Constance Moore, MBA 80, a distinguished real estate veteran and volunteer board member for numerous organizations, will be honored with a Lifetime Achievement Award at the 18th annual Haas Gala on November 1.
The award recognizes members of the Berkeley Haas community who embody Haas’ Defining Leadership Principles and who have made a significant impact in their field and through their professional accomplishments. Moore is the eighth person to be given a Lifetime Achievement Award from Haas, and its second female recipient.
Moore is the former president and CEO of BRE Properties, a real estate investment trust that develops and manages apartments in highly desirable locales in the West. She’s been named to the Northern California Real Estate Women of Influence Hall of Fame and been noted multiple times as one of the Most Influential Women in Bay Area Business by the San Francisco Business Times.
Her volunteer leadership includes serving on the Haas Board and as chair of the Policy Advisory Board for Haas’ Fisher Center for Real Estate and Urban Economics. She has also taught generations of students as a guest speaker in numerous Haas classes. She serves on boards for many organizations, including the San Jose State University Tower Foundation, BRIDGE Housing Corporation, and the Urban Land Institute, among others.
Other alumni honored
Two other alumni will also receive awards at the Gala.
Paul Rice, MBA 96, the CEO and founder of Fair Trade USA, will receive Berkeley Haas’ eleventh annual Leading Through Innovation Award for his pioneering work making the Fair Trade movement part of the mainstream consumer and retailer experience. Rice found the common ground among underprivileged farmers and workers, discerning consumers, and retail brands that helps alleviate poverty and allows everyone along a supply chain to create positive social and environmental change.
His company has provided 1.6 million families in scores of countries worldwide with sustainable livelihoods, protected ecosystems, and offered millions access to healthcare and education. As a Haas Executive Fellow, Rice has inspired countless students to become social entrepreneurs and find solutions to society’s most pressing problems.
Anthony “Tony” Chan, BS 74, the owner and managing member of Worldco Holding, LLC, will receive the Raymond E. Miles Alumni Service Award in honor of his longtime volunteerism and leadership at UC Berkeley and the Haas School of Business. Chan served for 12 years on the University of California, Berkeley Foundation Board of Trustees and has served for many years on the Haas Board. He has provided leadership to Haas in a variety of areas, most recently in the board’s campaign to support the Dean Lyons Faculty Research Fund, which resulted in 100% participation.
After working in the dairy industry in Illinois for six years, John Monaghan, MBA 20, arrived at Berkeley Haas on a mission to dive deeper into the business of food.
He didn’t waste any time. In his first year, Monaghan became co-president of the student-run Food@Haas, was nominated to the student advisory board for the Berkeley Haas Center for Responsible Business, and snagged a summer internship at Danone in New York, where he’ll be supporting marketing of the Oikos yogurt brand. He even shared lunch with Alice Waters at her restaurant Chez Panisse, after he worked as a graduate student reader during her Edible Education 101 course. “She hosted us as a thank-you for the semester,” he said.
Like many of the 20 full-time MBA students who have landed coveted internships and jobs this year in the food and beverage industry—at companies ranging from Clif Bar to Kraft— Monaghan is benefiting from the Sustainable Food Initiative at Haas. The umbrella effort, launched in April 2018 by the Center for Responsible Business, combines food-focused courses, cutting-edge research, entrepreneurship training, events with food industry luminaries, and key industry partnerships.
A food-focused tribe
The initiative both reflects and cultivates a growing interest in the food business at Haas and Berkeley. The number of students landing internships and full-time jobs in the food and beverage industry has doubled over the past three years, and the number of food-related startups—from 2019 MBA grad Somiran Gupta’s nearfarms, an online marketplace that connects small, local farmers directly with consumers, to Tannor’s Tea, founded by Samantha Tannor, MBA 20, whose company sells sugar-free matcha concentrate—is increasing every year.
“We’ve attracted a tribe of people who are food-focused,” says Doug Massa, a corporate relationship manager with the Berkeley Haas Career Management Group. “They want to learn about branding and marketing, but they also want to learn about opportunities in the food supply chain, business operations, and the role of venture capital in food.”
Connecting across Berkeley
Will Rosenzweig, faculty co-chair with the Berkeley Haas Center for Responsible Business (CRB) and a pioneer of the sustainable food movement at Berkeley, is leading the Sustainable Food Initiative. The founder of the Republic of Tea, Rosenzweig taught Haas’ first class on social entrepreneurship 20 years ago—and went on to mentor and invest in successful Haas startups including Revolution Foods, co-founded by Kristin Groos Richmond and Kirsten Saenz Tobey, both MBA 06, to make healthier cafeteria food for kids.
“With the riches we have at Berkeley, one of my jobs is to is to remove some of the boundaries between the disciplines, and Haas has been really supportive of that,” Rosenzweig said. “We’re getting other really smart people involved in solving these sustainability problems.”
Watch an “Edible Education 101” session with chef and cookbook author Samin Nosrat and community organizer Shakirah Simley, discussing diversity and inclusion in the food industry.
At the initiative’s core is “Edible Education 101,” which Rosenzweig teaches with Waters, who co-founded the class with author Michael Pollan in 2011. The undergraduate course brings scientists, CEOs, community activists, and chefs to Haas to talk about the future of food, from seeds to soil health to increasing access to quality food for all. Guests have included chef Samin Nosrat (of the popular Netflix docu-series based on her cookbook, Salt, Fat, Acid, Heat), who spoke last semester on diversity and inclusion in the food industry, to Danny Meyer, founder of Shake Shack and CEO of Union Square Hospitality Group, who addressed the future of restaurant careers.
Victoria Williams-Ononye, MBA 19, the graduate student instructor for the “Edible Education” course, said about 20 of her MBA peers attended the classes. “There’s a core group of people who come to Haas knowing they’re passionate about food,” said Williams-Ononye, who has accepted a job working in Breakthrough Innovation at Kraft in Chicago.
Monaghan called the caliber of “Edible Education” guest speakers “a hidden gem of this entire university.”
The sky’s the limit
Meanwhile, the Food Innovation Studio, Rosenzweig’s two-unit course which uses the Lean LaunchPad method to encourage students in food entrepreneurship, dives deeply into topics such as the rise of regenerative agriculture, sustainable alternatives to single-use packaging, the evolution of plant-based proteins, food system sustainability, and disruptive food delivery models.
While the majority of the students enrolled last semester were from the MBA program, the course draws students from across Berkeley, including Aaron Hall, a PhD student in the Materials Science & Engineering Program who is developing a richer-tasting plant-based fat substitute, and Jessica Heiges, a PhD candidate in Environmental Science, Policy, & Management, who co-founded RePeel, a reusable-food-container service for universities.
Yet those seeking to make housing cheaper through innovation face a slew of challenges: Housing industry entrepreneurs must navigate a thicket of environmental and other governmental regulations, as well as secure financing for projects that may not fit the industry’s mold.
“The need for innovative solutions and outside-the-box thinking has never been more urgent, and we’re encouraged by the growing number of entrepreneurs who are challenging our antiquated housing system and considering new ways for housing to be more equitable and affordable across the board,” said Terner Center Faculty Director Carol Galante, who previously served in the Obama Administration as U.S. Assistant Secretary for Housing.
The Housing Lab, supported in large part by the Chan Zuckerberg Initiative, aims to help entrepreneurs navigate housing laws and regulations, sharpen their business plans, and locate investors—all with an eye toward making housing less expensive. Applications open June 10 for non-profit and for-profit startups to join an inaugural cohort of five companies. The successful candidates will be announced in September.
“We know the housing crisis is a complex problem that can’t be solved by innovation alone, but we believe entrepreneurs have a key role to play in contributing to the solution,” said Housing Lab Program Director Michelle Boyd, MBA 19, who began working on the accelerator as a student and is staying on post graduation to lead it. “Because the housing industry is extremely regulated compared with other industries, these entrepreneurs need support.”
Entrepreneurs focused on housing face a huge number of hurdles, including national, state, and local regulations on areas ranging from construction standards and environmental sustainability to rent control and home financing. Local zoning and development plans, often highly politicized, can confound even a savvy and experienced entrepreneur.
Adding to those challenges, many housing innovation startups would have trouble getting accepted into a traditional technology-focused accelerator.
“Most accelerators and VC funds direct the majority of their capital to pure technology-focused innovations, and we think there are a lot of other good ideas out there that may not fit the VC model—either because they’re not a pure tech company, or they’re focused on a more regional market,” Boyd said. “These companies are also asset-intensive, meaning they own and operate real assets and buildings, and there’s is less support for startups like that. We want to elevate these ideas and connect them to the capital they need to scale.”
