Classified: What Uber (and others) teach MBA students about smart online marketplace design

“Classified” is an occasional series spotlighting some of the more powerful lessons being taught in classrooms around Haas.

woman holding a microphone in front of classmates and team
Marissa Maliwanag, MBA 24, pitching Tables Together during the Online Marketplace and Platform Design course. Photo: Jim Block

 

It’s a recent Tuesday evening at Berkeley Haas, and Marissa Maliwanag, MBA 24, has just five minutes to pitch her team’s idea for Tables Together. It’s an online marketplace that big corporations like Google could use to donate surplus food from their employee kitchens to organizations that feed people in need.

“There are matches that need to be made and we want to create a marketplace and solve the problem,” Maliwanag said, ticking off the amount of food that goes to waste in the United States each year.

After a few quick questions for the team, the rapid-fire pitch slam—part of the MBA class called Online Marketplace and Platform Design—continues. Students pitch ideas, among them a private plane rental marketplace to a community for matching skiers and snowboarders with coaches to a marketplace for tailors of bespoke clothing for events like weddings.

four students standing in front of a classroom pitching an idea
MBA students have just five minutes to pitch JetJunction, a private plane rental marketplace, during the night’s pitch slam. Photo: Jim Block

All of the pitches serve as practice for the students who are working toward final projects, says Assistant Professor David Holtz, who teaches the class, an elective that enrolls 68 students. The group is a split of mostly full-time and evening & weekend MBA students, on a journey that covers all aspects of online platforms—from A/B testing, network effects, and platform monetization, to reputation systems and discrimination in online marketplaces.

The class aligns with Holtz’s career experience as a former Silicon Valley data scientist. Most recently, Holtz worked for Airbnb, where he first became intrigued by online marketplaces. “I was exposed to a lot of interesting problems including reputation-system design, algorithmic pricing, and experiment design,” Holtz, a member of the Management of Organizations (MORS) and Entrepreneurship & Innovation Group at Haas, says. “To this day, these topics form the backbone of my research, because, in addition to being extremely interesting, they’re also extremely difficult to solve.”

Taking apart the case

During the first half of a recent class session, Holtz asked students to split into groups to discuss one of the week’s assignments: Pick a company on the a16z Marketplace 100 list—Andreessen Horowitz’s ranking of the largest and fastest-growing consumer-facing marketplace startups and private companies—and come up with a new market mechanism that the company might trial using A/B testing.  

One MBA student team wrote about the online specialty food marketplace Goldbelly, suggesting that the company might add a feature that prompts site visitors to indicate that they’re trying to buy a gift. Then, Goldbelly could customize searches and provide a more personal message option at checkout.

students sitting in classroom working on laptops
Students share their ideas for a new market mechanism that a company might trial using A/B testing. Photo: Jim Block

Holtz then runs students through a business case called “Innovation at Uber: The Launch of Express POOL, a case directly related to some of his marketplace research that examines experiment design in two-sided markets. Set in March 2018, the case follows Uber through the launch of a new product called Express POOL, which offers carpooling riders a cheaper ride if they agree to walk a short distance to and from pick-up and drop-off points and wait a few minutes before being matched to a driver. 

In this case, Uber had to decide whether to keep rider wait times at two minutes or change the Express POOL wait time to five minutes mid-experiment. The big dilemma? Uber benefited from a cost-per-ride reduction with a five-minute wait time but didn’t want to make a change that could hurt the user experience. “Even if the company did decide that a longer wait time was preferable, what did that mean for the ongoing experiment the company was running?” Holtz says. “Should they change the product mid-experiment or let the experiment continue running as originally intended?”

In this case, Uber had to decide whether to keep rider wait times at two minutes or change the Express POOL wait time to five minutes mid-experiment.

Holtz then shifts to a whiteboard, where he outlines different types of experiments (also called A/B tests) that marketplace companies like Uber use to test new features. 

First is the “bread and butter” user-level test, which Uber could have used to compare the behavior of riders with access to Express POOL to the behavior of those who did not have access to Express POOL. The second kind of test, a switchback experiment, would give all riders and drivers in a given market access to Express POOL for randomly selected 160-minute-long chunks. Over two weeks, Uber would switch Express POOL availability back and forth to compare behaviors.

The third type of experiment Holtz describes, which Uber did use with Express POOL, is a synthetic control experiment. It is the most accurate form of testing, Holtz says, but also the most complicated to run and the “noisiest.” Using the synthetic control experiment, Uber identified two sets of markets that, in aggregate, were as similar to each other as possible. The company then launched Express POOL in one set of cities, but not in the other. By comparing behavior in the two sets of cities, Uber could estimate the impact of both.

man in classroom teaching
The class aligns with Holtz’s career experience as a former Silicon Valley data scientist. Most recently, he worked for Airbnb, where he first became intrigued by online marketplaces. Photo: Jim Block

Holtz’s knowledge of how to apply A/B tests comes from deep research. He has conducted multiple large-scale experiments analyzing the effects of marketplace design choices on Airbnb. One study examined whether coupons would lead more Airbnb bookers to write more reviews—with the eventual aim of facilitating better matches on the platform and increasing revenue. Comparing behaviors of buyers who received coupons to those who didn’t, he found that the coupons led to additional reviews that were more negative, on average, and that the reviews didn’t affect the number of nights sold on the site or total revenue.  

In a separate, widely cited study, he and his co-authors examined the effects of remote work on collaboration among information workers at Microsoft. They scoured anonymized, aggregated data describing emails, calendars, instant messages, video/audio calls, and workweek hours of more than 60,000 U.S.-based Microsoft employees during the COVID-19 pandemic, trying to estimate the causal effects of firm-wide remote work on collaboration and communication. Results showed that under firm-wide remote work, collaboration patterns become more static and siloed, with fewer bridges between disparate parts of an organization. 

Impressive guest speakers

For Lena Corredor, MBA 25, knowledge gained in Holtz’s class is providing an opportunity to explore the challenges of building a successful entrepreneurship marketplace, which is her startup idea.

“This class is really eye-opening for me because it’s not as straightforward as it seems,” she says. “When you think about the different sides of a marketplace, one would think if you build it, they will come, but it’s not the case. The design elements he talks about are very important to business success.”

During most classes, Holtz opens with a guest speaker, and his roster includes an impressive industry bench of leaders including Sudeep Das, head of Machine Learning/AI at DoorDash; Martin Manley, co-founder of Alibris and former U.S. assistant secretary of labor; Ania Smith, CEO of Taskrabbit; and Briana Vecchione, a technical researcher at Data & Society’s Algorithmic Impacts Methods Lab (AIMLab); among others.

man sitting in classroom gesturing as he speaks
Roberto Pérez, MBA/MEng 24, said they were drawn to the class in part because of the impressive guest speaker roster. Photo: Jim Block

Roberto Pérez, MBA/MEng 24, an entrepreneur in Mexico before coming to Haas, said they were drawn to the class for two reasons.  “First, I knew that the professor had a great background and first-hand experience on this topic,” they say. “Second, I knew that the class would have a lot of guest speakers and that was interesting to me as this level of exposure is very valuable.”        

Looking toward the future of online marketplaces, Holtz said he’s excited to see where entrepreneurs will take new technologies, such as generative AI, AR/VR, and blockchain-based tech. To that end, he said he expects the students will hear more from a group of investors and VCs who are guest judges at the last class—Raphael Lee, Vickie Peng, and Lindsay Pettingill.

“They weigh business pitches all the time and will have a better sense than anyone of where we are headed,” he said.

UC LAUNCH teams gear up for Demo Day pitches

drone shot of Chou Hall and campus
2023 Demo Day will be held in Chou Hall.

Student-led startup teams tackling a diverse range of challenges—from carbon emissions to the use of AI in education—will come together to pitch this week at the University of California LAUNCH Accelerator’s Fall 2023 Demo Day

The event, a chance for startups to pitch their ventures to a panel of judges, will be held Thursday, Nov. 30, at Spieker Forum in Chou Hall. All eight finalists will compete for up to $50,000 in non-dilutive funding.

Rhonda Shrader, MBA 96, executive director of the Berkeley Haas Entrepreneurship Program, noted the strong turnout of women this year.

“For the first time in UC LAUNCH history, seven of the eight finalists have at least one female co-founder,” she said. “We are super excited to celebrate them on Demo Day.” 

Scaling a company

The UC LAUNCH program guides students through the steps of scaling a company using the lean methodology, with mentorship provided by experts in the field. All teams must include at least one current UC student, alum, or faculty member. More than 250 startups that have participated in the program have gone on to raise more than $1.4 billion collectively, according to UC LAUNCH organizers.

This year’s finalists include CarbonSustain, providing a way for companies to efficiently track and analyze carbon emissions. 

man wearing a light blue shirt standing in front of a tree
Paul Bryzek, MBA 24

Co-founder Paul Bryzek, MBA 24, said the team interviewed more than 85 potential customers, competitors, business owners, and subject matter experts while in UC LAUNCH. “Our interviews yielded 10 potential customers, three distinct customer target groups, an understanding of their willingness to pay, and gaps with the existing solutions,” he said. “We’re grateful for the mentorship from Rhonda Shrader and the UC LAUNCH volunteers who helped us to achieve product-market fit.”

Finalist Rumi’s platform helps schools integrate AI to enhance student learning through writing. 

Co-founder Mohammad Hossein Ghasemzadeh, MIMS 16, said the team did extensive research in forming the startup and believes that AI will play a key role in the future of education. “We’ve talked with over 150 instructors across the country, and we’re very excited to share our story and provide some insights into what the future of AI in education will look like,” he said.

Eight finalists pitching

Other LAUNCH finalists include OmBiome, a regenerative health company creating algae-based products for oral and gut health; Rely, simplifying property management for landlords and offers renters a comprehensive real estate meta-search engine; Materri, a materials marketplace focused on sustainable materials for footwear and apparel; Insta Chef, which is providing nutritious, easy-to-prepare meals to senior living facilities; Essence Labs, an AI-powered platform optimizing work schedules for female employees based on hormonal cycles; and AidRx, providing custom AI charting solutions to ease the documentation burden for pharmacists and other non physician clinicians.

The judging panel includes Ben Goldfein of WilmerHale, Jed Katz of Javelin Venture Partners, and Kat Mañalac of Y Combinator.

Register to attend Demo Day.

Startup Spotlight: Hate nagging your team? Try installing Chaser

man wearing white t-shirt and dark jacket
Josh Martow, founder of Chaser

As the director of product in his last role, Josh Martow, MBA 23, dreaded nagging his team members to make sure work got done. When he arrived at Berkeley Haas, he started mapping out an idea to solve his own problem, which led to the launch of startup Chaser.

In this interview, Martow explains how Chaser makes people more productive.

Could you give us a quick synopsis of what Chaser does?

Chaser follows up with your co-workers on the things they need to do. There are other project management tools out there that are supposed to solve this problem, but they break down because most teams struggle to constantly keep them up to date; no one wakes up in the morning and thinks, “I’m going to check Trello.”

With Chaser, you can delegate a task to anybody from within Slack. Chaser sends them the task, collects progress updates, and follows up until it’s complete. It works like magic because your co-workers never have to open Chaser. They don’t have to sign up for it or even know what it is! Their tasks just arrive in their inbox, and they can click “complete” right there.

How did you come up with the idea?

At my last job, so much of my work as a manager required making sure work was being taken across the finish line, which meant following up with people a lot. It’s not fun to be a nag and feel like you’re a babysitter to your team. It’s also not productive. And on the other end, no one likes to constantly receive these types of messages. 

We’re doing with Chaser what Google did for calendars.

We’re doing with Chaser what Google did for calendars. It’s amazing that my friends and co-workers can put events right on my calendar for me and all of the sudden our calendars are synced up. Why doesn’t this exist for to-do lists? Imagine if your co-workers helped populate your to-do list for you and all you had to do was hit “complete” or “change date” and it would reflect on their end too, just like when you RSVP on Google Calendar, or move an event around.

How does a manager use Chaser?

So anyone can add Chaser to a Slack workspace. Once it’s added, just type “/todo,” tag the assignee, write the task, and include a due date, if there is one. The task will appear in your direct messages and Chaser will take it from there! You can follow along in your dashboard, which also lives inside Slack, while Chaser goes out and makes sure it gets done.

For now we’re actually offering Chaser for free, so everyone can give it a try here.

What was your background before coming to Haas? 

Before Haas, I was the first employee at a startup Thriver Technologies. I got to wear every hat there. Throughout my time there I led sales, product, growth, and business intelligence. I was just running around doing whatever I could to help set up everything the company needed. We grew it to 150 people and raised a Series B, and after five years, I really got bit by that entrepreneurship bug and decided I wanted to do this myself. I ended up teaming up with the director of engineering and we set off to start our own thing.

man speaking holding a microphone
Josh Martow presenting at the recent entrepreneurial network event, B-school Disrupt.

How has Haas helped you as an entrepreneur?

The two biggest things for me have been extracurriculars and classmates. For extracurriculars, some free accelerators connect you with mentors, help you hone your pitch, and help you figure out your business. After competing in one of the Demo Days, one of the judges, who was also a VC, ended up putting in $100,000 after hearing the pitch. 

But my favorite thing about Haas is the Haasies. There are just a ton of great people who are interested in and want to talk about startups, and everyone comes from such diverse professional backgrounds. Just having people to bounce ideas around with is just so valuable.

What made you want to get an MBA to launch a company rather than launch without going to business school?

I didn’t study business as an undergrad and I wanted formal business training. I also needed time to develop more clarity and conviction around what we wanted to build. 

But also, you hear that business school is a great place to start a company. And it’s 100% true. 

Not having a full-time job gives you the freedom to explore, and being around Haasies realy helps you with that exploration. Not to mention access to the resources available, the accelerators, and being in the Bay Area. All of these things kind of just make it the perfect place to start a company.

What advice do you have for people considering launching a business while earning an MBA?

The No. 1 piece of advice is to cut out the things that are not 100% critical, and don’t succumb to FOMO when you see classmates doing things you just frankly won’t have time for. I definitely did not appreciate this enough at the start and was signing up for more than I could handle and would often be disappointed when I needed to miss out on things. It would have been a lot easier if I came into it understanding that you can’t do it all while you’re trying to get a startup off the ground.

That said, it’s a great experience, and it’s immensely valuable to be in school learning while thinking about your business and applying the things in class to your business every day. 

Startup Spotlight: Xepelin’s rise in fintech services

Xepelin, co-founded by Sebastian Kreis, MBA 18, rocketed to No. 3 on Poets & Quants’ 2023 Top 100 MBA startups list this year. The company, based in Mexico City, has raised $567 million so far and will use the funds to invest in new markets in Latin America.

headshot of a man

Haas News asked Kreis a few questions about his startup’s success.

Tell us about Xepelin. Xepelin was founded in 2019, the year after I graduated from Haas. Our aim is to be the “digital CFO” for small- to mid-size companies, offering an online platform that helps businesses organize their accounts and automate payments to suppliers and payment advances from customers.  

You’ve had quite a lot of success getting the company funded over the past year. Tell me a little about that.

Last year, the company secured $150 million in equity and a $140 million credit line from Goldman Sachs that we are using to expand software, payment, and working capital services in Mexico. We are headquartered in Mexico City and now have 400 employees. 

How big is the market for your services and what’s your expansion plan?

The companies we are targeting account for over 60% of Latin America’s GDP. These companies present an enormous opportunity for us, with more than $10 trillion in unmet needs. High acquisition and servicing costs have kept them underserved. Xepelin is committed to equipping these companies with efficient access to software tools, payments, and working capital.

