Topic: Entrepreneurship
Devin Fei-Fan Tau, BS 97
Film Director & Producer, No Sunrise Wasted
Tawainese American Filmmaker Devin Tau developed a passion for movies while working at his parents’ video rental store in Whittier, Calif. When it came time to choose a career, however, it wasn’t an option. Still, Tau bucked convention.
“In my Asian family, there are three acceptable professions: doctor, lawyer, engineer,” he says. “My brothers became engineers; I broke the mold by doing business at Berkeley.”
Tau went on to work a decade in corporate finance, then as an apparel buyer for Gap Inc. But putting stories to celluloid was too strong a pull.
“When I turned 40, I had a midlife crisis, so I went to film school and started my own production company,” he says. “I never thought that I would be a filmmaker, mostly because it was culturally never possible.”
To date, Tau has three feature-length films to his credit: the thriller Half Sisters (2023); Who’s On Top?, the story of four LGBTQ+ athletes who climb Oregon’s Mount Hood (2021); and The Road Home (2022), chronicling six formerly incarcerated adults and their challenges to relocate while on community supervision.
Tau, who is gay, says he is driven to spotlight stories that haven’t been told before. “I’m a huge advocate for the underdog.”
Tau says there are similarities between business and filmmaking, beyond raising funds to bring a project to fruition: “If you’re creative, you have a million ideas, similar to an entrepreneur. It’s always challenging to get people to believe in your ideas if you’re not proven or you haven’t come to market with your product.”
A Wealth of Talent
Haas alumnae help evolve finance in Asia.
Christina MA, MBA 01 (shown at top), found her way into finance serendipitously. As an undergrad at Georgetown University, she had planned on becoming a diplomat but changed her mind before graduation. All she knew when she earned her diploma was that she wanted an international career in a dynamic city bursting with opportunity. Given her language skills, Hong Kong seemed a good bet. This was the mid-1990s, and China was in a stage of dizzying economic growth as it opened itself to capitalism and foreign investment.
After three months of networking, she landed a role as a proprietary equity trader at an Asian bank, a career she’d never considered largely because it was such a male-dominated field. “I had visions of Gordon Gekko from the movie Wall Street, of big guys in suspenders and slicked-back hair,” she recalls.
Indeed, as a woman, Ma was in the extreme minority on the trading desk. For some long periods over the course of her career, she was one of only a handful of women on the trading floor and in an even greater minority as a senior female trading manager globally. While the finance industry has made strides toward gender parity since the mid-90s, it remains male-dominated. According to a 2022 report from Deloitte, 19% of C-suite roles within the world’s financial services institutions belong to women—but just 14% in Asia.
Like Ma, the Haas alumnae featured here are impacting their respective niches of Asian finance. They represent both seasoned executives and up-and-comers, speaking to how the Asian finance industry has evolved and what’s on the horizon from their respective perches. Whether it’s helping to bring ESG (environmental, social, and governance) to prominence, establishing a burgeoning venture-capital market, or pushing for gender parity, all of these women are finding ways to encourage the many transformations underway in Asian finance to redound to inclusion, sustainability, and equity.
Shifting culture
For her part, Ma resolved that structural gender disparities wouldn’t hold her back. “I try to spend my energy and time thinking about what I can change, instead of fretting about what I am not,” she says.
That outlook has led to great career success and satisfaction. After three years working as a proprietary trader and junior portfolio manager at a local fund, she left to get her MBA at Haas. Upon graduation, she returned to Hong Kong and spent over two decades climbing the ranks at Goldman Sachs, first as a trader then becoming a partner and ultimately heading up Goldman’s greater China equities business. Since then, Ma has moved to HSBC, where she’s now the head of global banking, Asia-Pacific, overseeing a team of more than 500 bankers covering some of the largest corporate and institutional clients in the world.
As she’s traced this trajectory, Ma has strived to make finance more inclusive for both women and local talent. This has meant raising issues with her male colleagues they hadn’t come across before. When Ma was pregnant, for example, she had to work closely with her manager to develop her maternity leave plan—a first, since they had never had a senior trader go off on maternity leave.
“I hope that I have shown other women and men that you can succeed while being different from others and that the diversity of thought and style is valued and a good commercial decision.”
—Christina Ma, MBA 01
Fortunately, some key aspects of the culture around women at work have shifted since Ma was a young parent. The Chinese government has prioritized gender equality within its social development policies, and women there are moving closer to greater flexibility in their work hours, paid mental health leave, and longer maternity leaves.
Some economists argue that, across Asia more broadly, taking these types of steps to embrace women in the workforce will be crucial as the region’s population ages. A 2018 report from the McKinsey Global Institute estimates that improving women’s equality in the region could boost collective annual GDP by 12%.
Ma has been heartened by the finance industry’s increasing focus on diversity and inclusion initiatives, especially at the junior level, where incoming grad classes are often half women. But she acknowledges that diversity within finance’s senior leadership hasn’t evolved enough.
“I think there’s a realization that this is a much longer road,” Ma says.
Still, she believes that her journey and the efforts of others like her make an impact in important ways—one of them being the ripple effect of representation. “I hope that I have shown other women and men that you can succeed while being different from others and that the diversity of thought and style is valued and a good commercial decision,” Ma says.
Establishing the forefront
Kin-Fun Lee’s two-decade career in finance has afforded her a front-row seat to some of the most significant changes that have rippled through the industry in recent memory. In 2008, when the global financial crisis hastened a suite of regulatory changes across the region and world, Lee, MFE 05, was an executive director at J.P. Morgan in Hong Kong, overseeing business management and development for Asian equity derivatives and the prime brokerage businesses. During this time, she says, she was active in helping the firm weather a crisis unlike any seen in a generation. At the same time, she helped it contend with how new regulations—like the Dodd-Frank Act in the U.S. and what would become the Markets in Financial Instruments Directive (MiFID) in Europe—were changing the business.
As the dust settled, Lee felt pulled to help usher along some of the changes that these new regulations had seeded. “The main objective of the reforms post-crisis was to protect the end investor,” Lee says. “That got me started looking into a new area: I wondered how I could get closer to those end investors to see the real need and to provide solutions that really help them.”
“We’re seeing more sophisticated investors in some regions. They have a greater need for more complex, innovative, and bespoke products.”
—Kin-Fun Lee, MFE 05
She accepted an opportunity to do just that in 2013, decamping from her investment bank position for a job with the global wealth manager Julius Baer. As head of strategy and business operations for the Markets & Wealth Management Solutions unit covering Asia, Lee has been instrumental in developing and deploying new investment products. Her role involves assessing client demand, ensuring regulatory compliance, and aligning products with the bank’s infrastructure. For example, she and her team have been supporting the integration of new asset classes (e.g. digital assets) into traditional formats of financial instruments, like exchange-traded funds and structured products.
Anticipating what investors will need keeps Lee, her firm, and the industry on the cutting edge—an increasingly complex endeavor, she acknowledges, as some of the fast-developing Asian economies attract growing investor interest.
“We’re seeing more sophisticated investors in some regions,” Lee says. “They have a greater need for more complex, innovative, and bespoke products while at the same time fully complying with the regulators’ requirements.”
Lee predicts “continuous growth” in investor interest in Asia as a whole. As that interest continues to pour in, she sees another shift happening in terms of the investment products investors will need: “In the last generation, investors in Asia were more focused on wealth creation,” Lee says. “But now, it’s more to the stage of wealth preservation—and passing wealth along to the next generation.” Lee plans to play a central role in crafting the investment products they need to do just that.
Encouraging ESG
Anni Zhang, too, is out to update some of the ways the finance industry has done business in the past. Her focus, though, is on pushing the industry to factor in previously ignored environmental and social risks—and opportunities.
“I’ve been able to play a huge role by educating people. It can be uncomfortable for traditionally trained finance professionals to include ESG into their customary analytical framework.”
—Anni Zhang, BS 14
Zhang, BS 14, is an ESG associate for Asia-Pacific-focused private credit firm ADM Capital in Hong Kong—and, she explains, is “basically responsible for everything ESG-related day-to-day.”
Across the entire investment process—from deal sourcing to advising the investment team on the relevance of ESG factors to financial performance—Zhang is helping to ensure that environmental and social factors are taken into account. It also means creating ESG action plans for portfolio companies (which are all small- and medium-sized enterprises in Asia) and working those plans into their loan covenants. And it involves monitoring and reporting on borrowers’ ESG performance.
ADM’s founders were pro-ESG at the outset, Zhang says, and in her two years with the firm (in addition to two years with its foundation arm) she’s pounced on the opportunity to push its ESG practices to the forefront of the industry.
“I’ve been able to play a huge role by educating people,” she says. “It can be uncomfortable for traditionally trained finance professionals to include ESG into their customary analytical framework. Over time, though, I’ve seen a change in mindset with our deal teams and with the broader industry. ESG is now a key competitive advantage of ADM.”
Zhang doubled-majored at Berkeley in business and conservation and resource studies, a dual focus that she says has been instrumental in helping her to reconcile the perspectives of both finance teams and sustainability experts. In Asia, bridging these perspectives will prove increasingly critical, she says. Not only are regulations and disclosure requirements pertaining to sustainability developing quickly—but the health of the region (not to mention the planet) may depend on it.
“I see a bigger opportunity for ESG here in Asia because there are so many underdeveloped cities and economies, so there’s a lot more opportunity to do good and contribute to their development in a way that’s sustainable,” Zhang says. “There’s also incredible nature and biodiversity here. So much is at stake.”
Advancing developing economies
In the most developed parts of Asia, many of the movers and shakers within the finance industry are rooted in—and most familiar with—the region’s major financial hubs, like Hong Kong, Tokyo, and Singapore. Not so for Tab Boonthaveepat, MFE 11, an executive director and trader at Goldman Sachs in Hong Kong covering Asian emerging markets—and she considers this distinction one of her great assets.
Boonthaveepat traces her roots to Bangkok, where she grew up and began her career (after earning her MFE at Haas) as a quantitative portfolio manager at hedge fund Phatra Securities.
The many economies across Asia represent a vast diversity in their stages of development, Boonthaveepat points out. Beyond the major financial hubs, other countries, like Vietnam and Indonesia, are emerging, and the rapidly growing Indian economy is somewhere in between. Thanks in part to her background and work experience in Thailand, Boonthaveepat is deeply invested in understanding (and explaining to others) how each of these markets presents investors with its own constraints—and opportunities.
“I always want to make sure that I’m helping these small markets have a chance in the global arena.”
—Tab Boonthaveepat, MFE 11
“Emerging markets in Asia are changing,” Boonthaveepat says. “And I think especially since the pandemic, we’re seeing more interest from global investors in India and also in some of the small Southeast Asian markets.”
She’s committed to connecting this growing interest from global investors to the markets that could benefit from their capital. “I always want to make sure that I’m helping these small markets have a chance in the global arena,” Boonthaveepat says. “That’s something I’m very proud of.”
Tracking what’s next
Aparna Chaganty, MBA 23, is also interested in bringing Asia’s investment opportunities to the world, and she’s working to do so within India’s burgeoning venture capital industry. “VC, as you see it today, was simply not prevalent in India 25–30 years ago,” says Chaganty, an investor based at the Bangalore office of global VC firm Bessemer Venture Partners. “There were not enough startups to create an ecosystem for multiple large VCs to come and play here.”
“It’s an incredibly dynamic market we’re in right now, and I want to leverage my Silicon Valley experience to help Indian startups compete and win on a global stage.”
—Aparna Chaganty, MBA 23
Chaganty’s work involves meeting founders who are launching India-born startups angling for a global audience. Thanks to the rate of Asia’s—and especially India’s—economic growth, she says the opportunities to be found in the region today are unique. Pair Asia’s growth with Chaganty’s industry focus on software—which is also evolving dramatically due to the development of AI—and you get “a very special point in time to be part of this industry,” Chaganty says.
“With the advent of AI, the market is on the precipice of a transformation,” she says. For one thing, small, lean startups are able to command more scale and revenue because of the power of their underlying software. At the same time, their business models face the challenge of having to find ways to continue driving value, even as the underlying software rapidly evolves. “It’s an incredibly dynamic market we’re in right now, and I want to leverage my Silicon Valley experience to help Indian startups compete and win on a global stage.”
Chaganty extends an invitation to her fellow Haas alumnae to join her on the exciting ride. Like many other parts of finance, the VC industry is still male-dominated, and Chaganty believes it could benefit from the perspectives of more women.
What’s more, she believes such a dynamic market is likely to beget a dynamic career. “Riding the wave of the special moment we’re in here can also mean a lot of learning and personal growth as well,” Chaganty says. “That’s the bet I made.”
Life360
Chris Hulls, BS 06, delivers safety and security
Chris Hulls has given millions of parents worldwide peace of mind. He’s the co-founder and CEO of San Francisco-based Life360, a family-focused location-sharing app. It now also allows users to connect and track pets and objects as well as offers emergency assistance, identity protection, and more. Hulls got the idea for Life360 after Hurricane Katrina in 2005 and mapped out his business plan in an entrepreneurship class at Haas. As a student, his idea won $275,000 in a Google software challenge. Along the way, he’s leaned on Haas connections to grow the company into the largest location-sharing app, with over 60 million active users worldwide. Here’s a look at how he did it.