Seed funding for housing innovators
Startup candidates for the Housing Lab could include, for example, a company that’s developing a construction method using low-cost yet environmentally friendly building materials, or one that’s promoting a new home-financing product aimed at low-income buyers. Or, a candidate might be producing multi-unit “co-living” structures suited to urban centers, or cottages designed to be tucked behind suburban single-family homes.
Applicants need to demonstrate their ideas’ validity through either customer feedback or extensive market research, and also must be working on their venture on a full-time basis. Candidates should also show a recognition of longstanding problems in the housing industry, such as predatory lending and housing discrimination, and how their venture plans to operate responsibly, Boyd said.
Successful candidates will join the six-month program in the fall and receive seed-funding grants of $100,000 to $150,000. Participants will meet both virtually and in-person at the Terner Center for coaching sessions on developing and scaling their business plans and understanding how best to work in the regulatory environment. In addition to learning about funding sources and meeting potential investors, participants will also gain access to faculty and alumni networks as well as to the Housing Lab’s advisory board of successful entrepreneurs, government leaders, investors, and housing advocates.
During a trip to China last year, Luofei Chen arrived at the airport a few hours early. Spying a soundproof karaoke booth, he decided to pop in and kill some time singing.
“I thought I’d spend 15 minutes in it. I ended up using it for an hour and a half. I think I was the last person to get on the plane,” says Chen, a freshman in the rigorous Management, Entrepreneurship and Technology (M.E.T.) program, which awards students two undergraduate degrees—one from Berkeley Haas and one from Berkeley Engineering—in four years.
Chen, who has always enjoyed karaoke with friends, says he got hooked on the fun of singing by himself. The karaoke booth, he adds, felt “like singing in the shower, but with better equipment.”
So, when he got back to the United States, he huddled with his roommate Noah Adriany, a first-year architecture major at Berkeley who also loves karaoke, and the two decided to find a way to bring soundproof karaoke pods, already popular across Asia, to U.S. airports and shopping malls.
Six months later, their startup, Oki Karaoke, is manufacturing its first karaoke booth, and it’s on track to arrive in California from China in May. This summer, the students will pilot test the booth in the Westfield San Francisco Centre in downtown San Francisco.
Their mission began in their Unit 2 residence hall, where Chen and Adriany invested their own money, about $1,000, to build a rudimentary prototype — an open karaoke booth equipped with a computer tablet and a video screen that plays music videos. They spent more than 40 hours a week for two weeks creating it in a makerspace in the campus’s Jacobs Institute for Design Innovation. Then, they installed the pod in their dorm’s lounge and used it to do research on the residents
“People really responded to being spontaneous and singing whenever they wanted to,” Adriany says. “We tracked up to 1.5 hours of singing every day with the 18-to-25-year-old age group during the two months we had the prototype installed.”
After the team took down the prototype in February, they moved forward with a plan to design Oki Karaoke’s first commercial soundproof karaoke booth. The 8-foot-tall booth, roomy enough for a maximum of four people, will have privacy options, such as curtains, for singers and will feature a video screen and a library of more than 1,000 English-language songs. Customers will be charged by the minute; further pricing details are in the works.
“Our target customers range from solo singers to a few friends to couples hanging out in the mall,” says Chen, who speaks Mandarin, prefers pop tunes and wants to add songs in Chinese to the library soon.
Stephen Torres, a Berkeley Engineering lecturer who teaches in the M.E.T. program, helped the founders develop their idea. Torres then introduced them to alumni Kai Huang, who earned a B.A. in computer science in 1994, and his brother, Charles, who graduated in 1993 with a B.A. in both economics and Asian studies. The pair co-created the blockbuster Guitar Hero games.
“They’ve gone through a lot of the same things we’re going through now with everything from licensing to manufacturing, and they’re helping us to build our company,” Chen says.
Help from Berkeley LAUNCH
The team, which now includes a third co-founder, Aayush Tyagi, a Berkeley junior majoring in electrical engineering and computer science, is currently participating in Berkeley LAUNCH, the UC-wide startup accelerator and competition designed to transform early-stage startups into fundable companies.
Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program and who serves on the LAUNCH faculty, said business models like Oki Karaoke’s don’t automatically translate from one part of the world — like China, where solo karaoke booths are in wide use — to another.
“Applying the skills they’ve learned in the LAUNCH accelerator can help them mitigate the risk and get to success more quickly,” Shrader says.
Oki Karaoke’s founders plan to stay in Berkeley this summer to work on the business and participate in Real Startup, a Bay Area entrepreneurship program that works with companies like Google, Warner Music Group and Apple to mentor students interested in music, media or entertainment technology.
With their first booth on its way, the founders are looking forward to getting customer feedback. “If we can prove that our pod works and that people love it, then we can possibly get the money to build 10, 20 or 40 more booths,” Chen says.
He adds that he’s excited to get the Oki Karaoke booth rolled out for altruistic reasons, too.
“Singing is a way to happiness,” Chen says. “It’s a very easy way to have fun.”
More than 200 people packed Spieker Forum last Thursday for the inaugural SheCann Summit, a day-long event aimed at making sure women and minorities don’t get left out of the brand new, fast-growing legal cannabis industry.
The event was co-presented by online shop and publication Miss Grass.
Event panels covered the cannabis legal landscape, industry investing and fundraising, marketing challenges, and conscious consumerism.
Steve Varacalli, Berkeley Cannabis Industry Club co-founder and co-president, came up with the idea for a cannabis conference that would focus on women and social responsibility. Varacalli, MBA 19, said he’d been watching the cannabis industry evolve from his native Australia before he arrived at Haas—and was getting increasingly intrigued by the potential.
“It’s not often that you watch an industry get deregulated,” he said. “It’s so exciting.” Varacalli notes the group “is not a consumption club,” but instead aims to destigmatize the cannabis industry, as well as provide career, investment, and entrepreneurial opportunities.
An investor conversation covered topics ranging from how a cannabis company is valued to how to decide when it’s time to raise venture capital to how to choose a VC partner. In cannabis, venture funding can still be tricky since cannabis is legal in California but still illegal at the federal level.
Tahira Rehmatullah, managing partner at Hypur Ventures, advised entrepreneurs to do their homework before investor meetings and match the content of their pitches to whom they’re meeting with. “Your pitch won’t be the same for everyone you are talking to,” she said. As early stage companies, you aren’t expected to have to have all the answers, she said, “but we have to know that the check we give you has some sort of a plan behind it.”
On the fundraising side, Erin Gore, founder and president of medical cannabis company Garden Society, discussed her challenges in raising a $2 million Series A round, including walking away from an intense potential investor who reminded her of a bad boyfriend. “I had the courage to tell him no, and I had three weeks of payroll left….and I had to have the confidence that this was going to work,” she said, advising, “If it’s not right in your gut, don’t do it.”
All event ticket proceeds benefited The Hood Incubator, which works to increase the participation of underrepresented minority communities in the legal cannabis industry, and Success Centers, which empowers marginalized community members through education, employment, and art.
Last fall, Chris Cindy Cordova, an aerospace engineer who arrived at Haas with little knowledge of the venture capital industry, attended a pitch session in Silicon Valley where VCs were grilling entrepreneurs seeking funding.
“Hearing that back-and-forth about what investors are interested in and watching how entrepreneurs presented themselves was useful to me,” says Cordova, MBA 20, who attended the session with 30 fellow members of the new Haas Venture Capital Club (HVCC) at Plug and Play, a Sunnyvale, Ca.-based accelerator.
With a goal of giving students an inside look into the world of venture capital and helping them to break into the tight-knit venture capital industry, the club has already grown to 160 members from the full- and part-time MBA programs.
Many Haas students are interested in venture capital and entrepreneurship, and launching the club was an effort to provide more connections and resources, said Chris Truglia, EWMBA 19, who founded the club in 2018 with Scott Graham, also an Evening & Weekend MBA student.
“Even though the heart of VC is in our backyard, we haven’t fully taken advantage of it,” said Truglia, who has worked in venture capital and is currently COO of technology startup Junar. “We’re hoping that the club will raise Haas’ profile as a feeder school to the best funds.”
“A confidence booster”
So far, the club has co-hosted, with the Women in Leadership club, a conference featuring speakers who discussed challenges faced by women in venture capital and by female entrepreneurs. Other events featured a panel of Haas students who landed internships or jobs in the venture industry, and a focus session with Strawberry Creek Ventures, which co-invests with other funds in companies led by Berkeley alumni.
