March 10th, 2010
Baker. Entrepreneur. Governor?
Brian Murphy, WG'08, is founder of the Smith Island Baking Company. (Photo by Tommy Leonardi)
In the spring issue of Wharton Magazine, we’ll be profiling Brian Murphy, WG’08, a commodities trader-turned-entrepreneur who last summer launched a high-end bakery in the least likely of locations: Tiny, isolated Smith Island, Maryland.
As you’ll read in our feature (the magazine should be arriving in your mailbox sometime in late April), the Smith Island Baking Company is keeping Murphy rather busy.
But apparently, not busy enough—because Murphy recently decided that he’s going to run for governor. Maryland’s gubernatorial election is set for Nov. 2.
“Clearly, I’m relatively young and I don’t have political experience,” Murphy told me earlier this week. “But I believe our state is facing issues that are just too important not to be addressed.”
Maryland’s current governor is Democrat Martin O’Malley, a former Baltimore City mayor who has faced some tough sledding in Annapolis. Murphy plans to run as a Republican, and as a result will have to take on O’Malley’s predecessor, Robert Ehrlich, who appears likely to make another run himself in the Republican primary.
Suffice to say, Murphy faces pretty long odds. But he says he’s committed to making a run anyway—if only because he believes the state needs him to.
“I’m doing this for the same reason that I started the bakery,” he says. “Because it’s the right thing to do.”
March 5th, 2010
NFL Players Speak Up on Their Latest Wharton Experience
It’s become something a fixture on the National Football League calendar.
Just after the final gun sounds on Super Sunday and just before the NFL Combine kicks off Indianapolis, there arrives the NFL Business Management and Entrepreneurial Program–a four-day program, hosted in mid-February by both by Wharton and Harvard Business School, that aims to teach NFL players about the nuts and bolts of business and prepare them for life after football.
The program has been held at Wharton since 2005. Each year, it seems, the players who participate can’t say enough about the experience. That was true once again of this year’s program, hosted between February 16 and 19.
Here’s a sampling of comments from this year’s class:
Deion Branch of the Seattle Seahawks told the Canadian Press that he and his fellow players were impressed by the business minds they met through the program: “I was amazed to be in the room with all of these businessmen and entrepreneurs and have them share their stories with us. It was fascinating. It’s almost like how they look at us as football players. We were looking at them in the same way.”
Mark LeVoir of the New England Patriots, who attended the Harvard event last year and the Wharton event this year, told NESN.com that sees the program as a way to keep in touch with business trends: “Unfortunately, football is going to end some day. We all can’t be like Junior [Seau] and play for 20 years. If I could, I would, but you’ve got to start thinking what’s next for you after football. Hopefully, that’s a long time from now, but in that transition period, what are you going to do? Do I want to go back to school? Is that something I’m interested in. They’re kind of keeping me up to speed of what’s really going on with the business world.”
The Eagles’ own Trevor Laws said he knows his body won’t last long in the brutal NFL. As he told the Philadelphia Inquirer: “You come in and, after a tough day in the league, you realize your body hurts a lot and you’re not going to be able to play at this level for as long as you want. I’m in my second year here and I’m like, ‘Aw, my body already hurts. What am I going to be doing after 10 years?’ So you’ve got to prepare.”
Finally, Ken Shropshire, the David W. Hauck Professor and Director of the Wharton Sports Business Initiative, told ESPN.com’s Len Pasquarelli that he always enjoys working with the players: “We find the players to be a very engaged group,” said Shropshire. “They’re here because they want to be here, not because they have to be. It’s like, ‘Tell me what I need to know and what I need to do.’ They are very eager.”
February 18th, 2010
En Route to Mount Everest
In the year I’ve spent serving as Editor of Wharton Magazine, I’ve had the opportunity to meet some truly amazing people.
I’ve interviewed CEOs and CFOs, senators and entrepreneurs, world-renowned researchers and, of course, more than a few remarkable Wharton students. But I’m not sure I’ve ever interviewed anyone more inspiring than Lei Wang, WG’03.