The companies we are targeting account for over 60% of Latin America’s GDP.

What resources at Haas helped you become an entrepreneur?

There were two resources I tapped at Haas: learning from entrepreneurs and investors in the Bay Area who had already built successful startups, and working on fintech projects with Lecturer Greg La Blanc. I traveled to Mexico several times while I was at Berkeley because of the size of the market. I studied the metrics, such as credit and software market penetration, before committing to building a regional company, starting in Mexico and Chile. 

Dean’s Speaker Series: Sal Khan on how ‘delusional optimism’ led to free, world-class education for anyone, anywhere

man on a large video screen speaks to students at Haas
Khan Academy CEO and Founder Sal Khan traced his journey to provide free and accessible online education to kick off the fall  Dean’s Speaker Series Sept. 19.

With more than 150 million users in more than 190 countries since its founding in 2008, nonprofit Khan Academy has become an educational staple for students and instructors alike. 

Khan Academy CEO and Founder Sal Khan traced his journey to provide free and accessible online education during the first fall Dean’s Speaker Series talk Sept. 19. 

After graduating from Harvard Business School in 2003, Khan worked as a hedge fund analyst, having told his friends “I’m going to do this long enough so that I could become independently wealthy.” Around the same time—having always been passionate about education—he began tutoring his cousin over the phone using an interactive notepad. From there, Khan expanded his lessons to include family and friends, even writing software to create deep item banks—databases of questions—to help them practice. 

With advice from a friend, he began incorporating video, uploading his lessons to YouTube—and by 2008, Khan Academy reached almost 100,000 users. Even with the nonprofit’s initial traction, however, Khan noted the risks that come with starting any new business. 

“I think anytime you do anything entrepreneurial—for-profit or nonprofit—you have to start with that delusional optimism. You assume that surely the market, the investors, the philanthropists, whatever, whoever the stakeholders are, they’re going to recognize the value of what you’re creating. And oftentimes, it doesn’t happen as fast as you think,” Khan said. 

I think anytime you do anything entrepreneurial—for-profit or nonprofit—you have to start with that delusional optimism.

Despite receiving offers from venture capitalists, Khan turned them down to maintain control and ensure his organization remained free and accessible. Nine months later, current Khan Academy Board Chair Ann Doerr made an initial donation, which led to a lunch meeting and eventual working relationship.

After Bill Gates talked about his own kids using the platform at the 2010 Aspen Ideas Festival, Khan had another meeting to discuss ways to support Khan Academy’s future. This, coupled with more funding from Google, allowed Khan Academy “to become a real organization,” Khan said.

Since then, Khan Academy has expanded to include more than 70,000 practice problems with translations into more than 50 languages. The nonprofit is also partnered with upward of 500 school districts, even having its own accredited schools: Khan Lab School in Silicon Valley and Khan World School, a partnership with Arizona State University. Now, Khan Academy is launching Khanmigo, an AI educational chatbot, to help instructors and students understand how to use AI to support learning. 

In terms of running and scaling a nonprofit with an impact like Khan Academy, Khan cited the importance of teams maintaining a clear mission. 

If you can grow and maintain your talent and your alignment, a 300-person team can outperform a 30,000-person team.

“The hardest thing is, as you grow, to maintain alignment. If you can grow and maintain your talent and your alignment, a 300-person team can outperform a 30,000-person team,” Khan explained. “Alignment is not just communication. And this is a muscle that I don’t think people in Silicon Valley exercise enough—being very clear with team members: ‘Look, this is what we’re doing. If you’re excited about that, awesome. If you’re not, this might not be the place for you.’ That is kind of strong language, but I have found it to be very powerful language because otherwise people are just trying to pull (the organization) in all sorts of different directions.” 

Watch the full DSS talk below.

Read the full transcript:

– Good afternoon, welcome. I’m Don Moore, acting dean here at the Haas School of Business. I’m thrilled to welcome all of you to the first Dean Speaker Series of the year. Today’s guest, as you know, is Sal Khan, founder and CEO of Khan Academy. Sal holds two bachelor’s degrees of science and a master’s in electrical engineering from MIT and an MBA from a school called Harvard Business School, which you may have heard of. Sal became passionate about education while he was an undergraduate at MIT. He developed math software for children with ADHD and tutored fourth- and seventh-grade public school students. While working as a hedge fund analyst in 2004, Sal began tutoring his young cousin in math over the telephone with an interactive notepad. Within a couple years, he added more than a dozen relatives and family friends to his online classes. In 2008, he founded Khan Academy with a mission to provide free, world-class education for anyone, anywhere. Khan Academy now partners with more than 500 school districts and schools across the United States to help teachers tailor instruction to each student. Khan Academy is now used in more than 190 countries. There are more than 150 million registered users around the world and translations into more than 50 languages. Today, Khan Academy’s platforms include more than 70,000 interactive practice problems, as well as videos and articles that cover a range of subjects from pre-K to 12th grade. Khan Academy is piloting a new tool called Khanmigo, which gives students an entirely new way to use AI to learn. He also wrote a book, The One World Schoolhouse where he presents his radical vision for the future of education with a goal of leveling the playing field for access for all to world-class education. Thanks, Sal, for taking the time to join us today and to talk with us about your work. Now I’ll turn it over to today’s moderators, MBA students Anu Tej and Mrudula Vemuri.

– Thank you for that introduction. I’d like to just introduce myself one more time. My name is Mrudula Vemuri. I’m an EWMBA class of 2024. And I’d also love to share my first story using Khan Academy. I was desperately in need of help with my calc homework, and I had a calc final looming in college, and I turned to Khan Academy, and it hasn’t failed me ever since. Even through my macro and finance courses here at Haas School of Business, I’ve used Khan Academy, and it’s helped me all along the way, so I can’t wait to see what they have in the future.

– OK, I am Anu and I’m a full-time MBA class of 2024. I first learned about Khan Academy just after my undergrad. I had joined this early stage startup, and I was given a task to do data analysis, and I had no idea how to do it, and one of my teammates came to me and said, “Oh, you might want to check out Khan Academy for some of the concepts.” And I started with high school statistics that night, and I was like, “Oh my God, I needed this in college. I needed this in high school.” All this while I thought I suck at statistics, I did not. I was able to do that analysis that I did; and like Mrudula, I was able to pass my macro economics last year because of Khan Academy. Thank you so much for helping us. So I want to start,

– [Sal] Always good to hear the stories.

– I want to start with the origin story, Sal. I know you were tutoring students during your high school, and I also know that you will tell your friends when you are working in a hedge fund that ‘I want to work in hedge fund long enough to start my own school someday.’ So tell us more.

– Yeah, first of all, thanks for having me here, and as I said, always great to hear y’all’s stories. Yeah, I’ve always had this interest in education. I think going back to maybe even elementary school where we all had good moments in our education experience; and then we all had some not-so-good moments. And usually, some of those not-so-good moments are feeling a little bit bored or feeling disengaged or seeing some of your friends bored or disengaged. And so I’ve always been fascinated that there’s got to be a better way to do this. Anyway, you fast-forward to, I graduated from undergrad. My first career was in tech. Then after that, I go to business school. After business school, I find myself, I’m at a small hedge fund in Boston at the time, and I graduated from business school in 2003, and it’s now 2004. I had just gotten married. My family was visiting me up from New Orleans, which is where I was born and raised up in Boston. And even before that, actually, to answer your question directly, when I was working at the hedge fund—and this is what I did tell myself—but I would tell my friends who were like, “Well, what’s your lifelong goal?” I was like, “Well, I’m going to do this long enough so that I could become independently wealthy,” which I have not achieved, but I did the other, well, the thing I wanted to do after I wanted to be independently wealthy, so I can start a school on my own terms. I thought that would be the most fun thing to do, to be one day, be like a Dumbledore-type figure, but once again, in some ways have to convince anyone that, and we could talk more about, there’s some benefits of having to convince people things. But when it became clear that my cousin Nadia needed help, she didn’t even know that she needed help, but I knew that she needed help. She was in seventh grade, and she was put into a slower math track, which had all sorts of potential negative implications for her future. I offered to tutor her remotely when she went back to New Orleans. She agreed. And so, yeah, we got on the phone. We used to use instant messenger at the time to just communicate. We could see each other’s writing, et cetera. Slowly but surely, she got caught up with her class, even ahead of her class. At that point, I become what I call a tiger cousin. I called up her school, I said, “I really think Nadia Raman should be able to retake that placement exam from last year.” They said, “Who are you?” “I’m her cousin.” And they let her take it. And the same Nadia who was being tracked into a remedial track was now put into the advanced track. 

So I was hooked. I started tutoring her younger brothers, Armand and Ali, and it was working with them, and word spreads in my family, free tutoring is going on. So before I know it, there’s 10, 15 cousins, family friends that I’m tutoring on a regular basis. My day job, I was at the hedge fund, but markets close. I’d get on conference calls with, for the most part, my cousins, a few family friends.

But that’s how I started, and I was enjoying it. I was connecting with family, but I was also, I believed that there’s a way of approaching a lot of this subject matter that could be very intuitive and even enjoyable for my family. I also saw that there was a common pattern, and I saw this pattern throughout my education. The reason why folks struggle isn’t because they aren’t bright. It isn’t because they don’t have good teachers or they’re not hardworking. It’s usually because they have gaps in their knowledge. And by the time you get to an algebra class, it’s really hard to address those gaps of, say, dividing decimals or negative numbers. And those gaps happen in a traditional system because kids just keep getting moved ahead, even if they get a 60 or 70 or 80%, or they forget stuff. So that’s when I started writing some software for my cousins, too, ’cause I honestly couldn’t find any good practice on the internet at the time. This was back in 2004, 2005. Because I wanted them to get as much practice as they need. So I was creating these very deep item banks that were partially computer generated, et cetera. And that was the first Khan Academy. It had nothing to do with videos at the time. 

Then in 2006, by this point, we had moved out to the Bay Area. I was at a dinner party showing off the software. I’m a super cool dinner party guest, and the host of the dinner party, his name’s Zuli, I have to give him full credit. He said, “Well, this is cool, Sal, but how are you scaling your lessons?” And I said, “Yeah, it’s hard to do with 15 cousins what I was originally doing with just a handful.” And he said, “Well, why don’t you make some videos, upload them onto YouTube for your family?” I told him, “That’s a horrible idea. YouTube is for cats playing piano. It’s not for serious math.” But I got over the idea that it was not mine. And I gave that a shot. And that took on a life of its own, obviously. My cousins famously told me they liked me better on YouTube than in person. I think what they were saying was that they enjoyed having an on demand, not feeling shy, not feeling embarrassed. If it’s 11 p.m. and they had a question, they could access it. I believe they still enjoyed being able to get on the phone with me to go a little bit deeper. But then a lot of other people started discovering it. And then by 2008, there were about 50 to 100,000 folks using it on a monthly basis. And that’s where I incorporated it as a not-for-profit, a mission-free, world-class education for anyone anywhere. 2009, I frankly had trouble focusing on my day job. We had some savings at this point. My wife was a medical fellow, so she was still in training. Our first child had just been born, so our expenses were going up, but we were saving some money for a down payment out here in the Bay Area, which we all know is not a joke, even back in 2009. But we felt, well, maybe if we give it a year, hopefully someone will fund this philanthropically. So that’s when I took the plunge, and that first year wasn’t easy, but eventually, it worked out.

– Well, thank you. I know that I have personally shamelessly rewinded many, many videos. In my personal experience interacting with Khan Academy, I noticed that there’s a huge breadth of topics. Were you familiar with all of these topics before the beginning of Khan Academy? And if not, how did you teach yourself so many different things?

– Great question. The simple answer is no. I think that there, with that said, well, I can surprise folks with my breadth. Let me just say that I’m definitely above average. But there’s certain topics that I did know very, very well, math being one of them. I would say math and physics and some other parts of science I knew very, very well where I could kind of get into it. I didn’t need necessarily a reference or a textbook. 

With that said, once Khan Academy became a more professionalized organization and we wanted to make sure we covered all of the standards, we now have a team who’s curating the questions and figuring out the scope and sequence and instead telling me, “Hey, they’re using a different term nowadays for,” I mean, the most famous example is when I was in school, it was called atomic weight. Now it’s average atomic mass. Or let’s redo a video. So there’s definitely support now, but in those early days, but even now, I take joy; and maybe there’s folks in this room who feel the same way that if you learn to learn something well, that that is actually a very transferable skill to almost anything. And it goes against what I think most people are indoctrinated into in school. My biggest pet peeve is when I hear someone say, “I’m a math person,” or “I’m a humanities person.” And unfortunately, you’ll sometimes hear it from educators. In fact, you’ll almost always hear it from, you want to give a math teacher anxiety, ask them to engage in the humanities, or you want to give humanities teacher anxiety, ask them to engage in math. And even at a high school level, like, you graduated from high school, right? Like, this shouldn’t be something… So unfortunately, I think sometimes that not optimal signaling happens to students. 

But I think generally speaking, if you learn to understand something really well in any domain and you build that muscle of, like, asking the right questions: Wait, how does A lead to B? I’m not just going to take it as a leap of faith. I need to understand it, prove it to me. How does this make intuitive sense? You can take that to almost any domain. And I’ve always been, some of the subjects in Khan Academy are things like history, and I’ve always really been fascinated by history. I don’t have any formal training in it, but I’ve been fascinated both on just, like, these are real human stories that happened. How can it not be interesting? But then also I’ve always been sometimes frustrated on not being able to place things in time and space and seeing timelines and things like that. So I’ve tried to take that tack and when we try to cover some of that on Khan Academy, and we’ve gotten positive feedback. And then there’s certain even science topics that, when I took it in college, I took organic chemistry in college. It was not a class where I was like, “Oh, this makes intuitive sense.” I got through the class, I got a fine grade, I did what I needed to do, but I didn’t get out of that class thinking like, “Oh, I see the beauty in organic chemistry.” So when it was almost, as a challenge, some of those organic chemistry videos are still up there on Khan Academy. When I did this almost 10 years ago, I said, “Before I even press record on that first video, I’m going to just sit and immerse myself in organic chemistry for several weeks until I learn to love it, until I learned there must be an intuition behind it.” And there is and actually, it all boils down to electronegativity, actually. You don’t have to memorize as many mechanisms as you think. And I would call up friends and stuff like, “Explain this to me. Why is this happening?” And someone would say, “No, we don’t know. That’s an area of research.” I was like, “Well, someone should tell the students that too, so they don’t bang their head on a table and they’re like, I’m actually trying to figure out an area of open research.” So yeah, I don’t know it all, for sure. And I do use Khan Academy when I’ve already made 80 videos in a certain course and they want an 81st. I sometimes have to watch some of the videos that I already made in order to get up to speed.

– Oh my God, thank you so much for that. Can you tell us, I mean, you briefly took us through from your undergrad, to, like, starting of Khan Academy for your cousins and, like, the whole journey ’till today? But can you tell us what would you consider your first big break in your life? This can be before Khan Academy or after.