Faculty advisors to the club—Deepak Gupta, an industry specialist in the Haas Career Management Group, Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program, and William Rindfuss, executive director of strategic programs in the Haas Finance Group—are reaching out to engage Haas alumni as mentors. And the club’s VC Excursion Program aims to connect groups of HVCC members to alumni in venture capital for fun activities such as hiking, dinners, and boating.
Mingling with alumni who work in venture capital at a recent event at a local pub was a confidence-booster, said Cordova, the club’s co-president. “It helped me become more confident, knowing that there’s a group of pros out there who want this club to be successful and to see them acknowledge how it benefits the students,” she says.
Landing the VC jobs
Equally important is forming relationships with Silicon Valley accelerators and VC firms, in part through more treks to firms to shadow professionals, with the goal of helping students in the job search. Early efforts have yielded some returns: Four Haas students are already working at paid internships at Plug and Play.
The club is also developing what it calls its Talent Pipeline Program (TaPP), a program to help students of all experience levels to increase their knowledge of the VC industry through club activities and independent research, said Esmond Ai, MBA 20 and club co-president. Through the program, students will create training materials, organize workshops, and book guest speakers.
Student teams would, for example, undertake an independent project, such as researching an emerging market for a report or white paper. Then, instead of waiting for public job postings, teams could proactively approach VC firms and offer up their knowledge with an eye toward doing work for the firm.
“The idea is to place students in the right place at the right time when permanent job openings arise,” Ai said.
Frank Bunger, MBA 18, dreamed of space as a child. Today, he’s pursuing that dream as co-founder and CEO of Orion Span, a startup that plans to build the Aurora Space Station to launch travelers into space 200 miles above the earth’s surface by 2021.
Bunger, who started Orion Span as a Haas student, has a goal to raise $2 million by Feb. 5 on SeedInvest, an online investment service, so the company can begin building a prototype. The station will accommodate six people—two crew members and four guests, who will pay $12.5 million each for the 12-day trip. So far, 26 people have put down the $800,000 deposit.
We recently sat down to discuss Bunger’s space travel plans.
Berkeley Haas News: Tell me a little bit about your interest in space.
Frank Bunger: Space has been a passion of mine since I was a little boy. I was born in ’79 so I missed the Space Race. I remember being a little kid and reading in the history books about these journeys to the moon; I was like, “Wow! What an exciting time!” At that point, the 80s, it seemed like we were just on the cusp of creating this ecosystem in low-Earth orbit with the International Space Station and none of that came to pass because the costs were just far too astronomical for commercial endeavors to take root.
BHN:How did the idea for your startup happen?
FB: When I got to Haas I thought, “Okay, what could I do with the time I have left in this world and the skills I’ve learned as an entrepreneur to move this forward?” On the launch front, there are a lot of players like Space X that are attempting to significantly cut the price of launch and improve access to space. And in the destination business there is a field of players who were making things more expensive than they needed to be and then, by extension, they have to charge their customers more. That’s where I wanted to jump in first.
BHN: Who did you go to for help after you came up with the idea?
FB: When I came up with this concept in the summer of 2017 I started floating ideas. My first conversation was with a UC Berkeley faculty member who later became an advisor, Professor Tarek Zohdi from the mechanical engineering department. My first question to him was, “Can I 3-D print this whole thing, and just how cheaply can I build it?” Through many conversations, it turned out that we could probably 3-D print a good portion of it through known technologies. I eventually found some of the best people at NASA at the Johnson Space Center in Houston who have been in the industry for decades, who have done this before, who worked on the International Space Station, and told them what I had in mind. We started to slowly form a team.
BHN: So how much is it going to cost to build the station?
FB: NASA and other commercial entities are spending a lot themselves in order to make something operable. I knew that space travel could be done far, far more cheaply—$65 million to build the whole thing. It’s still relatively expensive, but compared to others, that is about an order of magnitude less than any of our competitors.
BHN: Why did you choose a low-Earth orbit destination?
FB: It’s just closer, so the amount of energy to reach that point is pretty much as low as it’s going to get to achieve orbit. So that’s one thing that keeps cost down on the launch front. Number two, you get awesome views. Lastly, the Earth’s magnetic field keeps you shielded from the Earth’s natural defenses.
BHN: What classes did you take at Berkeley Haas that helped you start Orion Span?
FB: Entrepreneurship lecturers Kurt Beyer and David Charron were extremely helpful. The venture capital class I took, too, helped while I was forming the company. And all the other classes around Haas helped, including some of the marketing courses—specifically strategic marketing. I asked the professor for advice many times and I think we really nailed it the marketing, at least at the get-go. We did a lot of things right early on.
BHN: How did classmates react to your business plan?
FB: I think some think I’m kooky and some think it’s cool. It’s a wide range.
BHN: What does the space station look like?
FB: It has the volume of a large, private jet—of a Gulfstream. It’s about 12-feet wide and 35- to 40-feet long, and cylindrically shaped because that’s what fits into a rocket. The key to a space like this is to keep it as open as possible so the guests sleep in these large-ish kind of sleeping pods. It’s kind of like a small cruise ship. I think that’s probably the best analogy.
BHN: What will your guests do once they’re up there?
FB: People want to feel what it’s like to be a professional astronaut. So they will spend a good part of it being citizen scientists. We want to grow food. And we’re also going to have just some fun activities. Even something as mundane as ping pong gets a lot more exciting in zero gravity because the ball goes everywhere, as does the paddle.
BHN: Do you worry that space travel is very elitist?
FB: Commercial aviation in the 1920s was a game for the rich. Space travel today is going to be a game for the rich. It will not be so forever. My goal is to make it accessible to everyone, but it takes time. The biggest bottleneck cost remains launch so until we see the price of launch come down, it’s going to remain something for the wealthy.
BHN: Will you go up with the first crew?
FB: I’ll go up within the first year but not first because if I go up, that’s 10s of millions of dollars we’re not making.
BHN: What do guests do to prepare to go?
FB: The minimum training time will be two weeks and the maximum will be three months, and we’re going to ultimately customize it per guest. The two-week training will be like diving training: you spend 80% of your time training on what to do in the unlikely event that things go wrong.
BHN: After the prototype is built, how much do you have to actually test it?
FB: A lot. The Space Act Agreement from NASA that provides access to facilities as well as know-how from their staff to test the hell out of the station launch. Our first milestone is to build a ground model, which is just going to be a demonstration that’s not flight-worthy. The second milestone is a scale model which will actually go up (empty with a payload) into orbit and serve as a test bed for us. The final step is to build the full-size space station. It goes through about a year of testing: vacuum chamber, pressure testing, materials testing, strength testing, all that kind of stuff, and NASA has facilities for doing that.
BHN: How do you get insurance for a business like this?
FB: There’s actually insurance companies out there that do this stuff, believe it or not. Yeah. They insure rockets and/or payloads, but we’ve already talked to two different providers that can insure this.
Arrow has an influential parent fund in Bow Capital. In 2015, the University of California partnered with Vivek Ranadivé to create Bow, a venture capital fund that would invest in research and technology developed by UC students and faculty. (UC’s Office of the Chief Investment Officer is an anchor investor with a $250 million commitment.) Ranadivé, the founder of TIBCO and the current owner of the Sacramento Kings, was asked to lead the fund.
Bond connected with Bow Capital during his first year at Haas, when he served as a Berkeley Haas Venture Fellow. Asked by Bow to come up with new ideas for investing in UC Berkeley startups, Bond proposed a fund that would concentrate on smaller, pre-seed-round deals, providing additional deal flow to Bow—which typically makes seed and Series A deals across the UC-affiliated system and beyond.
Bow approved the idea and Arrow Capital was born. It’s managed by Bond and five UC Berkeley students who serve as investment partners. The partners will typically invest $15,000—but potentially more—in each deal. They plan to make six to ten deals per year and, if they succeed, expand Arrow’s footprint to other UC campuses.
A flywheel of growth
Once Arrow invests in a startup, the student investment partners will work with the founders to help grow their businesses and raise subsequent funding. “Our work does not stop once the paperwork is signed. In fact, it has barely begun,” Bond said. “We hope that the startups we back will go on to raise a larger round led by Bow.” By investing Berkeley’s own endowment dollars back into UC Berkeley startups, “we create a virtuous flywheel of growth,” Bond said.
Applications for startups are already pouring in, and Arrow began reviewing them this week. The only requirement to apply is that the company must be connected to someone who currently has or previously had a UC Berkeley affiliation. Aside from funding, Arrow is offering startup teams connections to UC Berkeley alumni, other startups, and campus accelerators, helping the teams find talent, and providing operational and strategic guidance.