2008
Life360 launches to keep families safe. In its first three years, 25 million users sign up. Collectively, they share more than 150 billion location points—or 2,500 locations every second.
2012
The company wins a prestigious Webby Award and launches a geo-fencing feature, called “Places,” that allows users to receive alerts for specific locations. Angel investor Mark Goines, MBA 76, introduces Hulls to Itamar Novick, MBA 12, who joins the company as a stakeholder and spends nearly a decade there, mostly as chief business officer.
2013
The new “Circles” feature allows for private connections with friends, babysitters, dogwalkers, and other non-family members.
2014
Despite only being available in English, Life360 experiences 260% growth internationally and responds by launching in eight languages.
2019
Life360 goes public on the Australian Stock Exchange (ASX) under the ticker “360.”
2020
Responding to young users’ complaints about overbearing parents infringing on their privacy, Life360 develops “Bubbles,” which give teens the ability to show their general (but not exact) location.
2021
Life360 acquires Tile, a consumer electronics company known for its tracking devices, for $205 million. Families in 195 countries now use the app.
2023
The company cuts 14% of its staff and achieves adjusted profitability in Q1, faster than expected. Market value exceeds $1.4 billion, and growth continues as an in-house survey shows that Gen-Z embraces location sharing for its sense of safety.
Pushing Boundaries
Berkeley Haas’ commitment to educating future-oriented leaders demands a constant evolution of our teaching and research. Here, we highlight two new research centers whose work will keep Haas at the forefront of behavioral economics and drive positive healthcare innovations. As well, we feature a new climate solutions dual-degree program and a new fund-based class to prepare students to lead the transition to a more sustainable future.
Leading the Next Wave of Behavioral Economics
By Laura Counts & Mickey Butts
Ever since future Nobel laureates George Akerlof and Daniel Kahneman created a 1987 UC Berkeley course that broke the barrier between psychology and economics, the university has led the way in bringing these disciplines together into the field of behavioral economics.
In the ensuing years, psychology-based behavioral economics has explored the predictable foibles in our thinking, such as decision-making biases, fears of losing out, lack of self-control, and overconfidence. A classic example is Kahneman’s pioneering work with Amos Tversky on loss aversion, which showed that people are willing to take greater risks to avoid a loss than to secure a gain.
Now Haas is poised to lead the next wave, pushing the field beyond psychology and gleaning insights from disciplines as diverse as neuroscience, biology, and medicine with the launch last fall of the Robert G. and Sue Douthit O’Donnell Center for Behavioral Economics.
“Humans are living, breathing organisms affected by their unique life paths,” says Professor Ulrike Malmendier, the O’Donnell Center’s founding faculty director. “We have minds and bodies, and an economic science that describes human behavior needs to account for both.”
Thanks to a philanthropic investment of almost $17 million by Bob O’Donnell, BS 65, MBA 66, and his wife, Sue O’Donnell, the center will advance the next generation of research, extend learning opportunities to students, and position Haas as the preeminent hub for the field. Malmendier aims to bring in leading researchers from a wide range of disciplines for collaboration, conferences, and bootcamps—beyond what has been considered part of the field. The center will also provide fellowships to PhD students and postdoctoral scholars and will host the prestigious Behavioral Economics Annual Meeting (BEAM), co-founded by Malmendier, every three years.
Students will benefit from a curriculum enriched by the foremost thinkers in the field. In early April, for example, the O’Donnell Center co-sponsored a fireside chat with economist and Nobel Laureate Richard Thaler and New York Times writer David Leonhardt. Malmendier has also initiated a weekly reading group with faculty, PhD students, and post-docs to discuss the latest behavioral economics research. Such discussions will deepen the knowledge faculty bring to the classroom. And because of the interdisciplinary nature of the O’Donnell Center, the teaching of behavioral economics and finance will expand to students campuswide.
Breaking new ground
Malmendier’s goal is to open a new frontier in research that will help business leaders and policy makers. “We went from neoclassical economics that considered humans to be perfectly rational to behavioral economics that brought in social psychology,” explains Malmendier, the Cora Jane Flood Professor of Finance.
For example, after Nobelist Thaler and Cass Sunstein developed the concept of the “nudge”—interventions that spur people to act in their own self-interest, such as enrolling them in a retirement savings plan by default—hundreds of “nudge units” were established in governmental and private-sector organizations around the world. Just last spring, a report from the National Academies of Sciences, Engineering, and Medicine called for increased collaboration between behavioral economists and policymakers in part to encourage people to make better decisions.
“Now we want to move the needle further, bringing together the best minds for rigorous research on human behavior from the sciences more broadly, including neuroscience, cognitive science, biology, medicine, epidemiology, and genetics,” Malmendier says.
Pioneering collaborations
For her part, Malmendier will expand her groundbreaking work on “experience effects,” which earned her a Fischer Black Prize in 2013 for the top economist under the age of 40—the only woman to ever win the prize—and a Guggenheim Fellowship in 2017. She has studied how stressful experiences with recessions, layoffs, inflation, housing bubbles, and political repression make consumer and investor behavior more cautious and risk averse for years afterward. She’s also explored how stress can affect our health, careers, education, and other aspects of life in dramatic ways.
Now, she aims to further that work by collaborating with neuroscientists, neuropsychiatrists, biologists, medical researchers, and epidemiologists who have studied stress and trauma—insights that could more precisely demonstrate how past experiences shape our actions, such as completing an education, choosing an occupation, and deciding to have a family, today and across generations.
“As we walk through life, our outlook on the world changes, especially if we suffer trauma,” she says. “Neuroscience says our brain gets rewired. There may be a long-term impact of stress on our longevity, on our aging, and on our health.”
In addition to Malmendier, the center will include a host of affiliated researchers from Haas and Berkeley Economics and elsewhere across the university. They include center co-founder Stefano DellaVigna, professor of economics and business; Haas professors Ricardo Perez-Truglia, Ned Augenblick, Don Moore, and Gautam Rao, PhD 14 (who recently joined Haas from Harvard University); as well as Dmitry Taubinsky of Berkeley Economics, and others.
“We want to move the needle further, bringing together the best minds for rigorous research on human behavior from the sciences more broadly, including neuroscience, cognitive science, biology, medicine, epidemiology, and genetics.”
—Prof. Ulrike Malmendier
Shaping transformative leaders
Founding donor Bob O’Donnell says he was inspired by the interdisciplinary promise of behavioral economics at Haas. “UC Berkeley is dedicated to integrating business education with other disciplines on campus, which is essential in this area,” he says. “It should have a center devoted to continuing this work.”
O’Donnell, a retired portfolio manager for a large mutual fund group, often applied insights from behavioral economics during his career. “When combined with existing financial theory, I believe that its insights enhanced results for my clients,” he says.
Yet, during the 17 years O’Donnell taught an investment class in the Berkeley Haas MBA program, he says he sometimes encountered skepticism when introducing ideas from the field. “Indeed, one student asked, ‘Isn’t all this kind of woo-woo?’” he says. “Several years later, that student told me how perspectives from behavioral economics had helped her career in finance.”
O’Donnell envisions his endowed gift as one that will not only define the future of behavioral economics but shape truly transformative leaders. Founding the center, he says, is a start but more investment is needed to enhance curricular offerings and expand the groundbreaking research that will be the hallmark of the O’Donnell Center.
Malmendier is passionate about the potential of behavioral economics to help leaders create better solutions to the most complex and urgent problems of our time, like battling inflation. “If leaders keep in mind people’s emotions, their personal histories, and their psychologies,” Malmendier says, “they can engineer ways to make things more predictable and give people more control over events to help them live better lives. That is our ultimate goal.”
Harnessing AI to Transform Healthcare Outcomes
By Amy Marcott and Laura Counts
The U.S. spends almost 20% of its gross domestic product on healthcare—more than any other high-income country. Yet we see a low return on that investment: Americans have poor outcomes across numerous dimensions, including life expectancy.
A big factor in these poor outcomes is a healthcare system that resists easy remedies, says Haas Professor Jonathan Kolstad. Promising innovations and technologies are often dead on arrival due to lack of understanding of the incentives at play.
“There’s a big gap between the kinds of AI and machine learning tools that are being built for healthcare and the realities of the healthcare delivery system, including the complex incentives, how the system functions, who would buy the product, and who would use it,” he says. “Conversely, the healthcare system is behind in terms of the technology, the systems, and the adoption of new AI tools. Right now, there’s a unique opportunity to play massive catch-up.”
The new Center for Healthcare Marketplace Innovation (CHMI), a joint endeavor between Haas and Berkeley’s new College of Computing, Data Science, and Society, aims to bridge that gap with solutions that join AI and data science with behavioral economics and an understanding of the realities of the healthcare system and the vagaries of human behavior.
Launched this spring with a gift from an anonymous donor, the CHMI combines technology development and academic research, giving researchers and partners access to a massive database of healthcare data. In fact, CHMI is believed to be the first applied research center of its kind to merge data, behavioral economics, and artificial intelligence with a focus on technology incubation.
Applied behavioral economics
Previous approaches to healthcare innovation are often too simplistic, Kolstad says, while other technologies have simply aimed to replace doctors. “These are some of the smartest and most highly trained humans making lots of different decisions under complex situations—which machines simply cannot do,” he says. “It’s the interaction of technology and human decision-making where AI is going to meet the market in healthcare.”
Take, for example, helping a radiologist better identify cancer. To do so successfully, Kolstad says, requires understanding the realities of how radiologists work, what they try to do, when cancer is spotted, who’s being screened, what data are available with the right pictures, and even how they’re paid. “All of those layers are critical,” he says.
Kolstad is building a database that he hopes will be one of the largest multimodal healthcare data platforms in the world. This rich data will include health insurance claims as well as medical records, images, electrocardiogram waveforms, and other granular information all linked to longitudinal health outcomes. The platform will be available for both research and R&D. “We want to structure it so that you can use the data to learn and create new insights but also create new solutions that really meet patients where they are,” Kolstad says.
“It’s the interaction of technology and human decision-making where AI is going to meet the market in healthcare.”
—Prof. Jonathan Kolstad
In addition to this novel data platform, CHMI will also offer academic and industry partnerships to facilitate the development of new AI and technology solutions grounded in real-world problems; the incubation of new companies; and academic research on AI, behavioral economics, and economic incentives. The interdisciplinary center will work with researchers throughout UC Berkeley and at UCSF.
The importance of incentives
What’s key to success, Kolstad says, is working within the constraints of a complex, market-driven healthcare system bolstered by governmental incentives. “At the end of the day, you have to understand the incentives in order to create solutions that are going to get to scale and change things,” he says. “We’re facilitating what we think will make that system more effective, more productive, and more efficient, which will lead to better health at a lower cost.” Kolstad himself has done this with the launch of a new company, Healthpilot, to help improve Medicare (see sidebar, “Haas Research Fuels Company Benefiting Medicare Patients”).
“My strong hope for CHMI is that there will be novel technologies that will be positioned to create new startups, nonprofits, or open-source solutions,” says Kolstad, the Henry J. Kaiser Chair. He’s forming relationships with venture funds, big insurers, and government agencies keen to see CHMI innovations—executives who can collapse the time it typically takes to run a pilot and scale. “We’re here to actually change things,” Kolstad says.
Doubling Down on Sustainability
By Kim Girard and Laura Counts
Since Dean Ann Harrison assumed leadership of Haas five years ago, she has made sustainability a strategic priority for the school, working to ensure that students are trained to view leadership challenges with a sustainability lens. Undergrads can now minor in sustainability, MBA core courses are being revamped to incorporate thinking about climate change and other sustainability challenges, and Haas launched the Michaels Graduate Certificate in Sustainable Business, to name just a few offerings.
Now, MBA students wishing to deepen their training in the field have two new opportunities available to them: a dual-degree option and a pioneering Climate Solutions Fund class.
Master’s degree in business and climate solutions
Haas and Berkeley’s Rausser College of Natural Resources recently launched the concurrent MBA/Master of Climate Solutions to prepare the next generation of sustainability and climate leaders. The new program, enrolling for fall 2024, will allow students to earn a master’s degree in both business and climate solutions in five semesters, one more than is typically required for the full-time MBA.
Dean Harrison says the degree will teach critical skills and knowledge in climate data science, carbon accounting, and lifecycle analysis as well as technological and nature-based solutions. “Future business leaders will require a depth of training in both business and climate change to work across disciplines and execute competitive strategies,” she says. “This new program will provide a breadth of skill sets, equipping our grads to lead in building a sustainable, low-carbon future.”
Students in the MBA/MCS cohort will spend the first year at Haas completing MBA core coursework—which includes courses in leadership, marketing, management, finance, data analysis, ethics, and macroeconomics, along with sustainability courses—before moving to classes at Rausser. The MCS core curriculum includes climate and environmental sciences; climate economics and policies; technological, business, and nature-based solutions; training in analytical and quantitative skills; and applied exercises and engagements that emphasize adaptive thinking and problem-solving. MCS courses will translate the fundamental science and groundbreaking discoveries of UC Berkeley experts, enabling professionals to learn how to evaluate technologies, develop just climate strategies, and remove barriers to implementing practical climate solutions.
“Future business leaders will require a depth of training in both business and climate change to work across disciplines and execute competitive strategies.”
