better. Her leadership will be sorely missed.”
A sustainability mindset
Harrison said becoming a half-time ladder faculty member will allow her to spend meaningful time with her husband and two daughters, who live in New York, while staying connected to Haas and continuing her research.
“I will be able to remain at the school I have been truly passionate about since I first set foot here as a freshman at Berkeley in 1977,” said Harrison, a renowned economist who is one of the most highly cited scholars on foreign investment and multinational firms. “I am especially excited to have more time to focus on my research into the gender pay gap and what makes industrial policy work.”
Harrison’s top priority at Haas was to embed a sustainability mindset in all of the school’s programs and operations. This resulted in the creation of a sustainability certificate and a dual master’s degree program in business and climate solutions with the Rausser College of Natural Resources, as well as a summer minor in sustainable business and policy.
Courtney Chandler, Senior Vice Dean of Haas, said Harrison’s accomplishments have had school-wide impact—from growing the faculty, to fundraising, to growing degree programs, to infusing innovation, sustainability, and inclusion into business education.
“She believes in Haas’ potential and strives to further strengthen the school’s reputation by setting an ambitious vision for Berkeley Haas,” Chandler said.
During her tenure, Harrison appointed the school’s first-ever chief diversity, equity, and inclusion officer and the first chief sustainability officer. She orchestrated a major diversity, equity, inclusion, justice, and belonging (DEIJB) effort that broadened the profile of the school’s faculty, board, and student body, and created learning opportunities and anti-bias training for the entire Haas community.
“Grateful for her leadership”
Professor Jennifer Chatman, Associate Dean of Academic Affairs, said Harrison’s leadership over the past five years created cultural changes at Haas that have made the school “more diverse, more harmonious, and more collaborative than ever.” “Dean Harrison’s leadership style has set us up for an immensely bright future, and I am deeply grateful for her leadership,” she said.
(L-R) Ben Hermalin, Executive Vice Chancellor and Provost for UC Berkeley; UC Berkeley Chancellor-Elect Rich Lyons; Prof. Jennifer Chatman, Associate Dean of Academic Affairs, Dean Ann Harrison; Prof. Don Moore and Erika Walker, Senior Assistant Dean for Instruction, attending the Berkeley Haas 125h Anniversary Celebration in the Haas courtyard. Photo: Jim Block
Harrison’s focus on innovation and entrepreneurship resulted in a new faculty group and an entrepreneurship hub—slated to open this fall. Harrison envisions the hub as a central clearing house for students who wish to learn about all entrepreneurship activities across the Berkeley campus. The hub now has a faculty director, as well as an executive director.
In addition, Harrison expanded the school’s degree offerings with the Flex hybrid MBA cohort and worked closely with the Berkeley School of Public Health, the School of Engineering, Biological Sciences, and the School of Law to bolster their joint programs.
Harrison, a chaired professor at the University of Pennsylvania’s Wharton School before joining Haas, hired 40 new tenure-track faculty during her five-year tenure, 19 of whom are women. She also nearly doubled the number of faculty positions that are funded by Haas or by philanthropic funds.
Stepped up fundraising
Under Harrison’s leadership, Haas has also significantly stepped up fundraising and raised $236 million since 2019. This includes the largest single gift in the school’s history—$30 million from alumnus Ned Spieker, BS 66, and his wife, Carol, BS 66 to turn the upper-division undergraduate business program into a four-year program.
When naming her “Dean of the Year” in 2023, the publication Poets & Quants called Harrison’s tenure an “unimaginable and nearly breathtaking record of achievement.”
“What really motivates me both as a leader and soon-to-be faculty member are the transformational opportunities we provide for our students, staff, faculty, and alumni,” she said. “We provide opportunity for everyone, at a scale that is unequaled among the private schools. What a powerful mission.”
Hermalin will announce details about the appointment of an interim dean shortly. Hermalin said the goal is to begin the search for a permanent dean in early fall 2024, conduct interviews in late fall and/or early spring, and announce the new dean in spring 2025, aiming for a July 1, 2025 start date. The interim dean will likely serve through June 30, 2025, while a national search is underway.
Assistant Professor Solène Delecourt, who teaches negotiations to MBA students and studies business inequality, has been named as one of Poets&Quants“Best 40 Under 40 MBA Professors” for 2024.
Delecourt was selected from among 1,000 nominations from students, administrators, and faculty members at business schools around the world. The announcement comes just after she was honored with a Cheit Award for Teaching Excellence—the highest teaching honor at Haas—by students in the full-time MBA program.
“This has been a terrific year for me. I am thrilled to be chosen as one of the 40 under 40 MBA professors,” Delecourt says. “I want to thank my students wholeheartedly for their nominations.”
Just four years into her academic career, Delecourt is described by her students as a professor who changed their outlook on negotiations for life—a critical skill in our polarized times
Solène’s strongest message throughout my negotiations course was to create a win/win outcome, and assume we are all on the same side,” said Namit Singal, MBA 24, in his nomination. “I absolutely loved this learning and will take it away for life.”
Alex Berry, MBA 24, said he was going to switch out of an 8 am class section until he met her. “She brought an energy, vulnerability, and practicality to her classes that should be a model for every MBA professor.”
Besides her expertise and creative teaching methods, students also praised her sense of humor, positivity, and “infectious energy.” She earned a perfect score on her teaching evaluations—7 out of 7—last fall.
‘In love’ with teaching
In describing her path to becoming a business school professor, Delecourt says she accidentally “fell under the spell of this career path” after starting her PhD at Stanford, and “I am in love with it.” Her goal is for her students to learn while having fun.
“If they don’t have fun, I don’t think they’re going to remember much. At the same time, they need to learn because this is a class, it’s not a party,” she says. “And so for that, I design all of my classes to be packed with action.”
Some of those class activities include an improv-inspired negotiations tournament, and an open mic session where students share stories of a prior experience where negotiation skills could have helped them. She has a curated playlist—Beyoncé is a favorite—with lyrics that reinforce key learnings.
Delecourt also draws from her research passion to make students aware of power inequities, particularly for women and people of color. Her academic work has been gaining increasing recognition: A co-authored paper published in the journal Nature this year showed that googling for images rather than text amplifies gender biases. It received widespread media attention and won the Best Paper Prize at the 2022 International Conference on Computational Social Science, and was a semi-finalist at the 2021 Wharton People Analytics Competition.
Most of her research is at the intersection of entrepreneurship and gender. She recently ran a field experiment to test whether access to generative AI can boost success for small business owners in Kenya—and found it only helps people who were already high-performers. The paper won the 2024 white paper competition at the Wharton People Analytics Conference. Delecourt’s work has received funding from various sources, including a $250,000 grant from the Alfred P. Sloan Foundation this year. She currently serves as an editorial board member of the journalOrganization Science.
12th year of “Best 40 Under 40”
This is the 12th year that Poets & Quants has published the “Best 40 Under 40” list with the goal of “identifying and celebrating the most talented young professors currently teaching in MBA programs around the world.” The publication’s staff evaluated each nominee on teaching (weighted 70%) and research (weighted 30%).
Spend any time scrolling through social media or news sites and it feels like America is a nation in constant argument. Off-hand remarks often spark fierce screaming matches. Partisanship is up, Gallup tells us, while trust in institutions is down.
However, a new study co-authored by Berkeley Haas Assistant Professor Erica R. Bailey suggests this perception may not accurately reflect the nature and frequency of political debates among everyday Americans. In three studies involving nearly 3,000 participants, researchers found most debates occur not with strangers on social media but rather among family and friends. Moreover, participants often felt positive after such discussions.
“We have these misperceptions because of algorithmic amplification of negative media and negative interactions on social media coupled with the fact that we tend to really remember negative information,” says Bailey. “It creates this perception that we’re all just out there fighting with strangers.”
In fact, one study with a representative sample of nearly 2,000 Americans showed that people overestimate how frequently others engage in debates—and this misperception is especially pronounced for debates with strangers online. This false perception has psychological costs, the researchers say, fueling increased feelings of hopelessness about the future of America.
“Our findings suggest that Americans may experience a false reality about the landscape of debate which can unnecessarily undermine their hope about the future,” the researchers wrote in the study, published in the journal Scientific Reports and co-authored by Michael W. White, Sheena S. Iyengar, and Modupe Akinola of Columbia Business School.
Difficult and nuanced conversations
Bailey says the genesis of the project was reflecting on her own experience. “When I think about who I talk about hot-button issues with, it’s my colleagues and friends,” she says. “Engaging online feels like a waste of time. Why would I have a difficult and nuanced conversation with someone I don’t know or trust?”
Bailey, who studies authenticity, says online debates often feel artificial, with people less willing to openly share their personal experiences and more often just trying to make a point. But while we have a daily ringside seat to the most heated online debates, we lack line-of-sight into people’s private kitchen-table conversations—and these are harder for researchers to observe, recreate, and measure.
Perceptions of ‘typical’ debates
In their first study, the researchers asked 282 participants to freely recall a recent debate they had witnessed or participated in. About half of the participants described debates they observed online, and recounted that these interactions skewed more negative than positive. Interestingly, the respondents believed these instances were representative of typical debates, highlighting a perception that debates—particularly online—are generally seen as negative.
Personal experiences with debate
The second phase included two studies delving into personal debate experiences. The first involved 215 people in a behavioral science research lab, while the second included 526 individuals recruited online. Participants in both groups were asked about the topics they debated over the past year, who they debated with, and how they felt afterward. They were also asked to choose from a list of twenty common topics—including climate change, gun control, gender identity issues, and reparations for slavery—which ones they had debated.
The results revealed that reproductive rights and vaccines were the most common topics, while other contentious issues, such as policing and immigration, were debated less frequently. Most of the topics were debated by less than half of participants. Contrary to the popular belief of hostile online interactions, participants said the majority of their debates occurred with family, friends, and other close contacts.
In terms of emotional impact, online participants reported that their average post-debate feeling was positive, suggesting that discussions, even on divisive topics, often ended on a constructive note. The lab participants’ feelings were neutral, neither overwhelmingly positive nor negative.
“That was surprising to me, since I was not expecting for people to report feeling positive after a debate,” Bailey says. “That suggests that at least on some topics, people are better at finding a compromise or at least ending on a positive note.”