As Arrow’s managing partner, Bond—who started his first company at age 16 and studied math at Oxford University as an undergraduate—fashioned a rigorous, competitive two-step interview process for the student applicants. About 100 people expressed interest in the five slots, and eight students competed in the final round. They were asked to review two startup pitches and defend the startup they chose to fund.
Choosing the team
Last month, five UC Berkeley students—including three from Haas—joined the partnership as investment partners. They include Amy Guo, a freshman in the Management, Entrepreneurship, and Technology (M.E.T.) program; Kaitlyn Uythoven, BS 19; Niles Chang, BS 20, along with Levi Walsh, a third-year Computer Science major, and Berkeley Law student Ben Adler.
Bond specifically chose students from varied backgrounds with different investment interests and work experience. Chang, for example, loves both the media and the food and beverage spaces, and will be joining J.P. Morgan’s investment banking division next summer. Each student partner will focus on a few industry sectors.
“I’m fascinated by how technology has drastically changed the way we receive information, and it’s exciting to see the rise of original content and the strides in digital media,” Chang said. “I’m also a huge foodie and love the constant innovation in the food space, everything from plant-based meat to on-demand services.”
A former Cal beach volleyball player, Uythoven said she knew when she arrived at UC Berkeley that she loved business and working on teams, which drew her to apply to Haas after she finished her varsity volleyball career. Taking Lecturer Kurt Beyers’ entrepreneurship class last spring solidified her interest in startups and her desire to work for Arrow. “I found out that I really love entrepreneurship,” said Uythoven, who is interested in sectors ranging from blockchain to high fashion.
Guo, who is pursuing a dual degree in electrical engineering and computer science (EECS) and business, said she’s hoping to expand upon her interests in education (she founded Writer’s Ink, a student-run nonprofit centered around creative writing, in high school), entertainment, AR/VR, and e-commerce while working with Arrow.
“I thought that this was just the most incredible opportunity,” said Guo, who grew up in Irvine, Ca. “We, as students, get the chance to put significant capital into the companies our peers are starting. There’s a lot of responsibility in that.”
Building a pipeline
The partners spent the first few weeks after the launch getting to know each other and developing Arrow’s funding application for startup applicants, expanding the website, and meeting with other startup groups on campus including Skydeck, The House, Citris, and Free Ventures.
There’s been a ton of interest in the fund so far, Bond said. “Our primary mission is to build a pipeline for startups at Berkeley and we’ll be leveraging our talented community of students, faculty, and alumni to help these startups succeed.”
After spending the past seven years working in hedge funds, private equity, and investment banking, Bond said he’s happy to return to the startup world.
“I came to the West Coast to pivot back toward entrepreneurship,” he said. “I had previously founded a few companies at school and university, and really enjoyed the journey, and so I wanted to get back into that world. Silicon Valley was the best place to pursue that ambition.”
On the corner of a bustling, working-class neighborhood in Mexico City, Maria González has run a small photography business for years.* Recently, she took out a bank loan to purchase a new digital camera and printer that enabled her to produce high-quality images and deliver them at a rapid speed. González’s clients noticed her improved service and spread the word—new customers flooded her store. A few steps down the same street, Andres Perez owns a bookstore that would benefit from renovations. While these improvements would presumably attract much needed customers, Perez refuses to take out a bank loan. He explains that bank loans are stressful, require too much paperwork, and are meant for people with money or assets.
Financial inclusion brings major benefits to individuals like González and entire economies. By allowing people to invest in their future, smooth consumption, and manage risk, access to and use of a range of financial services help reduce poverty and inequality. Yet, access to financial capital is often cited as a barrier to growth for microentrepreneurs in emerging countries. In these countries, 40 percent of formal micro-, small- and medium-size enterprises are financially constrained.
But, as Perez’s story demonstrates, unmet financial needs among microenterprise owners may also be a result of low demand for the formal financial services available to them. Despite the availability and benefits of loans through banks and microfinance institutions (MFIs) in Mexico, take-up rates of formal financial products among microentrepreneurs is often surprisingly low. For example, only 4 percent of eligible applicants take up the credit available to them from Mexican bank and MFI Compartamos Banco. A new report by the Institute for Business & Social Impact at the Haas School of Business, University of California, Berkeley, in partnership with the Mastercard Center for Inclusive Growth, surveys microenterprise owners clustered at the bottom of the pyramid in Mexico and investigates possible reasons for their disinterest in formal financial services.
The formal versus informal financial system
The new report presents evidence that small business owners in Mexico prefer informal financial networks to the formal financial system. In the sample of more than 1,300 Mexican microentrepreneurs, over 75 percent do not consider borrowing from the formal financial system in times of economic need. Rather than take out a bank loan or MFI credit, more than two-thirds of these entrepreneurs would prefer to draw from their personal savings or borrow money from a friend or relative, and about 10 percent would sell belongings in exchange for cash. Interestingly, this is true among microentrepreneurs in the sample across all levels of education, suggesting that it is not lack of information or understanding that is compelling these small enterprise owners to avoid formal financial products.
The report goes further, inquiring what features of formal bank and MFI loans are unappealing to microentrepreneurs. Their aversion to collective loans stands out as an explanation. To guarantee high repayment rates, discourage risky projects, and increase accountability, formal banks and MFIs will often require microenterprise owners to apply for credit with a group of peers or neighbors. All group members would be penalized if the loan is not fully repaid. While collective loans are designed by banks and MFIs to increase credit availability to microentrepreneurs without collateral or prohibitively high interest rates, this design feature appears to discourage eligible borrowers in Mexico. Even in times of economic distress, the majority of Mexican microentrepreneurs surveyed would prefer an individual loan, citing as reasons personal responsibility for repayment, flexibility of credit to individual business dynamics, difficulty in meeting group eligibility requirements, and higher loan amount disbursed.
These results suggest that specific design features of formal bank loans and MFI loans intended to serve microentrepreneurs clash with their preferences, and inadvertently keep them on the periphery of the formal financial system.
Technology and financial inclusion
Cell phones and digital technologies are likely to provide the platforms necessary to increase financial inclusion for microentrepreneurs in the informal and formal economy. The report finds that over three-fourths of microenterprise owners in the sample own a cell phone. However, only 14 percent of cell phone owners use their mobile device for business-related transactions. Mobile channels—perhaps developed by formal financial institutions—could be used to track transactions, customers, and revenue to determine eligibility for individual loans, as well as monitor credit dispersion and repayment rates. Targeted programming that encourages business-related cell phone usage and training could lead to efficiency gains and unleash potential for microentrepreneurs. The cell phone market in Mexico is projected to keep growing, providing opportunities for value-added services that have the potential to increase financial inclusion and market share for microenterprise owners.
These findings suggests that digital technologies might enable banks and other financial institutions to design better products that encourage microentrepreneurs to engage in the formal financial system. Indeed, mobile money and other forms of digital finance are likely to be the major channels for accelerating progress on financial inclusion in Mexico and other emerging market economies. Of course, in addition to technology, there are various factors that influence a microentrepreneur’s demand for a loan, including low trust in formal banks and the government, fear of debt, sensitivity to interest rates, and lack of information.
Strivers in Mexico
To facilitate smooth transactions between banks and microentrepreneurs, banks must be familiar with microentrepreneurs’ business profiles, characteristics, and motivations. The report points out that microenterprise owners in Mexico vary significantly with respect to their level of education, number of clients per week, volume of sales, and amount of loans received in the past year. These findings indicate that it might be possible to determine the demand for financial products by individual microentrepreneurs based on their level of education or the size of their business.
As financial inclusion increases, some microentrepreneurs may be especially well positioned to benefit. The report proposes a framework to identify and classify this particular category of microentrepreneurs, termed “strivers” by the Mastercard Center for Inclusive Growth. Strivers are operating enterprises with two to 10 employees in rapidly growing market segments. They are poised to thrive and contribute to inclusive employment and economic growth within their communities, but are lacking the tools to increase their competitiveness and fully realize their business potential. The majority of respondents (60%) surveyed in the report are strivers by this definition.
Strivers, like most of the microentrepreneurs in the sample, prefer informal and individual loans, and are likely to own a cellphone. For strivers in Mexico, mobile devices may serve as important tools for information, training, and capital that lead to growing market share. The majority of the Strivers in the sample chose to be entrepreneurs over pursuing formal jobs; have a distinct sense of agency in their lives; and, as a result, believe that they have more control over their business outcomes.