—Haas Dean Ann Harrison
Michele de Nevers, executive director of Haas’ Office of Sustainability and Climate Change, says the dual-degree’s focus on early-career professionals promises quick dividends. “These professional students are clearly positioned to make an immediate impact and will serve a critical role as translators of academic insights and enacting these insights in the world,” she says.
All MBA/MCS students will participate in a semester-long capstone program that gives them the opportunity to partner with organizations operating across the business, government, and nonprofit sectors. A unique leadership course on organizational, political, and societal change for climate solutions will prepare students to be change agents anywhere they work. Students will also complete two summer internships, which will allow for deep immersion in different disciplines and more time to build relationships.
James Sallee, a professor in the Department of Agricultural and Resource Economics and faculty director of the MCS program, says that while new research on climate solutions is still critical, many of the things needed to address the climate challenge are already known. “What we really need are people spread throughout society and the economy who are in a position to take action on climate and who are equipped with the tools to make the right choices. Educating those students is the vision of the MCS program,” he says.
New Climate Solutions Fund
Financing the climate transition requires a diverse and technical tool kit: An estimated $4 trillion to $5 trillion per year will be needed to reshape global energy, transportation, food, and waste infrastructure and to help companies reinvent supply chains and integrate new technologies, says Professor Adair Morse.
To equip future leaders with the financial know-how to accelerate the transition to a low-carbon economy, Haas is launching the student-led Climate Solutions Fund in fall 2024—the first such course at a major business school.
MBA students in the course will serve as investment managers for the $2.37 million fund, learning how to structure financing in complex private markets by investing in real-world deals focused on solutions to climate change.
It was conceived of by Morse, co-founder of the Sustainable and Impact Finance Center (SAIF). “As the world moves toward a goal of net-zero carbon emissions by 2050, we need financial leaders with the skills to navigate the economic revolution we are facing,” she says. “This economic revolution will be staggeringly disruptive yet will also be a source of more business opportunities across all parts of the country than we’ve seen in 250 years.”
The Climate Solutions Fund curriculum will teach students new designs and uses of finance not traditionally taught in mainstream finance courses, including public-private partnerships with federal and state programs, identifying the underlying technologies to fuel the low-carbon transition, and envisioning new financial products. Morse saw the need for this financial expertise while serving as deputy assistant secretary of capital access in the U.S. Department of the Treasury from 2021 to 2023.
“As the world moves toward a goal of net-zero carbon emissions by 2050, we need financial leaders with the skills to navigate the economic revolution we are facing.”
—Prof. Adair Morse
“This level of reinvestment [in the climate transition] will require every finance tool available, including designing financial structures to mobilize government programs and work with community and industry partners,” she says. “Our goal is to expand how we teach students to provide the leadership and expertise that corporations, financial entities, startups, governments, and philanthropies will need to navigate this transition.”
Students in the course will assess investment opportunities in U.S.–based for-profit companies, working with outside investment partners to structure deals. Following a pitch competition, student managers will select one finalist to co-invest $100,000 to $300,000 annually. The fund is intended to generate positive returns over time so that future students can build off the capital.
The Climate Solutions Fund was made possible by a lead gift from Allan Holt, MBA 76, along with generous founding donations from Larry Johnson, BS 72; Charlie Michaels, BS 78, and his wife, Doris; Scott Pinkus; and Professor Laura D. Tyson, former Haas dean and co-founder of SAIF.
Gen Z embraces side hustles because ‘loyalty is dead’
Dean’s Speaker Series: Education startup founder Ramona Pierson on goal-setting, lifelong learning
From holding management roles at Amazon and Meta to launching three educational startups, Ramona Pierson, founder and Chief Technology & Science Officer at L3RN.AI, has always been goal-oriented.
As a child, said she had dreams of becoming a gymnast and running in the Olympics. After being recruited by the U.S. Marine Corps. for her skills in mathematics at the age of 18, she started running every day—and even qualified for the Olympics under the Marine Corps’ sponsorship. But while on a run at age 22, life took a turn. Pierson was hit by a drunk driver, an incident that left her in a coma for 18 months, and blind for 11 years. She had to relearn to walk and talk.
Nearly 100 surgeries later, Pierson was living in a group home for seniors; and with the help of the other residents, she said she was both encouraged and inspired to remain resilient and reach toward new achievements.
“Every day they had goals for me, and every day I started accomplishing those things. And it was that journey of goal-setting that really helped me come back,” she said at a Dean’s Speaker Series talk held on March 11. (watch the video below)
When Pierson finally had the chance to attend university, she not only thrived but ended up graduating as class valedictorian.
“It took a community,” Pierson said. “[Students would] read my textbooks into cassette tapes so that I could listen to them at night. They’d read the notes, and professors wouldn’t change their teaching style at that time, so they just put the notes up on the chalkboard (when there were chalkboards), and all the students would read those in and then help me organize my life.”
With the goal of becoming a neuroscientist after college, Pierson began conducting research at Camarillo State Mental Hospital. Eventually, her advocacy led her to transition to the education sector, focused on research, evaluation, and assessment at Seattle Public Schools. In that work, she discovered the need for students to have a supportive and nurturing environment in the classroom and beyond—especially when school may be the place in their lives where they feel the safest.
“The moment that we forget that and take kids or adults away from being lifelong learners, then we start capping our potential,” she said. “Whether that lifelong learning is gaining a new skill or something else, you have to stay involved in your own learning adventure.”
Her own experiences relearning and implementing learning solutions led her to found SynapticMash, which offered software tools to primary schools in Seattle, and Declara, a social learning and collaboration tech company. But startup life was not smooth-sailing. From fears about “the cloud” to being denied funding as a woman in business, Pierson faced her fair share of setbacks navigating a new avenue of education.
But Pierson knew there was a gap in the market when it came to helping kids catch up on core subjects as they go through the system. She added that, if you can find a way to fill a market gap that has not yet been invested in, you have a higher chance of having a successful business.
Throughout her career, Pierson went back and forth between her own startups and the corporate world. Most recently, she left her position as director of product management for AI Integrity at Meta to work on L3AN.AI, a startup that she feels aligns with her values of encouraging lifelong learning, now with the use of evolving technology like AI.
“Every time I start a company, we first develop core values with a startup team, and then I try to just have those leadership principles, and those core values drive everything,” Pierson said. “I’m not going to break my core values to make money. It’s easy to make money, but it’s hard to undermine the good of society.”
“Every time I start a company, we first develop core values with a startup team, and then I try to just have those leadership principles, and those core values drive everything,” Pierson said. “I’m not going to break my core values to make money. It’s easy to make money, but it’s hard to undermine the good of society.”
Read the full transcript below:
– Good afternoon. I’m Wendy Guild, assistant dean of MBA programs. I’m not Ann Harrison, but you are here at the Dean’s Speaker Series. Unfortunately, Ann Harrison can’t be here today, so I’m standing in to convene the event. Welcome. I’m thrilled to introduce our guest, Ramona Pierson. Ramona has a remarkable story of resilience. She was hit by a drunk driver when she was out running at the age of 22 while serving in the Marine Corps. After spending 18 months in a coma and enduring nearly 100 surgeries, she was finally able to rebuild her life. Because of her experiences relearning skills like speech and navigation, after the accident, Ramona decided to dedicate her career to educational solutions that help people find their paths and realize their visions. She ultimately founded three educational startups: SynapticMash, Declara, and L3RN.AI. Ramona has been an innovator in AI through developing AI solutions for social media, E-commerce, and business intelligence in leadership roles at Amazon, PricewaterhouseCoopers, and Meta. I’m so grateful to learn today from someone who truly embodies all of our defining leadership principles—question the status quo, confidence without attitude, students always and beyond yourself—through all of her entrepreneurial efforts. Ramona, thank you for coming today to tell us more about your story and teach our students how to steer their own futures amid the exciting and sometimes overwhelming advances in AI. I’ll now turn it over to MBA students Haritha Nair and Anupama Tej, who will moderate today’s discussion. Let you take it away. Thank you.
– Thank you so much, Ramona, for being here. It’s truly an honor to speak with you. Your story is truly inspiring. So why don’t we start there? A terrible accident changed your life, and can you tell us about that accident and your journey to recovery? And how has that shaped you and who you are as a leader today?
– You know, as a kid, I was always very goal-oriented. I don’t know why, but as a little kid, I wanted to be a gymnast, and so I trained all the time, and I wanted to be a marathon runner in the Olympics, so I ran all the time. And I probably had ADHD, so my teachers really hated me in the classroom all the time. So, they normally would have me go out and run instead of go into the classroom. But that benefited me. When I joined the Marine Corps, I ended up being the most physically fit Marine. I got to be in a pilot program, so I was the first woman in a fighter attack squadron. And what benefited me in that was, because I was so physically fit, just after Title IX came in, so I was running all the time. And when I went out for a run one day, so I had qualified for the Olympics, and the Marine Corps was sponsoring me, so I’d run about 13 miles a day and do my regular job. And one day, I went back, grabbed my dog, and went out in the street and started to run. And as soon as I stepped off a curb, a drunk driver ran the red light, and my left foot got caught up in the wheel well of the car. The bumper went through my throat, and it felt like a grenade went off in my head. So I woke up 18 months later, and I was 64 pounds and could not walk. I could not talk. I didn’t know who I was or even what species I was. And probably, had I not had my dog with me, she kept me from going underneath the car. Unfortunately, she ended up dying, but her body blocked me from being completely run over. So when I came to, nobody knew what to do with me. So essentially, the doctors just threw a dart into the dartboard, and they picked out a nursing home to put me in. And so, imagine having 100 grandparents that had nothing to do except focus on you all day. So, I couldn’t do anything without somebody nitpicking or actually identifying or assessing me. And there was one woman there that had been an educator before, and she had Alzheimer’s, so she’d repeat the same thing to me all the time, which, when you’re relearning something, it’s quite helpful to do the same thing over and over and over again. But the whole time I was there, they really helped me recover my goal orientation because I was so confused after my accident that I tried to get my thoughts back together, but they’d every day set up goals for me. Like, “You will accomplish this, this, and this. You will learn how to eat on your own.” And you have to remember, I had to get teeth again, so all my teeth are titanium and porcelain. They had to straighten my feet out and give me a new nose. And I lost my right eye, was completely blind at that time because I had a hematoma behind my left eye, and my cornea was destroyed. So eventually, the senior citizens felt like I needed to learn how to cross streets and use a cane and learn braille and get back into my life. So, every day they had goals for me, and every day I started accomplishing those things. And it was that journey of goal-setting that really helped me come back. And sometimes, I’d go see a doctor, and they’d go, “Well, you aren’t going to live six more months” because they found out I had all these brain injuries and heart injuries. So the biggest thing was my pituitary gland. When you have a head injury, your brain rips and shears. And so, my pituitary gland was split in half, which is one of the reasons I wasn’t able to gain weight beyond 68 pounds because everything I’d eat would just flow right on out of me. That’s pretty gross. But anyway. And so, then they had more new medications for me, and that helped, new surgeries for me to help slow things up, and then I ended up with a new heart valve, and that helped me. And so, when I wanted to go back to college, first thing I had to do was get a seeing eye dog because I was terrible with a cane. When you have a cane, you have to make sure that you don’t have PTSD. And since I had been run over, every time I’d get close to a street, I’d freeze up. So eventually, the senior citizens raised the money to send me to go get a seeing eye dog. And my seeing eye dog, she wouldn’t even stall. She’d go, “You’re crossing the street,” and she’d bully me across the streets and get me everywhere. And she also helped me succeed in college because she could help me find my classes, help me find the buses, help me find food, and she was a remarkable dog. And some of the obstacles that came up against the ADA laws for the American Disabilities Act was brand new and hadn’t been tested. So every time I’d apply for college, colleges would turn me down. And they’d say, “Only 1% of the blind people ever graduate, so we’re not going to accept you in here.” And so, it was actually in Colorado, the students went on strike and wouldn’t go back to the classroom until the college accepted me into school. And then, I had to prove that I could be a great student, and I ended up being valedictorian of the school. But it took a community. It was like being in the senior housing, where in the senior housing, all the senior citizens helped me. But when I was in college, students would read, this is before ChatGPT, but they’d read my textbooks into cassette tapes so that I could listen to them at night. They’d read the notes, and professors wouldn’t change their teaching style at that time, so they just put the notes up on the chalkboard when there were chalkboards, and all the students would read those in and then help me organize my life. And then I started working with the creators of Deck Talk and Vocalize—this is before there was text to speech. And we were able to get my laptop to be able to speak to me in a very rudimentary way, so I could take tests and be able to function independently in classrooms again. But every time I’d solve one problem, there’d be another problem. But being goal-oriented, I just kept saying, “I just need another four years of school. I just need this degree.” And then, as I moved on and through my education, and then fighting to get a job as a blind person wasn’t easy. And I had to go through residency because I set my bar low. I wanted to be a neuroscientist, so I had to work at Camarillo State Mental Hospital, and I was doing research on the perimeter cells of the brain as one of the causes of schizophrenia. Anyway, it was complex, but my goal-setting, and the folks, the other residents there, accepted me in and helped me dive through the hurdle. So one of the things I always learned was: Radical collaboration can help you overcome anything, and it takes a community to really raise all of us. So hopefully I didn’t go too long.
– No, I’m at awe of your strength and resilience and finding optimism even in the toughest times. So I think my next question is there. You mentioned this a bit, the community gave you strength to keep going. Still today, where do you find that strength and optimism from? We were just chatting earlier in the green room, and all the work that you do, where does that optimism come from for you?
– Probably from everybody I work with because so many people have made it possible for me to be sitting here, and I have new cornea in my left eye. And if it wasn’t for a person who was run over by a car and died, who donated their organs, I wouldn’t be here. And the communities of people who help bring me, I have this drive inside that my life should be that of service. And so, I’m a capitalist, too. So I try to combine that. How can I do good for others and really be focused on betterment of communities and people and try to have those core values that I lean on? So, every time I hire someone, I think about our core values. Every time I start a company, we first develop core values with a startup team, and then I try to just have those leadership principles, and those core values drive everything. And one of those core values has been really lifting communities. And by having that, it’s not right or wrong to not have that in your life. But I have been very dedicated to that, and setting goals around that in all of my companies, or even whether I take a job or leave a job. I left my job at Meta because the goals that the company set out, I have been running AI integrity, and then you can make a lot of money, a lot of revenue in the company if you demote integrity and focus on revenue, and there has to be a balance. And when we decided that we weren’t going to focus on that balance, it was time for me to go because I’m not going to break my core values to make money. It’s easy to make money, but it’s hard to undermine the good of society.
– Thank you so much, Ramona. You are definitely an inspiration, but I’m sure that’s not an easy thing to be. You must have faced a lot of challenges and failures along the way, and that’s something we usually don’t really talk about always. You know, a good story, like you’ve overcome some issues, and then everything was rosy. But I’m sure that’s not how it went. So, how do you really deal with failures, and what mindset do you maintain? And any advice you can give on how we can redefine our relationship with failure?
– Yeah, the innovator’s dilemma is if you can get over your skis too far, that you’re ahead of the innovation curve. And I’ve done that a few times, and I keep trying to temper myself. When I had started SynapticMash, nobody had heard of cloud computing then. It was right before AWS had launched itself, and I was going to school districts saying, “Give me your data, I’ll put it in the cloud” because I created an education cloud, and school districts were like, “I don’t even,” they’d look up and go, “What are you talking about?” So, trying to educate them around that, and the power of being able to have data in the cloud, and then being able to truly personalize learning. And that whole concept was ahead of the curve, so I had to back up, even though I knew that that was right around the corner. And it’s hard to talk to your investors about seeing a future they have no ability to see. It’s almost like a lizard only sees two-dimensionally, so it can’t see that you’re putting your fingers around it until you’ve actually touched it. So, how do you see that fourth dimension? And innovators are seeing that next turn in the road, and it’s hard to be able to describe it. Like, even FaceBook had called themselves Read Write Technology before they had the concept of social networking because they were trying to describe something that people hadn’t experienced before. So I had, with SynapticMash, I had to, I failed in my communication with school districts. So I had to figure out, “How do I get the language to be able to talk to people about something they hadn’t experienced before?” So I went to McGraw Hill and humbled myself severely, going to a publisher, and in my mind, I wanted to say, “Digitization is going to put you guys out of business, so you better partner with me.” Instead of saying that, I said, “We would make a beautiful partnership.” And I told them that, “If you let me digitize your content for free, I’ll put it into a technical space so that kids can get it anywhere, anytime, and just drop the whole cloud thing.” Even though I was putting everything in the cloud, I just said, “Anywhere, access to technology and content.” And that saved the company because I was at risk of losing the company because of not being able to sell it. And investors won’t invest in your company if you can’t get customers. So that was one failure, and trying to think about how to recover from that. And then with Declara, I have been told “no” 1,000 times because Silicon Valley at that time didn’t want, well, I went to Peter Thiel, and he said, “I don’t invest in women, and I don’t invest in people over 30.” And so I was like, “Uh-oh, I’m in trouble here.” So then it was, OK, I’m getting all these no’s. And then, he ended up investing us in us three times. So we were able to show the quality of our technology and figure out how to communicate. So, it was my failure for why it was difficult for investors to understand. Again, because I was talking about a future, at that time, I had come up with chatbots, and that was 10 years ago, so nobody was doing that. And so, imagine a bot doing all of the research for you. It was freaking people out. And so, people were having a hard time with, especially investors understanding it at that time. And now it’s all the rave. So there’s this risk of getting over your skis and then failing because you were too far ahead of where the market could bear it, you know what I mean? Other times I failed because, sometimes, I wanted to invent new computing. And again, the company I was working for was like, “If we invest in that computing power, it’ll put our platform out of business.” So sometimes, in order to take a leap change, you have to kill your one business to grow a new business. And not all companies want to be able to do that. But being a leader, you have to speak your truth and be willing to take that leap and bring your company forward, even if it’s through baby steps.
– Yeah. Thank you so much for sharing about your failures. We don’t talk about it enough as entrepreneurs. I think we need to. So you started talking about career already. So you went to college after this accident, and then you tried to build your career. I’m sure that was not easy. How did you get into your entrepreneurship journey? Can you tell us a bit about that journey?
– Yeah, it’s interesting because I was back in education again, and I had moved from New York to Silicon Valley, and at the time, like in 1996, where the dot-com was exploding. And if you invented anything, you could make some money. And so I—don’t do this—but I took my student loan and put it into the stock market and won’t tell you what I put it in, but I made a lot of money, so then paid off my loans, and bought a house with my wife, and then started investing in my innovations. And then, I saw a gap in the market. The market for education was changing, and the publishers were blocking innovation from coming in there, but the politics were starting to change. And so, school districts were starting to feel pressure from above to make changes, and there were changes in technology coming from below, and students were adapting technologies. And so, I realized there was this perfect storm coming in, and that investing my time and money and innovations in education, and thinking about, “Where do we need to go to really create a sea change?” Not just a one-step change, but, “How do we really personalize around a student and understand their foundational needs?” So, when I looked at data across the country around where student assessments were and where the curriculum was and why curriculum was not working for some students, it was obvious that—when I worked with the Gates Foundation to look at data—that some kids started having a dip in their education and math, right when fractions and decimal points came in. So pre-algebra, around third and fourth grade, kids would take a dip, and then they’d never recover from that. And so, I thought if I could focus on that one gap and understand why that’s there and the reason it’s happening there, is in elementary school. So, think about it. What teachers teach elementary school? Teachers that are avoiding algebra, calculus. So, how do they teach pre-algebra if they don’t have the math? So, what if we could stop that dip from happening? So, I thought, that is something that’s great for kids, great for the community, great for schools, and is a new market. So that was the gap that I focused on. So when you start a company, if you can find that one gap nobody is investing in, but that you can, in a very unique way, stop that gap: You’re going to have a great company. And that company, I ended up selling it to another company, and that company brought us in, and we ended up being in two-thirds of the school districts in the country and went public, made a little money, and anyway, it turned out really great for us.
– Thanks, Ramona. I think that’s a perfect segue because you mentioned the dot-com bubble when everyone was building a lot of companies. You also mentioned education, so this conversation with you would be incomplete without talking about generative AI. And you did mention in an earlier interview that the purpose of education is not to think on behalf of students. So do you think generative AI is detrimental to learning by thinking on behalf of students?
– Yeah, it opens up a whole different world, I think, because if you let generative AI do all of your thinking, my team, they’ll ask me questions, and then I’ll give them an answer of how I’d solve a problem. Then, they go to generative AI, and they ask it, and then they compare how I answer to how the AI answers. And ironically, we almost are always the same. Periodically, it has a hallucination. Not me, fortunately, but I think that it opens up a new world of, and kind of an exciting one for educators, “How do we actually teach people to discern information, to really understand, and to bring in a lot of different perspectives to what they’re trying to accomplish?” Because if your students are just asking this bot to do all the answers, then there’s a failure all around. The student’s not learning anything. But if you can help your student understand how they would answer something, maybe then see how the gen AI would answer it, how to set up. How do you discern? It’s kind of fun. I do it with my team, too, is, “Can you tell the difference between somebody actually doing the writing and Chat GPT doing it?” There’s a lot of Socratic learning and teaching that could happen if we just use our tools as educators to bring in different types of learning mechanisms and methodologies, to be able to help students be able to succeed in a world that’s going to be flushed with AI and flushed with content that may or may not be true.
– That’s really interesting. It almost reminded me of sort of a reverse Turing test. You’re trying to find out if it was written by a human or not. But you also mentioned about Declara, and we wanted to touch upon that a little bit, executing Declara, and you can talk about a little bit for everyone to really understand what it’s about. But it really needed a disruption to an existing education system, and we all, as part of the education system, know how rigid it can be. What are your thoughts on building products and solutions that disrupt existing systems and that can bring long-term change, especially when the system is not really helping you enter that space?
– Yeah, that’s a great question. When I created Declara, it was interesting because I was creating these bots, and Fermat’s biopharma companies really liked it because they could find molecular content from their content stores, and then the bot would go find the researchers that created it, and then create a community around that content so that they could figure out, how do we create new drugs faster? But the intention of the company was to focus on adult learning because, after I sold SynapticMash, and then I became the chief science officer for the company that bought it, Promethean. And what I saw over and over again were educators using the whiteboard. And I’d capture the data, and they would have fundamental problems because the curriculum kept changing or the standards kept changing. And so, you had new math, and then back to old math, and then new math, and then quadruple new math. I mean, it was so confusing that I think the educators were having a hard time Translating from one math curriculum to the next and the new standards. And I watched the data coming from the students. Some kids auto-corrected their educator in their tablet, and other kids were just completely confused. So I thought, “What if we gave a tool this time around for the educators so that they could stay on top of, create collaborative social learning among each other, and I could connect teachers all over the place?” So the country of Australia bought the platform, country of Singapore, Uruguay, Chile, Mexico, and then eventually Mark Zuckerberg, through Chan Zuckerberg, brought it to the state of California for teachers to use. I had one use case for it, but then it was being used in so many different ways. And then, when I went to Amazon, the ironic thing, there was all the senior vice presidents were like, “Can we buy Declara and bring it into Amazon? Because we need it for all of our developers.” And I was like, “No, because it’s been bought by, the EU ended up buying it for open ed.” So I was like, “I can build something new, but it’s one of those things, that you build it.” And every time I turn around, people are like, “Can you build it again? We need it now.” I was so far ahead of the curve that, how do you reinvent it? But the problem for me is, I’d reinvent it 10 years to be 10 years into the future again. I have a problem with staying in the current decade I live in. Declara was successful, but I realized if I could have it today, it would be right time, right market, and right solution. And since it was a social, collaborative platform, we’d have to put in those constraints around the AI so that it wasn’t used for ill.
– Thanks, Ramona. Since we were discussing this in the back stage, I just wanted to bring that back. Once again, you talked about education, and we have been discussing, at least in business school, about the increasing income disparity, especially between people with higher education and people with, a high school diploma, perhaps, and compared to the people with high school diploma, are now earning much less than they used to before. As somebody disrupting or has been in the space for so long, do you think upskilling people, even if it means taking them out of the education system, helps better, or investing more into traditional educational systems, can help them overcome this gap?
– Yeah, we had a great conversation in the back area. I always have to bring up a time when I worked for Seattle Public Schools, and I ran research, evaluation, and assessment, and then there was a problem with a principal in one of the schools. So they said, “Why don’t you take that on, too?” So I was like, in a school district, it’s very hard to find people to fill all the roles, so you just take on whatever you can. And what I saw there in that particular school, the kids were in the hallways. Teachers were afraid of the kids. The kids were afraid of teachers. Teachers were checked out. There was a lot of alcoholism. It was very crazy. And when I think about answering that, we have to invest in our kids, and we have to invest in helping them feel safe. At that particular school, kids would, I’d open up the school at 6:30 in the morning, and kids would come in and go to sleep in the halls, and I’d ask them why they’re doing that, and they’d say, “Well, this is the safest place in my life.” And then, they’d get breakfast there. And so, school becomes a safe zone. Now, once you get them into school, how do you raise the bar and make sure that you are bringing the highest quality educator curriculum and institution? Kids don’t need just classes, but they need concerned adults in their lives. They need athletics. They need art. There’s a lot that makes up a whole human and the caregiving that happens. So I would say, “Can we bring in skill development, education, and nurturing to all of our students and figure out how to reinvent school?” When kids were, during the pandemic, not going to school, there were a lot of kids that just disappeared because they don’t have this caring, nurturing environment for whatever reason. Maybe parents are working three, four jobs, we don’t know. But the kids need caring, loving adults that are going to nurture them, educate them, care for them, and provide them skills and capabilities and competencies. And so, what’s good for the brain is to be a lifelong learner. The moment that we forget that and take kids or adults away from being a lifelong learner, then we start capping our potential. So whether that lifelong learning is gaining a new skill or something else, you have to stay involved in your own learning adventure, constantly learn something new and take risks and hang out on the cliff and fail. And kids in school have to learn to fail and to do it with humility and get back up and do it again.
– I think we’re almost at time. My last question to you is, you’ve been a successful entrepreneur. What advice do you have for a room full of aspiring founders and entrepreneurs? What should they be doing? What should they use their time at Berkeley for?
– You know, you guys are going to find so many different paths to your future. First of all, drive forward with passion and be a lifelong learner, because there hasn’t been one job that I knew how to do when I took it. So, you kind of have the skills to pull it together. But then, when you’re in the job, you learn how to do it. When I went to Amazon, I had to learn how to write PR/FAQs. Now, I write them all the time; but in the beginning, I was like, my first one I had to redo 40 times. The senior vice president kept saying, “Oh, this is crap, this is crap, this is crap.” And I was like, “But I’m a good writer.” But I wasn’t. Not in their methodology. So, anytime you take a new job or do something, you’re going to not do it right. You have to learn how to do that and then be able to learn how to look into the future. Help your employer move forward ethically and to take the risk to speak up, speak the voice for the people who don’t have voices. I do all the time. Or I did, I try to have an inclusive design mentality as I bring teams together because I was one of those people that was neurodivergent and blind. And so, you will have, as you become leaders, different kinds of people. And you’re going to have to invent different ways to hold team meetings, to include people, to really have empathy and care for the people who are working for you. And whether you become an entrepreneur or you go to a company, you’re going to grow into these leadership roles every single day because you’re going to have to lead—either as a technical leader, as a business leader, as a human leader, as an entrepreneur, and take risks. Take risks as a leader, take business. Right now, we need business disruption because business is stale. We’ve got all these technical innovations, but the business side isn’t keeping up. We need a new way to measure impact. And so, as we start thinking about community impact, Earth impact, like you guys are inheriting an Earth, a world, communities, politics. that my generation has failed on. So how are you going to take it forward and create the new business innovations that will allow humanity to go forward passionately and healthily?
– OK, this was amazing. First, I want to give a thanks for our students and Ramona Pierson. This is the moment where you have an opportunity to ask questions. So we’re going to go ahead and use the microphone in the center of the room. And if you have any questions for our speaker, please come forward. Now’s your opportunity.
– Hello, my name is Harsev Singh. I’m an EWMBA student here. In my regular life, I’m a civil engineer. So I had a question. Education is a very tough problem in itself to solve. And I felt like, even when I was going through school, most of the stuff I learned was probably not useful. And is there a way to, say, shorten the amount of education time span so that an individual can then, say, graduate in the 20s or earlier and go into experiential learning?
– Oh, I’m so passionate about that. I actually have a TED Talk on it. But SynapticMash. I partnered with McGraw Hill and Promethean, the whiteboard company, mainly because we could capture the data off the whiteboard and from whatever technologies used in classrooms. And McGraw Hill had all of this content, and so we digitized content, and the state of Indiana was going to bring the three of us together using my algorithms and data system and assessment system to personalize learning, and McGraw Hill, so we digitized their content. And the state said that they had a big problem with “gap kids,” they called them, so kids who hadn’t advanced in math for three years and had fallen way behind their age peers. So what started to happen are teachers hated seeing those kids in the class, not because the teachers were bad. It’s like, if anybody is failing or whatever, you feel like I’m failing. So you start pushing back away. And the kids would feel it, and they’d feel their parents sort of giving up on them or getting angry with them and their peers making fun of them. So these kids would spiral, lose confidence. So we decided, we want to take that on. Can we catch these kids up with their age peers? So we took all this content, took our algorithms, and what we did is we matched kids with different teachers. We matched kids to teachers who taught in ways that kids like to be taught. So small classroom environments, project-based learning. Some people like large classrooms, but we broke that all up and changed their classroom order. So some kids seem to do better with math right before lunch because after lunch, they’re going to sleep. And these kids, in particular, usually didn’t get breakfast. So we would make sure these kids got snacks in their classroom. So right before lunch, if they took math, they tended to do better because they had snacks. They were still awake, and they were engaged with educators that seemed to be comfortable teaching in a style in which the kids were. And then, we fundamentally changed the curriculum and the order. So there was a $60 million Gates program, where they worked with everybody to deconstruct learning progressions. So we looked at all the learning progressions of precursors, post-cursors of learning. So we compiled this really complex algorithm, and within six weeks, we got kids halfway caught up to their age peers by assessing, continuously, understanding where their fundamental gaps were. And instead of trying to keep them moving on with their age peers, we gave up on that. We just focused on, find out where they missed something, like ones and zeros. They don’t know how to multiply zero to any number. Well, they’re not going to understand 10s later. So it was, let’s go back, solve those problems. Once we did, it was easier to catch them up to their age peers. So we left that program in there. Two years later, I had sold my company, and this program was running for free in the school, and everybody kind of forgot about it. And these kids ended up becoming two years ahead of their age peers because they were getting personalized learning. The school district had fundamentally changed how they brought education in. And all of a sudden, a teacher came to me when I was doing a TED Talk, and she asked me a question because she was part of the experiment. She said, “How do we teach kids that finish high school curriculum in middle school?” Because these kids were continuously learning, and the publishers are building a curriculum around a spiral way of learning. That’s why it feels so redundant. Whereas in Europe it’s different. They teach everything forward. Anyway, if we could actually personalize learning and make it deep and make sure we don’t move forward until the foundations of learning are accomplished, we could get these kids through school faster. But it isn’t the speed; it’s the depth. So then, I would challenge that the curriculum, instead of being superficial and spiral, actually goes deeper. So that if kids finish algebra in elementary school, teach them calculus. Why do we make them wait until high school when their brains are open to learning when they’re younger? So they wouldn’t get as bored if they’re continuously challenged all through their younger years? That’s my bias.
– Any other questions? Thank you.
– Hello, Ramona. My name is Beatrice. I’m a first-year MBA. I wanted to ask you more when you shared with us that Peter Thiel said he wouldn’t fund you because you’re a woman and over 30. So how did you rebound from that? How did you have to change your strategy?
– What I did was I decided that I like challenges, and so it’s sort of like, “You can’t do that,” so I, of course, am going to do it. What I realized is that we were building the foundations of our company on building blocks. And then, I finally went, “What are some complex themes I could pull forward in my roadmap sooner rather than later, so I could get the wow effect sooner instead of waiting until the logical time?” So, it meant that I had to tweak my roadmap, and then get it in front of customers and get their buy-in because customers will go on a journey with you, but they’re not going to give you a dollar till you wow them.
– So would you say it’s a revenue and customer stream that you had to bring in earlier?
– Yeah.
– Thank you.
– Yeah. Investors are different than they were in the ’90s. So in the ’90s, you have an idea, you’d get money. Now, they want to make sure you have customers before you get money.
– My name is Dave Franks. I am in Executive MBA. Real life, I work in motion picture color and imaging. I wanted to know if you could give some examples of, you mentioned that business is lagging behind the technology in certain areas. Can you give some examples of where business isn’t catching up and needs to potentially?
– Yeah, where are the incentives for more of our moving into environmental, creating more interventions and innovation in the environmental space, and especially in the education space with all of our kids, and they’re our greatest resource for the future. And yet, schools are getting less dollars every year, and people are cutting, wanting to cut taxes. I remember when I went to school, was before Proposition 13 hit, for the older folks in the room. But Proposition 13 basically stripped the schools of funding. And when I was in school, man, we had swimming pool and this and that. We had 100 people that would try out for football or soccer or whatever. We had giant teams, had a surf team. I grew up in Huntington Beach, so I was surfing, but we had music. I could take violin and do really terrible there and then go do piano and do worse. But we had lots of things. When I go to schools now, there’s barely any music or art. We’re de-investing; how can we create a new mechanism or business innovation in that space, in the theater space? How do we bring people back to the theater? When I was growing up, I always was at the theater or trying out for something and not doing so great. But there was opportunity and more tax dollars that were going into young people’s lives. And we’re talking about whole populations of people who are being de-invested in and losing their jobs, potentially to AI. Yet, we’re not taking the money that the billionaires, and lots of businesses are making and putting it back into our greatest resource, which are your children, you guys.
– Hi, Colby, she/her pronouns, second year in the full-time MBA program. Thanks for being here. You’ve mentioned, now, a few of the big hairy problems we’re dealing with. Obviously, climate crisis, education crisis, income inequality, leading to a lot of these things. I think a lot of us feel a bit overwhelmed by it. Like, what is our role, especially post-graduation? I’ve worked in the social impact space. That felt hypocritical at times, because under that model, you’re still beholden to the philanthropists funding who have the power. Or I went to Amazon, and I couldn’t fully dissociate from the fact that I was a part of Amazon. And so, I think it’s a lot easier, once you’ve had your successes, to be like, “Oh, you should go do this thing.” And so, I think a lot of us are just grappling with, “How do we do what we can, use our skills, not perpetuate these systems that are clearly not working for us, but also, we can’t just jump to a new system tomorrow, right?”
– Yeah. And I think there’s so many paths to answering that. So I’ll tackle a couple of them. One is, when I went to Amazon, it’s like being in the military again. It’s kind of fun, but it’s kind of weird. But anyway, it’s very revenue, and I have to run four WBRs a week. I ran fraud and abuse there; and so, I had a giant AI and engineering team and product team, and WBRs are weekly business reviews. So everybody, the whole company was very focused on different things. And I would get feedback. Ramona, you’re missing 10 cents. And I’m like, but we just had 2 billion transactions, 10 cents is missing from those 2 billion transactions. And we’d go scurrying around trying to find those 10 cents. But we were extremely data driven and goal driven, which I liked. But my large team, I realized that because I was building AI models for fraud and abuse, I could turn those models inward and lay off a bunch of people because I didn’t need them doing manual labor anymore. I wasn’t going to need developers anymore. So then, what I decided to do was to take on the education problem within the company, which wasn’t popular, but it got momentum, where even Jeff Bezos decided to invest $600 million in education of employees. And bunch of projects started to build up within the company to try to figure out, how do we upskill our own employees to that next level? So what I’m trying to say is, you may go to a company for one job using one skill, but you’re going to see inequities. When you’re at every company, even startups, you’ll find an inequity, and you will have a choice. Do I try to innovate something there and help the company with those inequities and help the community of employees? Or do I leave or ignore it? So, you’ll have choices, but you’ll always be able to do and participate in the good, the social good, and changing. Because if you can change the hearts and mind within a company and affect change, you’ve changed thousands of people’s lives, or tens of thousands. And then, number two is, as students and graduates and future leaders of the world constantly ask yourself, “Is there a new way for me to look at this problem?” Like Uber, they flipped the business model upside down and became successful. Can we flip some of these problems upside down and solve these business problems in different ways? It’s not just technology that can create new innovations—it’s how we look at business that could actually create broad change in how people deal with recycling, or deal with water, or deal with community, or deal with war or conflict. There’s something we can do differently. I always focus on education because I’m always like, if we can get people learning together, they won’t kill each other. Or if we can figure out how to raise the voice of, in the areas of inequity, we can change the world. But it’s definitely, a lot hasn’t changed too much since for my 60 years on Earth. But I think you guys are smarter; you’re more aware. My generation was sort of trying different things and got lost on the way and then came back. But you guys see all of our mistakes and have new innovations and have a new voice and have a better sense of the good that could be done than probably we did.
– Thank you.
– Thank you. I’m afraid we don’t have any more time for questions, but I just want to thank you all so much for coming and wonderful questions. I’d like to thank our students Anu Tej and Haritha Nair. And of course, I want to thank Ramona. Thank you so much for sharing your wisdom and the far-ranging, very interesting conversation. It was really fantastic. Thank you so much for joining us.
– Thank you.
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TOMS Founder Blake Mycoskie on leading with authenticity
When TOMS Shoes first hit the market in 2006, company founder Blake Mycoskie’s plan forever changed how people think about the for-profit business landscape. TOMS’ One for One business model was simple: Every time you sell an item to a customer, you give one away to someone in need.
Mycoskie said his idea came to him during a trip to Argentina.
Taking note of both the country’s popular alpargata shoes and, more importantly, the youth who could not afford to buy a pair, he was inspired to create a business that could help solve the problem.
“The idea was really simple,” Mycoskie shared at the Feb. 7 Dean’s Speaker Series, co-sponsored by the Center for Social Sector Leadership. “It was just: ‘What if I took these shoes that I see all these people wearing that I’ve never seen before, and sell them back in Venice, California, where I live, and every time I sell a pair, we give a pair to these kids that desperately need them for their school uniforms. The idea is, that if you buy a pair today, we give a pair tomorrow.”
That’s when “Tomorrow’s Shoes” became TOMS. As the brand grew in popularity, the company did not invest much money in traditional marketing strategies. (Watch the video below)
While a lack of marketing may seem antithetical to a for-profit business, it was exactly this alignment between values and practice that brought the company’s early success. “It’s this idea that our giving and our commitment to our impact had a greater influence on the customer than any type of marketing we could ever do,” Mycoskie said. “We were not necessarily going to be focused on the things that a traditional business was, but we really focused on giving and telling our story, and that’s why our model worked so well.”
From shoes, the company expanded its One for One model to include eyewear and safe drinking water. Mycoskie would donate a book for every purchase of his 2011 autobiography, “Start Something that Matters.”
Though he is no longer an owner of TOMS, Mycoskie’s leadership efforts have not stopped. He is currently a co-founder of the wellness program Madefor and is also investing in research into the use of psychedelics for therapeutic purposes.
“I really have this belief that, to found a successful company, it has to come from a passion, from a need, from something that you’ve seen in the world that you’re frustrated with or you don’t agree with or there’s a product you wish you had but you can’t buy,” Mycoskie said. “I believe that that’s where the great businesses come from.”
Read the transcript below:
– [Ann] OK, why don’t you all take your seats. Come and take your seats. Good afternoon, everybody. My name’s Ann Harrison. I’m the dean of the Haas School of Business. Welcome to today’s Dean’s Speaker Series. It is co-sponsored with the Center for Social Sector Leadership, otherwise known as CSSL. Nora here who runs it is sitting right here. I am absolutely thrilled to introduce our guest today, Blake Mycoskie. Blake’s story is a really powerful one.
He was on a trip in Argentina in 2006, and while he was there, he saw many children who had no shoes, and he was deeply affected by how difficult their lives were. And so, he decided to create TOMS Shoes. And in doing so, he created the One for One business model. And that’s a model where a customer, by buying a product, helps someone else in need every time they buy. And that was a complete revolution in the way to do for-profit business. Amazingly, over its lifetime, TOMS has provided over 96 million pairs of shoes for children around the world. Since then, TOMS expanded into other areas of vital needs, for example, eyewear and safe water.
Now, Blake didn’t stop there. He published a book, “Start Something That Matters.” And every time that book sells one copy, he donates a child’s book to a child. So that’s really amazing. His current ventures include co-founding a wellness program Madefor, and his philanthropic endeavors include working in the area of legalizing psychedelics—hopefully we’ll hear a little bit about that today, too. We’re incredibly fortunate today to have such a trailblazer here working in the area of socially responsible business, an area that Haas excels in and that we’re passionate about.
Blake, our students have so much to learn from you, I just want to thank you once again for coming to speak today to give your insights to our community. So just some quick housekeeping. When you sat down, you might have noticed a note card on your seat. If a question occurs to you, write down the question while you’re listening to the Q&A, and then you can hand it to our assistants here, my colleagues, they’ll be collecting them, and then there’ll be time starting about 1:10 for some Q&A. So now, I’m going to turn over the session today to two students who will be doing the Q&A, Eli Bresler and Yvonne Mondragón, and they will moderate today’s discussion. Take it away!
– [Yvonne] Thank you, hello, can you hear me? So Blake, thank you for being here. As we’ve mentioned before here at Haas, we care a lot about social impact and entrepreneurship, so everybody here is very excited to hear from you. To start us off, why don’t you tell us a little bit about your journey starting TOMS, kind of from your perspective, what influenced the One for One model and how that helped drive the success of TOMS?
– [Blake] OK, great, well TOMS started in Argentina, and there’s kind of a funny backstory of how I got there. How many people have seen the reality TV show, “The Amazing Race?” Oh, a lot of people. OK, did anyone see it 20 years ago when I was on it? Two people, yes! So my sister and I were on this TV show, “The Amazing Race,” and for those who haven’t seen it, you’re racing around the world for 30 days, and there’s a $1 million prize at the end. And interestingly enough, the last leg of the race was here in San Francisco. And unfortunately, at a very critical moment, my sister said, “We’re almost there to win the $1 million. Let’s stop and ask for directions to make sure we know where we’re going.” And as it’s such a cliche, as a man, I said, “No, I know exactly where I’m going. We don’t need to stop and ask.” And next thing I know, we were lost, and we lost the $1 million by four minutes. And after we lost $1 million by four minutes, about a month later, I got a text message from my sister, and it was this random string of numbers. And I thought, “That’s weird.” And I thought, “Well, maybe she kind of butt-dialed me or something, and that’s what came through on the text.” So I didn’t respond or anything. And then the next month, I got another text message, and it’s a different random string of numbers. And so I called her, and I said, “Paige, what’s with these text messages?” And she goes, “That’s the interest you owe me on my half million dollars.” And so, that was a great experience, but what, “The Amazing Race,” did was, it really took me to all these countries I had never been to. And Argentina was one of them. And so, I decided I wanted to go back to a lot of the countries. And so, in January of 2006, I took a trip to Argentina. I was there for about a month, and I experienced a bunch of different things. And one of the things that I experienced was, and it was the first time that I’d really seen this, was just really intense poverty. Just outside of Bueno Aires, I saw many kids in the street, and not wearing shoes and sniffing glue and just some really horrible things with these children. And at the same time, I noticed that a lot of the young people were wearing these slip-on shoes called alpargatas. And I grew up wearing Converse and Vans and kind of these thick, bulkier, slip-ons, but these were really different. And so, I asked my friend at the time about the shoes, and he said, “Yeah, the farmers wear them, the polo players wear them.” And I thought they were really interesting. In a very serendipitous way, I met a woman that was running a nonprofit, and they were specifically helping kids get shoes for school. The shoes was part of the uniform, and so many of these kids that I saw in the streets, the reason they were in the streets and not in school was ’cause their families couldn’t afford the uniform, which included a pair of shoes. And so, I had this kind of morning ritual where I drink my coffee and write in my journal about the day and have some of the things I’m thinking about and goals for the day. And when I was sitting on this farm that I was staying at in Argentina, I was writing in my journal, and this idea came to me and the idea was really simple. It was just: “What if I took these shoes that I see all these people wearing that I’ve never seen before and sell them back in Venice, California, where I live? And every time I sell a pair, we give a pair to these kids that desperately need them for their school uniform, and we’ll call it ‘Shoes for Tomorrow.’ The idea is, that if you buy a pair today, we give a pair tomorrow.” And most people think my name is Tom—it’s not. But that’s where the name TOMS came from, was “Tomorrow’s Shoes.” And we wanted to put the whole word, “Tomorrow’s,” on the tag, but it wouldn’t fit, so we shortened it to TOMS, and that’s how we got the name, yeah.
– [Eli] That’s really incredible, and as someone with two sisters in the crowd right now, I can only imagine that costing us all $1 million for four minutes, you’re probably catching grief about that today, so I empathize with that. We are on an MBA campus, and so, I think one of the things that we’re really curious about is the business of TOMS, and the One for One model signals a lot how you can have a profitable, successful enterprise and also have it do good, do well for the world. So I think one of the things we’re curious about is how you layer in social responsibility and what complexity that adds. What challenges have you faced in maintaining TOMS’ commitment to social impact while ensuring the company’s financial responsibility? What sacrifices do you have to make on both sides of that coin to make sure that both can succeed, financially and your social goals?
– [Blake] OK, well, I think maybe start in answering the question, just thinking about the financial aspects of the TOMS business model, there’s really kind of a magic formula that TOMS kind of created and that other businesses have followed. And it’s not necessarily just the One for One model. It’s this idea that our giving and our commitment to our impact had a greater influence on the customer than any type of marketing we could ever do. And so, while many companies might spend 10%, 15%, 20% of their margin on marketing, we spent basically zero. And instead, we took that money and we used it to pay for another pair of shoes, which was oftentimes less expensive than the marketing. And so, that’s why when we became extremely profitable, which was a kind of a surprise to me because when I started the, we didn’t even call it a business, we called it a project, we started the TOMS project, we priced the shoes based on how much it cost for us to make them in a guy’s garage in Argentina. So you can imagine when the business took off and all of a sudden we were working at big factories, the cost went down so much that our profit went up a lot. And so, we really had to focus on, to be successful as a business, we actually need to focus on our giving as much as anything else and telling that story of the giving. And I really learned that lesson in a really kind of funny way. I was in the JFK airport, we had just started TOMS and I was probably two, three months in and the only people we really sold TOMS to was my parents, their friends, my neighbors and I was living in Venice, California. And so, I was in New York trying to get new stores and I decided to go for a run right before I had to get to my flight and so I went to the JFK Airport not wearing TOMS, which was unique for me—at that point, I always wore TOMS. And so, I had my running shoes on, and I go to the American Airlines check-in counter, I’ll never forget this, it was kind of one of the most meaningful things the early days of TOMS for me, and I went to do the electronic check-in. And next to me, there was this woman wearing a red pair of TOMS, and I had never seen a stranger wearing our shoes. I mean, it was so cool! It was such a cool moment, and so, I’m kind of looking at her and I’m thinking, “Gosh, should I say something?” And so, I decide to say, “Hey, I really love these shoes you’re wearing, what are they?” And she says, “TOMS, TOMS Shoes.” And so, I’m doing the check-in. I’m like, “Oh, that’s cool.” And she literally physically put her hand on me and said, “No, you don’t understand! This is the most amazing company in the world!” She goes, “When I bought this pair of shoes, they gave a pair to a child in Argentina and there’s this guy who started, I heard he lives on a boat…” And she just went on and on. So I was feeling bad, and so I was like, I had to stop her. And I’m like, “Excuse me, actually, I’m that guy. I am Blake, I live on a boat, and I started TOMS.” And she goes to me, she looks at me like deer in headlights, she’s so, like, “What?” And she goes, “Why’d you cut your hair?” And I was like, “How did she know I cut my hair?” And I realized that she wasn’t just a customer, she was just totally invested in this, and she’d watched all these videos on YouTube of us giving the shoes away. And so, that’s how she knew I had cut my hair. But then, as I said thanks to her and went to my flight and started thinking about that conversation, I realized that this woman took the time out of her day at an airport to tell a stranger about TOMS. So how many people has she already told about TOMS? I mean, definitely all her friends and family and people on FaceBook, and so, I realized that the effect of just one customer connecting to our giving was going to have such a magnitude effect on how many shoes we would sell and ultimately give away. And so, that’s when we really decided that, as a business model, we were not necessarily going to be focused on the things that a traditional business was, but really focused on giving and telling our story, and that’s why our model works so well.
– [Yvonne] Yeah, that’s awesome to hear, to see that something you believe in, others also believe in, and it grew into what TOMS is today. Going off of that, large-scale innovation is something that is very hard to do. There are some products out there that we see that we think this large scale is inevitable. What are some of the challenges that you experienced with scaling up TOMS, and how did you face those challenges?
– [Blake] Well, the biggest challenge was making the dang shoes. I mean, I had never made shoes before. My Argentine polo playing partner, Alejo, had never made shoes before, and we met this guy who said he could make them in his garage, which he could do somewhat sufficiently. So really scaling the production once the business took off was really, really hard. What I found was, the key to that was finding people who did know how to make shoes and had done it for companies that really scaled. And so, we very early on were able to attract a really senior executive from one of the big shoe companies to come and start working in my apartment with us. I think he was employee number two or three, and the first two were interns off Craigslist. But Sean came to us, and I remember it was really cool. I went on a factory tour with him in Asia, and we were drinking beers one night, and I said to him, I said, “Sean, why did you come to TOMS?” Because, I mean, we’re paying you probably half as much as you as you made at this, I think it was Nike or Converse, I forget where he was at before, and he’s very senior in his role, he’d worked in the industry for I think 30 years. And I said, “‘Cause we’re paying you probably half or two-thirds what you’re paying, and you’re having to do the job of basically five people.” And it was so cool, he’s told me, he said, and this goes back to the giving being our key differentiator is, he said, “Because now my kids think I’m so cool, and my daughter thinks it’s so amazing that I’m helping kids get shoes. And so, that’s a big part of why I’m here.” And that’s also, I realized, just focusing on our giving and staying authentic to that was so important, because without Sean, we never would’ve been able to scale the business.
– [Eli] That’s really interesting. It feels like people are attracted to it because it’s solving two problems. It’s putting stylish shoes on people’s feet—that’s actually a fun problem to solve—it’s also putting shoes on the feet of people in need, and that’s an even more fun problem to solve. I think when we think about the most successful businesses, the most successful products, that’s what they fundamentally do. They solve problems that people can’t solve themselves. Velcro allows me to fasten my shoes, Advil allows me to reduce pain, inflammation, all that kind of stuff. How do you go about figuring out what problems people need to solve and how you can solve that problem? And even one step further, if you know how to solve the problem, how do you turn that into a business that can solve it for a lot of people? What does problem-solving and filling need look like for you?
– [Blake] OK, so I’m going to tell a story from a different company. So I’ve started, I think five or six companies, and most of them were before TOMS, and one of them was an online driver’s education company. Now, how I got into that business is really by listening to someone’s problem. I was at a barbecue for a television network that I’d also helped start, and my head of programming’s son was there, and he was 15 years old. And I asked him, “What are you doing this summer?” And he kind of said, “Uh, I’m learning to drive.” And I was like, huh, I mean, I would think that if you’re learning to drive, that’d be exciting for a 15-year-old. And I said, “Well, why is learning to drive not that exciting?” And he said, “Oh, I’m in this classroom, and it’s stinky, and it’s dark, and it’s in this mall, and I got this old lady teacher, and I can barely understand what she’s saying, and the cars are just crap.” And I mean, he was just super negative. And I was thinking, “Well, this is not good for our safety on our California highways. If this is how engaged or disengaged this kid is, like, we are in a lot of trouble.” And so, I went home that night, and this is right when MySpace was out and there was no Facebook yet, and some of you probably don’t even know what MySpace is, I’m realizing, and it was also when they were just starting to do things online that traditionally had been done in brick and mortar. And so, I thought, “Well, one way to solve this problem of these classrooms that are really not that inspiring, they’re usually in Sears malls or something, is to see if we could take this class online. And so, that could be more engaging, more entertaining, they could do it at their own pace.” And so, that was one idea. And I worked really hard with some legislature to get that changed in California so that we could do that. And so, that was Step One. And Step Two was, we got to get better cars, these cars have got to be more interesting. Now, this was right when Toyota came out with a Prius, and so, they had this huge desire to get people to know what an electric car even was. And starting with young people who might be more environmentally inclined was a big part of their thing. And so, I cold-called Toyota down in Torrance and got a meeting, and they decided to give us four cars at basically, at the cost. But the third thing was the teacher, and that was something that was going to be a little bit harder to do, because people who were kind of driver’s ed teachers were pretty—a very specific type. They’re usually retired, they were usually … I mean, I think everyone can remember the driver’s ed teacher. Unless you went to our school, ’cause I’ll tell you why ours was special, and you’d really remember because what we decided was these teenagers were not paying attention to their teachers at all. And so, we thought about, OK, how can we get them to pay attention? Now, we were lucky, ’cause we lived in Los Angeles, so we had a lot of actors and models. And so, we went and basically and hired a bunch of Abercrombie & Fitch models and actors that had all this free time, and we knew that teenagers pay attention to them. And it worked. And so, we had them as our driver teachers, and they would post pictures on MySpace of them and their teacher. And, so we solved all three problems at once!
– [Eli] That’s beautiful. I distinctly remember my driver’s ed teacher self-branded himself as Tupac Dave, and he was far too old to be trying to educate 15-year-olds about Tupac and not teaching them about driving. So I understand not learning anything and also trying to make sure kids actually learn how to drive so it’s safe. Pivoting a little bit, you’re mentioning a lot of partnerships, you’re talking about Toyota, you’re talking about these Abercrombie & Fitch models, you’ve been talking about this person that you met who was working at Nike came to work for you, and I think partnerships are key, and I know you often talk about collaboration as being key to success. I’m curious, what are the green flags that you look for in individuals, entities, partners of what you think would make them a trustworthy partner, a good faith partner, someone who you want to do business with, whether it’s an individual or an entity, kind of what’s your criteria? What are the green flags?
– [Blake] I mean, I think the most important thing in a partnership is: Is the partnership going to be seen as something that’s authentic, that makes sense? The best partnership we ever had was with AT&T. It was truly one of the biggest turning points in our business, and I would even say in my life. Because what happened was, I was on CNN doing an interview, and I did an interview, and they were asking about how many people worked at our company at this point, there were like 40 of us, and we were selling all over the world. And they were like, “How in the world do you run your business, when you’re in places like Ethiopia giving shoes or Cambodia or Guatemala and there’s only 40 of you and you’re competing against these big shoe companies?” And I pulled out my, it was funny, I had a BlackBerry back then. Do you guys remember BlackBerry? OK, good! I’m not as old as I think! And so I pulled out my BlackBerry on the CNN interview and I said, “This is how I do it.” And basically, I can run the business and do everything from my phone while I’m in Ethiopia. And so, this ad exec was in the back of a taxi in New York, and they saw this interview on CNN, and they thought, “Oh my gosh, if he uses AT&T, this is perfect.” And so, they called me, and luckily they asked me if I used AT&T, and I said, “Yes.” And that was one of the great, lucky moments of my life because they said, “We want to do a commercial about you and TOMS and your story, and we don’t want to create something slick, and we want to actually go with you on a giving trip to Argentina and just film you and then make a commercial.” And so, they made this commercial, and it was like lightning in a bottle. They loved it, they tested it, it tested well, they premiered it on the Masters Golf Tournament, which if you know that tournament, they only allow three different commercials for the entire term. And then they played it at the NBA Final Playoff games, everything. They ended up spending $30 million on a commercial to basically tell the TOMS story. But it was completely authentic because I use AT&T. And so, it worked really well for them. Our business grew 500% that year because of that commercial. And so, literally, I mean it was crazy how much it grew. And that was really the beginning of our mass growth. But that partnership was so important, and the reason it worked, to your question, is because it was completely authentic.
– [Eli] Thank you.
– [Yvonne] Yeah, that’s a great partnership story. Moving a little bit away from the business side and transitioning into leadership, I strongly believe every great venture has a strong leader behind it. You often talk about being a servant leader, one that aims to serve others. You talk openly about your failures and vulnerabilities. How do you think sharing some of those experiences have shaped you into the leader you are today?
– [Blake] Hmm, thank you. Well, I think when you hear the term, “servant leader,” I think it’s a really important term. And it goes back to the fact of, in most businesses, your employees that are on the front line are serving customers, you hear that phrase. And in order for them to really serve your customers, they need to be served from their managers, and I think that’s really the job of a manager or an executive, is not just to lead the vision of the business, but to really serve those that are working for them so that they feel empowered to really serve the customer. I think, also, leaders really set the culture, and I think talking about failures and vulnerabilities, you really, I believe, need to set a culture where it’s OK to fail. I always say “If I’m going to fail, I want to fail fast.” So I don’t waste a lot of time and money failing, but I learn from it, and I move on. And so, I think it’s really important that as a leader, that you show that failures are not going to be reprimanded. If anything, they’re going to be celebrated because what did we learn from that failure? And I think that’s a really important part of leadership.
– [Eli] I love hearing that. And I think one other thing we hear a lot of successful entrepreneurs talk about is luck. So learn quick from your failures, but also, you have to have some luck sometimes. Some say they create their own luck and that they earned it and they built that luck, and if they didn’t work as hard and put themselves in those situations, that luck wouldn’t have happened. Others say, “A beautiful opportunity fell in my lap and I got lucky that my idea worked.” So I’m curious what you think about luck and how much luck has played into your success.
– [Blake] I mean I’m a lucky guy for sure. So I think there is some truth to this idea that the harder you work, the luckier you get. But I also think that, sometimes just an idea, I mean, how do we have an idea? Start there: I’m sitting on a farm in Argentina, and this idea is somewhat downloaded or transmitted to my brain that then goes to my journal that then goes to starting a business that then goes to kind of changing the face of business across the world—I can’t take responsibility for that. I mean, from a spiritual perspective, I don’t really understand how that came about, but I feel really lucky that I was the one that got to do it. And so, I do think that you can make your own luck, and you have to work hard, but I also think that in certain businesses or certain ideas that come and really have a huge effect on culture, that idea was just, its time was to come. And the person that got to bring it to the world is pretty lucky, so I feel lucky.
– [Yvonne] Yeah, that’s great. I think we’re all hoping for some, a little bit of luck, out here to go on to our next endeavor. So your ventures have given us shoes, provided safe drinking water, and restored vision of countless individuals at a global scale. Going forward, where do you think the greatest need will be and what new business models outside of the One for One model have you been excited about or you’ve seen actually work?
– [Blake] Well, I think if I was an entrepreneur starting out today, I would be spending a lot of time looking at green energy. I think that one of the biggest problems facing our species right now is the climate. And I think there’s going to be so many opportunities—there already have been so many opportunities, so many fortunes built—focusing on how we can live in a more sustainable way. But it’s something that I don’t have a lot of experience or expertise in. But I think that’s where I would really be focused ’cause I think that there’s just going to be, I mean, technology and innovation is our only way out. And so, when there’s a necessity, there’s usually great opportunities for entrepreneurship.
– [Eli] I think half of my classmates here who are going into green energy and climate tech just got really excited, so thank you for that. The future is bright, my friends. I do also want to ask about another interest that you have in something that you’ve pledged time and resources towards, which is the legalization of psychedelics. And I just want to know, what inspired you to get involved with that and where do you think the opportunity is for that to succeed? Or just any general thoughts about that space, which is kind of new and upcoming?
– [Blake] Sure, I mean, I’m really excited about this. I feel like this is really at the beginning of a new frontier in how we help address so many mental health challenges. I’ve struggled myself with depression, I know many people that have, and I know many people that have taken the traditional route of pharmaceuticals and talk therapy and have not had success. I had the opportunity, gosh, it was six, seven years ago, a friend of mine, famous podcaster, Tim Ferriss, many of you probably know, called me and had known that I had worked with psychedelics myself and had found them very beneficial, and we had shared that with each other and in private, and he said the John Hopkins is thinking about creating the first-ever center for psychedelic research in the country, and they’re looking for a few philanthropists to kind of step up and help in Dallas. And at that point, most of my giving had been through TOMS, and then also a supporter of some of these nonprofits like Charity: water that I’m a big fan of, and so this was, kind of, giving to a university and helping endow a department for psychedelic research, this was really kind of outside of my scope, but I realized, and Tim really helped me understand and see that there was going to be very few opportunities as a philanthropist to have their dollars be so leveraged because if this worked and John Hopkins could show the effects of psilocybin or MDMA or LSD on different mental health challenges, that this could be the beginning of legalization and really our society accepting that these are not necessarily drugs, but they’re actually medicines. And so, I made that donation, and it was the largest donation that I had made, to date at that time, and then about two years later, there’s an organization called MAPS that’s been working really hard to put MDMA through the FDA, mainly for helping with PTSD. And they were at a critical place in their FDA, kind of path, and they needed to raise, I think, $10 million. And so, interestingly enough, Tim Ferriss called me again. And Tim and a guy named Joe Green were putting together this round and trying to raise this for the nonprofit, and they explained the benefit, especially to many of our veterans. The statistic that haunts me every day when we think about our veteran community is that 17 veterans a day commit suicide. I mean, that’s more people are dying of suicide than dying combat now, and that to me is just inexcusable. And so, seeing how MDMA can have an effect on that, in helping with the PTSD and depression that many of them experience was really an amazing opportunity for me. And so, I made that investment, and then I just kind of sat back and watched these two for about four or five years. And then, a couple years ago, I decided to get more engaged and more involved. I made an investment here in the Berkeley Center for Psychedelic Science. I continued to help John’s Hopkins. I’ve worked with the VA now on some projects there. And what I’m finding is, I like things to happen fast. I think as an entrepreneur, that’s kind of one of our characteristics. This is going to be a long process. I mean, this is something that I probably commit the rest of my life to because that’s how long it’s going to take for things to really become legal, to have regulated access. We’re working on a bill through the legislature in California right now to create regulated access for PTSD, for MDMA and psilocybin, that’ll go to the governor’s desk next year around September. So there’s a chance that it gets passed, which will then really change the landscape across the country. But this, to me, is the most exciting kind of science advancement that we could have that could have the biggest impact on what really is a health epidemic in our country with mental health issues. So I feel really, really lucky. It’s kind of like when TOMS idea came to me and I got to be part of a change in the way that business is done, I feel really lucky that now I get to be a part of a way that hopefully we help millions if not billions of people around the world with mental health issues.
– [Eli] Thank you so much. I do want to thank you for all that. I’m very passionate about this space personally. Do I wish I had my own Tim Ferriss? Absolutely. But otherwise just interfacing with those.
– [Blake] Oh, be careful. Tim Ferriss has been very expensive for me.
– [Eli] OK! That’s true, that’s true, that’s true. But no, it’s a huge need. And I think I could ask about 200 follow-up questions about that, but I want to be conscious of time. We have a lot of questions here from the audience. So the last question we want to ask you is, you’re sitting in front of a room of aspiring leaders, entrepreneurs, people who are going through their MBA or teaching at this program so that they can make a real difference. And so, just for the aspiring leaders in the room, whatever capacity that is, do you have any last words of advice, parting pieces of wisdom just for us aspiring leaders?
– [Blake] Oh man, that’s always the hardest question because, do I really sit here and give you advice? I mean, I’m not that much older than most of you guys in the room. I mean, I think, we were talking about this back there, and so I would say, if you have entrepreneurial desires, then this is advice that I think is particularly for you. And that is, that I really had this belief that, to found a successful company, it really has to come from a passion, from a need, from something that you’ve seen in the world that you’re frustrated with or you don’t agree with or there’s a product you wish you had but you can’t buy. I really believe that that’s where the great businesses come from. I think it’s very dangerous to come get your MBA, learn about entrepreneurship and be like, OK, I want to be an entrepreneur, I’m just going to go start a business, without the passion behind it, just ’cause you think you’re going to make money. I’ve seen most of those businesses fail, to be honest. And so, if you make making money the reason you’re getting into entrepreneurship, I think it’s dangerous. I think if you make the change you want to make or the product you want to create or the service you want to provide because you deeply care about it, the reason you’re becoming entrepreneurship, then the money will follow. And so, that is what I would say is kind of one of the main pieces of advice I have for entrepreneurs. The second piece of advice, I’m going to give two now, I just realized there’s another one, and this is going to be super contrarian to this group, I can tell already. ‘Cause you’re spending so much money to get your MBA here. And so, as soon as you graduate, you’re going to have a ton of pressure, yourself, your student loans, your parents perhaps, to go out and get a job that will pay the most amount of money for a job that you can get. And that makes sense, initially, but the truth is, no matter how much money you make working at a bank or a consulting firm or whatever, it’s not going to actually have that big of impact on how much money you make in your life. And I’m not saying making money is the only reason that we work, but it is one of the reasons. And so, what I tell people is, “Instead of going out and just chasing the biggest paycheck right away, think about what you’re most passionate about and invest your time, at least for a few years, in that without the pressure to pay those loans back right away or to make as much money as possible.” Because what usually happens is, if you follow your passion and you do something that you’re really deeply interested in versus just trying to make money, you become really good at it. And when you become really good at anything, usually you make money at it. And so, that I know is probably falling on some deaf ears, but that’s fine. And you think I’m naive and idealistic, and it’s easy for me to say ‘cause I’ve already made money, but I really have seen, I’ve given that advice to undergrads and MBAs over, probably, 15 years of speaking now, and I’ve had people come up to me or write me emails or letters years later and say, “That really made an impact,” because they ended up getting into something that they deeply cared about, and they got really great at it. And then they made the money, so there you go.
– [Eli] That’s brilliant, thank you so much Blake. Turn it over to Nora!
– [Nora] So first, I want to thank Blake for starting off with a loss, we don’t do that very much in business school, and I want to really acknowledge Eli and Yvonne who came up with the questions and posed them so well, don’t you think?
– [Blake] Yes, absolutely.
– [Nora] So my name’s Nora Silver, I’m a faculty director for the Center for Social Sector Leadership, we call CSSL. And I’m an adjunct professor here, and Ann was kind enough to share this Dean’s Speaker Series with us. Before we open it up for your questions, which I do have here, thank you very much. I have a few for you. How many of you are Berkeley or Haas students? OK, how many of you came here in order to make a difference or create social impact at Berkeley or Haas? How many came here for that? OK, about half. Do we have any alumni here? Welcome back. Do we have any friends and family of Blake or of CSSL? Yay, Ella! OK, so I want to take a minute with the students in particular, whatever you came here for. If you are curious about the kind of innovation that Blake made or the kind of career path that he took, I want you to know, do you know that you can explore it through CSSL? And I want to point out a couple things. Gloria, would you stand up? Gloria is right now teaching a course called Reinventing Capitalism for a Sustainable, Humane and Equitable World. It’s offered this spring, it will be offered next spring as well, stay there. In the fall, Gloria taught and will teach again Business Models for Social Impact. She teaches that with Kristin Groos Richmond. Both of them are serial social entrepreneurs who can introduce you to different models, such as that Blake described and describes in his book. Thank you, Gloria. For those of you who want to found something with social impact, we do have an impact startup disco. It’s an intensive weeklong with Jorge Calderon that will walk you through those initial kind of scary steps. And lastly, I’m going to be teaching in the fall a course on social movements. I’m exploring teaching that if that’s what you’re interested in. We have a lot of experiential programs, and one I want to point out to you, ’cause it’s coming up. If any of you are interested in trying exploring a Social Impact Summer Internship, we have a program that will supplement your salaries if that’s what you’re worried about. So look for the HIIA with net impact, and we’ll let you know about that. And we have career advising, so I and CSSL’s executive director are serial social entrepreneurs. We have faculty—20 plus, would you raise your hands here? I see you, come on!—that teach on things and know about things in the world because they’re professional faculty, so they’re out there working on these issues at the same time that they’re teaching you, things like climate tech and global health and food and education and economic development. So whatever is stirred up in you from hearing about Blake doesn’t need to stop here. There are many more resources at Berkeley and at Haas available to you, depending on your interests, and I just want to make sure you know where you can come to start the journey. So there are people here to help you with your curiosity, with your thinking, with your next adventure, no matter what that will be. But now, we still have some more questions for Blake. So Blake, back to you, ready?
– [Blake] Sure.
– [Nora] Alright, you may not be ready for this one, but we’ll try.
– [Blake] Oh no.
– [Nora] “Have you paid your sister 500,000-plus interest?”
– [Blake] So how many people know this clothing brand called Aviator Nation? Raise your hand. Enough, OK, so my sister started this company, and I think Forbes last said that she’s a billionaire now, so I think she’s doing fine.
– [Nora] Maybe she should pay you back? No, I’m kidding. Alright, alright, so here’s the next question: “TOMS was a pioneering business model, and I think received disproportionate scrutiny and criticism. How did you navigate it, and what would you have done differently in hindsight?”
– [Blake] Hmm, yeah, I mean that was a really hard thing for me because, hey, you hear this adage that the media loves to build you up so then they can kind of tear you down. And we got a lot of flak for what impact were we having on communities by just going out and offering a handout? And that was really hard, because all we were trying to do is do good. I mean, I was in Argentina, saw kids that didn’t have shoes, wanted to give them shoes. I didn’t come with a public health background, and so, we really at first were angry and frustrated and scared by this, and then we decided we had to lean into it. And so, ultimately what we did was, we hired some people who did have that background, who really understood the impact of giving free goods in these communities, how it impacted the local community, and that really led us to doing some local manufacturing. So we did a manufacturing plant in Haiti after the earthquake, which was really successful. We moved manufacturing also to Ethiopia, which created a lot of jobs in Ethiopia. And then the other thing we did is we realized that just giving shoes was not enough, that we had to be part of health programs as well. And so ,there’s a lot of health programs for worms that kids get in Central and South America, and so they want them to come in and take the medicine that would keep them from getting worms. But the incentive, a lot of kids wouldn’t come do it, they started saying, “If you come, you get a free pair of shoes.” And so, that was a big incentive, we worked with the Gates Foundation on that. And so, yeah, so we just had to get smarter and better and more sophisticated in how we did our giving.
– [Nora] Great, thanks. So, “How have your previous ventures, you mentioned four or five before TOMS, allowed you to be successful as an entrepreneur? What did you bring forward from those?”
– I mean, just lots of learning. A couple of them were moderately successful, and a couple of them were huge disasters. One disaster was after what I was on, it was not a disaster, but it was a failed business I guess, is after I was on “The Amazing Race,” I recognized that there was this tremendous amount of interest in reality stars and their 15 minutes of fame, but there wasn’t really a market for really kind of capitalizing on that. And so, I decided to start at, I think at the age of 25, I was very naive, I decided to start a television network, and it was an all-reality cable channel, in which I went around and bought the rerun rights of reality shows because once you kind of knew who won, they really had no interest at the networks. But what I realized is, people cared so much about the reality stars that you could pair the stars with the shows, and they could kind of almost do these shows where they gave commentary about what they were thinking when they did that move on, “Survivor,” or how they got that person outed on, “Big Brother,” or something like that. And so we were able to get the content for basically next to nothing, but we knew that advertisers really wanted to reach this audience, it was mainly an 18-to-34 audience, which was the key audience that advertisers wanted to reach. All these components showed that we were going to have incredible success in this business. The one thing we did not think about, which was the most important and the reason it failed, was there were only about 10 cable operators in our country at that time, and including DirecTV, satellite provider. And so, the cable operators, and then DirecTV, basically had a monopoly as to what content we see. It’s not like today where you can see it on Hulu or you can see it on a number of different streaming networks, obviously YouTube being one of the dominant players. So we basically had an amazing product, people wanted it, and we had advertisers willing to pay for it, but our only way we were going to get anyone to ever see it was through these cable operators. And they had no need for another network. I mean, they had 400 channels already. Getting one more was not going to have anyone all of a sudden decide to pay for cable television. They were paying for cable television for many other reasons already. And so, they basically said, “No, we’re not interested.” And so, we ended up going out of business. It was incredibly painful, I had to lay off like 40 people, it was a really challenging, challenging situation. And what I learned from that was, I never wanted to be in a business again where so few people had the power to make it work or not work. And so when I started TOMS, the great thing was, there’s thousands of stores in America that sell shoes, and so, I didn’t have to go out and get this one big fish customer, I could go and focus on one after another, after another, after another. And so, that was one of the real lessons that I learned from an earlier business that failed, that really helped me as I thought about TOMS.
– [Nora] Great, thank you. So, “The buy-one-give-one model used by TOMS has long-standing been a point of celebration, however, there have been shortcomings and challenges and all of that. Here’s the big question, Is it truly possible to be a business for good? And how should incoming business leaders incorporate,” I’ll read it as it says, “Corporate philanthropy into their company brands?”
– Absolutely, my mic, hello? I can just talk loud, too.
– [Nora] We’re trying to broadcast, though, hold on.
– [Blake] I could juggle.
– Hello, great, I don’t know how to juggle. I would love to learn though. So yeah, I mean I think that there’s a lot of examples of businesses for good out there now, TOMS being one of them. I think the key is to really focus on kind of three things, and you hear this a lot of time in conscious capitalism, the three Ps: people, planet, and the profit. By doing that, you can really build a business where all those stakeholders are equally benefiting. I think, I will say the bad news in all this is, is that, and because of the success of TOMS and other companies like TOMS, it’s not as novel to be a business for good as it was when we started. When we started, there was nothing like this. I mean, there was Ben and Jerry’s that had been giving, there was the Body Shop that had been giving, Anita Roddick, but neither of them built their whole business on it like we did with TOMS. And so, we really kind of pioneered this and several other businesses as well. But now, today, if you were starting a business, I was talking to an entrepreneur the other day and they were saying, “OK, well we’re going to incorporate this giving model, helping people get clean water, et cetera.” And they’re going to invest a lot of money in that. And I said to them, and they thought it was weird coming from me, I said, “I don’t think you should do that.” I was like, “I don’t think there’s going to be enough return on your social investment to make it work,” I talked about from a marketing perspective, “because so many other companies are already doing it.” So I think now what I would say for entrepreneurs that really want to do good in business is: “It’s really important to incorporate it into the business model itself.” So to do it as an add-on, or if you do this, we give this, I think can be more difficult, but if the actual business itself, and that’s why I use the example of green energy, if the business itself is making the planet a more sustainable place, then it is a business that’s doing good. But it’s also not necessarily having to carve out a percentage of its margin to do so.
– [Nora] OK, and the final question from the group is, “You talk a lot about conscious capitalism and for-profit business; and in your book, you also herald or celebrate nonprofits and philanthropists, and many people draw divisions between those, but you don’t. Can you talk a little bit about why you don’t or how you see that?”
– [Blake] Well, what I tried to do when I wrote this book, which is a long time ago now, as I’m thinking about it, and I’m trying to remember some of the things that I said, but I tried to really highlight two different organizations, businesses that were innovative and they’re giving and doing good like TOMS, but then also some of these new nonprofits that were being created that were operating more like businesses. And so, I’ll use Charity: water as a great example. How many people know Charity: water? Raise your hand. Oh wow, OK, you should definitely check out Charity: water. Not a lot of people here know, but they’ve been incredibly innovative. My friend Scott Harrison started it the same year I started TOMS, and his idea was to bring water to as many people in the world that need it as possible. And if you look at the marketing of Charity: water, it’s as innovative and as slick as any new Silicon Valley-backed tech startup. I mean, the branding is unbelievable. The storytelling is unbelievable. It competes with any business in terms of marketing, but it’s a nonprofit. They also do really, really innovative marketing campaigns asking people, especially young people, people who are 15, 16, 17 years old to give up their birthday in order to raise money for wells. And they found this to be incredibly successful, especially with social media, ’cause they can message out to all their friends, “This year instead of having a party or bringing a present, I’m asking you to donate $10 for every year I’ve been born or whatever.” And they’ve raised, I mean literally they’ve raised I think $300 million in the last couple years through these campaigns. So I also try to talk about something like that in the book as well ‘cause I think, at the end of the day, there’s a lot of big problems in the world that we want to solve, and sometimes the right vehicle is a nonprofit, like in the psychedelic space, for instance, and then sometimes it is a for-profit like TOMS. And so, I don’t really see a distinction between either, as long as the organization is being used to address a major problem in the world.
– [Nora] Great, thank you, Blake. We’re hitting our time, and I’m going to take a little editorial freedom and go off script here. Alan Ross, would you come up here? Alan does not know I was calling him up here, so bear with us. Alan is doing something I think is very innovative as a philanthropist, and he sent out an email just yesterday asking us to vote. So Alan, I want to relinquish the final two minutes to you to make a pitch to the group.
– [Allan] Well, thank you so much, that’s very sweet. It’s very surprising. I started something a couple years ago called the Chris Kindness Award, and everyone calls me Chris. I’m Alan. I named it after my kids’ preschool teacher who died, just the sweetest guy I ever met, and I give $1,000 every month to someone in Berkeley who does a kind act, random acts of kindness. We’ve had a gas station attendant, someone who volunteers, Children’s Hospital, a teacher, this month was a 16-year-old at Berkeley High who’s from Afghanistan, just arrived in America a year ago, who helps newcoming kids from all over the world acclimate to Berkeley High, sweet, sweet stories, and we just announced our three finalists for this month on Monday, one of whom is a Haas person, former student of mine of 20 years ago, Olive Davis. Anyone know Olive? Wonderful woman who was with YA for a while, Young Entrepreneurs at Haas, and now she started BBAY [Berkeley Business Academy for Youth] several years ago, giving back to the community, bringing in youngsters from middle school to Haas to educate them about business, to get them interested, so they’ll go on to college and all. Wonderful person, anyone can vote. ChrisKindnessAward.org, voting goes through Friday. If you want to vote for Olive, that would be wonderful. And we need nominations—we’re seeking nominations all the time. Go on our website, nominate anyone who lives, works, or goes to school in Berkeley, and we’re raising money now. We now give second- and third-prize cash prizes, also, and we’re trying to grow throughout the community, and beyond Berkeley as well. So ChrisKindnessAward.org, thank you so much, Nora. Thank you, dean, appreciate it, thank you.
– [Nora] So we know that many of you are doing meaningful and interesting things for your local communities, for your friends, for your family. We want to thank you for all of that, for Blake, Yvonne, Eli, Ann, thank you for coming, thank you for listening. We hope you are inspired to go out and try something really meaningful to you that you’re passionate about in the world, and Haas is here to help you, thank you very much.