Measuring misperceptions and their impact
The third study was an investigation into how Americans perceive debates compared to their actual experiences. About 2,000 Americans in a nationally representative sample were randomly assigned to either self-report their own debate experiences or to predict how often others engage in debates.
The results were striking. Across almost all categories, people significantly overestimated the frequency of debates, especially online debates involving strangers (the exception was in-person debates with family members). In addition, this overestimation was strongly linked to a sense of hopelessness about the future of America.
Implications
The research highlights a critical gap between perception and reality. “Taken together, these findings suggest that the ‘typical’ debate seems substantively different than two strangers typing at one another from behind their computer screens,” the researchers write. This misperception could be due to the visibility and virality of negative content on social media platforms, where extreme views often get amplified over moderate or conciliatory tones.
Second, the findings suggest that these misperceptions could be contributing to broader societal despair regarding the political climate and the future of democracy in America. By assuming that debates are overwhelmingly negative and frequent, people may feel a sense of futility about political engagement and discourse. (The researchers cautioned that this connection was largely correlational.)
Lastly, the research points to the need for interventions that not only make debates more productive but also adjust public perceptions about political debate. Educating the public about the actual dynamics of debates could help mitigate feelings of hopelessness and encourage more constructive and hopeful engagement with political processes.
The Full-time and Evening & Weekend MBA classes of 2024 graduated May 17 at the Greek Theatre. All photos: Brittany Hosea-Small.
Under sunny skies, the class of 2024 Berkeley Haas Full-time and Evening & Weekend MBA students were urged to never stop learning, to consider the strength of their character throughout their careers, and to stay connected long after they leave Haas.
Dean Ann Harrison welcomed the crowd of 423 graduating MBA students, along with their families and friends, to the Greek Theatre. She urged students to help each other after they graduate, give back, and draw on their resilience and determination.
“You are not just walking away with an MBA,” she told the graduates. “You are walking away with the business version of a superhero cape—power and influence. Not the kind of power that lets you leap tall buildings in a single bound. No, this is a real-world superpower: the power to change the world—one insightful conversation, one strategic hire, and one ethical decision at a time.”
Photo: Brittany Hosea-Small
Harrison introduced Monica Stevens, the 2024 commencement speaker, describing her as “a person of uncommon distinction and a great citizen of Haas.” Stevens urged graduates to dive into difficult conversations, collect “curiosity partners”—people who challenge you and open you up to new ideas—and be open to unlearning the things that we’ve learned in life.
“Please, repeat after me,” Stevens, who is an executive search consultant with Spencer Stuart and recipient of the Raymond Miles Service Award in 2017 for her work in supporting and improving diversity, equity, and inclusion initiatives at Haas, said. “‘Uncomfortable conversations are not my enemy. They are my secret weapon.’ I hope you take that to heart because, in today’s world, I know it is hard to have uncomfortable conversations about race, politics, gender, religion, identity, or what is the best business school in the world. It is a must-have skill, and guess what? You have that skill.”
Commencement Speaker Monica Stevens urged students to dive into difficult conversations. Photo: Brittany Hosea-Small
EWMBA student speaker Katherine Zepeda Arreola, a double Bear who immigrated to the United States with her family when she was 7 years old, called the class of 2024 “the best class Haas has ever seen.” Zepeda Arreola, who is heading to work at Apple after graduation, gave a shout out to each of the EWMBA cohorts, including her own—the blue cohort. “Thank you for being an incredible group of people,” she said, before switching to Spanish to thank everyone who supported them during the program.
Zepeda Arreola emphasized the importance of continuing to build character throughout their careers by showing up on time, doing what you commit to doing, and speaking up when it’s hard. “Not only is our MBA a great accolade; there’s something else that will speak volumes wherever we go: our character…it is what people will remember.”
FTMBA student speaker Xavier Jefferson, a first-generation student who came to Haas to pivot from working as a financial advisor to an investor, told the class to never stop investing in friendships.
“We’ve laid the foundation for a long-term investment,” he said. “But we must recognize that not every investment will turn out like Nvidia. Some might even crash and burn like FTX. But that doesn’t mean you stop investing, especially after we ascend to those offices with pristine downtown views. Don’t hesitate to text that person you thought about on your morning commute, to press accept on that random FaceTime, to make time when you are in town. I might be cooking.”
Jefferson’s speech received a standing ovation before all of the students walked the stage, tossed their caps, and headed to the courtyard for a reception.
Diarra White, MBA 24, who is joining McKinsey after graduation, said the day was bittersweet, but she’s ready for the next chapter. When asked for a phrase to describe her Haas experience, White said, “full of love.”
(L-R) Graduates Yassen Tarig Abdelfatah and Jacob Williams. Photo: Katrina Koski
Seek mentors of all ages, engage with discomfort, and invest in relationships were parting words delivered during the Berkeley Haas Undergraduate Program spring 2024 commencement ceremony.
“Become a master relationship builder,” said Commencement Speaker Jasvinder (Jas) Khaira, BS 04, a senior managing director and founding partner of the Tactical Opportunities Group at Blackstone. “Seek out mentors early in your career, and contribute to the relationships by adding value to them. Be a mentor to others, no matter your age or title. Those relationships will give you context when you hit the inevitable lows in life, and they will remind you of purpose when you are hitting your highs.”
Courtney Chandler, senior assistant dean and chief strategy & operating officer at Haas, welcomed about 500 graduating students in the class of 2024, along with family and friends who gathered at the Greek Theatre.
(Watch commencement video below)
Erika Walker, senior assistant dean for instruction, congratulated students for completing their studies at the No. 2 undergraduate business school in the United States. Forty-three percent of the 2024 graduates are women, 47% earned a dual degree, and 22% are the first in their families to go to college, she noted.
“We are so proud of you, as are your parents, mentors, and loved ones who supported you along the way,” she said, calling out all of the family members who flew from around the world to attend commencement. “Let’s give them a round of applause.”
Walker added that no matter where life takes you, a Berkeley Haas degree will open doors.
“Stay connected to each other, help each other succeed,” Walker said. “You are now part of a global network of more than 43,000 and more than half a million Berkeley alumni.”
2024 graduates walking toward the stage to receive diplomas at the Greek. Photo: Kim Girard
Khaira shared advice, gleaned from his career and personal life, including thoughts on the toll that 9/11 took on his perception of safety as an Indian man “wearing a turban and a beard.” Calling his father after the Twin Towers fell, Khaira said he told him he wanted to run away. His father asked him where he would go.
“I told him, ‘I don’t know. Maybe India?’ And the next moment was a pivotal part of my life that I won’t forget. He responded, ‘There is nowhere to go. Even India, of course, has its own religious discrimination.’”
That’s when Khaira said he realized “this wasn’t going to be an easy fix. There was nowhere to run.”
“As you graduate from Haas and start your career people will disagree with you, you will feel disrespected, you will deal with conflict,” he said. “There is no gain in running away from it. There is no value in responding with rage or ignoring it. Coming to my own terms with discomfort has been one of the most important life skills I’ve had to wrestle with. How do I gain perspective by using empathy? Does this person really want to hurt me, or are they insecure? Can I successfully move forward knowing I control nothing but can still influence everything?”
Left-right: Katrina Koski, director of inclusion & belonging at Haas, Saikat Chaudhuri, faculty director of the M.E.T. Program, and Emma Daftary, assistant dean of undergraduate programs. Photo: Katrina Koski
Emma Daftary, assistant dean of the Berkeley Haas Undergraduate Programs, presented awards to students and faculty, including:
Kevin Liao, Departmental Citation, awarded to the student with the most outstanding academic achievement in the field of business. A graduate of the Global Management Program (GMP), Liao is heading to J.P. Morgan.
Question the Status Quo, Chen Dai: Dai is an entrepreneur, engineer, and the first international student from China to graduate from the M.E.T. program at Berkeley Haas.
Confidence without Attitude, Shivum Berry:Berry built a yo-yo company at age 14 and went on to create a course at Berkeley on building an e-commerce business.
Students Always, Sakura Kappel: A transfer and reentry student raised by a single mother in the Philippines, Kappel “exemplifies a student who likes to question established norms and explore diverse perspectives, even if it may ruffle feathers.”
Beyond Yourself, Norma Garcia Galvan: A first-generation student, Galvan values community building, mentorship, and uplifting marginalized communities, which stems from her upbringing in an immigrant Mexican household.
Cheit Award for Excellence in Teaching for the Undergraduate Program: Haas Lecturer Mohammed Nadeem, who teaches marketing.
Outstanding Graduate Student Instructor: Kunal Cholera (his second win as a GSI).
Celebrating her 22nd birthday, undergraduate student speaker Julianna De Paula shared the anxiety she felt before leaving her family in Brazil to study at Berkeley. “As soon as I stepped foot on this campus, all of the anxiety went away. After meeting my roommates, classmates, and professors, I finally realized that I’d found a new home very far from my own,” she said.
De Paula, who will join L’Oreal as a marketing management trainee after commencement, said it’s the sense of community and belonging at Haas that she will miss most, including “the friendships forged over group projects, the mentorships of our professors, and the shared triumphs and challenges that have united us as a class.”
Summer Hua, the Haas Business Student Association (HBSA) president for the 2023-24 school year, and a first-generation international student, thanked her professors and her HBSA team, the “unsung heroes advocating for student voices” and “friends who have turned into family.”
Graduates gathered in the courtyard after the commencement ceremony. Photo: Kim Girard
After students tossed caps, they headed to a post-commencement reception in the courtyard as the sun broke through the morning fog. Asked to describe her time at Haas in one word, graduate Rachel Sanchez said “friends.”
One day last March, I gathered with my fellow EWMBA students inside of a 20-story building overlooking Johannesberg to learn about the world’s seventh largest coal mining company.
SIB South Africa builds upon the relationships of professors Mark Rittenburg and Ingrid Gavshon, who have deep connections to South Africa through decades of work around coaching, communication, and media in the country, and Lecturer Janine Lee, EWMBA 14, who previously attended the trip as a student, the SIB faculty team built a curriculum to push students to become more global-aware leaders and communicators.
While labeled as a business class, business was one many windows we were able to peer into while visiting South Africa.