This report provides an initial window into the lives and decisions of microentrepreneurs and strivers in Mexico. It highlights their need for credit to stimulate growth; specific barriers that keep them from taking-up loans from formal financial institutions; and the potential for mobile phone technologies to increase their engagement with these institutions. Impact-oriented design and evidence-based evaluation of financial products tailored to the needs of microentrepreneurs have the potential to vastly increase financial inclusion in emerging economies around the world. Bold approaches are necessary to realize the vision of sustainable growth for this promising segment of the economy.
The startup roundup series spotlights students and recent alumni who are starting a new business or enterprise.
Co-founders: Andrew Hill MBA 16, CEO Joanne Hill-Powell, chief data scientist
Many hospitals and clinics have turned to technology to better track their patients, using central records that detail medical histories, current prescriptions, and health goals. Andrew Hill, MBA 16 and co-founder of startup LiftEd, wondered why students receiving special-education services couldn’t benefit from a similar system.
After all, Hill’s sister, Joanne Hill-Powell, a special-education teacher and behavior analyst for more than 10 years, was spending countless hours a week tracking her students’ learning interventions, and preparing for meetings with administrators and parents. “The volume of data required to continuously monitor a student’s progress—a legal mandate for students with learning disabilities in the U.S.— is often scattered among binders, and stored in filing cabinets, on sticky notes, in emails, and in the cloud,” Andrew Hill says. “It gets complicated pretty quickly.”
Observing special-education classrooms during the summer of 2014—and getting a broader understanding of how hard it is for those teachers to track data—led Hill to found LiftEd with his sister. He combined his experience as a technology consultant and user experience designer with Hill-Powell’s doctoral-level training and extensive career working with students with various learning disabilities who range in age from three to 22.
The startup offers a mobile platform that educators and other special-education professionals use to monitor students’ progress on annual academic, functional, social, and behavioral skills goals. But perhaps even more importantly, LiftEd can be used to turn student data into digestible progress reports and data-driven charts that provide a window into a student’s learning. That allows educators to make better real-time decisions on the level of instructional support a student needs, says Hill.
In the current school year, LiftEd is on track to be used in 20 school districts, up from 10 last academic year. And by the 2019-2020 school year, Hill expects the system to be used in over 100 districts, under pay-per-student subscriptions.
LiftEd has raised more than $800,000 and is currently on the verge of closing a seed funding round, says Hill, who was named to the “Forbes 30 under 30” list for education this year.
At Haas, Hill says marketing lecturer Wasim Azhar and Assoc. Prof. Adair Morse, who teaches New Venture Finance, as well as Asst. Prof. Juliana Schroeder and Assoc. Prof. Sameer Srivastava, were all incredibly helpful, along with the Berkeley Haas Entrepreneurship Program executive director, Rhonda Shrader, and entrepreneurship lecturer, Jorge Calderon.
Hill says the company has proven, through a third-party study, that LiftEd saves educators time, on average 10 or more hours per week. The platform is also accelerating the rate that students master individualized educational goals, and is empowering educators to better prioritize student instructional needs, Hill says. “We had a teacher tell her district’s special-education director that she’d rather give up a kidney than not have LiftEd again this year,” Hill says. “So, I think we’re onto something.”
81cents Founder: Jordan Sale, MBA 19
At age 21, Jordan Sale, MBA 19, was excited to land an unpaid internship at a Washington, DC-based communications agency. At the advice of her uncle, Sale worked hard to put together a case for why she deserved a stipend for living expenses. While her employer didn’t giver her that stipend, the agency did agree to a transportation stipend.
“Every time I took the subway that summer I was so happy,” says Sale. “This made me understand first-hand the importance of negotiating—despite not doing very well at this one.”
Eight years later, Sale is advising other women about compensation, whether they’re negotiating a starting salary or seeking a raise at a current job. Her startup, 81cents, a name that refers to the amount a woman earns on average for every dollar a man earns, aims to help women avoid the so-called wage gap. While Sale acknowledges that there are systemic reasons for the wage gap, she says that men initiate negotiations four times as frequently as women, often landing better results. “It struck me that this is something that’s pervasive,” she says. “Negotiating works and it’s something tangible that women can start to do right now to initiate change for us.”
81cents reviews compensation packages and helps clients plan their negotiating strategy, even running mock negotiations. Clients have the option to pay an hourly fee of $81 or a total of $425 for unlimited help. The company also offers lower cost “crowdsourced offer reviews,” in which it circulates a client’s offer, minus identifying information, among its network of recruiters and hiring managers who provide feedback in the form of a personalized report.
Sale says her experience in a leadership role in Berkeley’s LAUNCH Accelerator program was invaluable in teaching her about the early days of building a company. Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program, and Profs. Omri Even-Tov and Juliana Schroeder have all helped her navigate the launch, she says.
Schroeder provided an hour-long primer on salary negotiations and serves as a resource on how to tackle challenging negotiations. Even-Tov, who is an entrepreneur, “has been a helpful mentor in navigating some of the classic challenges all early-stage businesses face, such as when to incorporate and how to think about equity,” she says.
Grants and fellowships have allowed Sale along the way. In addition to the $12,500 Larson Scholarship for Entrepreneurship, she also received a $5,000 Hansoo Lee Fellowship, a $5,000 Dean’s Seed Fund (now the Trione Student Venture Fund) grant, and a $5,000 Martin Fellowship. To move the company forward, she partnered with UC Berkeley students Nikita Jain and Grace Lin over the summer.
So far, 81cents has worked with about 65 clients. “When I hear back from a woman who’s had a successful negotiation, it’s incredibly meaningful, and motivates me to keep pushing” Sale says.
Shom Gupta, MBA 19 Surya Sendyl, MIMS 19
Shopping at a local farmers’ market can be fun—all those fresh organic strawberries and bunches of baby kale for the picking. Trouble is, some people just don’t have the time to go.
With his startup, nearfarms, Shom Gupta MBA 19, is bringing the farmers’ market online, where customers can order from local farms without going to the market. “This area has such a rich agricultural bounty and I wanted to tap into the local agricultural system,” says Gupta, a loyal farmers’ market shopper and self-described foodie. “Nearfarms is about making fresh, local produce easy and accessible.”
Gupta co-founded the startup with Surya Sendyl, a student in the MIMS (Master of Information Management and Systems program) at UC Berkeley.
Selection varies, and often follows the seasons. In October, the nearfarms website featured produce from the downtown Berkeley farmers’ market, including organic pasture-raised eggs from Riverdog Farm in Guinda, Ca., empire, honey crisp and gala apples from Billy Bob Orchards in Watsonville, Ca., and cauliflower from Happy Boy Farms in Soquel, Ca.
Gupta and Sendyl pick up their customers’ online orders at the local farmers’ markets, where they sort and pack the food for home delivery. The company currently delivers, using freelance drivers who ferry packages, typically on Saturdays, to Oakland and Berkeley. The startup will slowly work to expand its delivery area, says Gupta, who previously worked at New York online grocer FreshDirect.
Gupta acknowledges that nearfarms’s current business model may work only in areas with a high concentration of small farms, farmers’ markets, and consumers who care about how and where they buy their food.
And expanding to a completely new region would mean starting anew with recruiting farmers, since the company’s existing relationships with local farmers wouldn’t carry over to anywhere else. “But we’re comfortable with that,” Gupta says. “If we can nail down the Bay Area and be good at it, we’d be very satisfied.”
In Afghanistan, where fake or “ghost” workers siphon off government paychecks and some rural teachers get paid through bursars who carry bags of cash to remote areas, can mobile money reduce corruption in public payrolls?
In Sierra Leone, where just 10 percent of households own a TV and opposition parties are weak, can screenings of videotaped candidate debates at large public gatherings help increase voter knowledge and improve candidates’ accountability?
Of these and the myriad efforts to reform public institutions in the developing world, which ones are proving to be most effective?
That was the central question occupying the researchers, funders, and “public sector entrepreneurs” from across the globe who gathered at the Haas School this week to share knowledge and strategies on how to achieve positive institutional change in developing nations.
The forum brought together the people behind these evidence-based reforms to share progress and challenges, spark new research, and build connections. Visitors include high-level officials from the Mexico City Labor Court, the Judiciary of Kenya Law Reform Commission, the Uganda Ministry of Lands, Housing and Urban Development, Pakistan’s Punjab Commission on the Status of Women, the City of Dakar tax authority, and others.
“Over a number of years here at Berkeley we have been devoted to the study of the institutional roots of economic development,” Dal Bó said in his opening remarks. “We have learned that when you scratch beneath the surface, you find that behind every successful institutional reform project is an individual who, in some part of a public organization, decided that he or she had had enough and that something needed to change. In every single case there is a figure that we like to call a ‘public sector entrepreneur,’ who is somehow combining resources to make something happen.”