Never heard of her? Well, that’s a shame, because Wang, a 5-foot-2, 110-pound China native, is about to pull off one of the most incredible achievements in mountaineering history.
Wang leaves next month for Mount Everest, where she will spend the next two months preparing for a run at the summit sometime in late May. If Wang makes it to the top—which, given Everest’s nasty reputation, is no sure thing—she will become just the tenth person, and just the second woman, to have ever climbed each of the so-called Seven Summits (the highest peaks on each of the seven continents) and hiked to both the North and South poles.
We will be profiling Wang in our spring issue, but with her Everest trek coming up, I thought it appropriate to share her website with you, her fellow Wharton alums. The site offers regular updates on Wang’s journey, and you can also make a donation to help her complete this remarkable achievement.
We’ll be following Wang’s progress here on our blog throughout the spring, so check back here often. And again, be sure to check out our feature about Wang in our spring issue, which should be arriving in your mailbox sometime in late April.
February 2nd, 2010
An Unexpectedly Successful Entrepreneur—and Overseas Business Expert
Larry Harding, W'85
When real estate mogul Sam Zell spoke at Penn last October, he was asked to name the best country in the world to do business.
Hands down, Zell said, the answer was Brazil. Then he spent the next few minutes heaping praise on that South American nation. To hear Zell tell it, Brazil was business nirvana.
Larry Harding agrees with Zell … to a certain extent.
As founder and president of Annapolis, MD.-based High Street Partners, Harding, W,’85, has had little choice but to become an expert in the business climates of nations the world over. After all, High Street Partners, launched in 2003, has a singular focus: Helping entrepreneurs and others to launch and grow business overseas. In all, High Street has done business in 70 different countries—Brazil included.
And while Harding certainly sees the appeal of that South American nation, he’s also learned a thing or two about its business deficiencies.
Brazil may be a land of opportunity, Harding says, but it’s not without its issues.
“To some degree, Brazil has snuck up on people,” says Harding, who before launching High Street served as VP of International Finance for Ciena Corp. “It’s got a real strong and stable government, and it’s a huge, vibrant, growing market that’s just dominating South America. But it’s also another very challenging place to do business. There are just so many layers of bureaucratic taxes and regulatory requirements. You have more filings in Brazil than in any other country, and by a fairly wide margin, too.”
Doing business in Brazil, Harding says, means dealing with a blizzard of paperwork. Which means some companies—even highly sophisticated ones—will simply get overwhelmed.
That’s where High Street steps in. The firm not only gets companies up and running overseas, but also helps them deal with ongoing operational and regulatory issues: Payroll, accounting, tax compliance, human resource services and more. “Our mantra is: Any issue, any country,” Harding says.
Including, of course, China, a nation that, like Brazil, offers seemingly limitless opportunity—and a number of bureaucratic landmines.
“China has gotten a ton of press, all of it well-deserved,” Harding says. “But it’s a very challenging, very difficult place to do business. Laws are changing month to month and quarter to quarter. What may work in Beijing may not work in Shanghai. And then there are the well-known IP risks. So it’s a tricky place to work, but it’s such a growing market you almost have to be there.”
As for Western Europe and Japan—two markets that Zell, for one, dismissed as increasingly irrelevant? Well, Harding doesn’t view them quite so negatively. Those nations may not be growing at a radical pace, but they still certainly still have value, he says. Enormous value, actually.
“A lot of times people look at growth [incorrectly],” Harding says. “If you’re talking about the EU or Japan, [then] no, they don’t have near the growth of the BRIC nations and sometimes not even the numbers we’re seeing here in the U.S. But they’re huge economies. I mean, Japan is still No. 2—it’s an extremely strong and deep economy.”
High Street has enjoyed steady, stable growth since its launch and currently has about 65 employees at offices in Annapolis, Boston, Silcon Valley, Southern California, London, Tokyo, Shanghai and Hong Kong. The economic downturn left the firm “largely unscathed,” and after several flat quarters at the nadir of the recession, Harding says High Street bounced back with a series of strong quarters to finish the year. He’s even more optimistic about future growth.
Harding admits the firm’s success has come as a surprise even to him.