Part of our class pre-assignment focused on South Africa’s history and politics. We discussed Nelson Mandela’s rise, the years of apartheid, the country’s democratic transition, and its current economy. Learning about its history reminded me that apartheid was not a relic of a forgotten past but indelible in the townships we drove past and part of what drives South Africa’s entrepreneurs toward change.
Through the network of our professors, we had a unique week, highlighted by the hospitality of their friends and professional colleagues in intimate settings that helped us better understand companies. We visited ABSA, a banking conglomerate based in Johannesburg, and SASOL, one of Africa’s major energy companies, where we had a chance to speak to some of the senior leaders.
Outside of traditional corporations, we also visited multiple non-profits in South Africa, including iHub, Harambee, and Rise Above Development, learning about the aspirations of South African youth. A highlight was a chance to collaborate on a crisis management role-play exercise with the students at iHub, giving them a glimpse of how things could work in their future careers. Between rounds of Nando’s chicken, a South African classic, we continued many conversations as part of an informal meet and greet, discussing careers, skill development, and passions. It was a lesson in hope, shared humanity, and, once again, perspectives you often won’t find in a standard business school class.
MBA students working on a project in South Africa. Photo: Ingrid Gavshon
Our most unique visit was with the deputy mayor of Cape Town, Alderman Eddie Andrews. A city the size of Boston that prides itself as one of the most beautiful places in the world, we got an inner glimpse into the workings of Cape Town. A former rugby player turned politician, Andrews was kind, patient, and enthusiastically answered more than an hour of questions, touching on everything from structure, sustainability, funding, national politics, and more. His mission to set an example of good governance for South Africa inspired us.
Layering on the many ways we interacted with different sectors of the South African economy, the class also allowed us to experience South Africa as tourists, from the grasslands of Kruger National Park to the iconic mountains of Coastal Cape Town. We took solemn tours of Mandela’s prison on Robben Island and the Apartheid Museum, where we spoke to Mandela’s former jailer. They all contributed to our growing connection and understanding of the country.
It’s hard to talk about SIB without mentioning the people. As with any other Haas class, having diverse experiences added dimension. As EWMBA students, we all come from different backgrounds with different motivations for the trip. Our industries span from technology, healthcare, real estate, and education to jobs in sustainability, sales, and clinical research. This spectrum was foundational to our visits, yielding new questions at every site that drew upon students’ unique curiosities.
We went on excursions and dined together, shared jokes while passing snacks on our bus, and spent time reflecting on the week’s fun, stimulating, and complex experiences. Our celebration dinner included emotional toasts, superlatives, and Polaroid memories. As part of the course, our faculty team prompted us to write a letter about our dreams and aspirations for the trip, which encouraged shared vulnerability that pushed many of us to the edge of our comfort zones.
Toward the end of our trip, many of us agreed that SIB had shifted from a class and transcended into something more abstract—an experience, a journey, an academic version of catharsis.
Reflecting upon the best parts of SIB, I was reminded of one of the Berkeley Haas core Defining Leadership Principles: Beyond Yourself. In South Africa, we were forced to challenge our privilege consistently. There was nuance in everything there, from starting and investing in a company to advising young people who come from very different upbringings. In all of this, we saw ways to better ourselves, better our perspectives, and grow an inch closer to the ethos of leadership we saw as a symbol of Haas.
For many of us, it was our first time visiting South Africa. Thanks to this experience with Haas, it may not be our last.
Haas Voices is a first-person series that highlights the lived experiences of members of the Berkeley Haas community. Here, Tsadiku Obolu, who is graduating from the undergraduate Management, Entrepreneurship & Technology (M.E.T.) program this week, shares the wisdom he gained while working on his mental health.
Tsadiku Obolu is graduating from the Management, Entrepreneurship & Technology (M.E.T.) program this week.
While serving as the senior advisor for the Haas Undergraduate Black Business Association, or HUBBA, I typically ended each of our meetings with some ‘senior advice,’ or words of wisdom.
Some of that advice included ‘Know what you don’t want as much as what you do want,’ and ‘You don’t become a leader to be acknowledged by everyone. You are a leader when everyone acknowledges you.’
I was only able to give this advice because I learned it in therapy.
It’s strange to find myself talking about mental health therapy as a Black man. In our culture, men are already looked down upon for being vulnerable and aren’t given the space to talk about their mental health. On top of that, Black men are seen by many as hyper-masculine and are often forced to hide their emotions, so they don’t seem weak.
I started therapy 10 months ago because I had difficulties relaxing and was having issues with sleep and focus. I am a very deep thinker and a hard worker. This deep thinking has helped me to achieve high goals academically, which got me admitted into the highly competitive M.E.T. program four years ago (after my mom convinced me to apply!). But it also had a downside: I couldn’t stop fixating on my thoughts.
Since starting therapy, I’ve become a convert. Not only have I found it incredibly helpful to have someone who helps me work through my problems—the sessions also opened up a new way of thinking for me. My ability to deal with problems in a constructive way has increased tremendously. I started to look at the world differently. I think of therapy like the gym. If you want to train your body, go to the gym. But if you want to train your mind, go to therapy.
“One of the greatest lessons I have learned in therapy, and at Berkeley, is the great power of vulnerability.”
One of the greatest lessons I have learned in therapy, and at Berkeley, is the great power of vulnerability. In being truly vulnerable and speaking my truth, I believe that I brought the people into my life who were meant to be there. I attracted the right circle of friends and pushed out the people who weren’t supposed to be there. It was only when I began being true to myself that I was able to create that community. I found true friends, and I accomplished more than I ever could have imagined.
Some of those accomplishments included being the first-ever Black person in my consulting club—a club that now has seven Black members. I recruited members by engaging with the the Afro Floor (short for the African American Theme Program, a community at Cal that enables students to exist in Black spaces, where they can learn from Black/African theorists, scholars, and organizers), and Black Wednesday, spaces that consulting clubs typically don’t enter because their members don’t come from these communities.
One of my close friends, UC Berkeley student Marcus Aina, and I also founded HUBBA’s first consulting fellowship for Black students on campus, which provides access to previously unavailable skills and resources to help them apply and make it into competitive consulting or professional clubs.
Lastly, therapy helped me redefine how I view success. Success goes far beyond career, money, or any particular job.
I believe that my success is defined by who I am, not where I will work after I graduate (though I am thrilled to be heading to Google). My beliefs are more aligned now with one of my favorite Japanese manga shows Jujutsu Kaisen. ‘Are you the strongest because you’re Satoru Gojo? Or Are you Satoru Gojo because you’re the strongest?
he asked. To me, that means you are not defined by the job or accolade you get; you are defined by the person you are to get it. Being the best version of yourself brings the achievements. You are not your best version because of what you achieved.
I believe everyone should get a therapist. I have helped people at UC Berkeley, friends, and even family connect with therapists. It can be difficult to take that first step, to make the phone call to your doctor and talk about your needs. But as someone who has been in therapy for the last 10 months, I couldn’t be more happy with how much I have grown.
Reflecting on my time at UC Berkeley, true success is measured by the positive impact you have on others and the world as a whole. My time at Berkeley was not successful because of a job I got. It was successful because of the people I was able to impact along the way.
The poet Rumi once said, ‘You are not a drop in the ocean. You are the entire ocean in a drop.’ To that, I say that when you impact a person’s life, you are not impacting a single drop. You are impacting an entire ocean.
Professors Jennifer Chatman (left) and Sameer Srivastava (center), co-directors of the Berkeley Center for Workplace Culture & Innovation, interview Stripe CEO Patrick Collison.
Patrick Collison and his brother John conceived of financial services company Stripe as something that they thought should already exist.
On the way back from a UC Berkeley-hosted startup event in 2009, John, who is president of the company, suggested that they turn their idea for an “easy way to move money online” into a reality by creating their first prototype. Now, Stripe is used by millions of businesses across almost 50 countries, from startups to global enterprises like Ford and Amazon, having reached a $1 trillion in total payment volume.
Co-founder and CEO Patrick Collison shared his journey founding Stripe and the company’s mission to “grow the GDP of the internet” at a recent Dean’s Speaker Series, co-hosted by the Berkeley Center for Workplace Culture and Innovation. Professors Jennifer Chatman and Sameer Srivastava interviewed Collison in a fireside chat format.
Born and raised in rural Ireland, Collison grew up without a consistent internet connection, only reading about it in books. At age 13, he made his first pitch to his parents for satellite internet. It was from here that he discovered programming, planting the first seeds for one of the most successful software-as-a-service companies today.
But the journey from startup to Fortune and Global 500 wasn’t always smooth. Between difficulty finding growth to feeling like he was misallocating time, Collison reflected that the first few years were a time of trial and error. He noted, however, that if the idea and the market are good, startups can actually be fairly resilient as management learns along the way.
“I think it’s much better to be right than to be consistent. And I think somehow getting yourself into the psychological frame where that’s OK, and you can swiftly recognize, ‘well, I tried this, it’s really not working, let’s do something else,’” Collison said. “As long as you get into that mindset, I think a lot of the actual errors themselves are recoverable.”
With the success of the company dependent on handling people’s money, Collison likewise stressed the importance of ensuring a meticulous and diligent atmosphere at Stripe.
“There’s this culture at Stripe of just really prizing the small details. And we talk a lot about craftsmanship and rigor and abstractions that can endure over decades and sort of really getting those right. So I would say precision is pretty deeply embedded,” he said.
Stripe is also known for its early adoption of a writing-oriented culture. An avid reader and self-described “misanthropic introvert,” Collison said this came about partially as an accident. But he likewise reflected on its benefits, citing written work as valuable for its ability to be reflected and improved upon.
In 2020, the company launched Stripe Climate, which allows users to direct a portion of their revenue toward scaling carbon removal technologies, leading to the implementation of the second-ever large-scale advanced market commitment (AMC) for carbon removal.
The company’s mission to do good hasn’t stopped there. Believing access to the internet is crucial for global development, Collison stressed the role Stripe has on aglobal scale. Citing his own experience witnessing the rapid expansion of Ireland’s economy, he stressed the “moral importance” of economic growth for parts of the world that have been left behind. .