– Oh, big break. Oh, so many breaks. I’ll give you more than one. Probably the first is when I was in second grade, my older sister was three years older than me, and she was, like, the star student. She was in the gifted program. I thought I was in the gifted program because they take you out; they took me out of class every day into some kind of enrichment thing. It turned out it was speech therapy. So I was being in a different, I was put in a different category than my sister, but because I was Farah’s younger brother, I think the school said there must be something there. And so they kept testing me. And so the first break was I went from speech therapy into this kind of gifted enrichment program that they had. It was Louisiana Public Schools, not famous, but it was a really good program. I still remember that first day, 7 years old, I walked into a classroom, unlike any other classroom I had ever seen, there were just, like, five or six kids in the room. Some kids were playing chess, some kids were drawing, some kids were playing “Where in the World is Carmen Sandiego?” And there were two teachers. I mean, it was well-resourced if you really think about it in hindsight. And they’re like, “Oh, Sal, come on in.” And I walked up to both the teacher’s desks and they said, “Oh yeah, so what are you into?” And I said, “Well, I really like drawing. I really like puzzles.” And so they’re like, “OK, so we’ll draw and do puzzles.” And I didn’t even want to tell anyone about this thing ’cause I thought it was some type of, like, secret racket going on inside of my school that would be taken away from me if people knew what it was. But that I consider a break because one, that opened my eyes to what school could look like if everyone was really engaged and interested. And I think most of my memories from elementary school are that, so it had a real impact on me. 

I mean, there’s a bunch of other breaks. I would say another, I’ll give my sister credit. When I was in, we didn’t have a lot of money, raised by a single mother. My mom was essentially making minimum wage eventually. And I remember when my sister was applying to college and I asked her, “What’s your first choice?” She said, “Brown University.” And I said, “You’re nuts. Brown University’s tuition is twice what our mom makes per year. Like, there’s no way that you’re going to Brown University.” And then my sister explained to me about financial aid and this and that. And my sister got in and was able to go. I mean, she still had some significant debt, and I think it’s gotten more generous since then, but it was very generous. It’s much better than what we thought it would be. So, that I considered a break of sorts ’cause that opened up my aperture to what’s possible. 

You fast-forward, I mean, I’ll give a couple, well, I’ll fast-forward to the Khan Academy ’cause I think there was a big break there, which is, I talk about quitting my job. Me and my family are now living off of savings. I think anytime you do anything entrepreneurial for-profit or nonprofit, you have to start with that delusional optimism. You assume that surely the market, the investors, the philanthropists, whatever, whoever the stakeholders are, they’re going to recognize the value of what you’re creating. And oftentimes, it doesn’t happen as fast as you think. When I quit my day job, I was talking to some philanthropists, but very quickly, those pitted out. They really didn’t know what to make, how to make sense of what we’re trying to do at Khan Academy. And about nine months into that, it was stressful. I was waking up in the middle of the night. We were digging into our savings, about $5,000 a month. It was quickly not a down payment on a house anymore. And I was really questioning every, I’d given up a good career that I, for the most part, enjoyed. And then it was, yeah, about nine months in, all of a sudden, a $10,000 donation came in. I immediately emailed the person, her name is Ann Doerr. She’s now our chairperson. But at the time, I said, “Dear Ann, thank you so much for this incredibly generous donation. This is the largest donation Khan Academy has ever received. If we were a physical school, you would now have a building named after you.” And Ann responded back and said, “Well, that’s surprising to me. It’s actually surprising to me you’re a one person operation. I thought this was, like, a real thing. I see you’re in Mountain View. I’m in Palo Alto. I’d love to have lunch and learn more about what you’re doing.” So we have lunch, and Ann kind of asked me, “What’s your goal?” I said, “Look, I filled out free, world-class education for anyone anywhere.” And says, “Well, that’s ambitious. How do you see yourself doing that?” And I said, “Well, I’m building out all these exercises, videos, I’m going to go into all subjects, all grades, all and all this practice software to allow kids to learn at their own time and pace. I had already started building some teacher tools so the teachers could keep track of it. I had a notebook of testimonials from around the planet.” I said, “Eventually I want to localize this into languages of the world.” And Ann said, “Well, that’s ambitious, but how are you supporting yourself?” And I told her in as proud of a way as possible, I said, “I’m not.” And she kind of processes that. She pays the bill, and then we part ways. And about 10 minutes later, I’m driving into my driveway in Mountain View and I get a text message from Ann and it says, “You really need to be supporting yourself. I’ve just wired you a hundred thousand dollars.” So that was a good day a little bit. So that was great…

I’ll list one more ’cause the story only gets crazier. About two months after that, this is now about May of 2010, I want to say, or maybe June. I’m running a summer camp ’cause I never thought online is a replacement for physical. I always thought online could be a liberation of the physical, so you could do more games and simulations and things like that. So I was literally running a trading floor of seventh graders, and I start getting text messages from Ann, which you can imagine I now take very seriously. And there were five or six text messages that were coming. It was a little bit disjointed, but Ann was essentially writing, this is Ann writing, “I’m at the Aspen Ideas Festival. I’m in the main pavilion. Bill Gates on stage last five minutes talking about Khan Academy.” So I didn’t know what to make of this. And y’all can look, if you do a web search for like Bill Gates, Aspen Institute, Khan Academy 2010, you should find this video. But I found this video when I boot, I booted a seventh grader computer, and I found a delayed broadcast or a recording of it where Walter Isaacson asked Bill Gates, “What are you excited about?” Open question. And Bill Gates just, “There’s this guy Sal Khan. He’s got this website, Khan Academy. I use it with my kids. I use it myself.” And I was like, “Is this really happening?” And I remember that night I showed my wife that. I’m like, “What do I do now? Do I call him up? Like, what’s the protocol here?” And they left me in that state for about two weeks. Two weeks, I’m in actually this walk-in closet where I still am about to, worldwide headquarters of Khan Academy, about to record a video. And my cell phone rings, it’s a Seattle number, and I answer it. “Hello?” “Hi, this is Larry Cohen. I’m Bill Gates’ chief of staff. You might’ve heard that Bill’s a fan.” “Yeah, I heard that.” “And if you’re free in the next few weeks, we’d love to fly you up to Seattle and figure out ways that we might be able to collaborate.” And I was looking at my calendar for the month, completely blank. So I said, “Yeah, sure. I got to cut my nails next Wednesday, but I’m happy to meet with Bill.” But anyway, we had that meeting, and it was very similar to the meeting with Ann. And so by fall of 2010, and actually I was having similar meetings at around the exact same time with executives from Google, and I can talk more about that, who were trying to fund a, they were going to fund five projects that could change the world was their charter. And then fall of 2010, it all converged. So that was a major break. The Gates Foundation and Google, on top of the money the donors gave, allowed us to become a real organization.

– Wow, thank you for sharing all of those big breaks. And I hope that a lot of us in this room are hoping for our next one. Just to go back a little bit further down memory lane, who was a favorite teacher in your past and how would their role be transformed by Khan Academy and generative AI and ChatGPT that’s coming into the world now?

– Oh, good question. I’ve answered the favorite teacher, but not the combo one. I’ll give credit to, I talked about that first day in second grade, Ms. Kraus and Mr. Cell in that enrichment class. I think what would’ve happened if Khan Academy existed then, some of that “Where in the World is Carmen Sandiego” play would’ve been Khan Academy play. And you would’ve had some kids in Metairie, Louisiana, accelerating dramatically in math and science and other subjects. 

Ms. Ellis was my fifth-grade social studies teacher. And I remember her because in hindsight I realized how brilliant she was. She ran her fifth-grade class like a humanity, a college graduate seminar. I remember she used to just peel an orange at the front of the classroom and just ask us questions all day about like, “So why do you think they did this? And why do you think this happens? And what would’ve had been different if they didn’t decide to declare war and et cetera, et cetera.” And I always found it really interesting, and later, I realized how special it is to have a teacher like that. If Khan Academy, Khanmigo and all of this existed, yeah, I think it would’ve provided even more space for that type of Socratic dialogue because students could get a lot of the core skills at their own time and pace. And if you have the AI to also be able to supplement and you can ask some questions that you might otherwise be embarrassed to ask in class, all the better. 

Let’s see, I remember Ms. North was a really cool teacher in middle school who once again liked a very Socratic, very philosophical type of question. She was our English teacher.

And then in high school, Mr. Hernandez, who was a math teacher, but he was also the advisor. It might not surprise you, I was the president of the math club, and he was our advisor, and he kind of treated me as a colleague, which was really great. Like, we would plan things together. And I really appreciated that. 

And then Ms. Kennedy, who ran journalism. She also ran it, like, we would just run, she ran it like a company, like, we ran the newspaper and she was like the chairman and she would advise us and help us. 

And I should also, when I was in high school, I did dual enrollment at the University of New Orleans, and there was a professor there, Dr. Santania, who when he realized that I was taking some very advanced math courses with him. And when he realized that I didn’t have a computer at home, nor could I afford one, he got me a job at the university doing research with him. And that’s essentially how I first got access to a computer and I started learning how to program, et cetera. So yeah, I don’t think—I might not be here if any of those folks maybe weren’t there.

– Wow, thank you for sharing those inspirational stories and how those people have impacted your life. I know that you’ve told us that learning the ability to learn is of utmost importance, but what’s a skill that took a lot of time or attempts to master for you?

– Oh, that’s a good question. I mean, if I go refer back to what I’ve already told you, learning to speak properly. I still have to pause before I say hospital ’cause until I was about 8 years old, I would say hostable. And I still sometimes will if I’m not really, really careful. So I always say hospital, I pause. So I’ll say that. 

Other things, well, I’ll say at the other end of my life, and this is one that unfortunately a lot of folks I think haven’t invested enough in is, in 2015, so eight years ago, like, weird things were happening. Like, I started getting claustrophobic on planes. Like, I would get on a plane, and I’d, like, want to get out as soon as possible. Like, it was not a pleasant experience. And I’m, like, something’s off, and I wasn’t sleeping well. And in hindsight it was really; I was probably too stressed, and t’s like a frog in boiling water. It just creeps up slowly, and it manifests itself in these really weird ways. But I started taking meditation very seriously at that point, really just so that, ’cause I had to travel, and I, just to see if it would make the planes more pleasant. But that practice of meditation I now take very, very, very seriously. And a lot of times, especially people who are ambitious, who want to do big things in the world, they try to kind of account for their own time as much as possible. And they try to be as on and as productive. And I still do that. I try to be as productive as I can when I’m on, but the off time is just as important, arguably more important. And I think it’s easy to overlook. So it’s taken me—it took me, when was that? I was 39 years old when that happened. It took me 39 years to realize that. And I think every year, I realized that more and more and every year, I take more permission with myself to, “I’m going to go to the sauna today,” or “I’m going to take this meeting walking around the park,” or “you know what, I’m just going to cancel these three meetings ’cause I don’t think I really need to be in that. And instead I’m just going to go meditate outside.” And I actually think that makes me more productive and it makes me a better entrepreneur, leader, whatever you want to call it.

– Wow, I think especially MBAs needed to hear that. We definitely need some off time and definitely some meditation to help us feel grounded. I did that just again before getting on stage. And maybe you answered this, but I’m going to ask this again. What is a topic or a skill that you think everyone should learn that is traditionally left out of K-12 education?

– Oh, so much. I mean, look, I’m talking to a bunch of MBAs. A lot of what I learned in the first year of business school, like accounting and the core of finance and how do you price something and present value? The mathematics of it are, like, middle school mathematics. It’s not super difficult. I don’t see any reason why that shouldn’t be taught in middle school or worst case, in high school. Anyone who just needs to think about one day starting a business or trying to decide whether they’re going to rent versus buy a house, they should learn that. 

So I would say those types of skills and at minimum, personal finance skills, and this is something that schools are increasingly, at least states are passing legislation for schools to teach it. I think the schools without help are going to have difficulty ’cause like who’s going to teach it? Well, we’ve been working on this for many years, but we’ve recently launched a full financial literacy course. It’s targeted at the high school level, but honestly it’s useful for anybody where it’s like, people, well, I remember, I had an MBA and the first time I went to buy a house, I was just like, “Why do I need title insurance? What is title insurance?” You’re like, “What is this thing? And exactly how does escrow work, right?” So I think that type of thing is super, super useful. 

There I had a brief period in undergrad where I wanted to be a, well, I’ll say there’s a class I took actually in, I was going to talk about, I briefly thought I wanted to be a lawyer, but then there was a class I took in business school called business law. But it was essentially, it was a crash course in law. And I remember thinking, “This could have been taught to me when I was in seventh or eighth grade.” Like, it should have been taught to me in seventh. Most people get through the whole education, including a college degree or including graduate school, and they don’t understand the legal system, which seems pretty darn important. So yeah, I would throw in financial literacy, legal system, basic finance, and accounting. Those are the big ones.

– Thank you. So our next question is: You’ve started Khan Academy and registered it as a nonprofit organization, and you’ve continued to run it as a nonprofit. How did you decide on this business model, and why not a private company?

– Hmm, yes. And there’s actually I think now three business school cases on this decision. How it’s evolved, it’s interesting. My day job at the time, I was a hedge fund analyst, which was arguably the most for-profit activity. It was only for-profit. Like, there’s no other benefit, or well, liquid capital markets and pricing efficiency, every hedge fund on the margin is helpful. But anyway, it’s primarily for-profit. But while in that job, I was able to be a really, it was interesting to be an observer of how organizations’ behavior was driven by capital structure. That honestly, you had annoying people like me, hedge fund analysts calling you and trying to figure out whether you’re going to meet or miss your earnings this coming quarter. And usually, the way that executives are compensated at these firms are based on stock performance and things like that. And I also saw when the debt holders are senior versus to when you have a strong founder versus when you’re in the second generation and the founder’s left, very few of these organizations are able to stay. There are for-profit organizations that start with a strong, mission-driven founder and are able to stay true to that until something happens to the founder or until the founder doesn’t have control of the organization anymore, right? Private equity just bought it or well, now the founder owns 20%, but 80%, it’s a public company now, or the founder dies, goes away, gets fired, and now someone else is taking over. There’s very few examples you can give. 

And there is an irony that the only class in business school—I don’t know about Haas—but where I went to business school, they didn’t fail anybody, but they would give you these like internal grades and the only grade that I would’ve been, like, the equivalent of a fail if they actually failed anyone, was a class called social entrepreneurship. Because I was so skeptical of some of these nonprofits, I was just like, “Yeah, they tell a good story, they pull on your heartstrings, but is that really going to cure cancer? Is that really going to blah, blah, blah, blah.” And that’s what I wrote in the essay until I realized that that was the not-for-profit that the professor started, but not a good idea. But it didn’t fail anyone, so not a big deal either. It allowed me to speak my truth. 

So I was cynical, but being in the hedge fund world, I said, “I want this Khan Academy project to just always be there.” I read a lot of science fiction. I was like, “what if this could be like a new type of institution, like the next Oxford or Smithsonian, but it could be on a completely different scale. It could be for billions one day and maybe it could last for hundreds of years.” And if you look at that, the only organizations that can be true to that type of a mission are not-for-profit organizations. And so, it’s sometimes delusional to say that you want to be the next Google or the next Facebook or the next Amazon. That’s hard enough. It’s arguably even a little bit more delusional to say that you want to be the next Oxford or you want to be the next thousand-year institution, but you live once, why not try?

– And what are some of the biggest challenges you faced while running and scaling a nonprofit organization? I know it’s very unique and different from running a for-profit company. A lot of our classmates who are in this room today are either building their own organizations like this or want to join one and lead one of these organizations.