“I spent most of my career supporting entrepreneurs and never really envisioned that I wanted to be one myself,” he says. “I actually never thought that was where my skill set was. … But the market opportunities seemed clear to me, and what I’ve found is that I both very much enjoy being an entrepreneur and that I’m better at it than I’d thought I’d be, too.”
January 25th, 2010
We Want Your Ideas!
We here at Wharton Magazine have been working hard to make this magazine more entertaining and more engaging than ever before.
And while we think we’re well on our way, we certainly don’t think we have all the answers.
This is your alumni magazine, after all, and we want your ideas on how to make it even better.
Starting today, we’re asking you to tweet us your ideas for a new feature in the magazine. Have an idea for great column? A new feature in Debrief? Or maybe something for the Class Notes section? Well, here’s your chance to share it. And to give you some additional incentive, we’re giving away one Wharton tee-shirt per day. But you can’t win the tee-shirt if you don’t tweet.
We’ll collect ideas through Feb. 8. In mid-February, we’ll post the best ideas we receive in a poll on our website. Then we’ll let you, our readers, vote for the feature you’d most like to see in the magazine going forward.
If you have any questions at all, please feel free to write us at any time at magazine@wharton.upenn.edu. Or, of course, tweet us directly @whartonmagazine.
Thanks for reading–and let the tweeting begin.
January 7th, 2010
Challenging the ‘Myths’ of American Entrepreneurship
The more entrepreneurs, the better.
Right?
Wrong.
At least, that’s the word according to Scott Shane, G’91, GrW’92, a renowned researcher on all things entrepreneurship. Shane, a professor at Case Western Reserve University’s Weatherhead School of Management, raised some eyebrows—and drew some criticism, too—with the publication of his recent book, The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors and Policy Makers Live By. The book is being released in paperback later this month.
Built around Shane’s rigorous examination of American entrepreneurship, the book lays out some less-than-pleasant realities about the quality of our nation’s entrepreneurs and their impact on the overall economy—realities that some people, it seems, aren’t yet willing to accept.
“I think people are in denial,” says Shane, the author of 11 books on entrepreneurship and innovation management. “I think people are actually mad at me for writing this.”
Shane began work on the book, he says, after years of hearing the same old clichés about entrepreneurship—but not seeing any actual data to back them up. With this book, Shane intended to finally challenge those clichés.
Ultimately, he proved many of them to be false.
“One of the biggest myths is this idea that America is a particularly entrepreneurial place, and that it’s actually becoming more so over time,” he says. “If you look at the data … you realize that, on a whole host of measures, the United States is actually pretty middling compared to other countries and that, over time, there’s been a declining trend. The U.S. is neither the most entrepreneurial nation nor is it getting more entrepreneurial. But if you asked a student or a person on the street, they would tell you the opposite.”
Those same people, Shane says, would likely also say they believe entrepreneurial activity to be, by rule, a good thing—that more people starting more companies would create more jobs and, by extension, eventually stimulate the economy.
It would seem to make sense, too. Unfortunately, says Shane, it’s not true—because for every Steve Jobs, and for every Meg Whitman, there are thousands of entrepreneurs who fail. And bad businesses, or failed businesses, don’t do the economy any good.
As he writes in the book: “Instead of naively believing that all entrepreneurship is good, we need to recognize that only a select few entrepreneurs will create the businesses that will take people out of poverty, encourage innovation, create jobs, reduce unemployment, make markets more competitive and enhance economic growth. … We need to think like venture capitalists and concentrate our time and money on extraordinary entrepreneurs and worry less about the typical ones.”
Shane says while the book has stirred up some controversy—some say, for instance, his definition of entrepreneurship is far too broad—it has also served to make his students at Weatherhead think a bit more deeply about their future plans. Many of those students, he says, have been operating under the assumption that, for example, venture capital will be out there waiting for them.
“It has forced the students to realize,” Shane says, “that a lot of what they want to happen is actually very rare—and unlikely to happen.”
Shane is currently putting the finishing touches on yet another book. Born Entrepreneurs, Born Leaders: How Your Genes Affect Your Work Life, to be published later this year, will be the first book to examine the role that genetics play in shaping our behavior in the workplace.