“I think the internet is one of the most important technologies ever created with respect to the enablement of global development,” he said. “Stripe’s mission is to grow the GDP of the internet.”
Read the full transcript
– Good afternoon. It doesn’t seem like it’s on. Is it good? Good afternoon. Welcome to our Dean’s Speaker Series, co-hosted by the Berkeley Center for Workplace Culture and Innovation. My name is Jenny Chapman. I’m the associate dean here at Haas. Dean Harrison is actually traveling on school business, kind of around the world right now. She apologizes that she can’t be here, but we are here, and I’m so absolutely thrilled to introduce our guest today, Patrick Collison. Patrick has been an entrepreneur, I’m guessing since the day you were born. He created iPhone apps with his brother John and his teams, founding Auctomatic while at MIT, and co-founding his biggest venture Stripe, which we’re going to talk a lot about. Stripe was born when Patrick and John looked for a payment platform but couldn’t find all of the features they thought would be important. And Stripe debuted in 2010 and grew exponentially because the product is really simple for businesses to implement. Of course, the back end is anything but simple, but it’s easy on the front end for customers. Through Patrick’s leadership, Stripe has reached, listen to this, $1 trillion in total payment volume. So it’s really becoming a dominant methodology. And today—
– You can’t assume the causality, though, there. You can’t say, like, because of my leadership. It could be despite my leadership.
– I’m sure that that’s correct, but we will talk about the attribution, I’m sure. You will deflect it, and we will heap it on. So today, millions of businesses, from hypergrowth startups to global enterprises like Ford and Amazon, use Stripe to accept payments and payouts, manage complex business online. Patrick, we were back in our green room here, and Patrick was telling us about his biomedical research foundation, the Arc Institute, that he co-founded in 2021. Fascinating, fascinating work. Through the Arc Institute, Patrick and his co-founders are pioneering new model research in partnership with Stanford, UC San Francisco, and UC Berkeley, and hopes to enable passionate biomedical investigations to study and address complex diseases, which gives us all great comfort to know that brilliant minds are researching some of the most difficult health challenges that we face. So Patrick, we’re incredibly grateful to have you here today, to impart your learnings on our student body.
– No, thanks for having me. And it’s a particular honor to be here because the first time I tried to come here, you guys rejected me. So it’s… No, look, I might have rejected me as well.
– So did you land at your safety school, MIT?
– My first ever trip to America was to the Bay Area to… And I visited Stanford and Berkeley, and those are my first, literally, kind of two experiences of the U.S., and I just assumed all of the U.S. is like this. And so then, I, yes, decided to apply to college here, but I couldn’t get further than the East Coast.
– Oh my gosh. Well, that was a miss on our part. I can’t say it would be the first or last one, but… Anyway, let me do two more housekeeping things, and then, we can properly welcome you. The first housekeeping issue is: You notice that you have note cards on your chairs, and a pencil. And it’s not for keeping your golf score. But please, if you have questions, please note them on the card. We have collectors, Sarah and Audrey, who will be collecting them throughout the session and bringing them up here. And at around 1:15, 1:10/1:15, we’re going to start answering questions from the audience. So please, be sure to capture those questions. And second, I want to introduce my colleague, Sameer Srivastava, my partner in crime. We are the co-founders of the Berkeley Center for Workplace Culture and Innovation. And many of you probably have had Sameer for the power and politics class. So Sameer, welcome too. So let’s give now a proper welcome to Patrick if we might. Thank you so much for coming up. So let’s start with a kind of softball question, which is, if you could walk us through your kind of career progression, I think it would be of great interest to our students.
– Oh gosh. Alright, well you already heard an important detail in this, but, so I grew up in very rural Ireland, and our house was kind of far from the phone exchange, so it’s more detailed maybe than the career than you want, but you can push fast-forward at any any point. But just the relevant kind of consequence of that was, we couldn’t really get a proper internet connection. And so, I first learned about the internet by reading books and borrowed from the library, and to think, “Wow, this internet thing sounds great.” And there was no TikTok or anything. And then, actually, the first pitch I ever wrote was to my parents when I was 13, trying to convince them to get this kind of pre-Starlink satellite internet connection from Germany, and very, very graciously, and I don’t know, forbearing exceeded, and we got it, and it was 100 euros a month or something, which was a big deal. So once we got that, then, I discovered programming, and kind of fell down that rabbit hole. And then, when I went to MIT, and maybe you guys have had kind of versions of this experience, but I considered myself pretty good at math and physics and sort of science and things like that when I was in high school. And so, MIT had three different intro kind of freshman physics classes. And I thought, with great ambition and virtue, that like I’d go take the hard one, and I did, and it was hard. And they had this kind of particular midterm, and that, I guess they use this kind of weed out, I don’t know, the something… And I remember the average score on that midterm was like, a 43 or something. And I was feeling, initially, I don’t know, well kind of mixed feelings, but somewhat proud I’d scored like a 70 or something like that. And then, I saw that this… I don’t know if this is good for one’s psychological well-being, and maybe now this policy has been reconsidered in the intervening years, but at the time, they published everyone’s score publicly. And then, I saw that this guy, Yufei Zhao, had gotten like a 97. And that was like a big moment in my life where, to be clear, I’ve never interacted with Yufei Zhao, I don’t think he’s heard of me.
– But you certainly remember his name, don’t you?
– He is large in my life. And I thought, well, “If Yufei Zhao exists and can be so spectacularly better than me at physics, well, maybe I shouldn’t become a physicist. Comparative advantage, Ricardo, the whole thing. So I did some soul-searching, and by the way, I looked him up, and he’s done very well now in math and physics. So, I think we… And he now trains MIT Putnam team, and they’re doing… Anyway, so he found his thing.
– He didn’t found Stripe.
– Well, look, I think he’s not doing… I think Yufei Zhao has self-actualized with tremendous effectiveness.
– You both have.
– But anyways, so… But I done all this programming in high school, and so… And then, right around the time of that midterm, this was fall of 2009. Sorry, fall of 2006, excuse me. Reddit was purchased by Conde Nast for I think $12 million. And I knew the Reddit guys a little bit because YC started out in Cambridge, and they were based there in Cambridge, and they were just like normal people, or so I thought, and the idea that they’d just sold like a website, like anyone can make a website, for $12 million, just there, was a big kind of shift in my perspective. And so, I thought, “Well, not cut out to be a physicist, maybe this startup thing could be interesting.” And I really liked programming. And so, my brother and I, we decided to start a company. It did OK. It was acquired for a reasonably small amount. Went back to school. And something we learned over the course of that first company was… Cloud computing was just starting back then. I think EC2 launched in ’07, maybe ’08. And it was now getting incredibly easy to just launch a website, and you could do that in an afternoon. You didn’t have to call someone up and rent a server. But whenever you wanted to move money, it was kind of jumping back in time a century. You’d go to a bank and fill out paperwork, and the forms were in Latin—or so it felt. And so, it was just this kind of weird dichotomy, where certain aspects of setting up a business were becoming kind of so streamlined. And then other parts were, yeah, were so… There was such a high activation energy barrier and kind of so much inhibition, and we thought something like Stripe must exist, and we were Googling for it. Like, there must be, like… How could there not be an easy way to move money online? Like, it’s not an obscure need. But we eventually concluded there wasn’t. And so, we’re walking back from dinner, not that far from here, a restaurant in San Francisco, and John turned to me… We’d come out here, actually we come out here for a startup event at Berkeley. You guys hosted YC startup school in 2009. And we were feeling very inspired. And so, after dinner, John, we’re walking back, John said to me, “Well, we should just build a prototype of this Stripe thing. You know, it can’t be that hard.” Here we are.
– Wow, that’s great.
– Great, so we wanted to ask you also about the early days of Stripe, ’cause every startup faces challenges and hurdles. So, could you describe for us, like, one big challenge or hurdle that you encountered in the early days of Stripe, and how you overcame it?
– Well, I had breakfast this morning with another startup founder, and we were kind of reminiscing about or discussing the fact that people will sometimes ask us now, I mean, she’s been working on our company for, I don’t know, five or six years now. And people will sometimes ask, like, “Is it still fun?” And we were kind of making fun of this question because the early stages of the company are never fun. And so, is it still fun? Like, which period was fun here? So, look, the early days of Stripe, like, in hindsight, it’s now, like many maybe intense experiences in life, you look back on them with some kind of fondness, but when you’re living them, I mean, you don’t know the outcome. I mean, they’re just stressful. I remember very vividly just how intent, intently, and intensively we worked. And I don’t know if we kind of had to, but we felt like we had to, and we did. Like, we started out down in Palo Alto, and we hired this guy who lived in San Francisco, and he ended up deciding to move from San Francisco to Palo Alto because the last Caltrain left Palo Alto to go north at 11 p.m., and he felt guilty leaving the office early every evening. And that’s, like, again, maybe that was… We were kind of misallocating our time or something, but just as a descriptive matter, that’s how it played out. And then, of course, there are all sorts of undulations and tribulations. Like, I remember our first serious outage very vividly where people are using Stripe to move money, and if Stripe is down, their business is down. So we felt this very intense responsibility, and a rack blew up at a data center, and Stripe therefore was unavailable. And we had a kind of… We didn’t have proper redundancy at the time. And I was paged at 2 a.m., and very unusually I’d left… I mean, Stripe was five people at the time, and very unusually, I’d left my laptop at the office, so I had to get on my bike, pedal to the office, start trying to fix things. It took six hours. Eventually, 8 a.m., 10 a.m., it’s back online. I remember feeling so horrifically dejected because I realized, as Stripe recovered, that we hadn’t received a single complaint. Nobody had even noticed. Stripe was that inconsequential in the world. And then, of course, subsequent to that, we had production issues that were… In fact, there was no shortage of complaints. And you’re taught to be kind of careful what you wish for. But I would say overall that… And by the way, I think this is not… I don’t think Stripe was in any way an unusual experience here. Like, I don’t think it’s in any way unusual where the experience of the first five years were… It was fulfilling, but, yeah, it was just like difficult AF. And I remember Jensen recently saying publicly, Jensen Huang from NVIDIA, that, if he’d known what starting NVIDIA would be like, even knowing the outcome today, the hottest company in the world, whatever, that if he’d known in the beginning what it would actually take, that he wouldn’t have started it. And I think, even when you condition on success, you get sort of a surprising number of responses like that.