– Yeah, if you asked me in 2000, if you asked me in late 2009, I would’ve said the biggest challenge is raising money and convincing people that you’re legitimate. I, at the time, took the most naive strategies and look, the advantage that Khan Academy had or that I had was that I was making something that was discoverable by people. I think it’s a very different thing if you’re starting a not-for-profit where you’re taking donations from one group and then you’re going someplace in the world and then you’re putting that money, I’m probably not the best person to ask on how do you start a not-for-profit like that. But here, not only was I making something that people could find and discover, but it was happening, it was growing, in those early days it was growing 15, 20% per month. So it was on this kind of exponential growth curve that people would associate with a high-growth tech company. And look, VCs were coming up to me and they were saying, “Hey, I’ll write a hundred thousand dollars check right now. You can quit your day job.” And it was tempting and I would take the second meeting with them, but the second meeting, they started talking about premium offerings and putting this behind a paywall and that and this is how you’re going to, and I’m like, no, and I was getting letters from kids that I knew and families that I knew would not be able to use the tool if this VC had their way. And so that’s why I kept turning that down, and luckily, my naive strategy kind of worked with people like Ann discovering it. And eventually, I mean, you can’t plan for Bill Gates just showing. I have a theory that I sometimes play with that benevolent aliens are using Khan Academy to prepare humanity for first contact. And some of what I told you of like, these things that seem a little bit more than just chance. Those are my data points. I have more. I actually think the benevolent aliens help set me up with my wife as well, so that I can prepare humanity for first contact through Khan Academy. But I have some good stories there.

But the real difficulties, I think, beyond that first validation, which is a hard one, and it was really hard. I mean, I kind of laugh about that nine months where I really didn’t know what I felt like; I kind of ruined our financial future. But once we started to have resources, I think it is, and we were a little bit, we are still unusual. We’ve been able to attract very good talent. Like, the main arguable advantages that a for-profit has over a nonprofit is access to capital, access to talent and potentially some notion of the incentives make you act in a different way, which could be good or bad. Access to capital, at least in those, in hindsight, I’m happy that the access to capital we’ve had, our budget is a real budget where it’s like 60, $70 million a year now. And it’s primarily philanthropic. So we have been able to do that. 

Now, there have been other for-profit organizations, including in EdTech, that started a year or two after Khan Academy; and they get higher and higher valuations, and they’re able to do these really huge rounds and raise a hundred million, raise 500 million, raise a billion dollars. And as a 30-year-old, I would’ve been somewhat envious of that. Now, I don’t envy that at all because that creates all sorts of distortions and pressures. And the hardest thing is, as you grow, to maintain alignment. If you can grow and maintain your talent and your alignment, a 300-person team can outperform a 30,000-person team. I’m not saying this even as an exaggeration. I 100% believe this. Like, you see this playing out in the real world right now. I mean, OpenAI is a 300-person team. I think they’re outperforming many 80-, 90,000-person teams on what they’re doing ’cause they are aligned. And to some degree, probably the scarcity of capital in their early days helped drive that. And their group that I know very intimately now, and I know some of the 90,000-person organization, some of them were our original funders very well as well. But yeah, I think that alignment, when you get to like 20 people, you start realizing that people just don’t always assume the obvious, what you think is the obvious thing ’cause you’re not just having conversations on the way to the snack counter or whatever. And so you have these growing pains. There are like 20 people, 50 people, 100 people, 200 people. And so now I’m a big believer in like, you can’t overinvest in alignment and alignment is not just communication. And this is a muscle that I don’t think people in Silicon Valley exercise enough, is being very clear with team members of like: “Look, this is what we’re doing. If you’re excited about that, awesome. If you’re not, this might not be the place for you.” That is kind of strong language, but I have found it to be very powerful language because otherwise, people are just trying to pull it in all sorts of different directions.

– Thank you. And just to, like, double down on that last few statements: As your business grew, what were your main culture objectives, and how did you maintain or create that company culture? Did you have any hiring strategies or professional development plans that you leaned into? Tell us more about that.

– Yeah, no, it’s a good, I segued well into your next question. My early days, like, my first job out of college was at Oracle. I was a product manager there and I got very cynical, very fast. I was like this big company, I’m just sitting in meetings all day, well, anyway, I don’t want to name, well, there’s some fun stories there, but my manager at the time had some views about the efficiency and how it could be improved at the organization. 

But that made me, like, there was a time where I said, “Khan Academy is always going to have, is always going to be a startup. It’s going to be a perpetual startup. I don’t want it to ever be a large company because large companies become bureaucratic and people just sit in meetings all day.” And so I had a view of “Let me just hire the smartest people I can and get out of their way and have as few meetings as possible.” That can sometimes be good, but it leads to issues at some point. Smart people, if they’re not aligned, can easily try to pull in different directions. And if you’re not communicating enough, you’re not going to get enough alignment. So over time, I’ve started to realize that it’s very important to, that we are a place where people can bring their full selves to. And because look, you’re spending a large chunk of your life doing work. And so, I try to—Khan Academy is a place where you shouldn’t be embarrassed to say that you’re going to take an hour to go meditate. You should be proud of that. You should even say that as an example. And look, a lot of that comes from me setting an example. It’s one thing to say it. It’s another thing to say, “Hey, I can’t attend that meeting because I’m going to be meditating,” and that sends a signal to other people. “Or I can’t do that evening meeting because I said that I’m going to do this event with my family that night.” So I think it’s very important to put those guardrails and all of that. 

But I think culturally what I take a lot of, what I try to put a lot of energy into is making sure people are aligned. Like, disagreeing is great. Like, let’s disagree while we’re talking about the tactics of something, but we’ve got to make a decision and then we’ve got to commit to that decision, otherwise we’re just never going to go anywhere. And if you can’t truly commit to the decision and then that goes into the, like, this might not be the right place, right? Like, otherwise, you’re just going to be constantly trying to undermine it in passive-aggressive ways. So I think that’s another cultural thing. 

I’ll say another cultural thing that I’ll say, which is, I think, obviously words like DEIB or letters like DEIB are, like, a big deal these days and they always have, and I’ve always been a very big believer in that. But I do believe that sometimes it is viewed as a signal for you are a left-leaning organization, or you say DEIB, but you really mean that you subscribe to these ideas that other people might not subscribe to, which is almost the opposite of DEIB, right? The whole argument behind diversity is that when you have different viewpoints, people who are different than you, now reasonable, and people who aren’t trying to shut each other down, et cetera. But if you have different reasonable viewpoints, that’s going to get your eventual decision to be a better place and people with very different experiences. And I remember a wake-up call for me was we had a senior executive at Khan Academy, this was about five or six years ago, and it was at an offsite, and all of a sudden, and he was an older gentleman and he said, “I was afraid to say this, but now I feel comfortable with y’all enough to say this. I’m an evangelical Christian and I’m a Republican.” And I remember when he said that, like half the team was like, “Wow, you’re so brave for saying that.” And then the other half of the team was saying things like, “Who did this guy vote for? And what’s his view on this and this?” And that was an eye-opener for me. It’s like, we can say DEIB, but we aren’t DEIB if that guy, who was really good at his job, who everyone really liked to work with, was afraid to even say what religion he is. And so what I try to do now is push everyone on DEIB where I say, “That’s not to hire more people that agree with you. That is to hire people who are truly from diverse perspectives that can push us to get to a better place.” So I think I take those words more seriously than a lot of other corporations that do it in a very performative way. I think there’s, most executives, if I’m honest, say I’m not going to get involved. I’m going to hire someone else to do that. And I’m just going to keep nodding and hope for the best versus actually trying to get true DEIB.

– Thank you for that. After hearing the inspiring story of the origin of Khan Academy, our ambitious and idealistic students here have questions for you. If you’re interested in asking a question, please go ahead and step to the mic right there in the aisle and tell us who you are and then go ahead with your question.

– Sal, thank you. Is this on? Probably not. OK, it is. Sal, thank you. My name is Doris. I’m a second year, and I lead our Haas Education Club here, which everyone should join. Aside from that pitch, oh, first off, I grew up hearing your videos, watching your videos, so I’m very familiar with that voice and today, I’m able to put that voice to the face and it’s great. My question for you is what is the largest gap that you see in American education today?

 

– Oh yeah, it’s a big one. I’ll say at least two. I’ll say the big one is, we fundamentally have a seat time based system, especially in high school, but even in college as well, right? In high school, we know the Carnegie units, which is like, you get a Carnegie unit when you sit in a year in math, a Carnegie unit, a year in English, et cetera. And even college, high school graduation requirements and college entrance requirements have stuff like you need to take three years of math. You need to take two years of foreign language. That, in no way, talks about whether you learn the math or learn the foreign language. So I would love to go more to an outcome-based or competency-based system that’s like, you should get to this level of math before graduating from high school. You should get to this level of reading, this level of writing. And if you don’t, you have the opportunity incentive to keep working on it. It’s not like it’s an all-or-nothing type of thing, but if you go there fast, great, you can get there fast and you can work on other things. 

I think college should be the same, the fact that it’s all credit-hour based and that magically, regardless of what you major in, it’s all kind of like a four-year program. Yeah, there’s some arguments behind it from a stage of life point of view. So I would go to a competency-based, a corollary to that is being mastery-based, which is this idea that if students have a gap, a conceptual gap, that they have the opportunity, the incentive to continue to work on it. So if you’ve got a B in computer science, and two years later, you’ve mastered that material, you should be able to do something that allows you to show that you’re now at an A level, your transcript should be able to be upgraded, so to speak. And a correlator to that is, allow students to learn at their own time and pace.

– [Doris] Thank you.

– Hi, my name’s Patty Debenham. I run a center here for Haas students all about social impact. And I’ve been a big fan for a long time. I loved your book and at the end, you painted a terrific vision of a new kind of higher education that doesn’t cost $70,000 a year. I mean, even Berkeley, a public institution, is crazy expensive. I’d love to hear how you’re thinking about that now and how it can be possible that my 10-year-old doesn’t have to pay 70, well, I don’t have to pay $70,000?

– Yes. No, this is something I’ve been thinking a lot about and many of y’all know, I mean, I wrote that book, and then the year after I’m like, it’s one thing to write about a book. It’s a whole other thing to try to implement it. So I did start a school and now schools based on the principles in that book. We have Khan Lab school out down here in Mountain View and Palo Alto. And now there’s this Khan World school that we started with Arizona State University, which is a virtual high school. So the virtual middle and high school, and then Khan Lab school down here is K-12. 

But the big question is: What about higher ed? And there’s a couple of tactics that we’re taking. One is we are actively exploring ways that Khan Academy, mastery on Khan Academy can result in college credit. So one method is if you can make essentially some version of dual enrollment via Khan Academy available to anyone on the planet, and it’s essentially it’s free or near free, and they can get a lot of these first- or second-year classes out of the way; that automatically lowers the cost of college education and actually increases the capacity for more people to get through the physical doors, so to speak. But the really cool thing would be if—and I don’t care if I’m involved—but someone, and there’s some universities, I think, that are already touching on that. There’s, like, Waterloo in Canada, which many of y’all know is an excellent, one of the world’s best engineering schools. Kids graduate from there, not with debt, but with savings because they use the co-op program so effectively, internships. And there’s another advantage where, while the Stanford and the Berkeley and the MIT kids are in classes in the fall and the spring, the Waterloo kids are getting, they get a monopoly in all the internships at all of the places, and they’re getting paid. And so that’s why not only are they getting better experience, they’re more employable. So I think a model like that would be really interesting. I would love to see it in the U.S. I know there’s a lot of talk these days about downtown San Francisco having emptied out. I’ve whispered to a few folks, “Hey, someone should start a university there, but make it so it’s free and not free through philanthropy.” Maybe you need some philanthropy to get it going, but in the long run, it’s free because the students are able to do a lot of real-world work that can be used to both pay the university and pay the students. So yeah, we’ll see. We’ll see. Yeah, your 10-year-old, I have about eight years to work on that. We’ll see what happens.

– Thanks for taking the time, Sal. My name is Asif. And a subject that talks about that learning to learn and critical thinking that you mention a lot is philosophy and looking at some of your books, maybe you’re a fan as well, but academic philosophy is famously dull, whereas the practical impacts of a philosophy educated population society is invaluable. So I’d love to get your thoughts on philosophy in the education system and maybe if you’re incorporating it into Khan World School or Labs.

– Yeah, so we definitely incorporate, like, when I think about what a great education looks like, I think you definitely should have Socratic dialogue about things like philosophy. I mean, there’s other types of things that you can get into really good, thoughtful debates and discussions about, but philosophy’s definitely like half of all the discussions that you could easily have. And at Khan World School, Socratic seminar is actually the anchor point for the whole school. And we’ve partnered with Steve Levitt’s group at the University of Chicago to create a whole list of topics. And half of them are literally philosophical, but they’re real-world philosophical to make it not just abstract. So there’s, like, literally a debate for middle school and high school students on things like should we leverage CRISPR to modify the human genome? Go. And all sorts of philosophical debates start to emerge from that. Will AI be a net positive or negative for humanity? Is GDP the best way to measure progress? You have to learn economics and history and math, but there’s a lot of philosophy in that. So yes, I’m a big fan of it. We’re definitely trying to, implementing the schools we’re doing. 

The AI that we just, Khanmigo, which we built, we partnered with OpenAI over the last year. We launched with GPT-4 several months ago. One of the things that you can get into debates with the AI about frankly all of these topics and more, so that’s one way to hopefully scale it out a little bit more. And then we do have some content already on, and this is more academic philosophy. We’ve partnered with an organization, so that content is on Khan Academy. But yeah, I definitely think it is important. It is one of those things that I think you could have it in almost any subject. And I think that’s actually probably the way to make it, you tie it to real-world issues that is happening every day on the news. Like, reasonable people aren’t getting into debates about these things. Those are great fodder for philosophy.

– [Asif] Thank you.

– Hi, first off, a huge thank you. I was a public school teacher in New York City and Khan Academy liberated my classroom to be a standard space, like collaborative problem-solving space.

– [Sal] Oh, that’s good to hear. That’s the dream.

– My students in Brownsboro were, like, outperforming Westchester white, like, rich students because of work like yours.

– [Sal] If you have any information, I’m always looking of, anyway, but yeah, go.

– I’m looking for an internship this summer. But people looked at, and what made Khan different from me is that you trusted me as an educator to understand data and you gave it to me so I could use it. And you trusted my students to have the data too. That was better than ST, better than I learned, better than anything else. But people looked at me as an educator as unique because I knew how to use the data. My big fear going into AI and ChatGPT is how do we support and build a teacher force that is able to use that technology to liberate their classrooms?

– Yeah, that’s a great question. And what I’m hopeful about, obviously, it’s still very early days, we’re building this right now with all of our Khanmigo stuff. We realize it’s great; Khanmigo can act as a tutor, but it’s even more powerful that it can act as a teaching assistant. And some of that is to help with things like lesson plans and rubrics and give a first-pass grade and writing progress reports, which as you know, as a former teacher, take up a lot of your time.

– [Audience Member] A lot of time.

– So that’s good. But I also think that generative AI means the end of these, like, kind of spreadsheet looking dashboards that you’re familiar with because now it’s like you’re having an analyst. And we already have implemented some aspects of this where a teacher, instead of seeing the dashboard, right, and then having not every teacher can do what you did. And like looking at the dashboard and figuring out which kids could use what, they can just talk to the AI and say, “Hey, so what’s going on?” And the AI can say, “Well, for the most part, the students are doing all right. Here’s five kids who are, for the most part, struggling with these three concepts. Here’s an idea for a mini lesson that you could do with these three kids while the other, or these five kids while the other 20 or 25 students work at their own. Or if I were to group, or here’s an idea for a lesson, and by the way, I would group the kids this way for this reason. This third of the class is really struggling, this third is OK, this third is ready for some really enrichment. They’re getting bored. Let’s give them something else.” This isn’t science fiction anymore. And then if you want the data and the AI will say, “Oh, and by the way, if you don’t believe me, click here for the spreadsheet.” But I think that’s going to make it much more accessible to all teachers. You’re going to be able to text with the dashboard, so to speak, and say, “What should I do? What insights are here? What do you recommend I do next with the students?”