December 14th, 2009
Tiger’s Best Strategy? Get Back on the Course—and Win
Tiger Woods is down. Way down.
His once-pristine reputation is in tatters. His marriage is in pieces. His golf career is on hold. And his sponsors, including heavyweights Accenture and Gillette, are running for the hills.
So what can Tiger do to stop the bleeding?
Simple, says Ken Shropshire: Play golf—and win.
“The key for any kind of renewal of his marketability is to play and play at high levels,” says Shropshire, the David W. Hauck Professor of Legal Studies and Business Ethics and director of the Wharton Sports Business Initiative. “There has certainly been tremendous damage done, but there’s no way that damage can be repaired if he doesn’t play. The key question, I think, is how far back he can really come.”
That’s a question that may not be answered for years, though, because the Woods story is bigger and more complicated than any in recent sports history.
Never before has the world’s premier athlete—the most popular, successful and marketable athlete in any sport—had to confront such salacious allegations at the height of his power. So there’s no way of knowing whether or not Woods can ever regain the marketability that he once enjoyed. “We don’t have much precedent to look at,” Shropshire says.
What is clear is that, for now at least, most companies want nothing to do with him.
Gillette, which had sponsored Woods since 2007, announced last week that it would phase the golfer out of its advertising campaigns. Gatorade says it will halt production of the Woods-branded Gatorade Tiger Focus sports drink, though the company claims that decision had been made before the scandal broke. And the global consulting firm Accenture broke ties with Woods on Sunday, noting in a strongly worded statement that the golfer was “no longer the right representative” for the company.
It’s not all bad news for Woods, though. His most important sponsor, Nike, is standing by his side.
But that’s hardly a surprise, says Shropshire.
“They almost have to [support him],” Shropshire says. “He is their brand. Moving away from him wouldn’t do them much good. … Plus, imagine how much product they have out there [with Woods’ name on it] already. Manufacturing-wise, that just can’t be stopped. For Nike, it’s a more a matter of, ‘We’re in Afghanistan; now how do we win and how do we get out?’”
Defending his company’s decision to stand by Woods, Nike founder and chairman Phil Knight told the Sports Business Journal on Monday that, “when [Woods’] career is over, you’ll look back on these indiscretions as a minor blip.”
Shropshire says that very well may be true. Which is why he believes Nike, and the other companies that maintain their association with Woods, may be making the smart play. Woods’ career could stretch on for decades, Shropshire says, so he’ll have a lot of opportunities to put this whole mess behind him.
The sponsors who stand by him, by extension, could reap the benefits.
“[Accenture] is basically saying, ‘Our partner is down, and we’re cutting him loose,’” Shropshire says. “There may be no consumer backlash on them, but there certainly could be Tiger relationship damage. This guy could end up playing on the senior tour. His career could go on forever. And redemption is very much an American story. Who knows? Maybe if he can signify that he’s cleaned up his life, and that he’s headed in the right direction, the [marketing] message can be, ‘You can do this, too—so have a Coke.’”
December 2nd, 2009
Magic Sliders Founder: ‘Retailing is Really Changing’
Madi Ferencz,WG’71, the super-successful entrepreneur behind “Magic Sliders,” is ready for a new challenge.
Two of them, actually.
Ferencz spent nearly two decades running Magic Sliders L.P, a company that would eventually sell more than 200 million units of its signature product—coated sliding disks designed to make moving furniture and other heavy items possible without scratching floor surfaces. Before that, she worked with The Nestlé Company and Colgate, putting her skills to use in marketing and new product development.
Now she’s the driving force behind two new products: A cutting-edge, environmentally friendly fireplace unit called the Anywhere Fireplace; and a headache treatment called Dr. Mauskop’s Migralex.
“I’ve got two launches coming up,” Ferencz said this week. “Having been in consumer products, I’m always interested in looking around to see what’s new and exciting and different.”
The Anywhere Fireplace certainly fits that description. It is a high-style, smokeless, odorless, vent-free “fireplace” that burns not wood, but rather non-toxic, non-polluting bioethanol. The fireplace leaves behind no soot or ash and comes in sizes small enough to fit even small apartments.
“When I was working in the corporate world, I was in brand management, but it was the new products that were exciting for me,” Ferencz says. “And I’ve always had an eye for design, too. So the fireplace sort of combines those areas. … When we first saw the fireplace, we just thought it was a beautiful decorative item as well as very functional.”
Dr. Mauskop’s Migralex, a magnesium-based headache cure developed by Dr. Alexander Mauskop, director of the New York Headache Center, will be available later this month and, like the Anywhere Fireplace, will be offered (at first, at least) strictly via the Web.
And there’s a reason for that. “Retailing is really changing,” Ferencz says. “The biggest changes are happening because so many retailers have gone out of business, and the ones that are left doing real volume are few and far between. It’s getting very difficult to get in to even see the buyer, or get the product listed. Real estate is just getting more expensive to obtain in the store, even if you have a good product.”
Because of her success with Magic Sliders, Ferencz says she’s often approached by young entrepreneurs asking for input on their products, or for advice on how to make their entrepreneurial dreams come true.
What does she tell them?
“Two things,” she says. “First, not everyone wants to do what it takes to actually be an entrepreneur. Because it does mean working a lot harder than you would if you were at a corporation. You better be in love with it, because for the amount of time and the kind of tribulations you’re going to face, you’re going to need a major commitment. And second, you better make sure you have the right experience to do it. One of the biggest reasons people fail is that they don’t know what they’re getting into.”
She adds: “It sounds wonderful, but it really is a surprise to people to learn what takes.”
November 20th, 2009
She Followed Her Heart–All the Way to MTV
Dara Cook has worked with Eminem and Tracy Morgan. She helped Carson Daly achieve stardom as host of MTV’s Total Request Live. She is one of the creative minds behind the network’s hugely popular Video Music Awards, which is annually one of the most buzzed-about events in show business.
She’s also a Wharton grad who spent her undergraduate years studying … marketing.
So what, exactly, should current Wharton students take away from Cook’s unique career path?
“That there are things you can do with your career that are different than normal careers and jobs companies offer when they’re recruiting at Penn,” says Cook, W’95, a Head Consultant and Writer for MTV Networks who spoke to Penn students on Nov. 19 as part of the Penn Alumni Multicultural Outreach Career Spotlight. “When I was in school, the big things were the consulting firms and the banks, but I was always the one looking for the odd opportunities. I don’t think people are necessarily looking for these kinds of opportunities, but I want to show students that there are other ways to approach your career.”
That’s certainly what Cook did.
After initially landing at Ziff-Davis Publishing group, she moved on to Time Inc. where she worked in marketing for such titles as Time, Fortune, Sports Illustrated and Money. But she soon realized her heart was in writing, not marketing. So she took her first career risk: She quit her marketing job and decided to start a writing career—from scratch. “I knew I had to do what I loved to do,” she says.
Fortunately for Cook, she made the decision just the dot-com revolution hit. New sites were popping up left and right, and they all needed content. Which meant they needed writers, too. Cook’s career took off.
“It was a great time to be a writer,” says Cook, who was both a Joseph Wharton Scholar and a Benjamin Franklin Scholar during her time at Penn. “There was a lot of money out there. Too much money, probably. … The one thing I would say about Wharton is that I think my time there gave me a certain level of presence of mind about what was going on in the market that maybe other creative people didn’t.”
That presence of mind paid off, too, when Cook was faced with her next big career decision. MTV came calling with two different job offers: One as editor of MTV.com, the other as a junior-level writer for MTV’s television division. Though the dot-come job offered more pizzazz, more power and more perks, Cook, sensing all wasn’t well in the dot-com world, opted for the television job.
“I remember somebody telling me I was a fool—that the dot-com where was the future was at … that television was dying,” she says.
Five weeks later, MTV.com announced sweeping layoffs. Among those laid off was the editor.
“And there I was on the television side, and it was all great,” Cook says. “I’ve been there ever since.
“I’ve arranged my career in [such] a way that I have a lot of freedom. I can work on a bunch of different projects. It’s not the same thing forever. That’s what I love about MTV. It’s always different. Not new and improved. It’s just completely different.”
November 10th, 2009
Steve Forbes Offers His Thoughts on Tax Reform, Health Care
Yes, Steve Forbes still supports a flat tax.
Back in 1996 and 2000, when the publishing magnate ran for President, it seemed his entire platform was built around tax reform—radical tax reform. He proposed scrapping the U.S. tax code and replacing it with a flat tax that he believed would make life easier for Americans, streamline government and help stimulate the economy.
Nine years after his last run, Forbes still believes the flat tax could be America’s salvation. “Twenty-five countries have tried it,” Forbes told Wharton Magazine student correspondent Crystal Lu, W’13, recently. “And it’s succeeded everywhere it’s been tried.”
Lu caught up with Forbes for a quick interview just before he spoke at Penn’s Irvine Auditorium on Nov. 3.
Q. What is your opinion on the Obama Administration’s handling of the economic crisis so far?
So far it’s been a big disappointment. First, the Obama Administration is continuing the Bush Administration’s policy of the weak dollar, which guarantees a weak recovery. This should not be a partisan issue. After all, Bill Clinton had a strong dollar, Ronald Reagan had a strong dollar, and I believe John Kennedy, too. So Bush was the first since Carter that had a weak-dollar policy and the Obama administration has not changed it. That’s one of the reasons why small businesses are having a very hard time getting credit, which is going to hurt job creation next year. It will also give us inflation unnecessarily. [The administration’s] tax policies, if enacted, would be very harmful. Raising tough personal rates won’t affect just individuals, but also small- or medium-sized businesses, many of which are taxed at personal rates not corporate income tax rates, so you get a double hit on those. I worry about trade. The administration has done nothing about free trade. Since Herbert Hoover, that has been happening. I hope that changes but so far it’s been protectionist.
Q. Do you think there have been any major missteps taken by the Administration?
Trade is huge. The stimulus plan was a nice waste of money, most of it. If they wanted a true stimulus, they would have cut the payroll tax for a couple of years, which would have given people money instantly and also lowered the cost of employing people. So the dollar, taxes, trade, healthcare—I think we should be going [in] the opposite direction. Instead of a government takeover, we should have more patients control healthcare resources, not bureaucracies. And on energy, why not move to promote exploration for natural gas and developing nuclear energy? They are very slow so far in proposals to modernize the grid and if you want wind power, you better have transmission lines to move the electricity. They haven’t done that.
Q. Going back to healthcare, you don’t believe there should be a public option?
Well that’s government, and I’ve seen what the government has done to Medicare, Medicaid, Social Security, housing. And what they should do, instead, is remove barriers to people buying insurance around the country. If you live here in Philadelphia, it’s illegal for you to buy insurance in New York or New Jersey. You’re allowed to buy cars there. You’re allowed to open up brokerage accounts, banks accounts. Why can’t you buy health insurance? That way you’d get real competition. Right now each state erects its own barriers. A lot of states have very little competition.
Q. Your political platform was built on tax reform. If you could enact a single reform today, would you still like to put in a flat tax?
Well, what a flat tax does is jump the current tax code, all 9 million gory words of it, and replaces it with a single rate, with generous exemptions for adults and for kids. A family of four, for instance, would pay no federal income tax on your first $46,000 of income, no tax on your savings, no death taxes. On the business side, it would reduce the rate from 35 percent to 17percent. My flat rate would be 17 percent. It would also get rid of depreciation schedules. So if you make a capital investment—you know, build a plant or buy a computer or truck—you would expense it in the year in which you make it, instead of over several years. … You’d see the economy take off like a rocket.
Q. Could you tell me about your new book: How Capitalism Will Save Us: Why Free People and Free Markets Are the Best Answer in Today’s Economy?
What it does … is walk through what capitalism actually is, how it works and the raps against it—the greed, that it’s unfair, that it crushes the small, that it hurts the poor, that it’s not good for healthcare, and on down the line. And it deals with them in a very conversational way, and what it gets to is the essence.
+1.215.746.6409