– So we’ve been—
– I’m sorry, I’m really encouraging you guys to start a company. It’s great. Such a motivational fireside chat here. But look, actually, OK, if I knew what it would take, I would still start Stripe. There.
– You’ve heard it here first.
– Maybe NVIDIA was just harder or something, and I’m just a wimp, but…
– Yeah. Maybe he was having a bad day. So we’ve been really intentional here at the Haas School at creating a deliberate culture, which our students know well. We have four defining leader principles. One of my favorites is confidence without attitude, which is why I think our students are so open to learning and not overconfident. But I’m wondering about your intentionality in designing the culture at Stripe, and what you did initially, how you’ve scaled the company. I think now you have something like 7,000 employees. What looks different now? How is the culture doing? How are you thinking about it? We would be super interested to know.
– Well, just, you mentioned kind of the culture, the values here. And actually, we did notice pretty early on, and I won’t mention kind of any other schools, but just, we noticed that Berkeley students were more humble. And that was something that… But gee, you can’t let that go to your heads. It’d be self-defeating. So you can’t be proud of that. But yeah, I don’t know if it’s the Irish thing or something, but somehow… I mean, Ireland has kind of a hypertrophic pernicious version, I think, of humility, where we start to get resentful of anything that’s successful. Like U2 or any other tremendous Irish export, we take a very dim view of those things. But anyway, so we, early on… I don’t know. Well, partly because we knew that Stripe, even if it worked, would take a long time, just ’cause it’s an infrastructure business. With Snapchat or TikTok or something, everyone can just kind of decide overnight, we’re going to adopt it, it’s going to become super popular, within two years it’s an overnight success, whatever. If you look at the internet, or if you look at… Take a company like Amazon, kind of companies that are operating more at the sort of infrastructure level. Like Amazon, within its first couple of years, was not growing 100% year over year or something like that. Amazon, within four years, was growing at about 30 points a year. And what’s remarkable about Amazon is just the durability with which they’ve sustained that growth, but the kind of the rate itself is not particularly noteworthy. And similarly, if you take the internet, the internet has grown at a compounded rate of around 30% to 40% year over year. But in no year after the first two, I think, did the internet double year over year. Again, it was just this remarkably sustained growth over the course of, now, more than four decades. And so, anyway, we kind of knew that Stripe would… Again, even if it was going to work, would probably have roughly that kind of character. And so, yeah, we wanted to figure out a sort of a cultural orientation that we thought would kind of befit that, and that that requires recognizing that we’re not here to build cars, we’re here to build roads, and it’s the kind of personality not of someone who wants to build some hyper-successful app, but the kind of person who would like to build a TCP stack. And that’s not everyone, and that’s fine. We need cars for the roads. And so, there’s kind of a diversity of different skills required. And again, it is very hard to separate that which is adapted for Stripe and that which is just kind of personal preference or something. But because Stripe’s domain is really complicated, and where the details really matter. Like, if we make a mistake, just one mistake, there’s a very good chance that that’s, like somebody’s paycheck is wrong or something. It’s even in a single instance… There’s this, I think, a culture at Stripe of just really prizing the small details. And we talk a lot about craftsmanship and rigor and abstractions that can endure over decades and sort of really getting those right. So I would say precision is pretty deeply embedded.
– So could you talk a little bit about your own leadership journey during that process? It’s one thing to be the leader of a small startup, another to be running an organization of the size and scale that Stripe is now. And thinking, in particular, about this idea of rigor or precision, how do you really try to embody that and reinforce it through your own leadership?
– Well, the good news about startups is, as far as I can tell, if the initial idea is good, and if kind of the market’s good, like, kind of those core characteristics, and if you’re willing to recognize your mistakes, the startups… So startups I think are actually quite resilient, and they can endure a lot of managerial malfeasance as you learn along the way. And I definitely didn’t come to Stripe with any kind of enlightened leadership expertise or sort of genetic muscle memory or something. Like, Stripe didn’t have any managers until we were 70 or 80 people. And that’s not a best practice. If we were doing it all again, I would definitely kind of invert colors on that one. And also, there’s lots of other things that I think in hindsight were ill-advised and mildly unhelpful but empirically survivable. And so, I think at a meta level, the question is, yeah, much more sort of the rate of adaptation, the rate of learning. And John and I, we’re… Stripe conducted layoffs in 2022, where… During the pandemic. I just said a moment ago that the internet, Amazon, whatever, didn’t grow that quickly. During the pandemic, it was such a crazy time that even though, again, Stripe broadly has that character, we roughly doubled in 2020 and 2021. And so, kind of our forecast, how big we would be and what we would need to sustain the service and everything got pretty out of whack. And so, in 2022, we were trying to kind of rectify this, obviously acknowledging a misprediction on our part and significant mistake. And John and I had this conversation, where we decided, imagine that we’re sort of marauding private equity raiders who’ve just purchased Stripe, and we’re horrified at the decisions the prior management has made. And the want and errors and mistakes and sort of grievous instances of mismanagement that have been committed. And somehow, I think it’s much better to be right than to be consistent. And I think somehow getting yourself into the psychological frame where that’s OK, and you can swiftly recognize, well, I tried this, it’s really not working, let’s do something else. I think, as long as you get into that mindset, I think a lot of the actual errors themselves are recoverable.
– Yeah. Better to be right. We agree with that. So…
– But it sounds like a… It’s easy to say. I think a lot of people, and to be clear, even myself, like, I think we all feel surprisingly strong kind of psychological pull to kind of intertemporal internal consistency.
– Well, there are huge biases. Actually, one of the deep experts in what’s called the escalation of commitment cycle, Barry Staw, was a professor here for many years, and it’s a very, very treacherous bias. That consistency, people really worry about having an external image of consistency, and even maintaining consistency internally, because in some ways consistency describes the essence of who you are.
– Yeah, and look, I mean, presumably there is some set of things about which one ought to be consistent, right? And so, it’s maybe wrong to toss consistency overboard wholesale.
– Right.
– But tying your self-conception and identity to specific management practices seems like maybe over-constraining the action space.
– Yeah. Well, I mean, the countervailing force is an experimental mindset, right? Where you’re actually discarding ideas that aren’t working because they’re not working.
– Yeah. And again, maybe the fact that we kind of came from the middle of nowhere in Ireland, like, it was… One thing that is, I think, helpful, a lot of different cultures around the world have kind of some self-conception of grandeur, right? The French people, English people, say Americans, one could occasionally accuse them of that.
– What?
– One thing that’s great about Ireland is, we never have delusions of grandeur. And Ireland never thought of itself as, like, the best country in the world by objective criteria. And very fond of it, to be clear. And so, anyway, it wasn’t that hard for us to think, “Well, we know nothing about this domain, and we should assume that 70% of the things we try will turn out, ex post factor, would be mistakes.”
– Yeah. Yeah, yeah. Well, an interesting issue. So switching topics a little bit, there’s a lot of discussion about… Well, we used to think about hiring people for culture fit. In fact, my dissertation was on culture fit and understanding all about culture fit. And in addition to finding people who can do the job, you want to find people who resonate with the culture that you’ve created. But people are now talking about culture add, and ensuring that you’re not just fueling a kind of homogeneous mindset in an organization. And so, I’m just interested to find out where Stripe is on this balance.
– Well, I think this question’s really interesting at the meta level, where, “How do we have more variegated and kind of heterogeneous cultures across an industry and across a society around the world so that people can find the place where, yeah, that that place is me, right?” And actually, one of the things that I really like about the internet… Like, Stripe’s mission is to increase the GDP of the internet. There’s sort of a fundamental question of like, “Why should you be excited about that?” Like, kind of, who cares? And I think part of it is, that enables increased access to goods generally, where, for most people in most parts of the world, it’s pretty difficult for them to benefit from the set of goods and services that, say, we here in the Bay Area might be able to purchase. And again, growing up in Ireland, there were so many magazines or newspapers or whatever we would get, and there’d be little fine print, “Offer not applicable in the Republic of Ireland,” where it was printed for the U.K., but they hadn’t figured out the shipping mechanics for Ireland or something. So something I think about the, just about this, kind of this global extension, global access. But maybe a second order aspect of the internet that personally appeals a great deal to me is, I think we want a… I think a richer society, not in the kind of pecuniary financial sense, but in kind of a… In the second sense of the word, is one where there’s a greater array and more complexity of goods and services, and that variety is in more abundance. And if you can aggregate more demand via the internet, well, then it can make sense to serve some very narrow niches, right? And part of what I love about Stripe is, I’ll stumble upon so many businesses where I think, wow, like, I would never have thought that that could even be a business, right? You know, people, a marketplace for sort of user designed and user-created action figures, right? Or CRM for Boy Scout troops. And these things would never make sense if you just had a village or you just had a town. It only makes sense where you can aggregate sort of the entirety of the internet’s demand. So anyway, I think that this also, with respect to cultures and if one can only work in one of 10 businesses, well, they’ll probably all… Like, by necessity, they’ll probably all have something approximating the same kind of culture just by virtue… Like, there can’t be that much self-selection going on if there’s only 10 places. And I love finding organizations with just very unusual and places where the central limit theorem doesn’t apply. And I visited the folks at Jane Street not that long ago, and I really think Jane Street would not be for most people. I mean, it probably wouldn’t be for me, but like, for the people at Jane Street, it seems awesome, and they stay there so long. Right? And my wife’s a scientist, and as you get a sense for the cultures of different departments at a university, or even across universities, you realize, well, some of these have very unusual cultures. And again, probably not even for most scientists in that area, but right for a little group of people who can affiliate. So anyway, just to your kind of point about culture add, I think figuring out mechanisms by which we can enable more of that structural diversity kind of across the board. I think that’s really helpful.
– So turning to unique cultures, I want to come back to Stripe. And one of the cultural tenets that you have talked about as being, “Continually paranoid at the prospect that we might be forgetting something important.” So I’m wondering if you could give us an example of that tenant in practice, but also, how do you keep it from going too far, from being too paranoid?