– [Audience Member] Thank you.

– Hey, Sal, my name’s Alex. Following up on that a little bit on the Khan World Academy, I was listening to the podcast with Steve Levitt, and initially I was skeptical, but then I heard the student talking about her experience and it started making a lot more sense. And so I was more curious if you can go in on, like, how you continue to design that curriculum and also what your vision is to scale that up so that more students can have an experience like that?

– Yeah, I mean the beauty of Khan World School and ASU, we did it ’cause ASU already runs ASU prep, which already has 40,000 students, so they know how to scale. And they already have a charter in the state of Arizona, which means ASU prep. And now Khan World School is free to any student in the state of Arizona. And hopefully, we can get charters in other states as well. So that free, world-class education for anyone, anywhere can be true beyond Arizona ’cause this is a full school. 

 A lot of the principles are what we’ve learned over 10 years running the physical Khan Lab School. And also what I wrote 10, 11 years ago in The One World Schoolhouse, students learning at their own pace, having more agency autonomy, the adults, the teachers, the guides, whatever you want to call them, their time focused more on unblocking students, motivating students, advising students, driving Socratic seminars versus lecture, et cetera, et cetera. And with a virtual environment, you’re not bound by time or space in the same way. And we also wanted to show that you could do virtual much better than people did it in the pandemic where it was soul-crushing. And so, we anchor it with a Socratic dialogue. Kids get an hour or two of synchronous community-building discussion advisory every day, but then they have a lot of autonomy to do other things. 

And to your point, Steve Levitt, who everyone knows here from Freakonomics, famous economist, he’s not a sucker for bad data. But as far as we can tell, these kids are not learning 20, 30% faster. They’re learning two x, three x faster, and they’re enjoying it. And there’s stuff we’re not even measuring like the seminar ’cause there aren’t any standardized tests for how good someone is at seminar. But we feel confident that these are well-rounded students that are going to really thrive later on.

– [Alex] Thank you.

– Thanks, Sal. My name is Vinit, and I’m in the MBA program. So recently, I started getting excited and passionate about using technology and AI to perhaps achieve, like, educational parity. And so I was at this San Francisco tech meetup, and I started going around and just started pitching this idea to some folks. Look, we don’t need to teach children or kids how to use computers or even learn how to code anymore. Like, AI can generate code. We need to just provide them more creative ways to play with code or sort of just give them, like, the fundamental building blocks like Legos using AI and they can just sort of create apps on their own and feel empowered about themselves. And what ended up happening throughout the course of the evening was when I talked to the investor community, like the VCs and folks, they would just look at me like, no, no, like EdTech’s a very, very difficult business model. You’re either going to have to sell to the parents or schools, which is no joke. And then there happened to be folks there that were parents and many of them were technologists famously creating apps for adults. But then when it comes to their own kids, they would say like, “No, I just want my kids to play outside, be in the nature. Like, I personally believe that technology hasn’t really given us anything meaningful in form of, yeah, education other than Khan Academy, of course.” But I mean, it is valid concern giving tha the rates of stress, anxiety and focus attention for teenagers or preteens especially has gone up quite a lot recently. So, yeah. I don’t really have a question. I guess I would wonder how I really want to remain optimistic, and you’re one of the few people that I see that are optimistic still in this space. So when you’re not speaking to a room of full of people that have already bought into this idea, I guess, how do you convince those folks, whether it’s parents or investors or whoever it is?

– Yeah, well, I think a bunch of stuff you said resonates with, I think the VCs you’re talking to are right. EDTech is a hard thing especially if you’re trying to get VC-like returns. It’s a very hard thing. And if you want to get VC-like returns, you probably will have to sacrifice some of, maybe some of your principles around like, OK, let’s make this a thing for rich kids, and maybe it helps them cheat a little bit or something like that. Honestly, there are multi-billion dollar publicly traded EDTech companies, that is their business model. I won’t name names. So it is hard ’cause it’s, and it’s even harder if you’re trying to introduce a new paradigm around, in your case, engineering/coding. 

My answer to the screen time is, it’s not about screen time is neutral. There’s some very good uses of screen time. Obviously, if a student is writing a paper, coding, doing some graphical art, I argue Khan Academy. But even that needs to be within reason. For my own children, I still want them to go outside, play with their friends. If someone visits Khan World School or especially Khan Lab School, if they visit, you’re going to see kids not on a computer all day. They do probably use a computer more than your average school, but they’re also getting more social interaction than your average school because they’re not sitting in lectures all day, either. So Khan Lab school kids are constantly working on projects and collaborating and walking around the space. They don’t have to sit in one chair all day. So I’m a big believer in that. So my advice would be, you might be trying to tackle too many degrees away from where people’s comfort zone is right now, but maybe there’s a way to take that same tool and show that you could use it to create, like, enterprise apps or things like that, and college students could use it to start companies. That could probably get, I could imagine, VCs wanting that even to start their own incubator. They create an app like that, and people could come in and just write apps really, really, really fast and get product market fit tests really, really fast. That could be an interesting model. 

But maybe there’s other things if you find the right partner with Lego or something, I don’t know, it’s not easy to pull off. Who knows? I don’t want to discourage you either ’cause what I was doing in 2008 or 2009, people found far, far more ridiculous than what you are doing. So people thought not-for-profit, YouTube videos, personalized learning, all of these stuff, was sounded ridiculous.

– [Vinit] Thank you.

– Well sadly, we are out of time. Thank you for the time that you’ve spent with us today, Sal.

– [Sal] Thanks for having me.

– Thanks to our moderators, Anu and Mrudula. Thanks to all of you for joining us. This has been a wonderful and inspiring hour. I hope you’ll join us again for future Dean Speaker Series. Have a wonderful day.

Berkeley named top university for number of venture-backed companies

PitchBook has ranked Berkeley #1 for its number of venture-backed companies founded by undergraduate alumni and #2 for its number of founders, according to the 2023 PitchBook University rankings.

The 2023 PitchBook rankings also named Berkeley the #1 public university for startup founders.

A total of 1,433 Berkeley undergrad alumni founded 1,305 venture-backed companies, a virtual tie with Stanford, whose 1,435 founders started a total of 1,297 companies, according to Pitchbook.

Taking into account all graduate alumni, Berkeley ranked #5 in startups and founders. Berkeley Haas MBA alumni ranked #9, with a total of 447 founders who started 413 venture-backed startups. (The ranking doesn’t include many more startups that have been founded without venture capital funding.)

The 2023 PitchBook University rankings are based on the total number of founders whose companies received a round of venture funding between Jan. 1, 2013, and Sept. 1, 2023.

The analysis is based on PitchBook data for global VC investment, as well as the educational information of more than 150,000 founders. Since companies can have more than one founder, and founders may attend multiple schools, it is possible for the same company or founder to count toward multiple universities.

Read UC Berkeley’s article about this ranking.

FlowGPT cofounder on his visionary AI project that’s speeding ahead in the AI market

Startup: FlowGPT
Co-founders: Lifan Wang, MBA 22, and Jay Dang, a former UC Berkeley Computer Science major

photo of a man in black and white
Lifan Wang, MBA 23, co-founder of startup FlowGPT (Wang used Lensa AI to generate the image.)

In this interview, Lifan Wang discusses how he met his FlowGPT co-founder, Jay Dang, at UC Berkeley, and why speed was critical for his startup in entering the AI market.

How did you  come up with the idea for FlowGPT?

We started this project in January. We both were power users of ChatGPT when it first came out. We would spend around 10 hours a day exploring different use cases of ChatGPT prompts and trying to leverage AI to increase our productivity. As we used it more, we realized that there are so many more use cases that people haven’t discovered.  So we started doing extensive research by talking to people who use ChatGPT and prompts. We talked with approximately 100 people from various online communities, such as Discord channels and found that people constantly post and share ChatGPT prompts with each other, which gave us the idea to create a dedicated platform for prompt creators to share their prompts.

How did you get started in entrepreneurship at Haas? 

Haas is a great place for aspiring entrepreneurs. I’ve taken several entrepreneurship classes, including a class with Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program, that helped me understand the process of launching a startup — from searching for ideas to conducting user research to creating a prototype. 

Haas is a great place for aspiring entrepreneurs.

In the Business of AI,  taught by Pieter Abbeel, a renowned professor in the engineering school, I interacted with generative AI and learned about neural networks and the GAN (Generative Adversarial Network), which pits two different deep learning models against each other in a game. I also explored various technical imaging technologies. I firmly believe that AI, especially generative AI, is going to be a significant trend that will revolutionize the world.

Where did you meet your co-founder?

Jay and I met during our time at UC Berkeley SkyDeck, where we attended various events. Jay was seeking funding for his startup in his freshman year. As a part-time venture partner, I was interested in potential investment opportunities. He pitched me his startup, which connected to the work I had previously done in the industry. We had extensive discussions and got to know each other well.

Are you both seeking funding right now?

We secured our C round of funding in May and are currently preparing to launch a new funding round this month or next. Our user base has experienced robust growth, and based on the data we’ve gathered, now is the perfect time to accelerate expansion.

What are some of your concerns about the future of AI or its impact on work and society?

With every technological advancement, there are inherent risks. When computers were introduced, illegal activities emerged on websites and regulations evolved. Our aim is to empower people to be more productive and generate a positive impact while prioritizing safety. We must ensure the safe use of AI, which will become a powerful tool, similar to the internet and software. Many people are already leveraging new AI tools like ChatGPT and Prompt Engineering to increase their productivity. At FlowGPT, we use ChatGPT daily for coding, product management, messaging, and marketing, covering various aspects of our operations. AI represents the next generation of powerful tools that elevate human productivity to new heights.

Our aim is to empower people to be more productive and generate a positive impact while prioritizing safety.

Do you have any advice for aspiring entrepreneurs? 

Execution is crucial. That is the most important thing I learned from Jay, my co-founder. 

We launched the product in January, just one and a half months after ChatGPT’s release. Unlike many competitors, who were still in the ideation stage, we were already ahead. When competitors attempted to imitate us, we had already iterated three times and gained a million users. 

My advice is to start building right away. You don’t have to be an expert at product development to get started. During my time at Cal, I noticed many people getting stuck in the same phase. Some might say, “I’ve got all the business plans figured out, and all I need is one programmer to build the product.” However, as time passed, they were still searching for programmers. The ability to launch is crucial, especially in the initial stages.

 

Startup Spotlight: Download Scribble AI to write content faster than ever

three students and a woman holding a check
Left-right: Dean Ann Harrison with Sahil Mehta, BS 23, (Business & Electrical Engineering/Computer Science); Jayaditya Sethi, BS 24 (double major in business and computer science); and Ethan Jagoda, BS 24. Their startup, Scribble AI, tied for third at LAUNCH.

Jayaditya Sethi, BS 24 (double major in business and computer science), along with Sahil Mehta, BS 23, (Business & Electrical Engineering/Computer Science)  and Ethan Jagoda, BS 24, (computer science), founded Scribble AI, an AI startup that placed third in the recent UC Berkeley LAUNCH accelerator pitch day. The startup is also part of the Batch 16 startup cohort at the UC Berkeley SkyDeck accelerator. We recently asked Sethi, who will be a software engineering intern at PayPal this summer, five questions about Scribble AI. (Download the app here.)

Tell us what ScribbleAI is and how people use it?

Scribble AI is a simple mobile interface people can download that uses AI to effortlessly create customized written content live on iOS and Android phones. It can be used to generate emails, poems, tweets and everything in between across 12 different languages and 20+ style customizations.

What is your favorite way to use ChatGPT (an artificial intelligence chatbot developed by OpenAI)?

Our favorite use for ChatGPT is for debugging code as this was crucial for us to launch the app within two weeks without any prior mobile development experience.

How did you meet your co-founders Ethan and Sahil?

We have been close friends since starting at UC Berkeley. Sahil and Ethan met through the startup accelerator and consulting club Entrepreneurs@Berkeley. Ethan and I met through a class and are now roommates. We have all collaborated on previous projects, such as being part of Entrepreneurs@Berkeley leadership and co-founding a music club together.

What is the most important takeaway from participating in LAUNCH?

Our biggest takeaway from LAUNCH was to constantly challenge our assumptions about our business. During each workshop, the mentors at LAUNCH questioned our hypotheses about our product and its use cases, helping us find a scalable business model. For example, we learned to find the root causes of a customer’s problem, rather than simply take what a user says at face value. These are lessons we will carry for years as we continue our startup journey!

What are your plans for Scribble AI now?

We plan to scale up traction in international markets, particularly among social media creators who need a tool to write content 10 times faster. We are also developing the premium version of our app, which will be tailored to each user’s specific needs

Pitching with purpose: Students imagine future of mobility for automaker

nine people standing on stage holding a check
Pitch winners with judges (left-right) Nick Triantos; Tafflyn Toy; Henry Chung; Victoria Marcus, EWMBA 25; Srivatsa Chakravarthy, EWMBA 25; Oleksandr Krotenko, EMBA 23;  Simeon Ryan, EWMBA 25;  Ju yup Kang; and ChangWoo Kim. Photo: Jim. Block

A student team that imagined a plan for Hyundai Cradle to build an electric-powered mobile medical fleet and market it in North America won the 2023 Haas Purpose-Built Vehicles (PBV) Challenge.

Hyundai Cradle, Hyundai Motor Group’s Mountain View, Calif.-based open innovation and investment arm, sponsored the challenge, which was held April 23 at Berkeley Haas. 

Cradle challenged students to develop novel business models for the company’s future PBV market launch in North America. Hyundai Motor Group is in the final stages of building a flexible automobile base, called a skateboard, that can be used to produce many kinds of PVBs—vehicles ranging from ambulances to passenger shuttles to delivery fleets for small businesses.

The first-place team took home $15,000 for its pitch. Winning team members included Srivatsa Chakravarthy, EWMBA 25; Oleksandr Krotenko, EMBA 23; Victoria Marcus, EWMBA 25; and Simeon Ryan, EWMBA 25.  

The competing teams, composed of graduate students from across all three Haas MBA programs and the UC Berkeley School of Information, participated in a semester-long series of training sessions, focused on the Lean Startup method and customer discovery training. The top three finalist teams were then tasked with finding and validating novel business models for PBVs that they pitched to judges at the end of the program. 

“This was a fantastic way to showcase students from across all three of our MBA programs,” said Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program (BHEP). “The program also provided a perfect opportunity for our MBA students to work with top graduate students from across the campus.”

Solving real problems

The winning group pitched a fix for emergency medical services that they described as “antiquated, expensive, and ripe for technological disruption.” The team suggested that Cradle partner with industry leader AMR (American Medical Response) to capitalize on the company’s market share and need to contract with an outsourced fleet.

two men and one women pointing, wearing suits speaking at a conference
Victoria Marcus, EWMBA 25, pitches during the 2023 Haas Purpose-Built Vehicles (PBV) Challenge. Photo: Jim Block

Marcus, who works in corporate finance, said she was excited to work on solving a real problem experienced by a company outside of her industry.

“Going through the pitching process with judges was the pinnacle business school experience I’ve always wanted to try since I started my EWMBA,” she said. During Lean Launch, she said her group conducted more than 30 interviews with potential clients. “We had to pivot a couple times from our original idea to make sure we were solving problems for them,” she said. “Ultimately this led us to think hard and adapt so we could develop a detailed business plan that would benefit potential clients.”

During the pitch day, Kia’s vice president of new business planning, Ju yup Kang, a judge for the competition, outlined how KIA is transforming from a car company to a “full mobility solution provider.” Henry Chung, senior vice president and head of Hyundai Cradle, said the students had clearly put in a lot of effort to develop creative solutions to difficult problems. 

Chung; Kang; Changwoo Kim, a chief coordinator at Cradle; Tafflyn Toy, an open innovation project manager at Hyundai Cradle; and Nick Triantos, chief architect, automotive system software at Nvidia, served as the final challenge judges.

Team Ingenium took second place ($10,000) with a pitch for all-in-one fleet management. Members included Reggie Draper, EMBA 23; Michael LaFramboise, MBA/MEng 24; Matthew McGoffin, MBA/MEng 23; and Michael Yang, MIMS (master of information management and systems) 23.

Team Mobility Moguls took third place ($5,000) for a strategy that addressed a mobile future for police & security. Team members included Anmol Aggarwal, EWMBA 24; Suveda Dhoot, MBA 24; Hrishikesh Nagaraju, MIMS 24; Nithin Ravindra, EWMBA 23, MIMS 24; and Lutong Yang.

a group of students holding three large checks
The three prizewinning teams in the Haas Purpose-Built Vehicles (PBV) pitch competition with checks. Photo: Jim Block

 

Startup Spotlight: How late-night crypto conversations led to hyphen labs launch

two men standing in downtown Berkeley
Tarek Mohammad and Jin Kim, both MFE 23, launched hyphen labs in November 2022.

When Jin Kim and Tarek Mohammad, both MFE 23, met at orientation for the Berkeley Haas Master of Financial Engineering program last year, they instantly connected over a shared passion for blockchain, crypto, financial systems, and entrepreneurship. 

Intense discussions, many times lasting until 4 a.m., led Kim and Mohammad to launch hyphen labs, a platform for industry decentralized finance (DeFi) trading. DeFi is a broad term for applications and projects in public blockchain geared toward disrupting traditional finance. 

While at Haas, hyphen labs was accepted to the UC Berkeley SkyDeck accelerator cohort, and was the first MFE-founded startup to make it into the Techstars accelerator program. Kim and Mohammad, who launched hyphen in November 2022, are now heading to Miami and Boston to raise a seed round.

In this interview, they discuss what led them to Haas, the experience of launching a fintech startup, and the challenges ahead.

Haas News: Tell us a bit about your background and what led you to Haas?

Tarek Mohammad: I have a unique story because I come from a unique place. I studied economics and actuarial science as an undergraduate in Lebanon. However, starting in 2019, Lebanon experienced huge economic turmoil. The government defaulted on its government bonds, and then the banking system defaulted. I lost all my personal savings. By that time, I was working for KPMG as a consultant. Then Covid hit. During that period, the ammonium nitrate explosion hit the Port of Beirut in August 2020. The KPMG office was five minutes walking distance away from the explosion and one of my managers died.

With all of this change and turmoil, I decided to create a fintech startup. I quit KPMG. By then, I’d decided that the banking system needed to be fixed, and the only way to do it was through blockchain because with blockchain, there are no intermediaries. Then I applied to the Master of Financial Engineering program at Berkeley Haas and arrived in the states in March 2022. During my studies, I won the Franklin Templeton Blockchain contest in Palo Alto. After this, Jin and I decided to partner on a venture together and never looked back.

I’d decided that the banking system needed to be fixed, and the only way to do it was through blockchain. — Tarek Mohammad.

Jin Kim: I am from South Korea and worked in AI research as a machine learning researcher. That got me interested in trading with AI algorithms and a professor at my school. I started and ran a small hedge fund focusing on U.S. equity and crypto investments using AI. Though trading was still my thing, crypto trade got me more into the blockchain itself. So, I went to work as an investment analyst intern at the VC arm of Dunamu, the biggest crypto exchange in Korea. Since I liked finance trading, algorithms, and crypto, I thought I should attend a master in financial engineering program. The best program out there happened to be Berkeley, which is also near Silicon Valley. It fit both of my goals: to get a bit more academic and hands-on experience in the field and exposure to people who like to take risks and try new things.

What does the company do?

Mohammad: What we’re trying to do is build an infrastructure for institutions to be able to get crypto exposure, specifically on DeFi. So, if say, BlackRock wants to access the DeFi infrastructure or trade on crypto on DeFi, they can use us because we provide a solution. We hold custody of their assets and provide them with a DeFi interface and infrastructure that provides some compliance and comfort. 

When did you realize that your idea was unique and could work? 

Kim: It wasn’t a simple “aha” moment. We interviewed our potential clients every day to hear what they needed and found that every client is different, so their respective needs are also different. It helped us greatly to pause every now and then to review what we learned. With these quick pauses and iterations, we saw a pattern emerging with many people dealing with a problem that was worth looking at. Then we had a feeling about what would work. 

We saw a pattern emerging with many people dealing with a problem that was worth looking at. — Jin Kim

What are some of the challenges that you all are facing while building a startup?

Mohammad: It’s a perfect time to be a builder, but it’s a challenging time for fundraising, especially over the last few weeks with the banking meltdown. On the personal side, we also have unique challenges. As international students, it isn’t easy with our visas. Many international classmates immediately go to work after graduating for visa reasons instead of going into entrepreneurship directly. But running a startup, we needed to consider our visas while we figured out the payroll, hiring, and acquiring talent. Moreover, we also needed to figure out the product itself. I’m talking to customers every single day. 

What did it mean to get accepted to Techstars, and how has the experience been?

Mohammad: It’s really a great community. It’s a hub for entrepreneurship, one of the biggest hubs in the world, and one of the biggest funds. Of course, the process was challenging, with a low acceptance rate. But it’s an ecosystem. You’re surrounded by people you can relate to, people who are builders and ex-founders. So, it’s more of an ecosystem for us. It’s a lifetime membership.

What are some ways in which the Berkeley Haas community has helped you throughout this process?

Mohammad: We worked within the MFE network and the broader Haas alumni network. We get a lot of answers regarding our product and our company’s direction from talking to these people. So mostly, we think about this from the networking side and how existing students and MBAs with industry experience can help us shape our direction.

What was something that really attracted you to Berkeley Haas and how has being in Berkeley helped you in your pursuits? 

Mohammad: Maybe it’s a cliche, but some of the greatest startup companies come from Berkeley—firms like Intel, Tesla, and SanDisk. These companies are considered the north stars in their respective industries. Being in the Berkeley ecosystem pushes you every day to create and innovate. Beside Techstars, we got into SkyDeck, the incubator batch. This allowed us to connect to founders on campus. School for us was not just a place to study, but also a workspace to meet fellow founders and innovators. Finally, the campus location near Silicon Valley in the Bay Area boosted our reach outs and accelerated our product discovery. And I think that the international aspect and diversity here helps. On the mentor side, we are lucky to have Linda Kreitzman, founder of the MFE program and a current lecturer, and Professor Christine Parlour as mentors. 

School for us was not just a place to study, but also a workspace to meet fellow founders and innovators.— Tarek Mohammad

Kim: Berkeley was such a great place to connect with people from faculty to alumni. So many people helped us out or referred us to people who could be of help. It was a humbling experience. We often ask whether we deserved all this help. We hope to do the same for other Berkeley founders, peers, or alumni to pay it forward.

Nvidia CEO Jensen Huang on inventing new markets

Jensen Huang photo
Jensen Huang

Jensen Huang,  co-founder and CEO of Nvidia, solved the 3D graphic challenge for the personal computer in 1999 with the company’s release of the first-ever graphics processing unit (GPU).

Nvidia’s vision for the chips that fueled new video games existed before they had a name for it, Huang said during last week’s Dean’s Speaker Series at Haas.

“It’s OK that you don’t’ have the words to describe it, but you need to know what the company does and for what reason,” said Huang, whose company was named to Time Magazine’s annual list of the 100 most influential companies of 2022.

Nvidia set new standards in visual computing with interactive graphics on tablets, portable media players, and workstations. Its technology has been used in movies like Harry Potter, Iron Man and Avatar and is at the center of the most cutting-edge trends in technology: virtual reality, artificial intelligence and self-driving cars.

Now, Nvidia and other chip-makers’ stock shares are rising over their potential to power OpenAI’s language tool, ChatGPT, a “chatbot” that interacts in a conversational way with users.

(Watch the DSS talk here.)

Huang calls ChatGPT “the iPhone moment of artificial intelligence.”

“When was the last time that we saw a piece of technology that is so versatile that it can solve problems and surprise people in so many ways?” he said. “It can write a poem, fill out a spreadsheet, do a sequel theory, and write Python code. We’ve been waiting for this moment.”

Nvidia is constantly reinventing itself, which is the key for every entrepreneur, he said.

“Creating something out of nothing is a skill that I think every company or startup needs to have,” he said. “The energy of looking for something new – a new way of doing something – is always there.”

Leadership requires both dedication and empathy, he added.

“Being a CEO, being a leader, it’s a craft. You have to dedicate yourself to the craft. I don’t think there’s any easy answer aside from that. You have to have curiosity, you have to have deep empathy for other people’s work.”

Startup Spotlight: Alokee wants to be your virtual realtor

Startup Spotlight profiles startups founded by current Berkeley Haas students or recent alumni.

Alokee

Team: Matthew Parker (co-founder and CEO), Hamed Adibnatanzi (co-founder and head of legal), Noman Shaukat (co-founder), Marcus Rossi (COO), and Mandy Kroetsch (CMO), all EMBA 23.

Photo of EMBA student Mandy Kroetsch
Mandy Kroetsch met Matt Parker in the EMBA program while she was bidding on houses.

When Mandy Kroetsch met Matthew Parker last year in the Berkeley Haas MBA for Executives Program, she was juggling classes while bidding on houses in southern California.  

“I was getting up at 4 a.m. and checking listings,” said Kroetsch, EMBA 23. “I found houses that came on the market before my agent even told me.”

Kroetsch started questioning the value of her real estate agent. Meanwhile, her challenges confirmed for Parker, a veteran Seattle real estate broker, that she probably didn’t need one.

So Parker decided to solve the problem by partnering with EMBA classmates to create startup Alokee. The company, which functions as a virtual real estate agent, empowers California home buyers to bid directly on properties.

The site is designed for people who grew up banking, paying bills, and shopping for most everything online without an intermediary, Parker said.

“Increasingly, Gen Z and other digital natives are baffled by why they have to talk to a real estate broker when they find all of the listings and tour the properties themselves and want to just make an offer,” Parker said.

“Increasingly, Gen Z and other digital natives are baffled by why they have to talk to a real estate broker.” —Matt Parker

Ease of use, money back

Launched nine months ago, the Alokee website is live in California, featuring photos of homes that have sold in San Jose and San Diego. The company plans to expand soon, and has a waiting list to beta test the site with customers in Washington, Oregon, Arizona, and Nevada. 

Alokee’s selling point is its ease of use: Create an account, provide proof of funds for a down payment, and then “make 12-to-15 decisions” on offer price, a closing date, loan payment schedule and amount, and other sales decisions. A buyer could potentially be in contract to buy a house in a matter of minutes, Parker said.  

Matt Parker in front of brown wall
Matt Parker, CEO of Alokee

A second benefit is that the buyer receives a chunk of the agent’s fee in cash back after a sale. In San Francisco, for example, where the agent commission on a home sale averages $40,000, Alokee takes a set fee of $9,000 and returns $31,000 to the buyer. “We don’t want to chase down the big commissions,” Parker said. He added that the check comes at a perfect time, as buyers typically invest the most in their houses—additions like solar panels, window replacements, energy-efficient appliances, and insulation—at the time of purchase.

An EMBA team

Parker started Alokee with classmate Hamed Adibnatanzi, a legal affairs veteran. Adibnatanzi used his law expertise to make sure that the mass of paperwork required for any real estate deal on the site was simplified for a direct buyer and met federal, state, and local requirements. 

Meanwhile, the team is still sorting out the website’s technical complexities. Noman Shaukat manages the code behind the offers that flow through the site. “It’s a technical challenge, not a legal one for us,” Parker said.

Parker also asked Marcus Rossi, a former commanding officer with the U.S. Marines, to be Alokee’s COO and invited Kroetsch, a chemical engineer by trade, to join as CMO. “I told him I’d love to help,” said Kroetsch, who worked with a branding agency to come up with the name Alokee, which combines the words Aloha and key (meaning the key to a house).

We are working through the marketing plan right now, and I am happy to be a part of this team,” she said.

Learning to scale

This is Parker’s second startup. He came to Haas after starting national home improvement repair and renovation service ZingFix. At ZingFix, he realized that there are different skills required to manage a company as it scales across state lines. “A quickly-growing startup was a new business challenge for me,” he said. “The more people that joined, the more I realized that I would need an MBA to take care of our stakeholders.”

portrait of Homa Bahrami
Senior Lecturer Homa Bahrami coached the Alokee team.

Deciding on Haas, he said the program has provided priceless support for what he’s trying to achieve, from mentorship to participating in the UC LAUNCH accelerator program and competition, in which Alokee was a finalist. “Once you get to the finals of LAUNCH you get introduced to top-tier mentors and a storytelling coach. These people understand what you are doing, and they pick apart your business model,” he said. Senior Lecturer Homa Bahrami spent time coaching the team, helping them to develop a hiring framework. “Everything she told us was correct,” Parker said. “She’s probably in the top 10 smartest people I’ve met in my life.”

He added that Distinguished Teaching Fellow Maura O’Neill’s New Venture Finance course also helped them navigate as the company works to land a seed round of funding.  

While saving homebuyers money is a goal, Parker said the company will build more gender and racial equity into the home buying process by giving buyers direct bidding power. “Homes are how people stay in power and get in power,” he said. “We want to give all people the power to win in the real estate game.”

‘Magic’ disruption in the transportation industry lures MBA grads to jobs

Yiannos Vakis, MBA 23
Yiannos Vakis, MBA 23, co-president of the Haas Mobility Club, interned at Zoox.

As a strategy manager at self-driving car startup Zoox last summer, Yiannos Vakis, MBA 23, spent a lot of time thinking about the challenges of rolling out robotaxi fleets in cities. 

“Watching self-driving cars navigate the complex streets of San Francisco is pure magic,” Vakis said. “But to commercialize at scale, the industry has big strategic questions to work on that no one has fully solved so far.”

Vakis, co-president of the Berkeley Haas Transportation and Mobility Club, is among a growing number of students drawn to the rapidly-changing and fast-growing transportation/mobility industry. At Berkeley Haas, interest in the sector reflects that growth, with eight students in the Class of 2022 taking full-time jobs in the industry, (up from previous years), and 15 students in the 2023 class accepting internships. One lure, aside from the fun of being immersed in new technology, is the impressive pay. Mean base salaries for the 2022 FTMBA grads reached the higher end of the school’s employment report, coming in at $152,000 with a mean $23,000 bonus.

The Haas Mobility Club is hosting its annual Haas Mobility Summit 2022 Saturday, Nov. 5, at Chou Hall’s Spieker Forum.

Doug Massa, a relationship manager in the transportation and mobility sector for the Berkeley Haas Career Management Group, said the rise in interest comes at a time when companies that spent years on the technical aspects of building their products and services are looking to scale.

Doug Massa
Doug Massa, a relationship manager in the Berkeley Haas Career Management Group.

 “That’s why these companies are recruiting strong MBA talent,” Massa said. “MBA roles like corporate strategy, product management, and operations are what get our students excited and these are the types of roles that they’re landing.”

Many current students are meeting and networking through the Haas Mobility Club, which is hosting its annual Haas Mobility Summit 2022 Saturday, Nov. 5, at Chou Hall’s Spieker Forum. The summit, UC Berkeley’s largest transportation-focused conference, focuses this year on “reimagining sustainable and accessible mobility,” with senior executives from Zoox, Rivian, General Motors, Spin, Autotech Ventures, and others joining. The student-run Haas Mobility Club, now more than 175 members strong, welcomes graduate students from beyond Haas—in the Engineering, Data Science, and Urban Planning programs. 

Disrupting industries

As the market has heated up, Massa said he’s fielding about 20 calls a week from first and second-year students who want to talk about job opportunities in transportation. In addition to Uber and Lyft, Massa helps students recruit for roles at upstarts as well as big automakers like GM and Ford, electric auto leaders like Tesla and electric adventure vehicle maker Rivian, and autonomous vehicles like Cruise.

Minjee Kang portrait
Minjee Kang, MBA 23, interned at Rivian.

Haas Mobility Club member Minjee Kang, MBA 23, landed an internship in strategic operations at Rivian. Kang, who worked in operations at Air Korea before coming to Haas, said her goal and her reason for getting an MBA is to be part of sweeping industry-wide change.

“I believe the airline industry is going to be disrupted soon, just like Uber and ride sharing disrupted the traditional auto industry,” she said. “I think the transportation and mobility industry is facing a variety of opportunities as a whole, and I want to be a part of it.”

Sarah Thorson
Sarah Thorson, MBA/MEng 23 and co-president of the Haas Mobility Club, interned at Nvidia.

Sarah Thorson, MBA/MEng 23, who studied mechanical engineering as an undergraduate, landed an internship in product management at Nvidia, where she worked on autonomous vehicle development tools.

Thorson said she’s always been pulled to the technical side of the auto industry and knew she could study both business and engineering in her dual degree program. “I wanted to come to Haas to explore a product role in tech and to learn about the impact of technology innovations on transportation and mobility,” said Thorson, co-president of the Haas Mobility Club.

Investment opportunities in transportation also lures MBA students. Logan Szidik, MBA 23, pivoted toward early stage venture capital investment at Haas, working as an intern at Menlo Park-based Autotech Ventures.

Logan Szidik, MBA 23
Logan Szidik, MBA 23

 “With companies staying private longer than ever before, private capital has an outsized impact on the future of the automotive industry,” he said. “As someone with a deep interest in technologies addressing the climate crisis, I wanted to better understand how investors approach start-ups focused on emerging spaces like vehicle-to-grid and fleet electrification.”

Alumni ecosystem

As more Haas grads move into transportation, the alumni community has expanded, with about 180 members of the Haas Mobility Network’s WhatsApp group.

That community includes transportation industry entrepreneurs like Ludwig Schoenack, MBA 19, co-founder of Kyte, a cars-on-demand service, and Arcady Sosinov, MBA 15, CEO of FreeWire, which makes fast electric vehicle chargers and battery generators. Both Bay Area companies have found success in raising $239 million and $230 million respectively, to expand their businesses.

This rich alumni network will continue to serve students well, Massa said. (Carlin Dacey, MBA 22, for example, recently joined Kyte as a market manager)

“The network has led to internships and full-time jobs,” he said. “It’s become a really nice ecosystem.”

Startup Spotlight: HOPO Therapeutics imagines a future without heavy metal poisoning

Hannah Weber on campus
Hannah Weber

Startup Spotlight profiles startups founded by current Berkeley Haas students or recent alumni.

HOPO Therapeutics is a Berkeley-based biotech startup working to develop treatments for people exposed to toxic heavy metals in their homes, environments, and during medical procedures and treatments.

Hannah Weber, MBA/MPH 23, met HOPO co-founders Julian Rees and Rebecca Abergel—both scientists at the Lawrence Berkeley National Laboratory and leading experts in heavy metal poisoning–last year at a meet and greet hosted by the Berkeley Life Sciences Entrepreneurship Center. 

The meeting was fortuitous. Weber came to Haas with a mission to work on developing a product or drug that could improve global health and to create a new model for access to medicine. Rees and Abergel told her that they’d been working on a drug to address lead poisoning and radiological hazards and were ready to find a partner to help raise funds and bring the drug to market. The meeting led Weber to join their team as vice president of strategy and business development.

A leap forward

More than 800 million children—about one third of the world’s young population—are currently living with lead poisoning, according to a UNICEF report. Other reports suggest half the current American population was exposed to harmful levels of lead in early childhood. 

HOPO Therapeutics’ first product— HOPO-101—is a novel oral treatment that works by selectively binding to toxic metals so they can be removed from the body, a leap forward from older-generation treatments that also remove essential minerals in the process, Weber said.

The company expects the Phase 1 clinical trial to begin later this year, testing for the treatment’s safety in humans. “This innovative product has a broad application for hundreds of millions of people around the world suffering from heavy metal poisoning, and needs to be launched in a way that maximizes its application for public health,” said Weber.

“This innovative product has a broad application for hundreds of millions of people around the world suffering from heavy metal poisoning.”

HOPO-101 has received government funding to date, but one of Weber’s first goals for the company is to secure venture backing, starting with the company’s first seed round. Over the next five years, the company plans to develop relationships with physicians, governments, impact investors, and global health nonprofits to establish distribution channels. 

“This is a lesson in sticking true to our values and finding partners that share our global health mission, and are eager to help us make it happen,” she said.

Weber pointed out that the pandemic has increased awareness of the importance of private and public partnerships in global health—her original mission for coming to Berkeley Haas.

“It’s made us all aware of the need for quick development and quick distribution of affordable life-saving drugs,” she said. “It’s also made the world appreciate the importance of public and private partnerships and the importance of collaboration across the table.” 

Working on the company while at Haas also has its benefits, she said. “There are so many classes that allow you to explore your own venture within the classroom,” Weber said, noting that Health Management professional faculty members Kim MacPherson and Jeffrey Ford have been particularly helpful mentors. Weber has also found many opportunities to tap into the Bay Area startup ecosystem to advance the company, participating in the National Science Foundation’s I-Corps program for entrepreneurs, as well as the San Francisco B-School Disrupt showcase.

A passion for improving access

Weber, whose father was a physician, has been around healthcare her entire life and said she’s always had a passion for treating patients who had little access to care. Though she entered the undergraduate program at Georgetown University on a pre-med track, she quickly pivoted to global health and, more specifically, sought to focus her career on addressing how the pharmaceutical sector could be a partner in improved access.

An internship in Tanzania during college working on introducing digital innovations into government hospitals also led her to consider the impact a private company could have on global health. That led her to L.E.K. Consulting after graduating, where she worked in the Life Sciences Practice for nearly four years. Learning about strategy and market access from the point of view of pharmaceutical companies, made her look forward to being involved in making some of those company-forming decisions.

“I was excited at the prospect of working with a team developing novel medicines and asking big questions about how we could get them to people that needed them most,” Weber said. “I was looking to get involved with a small company launching a new technology, one that had that mission in mind.”

That mission led her to pursue an MBA/MPH at Haas, and has been the foundation for growing HOPO Therapeutics.

“I had a strong conviction that it was possible to do well and to do good. Business school has been an eye-opening chance to see how it’s possible,” she said.  “Luckily, I’ve found a community at Haas and at HOPO that really resonates with that idea.” 

Startup Spotlight: Bird plans to make banking easier for African immigrants

Startup Spotlight profiles startups founded by current Berkeley Haas students or recent alumni.

Photo of Joe Obeto
Joe Obeto, MBA 21, co-founded Bird to make opening bank accounts and sending money easier for African immigrants.

Joe Obeto, MBA 21, co-founded startup Bird to help solve a vexing roadblock he and other African immigrants face when they arrive in the U.S.: trying to open a bank account. We recently interviewed Obeto about what led him to become an entrepreneur and his big plans for Bird.

Describe your startup in 30 words or less.

We’re building a platform to enable non-US residents to open a bank account, a checking account, and do easy and frictionless cross-border transfers. 

What was your background before coming to Haas?

My undergrad degree was in computer information science. When I graduated, I had several options: to pursue the traditional technology route as a software developer or maybe go into finance. What really shifted for me was during a summer that I went to Wall Street to intern for Credit Suisse. My experience that year was very incredible, and that really pushed me toward finance. I came to realize that not only do I like finance, I really wanted to become an entrepreneur.

What was the problem that you are solving with Bird?

When I first came to the U.S., I learned that I had to be a resident of the country for about six months minimum before I could open a bank account. With most major banks, this is the policy. In addition, sending money back to Nigeria is very expensive or it takes several days for the money to get to the final destination because there are so many intermediaries. It also costs 10 times more to send $100 to Nigeria than what it would cost you to send to a place like the U.K. or Poland because they have stable currencies.

So you decided to address these challenges as an entrepreneur?

I thought we could build a solution to solve this. So we decided to build a platform to do two things: enable non-U.S. residents to open a checking account and also enable a frictionless, low-cost way for you to be able to transfer money cross-border. There are some regulatory processes that we need to complete before we can actually go live with the banking solution, but the cross-border solution is going to be ready soon.

How does a Bird service work?

We don’t have a banking charter, so we cannot actually hold your funds. What we’ll do is partner with a local bank so when you open an account on the Bird platform and deposit money, it will be held at the bank, so it’s FDIC insured, meaning your money is going to be safe. You can do a wire transfer and have a debit card from the Visa network or the Mastercard network. You can use the card globally, anywhere that Visa or Mastercard is accepted. In addition to that, you can also transfer money.

How will transferring money work?

Right now, we’re establishing a payment corridor between Nigeria and the U.S. We want to test this corridor out. Eventually, we’re going to expand to other corridors in Africa. We’re looking into Ghana, South Africa, and Kenya, as well as Rwanda.

Right now, we’re establishing a payment corridor between Nigeria and the U.S. We want to test this corridor out.

Will transferring money using Bird be cheaper than other methods?

Yes, it is cheaper because rather than having multiple intermediaries moving money from one end to the other, we will use a stablecoin on the blockchain to move money cross-border. Essentially, we convert dollars to USDC stablecoins (a cryptocurrency). When it gets to Nigeria, that USDC stablecoin is on-ramped to Nigerian currency. The same thing will happen when somebody’s trying to send money to the US. We’re able to cut out a lot of middlemen and drastically reduce the cost of sending money internationally, especially to Africa.

Have any Haas courses helped you build the company?

New Venture Finance with Professor Maura O’Neill.  She’s incredible. I learned a lot from that course, and even today when I’m talking to investors or negotiating a term sheet, the learnings from that course have been helpful; the entrepreneurship course taught by Kurt Beyer was helpful as well, and an operations course taught by Professor Terry Taylor showed me how to run operations of any firm. We went through lots of cases, analyzing different companies and what led to their successes, what led to their failures. As somebody building a company, you need to be able to learn from failures so you don’t repeat the same mistakes.

You also placed second last spring at UC Berkeley LAUNCH after going through the accelerator program. How did that help? 

LAUNCH gives you a framework for you to validate your idea. It uses the lean startup methodology to develop a very strong value proposition. You go out to talk to customers to challenge your initial hypothesis, test it, validate it. Ultimately, when you come out of LAUNCH, you realize that you have a stronger position for your customers and that you are building something that people actually want and need.

Did you always plan to get an MBA?

That has always been part of my strategy. An MBA is not going to necessarily make you a successful person or a successful entrepreneur. But it does reduce your chance of failure and increases the odds of your success. Building on that knowledge of having a structured approach to entrepreneurship, to starting a business, is what the MBA equips you with. Besides that, I think the network that I’ve been able to build here in the Bay Area has afforded me the opportunity to build something that I think will be a success.

Boba dreams: Undergrad student to open Aura Tea in downtown San Francisco

Photo of Kashish Juneja, BS 22
Kashish Juneja, BS 22, is opening Aura Tea shop in downtown San Francisco at the end of March.

Kashish Juneja, BS 22, is learning about running a business in real-time as she prepares to open startup Aura Tea’s first shop in downtown San Francisco on March 27. In between juggling a mid-term and going to class she’s taking calls from her contractor and interviewing for counter help at the shop that will serve boba tea with a twist: It’s sugar free, made with plant-based milks, and under 100 calories. 

“It’s insane from the operational side,” said Juneja, whose first shop is strategically located on Spear Street across from Google and Databricks offices, where employees are starting to trickle back. “We need to make sure there’s a demand and that we’re making sure the product is good enough so that people will continue showing up.”

In many ways, Aura Tea has been a team effort from the start. Juneja recruited 22 interns from the UC Berkeley community who help with marketing, TikTok, and Instagram, where she’s drawn support from NFL players to local musicians. Students and Cal athlete ambassadors helped her host on-campus events that offer “boba for de-stressing”—and she recently held a pop-up on Telegraph Avenue in Berkeley, giving away Cal-themed boba tea drinks.

Aura Tea space on Spear
Aura’s new shop will open March 27 on Spear Street in San Francisco. Photo: Kashish Juneja.

Kaitlin Dang, BS 24, an intern who serves as business growth lead at Aura Tea, said her favorite Aura flavor is mango pineapple.

“Before I started working here I was an avid milk tea connoisseur, trying new places,” said Dang, who is in  her second year of the Berkeley Haas Global Management Program. “My taste has changed from sweeter teas and now I drink a lot of fruit teas. Most fruit teas are very sweet and not refreshing. Aura tea has a refreshing taste.”

Solving her own problem

Juneja, who grew up in Cupertino, has always loved boba. “Our high school was boba central, with a boba shop across the street that was open during lunch every day,” she said. “I played tennis every day so it balanced out.”

Photo of Kaitlin Dang drinking boba
Kaitlin Dang, a sophomore in the undergraduate Global Management Program at Haas, is Aura’s business growth lead.

Her boba addiction continued at Berkeley, but drinking those 500 extra boba calories without her usual tennis playing led to an unwanted 30-pound weight gain. Aura Tea, she said, was founded in part to solve her own problem.

The idea to start making healthier boba tea emerged during a Plant Futures course that she took with Will Rosenzweig, the faculty chair of the Center for Responsible Business at Haas who co-founded the Republic of Tea.

She’d already taken an entrepreneurship bootcamp and was interested in starting a company. Plant Futures, a collaboration between Berkeley Haas, Public Health, Engineering, Public Policy, and the Berkeley Food Institute, pushed her idea forward.

Throughout the pandemic, Juneja could be found crafting tea in her apartment, testing different oat, almond, and pea milks, which make her tea drinks vegan, and sweeteners, using fresh loose leaf green and black teas from the grocery store. (Boba pearls are naturally vegan, as they’re made of tapioca starch, which comes from cassava root.)

Juneja tested her teas on friends and classmates. In the early recipe days, she conducted a blind taste test: her milk tea against the Boba Guys’ tea and others. (Boba Guys was co-founded by Andrew Chau, MBA 11.)  “We didn’t win but it was a good start,” she said. “Our taste was nowhere that it is now.” 

It took time to get Berkeley-based impact investor David Jiang to take a chance on her venture, she said. Jiang’s wife’s father was a tea farmer in China, and they all shared an interest in tea. “There was a lot of making it and taking it back to them,” Juneja said. “I was taking what I learned in class and bringing them my tea and my pitch deck.” 

I was taking what I learned in class and bringing them my tea and my pitch deck.

Valuable startup experience

The shop, which will take to-go orders online, will offer a combination of grab-and-go and fresh-brewed drinks with boba tea in flavors including strawberry, matcha, pineapple, and mango. Aura will offer coffee drinks, too, and a masala chai with infused with spices and CBD for relaxation. (Aura’s boba pearls are made by US Boba Company in nearby Hayward, Calif. Her tea is sweetened with Purecane, which she says she chose for its lack of an aftertaste.) 

Students drinking boba at an Aura Tea rooftop party.
Students sample the tea on a campus rooftop last week during Aura Tea’s launch party.

Dang said she’s getting valuable experience working for Aura. “There’s a lot of creativity involved,” she said. “I have the space to try the things I want to try. We’re appealing to a certain wide demographic: corporate employees, health influencers, healthcare professionals, and foodies. I like to try things I’ve seen work in other industries, casting a wide net.”

Juneja, who will work in the shop part-time until graduation, said she’s grateful to her entire community of classmates, professors, and advisors for all of their help with Aura’s creation.

 “When I wrote my essay to get into Haas I said I wanted to solve a problem,” she said. “My dream came true.”

Haas community turns unity into action in support of Ukraine

The shock and disbelief that rippled through the Haas community after Russia attacked Ukraine last week is turning into unity and action by the many students, faculty, staff, and alumni with deep connections to the region.

Fiodor Otero holding a sign at a rally for Ukraine in San Francisco City Hall.
Fiodor Otero, MBA 23, shows his support for Ukraine at a rally at San Francisco’s City Hall last Thursday.

Today, the student-led European Business Club held a “Haas for Ukraine” forum for Ukrainian and Russian students to share their perspectives on the conflict. Others are launching fundraisers, and a faculty member has begun organizing a collective of fellow Ukrainian economists to brainstorm how to help the country both short- and long-term.

“We hope we can be of help, because the feeling of helplessness watching the situation unfold from afar has been among the worst parts of the emotional rollercoaster,” said Assistant Professor Anastassia Fedyk, who was born in the Ukraine and immigrated at age 10 when her mother Tatiana Fedyk, PhD 08, began her doctoral studies accounting at Berkeley Haas.

The violence is taking a huge emotional toll. Like many Ukrainians, Fedyk’s family has been preoccupied with checking in on their close family back home, some of whom are now leaving for Romania. Dima Okrimchuk, MBA 17, calls his parents in Kyiv every few hours to make sure they are okay, anxiously waiting to hear their voices. 

“Watching live reports of my country torn apart by the Russians is just devastating,” he said in an interview from Lisbon. “This is something I will never forget.”

“We hope we can be of help, because the feeling of helplessness watching the situation unfold from afar has been among the worst parts of the emotional rollercoaster.”  -Anastassia Fedyk, assistant professor of finance

A startup disrupted

Okrimchuk said he feels some guilt for leaving family and friends in Kyiv two weeks ago, relocating to Lisbon with his wife. But he said he’s now focused on raising funds for the Ukrainian army and spreading awareness of the conflict, while he continues work on his online game startup Organization.GG. He started the company while at Haas before moving back to Kyiv, where he recently received seed funding. 

Dima Okrimchuk, MBA 17 with his startup team at Organization.GG
Dima Okrimchuk, MBA 17, (fourth from left) with his team of Organization.GG employees who left their Kyiv headquarters after the invasion.

Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program, worked with Okrimchuk when his company placed third in the fall 2020 LAUNCH accelerator competition at Haas. Last year, Okrimchuk served as a mentor in a class that Shrader taught online for Ukranian entrepreneurs as part of GIST Innovates Ukraine, a U.S. State Department-sponsored program. Shrader taught students the Lean Startup methodology. 

Having developed relationships with so many of the country’s entrepreneurs, Shrader says she is devastated by the Russian invasion. “I loved working with these students,” she said. “I’m in tears.”

Before deciding to leave Ukraine, Okrimchuk asked his Organization.GG team whether they planned to leave Kyiv as well. “Everyone else had their own plan on what to do,” he said. “Out of the five of us, one remained in Kyiv, and four headed for different parts of Ukraine. They took their cars or found cars and left. A lot of people were running out of gas and there were huge traffic jams.”

Okrimchuk said he’s unsure when or if he will be able to return. “I can only hope that this won’t last long and we find a diplomatic solution,” he said. “There can’t be winners in the war. At the end of the day Ukraine is not only fighting for its own independence, but for peace and stability globally. I urge everyone to put pressure on their governments to help Ukraine with financial, military and political support before it is not too late. We are fighting for you, too.”

“There can’t be winners in the war.” -Dima Okrimchuk, MBA 17

Lives left behind

Fiodor Otero wears a "Stand for Ukraine" mask
Fiodor Otero, MBA 23, shows his support at the Haas for Ukraine event Monday. (Photo: Mary O’Connell)

Fiodor Otero joined a rally for Ukraine in San Francisco’s City Hall Plaza Thursday, which left his throat sore from shouting. A Russian classmate who supports Ukraine came along with him, moved to tears by the speeches.

“It’s been a roller coaster,” said Otero, MBA 23, whose mother is Ukrainian. He has an aunt and cousin living in Donetsk in Eastern Ukraine, where conflict between Russian separatists and Ukrainian government has continued since 2014. His voice cracks as he discusses the past week of worrying about his family as the Russian forces advance. 

“For them, war has been a normal part of life for eight years,” he said. But now, on her way to the market, she’s noticing the bombing is getting closer and louder. At 68, she is now considering leaving the same apartment complex where she’s lived her entire life.

“I was talking to my cousin last night, asking what it was like for them,” said Otero, who grew up in his father’s native Panama. His aunt and 33-year-old cousin are now talking about fleeing to Panama, where his mother is living. “It’s just so hard. My aunt is saying she will be a refugee for the rest of her life. She’s going to leave their entire life behind.” 

She now talks about giving away her things before she leaves, including her fine china and her nice glasses.“My cousin said something that struck my heart: ‘We’ve been saving these nice glasses and china to celebrate the good things in life, but those good things will never come,’ he said. ‘It’s time to start drinking from these every day before we leave.’ It’s so hard for me to emotionally process that.”

Global fears

Dimitry Livdan (Photo: Jim Block)

Dmitry Livdan, a Berkeley Haas associate professor of finance, grew up in Kharkiv in Eastern Ukraine before immigrating to the U.S. at age 24. He lost his mother to COVID last year, and wasn’t able to return to say goodbye. She was the last of his close family there.

He takes a dim view of Russian President Vladimir Putin’s prospects for success​ and hopes he will fail quickly.​ “I hope this is just for show, and he gets slapped in the face in two weeks,” he said of Putin. 

With Russia’s wealthy elite losing billions already, he believes any support for Putin will erode quickly as the economic sanctions hit hard.​ ​Livdan says his big worry is that Putin’s invasion will embolden China to make a similar move. “I worry most about what this means for Taiwan,” he said.

‘The unimaginable’ has happened

Photo of Anastassia Fedyk
Anastassia Fedyk
(Photo: Copyright Noah Berger / 2019)

Fedyk, a Berkeley Haas assistant professor of finance whose research focuses on behavioral biases and in individual and group decision-making, said her reaction on Wednesday night and Thursday morning was anger, panic, and “the understanding that the unimaginable had happened, and that things will never be quite the same again. I taught on autopilot while inwardly feeling like my world was coming apart and could not say a word about the situation in class lest I start crying.”

By the end of the week, Fedyk said, her emotions shifted to a mix of “pain, hope, determination, and of course pride in my compatriots. Like the entire world, I am inspired by the resistance of the Ukrainian people—but I am worried whether the newly mobilized global support will be enough.” 

The stakes are high, she says, eight years into the conflict that has been simmering since Russia annexed Crimea in 2014. If Ukraine falls, “Putin would very likely not stop there, and there is a security risk to other parts of Europe; by contrast, if Ukraine succeeds in pushing off the aggression, it might have positive spillovers in Belarus and perhaps even in Russia.” 

As an economist, she believes that “letting Putin win would effectively plunge Ukraine into the economic dark ages together with Russia. And if we succeed in fighting off the invasion, there will still be much work to do on reconstruction, but at least there will be something to reconstruct, and we will have global support.”

That’s why she is organizing with other Ukrainian economists at U.S. schools to brainstorm solutions both for the immediate term and in the months and years to come. At the same time, she is glued to the news alongside her parents and her grandmother, who has been visiting from Ukraine since September. She is also trying to parent her three-year-old son, who refers to Putin as “the bad guy,” and talks about throwing him into a prickly cactus bush.

“We have been trying to teach him to use his words rather than fighting, but it’s very hard when we are watching this unfold,” she said. 

“Collaboration is the key word:” Venture capital’s rise at Haas

Stanford and Haas students came together at Haas in November for a first of a kind founder-investor mixer.  Left to right: Atusa Sadhegi,  EWMBA 22 (Berkeley Haas), C.C. Gong (Stanford GSB), Alon Dror (Stanford GSB), Alejandra Vergara, MBA 22 (Berkeley Haas), and Dogakan Toka, EWMBA 22 (Berkeley Haas). Photo: Jim Block

On a recent rainy night, more than 100 Berkeley Haas and Stanford GSB students convened in Chou Hall’s Spieker Forum for a first-of-its-kind Founder-Investor Mixer.

Haas MBA students Atusa Sadeghi and Alejandra (Ale) Vergara, along with Dogakan Toka, EWMBA 22 and co-president of the Berkeley Entrepreneurship Association (BEA), were behind the event. As co-presidents of the Haas Venture Capital Club, they decided it was time for students from the two programs to get to know each other in the tight-knit industry, where they’d inevitably run into each other post-graduation. 

“I think collaboration is the key word here,” said Sadeghi, EWMBA 22, a former mechanical engineer who transitioned into venture capital over the last two years. If we’re going to be in the same industry, let’s be united.”

VC Club mixer with Stanford and Haas MBA students
Stanford and Berkeley Haas MBA students getting to know each other at the founder-investor mixer in Spieker Forum. Photo: Jim Block

A new fund

That shared vision for unity among investors and entrepreneurs is something Sadeghi and Vergara, full-time MBA 22, have emphasized since taking on their roles amid the Covid pandemic. Under their watch, they organized the event with Stanford, landing the support of sponsor First Republic Bank and Andrew Liou, a senior relationship manager at the bank, who “didn’t think twice before supporting the collaborative effort,” Vergara said.

Membership in the student-run VC club, founded in 2018 by evening & weekend MBA students Chris Truglia and Scott Graham, has increased from about 100 to more than 500 students, split 50-50 between the evening & weekend and full-time MBA programs. Since its founding, collaboration and networking among students from both the programs has been critical to the club’s success, Truglia said.

Alejandra Vergara (left) and Atusa Sadhegi are co-presidents of the Haas VC Club. Photo: Jim Block

The club hosts popular pitch nights, often partnering with other UC Berkeley clubs, and has built a database with answers to the most common questions students ask about the venture capital industry. This past fall, venture capital club leadership also helped spearhead the creation of Courtyard Ventures, a new venture fund led by Haas MBA students that provides an opportunity for Cal students and alumni to invest in early-stage Cal startups. The fund has recently begun deploying capital, after exceeding funding goals and closing its first two investments in early January, Sadeghi said.

“These women are amazing—they’ve done an incredible job,” said Deepak Gupta, an investor and venture capital industry advisor with the Berkeley Haas Career Management Group.

Deepak Gupta
Deepak Gupta, venture capital industry advisor with the Haas Career Management Group.

While entrepreneurship is a well-established career path at Haas, Gupta said he’s seen a shift in student interest and effort in venture capital over the past three years, as the number of Bay Area VC funds has proliferated. “Now, these funds are coming to Haas to recruit for associate and principal roles,” said Gupta, who is also managing partner of his own pre-seed fund Blue Bear Ventures started at UC Berkeley. By next year, Gupta predicts Haas could double its number of full-time offers.

That growth would be significant. For each of the past two summers, about 15 to 20 full-time MBA students interned at venture capital firms, up from just a few in 2015, said William Rindfuss, executive director of strategic programs in the Haas Finance Group. While there’s a longer track record of students studying finance going into investment banking, a total of around 10 grads took full-time jobs in venture capital over the past two years. “We’ve had more students doing VC internships, and that will likely lead to more full-time VC job offers,” Rindfuss said. 

The passion for investing

But increased hiring comes down to overcoming challenges endemic to the venture capital industry. VC funds can be insular, they don’t hire on a predictable schedule, and entry-level pay can be low compared to other finance jobs—with a big payoff delayed until you make partner, Gupta said.

“Venture is so ‘just in time’ and when people hire you you start immediately. It’s not like consulting  where you get your offer and start next July,” said Jeff Diamond, MBA 22, a VC Club officer and a general partner at Courtyard Ventures. But Diamond, who came to Haas to switch from a career in the entertainment industry to early-stage investing, said he’s committed to a VC career. “It’s a lot of work but it’s rewarding,” he said. “It’s what I liked about working with artists, writers, and directors. You want to be the person who works with them. The idea of being with these companies for the long haul is what interests me.”

“The idea of being with these companies for the long haul is what interests me.” — Jeff Diamond, MBA 22

There’s clearly passion for investing in the Haas alumni network, which is expanding to include graduates like Sydney Thomas, MBA 16, a principal at seed-stage fund Precursor Ventures; Matthew Divack, MBA 19, an investor at Moment Ventures, and Champ Suthipongchai, MBA 15, who co-founded Creative Ventures, a tech VC firm investing in startups that address the impact of increasing labor shortages, rising healthcare costs, and the climate crisis.

Making alumni connections

An earlier success story in venture capital, Michael Berolzheimer, MBA 07, founded Bee Partners in 2008. An internship at pre-seed fund Bee Partners piqued Vergara’s interest last year, but she worried she lacked a technical background. Then Vergara met Kira Noodleman, MBA 17, a partner at Bee, through the Berkeley Female Founder and Funder’s summit last year. “Kira encouraged me to apply,” said Vergara, who landed the internship. That led to a full-time job offer with the fund when she graduates in May.

Looking for more investment experience, Sadeghi found her internship as a senior venture associate at Blue Bear Capital (separate from Gupta’s fund, Blue Bear Ventures). She first met Carolin Funk, a Blue Bear partner invited by the 2020 Haas Venture Capital Club to speak at the school. Interviews at Blue Bear led to an offer. She then learned that recent alum André  Chabaneix, MBA 21, already worked at Blue Bear as a senior associate.

“André is just amazing,” Sadeghi said. “We have a lot in common in terms of our background and industry interest so we bonded pretty quickly. In our overlapping year at Haas we participated in the 2021 Venture Capital Investment Competition (VCIC)  where we ended up representing Berkeley at the global finals together—and now we’re great friends and colleagues.”

Left to right: Alejandra Vergara,(Berkeley Haas) Alon Dror (GSB), C.C. Gong (Stanford GSB), Dogakan Toka (Berkeley Haas), Atusa Sadeghi (Berkeley Haas), Paola Retes (Stanford GSB).

While students continue their internship and career recruitment this spring, the VC Club already has many events planned, including club-sponsored workshops, student-alumni mixer events and more collaboration with peer MBA programs. Vergara and Sadhegi encouraged students “who are just interested in learning more about VC or are fully committed to this career path,” to check out the club.

“It’s been such a pleasure running the 2021 VC club year with Ale, and we can’t wait to welcome the 2022 leadership team to carry us forward,” Sadhegi said.