30 studies underway
Launched two years ago, the EDI initiative has already allocated allocated $5.5 million in funding to 30 randomized control studies involving 80 researchers across 12 countries, Dal Bó said. They include academics, research institutions, and reform-minded public organizations working to increase government transparency, accountability, and other reforms to political and legal systems.
Randomized control trials are considered the gold standard in field research, reducing bias and providing data on which reforms actually make a difference. EDI is focusing on programs that work closely with local institutions and government, rather than efforts by outside groups alone that may be less sustainable. While there are many initiatives funding impact evaluations in the developing world, EDI has a broader goal, Dal Bó said.
“We want to go beyond the individual impact evaluations and create linkages to build more cohesive, generalizable knowledge,” said Dal Bó, the Philips Girgich Professor of Business and an expert on government corruption and reform, who holds a joint appointment in the Political Science Department. “The other thing we want to do is put the lens on these public sector entrepreneurs and endow these people with instruments that might be helpful.”
Frontiers of evidence-based policy
The forum included interactive sessions with leaders of the studies that are underway, discussions about the state of science and open policy questions, funding priorities, and presentations from the “frontiers of evidence-based policy.” Two of the presenters were professors Katherine Casey of Stanford’s Graduate School of Business, who conducted the study of citizen engagement and election reforms in Sierra Leone, and Michael Callen of UC San Diego’s Rady School of Management, who led the experiment on using mobile money to fight corruption in Afghanistan (which was not funded by EDI but presented as an example of a large-scale public sector experiment).
Callen worked with the Afghan Ministries of Finance, Labor, and Education and the Office of the President to register all workers and then test whether paying them through mobile money would reduce the substantial “leakage” of government funds. The program was successful enough that Office of the President and the Ministry of Finance are bringing it to scale with the goal of paying all public employees using mobile money.
“The evidence-based smart policy movement is creating innovations at a remarkable pace,” he said. “But for something like this to succeed it needs to be anchored in government so that innovators can hand it over to implementers.”
Dal Bó and Finan, who act as the scientific leads for EDI’s randomized control trial program, also presented on their own research on reform efforts in Mexico and Paraguay. Their experiments (not funded by EDI) showed how financial rewards, and mobile technology, can help with the recruiting and monitoring of frontline public service workers. In one study, they rolled out mobile phones to the government agents who support small-scale farmers in Paraguay. They found the phones improved their performance, allowing them to not only document their farm visits but also for their government supervisors to track and monitor their locations.
The Startup Roundup series spotlights students and alumni who are starting a new business or enterprise.
Federico Alvarez del Blanco, MBA 18
John Kim, PhD 18 (UC Berkeley/UCSF Bioengineering)
Hector Neira. PhD 18 (UC Berkeley/UCSF Bioengineering)
Robert Kim PhD candidate (UCSD MD/PhD, Neuroscience)
Busy surgical teams inadvertently leave an instrument inside a patient an estimated 1,500 times a year in the U.S. alone, according to research. Less frightening, but still problematic, is the considerable cost to hospitals that bring instruments into the hospital that are never used, but must still be sterilized or restocked—as well as delays that happen when the required instruments fail to make it to the surgical tray.
Solving those problems is the focus of Vidi, a fledgling company launched last November by Federico Alvarez del Blanco, MBA 18, and three other University of California graduates. “Tracking surgical instruments, is slow, manual, and error-prone,” Alvarez del Blanco says.
The team’s inspiration came while they were attending a workshop on visual recognition sponsored by information technology company NEC on the Cal campus. “We realized that the technology being used to develop self-driving cars could have wider applications in the medical field,” he says.
The heart of the Vidi system is a camera mounted in the operating room and connected to a computer. The system scans the surgical tray, recognizes the instruments on it, and keeps track of them. When the surgery is concluded, the system gives the team a readout of each item that was in the cart at the beginning of the procedure and lets them know if anything is missing.
The really difficult part of developing the system is training machines to correctly recognize hundreds of instruments, Alvarez del Blanco says. It’s similar to the technology self-driving cars need to recognize objects and react accordingly. That’s why Vidi team members have advanced degrees in fields such as bioengineering, neuroscience, and image recognition.
Although Vidi, which means “to see” in Latin, is very young, it has already gained a good deal of recognition. The team was awarded a Haas Dean’s Seed Fund grant last year; earned a second-place win at the University of California Big Ideas Competition in 2018; and won awards from NEC and the National Science Foundation’s I-Corps program.
Alvarez Del Blanco says his time in the MBA program helped him build the connections he needed to launch Vidi. “Haas has an interdisciplinary approach that gave me access to ideas and people across the entire University of California system,” del Blanco says.
Kourosh Zamanizadeh, BS 09, MBA 18
Ryan Alshak, BS 09 (Political Science)
If you’ve ever had dealings with a law firm, you’ve probably gotten a detailed bill with line items for everything from reviewing files to drafting documents to answering emails. While it may seem cut-and-dried, billing clients is actually a burdensome, error-prone task that costs law firms potentially billions in wasted time and lost revenue, says Kourosh Zamanizadeh, MBA 18, co-founder and COO of Ping.
A Berkeley Haas-nurtured startup, Ping uses artificial intelligence, machine learning, and cloud computing to automate legal billing. The software tracks, stores, and analyzes the time attorneys spend on a case, and then creates client-ready bills. It’s early days, but Ping has already attracted significant funding from top-tier venture capital firms (a public announcement is pending), along with a $5,000 grant from the Dean’s Seed Fund. It was named “Legal Tech Startup of the Year” in 2017 by the American Bar Association.
Ping has landed its first large client, Mishcon de Reya, a London-based law firm employing more than 800 people, says Zamanizadeh. Ping has already run a successful pilot and the firm has committed to expanding it company-wide within the year. Zamanizadeh also expects to start trials with a number of other global law firms later this year—a business expansion that will require a larger technology team.
Zamanizadeh and co-founder Ryan Alshak met while undergraduates and fraternity brothers at Cal a decade ago. “We always dreamed of starting a company together and decide to take the leap in 2016,” he says. “We both left our careers and just went for it.” The startup team has a deep lineup of relevant talent: Alshak is a former lawyer; Matt Bordas and Janesh Gupta are software engineers;Eric Zaarour is a designer; and Zamanizadeh has experience in business development and investment management.
This is the second startup for the five-member team, who made an earlier, unsuccessful attempt to build a company around an app for exchanging contacts. The team hit upon the idea of focusing on legal technology and they were accepted by Skydeck, the accelerator run by Berkeley Haas, the College of Engineering, and UC Berkeley, where they had a home base to develop their idea further.
“The startup ecosystem at Berkeley has very much matured since Ryan and I first met as undergrads. It’s truly world-class,” says Zamanizadeh, who credits Skydeck Executive Director Caroline Winnett and Ikhlaq Sidhu, chief scientist and founding director of the Sutarja Center for Entrepreneurship & Technology, for their extra support. “The environment has been very empowering and the help we’ve received couldn’t be any more genuine.”
Dustin Seely, EWMBA 18
Michael Brenndoerfer, M.Eng 18
Efficiently buying and selling bitcoins and hundreds of other cryptocurrencies is not a problem most people have. But as these hypermodern currencies become more of an investment and less of a curiosity, investors will need a simple way to manage their crypto-portfolios.
That’s the market Dustin Seely EWMBA 18, co-founder of Cryptonite, is going after. “We’re going to give investors a way to invest in the entire cryptocurrency market in one place, and do it in U.S. dollars,” he says.
Seely and co-founder Michael Brenndoerfer met in a Berkeley Haas entrepreneurship class, and then took the new, multidisciplinary “Blockchain and the Future of Technology, Business and the Law” course last spring, where they learned more about the technology underlying cryptocurrencies. Their young company was awarded a Dean’s Seed Fund grant and is expected to go live in the fall.
The cryptocurrency market is volatile and expanding, with a market cap of about $250 billion in mid-July (down from a peak of more than $800 billion in January). Although bitcoin is the most valuable and most widely known, there are now more than 1,600 cryptocurrencies sold on almost 12,000 scattered exchanges, according to CoinMarketCap. What’s more, many of those exchanges do not accept dollars, so doing business with them requires buyers to slog through complicated, multi-step trading procedures. Buying a cryptocurrency called Zilliqa, for example, means buying a bitcoin in dollars, and then using the Bitcoin to purchase the Zilliqa, Seely explains.
Cryptonite will serve as a middleman between investors and other exchanges. Account holders will be able to buy cryptos in dollars without dealing directly with other exchanges, and manage their portfolio on a mobile device, Seely says.
At the moment, cryptocurrencies are only lightly regulated, but Cryptonite is preparing for the future. “Securities regulations are coming to the space and we welcome it,” Seely says. “Regulation will give further legitimacy to the market and we can use it as a competitive advantage when we become fully compliant.”
Judges at the 2018 UC Berkeley LAUNCH competition last Thursday awarded top honors to a team led by a College of Engineering student with a big data startup.
This year marked the 20th anniversary of LAUNCH, UC Berkeley’s startup accelerator created by and for UC Berkeley founders.
Every year, startups complete three months of mentoring and product development designed to transform early stage startups into fundable companies. The program culminates with a pitch competition.
Judges winnowed this year’s crop of 23 startups to 10 finalists. Their founders had just five minutes each to make a pitch touting their business plans, as the nearly 400 people who filled Andersen Auditorium watched, ate pizza, and cheered on their favorites.
This year’s finalists represented a wide swath of the business world, from farming to medicine and emerging technologies like machine learning. “The best part for me was seeing our founders crush their presentations,” said Christian Keil, MBA 19, the co-chair of LAUNCH. “They’ve come so far in the three months of our program—so many pivots made, interviews completed, storms weathered. To see them shine in front of investors and the general public was amazing” Companies that have completed the intensive LAUNCH program over the last three years have raised more than $36 million in venture funding, Keil said.
LAUNCH teams from Haas and beyond
Haas-founded finalist teams included, Chema González-Garilleti, MBA 19, who leads Collaboratorium, an enterprise decision-making Software-as-a-Service product; Shom Gupta, MBA 19, of NearFarms, which is creating a marketplace linking consumers and local farmers; and Jessica Eting and Pedro Moura, EWMBA 18, who lead Flourish, a personal finance tool that uses games and rewards to help people establish savings habits and achieve financial security.
Data Agora, winner of this year’s $25,000 grand prize, is building a secure, online marketplace for buyers and sellers of big data.
“Acquiring high-quality data is very difficult,” says founder and CEO Ashwinee Panda, a sophomore in the College of Engineering. Unlike data brokers, the usual avenue for the commercial exchange of data, Data Agora’s systems never see the data. Instead the company uses machine learning to facilitate the transaction and avoid the risk of data breaches and the loss of privacy, Panda says.
The $10,000 second-place prize went to Jobwell, a tool that helps organize job searches and provides virtual coaching for users. The company was founded by former LegalZoom employees; May Lu, a Wharton MBA, and Daniel Kent, now a graduate student at UC Berkeley’s School of Information.
Third-place winner of $1,000 was Medinas Health, founded as a market for surplus medical supplies by CEO Chloe Alpert. Medinas Health handles items as small as a box of sutures, worth about $300, or as large as a C-Arm, a $100,000 device that holds medical equipment in place.
The company acts as a broker, and arranges inspections of critical equipment, Alpert says.
Growing up in a conflict zone in Turkey led Hejar Oncel to research the connection between water availability, wars, and sustainability.
“One of the reasons we have so many wars in the Middle East, Turkey, Syria, and Iraq is, basically, water scarcity,” says Oncel, MBA 18, who was joined by Hien (Sunny) Nguyen, also MBA 18, to present March 14-17 at the MBA World Summit in Cape Town, South Africa.
This year, a total of 100 MBA students from top business schools worldwide were selected to attend the summit, chosen from more than 3,000 applicants. The summit, founded in 2014, aims to create a global MBA leadership community by encouraging the students to debate “the most pressing issues of our times.”
The Haas students competed in two qualifying rounds before they were invited to the final event in Cape Town.
The summit agenda, crafted with the input of the MBA students, focused on three topics: collaboration culture, high-impact exchange, and interdisciplinary approaches to global business and societal issues.
Throughout the week, Nguyen and Oncel joined other students on a Social Impact Day, traveling with local residents, visiting villages in order to get a better understanding of the business problems they face. They paired with aspiring entrepreneurs in the Khayelitsha community, one of the biggest entrepreneurial hubs in South Africa, to share ideas.
Nguyen’s summit topic is close to home. She is researching how to build a stronger entrepreneurial ecosystem in her native Vietnam. She said she grew up surrounded by entrepreneurs in a country where the GDP per capita was about $2,000 in 2016.
“Vietnamese people are very entrepreneurial. You can find a small business owner on every street corner,” she said. “What struck me the most is the missed opportunities due to a lack of an entrepreneurial ecosystem in Vietnam, as well as many other developing countries. That is why I came to Haas—to find ways to tackle this problem.”
She co-chairs a business conference about startups in Southeast Asia and took part in the Global Network of Advanced Management (GNAM) to learn about entrepreneurship in Mexico and Latin America. She also represented Haas in the MISK Global Forum on innovation and entrepreneurship in Saudi Arabia.
Before coming to Haas, Oncel earned a PhD in mechanical engineering from the University of Houston and held several engineering and technology management roles at National Oilwell Varco in Texas and Norway. He recently worked as a senior management associate intern at Bridgewater Associates. He says he’s interested in exploring how businesses can achieve profitability while focusing on water sustainability and optimization.
Oncel said Adj. Prof. Nora Silver’s class, “Large Scale Social Change: Social Movements,” was a starting point and an inspiration for his World Summit project. Silver is the founder and faculty director of the Center for Social Sector Leadership.
“She definitely reframed my way of perceiving business, management, and social change,” he said.
Organization leaders have a seat at the table and can influence policy, he said, and they should understand the impact that their businesses have on water and energy usage.
“I’m just trying to bring a Haas approach to a responsible business. I want to bring that perspective and explain why we can care so much about sustainability, environment, and human rights at Haas—and still create big companies that are creating value for shareholders,” he said.
The team of five MBA students and one Berkeley Law student now moves on to the April 6-7 VCIC 2018 Global Finals at University of North Carolina’s Kenan-Flagler Business School. Global VCIC is the world’s largest venture capital competition, with teams competing from the US, India, Asia, and Europe
The winning team includes Andrew Briggs, Alibek Dostiyarov, Max Kubicki, and Matthew Bond, MBA 19, along with Amy Fan, MBA/MPH 19, and Nick Calcaterra, JD 20. “Team Alpha” bested teams from University of Southern California; the University of California, Los Angeles; the University of California, Davis, and University of San Francisco.
The group had already beaten 36 other UC Berkeley graduate-level teams to score a place at the regionals.
Time pressure and short deadlines
The team had a great dynamic, Bond said. “Everyone was able to competently work both independently and together under time pressure with short deadlines. During the due diligence startup meeting and partner meetings, we were all in sync, speaking equally with smooth transitions and allowing different members to answer questions based on their knowledge of the subject matter,” he said.
Bringing a diverse set of experiences and skills to the negotiating table while competing against other California-based teams, Alpha excelled at due diligence, term sheet drafting, and negotiation tactics, said Adeeba Fazil, program manager for the Berkeley Haas Entrepreneurship Program (BHEP). Prepping the team to compete was Terry Kelly of Dorsey & Whitney LLC, who led training workshops for the students prior to the regionals, and mentor Bill Reichert of Garage Technology Ventures.
“The regionals allow students to gain so much valuable experience as VCs for the day, and our team was truly passionate about the company they chose to invest in,” Fazil said. “This competition is intense—it’s back-to-back meetings before the students decide to negotiate with a startup of their choice. Our team stuck to its terms and really worked together to negotiate an agreement.”
Winning recognition from Y Combinator, the prestigious Silicon Valley startup incubator, isn’t easy. Overall, less than 3 percent of the companies that apply are accepted each round. Since 2005, Y Combinator has funded more than 1,588 startups, including Airbnb, Dropbox, and Weebly.
Two Haas companies, Onederful and Players’ Lounge, made it into this year’s winter Y Combinator cohort, each receiving $120,000 and an opportunity to work closely with world-class mentors to grow their businesses and refine their investor pitches.
“Teams, like Onederful and Players’ Lounge, who dig in and do the hard work are natural fits for Y Combinator,” said Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program. “They’re great founders, focusing on the fundamentals.”
Here’s the skinny on the two startups.
Karen Yee Taylor, EWMBA 19, co-founder & CEO
It all started with a toothache.
Karen Yee Taylor, EWMBA 19, found a dentist, went in for a 10-minute appointment, “and it turned out it wasn’t a big deal,” she said.
A week later, she received a huge bill “because the office didn’t verify my insurance and I actually wasn’t covered for this check-up.”
Since her father is a dentist, Yee Taylor suspected that something wasn’t right. “I decided to dig in, and what I discovered was a massive problem in the industry. Sorting out insurance benefits by making phone calls and faxing documents back and forth is a big waste of time and money.”
Yee Taylor and her brother, Alex Yee, are now building Onederful, a web portal that allows a dental office to verify a patient’s insurance information in seconds. The information is standardized across all the insurance carriers so offices can quickly find what they are looking for. The site is currently being tested by about 50 dental practices.
Before settling on a business plan a year ago, Yee Taylor and her brother interviewed dozens of dentists and their staffs. They found that the routine process of checking on a patient’s insurance benefits could take up to 30 minutes per patient, and reduce revenue by approximately 7 percent due to denied claims caused by eligibility errors.
To solve the problem, Onederful connected to 240 dental insurance carriers. Subscribers to its service can go to Onederful’s secure web site, type in a patient’s information and get access to their insurance plans in a standardized way.
Because patients’ dental records and related insurance information are regulated under federal HIPAA rules mandating high levels of privacy and security, much of the $120,000 awarded by Y Combinator to Onederful was used toward secure software and services, Yee Taylor says.
The team is using the remainder to pay living expenses while they work to launch the company.
They head to Y Combinator headquarters once a week to meet with mentors and work through the company’s growing pains.
“We’re meeting with great people and getting great advice,” Yee Taylor says.
Yee Taylor said a course called “Innovative Leadership Through Design” with Haas Lecturer Angèle Beausoleil helped shift her focus to users and their problems first. “It’s been the approach I take any time I question what to build or tackle next,” she said.
Mark Murphy, MBA 17, co-founder and CFO
As an undergraduate student, Mark Murphy played multiplayer online soccer every day with his varsity soccer teammates Austin Woolridge and Zach Dixon.
Then the group graduated.
“Playing was something that we found increasingly hard to do on a consistent basis after school and it was something we really missed,” Murphy said.
As with so many inventions that fill a need, the team came up with the idea for Players’ Lounge, a video game social startup for Xbox and PlayStation users. The site hosts head-to-head matches for money, along with free tournaments for cash prizes for games including FIFA (soccer), Madden (football), NBA2K (basketball), MLB: The Show (baseball), NHL (hockey), and Call of Duty.
Players can be matched with an opponent who wants to bet, play each other online on Xbox or PS4 for no money, or join a tournament to win money.
The company is growing quickly. Both revenue and visitors to video game tournament host Players’ Lounge have roughly tripled in the last year, Murphy said.
The surge in performance has largely been driven by the video game stars, called streamers, who are paid to interact with the Players’ Lounge audience, Murphy said.
At Haas, Muphy took his idea for Players’ Lounge through the Lean Launchpad process, a rigorous methodology that helps students discover early on if a market demand exists for a product of service.
Murphy and his team conducted 50 to 60 interviews with potential customers.
The team’s original plan was to host live game-oriented events. (The team met Dan Delaney, their current CTO, at their first event.) But feedback Murphy received during the UC Berkeley LAUNCH startup boot camp program convinced him that building an online gaming platform and community had a better chance of success.
Now, the team is using the Y Combinator seed funding to help pay the streamers and fund a marketing campaign.
Murphy said the intensive mentoring provided by LAUNCH and Y Combinator has proved invaluable. (Four other LAUNCH teams —Xendit, Lendsnap, Innovein, and Dost—were also past Y Combinator startups.)
“We’re already a lot more focused,” Murphy said. “If you can’t grow with that kind of help, you probably have a bad business model.”
They call Ludwig Schoenack “the connector” in campus startup circles.
It’s an apt nickname for Schoenack, an amiable MBA student who just launched the Haas Startup Squad, a team of matchmakers who help connect Haas students to entrepreneurs at the UC Berkeley incubator, Skydeck.
Tucked away in the penthouse of Berkeley’s tallest building, SkyDeck companies—founded by a wide breadth of UC Berkeley students, faculty, and alumni through different programs—are working on everything from cryptocurrency software to gene editing to consumer apps to cancer-fighting drug therapies.
While the founders are often computer science and tech whizzes, they’re looking to business students to help them nail down a market opportunity or build a proper business plan. For MBA students, SkyDeck provides a window into the startup world, and the ability to hone their skills, while possibly helping to create the next unicorn, or billion-dollar company.
So far, Schoenack and his team have made more than a dozen successful matches.
“Ludwig has been phenomenal,” says Caroline Winnett, MBA 90, the executive director of SkyDeck, a partnership among Haas, Berkeley Engineering, and the Office of the Vice Chancellor for Research. “We’ve been beyond thrilled with his ability to execute and move quickly. He’s quickly become an important part of the program here.”
When Schoenack, a native of Germany, left his McKinsey consulting job to come to Haas, he was on a mission to immerse himself in the startup ecosystem. He tracked down Winnett during MBA orientation week.
“He came on by and said ‘I’d like to connect Skydeck to smart MBAs. What do you think?’’’ Winnett said. “It was an idea I’d been thinking about for a while.”
Winnett took Schoenack aboard and he immediately started showing up twice a week at SkyDeck, which houses a mix of startups that are at various stages of development and funding—along with 16 additional cohort companies chosen each semester to receive $100,000 and mentoring from the Berkeley SkyDeck Fund. (Bitbutter, founded by Jin Chang, MBA 19, is among the SkyDeck Spring 2018 Cohort.)
During his first few months at SkyDeck, Schoenack started working with several startups, applying the skills he’d honed at McKinsey: fostering teamwork, working under high pressure, and disentangling problems. Word got out, and other teams started asking for business help.
Overwhelmed by the demand, Schoenack recruited fellow students Lucie Bardet, Matt Morrison, and Ryan Crestani, all MBA 19, turning his one-man show into the Haas Startup Squad.
Bardet said she joined the Squad to meld two of her goals: to gain experience within the startup world and contribute to the campus startup ecosystem.
“Ludwig’s intention of increasing collaboration between business students and startups was just perfect,” she said.
A mixer leads to matches
This semester, the Startup Squad advertised on campus for four MBA students to match with SkyDeck startups. A crowd of more than 30 MBA students applied.
The Startup Squad whittled the applicants down to 16 students, who were invited to a mixer with SkyDeck founders.
“We put them all in a room with pizza and beer and had everyone pitch their startups and had the MBAs pitch their ideas,” Schoenack said. “People talked and connected with no pressure and no promise of a match.”
Becky Newman, MBA 19, was among the students who quickly matched, choosing startup Keybee, a marketplace for short-term rental support services.
Przemyslaw Jeziorski, an assistant professor in the Haas Marketing Group, is an adviser to Keybee, which was founded by his wife, Nadia.
After considering multiple startups, Luis Felipe Sucupira, MBA 19, decided to work with SkyAlert, an early earthquake alert service.
“There’s a lot of research and interviewing of SkyAlert’s potential clients that’s required and it’s a lot for them,” he said. “This is about trying to find the best type of client for them and the easiest low-hanging fruit to generate clients and revenue.”
Steve Keim, MBA 19, partnered with Benjamin Gowen, PhD 16 (molecular & cellular biology), and founder of SkyDeck team Peregrine Biotech. “I don’t have a business background, so having a Haas student who can help me think about things from the business perspective is really helpful,” Gowen said. “The analytics are better than what I can do on my own and it frees up my time.”
Keim, who is taking Prof. Toby Stuart’s entrepreneurship class at Haas and learning about startups through cases, appreciates SkyDeck’s hands-on opportunities.
“You get exposure to an incubator like SkyDeck that doesn’t exist elsewhere,” he said. “It’s such a unique feature of Berkeley and Silicon Valley and you really have to take advantage of it while you can.”
Matching beyond SkyDeck
While much of Schoenack’s time outside of class is spent at SkyDeck, his matchmaking skills are at work across campus—with Citris Foundry and the Berkeley Haas Entrepreneurship Program (BHEP), which oversees the Dean’s Startup Seed Fund, and I-Corps, a collaboration between Berkeley, UC San Francisco and Stanford University focused on commercializing university research through grants from the National Science Foundation.
“I love it when students take it upon themselves to create something,” said Rhonda Shrader, the executive director of BHEP. “Ludwig has connected Berkeley faculty and student inventors to I-Corps. He’s helped us make some really good matches.”
While many of the MBA students now working at startups aren’t planning a startup life after graduation, Schoenack said that’s not the point. “A lot of people want to explore and experiment,” he said. “No one does this for the money. The MBAs get exposure, you do new things–and just being up here is really fun.”
Schoenack is another story: He’s planning to start his own company.