– Can you be too paranoid? What do you think? Well, if one can be too paranoid, then we might have to reconsider some things. So… The thing that makes me so paranoid, and maybe this is kind of more idiosyncratic to Stripe, is again, just the… Like, we handle around $1 trillion a year, that works out to around 1% of global GDP. And again, there’s just kind of basic point that, if Stripe is unavailable, that’s a lot of people and a lot of businesses and a lot of activity that isn’t happening. And during the pandemic, DoorDash, Instacart, Zoom, and Amazon, and so many of what kind of felt like load-bearing pillars of society, they were handling their transactions with Stripe. And so, we feel this extremely… I don’t know, solemn kind of custodial responsibility to be able to provide uninterrupted service to them, the way that they ought to expect. And so, it’s less a competitive paranoia, and more paranoia that we’ll screw something up with respect to our obligations to them. And again, I don’t know if you could take that too seriously, but for us, it’s very weighty.
– So I have a question. I used to teach a case about John Reed, who decades ago was the CEO of Citigroup, and he was one of the first to use a kind of metaphor of the back office being like a factory. You use a metaphor of front office, back office, in finance being more like a bicycle, which I find appealing. I’m a cyclist. So what does that actually mean, and how does that influence how you make decisions and how roles are thought about within Stripe?
– Well, I’ve forgotten I said that, so thank you for… It’s a good metaphor. But… The thing we spend a lot of time thinking about is necessarily in organizations you… Or maybe necessarily is a strong word, but the bureaucracies haven’t worked that well. So it appears necessary with current organizational practices to have some kind of a hierarchy. And I don’t have a better idea. So let’s just kind of take that as a premise. That necessarily involves some logarithmic game of Chinese whispers and information loss sort of through transmission. And so, the picture that the people making the most important decisions may have, might be meaningfully divergent from that which is actually true. And so, the thing I’m always wondering about is, just, “How do I know what’s actually true?” And not just how do I know, but how do leaders generally across Stripe know what’s actually true? And so, we built our own internal project management software. And it’s less because we want to be able to kind of customize the animations. It’s more that we want, like… Because it is so important that we know what reality is saying that, we want to be able to kind of figure out the optimal way of surfacing that context. And I mean, it’s true to some extent in every organization, but I think it’s especially true in knowledge work and in the creation of… Like, software is an interesting thing, where there’s mining, where maybe there’s just some kind of linear elasticity between the number of people extracting the rock from the ground and how much rock is produced in the economic value, whatever. It’s very kind of tailor-en. And then, you have movie making or novel writing, where, if you’re a publishing house, you can’t just kind of measure your likely prospective success on the basis of just number of writers, right? Like, it’s so sensitive to the specific efficacy of every individual person. I think creating software is sort of, in an interesting way, halfway between mining and novel writing, where look, there is just… There is some scaling in the amount of work and one person could not build all of Facebook, or choose your service, but it’s definitely not linear. And for us at Stripe, even though decisions have to get made, the work is not being done by the decision-makers. The software engineers and the designers and everybody involved in… The partnerships people, whatever. In the creation of the product, they’re our authors. They’re the people actually creating Stripe, and everyone else is in some sense playing a supporting role. And so, I think it’s important to have that kind of inverted mental model in mind. And it’s not sort of a feel good thing, it’s just, it’s a deep truth. Like, I don’t know how many support staff work behind J.K. Rowling to enable the books to get published. But J.K. Rowling is the one doing the writing.
– Yeah, right.
– So I’m going to turn to another facet of the culture at Stripe, which has to do—
– Can we talk about J.K. Rowling, or is she canceled? Alright, OK.
– Not yet.
– We’ll let it slide this time. So—
– We’re at a business school.
– Yes, exactly. So the other facet of the Stripe culture I want to talk about is the writing dimension. And, of course, it’s becoming more pervasive now, but my sense is you were one of the early adopters of a writing culture. So tell us a little bit about where that comes from, and then, how you reinforce it.
– It’s kind of funny. I know what you mean. It’s kind of funny to consider oneself an early adopter of writing culture for true to form tablets. What do I say? Well, partly I think it comes from… We were just kind of misanthropic introverts in the beginning and we, even when there’s only four or five of us working on Stripe, we would just communicate a lot in written form because it’s kind of less oppressive than having to talk to each other. So part of it was just that kind of predisposition of early people. And to be fair, if I must include myself. Like, John, my co-founder is much more extroverted and charming, and usually, he’s kind of… It’s rare that I’m wheeled out for public engagements.
– He’s the front man.
– You can see why. So if John didn’t exist, it’s unclear whether Stripe would have any customers. But I do like writing, and I like reading. I think it’s like a… I found very… Bruno Latour has this piece about… And he overcomplicates it because you have to for that kind of work. But he has this piece about kind of immutable, I guess, mobiles since he’s French. And he kind of makes this point that the printing press is maybe correctly associated with the advent of the scientific revolution. But maybe the sort of simplistic sense, in which we might perceive the causality there as, “OK, we have the printing press, we can distribute more stuff, and now just people have more information, whatever.” They come to more insight. He makes the point that before the printing press, manuscripts were necessarily copied by hand. And in the act of copying by hand, obviously there’s the prospect of the introduction of error. And so that means, when you kind of encounter or confront some observation where there’s a disparity between that claimed by the work or by the theory or whatever, and what is it you see, you can’t really tell. Is it because the theory is wrong, or is it because there was some boring mistake made along the way, right? And it’s kind of when knowledge became more rigid that it became easier to break in a way that is conducive to the rejection of false theories and inadequate explanations. I found that very thought-provoking. And I think there is something to that. And obviously, this also gets the difference between oral cultures and literary cultures, where, I guess back to this idea of assuming that 70% of what we believe is wrong, if we don’t write it down, it’s going to be harder to remember what specifically we thought and what specifically we believed because our minds will play subtle tricks on us. And so, I think part of the value in writing things down is, our past selves look stupider. And that’s actually very adaptive because we’re like, “Oh wait, we had these beliefs, and just, clearly these two are not true.” And I think, yeah, that robustness through time makes it easier to find our flaws.
– I was going to say, as a sociologist at a business school, I’ve talked to lots of CEOs. This is the first time someone has brought up Bruno Latour in a response to a question. So very impressive.
– Yeah. I’m going to skip around here ’cause we want to get to the audience questions. So actually, Sameer and I have a podcast because, like, who doesn’t? And our second episode just dropped today, and it’s about… CEOs have been, lots of managers have been asking us about work schedules and remote work and hybrid work and what’s working. So since we don’t know the answer, we’re going to ask you. So I understand that Stripe’s remote workforce increased from about 20% pre-Covid to almost 40% now. Is that about right? Yeah. So I mean, how has this influenced the company? What differences do you notice? Is it what you’re expecting for the long term?
– Well, I think the right answer is probably quite scale dependent and like, with Stripe now being 7,000 or 8,000 people, we can’t all fit in the same room regardless, no matter how draconian our in-office policy, right? And furthermore, we serve businesses and employ people all around the world. And so, we’re necessarily somewhat remote in that sense. Like, there is no universe in which we’re not having lots of Zoom meetings, just because of the globally distributed nature. And then, so the question is more something around the exact nature of the interactions we want people to have in the course of their day, but not, again, whether they’re conducting a lot of work that is distant from their colleagues. And so, I think for a large organization for whom that’s the case, there are considerable benefits to in-person work, just for boring reasons… I mean, everyone, this becomes such a religious debate, but I think there’s… A bunch of the kind of precepts are, I think, fairly uncontroversial. Like, there are some people who are really effective and really enjoy working in their cave. I think I would probably be one of those people, and sadly, I’m not in a role where that makes sense. But some people are, and that’s great. Other people, they get really bored, and they go, they get cabin fever, and they really want to be around other people. And just like, those people exist as well. And society probably has some mechanism for the provision of employment for both categories. It’s probably a significant efficiency gain to have more options for the kind of, the cave dwellers, the people who just want to sort of sit in the room and do the work by themselves. Again, like me. And then I think there… You have to think about it kind of longitudinally, where there’s a question of skill and culture and knowledge transmission. And so, I think some of the analyses that look at kind of short-term efficacy, they… I mean, that’s interesting, but I think you have to take… Ideally, you have to take a kind of a full life cycle view. And I think that sort of the cohorted change over a workforce. And Berkeley has a pretty strong culture, as I understand it. And they’re like, if Berkeley went remote, maybe Berkeley would be fine like next week or next month. But the idea of like four, 20 generations of Berkeley students being remote, I have to think that culture would at least be different, right? So yeah, I think all those considerations apply, but maybe relevantly for this room, I don’t know, I do notice that the 10-person, the 20-person, the 50-person companies, for whom being in room together is an option, the ones that exercise that option really seem to do better. And I think we all even intuitively kind of know it, where… I often ask parents, like, if your kid was considering two different jobs, one is kind of fully in person, resolutely five days a week, and one is kind of loosey goosey or fully remote or something, which, with your kid’s best interest in mind, which would you advise them to take? And no parent that I’ve asked has ever hesitated in answering that question.
– That’s right. OK, so, yeah.
– So I have the honor of doing the audience questions as well as my own. So—
– Austin, you want to introduce yourself?
– Sure, yeah. So I’m Austin Schoff, I’m a second-year MBA, I’m also a member of the Dean’s Speaker Series board. I think the first question we want to start with is the future of money movement. What do you think will happen? Will it be more real-time payments? Will it be more crypto type transactions? Will it still be T+2, and we’ll be stuck using Swift for eternity? What do you think is the future of money transactions and money movement?
– I think the short answer to your question, like, to each specific sub-question you asked, I think the answer to each one is yes, except maybe the T+2. But so, first off, the U.S. is actually one of the places in which payments are changing the slowest, where across most other… Not most. Many other major markets around the world, there’s been enormous changes over the last 10 years or so. So obviously, UPI in India. Everyone knows WePay and Alipay in China. But those are kind of famous ones. But like, Pix was launched in Brazil in 2020, and within two years, the majority of the Brazilian adult population was a weekly active user on Pix. It’s kind of UPI for Brazil. There’s Swish and TWINT in Sweden and Switzerland, respectively. And a whole host of schemes like this across in… Malaysia has its own. Japan is now finally starting to change pretty rapidly. So it’s happening, is the short answer. The Ron Paul GIF. And then, crypto, I think that… I mean, there’s kind of a fundamental question for crypto, like, these different lenses of analysis of store of value or some kind of risk hedge or kind of are talking like a means of exchange. But as a means of exchange, I think you should probably further disaggregate between stable coins and like, crypto crypto. I think the stable coin thing is happening, and the absolute numbers are sold reasonably small, but not that small. I think the outstanding tether volume is now, like, in the order of a $100 billion or so, like, it’s not nothing. And then, given the existence of stable coins, it’s not totally clear to me why you would ever use Bitcoin or some other kind of less convenient currency for a medium exchange. And Swift will still be a useful technology for interbank settlement, as it was initially designed. Or forfeiture was initially designed. And T+2, it’ll probably shrink, but you do have to… I mean it’s interesting to look at with FedNow in the U.S., this kind of new real-time payment scheme in the U.S. that has only kind of partially rolled out support, but we’re already starting to see that having instantaneous transactions… What about scams? What about fraud? What kind of oversight is possible? So it’s not a totally free lunch. And Bitcoin, of course, acolytes not unjustly, because for certain use cases this is important, but they often celebrate the fact that transactions are instant and irreversible. We also see some of the downsides of that with respect to other activities. But it’s all happening.
– Next question I want to hit on, how do you deliver constructive feedback while maintaining trust, especially given that a mistake in your organization could be the loss of a couple billion dollars depending on scale?
– I think people really want to… I think they really want to know what is… What is their interlocutor’s authentic view of them? And I think loss of trust doesn’t come from constructive feedback but comes from a divergence between what’s true and what you’re saying is true. And so, I would almost kind of invert it where it’s like, well, if you’ve constructive feedback and you’re not telling them, I think you’re really undermining trust. And, look, this is… I don’t know if it’s possible to teach giving good feedback. I haven’t heard of it being taught well anywhere. Maybe it is, I’m not saying it’s not. But I think it would be a very valuable skill to teach if, in fact, it can be taught well, and some of the people at Stripe… There’s, in fact, I think, even a causal relationship, a causal positive relationship, where the people at Stripe with whom I feel the greatest trust are, to a significant extent, those who give me the most critical feedback. And maybe just even kind of knowing… Like, maybe that fact should just be like on a billboard. Not about me, but just that these things, in fact, can go together.
– Could you talk a little bit about Stripe Climate and how we should think about your commitment to carbon removal as part of Stripe’s long-term goals?
– Yeah, so… If you look at the IPCC forecasts of what’s going to happen to the Earth’s climate over the course of the 21st century, basically, we’re going to significantly overshoot any reasonable target. Two, two and a half degrees, whatever. Unless we remove a significant amount of CO2 from the atmosphere, because the problem where, even if we fully decarbonize the economy, all the CO2 molecules, they don’t know about that. Like, they’re still there. And so, there’s this kind of overshoot and overhang, and we were looking at these IPCC reports a few years ago, and all companies are sort of announcing their sort of fancy climate whatever. And many of those are good and come from a good place, but not all of them are, and a lot of companies are pursuing kind of carbon offsets that we think are… Like, are just fundamentally kind of, almost necessarily fraudulent. Like, I think they’re fraudulent, they almost couldn’t not be, even if you were trying, where you’re kind of paying for counterfactuals and you’re like, “OK, well, I will not cut down this forest, please pay me.” But it’s like, were, are you going to cut down that forest? Like, how could anyone even know that, right? So anyway, we’re reflecting on those IPCC reports, and then kind of thinking about corporate programs in the context of climate generally. And I mean, because of this kind of precision rigor thing, we hate doing something that’s… Inauthentic is not quite the right word, but, if we say something, we want it to be literally true. And doing something kind of just for show really kind of rubs us the wrong way. So anyway, we noticed that no company in the world as of 2018 had ever purchased commercial carbon removal. So removal is totally different to offsets. Removal is like, I will give someone some money, and they’re going to have to bring back some actual CO2 molecules. But there’s this kind of, this proof of work involved, and more importantly, the molecules are no longer in the atmosphere. So no company had bought from any of these companies today. There were, or back then, there were, I think, only two companies even in operation. We thought, “Well, this will have to become a sector.” Again, the IPCC reports show you that. Like, they say we’re only not screwed if we remove a lot of CO2. And so, we thought maybe it’ll be helpful if we kind of… I mean it’s not like Stripe is Microsoft or IBM or something. Like, we’re not the most blue chip, legitimate, or legitimizing buyer you could have, but we’re something at least, and so, maybe it’d be helpful to these companies if we started to purchase from them. So we started to buy from them in 2018. Our first transaction was for $1 million of CO2. And kind of based on that, and learning more about the sector, we were very fortunate to have some really terrific people join. And they cooked up this really incredible AMC, the second-ever large-scale AMC. So AMC stands for advanced [market] commitment. And the idea is, you pre-commit to purchase something, something that doesn’t currently exist, as this was first pioneered for vaccines where there are all sorts of conditions we want to vaccinate people for, but like, the vaccines literally don’t exist. Of course, the vaccine manufacturer, the scientists or whatever, there’s market risk for them where it’s like, well, if I invent it, will anyone buy it? And so, this is a way to try to kind of bridge that gap. Worked quite successfully there. Gavi was the program. And so, we decided, “Hey, let’s do the same thing for carbon removal, where we want more of these companies to exist. We’ll pre-commit upfront to purchase $1 billion of carbon removal, at any price, from whoever will come along and sell it to us.” And so, we assembled a coalition that includes Meta, Alphabet, McKinsey, JPMorgan, a host of other companies, but Stripe committed the largest amount to it. And gosh, we’ve now, I think, purchased from on the order of 40 companies or so. And the stat that I’m proudest of is that, in most cases, we are the company’s first-ever customer. And so, we’re not like coming along to somebody who, we’re their thousandth customer, it’s already validated. Kind of, we’re through frontier, this organization kind of sticking our reputation on, “Hey, we think this technology is legitimate, we think it has promise, we’re going to contract with you today, and hopefully you can now use that contract to sell to others, and so forth.” So anyway, it’s early days. Most of the CO2 is still in the atmosphere, so it would be premature to declare any kind of victory. But some of the companies are now actually removing it, and yeah, we’ll see how it goes.
– How do you think technologies like Stripe can help businesses in developing markets, maybe even in places where internet connectivity is not as strong as it could be? What do you think the future is for the developing world?
– I think the… Well, I think the internet access problem is pretty quickly being solved, in that… Like, over Thanksgiving, I went to Brazil, and I was on a little boat on the Amazon, and I had perfect 3G reception. Across most… Like, India thanks to Reliance Jio, data is becoming super cheap in the most populous country in the world. And there’s kind of versions of this story playing out in so many places. So I don’t worry too much about the provision of internet problem. I think the… Look, I think the internet is… Is one of the most important technologies ever created with respect to the enablement of global development. And so, I was born in Ireland in 1988, and when my parents who were born in Ireland, Ireland was a kind of, was a deeply impoverished theocracy, and the Catholic Church kind of ruled with an iron fist, and we were a very kind of mercantilist socialist, closed little enclave. And there was a great deal of interest in sort of, how could Ireland be the… How could things in Ireland be working so badly? We’re right there next to England, why is Ireland so bad? And it turns out that it was bad policy. And some enlightened people like T.K. Whitaker and others, they proposed that, “hey, if we reformed and reconfigured ourselves in a kind of more free market direction, that good things could follow. And there was some propitious timing, where the EU came along, and we joined it, and American multinationals set up operations in Ireland. We benefited from that and so forth. But hey, point is, between when I was born in ’88 and when I left for college in 2006, Ireland had, I think, the fastest economic growth of any country in the world. And you can’t grow up around that and kind of fail to internalize the, like, the moral importance of economic growth. And it’s kind of avant garde, here in the U.S., the Bay Area, rich places, just sort of degrowth and the ills of capitalism, whatever. And for places that are already extraordinarily prosperous, I understand how it might be difficult to perceive the underlying imperative there. But having kind of seen some of the kind of… The longitudinal difference, it’s… And I’m sure many of you have kind of versions of this from your lives. The criticality is very apparent. And so, anyway, Stripe’s mission is to grow the GDP of the internet. And we think about this a lot with respect to those emerging markets where… There’s only one technology that we’ve ever found to enable impoverished places to become, or at least to get on the trajectory to kind of full developed world status. And that is a free market economy connected and integrated with the rest of the world. And Stripe’s obviously not going to solve that, but if we can play a very small role in enabling those transitions, we’ll feel good about that.
– Amazing.
– Fantastic. Are you done?
– We have one final question.
– OK, one final.
– Are there any founders that you strive to emulate? And then, conversely, are there any founders who give you the ick?
– We won’t tell.
– It’s not recorded or anything.
– Exactly, not being livestreamed. So… Look, it’s hard to single out individual founders. I think that, I mean, which, look, it’s kind of a bland answer, but also true. I mean, I’m kind of partial to… I mean, we culturally know a lot about the present day founders, right? I think it’s kind of interesting that the founders of kind of generations past, and like, not that many generations past, are so much less culturally conspicuous. And so, sorry, this is now going to become an infomercial, but there’s a book Stripe Press published called “The Big Score” about the semiconductor industry, primarily in Silicon Valley, in the ’70s and the ’80s. And those characters and firms like National Semiconductor, and so on, they’re kind of forgotten today. But they were incredibly impressive. Or Cypress, these sorts of businesses. And so, I found it fun to learn from them and to see kind of what’s similar, what’s different. And then, I don’t know, I really enjoy kind of founder-like personalities from non-startup domains, and just kind of, again, both the sort of the compare and the contrast. And so, a guy who really inspired me growing up was Ed Walsh, who started the University of Limerick when he was 31. And nobody… Limerick is a very small city in Ireland, and nobody at the time really thought that Limerick even deserved a university. And he couldn’t persuade anyone to kind of let Limerick have a university from Day One. And so, it was a national institute of higher education. My dad was actually in the first year of students there. But then, eventually acquired kind of full university status. But like, I don’t know, he was a 31-year-old, who before that was living in the U.S. and decided like, screw it, I think Limerick should have a university. And over the course of several decades, really realized that vision in an extraordinarily impressive way. So, I don’t, I like finding those personalities from the nontechnology domain.
– Yeah. Well, thank you Austin. Those were terrific questions. Patrick, a whirlwind of insight and things… Yeah. Citations—
– That was so disorganized that I’m having trouble even summarizing it.
– No, no, no. Well, you began with Ireland, and you ended with Ireland. I think it’s completely appropriate. We are so grateful for coming to share your thinking. We hope you will come again sometime soon. But let’s offer Patrick our deepest thanks for coming out.
– Thank you very much.
– Fantastic. And thank you all for coming. We really appreciate you attending. We hope you got a good lunch and lots of mushrooms, I think. We’ll see you again soon. Thanks everybody.
The 2024 LAUNCH Demo Day participants. Photo: Jim Block
Startup founders at UC LAUNCH Demo Day last week pitched ideas ranging from improving package delivery to crafting better athletic supplements to expediting the building permit process.
Each year, 20 startups from across the UC system are are chosen from more than 100 applicants. The chosen startups founders are paired with entrepreneurs and mentors, and led through an intense three-month Lean Startup-focused curriculum.
The program finishes with Demo Day, when teams pitch to judges for cash prizes in front of an audience. This years Demo Day judges included Noah Doyle, managing director of Javelin Venture Partners, Hina Dixit, a partner with M12, Kira Noodleman, a partner at Bee Partners, and David Bloom, a principal at the House Fund.
The top three teams that pitched on Demo Day:
First place: Doorstep AI: The startup, cofounded by Rishabh Goel, BS/BA 22, (a graduate of the concurrent Robinson Life Science, Business, and Entrepreneurship program/business program), is working to simplify the last 500 feet of package delivery/pickup—particularly deliveries to apartments and multiple tenant dwellings. Doorstep AI, which offers a visual guidance system to aid in package drop-offs, is kicking off a pilot in New York City.
Rishabh Goel, BS/BA 22, pitches startup Doorstep.ai. Photo: Jim Block
Second place: OptiGenix: The startup offers biologically tailored supplements for athletes; the two founders—Jai Williams, BS 23, a high jumper, and Gabe Abbes, BS 24, a distance runner—discovered that they were taking the same supplements, though their sports demanded different kinds of strength: Williams needed more power, while Abbes required prolonged energy. Through genetic and quarterly blood testing, the startup aims to personalize supplement packages to help athletes meet their goals.
Jai Williams, BS 23, a high jumper, and Gabe Abbes, BS 24, a distance runner, presenting at LAUNCH. Photo: Jim Block
Third place: Citmit (UC San Diego & UC Berkeley founders) Citmit is working to expedite the building permitting process by up to six months, using AI tools to evaluate/accelerate documentation checks. The San Diego based startup is initially focused on accessory dwelling units (ADUs) such as mother-in-law units and cottages, as those are the most in-demand/problematic. Driven by its AI component, Citmit operates as a user-friendly chat box.
UC Berkeley’s Graduate School of Journalism and the Haas School of Business—with support from Bloomberg News—have launched an initiative to enable journalism and business students to take classes across the two disciplines. The schools are pursuing a formal joint certificate in Business Journalism, with the goal of strengthening reporting in a field that is multifaceted, complex, and pertinent to everyday lives.
“All stories are business stories — whether you’re covering city hall, labor, the environment or education,” said Berkeley Journalism Dean Geeta Anand. “We’re teaching students how to hold power accountable and usually power lies where the money rests — in the corporations that dominate our country. We are diversifying the storytellers and giving them the tools they need to cover business responsibly, knowledgeably and robustly.”
Dean Ann E. Harrison, Anand’s counterpart at Berkeley Haas, emphasized the benefits of crossing disciplines. “In order to cover business, journalists need to understand how business operates and how money moves through the economy. And business leaders can benefit from having a deeper understanding of the media,” Harrison said. “This is a win-win for students at both schools.”
Bloomberg Senior Executive Editor Tom Giles teaches “Covering Silicon Valley.”
The Berkeley initiative kicked off with a class taught by Bloomberg Global Technology senior executive editor Tom Giles on “Covering Silicon Valley” in collaboration with Bloomberg News. The class seeks to provide a “foundation for reporting on a broad range of business topics, from IPOs and market swings to employment gains and trade flows,” emphasizing the Bay Area’s tech industry and players.
“Understanding how money is used to build businesses, create jobs, amass wealth and, too often, widen inequality has never been more urgent,” Giles said. “Our aim is to give journalists the tools they need to follow money, expose the misuse of it, and tell the story of capitalism clearly, unflinchingly and compellingly.”
Berkeley students are the first in the nation to use the just-released Bloomberg Guide to Business Journalism, which provides students and professionals with the essential tools for reporting on companies, industries, financial markets, economies, banks and government policies anywhere in the world. The book illustrates how to chronicle capitalism for different audiences — from general consumers of business news to market specialists — and how to present compelling stories across print, web, video, and audio formats.
The fellowship is an intensive ethics program for up to 90 students and early-career professionals studying business, journalism, design and technology, law, medicine, or religion.
Through the two-week curriculum, fellows will examine the role that their fields played in Nazi Germany during the Holocaust, and explore some of the ethical concerns that apply today. Business fellows will travel alongside the law & design and technology fellows, who will consider how ethical constructs and norms in their professions align and differ.
Drown, who will work at McKinsey & Co. in the San Francisco office after graduation, discussed the program with Haas News.
What inspired you to apply to FASPE?
I’ve always been interested in how companies can be more ethical and sustainable and their decision-making processes. FASPE provides an opportunity to think about some of the modern ethical issues that companies are grappling with. After Haas, I’m entering consulting and having some ethical decision-making tools in my back pocket will be helpful when I’m working with companies on ethical challenges.
How has your experience at Haas helped shape your interest in the program?
Haas has been a great place to think about ethics in business and is present in every class I take. I had an interest in ethics and business before coming to Haas, and Haas has only ignited that interest more. The opportunity to participate in FASPE is a continuation in exploring some of the ethical questions and dilemmas that I’ve encountered while at Haas.
What do you hope to take away from the trip?
I hope to take away some examples and tools for ethical decision-making in business. I’m particularly interested in how this program will relate modern ethical challenges to the context of the Holocaust. I’ve never traveled to Auschwitz or any of the sites that we’re planning to visit and I want to come away with a better understanding of the role of different stakeholders (in business, law, journalism, etc.) in permitting or even accelerating atrocities of the Holocaust.
These two weeks will be an opportunity to think about the business community’s role in the Holocaust especially. Beyond that, this is an opportunity to be with like-minded business leaders who care about ushering in more ethical decision-making in business.
How does the fellowship align with your career goals?
The fellowship emphasizes how to integrate ethical decision-making across every department and every section of a business’s operations.
This fellowship follows my motivation to find ways to make the business case for investments in sustainable initiatives. Before coming to Haas, I worked on the sustainability team at Gap, Inc. and as much as I enjoyed the role, I lacked tools in understanding language, communication, and business models necessary to convince companies to make investments in sustainable initiatives. This motivation is what drew me both to business school at Haas and to the FASPE program.
Weekly targets, annual resolutions, five-year plans—all of them so troublingly elusive. With best intentions, most of us fail to stick with the goals we set.
Next time, consider pursuing them with a friend.
New field research by Assistant Professor Rachel Gershon, published in Management Science, suggests that pursuing our goals with friends may make them more attainable. Gershon, along with Cynthia Cryder of Washington University and Katy Milkman of the University of Pennsylvania, specifically looked at gym attendance and found that going with a friend—even with the hurdles of coordinating two schedules—increased visits by 35%.
“Despite adding the friction of working with another person, we saw people becoming more motivated and more likely to go,” Gershon says. “This illuminates how social incentives, which aren’t always taken into consideration, can help people overcome other barriers that stand in their way.”
The experiment recruited two groups of participants for a “Gym Bonus Month,” which lasted four weeks, from February 1 to February 28. Both groups paired up with a friend and were offered a $1 Amazon gift card for each visit to the gym. One group received this bonus every time they went to the gym, regardless of their friend’s activity; the other group only received the dollar if the two of them went together.
As noted, those who received payment only when they visited the gym with their friends doubled how often they went together, and increased their overall gym visits by 35%. Gershon and her colleagues concluded that the logistical costs of coordinating with someone else were eclipsed by two benefits. First, people enjoyed their visits more when the event was social, which made future visits more likely. Second, they felt a greater sense of accountability when meeting their friend at the gym.
“Our study identifies two types of accountability,” Gershon says. “People feel responsible to their friends, as they wanted them to get the reward, but they may also have reputational concerns that their friends would think less of them if they didn’t follow through.”
Social benefits
Although this might seem intuitive, when Gershon and her colleagues surveyed people about which of the two conditions they would prefer to be part of, the majority—more than 80%—said they would rather not have to coordinate their visits with a friend. While unsurprising in some ways, Gershon says, this suggests that people might readily see the drawbacks of coordinated visits but not recognize the potential benefits, from increasing motivation to creating stronger social bonds.
The researchers also found evidence that, when looking across both partners in a pair, this social attendance of the gym seemed to provide the greatest benefit for those who exercised less. Specifically, among the two friends, the one who exercised more frequently prior to the study saw a bump in how often he or she visited the gym. But the partner who exercised less frequently prior to the study saw an even larger bump in visits, suggesting these kinds of social incentives may be especially effective for distinct groups of people.
Beyond the context of this experiment, the findings illustrate how building a social dimension into desired behaviors can promote follow-through. Companies that want to increase employee engagement with skills training, for instance, might consider using a joint-incentive program. This could boost participation while simultaneously fortifying interpersonal bonds in the workplace.
The findings also present implications for another area that Gershon studies: referrals. Many places offer a free month of membership or some other incentive if you recruit a friend. “There are all sorts of contexts where people are trying to start a new hobby, a new exercise routine, and companies can encourage them through social networks,” she says. “This work shows that referrals may be a way for companies to not only engage additional customers, but to also increase the motivation of current customers.”
Emma Daftary, assistant dean of the Berkeley Haas Undergraduate Programs, presented awards to students and faculty, including:
