KWHS Trailblazers Ebook

http://kwhs.wharton.upenn.
edu
19 Trailblazers
Who Are Changing
Your World
(Some You Know and
Some You Don’t—Yet)
http://kwhs.wharton.upenn.edu
19 Trailblazers
Who Are Changing
Your World
(Some You Know and
Some You Don’t—Yet)
© 2013 by Knowledge@Wharton
Knowledge@Wharton
The Wharton School
University of Pennsylvania
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or registered trademarks of their respective owners.
Design by Lara Andrea Taber

Contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Millionaire at 25: Jack Abraham on What It Takes

to Be a Successful Entrepreneur. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Generation Microfinance: Charlie Javice Believes
in the Power of Students to Alleviate Poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Serial Tech Entrepreneur Sachin Rekhi:
Relationships Build Careers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Chipotle’s Steve Ells: How a Classically Trained Chef
Reinvented Fast Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
The Salwen Family: Doing Good, with the Power of Half. . . . . . . . . . . . . . . . . . . . 32
Roger Farah’s Strategy for Polo Ralph Lauren: Weaving
“Left Brain” Discipline with “Right Brain” Creativity . . . . . . . . . . . . . . . . . . . . . . . . . 41
Pfizer’s Amy Schulman on What Women Need to
Succeed in Their Careers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Magic Johnson: Dominating the Business Arena
After a Stellar Basketball Career . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Entrepreneur Elon Musk: Why It’s Important to
Pinch Pennies on the Road to Riches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Aramex’s Fadi Ghandour Unfolds His Roadmap
for Budding Entrepreneurs in the Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Shokay’s Carol Chyau: Weaving Connections
Between Herders and Knitters in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
3
Joss Whedon’s Plan to Monetize Internet Content
(Watch Out, Hollywood). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Vivek Ramaswamy: Breaking Down Barriers
to Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Seth Goldman: Brewing Organic Tea with a Mission-based
Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Kareem Abdul-Jabbar: “The Things That You Achieve,
You Achieve As a Team” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Maria Mahdaly: Succeeding as a Female Entrepreneur
in Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Under Armour’s Kevin Plank: Creating “the Biggest,
Baddest Brand on the Planet” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Tal Dehtiar: Looking for “Profit with a Purpose” from
Socially Conscious Footwear Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Seth Berger’s Full Court Press: Building a Company
from the Ground Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
About Knowledge@Wharton High School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
4
Introduction
T oday’s leaders are blazing trails in every industry, from fast food,
fashion, and footwear to social entrepreneurism, philanthropy, and
pharmaceuticals. If you’re considering heading down a specific career path,
planning to start a business, or looking for leadership inspiration, there’s
nothing like getting the lowdown from the people who have been there and
done it. The editors of Knowledge@Wharton High School have selected 19
leaders (some you know and some you don’t—yet) who have learned a lot
on their journeys—and have a lot to share.
Drawn from some of the most engaging articles and interviews that
have appeared in Knowledge@Wharton, this inspiring ebook offers wisdom
and insights that will open your mind about the possibilities and the
challenges of blazing a trail.
Explore Jack Abraham’s qualities of a successful entrepreneur, including
possibly the most important—the ability to sell. Learn about Steve Ells, a
classically trained chef, who went against the grain of what people expect
from fast food and started a restaurant called Chipotle, which now has more
than $1 billion in revenues. Find out why the Salwens sold their home in
order to invest their wealth for a social return rather than a financial one.
Read about how Maria Mahdaly has overcome the challenge of being a
female entrepreneur in Saudi Arabia to help other young women start
businesses. Discover how Magic Johnson challenged people’s expectations
to reinvent himself as a businessman after a top-notch career in basketball.
Learn how an inconvenience inspired Kevin Plank to start Under Armour
in his grandmother’s home after completing his football career. Read about
how Carol Chyau has found a way to improve the lives of poor herders in
remote Western China and women knitters in rural Shanghai by directly
sourcing yak fiber and selling the finished products internationally. Meet
Roger Farah, chief operating officer for Ralph Lauren, a company that is
thriving despite the economic conditions.
These leaders and others are sure to inspire you on your path.
Enjoy!
5
19 Trailblazers
Who Are Changing
Your World
Millionaire at 25: Jack Abraham
on What It Takes to Be a
Successful Entrepreneur
J ack Abraham, 25, is a successful entrepreneur. In 2008, he left Wharton to

found Milo.com, a shopping engine that searches local store shelves in real
time to find the best prices and availability for products of all kinds. In
December 2010, eBay bought Milo.com for a reported $75 million. Today,
Abraham still runs Milo.com, which is a unit within eBay, and he is the
director of local for eBay marketplaces, which means that he develops the
company’s position in integrating online and offline commerce. Abraham
spoke with Knowledge@Wharton High school from his office in San Jose,
Calif., about the triumphs and challenges of entrepreneurship—starting with
his days at Langley High School in McLean, Va.—and what it takes to succeed.
An edited transcript of the conversation follows.
Knowledge@Wharton High School: How long have you been interested

in starting your own business?
7
19 Trailblazers Who Are Changing Your World 8
(Some You Know and Some You Don’t—Yet)
“If you never give up, you have a 100% chance of success because
eventually you’re going to get it.”
Jack Abraham: Since I was pretty young. I grew up in an entrepreneurial

family and saw my parents start some cool businesses [Jack’s dad is Magid
Abraham, founder of comScore, an Internet marketing research company].
I fell in love with the Internet and data and what was possible with both. I
started a couple of businesses in high school and one while I was in college
and then did Milo after that. I also had some failures, which is important
because I could learn from them. Failures are one of the key ingredients to
success. Look at Vinod Khosla [co-founder of Sun Microsystems] or even
Steve Jobs [of Apple]. They had a series of failures that they were able to
learn from and that ultimately helped them achieve success.
KWHS: What businesses did you start in high school?
Abraham: One was an SAT and AP prep tutoring company. The idea was
that Kaplan and all these other companies charge you an arm and a leg for
these classes to prepare for the SATs and APs, but the people who instruct
the classes haven’t gotten into a great school themselves; they’re just going
by a book. I tried to build a network of really smart tutors who might or
might not have taken these classes and were willing to work with students
in the Northern Virginia area. I learned the value of having a brand behind
you. Part of the reason Kaplan is successful is not because it has great service;
it is because they spend a gazillion dollars on advertising. Everyone knows
them and thinks that they offer a high-quality service. It was a great business
for high school. But it was never able to scale into a really big success.
I also started a business making custom computers. We would talk to
companies and ask what most of their people would be doing on the
machines, and then optimize the machines for that use and sell to them.
We got some good clients, but I learned that there were so many boundaries
to scaling that business. You need business development, sales, longer lead
times with businesses. It was a great idea, but it didn’t catch on. It teaches
Millionaire at 25: Jack Abraham on 9
What It Takes to Be a Successful Entrepreneur
you a bunch of things about the approach you take, what companies you
want to start and what companies you don’t want to start.
KWHS: Why did you start Milo.com?
Abraham: I wanted to start a big, consumer-based business that solved a

pain point that people were facing. There was a lot of innovation happening
in web 2.0 in social and video and other segments of the web that were being
reinvented. Interestingly, shopping seemed totally stagnant and stuck in a
web 1.0 world. So I got to thinking about what was happening in commerce
and where shopping was going. One big trend was the Internet’s ability to
drive offline behavior. I had this hunch that just like the Internet was starting
to influence social interaction, it was also going to influence commerce in
the real world in a very real way. I thought, “What if you start using the web
to drive people into the store?” It’s a win for the consumer and a win for
the store because they need more sales and foot traffic.
We also discovered a really big pain point there. People loved looking
at reviews, pictures and descriptions online, but they had a difficult time
figuring out what was in stock right then at a store nearby, and who had
the best price. The state-of-the-art at the time when we were founding Milo
was literally calling from store to store to check inventory and/or driving
around from store to store. In that scenario of people calling store to store,
it’s literally a human looking at a computer screen and picking up the phone
to talk to another human looking at a computer screen. There had to be a
way programmatically to eliminate the need to do that. I left school early
in 2008 to move out to the West Coast and start working on building Milo
full-time. We had some early traction with five merchants, which was great
in terms of validating the service.
KWHS: How did you start a business right when the recession was hitting?
Abraham: We were hunkering down for about six months on figuring out
the product and distribution. And then the economy started tanking. That
was a scary time to be running a business. It went from everything getting

funded and high valuations and easy to raise money, to literally no one
investing. Prior to this supercrash, I was fortunate enough to meet Keith
Rabois, one of the early PayPal guys, an early investor in LinkedIn, Yelp and
YouTube, and the COO [chief operating officer] of Squared. After two weeks
of him ignoring me … I managed to get a meeting with him. Within 10
minutes of meeting me, he decided he wanted to invest. He introduced me
to the co-founder of YouTube, Jawed Karim, who also decided he wanted to
invest, and Kevin Hartz of Eventbrite, who also wanted to invest. I was getting
very close to closing an angel round [angel investor] with them and the stock
market started going down 5% a day. By the end of the week, the stock
market had gone down more than 25%. This was the exact same week that
Sequoia Capital, one of the best venture capital firms [in California], sent
out a memo to all their portfolio companies with a big picture on the first
slide of a grim reaper that said ‘RIP Good Times.’ Still, we pushed through
and closed that first angel round [of financing] with Keith, Kevin and Jawed.
The money was valuable, but what was really valuable was their time.
They had a ton of success with business-to-consumer web companies, and
I figured there was a lot to learn from them. As a part of the round, I
negotiated spending an hour with each of them every Friday where I could
tell them about what was happening in the business and get the chance to
learn from them. That was an amazing experience for me. Kevin is this great
serial entrepreneur who gave me advice on recruiting, setting a culture and
setting goals and metrics for my team, raising money, positioning to
investors and getting great advisors. Jawed was the tech and product guy
who figured out YouTube. Keith was great with strategy, product, all across
the board. I was like a sponge. We were able to build a great team. Before
long, we were able to get about one million people a month using our
product. During the four-month period in 2009 when we went out [to get
further financing], we were one of four early-stage consumer Internet
companies that got funding. A lot of people would have thrown their hands
up and quit, but we still managed to pull it off and get that round done. We
grew the retailer network and a great distribution network across the web.
Millionaire at 25: Jack Abraham on 11
What It Takes to Be a Successful Entrepreneur
Big companies, everyone from Google, Microsoft, Yahoo! and eBay, started
reaching out to us for partnerships. Through that process, we got to know
a lot of companies very well, and eBay bought the bigger picture vision of
what we were going after. We realized that there was so much more we could
do if we joined forces, rather than a simple partnership. We weren’t looking
at all to sell the business, but they made us an offer and we decided that was
the best path for the company.
KWHS: Has it been difficult to give up some control of Milo to a bigger

company?
Abraham: It’s really hard to go from a team of 25 or 30 core people to a

company of 15,000. It’s a big transition. I had never worked for a big
company before. Just like there is a lot of learning to be done to run a start-
up company, there is also a lot of learning that needs to be done to be
successful at a big company. EBay has given our team a fair amount of
autonomy. We have our own house on eBay’s campus, which everyone calls
the Milo House, and we’re still able to set most of our own direction. We’re
plugged in at the right level of the organization. Sometimes when
companies get acquired, they end up seven rungs beneath the CEO and can
get lost in the shuffle. That’s when bad things can happen and companies
get shut down. I have an awesome boss, Dane Glasgow, who is a brilliant
guy. He dropped out of Cornell to found a company and sold it to
Microsoft, and started a company after Microsoft that was bought by eBay.
It’s been great having him as my mentor and boss because he understands
the issues we face.
I can still be very innovative within our direct team because that is what
we value. Doing things across different business units and sections of eBay
as a whole is really challenging. There are a lot more people. You can’t just
have an hour-long meeting and then spend the rest of the time executing.
A lot of coordination, consensus building and approvals have to happen.
KWHS: What are your top three qualities of a successful entrepreneur?

Abraham: Persistence is one. The second would be resilience. Bad stuff

always happens. Sometimes it’s in your control and in your domain and
you can feel good about that because you can fix it. Sometimes it’s out of
your control, like the macroeconomy implodes and the top newspaper sends
out a [memo] to everyone in Silicon Valley saying the party is over, nobody
gets funding and fire everyone. Or the initial idea didn’t work and it’s not
the right time. Being able to bounce back from all those things and never
give up is so important. If you never give up, you have a 100% chance of
success because eventually you’re going to get it. The third thing is an
attribute I’ve found in almost every successful entrepreneur I’ve met. You
need the ability to sell. That doesn’t mean being a salesman. As a CEO and
founder, you are always selling your ideas and your vision to your team,
potential recruits, mentors, advisors, investors, partners. If you can’t sell,
you are going to have a really hard time with most of the challenges you
face as a founder. If you can sell, you can get a lot of people aligned on your
side to a common vision that you want to execute against and galvanize a
team toward doing superhuman work to get it done. Sell the idea, sell how
big it can be and get great people involved in what you are doing.
KWHS: What about risk-taking?
Abraham: I think entrepreneurs take very calculated risks. They understand

the potential benefits and the likelihood they’ll be able to reap them. Some
people might think that entrepreneurs take crazy risks, like leaving school
early to do a start-up. In my mind, it was the least possible risky thing to
do. You have to be willing to put yourself outside your comfort zone and
go for it.
KWHS: Where will you be in five years?
Abraham: I enjoy building products that solve pervasive, everyday

problems. It’s highly likely that I’ll be doing that as an entrepreneur working
on another startup. n
Published: November 3, 2011, in Knowledge@Wharton High School
Generation Microfinance: Charlie
Javice Believes in the Power of
Students to Alleviate Poverty
C harlie Javice, a rising sophomore at The Wharton School, University

of Pennsylvania, is founder of PoverUp, an online network that lets
socially minded students learn, connect and invest in social businesses and
microfinance – the concept that a little money can help poor people start
businesses that will lift them out of poverty. In addition to getting high
school and college students involved in microfinance through consulting
work and internships with microfinance institutions and social businesses,
PoverUp also gives individuals the chance to invest in small businesses
globally and helps microfinance operators get the money they need to assist
individuals and businesses.
“I found that microfinance resonated with me, considering that $200
in Thailand, China and Laos, where I had been, makes a difference. You see
that impact. We came back and said, ‘Wow, students can really play the most
powerful role.’ You don't need a lot of money to do it.”
PoverUp, which launched in April 2011, was named one of Inc. Magazine’s
“11 Coolest College Startups,” and Javice, who is 19, was one of Fast
Company’s “100 Most Creative People in Business 2011.” She spoke with
Knowledge@Wharton High School editor Diana Drake for a video about
the concept of “financial inclusion,” the true value of a small amount of
money, and the technological challenges of building an online platform.
13
Knowledge@Wharton High School: We’re here today with Charlie Javice,

a Wharton student and founder of PoverUp. Welcome.
Charlie Javice: Thank you, Diana.
KWHS: Please tell us about PoverUp.
Javice: PoverUp is a student microfinance and social business action

platform for students to learn, connect and invest in microfinance and social
business. In brief, what we do is offer students research fellowships all over
the world and internships with different microfinance institutions and
social businesses. [We also provide] a whole investment platform for you
to invest your money through us and help alleviate poverty.
So you could pick projects from around the world that included water,
sanitation, microcredit and women’s empowerment as well as [projects]
that concentrated on rural areas. You could tailor it for students and what
you’re passionate about. All of this is built around a socially minded network
for students to be able to share their passions, be able to get that support
network. From there, you could plan events—organize a huge grassroots
movement—which is what we’re aiming to do.
Knowledge@Wharton: When did your interest in global awareness and

activism truly start, and how did that lead into PoverUp?
Javice: Throughout my life, I’ve been involved in community service. At

my [high] school, I had already started a Thanksgiving soup kitchen with
my brother, Elie Javice, who is going to be coming here next year as well. I
had volunteered there for about seven years—loved the experience, and
really loved helping people and seeing the benefit it had on Thanksgiving,
Christmas and New Year’s. However, I kept on seeing the same people
come back.
Generation Microfinance: Charlie Javice Believes 15
in the Power of Students to Alleviate Poverty
And I started thinking, ‘How can we make something sustainable so

that I don’t see these same faces, so that they can start moving up in the
echelon of economic development?’ From that point, I started reading. I
had heard about microfinance and started thinking, ‘Oh, this could be really
cool. Two hundred dollars can have an impact.’
At the end of my 10th grade [year in high school], I was able to
volunteer at the border of Thailand and Myanmar (or Burma). I taught
English and got to see all these different entrepreneurial activities. What
really struck me there was that a lot of people were asking me, “Why are
you teaching English? These people need food. These people need other
things than English—water or other basic substances.” And we were sitting
there and saying, “Well, if you look at the economy of Thailand, [the English
language] is the main driver as far as tourism. If you could speak English,
you could get a job.” And it’s really teaching a man to fish from that point
on [referring to the Chinese proverb, “Give a man a fish and you feed him
for a day. Teach a man to fish and you feed him for a lifetime.”]
I came back and wanted to continue my involvement globally. I found
that microfinance did resonate with me, considering that $200 in Thailand,
China and Laos where I had been, makes a difference. You see that impact.
We came back and said, “Wow, students can really play the most powerful
role.” You don’t need a lot of money to do it. It’s an investment, so you’re not
throwing your money away or getting it back. And you can choose whatever
you want [to focus on in the microfinance arena], even if you’re not passionate
about financial services, because I know most people don’t grow up as a 4-
year-old saying, “I want to do finance.” There are many other ways as far as
combining financial services with health care or education, which are so much
fun and really appeal to everyone. There’s no excuse not to get involved.
As a high school student, what was there to do in this [microfinance]
space? I found an outlet at the Penn Microfinance Conference that’s
organized annually. I got to meet other past students—notably Sam
Adelsberg, who founded LendforPeace, who is really inspiring. I found
myself at 17 starting to introduce microfinance clubs [in high schools] and
realized it’s such a fragmented movement that we should really get this
going and spur it. That’s how PoverUp came to be. I’m so lucky to have an
amazing team to work with. And that’s the core of it—having an amazing
team, a big idea, and just going for it.
KWHS: At what stage of development is PoverUp right now? How has it

grown this year?
Javice: This year has been really busy, I have to say. I was a freshman this
year. So I came into college like everyone else with a business, sort of
assessing where it was, where it should go and the potential it had. Before I
came, I had started writing the business plan in the spring of my junior year,
right after the conference. And then it developed from there.
We started getting a network of schools, an amazing board of directors,
a board of advisors, to really solidify that. Now we’re at the point where
we’ve just signed a few partnerships with microfinance institutions. We
launched our website beta version. We’re starting to get media exposure,
which has been great. And we’re hoping to organize a conference in
November and have the first “PoverUp Your World Day,” where you’ll have
mobile giving to be able to choose your different projects in microfinance
and, hopefully, raise awareness [about microfinance] around the world.
KWHS: Busy year!
Javice: It’s been growing at a really big rate, about 50 schools [joining the
PoverUp network] every month or month-and-a-half.
KWHS: Microfinance has come under a microscope recently, particularly

after aggressive pressure [on individuals] to repay microloans resulted in
35 suicides in India. What are your thoughts about the strengths and
weaknesses of microfinance?
Javice: Microfinance, in my mind, is giving the opportunity to someone

who wouldn’t [otherwise have one]. It’s giving loans—financial services—
to a previously unbanked population. So obviously, you look at me as

an entrepreneur. I have the opportunity to fail at the same time as I have
the opportunity to succeed. And that’s the same for people living at the
bottom of the pyramid on $2 a day as it is for me, except it’s harder
for people, usually, on $2 a day or under. You look at it from that
standpoint, and [microfinance] is financial inclusion—making sure the
unbanked get banked and have access the same way I have access to
financial services.
I think that’s the beauty of microfinance and this movement. It’s based
on the essence of fairness and equality. That’s what we’re trying to do here,
is build an inclusive system for everybody to benefit from, I would say,
capitalism or other things as such. That’s what microfinance is to me.
However, right now, as you said, it has been at a tipping point. Where
microfinance has built up, there’s been all this fairy dust, and we’ve made
all these promises to alleviate poverty. We’ve seen book statements say, “Fifty
percent of people who receive loans get out of poverty.” And we’re sitting
here like—microfinance alone isn’t the solution. It comes with the
infrastructure. It’s not only going to be based on a microcredit loan, per se.
You need savings. You need health insurance. You need clinics. You need
doctors. You need schools. Microfinance can spur [all of this] because it’s
putting money into the system. However, it can’t be done alone. I think
managing expectations was where we faulted.
KWHS: Describe your typical week. Are you able to successfully juggle
school with all the demands of PoverUp?
Javice: That’s a tough question. I started in high school, and I went to a

French school. So with the Baccalaureate—the French Baccalaureate—I was
in school from 8:00 until probably 5:00 or 6:00 some days. So my school
was great and flexible and allowed me to go for meetings. But it was very
difficult. However, my grades managed not to drop.
It’s the two things: you need the education to be able to succeed with
your business, but at the same time, you need to work on your business. At
Penn, I think I found a healthy balance where I’ve been able to take five
classes—from classes in the law school to an MBA class last semester—and

finish all the Wharton core [classes], hopefully soon—and then being able
to do social impact consulting as well. I’m very involved in Hillel [a Jewish
campus organization]. So it’s [learning to manage] a lot of different outlets.
KWHS: Describe a couple of the meetings you might have for PoverUp.
What is some of the activity side of actually building this organization?
Javice: So the activity side of building this organization—I would say, one,
it came through fieldwork. I had the opportunity to intern with PlaNet
Finance [a non-governmental organization that aims to alleviate poverty
around the world through the development of microfinance] in Buenos
Aires and do a lot of fieldwork and see what it was like living on $2 a day
and what was needed. I think that’s really important.
As far as the typical meetings I would [attend] to build this—wow. This
goes from meetings with CEOs of advertising agencies, to PR, to going to
meet all these different microfinance institution partners, to flying and
speaking at differences conferences—like the University of Chicago Booth’s
Microfinance Conference and Microfinance USA. It’s being able to interact
with the industry and see all the new research that’s coming out and being
able to run around and meet all these students who are interested. That’s
my favorite part—the student aspect and the industry professionals who
are on the ground are what I love to do and interact with.
KWHS: What is the biggest mistake you’ve made in developing PoverUp,

and what have you learned from it?
Javice: The biggest mistake was technology outsourcing. I think that is a

very intricate detail. Yes, we did have some help from people at Oracle, and
they found a team in India. However, technology—just assume it always
takes longer than what you initially thought it would. So always budget in
a few more months, and then I think you’ll be fine. From that standpoint,
being able to manage that and having more manpower than you think you
need in case something happens is where you really need to be careful.
As far as other things I would say I’ve learned from PoverUp that
weren’t necessarily mistakes—it’s very particular working with students, as
you know, because [of our] schedules. We have finals. We have midterms.
We have our other activities and extracurriculars. And either in high school
or in college, it’s the same thing. It’s the opportunity cost of time—how
much we’re willing to put in it and how much we aren’t. And it’s being able
to juggle that, as you mentioned previously, when I discussed my weekly
schedule. Not a lot of sleep.
KWHS: Why are today’s young people such a powerful tool in global
change? You talked about loving your work with the students. Can you make
a difference? Can young people make a difference, truly?
Javice: Of course. I mean, we’re doing it right now. So why can’t you? [is
really the question to ask]. People these days value students; we’re starting
to become assets and value-added. You go to all these companies [we work
with through PoverUp] and they’re like, “Of course we’ll take consultants.
We’ll take interns.” It’s really just a question of pushing for it. Especially
when you are dealing with not only domestic issues, but abroad, a small
amount of money goes a really long way. It’s about giving the opportunity
to other people, and it ends up benefiting you as well. So it never hurts. And
really, starting with $5, you could have [a meaningful] impact. I think that’s
the most powerful part. n
Published: July 20, 2011, in Knowledge@Wharton High School
Serial Tech Entrepreneur Sachin
Rekhi: Relationships Build Careers
A few years back when Sachin Rekhi was working for Microsoft, one of
his management mentors taught him the value of walking the halls.
“She used to tell me that I had these great ideas, but that at a company like
Microsoft the ideas are worthless unless you can socialize them with your
team and convince them of their value,” he says. “She helped me realize how
to spend time building relationships through small and simple tactics.” So
every morning, Rekhi would walk the halls to say hello to two or three
people – a way, he adds, “to keep those relationships warm.”
“Research shows that in terms of business relationships, the weak ties
are the most important.”
As a young technology professional, Rekhi, 28, learned that strong
business relationships were as critical to the success of his career as the skills
he had developed. With that idea in mind, he and his wife, Ada Chen,
founded Connected in 2010, a contact management service to help people
20
manage their relationship networks. They sold Connected to LinkedIn, an

online network of professionals, in October 2011, and today Rekhi is the
principal product manager at LinkedIn running the Connected team, which
also includes Chen as the head of user growth.
Before founding Connected, Rekhi fostered many business relation-
ships. He was the co-founder of Anywhere.FM, a cloud music service that
he started after leaving Microsoft and sold to imeem, a music and video
sharing site, in 2007. After working with imeem for a few years, he was asked
to join Trinity Ventures, a high-profile venture capital firm in Silicon Valley,
as the entrepreneur-in-residence, where he was given resources, time and
help to figure out his next start-up idea.
Rekhi, a 2005 University of Pennsylvania graduate who studied both
computer science and finance, spoke with Knowledge@Wharton High
School about maximizing the potential of business relationships.
Knowledge@Wharton High School: Why are relationships so important

in business?
Rekhi: In the business world, so much that happens is because of the teams
that you are working with and the relationships you are developing.
Individuals don’t accomplish much in business; it is usually through the
work of a team. In entrepreneurship [as in] any company, if a team gels well
together and complements each other in terms of skills, it becomes an
accelerator of the individual people within that relationship. The business
relationships you have and maintain will help you get your next job, get key
customers and hire the people you need to be successful in your company.
All of these activities are more about the people you know and the
relationships you’re able to maintain than anything else.
One of the key nuances about this is that often people are very focused
on their strong ties—their friends, their colleagues, their family. Research
shows that in terms of business relationships, the weak ties are the most
Serial Tech Entrepreneur Sachin Rekhi: 22
Relationships Build Careers
important. These are the people who have been a part of your life at some
point, but that you are not proactively talking to every week or every month.
Maybe it’s somebody you worked with at your previous company whom
you are no longer working with. Keeping that weak tie warm is really helpful
to your business success.
KWHS: What is relationship management?
Rekhi: Relationship management is all about the tactics and best practices
you employ to proactively manage your relationships in your life. You can
do it in a personal setting or a professional setting, but most people are
doing it in both. The key thing about relationship management is the
management piece. A lot of people use Facebook and LinkedIn to stay up
with what is happening with their friends, but that’s not the same as
proactively managing those relationships.
KWHS: How does social networking help us connect with more people, and
how does it hurt that goal?
Rekhi: Social networking is by far the most exciting thing in terms of

helping professionals manage the vast number of relationships they need.
By having tools like Facebook, Twitter and LinkedIn, you can now stay up
to date on what is happening in people’s lives much faster and much better
than before. It’s amazing that I can go to LinkedIn and see that one of my
college friends has switched jobs, or I’ll go to Facebook to see when one of
my friends is in my city. Having that kind of information is amazing because
you don’t have to call your friends up; you can get all that information
online.
At the same time, that also creates a lot of chaos. There’s just too much
information to keep up with nowadays. We all have thousands of friends
on Facebook and LinkedIn, and it becomes difficult to keep up with
everything that is going on. We need a set of tools to help us prioritize the
time and effort that we spend on these to proactively manage our
relationships. Right now, when you go to Facebook, you read your feed, but
that doesn’t help you focus on the people who are most important to you.
You are losing touch with the people who aren’t posting as frequently. Part
of our goal with Connected was to build a set of tools that helps you more
proactively manage your relationships on these services; to figure out who
is most important to you out of all the friends you are engaging with, and
spend your time focusing on those relationships. For example, here is a set
of people I want to make sure I talk to every quarter or at least once a year,
and then telling you when there has been a gap of a year since you have had
any communication with them. It helps you get back in touch with people
whom you have lost touch with.
KWHS: How have relationships helped advance your career?
Rekhi: After I finished at imeem, I spent some time with a variety of venture
capitalists to talk about opportunities I wanted to pursue. I became very
close to Gus Tai at Trinity Ventures on both a personal and professional
level. I would talk to him about my ideas, and he would give me feedback.
He is the one who offered me the entrepreneur-in-residence opportunity
at Trinity Ventures. That close relationship I had developed six months prior
with Gus is what made it possible for me to have that role at Trinity and to
launch Connected. Now fast forward to 2011, when LinkedIn purchased
Connected. This happened because of a relationship that Ada had through
her former employer, Mochi Media [in San Francisco]. The vice president
of business development at Mochi Media knew some folks at LinkedIn and
he’s the one who gave a positive intro to Ada and me to reach out to
LinkedIn. Ada had left Mochi Media to start Connected with me, but she
did it in such a way that everyone had a very positive reaction to her leaving.
She maintained great relationships with everyone there.
KWHS: So there is something to be said for keeping past relationships

strong and positive.
Serial Tech Entrepreneur Sachin Rekhi: 24
Relationships Build Careers
Rekhi: Definitely. When you look at some of the most successful teams
inside a company, they are usually composed of groups of people who have
worked together in previous companies. Even here at LinkedIn, our CEO is
from Yahoo and has brought a lot of his senior executives from Yahoo to
join us. He knows he works well with those guys. I have this practice called
a draft pick. In the sporting analogy, you always have your draft picks of the
people you want to put on your team. Anytime I have a job or a role, I always
think about the people who are my draft picks. If I were to start a company,
who are the people on the team I’m currently working with that I would
love to have work with me again? I actually tag these people as draft picks
within Connected, and these are the people I know I need to stay in touch
with throughout my career. I have everyone from people I was study buddies
with in college to people I worked with at Microsoft, imeem and
Everywhere.FM. I focus my relationship management efforts on them to
make sure we stay in touch.
KWHS: What are a few ways that people keep their relationships warm?
Rekhi: Spend five minutes every morning reaching out to one person in
your network who you don’t normally interact with on a daily basis. Post
on their Facebook wall, say happy birthday, congratulate them on recent
events in their life, or just say hi. A simple gesture goes a long way to keep a
relationship warm.
KWHS: Were you entrepreneurial in high school?
Rekhi: In middle school and at Pittsford Sutherland High School near

Rochester, N.Y., I started my first software company called Gumball
Software. I made this little product called Vocabulary Master. You had all
these spelling tests and you had to know the definitions of words. I made
this software program that gave you the definition of a word and asked you
what the word was. I actually made it available to a bunch of my friends. I
recruited some of my classmates to help me sell it for $5 to other students.
I was less focused [back then] on building a business, but instead focused
on building products that were useful for my classmates.
KWHS: What advice do you have for high school students about networking
and forging valuable relationships?
Rekhi: The big thing is to not let the current relationships you are focused
on make you forget the past relationships that are important to you. When
you first go to college, it’s really easy to focus on all the exciting new
relationships you are making with your new college friends. You can forget
about the great high school relationships you had. Every time you move
into a new phase of life, it’s really important to reflect and find ways to stay
connected to the people who have been important to you, both personally
and professionally. You never know when these relationships will be useful
to you in the business world. n
Published: March 1, 2012, in Knowledge@Wharton High School
Chipotle’s Steve Ells:
How a Classically Trained Chef
Reinvented Fast Food
Kendall Whitehouse
I t’s a classic variation of the American success story: An aspiring entre-

preneur starts a hole-in-the-wall restaurant serving food that’s quick and
unpretentious. Pretty soon, he starts a second restaurant, and then a third.
Investors flock to the company, attracted to the owner’s relentlessly
perfectionist style. Before long, identical versions of that hole-in-the-wall
have popped up in food courts and strip malls all across the country. And
it’s only a matter of time before this simple fast-food joint decides to take
on the world.
On one level, that story describes the career of Steve Ells, who in 1993
founded a burrito restaurant in Denver that he called Chipotle Mexican
26
Grill. Today, that restaurant is a publicly traded company with $1.3 billion
in revenues from some 900 restaurants across North America. On
November 14, 2009, Ells formally announced plans for the first European
Chipotle, on London’s Charing Cross Road, set to open in the following
April. In January 2010, Chipotle announced that it was also scouting
potential locations in France and Germany.
But, as he made clear in a November 2009 Wharton Leadership Lecture,
Ells is not your average chain-restaurant tycoon, a Colonel Sanders in trendy
eyewear. And the chain he founded is not your average fast-food behemoth.
As such, it provides a case study in whether a firm can thrive even as it
spends extra money to honor a set of non-economic values. Ells believes
the answer is yes.
“Chipotle now buys more naturally-raised meat—antibiotic-free and
no growth hormones, and fed an all-vegetarian diet—than any other
restaurant company in the world,” he said. “I’m very proud of that, and it’s
more sustainable than the mass-produced commodity way.” The chain has
also begun buying organic beans and trying to source vegetables locally
in-season. “All of a sudden I find myself with this team of 25,000 Chipotle
employees who are excited about feeding people really good, sustainably
raised food.”
According to Ells, “We have an opportunity to change the way people
think about fast food, which is what most people in this country eat.” Much
of it, he said, is based on the Ray Kroc model and the standard set by
McDonald’s. “Now we have a business model that’s based on spending more
for sustainably raised foods, and also making a very handsome profit and
providing real growth opportunities.”
A graduate of the famous Culinary Institute of America, Ells never
meant to re-invent fast food. Quite the contrary: Having trained in classical
French cooking and apprenticed at nationally celebrated gastronomic
landmarks like San Francisco’s celebrated Stars restaurant, his goal was to
start his own white-tablecloth, haute-cuisine palace. But restaurant start-
ups are costly and risky. So he decided to move home to Denver and open
a local version of the cheap, tasty taquerias that he had loved in California.
Chipotle’s Steve Ells: How a Classically Trained 28
Chef Reinvented Fast Food
The plan was to use Chipotle as a cash cow to fund the “real” restaurant he
dreamed about.
That didn’t happen. Opened in an 800-square-foot former ice cream
shop, Chipotle was an instant hit, making $30,000 a month. A rave
newspaper review followed. The reviewer “said things like, ‘Everything has
depth and character, nuance, layers and layers of flavor,’ describing it like it
was some fine restaurant,” even though the dish in question was an
oversized burrito that came wrapped in tinfoil, Ells noted. “After that, there
was not only a line, but a line out the door. We ran out of food.”
Precision Cooking
Using cash flow and a loan from his father, Ells opened a second Chipotle,
which “blew away the first.” Despite his good fortune, Ells said, he actually
felt guilty: He wanted to be a legendary chef, not a hustling fast-food
entrepreneur. “So it was like, ‘Okay, I’m going to start just one more, and
then I’ll start a real restaurant.’” But the chain’s growth kept putting that
off. Eventually Ells chalked up Chipotle’s success to the fact that, unwittingly,
he had been treating it like a real restaurant all along.
“Every single customer who came through that door was precious,” he
stated. “I had to give them a very special experience. I had a small crew. I
taught them how to cook. I taught them how to grill the chicken just right
and how to make beans—you have to toast the cumin seeds until they just
start smoking a little bit, and then grind them in the mortar and pestle—
and how to chop garlic so it doesn’t oxidize, so you get a nice, fresh garlicky
flavor….It was very precise. We’re cooking burritos and tacos here, but I
was applying the classical French chef mentality that I had learned in
cooking school. I would throw things and yell, and I had a temper. It was
really quite a scene.”
Ells, whose chain was on track to add roughly 120 new restaurants in
2009, says he is “opening three real restaurants a week, sometimes four.” The
Chipotles that have spread out from Denver still look a lot like the first store,
right down to the simple corrugated metal surfaces that Ells installed back
when he was doing his own manual labor. It’s been a lot trickier, though, to
maintain his fastidious French chef-style control over ingredients and

techniques.
Much of his disdain for “mass-commodity” ingredients is a question of
personal values. Once he became a big enough buyer of pork, he asked to
see the facility the meat came from. “It really is terrifying,” he said. “There’s
so much exploitation that I witnessed there, not only from the animal-
protection point of view.” He was also disturbed by the environmental
consequences of the waste run-off from the facility—and the public-health
implications of having a pork supply kept on low-dose antibiotics to ward
off diseases that could spread in industrial confinement.
“I knew at that moment I did not want my success to be based on this
kind of exploitation,” he said. “So we started buying all naturally-raised
meat.” But it wasn’t just a question of being humane. His initial curiosity
about the meat supply was actually prompted by the fact that he was
unimpressed with the quality. By switching sources, he said, he wound up
with a product that, to customers, just tasted better.
Ells’ status as the anti-Ray Kroc is not without its ironies. As Chipotle
began to take off and Ells began looking for sources of capital beyond family
and cash flow, he wound up doing business with a certain global hamburger
chain that was looking to invest in new business: McDonald’s. Following an
initial investment in 1998, the company held a majority stake as of 2001.
By the time McDonald’s divested, in 2006, Chipotle had 540 stores—up
from 18 when they first linked arms.
Lords of the Rings

“Culturally, Chipotle and McDonald’s are just worlds apart,” Ells noted,
joking that his casually-dressed office staff referred to visiting McDonald’s
bigwigs as “the rings” because of the jewelry on the men’s fingers. But he
described the relationship as productive. “They really liked what I was
doing,” he said, recounting how he took executives into his kitchens and
commissaries to show them cooking procedures that must have looked
extraordinarily cumbersome to a firm accustomed to taking an industrial
approach to flavor. One of them, Ells recalled, said the young Chipotle
founder reminded him of Kroc.
Chipotle’s Steve Ells: How a Classically Trained 30
Chef Reinvented Fast Food
The firms decided to part ways in 2006, Ells said, because McDonald’s
was eager to focus on its core business. And Ells was happy he no longer
had to navigate the contrasting corporate cultures. “We just didn’t see eye
to eye,” he said. Chipotle went public in an IPO that saw its share price
double in one day—the second-best restaurant IPO of all time. McDonald’s,
Ells added, ultimately made $1.2 billion after putting some $360 million
into the chain.
Among the major differences with the golden arches: McDonald’s
wanted Chipotle to follow its franchise model. Ells—ever the detail-obsessed
chef—resisted. “We wanted to own the economic model. You franchise if
you want money and people. We had plenty of money for our growth rate,
and we had great people.” Ultimately, he decided, the firm was going to grow
the way he wanted.
As someone with no particular business background, Ells has sur-
rounded himself with seasoned pros, although he prefers not to hire top
executives with a chain-restaurant background for fear that too much
conventional wisdom will seep into the corporation. Four years ago, for
example, Ells brought in as co-CEO an old friend named Montgomery F.
Moran, whom he describes as an incredible leader of people. “He’s a trial
lawyer. And he said, ‘Steve, I don’t know anything about the restaurant
business. I can’t do this.’ And I’m like, ‘Perfect….I don’t want another
seasoned fast-food executive.’ In fact, I don’t want any of them. I want them
to think differently about things. This was one of my big mistakes during
the McDonald’s years: I let some of that [attitude] come into the
organization….We’re very proud of doing things on our own terms.”
One of the favorite innovations with Moran, Ells said, is something
called the “restaurateur” program, under which Chipotle managers are
designated restaurateurs, a status that comes with significant possible
financial benefits. To be a restaurateur, a manager has to have a perfect
store—including a top-notch staff. “Every single person on the staff has to
be somehow inspired and have characteristics that you can’t teach:
infectious enthusiasm, honesty, clean, presentable, good hygiene, fun to talk
to, great eye contact, the kind of stuff you look for in a friend,” he said.
The result, he added, was that turnover went up as managers looked to

rid themselves of subpar staffers who might keep them from becoming a
restaurateur. In addition, restaurateurs get a $10,000 bonus whenever one
of their staff becomes a store manager. “We want them to assemble a team
of high performers,” he said. “The fast food business is plagued with people
who are generally low performers….No fast-food chain fires staff. They’re
like: ‘Please! Come work!’” Chipotle, with a reputation for better pay than
many chains, according to Ells, is also in a better position to replace entry-
level staff who have been pushed out. “Chipotle has been built on
word-of-mouth primarily, and I think we have developed a good bond with
a lot of our customers.” He said that sort of reputation could be extended
through social media and a style that reflected Chipotle’s unpretentious stores.
The son of a pharmaceutical executive, Ells grew up in Colorado and
studied art history at the University of Colorado before switching gears and
going to culinary school. He still lives in Denver, where Chipotle is
headquartered. And, he says, he still loves a good burrito.
The Chipotle mode—with its better ingredients, better staffers and
slightly higher prices—is the wave of the future, Ells states, mostly because
it matches the health, taste and philosophical priorities of the modern
market. “We had a period of extraordinary, double digit same-store growth.
I think it’s a testament to what people want to eat. I’m hoping that more
companies use Chipotle’s model: Good food and not having preservatives
or artificial [ingredients]….I hope it displaces the stuff that’s based on
exploitation, not only of the land and animals, but of people’s taste buds
and health.” n
Published: January 20, 2010, in Knowledge@Wharton
The Salwen Family: Doing Good,
with the Power of Half
Allison Shirreffs
T he Salwen family decided that charity begins at home in a big way. They
sold their home—a mansion in Atlanta—moved into a house worth
half the value and donated the rest of the sales price to The Hunger Project
and its work to end poverty in Ghana. Then they captured that simple but
astonishing saga in The Power of Half: One Family’s Decision to Stop Taking
and Start Giving Back, a book that is challenging a growing number of
readers to find their own ways to share what they have with others and at
the same time draw closer as a family. Stewart Friedman, a Wharton
management professor, founder of the Total Leadership community, and
director of the school’s Work/Life Integration Project, talked with Kevin
Salwen and his daughter, Hannah, a high school junior, in a video interview
about about their story of downsizing with a difference.
32
Stewart Friedman: You were the catalyst for your family’s decision,
Hannah, when you were just 14. How did this come about?
Hannah Salwen: Well, one day I was riding in the car with my dad and we
came to a stoplight. I looked to my left and saw a man holding up a sign
that said, “Homeless. Please help.” I looked to my right and I saw a man in
a Mercedes coupe. I kind of toggled back and forth between the haves and
the have-nots of the situation and I said to my dad, “You know, dad, if
that man in the Mercedes didn’t have such a nice car then the man over
here—the homeless man—could have a meal.” My dad thought about it
for a second and said, “Yeah, but, you know, if we didn’t have such a nice
car, then that man could have a meal.” So that night when we went home
and we talked to my mom and my brother, Joe, about it, my mom kind of
in a fit of frustration said, “Well, what do you want to do? You want to sell
the house?” And I said, “Yeah. That is what I want to do.” So that is what
we did.
Friedman: Wow. Now that must have been a very difficult decision for you
as a family to make. It really did transform your family in terms of your
having to identify what matters most to you and where you are going to
invest your resources. Tell us about the process of decision-making that led
you to go through with this impulsive idea.
Kevin Salwen: We spend a lot of time in all of our lives thinking about
how to invest money to make more money. But our family had never spent
a lot of time thinking about how to invest money in order to make change
in the world. So that was a process that my wife, Joan, essentially invented
as we went forward. We would get together basically every Sunday over
bagels and coffee and as a foursome—the two kids and the two adults—we
would do research. We would go through discussions about a series of issues
in the world—ranging from sexism to lack of education to lack of water to
The Salwen Family: Doing Good, 34
poverty—to start to understand our values first and figure out how we
wanted to invest our money.
After nearly a year of discussion and research, we then voted—one
person, one vote. And we decided we wanted to work in Africa with an
organization that was very entrepreneurial and very grass roots. There were
a whole series of criteria that our year of research took us to and The Hunger
Project was the organization we decided to work with.
Friedman: One person, one vote is one of the more striking aspects of your
story—your decision ultimately as parents to create a kind of collective
decision-making where each of the four of you had an equal voice.
Kevin: That was crazy, wasn’t it? There is an irrationality to selling your
house and giving away half of it. There is possibly something even more
irrational about saying, “Okay, I’m going to let the hormonal teenagers have
exactly the same say as the adults.” But, you know, my wife really insisted
on this and it was fascinating because it’s probably the most important thing
that we did. What she said was, “Look, who is selling their house? All four
of us. Granted we bought the house, but the kids are giving up their rooms.
They are giving up their backyard. They are moving just as we are.” To not
make this a family project in which each family member has a say would be
missing that point, so we completely flattened the hierarchy. One person,
one vote. It was possibly the most empowering thing that ever happened
for these kids.
Friedman: I’m sure that there might be some parents out there who are
thinking that equal votes for children doesn’t quite square with our values
and how we operate. I’m sure you must have met with some ambivalence
in yourselves about moving to that model.
Kevin: I was nervous about it. When Joan first brought it up I actually didn’t
love the idea, in part because I worried about how we would wall it off, not
so much in this project but in other respects. How do I let my kids have a
say over where we invest $800,000, which is what we ended up doing, and
then turn around and say, “No, you can’t use the car.” Or “No, you have to
do your homework before you go out with your friends.” I wondered where
the boundary would be.
Friedman: So did it become harder to draw those limits?
Kevin: The amazing thing is that as we empowered the kids to make

important decisions, they stepped up in other areas of their lives. And we
essentially went from dial-up to broadband in the lines of communication.
Now if Hannah is going to do something, or does do something, we talk
about it. And I can trust her more to make better decisions about those
things, like when she is going to drive the car. So I don’t even have to tell
her most of the time. But when I do, she does respect that because she
understands where I’m coming from because she knows me better and she
knows Joan better.
Friedman: So you go through this process of making a decision ultimately

to work with The Hunger Project and then travel to Ghana. Tell us what
you encountered there and what you learned.
Hannah: When you go over to Ghana with The Hunger Project, you see
that it does no hands-on work. They really believe in the Africans. They
really believe that the people in these communities are the change agents
of their own future. So when we went there, we did no hands-on work. I
was expecting to build a well or maybe paint a church or build a school. It
was shocking to me that what I was supposed to do was just to connect with
the people there and to say, “I believe in you and this work that you are doing
is going to change your life.” That’s really empowering for them, knowing
that we stand behind them and that we are there for them no matter what.
We did go to the opening of a corn mill. My favorite part of the whole
trip was seeing how excited these people were over this corn mill—because
it meant that their kids, mainly girls, didn’t have to walk six miles round-
trip to get their corn milled anymore, but could instead go to school and
get an education. When I was leaving, my dad told me that the mill cost the
same as Joe’s braces. At that moment, I knew that we were doing the right
thing with our money and that we were really making a difference in these
communities.
Kevin: Actually, if you think about it, we did the same thing at home that
we were asked to do in Africa, which is to empower people to build their
own futures. What is fascinating is the old saying that if you give a man a
fish he’ll eat for a day, but if you teach a man to fish he’ll eat for a lifetime.
Well, The Hunger Project’s perspective is that the man already knows how
to fish. The man just doesn’t have the resources to be able to fish. The man
could probably teach you how to fish. And, by the way, if you really want
success, the man almost always has to be a woman. The Hunger Project’s
focus is very much on women’s empowerment.
Friedman: Why is that?
Kevin: Because if you give a man $10 or a man earns $10, the first thing he
will do is smoke some cigarettes, drink a few Coca-Colas, maybe go out for
a beer with his friends, and then come back with a few bucks. What the
woman will do is make sure the school fees are paid first, primarily for her
daughter because the son is usually already taken care of, and then make
sure the household is taken care of, and then if there is something left over
we’ll have a conversation.
Friedman: This is truly a remarkable example of giving and of sacrifice,

but I know that you have said extremely eloquently in the book that the
return to you personally and to your family was much greater than the cost.
Could you say a bit more about that?
Kevin: To me, it is amazing how we set out to do a little bit of good in

the world and that what it has done for our family has been completely
transformative. At a time when our teenagers are supposed to be going in

every direction, our family has never been closer. There is a trust among us
and a connectedness that we never had before.
Hannah: People always ask me, “Do you miss having the cool house?” Of
course, I do.
Friedman: Including the elevator to your bedroom?
Hannah: Exactly. It was so cool when people would come over and say,
“Come on. Let’s go ride the elevator. It’s my birthday. Please. Please.” But
when I think about it, giving up the house is helping 40,000 villagers in
Ghana and has helped our family grow closer and have trust in one another
and I would make that trade any day.
Kevin: But it’s really important to say that we don’t expect anybody else to
sell their house.
Hannah: Especially in this tough economy. We understand that people

don’t have the resources to do that all the time. But we do think that
everyone has more than enough of something in their lives that they can
afford to give away half—and that can be time. Maybe if you watch six hours
of TV a week, maybe you cut that down to three hours and then you spend
three hours at a children’s shelter. Or maybe you decide to take half of your
vacation that you would normally take and use that unspent time and
money to donate to the Ronald McDonald house or visit kids in a cancer
clinic. It really is all about finding that one thing in your life—whether it’s
time, talent or treasure—that you can afford to give away half of.
Kevin: The real key to it is if you can get together with your family or your
dorm or your sorority or fraternity and do it collectively, then you get that
power that comes from the interconnectedness of your intentional actions.
That’s where the personal gain comes in.
Friedman: And you didn’t know that it was coming. That was sort of an
unintended byproduct of this amazing impulse that you had to try to heal
the broken world.
Kevin: It healed our world. At the beginning, I would have said, “Well,
maybe we can help some people in the developing world build themselves
a better future.” And we ended up doing that, but also building ourselves a
better future.
Friedman: You must encounter a great deal of skepticism from people

saying, “Well, you could afford to do that. What you have downsized to is a
lot more than what most people have to begin with.” How do you respond
to those kinds of criticisms and also the notion of overseas support as
opposed to helping the many, many people here in America who could also
benefit from philanthropic giving?
Hannah: Well, first of all, this doesn’t have to be about money at all. You
don’t need a lot of money to do a half project. It is all about finding anything
in your life that you can afford to give away half of, whether that is the
clothes in your closet or the amount of time you do XYZ or how much
money you have.
We had three main reasons for deciding to work overseas. The first
reason is that we were already doing a lot of work locally. I work at Café
458, which is an Atlanta restaurant for homeless men. My dad is on the
board of Habitat [for Humanity]. My brother loves the Humane Society.
My mom and I work at the food bank. And we felt like we also wanted to
work globally. But at the same time we did increase the amount of work we
were doing locally.
The second reason is we wanted to work in a place where our money
would really be effective. We wanted to watch the project progress, see how
the villagers were benefiting from it and be able to see the improvements
that have been made.
The third reason is there is no safety net in places like Ghana. They don’t
have the luxury of having a soup kitchen down the street or a food pantry
two blocks away. They don’t even have health care for tens of miles. So we
wanted to work in a place where we were going to have the most impact.
Friedman: So how has this changed your outlook? Kevin, you were a Wall
Street Journal editor and a successful writer and entrepreneur. This project
now is probably taking up a good deal of your time and energy and opening
up all kinds of new opportunities for you. How has your professional
identity changed as a result of this transformative experience?
Kevin: What has happened in my professional life is that I have gone from
being just a writer and an entrepreneur to being an evangelist because
we have stumbled across something that has become very powerful for
our family and for the world. So we want to tell that story. We want people
to hear it because we think they can do great things with their own
communities.
Friedman: How about you, Hannah?
Hannah: Well, I want to be a nurse. I was inspired by the nurses in Ghana

and just seeing how much of an impact that they have on their
communities. As for the future, I will always find half projects to do. So
often in our lives we say, “I wish I could do more.” But there really is nothing
to the word “more.” With half, it is so measurable. You can track it. I think
that I will be doing half projects for my whole life.
Friedman: Could you give us an update on what is happening in Ghana

with the early results of your contribution there?
Kevin: The way The Hunger Project works is they run a five-year program
that helps villagers move from poverty to self-reliance. We are in year two
with one set of villages and in year one with the other set. So the programs
will be going on for the next three to four years and the villages are on the
path to self-reliance. We will go back over there very soon and do all the
things that we do when we are there: spend more time in the villages, meet
with the people, support them—and dance very badly. n
Roger Farah’s Strategy for Polo
Ralph Lauren: Weaving “Left Brain”
Discipline with “Right Brain”
Creativity
T he recession and pullback by American consumers have dealt serious

blows to the retailing landscape. Yet while some big names have gone
under, Polo Ralph Lauren has emerged unscathed from the wreckage,
according to company president and chief operating officer Roger Farah,
who spoke on campus during the University of Pennsylvania’s Fashion
Week, an event co-sponsored by Wharton. “Where others were groaning
under the weight of loans and borrowed money and working capital
constraints, we continued to invest during the last crisis. We did not take
our foot off the gas pedal at all,” Farah reported.
To hear Farah tell it, Polo Ralph Lauren’s ambitions have hardly been
dampened by the turbulence of the last two years. The $5 billion company
is now making a major push into the Asia-Pacific region. After buying back
licenses to the company’s products in Japan, China, Hong Kong, Singapore
and the rest of Asia, Farah is preparing to build a powerful operation there
that he expects will generate one third of the company’s revenues in 10
years. “We are on a 10-year path to reinvent ourselves in Asia,” Farah stated.
Succeeding will require the perfect union of what Farah called “left
brain/right brain creativity.” And in many ways that is what Farah’s
partnership with founder Ralph Lauren has been all about. Started 43 years
ago when Ralph Lauren began with a simple line of ties, Polo Ralph Lauren
evolved into a mega-brand that represented an almost Great Gatsby-like
American lifestyle. The company went public in 1997 but immediately
41
stumbled, missing earnings estimates. The stock, which hit the market at
$33, was mired in the teens when Lauren hired Farah in 2000.
Farah brought a heavy dose of left brain business acumen to Polo Ralph
Lauren. Fresh off his job as chairman of Venator Group, the company that
would eventually become Foot Locker, Farah began upgrading the less sexy
but critical aspects of the business, including supply chain management,
technology and distribution. He also began the process of reclaiming
control of the Ralph Lauren brand, buying back licenses for the company’s
products in Europe and other markets. “We had 1,000 employees when I
joined in 2000, and now we have 18,000,” Farah said in an interview with
Knowledge@Wharton before his speech. “We developed the management,
and we have the balance sheet and talent to run all these businesses now.”
Polo Ralph Lauren today is an amazingly complex machine, he noted.
“It is manufacturing, transportation and logistics; currency hedging and
financial controls, as well as all the things that go into what the customer
actually sees.” The company has what Farah described as a pyramid of
brands, with Ralph Lauren’s expensive runway collection at the top. That
collection, which includes handmade products using the best materials, has
limited distribution. Suits, sportswear and other premium items occupy the
middle of the pyramid, and products designed for Kohl’s and JC Penney
are on the lower rung. The company produced 175 million products last
year in 45 countries and shipped them to more than 9,500 different points
of distribution around the world.
On top of that, Polo Ralph Lauren handles advertising and store design
in-house, requiring a large internal advertising team and an army of
architects and design professionals who not only design the stores and
displays for the company’s products, but also scour the world for antiques
and flea market finds to make those settings unique. “I can stand here with
great confidence and tell you nobody who has stood here before me has
ever [handled] that kind of complexity,” Farah told the crowd.
The level of intricacy will only grow as the company begins its offensive
in Asia. Farah is hoping to replicate the success Polo Ralph Lauren has had
in Europe. After buying back some core apparel and accessory licenses there
Roger Farah’s Strategy for Polo Ralph Lauren: 43
Weaving “Left Brain” Discipline with “Right Brain” Creativity
10 years ago, the company pumped hundreds of millions of dollars into its
operations and built a business that had been just a couple hundred million
dollars into a nearly billion dollar operation. On April 15, 2010, the
company opened a 13,000 square-foot flagship in an historic district in
Paris. The progress came despite skepticism that Lauren’s distinctly
American image would play well overseas. Farah noted that the brand now
portrays less of an American-centric ideal and more of an “aspirational
lifestyle” in general. Still, he acknowledged the company is wrestling with
how to penetrate the Asian market, a push he said will require customizing
some products, from color to fit, for clients in that region.
Of all the challenges Asia presents, however, finding the right people to
lead the charge is one of the greatest, Farah stated. To build and manage the
business he envisions there, Farah calculates that Polo Ralph Lauren will
need an army of thousands of people. “We talk about attracting and
developing talent, [but] it is easier to talk about than to do.” That’s one
reason he advised students in attendance to think about what the growth
of Asia means for their own careers. “When I talk to young people at our
company, I say part of our strategy is global, and that may mean over time
an opportunity for you to work internationally. They all say ‘Great, I’d love
to go to London or Paris’. Well yes, but there may be other parts of the world
that have opportunities as well.”
Riding Out the Recession

Polo Ralph Lauren’s ambitions for Asia aside, Farah also acknowledged that
the recession has had an impact on the company. Net revenues for the first
nine months of fiscal 2010 were down 4% to $3.6 billion, due in large part
to the broad drop in consumer spending. Still, the company’s financial
footing is solid with $1.3 billion in cash and short term investments on hand.
In February, the company announced full year revenue would decline by a
low single-digit rate—better than the mid–single digit figure expected earlier.
The turmoil of the last two years is certainly impacting how people
spend their money, Farah added. “I think the real change in this is not the
wealthy customer spending money differently. It is the customer who was
operating on borrowed resources. Whether it was excessive credit card debt

or home equity loans, [spending by] the segment of the population that
was spending today because tomorrow was going to be better … has
changed. I think people will spend more in line with what their real income
and prospects are.” And that, he said, will be a long-term positive factor
for the U.S. economy. “The U.S. savings rate will go up. I think it had gone
negative in 2007 and 2008, which means people were spending more than
they were making. The U.S. was the only developed nation in the world
[in that position].”
Farah suggested that the reach of Polo Ralph Lauren’s brands from high
end couture to mass market retailers, like Kohl’s, positions the company
well for that shift. “We were already balanced in a way that allowed us to
capture changing consumer sentiment,” he noted. “We did not change prices
and we did not change marketing or distribution strategies. We obviously
managed our balance sheet and our expenses carefully. And we probably
shifted some capital to international opportunities. So we are spending
proportionally more internationally and less domestically.”
While Farah considers himself the left brain discipline to founder Ralph
Lauren’s right brain creativity, he also has a true love of the retail world. He
told the crowd that back in 1974 when he left Wharton for a job at Saks
Fifth Avenue (he finished his studies early but returned in 1975 for the
formal graduation ceremony at the urging of his mother), most of his fellow
students were headed to Wall Street or consulting jobs. He figures his
starting salary—$8,600 a year—was one half to one third of what others in
his class were earning. “A lot of people thought I was crazy. I took a path
that was unproven and untested.” But Farah said he knew it was the right
road for him. “One of the things that was clear to me was I wanted a
diversified day….And over the course of my career what has been
particularly satisfying to me was I had a hand in marketing, finance, design
and distribution.”
He insisted that retail was also a great place to test yourself. “Retailing
at the time was one of the few businesses where you could operate a fully
integrated [company] at 23 or 24 years old. You had product, marketing,
Roger Farah’s Strategy for Polo Ralph Lauren: 45
Weaving “Left Brain” Discipline with “Right Brain” Creativity
distribution and a P&L [profit and loss] statement. Here’s your name and
here are your results. I thought that was important.” He started out at Saks
and was president of Rich’s/Goldsmith’s Department Stores by the time he
was in his mid-thirties. After years with Federated Department Stores,
including some of that time running Macy’s, Farah left to head up struggling
retailer F.W. Woolworth. In 1997, Farah shuttered the remaining Woolworth
stores, focused the company on its Footlocker franchise and renamed the
business Venator Group. In 2000, he made the leap to Polo Ralph Lauren.
Having witnessed the end of a once great retailer like Woolworth, Farah
noted that Polo Ralph Lauren’s longevity is a rarity. “I was a student here in
the mid-1970s, and unfortunately most of the brands that were important
then are no longer in business. Part of the reason for that was they did not
properly control the distribution and pricing of their brand.” As for the
greatest challenge facing Polo Ralph Lauren today, “Our risk is really in the
execution,” Farah said. “While we have executed well to this point, we are
looking to do some pretty big things. And as a company I think one of our in-
house challenges is [asking whether] we are taking on too much at once.” n
Published: May 12, 2010, in Knowledge@Wharton
Pfizer’s Amy Schulman on
What Women Need to Succeed
in Their Careers
I t was the early 1990s and Amy Schulman was a young lawyer about to
conduct her first deposition. She arrived an hour and a half early for the
appointment. She readied her Post-It notes and an outline, in case she got
nervous and forgot what to say. But when the deposition started, she sat on
a chair and promptly fell backwards with her skirt over her head and her
legs in the air.
Schulman had to pick herself up and move on, with a partner from her
law firm watching her every move. In her quest to exert greater influence
over witnesses by appearing taller and more imposing, Schulman had
adjusted the chair seat to a higher position. But she rotated it from the base
so much that the seat became completely unscrewed. The lesson she learned
was a simple one: Be yourself. Schulman, now senior vice president and
general counsel of pharmaceutical giant Pfizer, shared this and other career
insights at the 12th Annual Wharton Women in Business Conference held
in Philadelphia.
An attorney and former partner at DLA Piper, she joined Pfizer two
years ago and led the legal team in the drug maker’s $68 billion acquisition
of Wyeth Pharmaceuticals in 2009. The National Law Journal named her to
its list of the “20 Most Influential General Counsels” last year while Forbes
magazine included her as one of “The World’s Most Powerful Women.” Such
a career trajectory might imply that Schulman had it easy, that she always
got things right. By her own admission, however, Schulman has made her
share of mistakes but said she learned to accept and learn from them. Along
46
the way, Schulman rose to a position she never imagined she would attain
when she was starting out.
As a teenager in 1979, Schulman thought she would spend her life
organizing farm workers. But her path to a successful legal career was paved
a little bit at a time by two generations of women in her family. Her grand-
mother’s family did not have enough money to send the women to school,
so Schulman’s grandmother became a legal secretary and ended up
marrying her boss, a federal judge. Schulman’s mother married at 20, had
two kids, divorced and went to law school at 45. Schulman attended Yale
Law School at 28, and about two decades later achieved her current
position at Pfizer.
While rising through the ranks, she has learned valuable lessons about
success. For one, she stressed that men and women don’t need to strive for
perfection to do well because no one gets it right all of the time. The key is
to acknowledge the missteps and use them to grow, without being paralyzed
by the fear of showing flaws. Still, Schulman noted that ambitious women
tend to operate in a “dutiful daughter” mode and do everything the
employer wants, perfectly. Schulman admitted she felt the same way early
on as a young attorney. “I was so scared that if anybody learned I wasn’t
perfect I was immediately going to get thrown out,” she said. “We had to get
it right. ‘Right’ meant you didn’t make a mistake.”
But such a perfectionist mindset can be constricting to one’s career,
Schulman pointed out, because there is no chance to learn and mature from
the experience of getting things wrong. When a mistake is made, Schulman
said, the tendency of many people is to either ignore it and hope no one
else has noticed, or to think the error so glaring that it is all anyone can see.
Instead, she advised the audience to strive for a balance and see the mistakes
for what they are—and remember that everyone makes them. “The ability
to say ‘I’ve made a mistake’ … requires a certain level of maturity that I think
is particularly hard for those of us who grew up succeeding, because we were
really good at making sure everything we did was perfect,” Schulman noted.
According to Schulman, women also tend to internalize the dynamics of a
situation more than men, and moderating this mental attitude is critical as
Pfizer’s Amy Schulman on What Women 48
Need to Succeed in Their Careers
well. She should know: Not only did she rise up the ranks with more male
than female colleagues, Schulman also has three sons at home. This
experience helped her observe that when men lose a ball game, they say the
field was wet or the referee was outrageously unfair. But women say, “‘I let
everybody down. I can’t believe I didn’t handle better the fact that the field
was so slippery,’” she noted. “It’s the difference between internalizing and
externalizing.”
Women and men interpret the same message differently, she said, and
being aware of this difference can be critically important to thriving in the
workplace. Schulman recalled that at one law firm, bosses were less than
effusive with praise because that was their style. So at partnership reviews,
mid-career female lawyers would be told they were doing OK. Women
would react with surprise and disappointment. “[They would say] ‘OK? It’s
just OK? What do you mean just OK?’” Schulman said. But the men saw
the same message more positively and believed that “Everything’s OK! I’m
on top of the world!” Later, when both sides compared reviews, Schulman
noted, the men would brag about their stellar evaluations, while the women
told the group that they had been judged as mediocre. In fact, they had both
received the same message.
Schulman suggested that such misinterpretations of messages by
women contribute to many female attorneys leaving law firms a few years
before they come up for partner. Companies tend to attribute such
departures to a female employee’s desire to have a better balance between
work and family—something a busy law firm cannot always provide. But
Schulman said this pat response to such resignations lets the company off
the hook, when instead they should be examining all the reasons behind
the exodus. She cautioned that firms should not assume that the choice to
leave “takes place absent social context and that women are all happier at
home having balanced lives.”
No Perfect Balance
Besides, striking a perfect balance between work and home is an illusion,
Schulman maintained. At different points in life, one side will have more
pressing needs than the other. “They are never in [balance] because they are
not equally and perfectly weighted at any given moment,” she noted. “If you
try and juggle them that way, then you are the proverbial parent on the
soccer field on her Blackberry, and all you’re doing is cheating both.”
Women should recognize that whatever choices they make at any given
point—be it to spend more time with family or to accept a promotion even
if it means working longer hours—are not necessarily set in stone for all
time, Schulman said. Be open to non-judgmental conversations about
choices between family and career, and realize that these choices may change.
Once a decision is made, be at peace with it. “There is no doubt that I am
not the parent or the mother I would have been had I been home full-time
or even part-time,” Schulman noted. “I’m not sure I would have been a better
parent or mother or wife….I just would have been a different one.”
But choosing to focus more on one’s career than family does not mean
making unnecessary sacrifices for work, Schulman pointed out. When
Schulman had her second baby, she was a mid-level attorney at a big Wall
Street law firm and hoped to make partner. She took her 13 weeks of
maternity leave, but became anxious that she would be forgotten because
of her absence. So when Schulman finally went back to work, she was
determined to impress. That is why she quickly agreed to go to the
Philippines on behalf of her client, Del Monte, which had some cases
involving banana plantations. “I didn’t have to do it, but I didn’t know that.
I thought I had to show that I was completely back in the game,” she said.
“‘Hey, send me to the Philippines. No problem! It doesn’t matter that I’m
still nursing.’”
Schulman said if one of her staff offered to make a similar sacrifice
today, she would tell them to spend time with the new baby. Only if the
situation was absolutely critical would she ask them back to work before
their leave was over. Schulman advised women to strike that balance as well:
Give yourselves permission to take a break.
By the time she had her third child, Schulman already was a partner at
a law firm. She also could afford a nanny, so she took her youngest on the
road with her. But then, something else bothered her: “I actually couldn’t
Pfizer’s Amy Schulman on What Women 50
Need to Succeed in Their Careers
see the next 10 years. It just felt like more of the same,” Schulman noted. “So
when the Pfizer job became open, I decided that this was something that was
going to be more fun than what I was doing. Fun was the operative word.”
Whatever one chooses to do, Schulman said, a career ultimately has to
bring satisfaction and evoke a sense of passion. When Schulman interviews
candidates for a job, one of the main qualities she seeks is enthusiasm.
Lawyers who do not show much passion give the impression that they just
want to beef up their resumes by working at Pfizer. Schulman prefers
applicants who can show genuine interest in the company and the work.
“The willingness to challenge and reinvent yourself and to say that fun
matters is the biggest driver,” Schulman said. “Find those things that excite
you and don’t be afraid to show it.” n
Published: November 10, 2010, in Knowledge@Wharton
Magic Johnson: Dominating
the Business Arena After a
Stellar Basketball Career
E arvin “Magic” Johnson’s basketball career included five national

championships with the Los Angeles Lakers and a gold medal with the
“Dream Team” at the 1992 Olympics. But domination on the court meant
little when Johnson began approaching investors to launch his first business
venture. “Everybody wanted the autograph, but nobody wanted to invest
with me. At the beginning, I got turned down 10 times before someone said
‘yes.’ You know what they said? They said I was a dumb jock,” Johnson noted
during a 2010 presentation at Wharton.
Magic the businessman wasn’t the proposal’s only tough sell. Investors
also doubted that there was any money to be made building high-quality
movie theaters and restaurants in inner city neighborhoods. Over the past
20 years, however, Johnson has proven he has the acumen for more than
hoops. Beverly Hills, Calif.-based Magic Johnson Enterprises now owns or
operates gyms, Starbucks coffee shops, Burger Kings, movie theaters and
other businesses in 85 cities across 21 states. His Canyon-Johnson
Investment Fund has been behind nearly $4 billion in urban revitalization
projects that resulted in the creation of 4.5 million square feet of retail and
commercial space.
Johnson credits his success to having a concrete business plan that he
felt passionately about—and an ability to help partners see the potential in
urban, predominantly African-American and Latino neighborhoods.
“You’ve got to knock on the doors of corporations who have the same
mindset as yours, who have the same heart as yours,” Johnson noted. “If I’m
51
in New York, I can take [investors] to Harlem, I can take them to the Bronx,
I can take them to Los Angeles, and I can take them to the South Side of
Chicago. You’re going to have to find a way to touch their heart and spirit.”
Pound Cake and Sweet Potato Pie

When Johnson was trying to broker a partnership with Starbucks in the
1990s, he told CEO Howard Schultz that “the growth of his business would
be in urban America. He already had [coffee shops] on every street and
across the street from each other.” But a boardroom pitch wasn’t enough to
close the deal. Johnson invited Schultz to spend a Friday night at one of the
6-foot-9 former point guard’s movie theaters. The visit coincided with the
opening night of the Whitney Houston vehicle Waiting to Exhale, and the
theater’s lobby and screening rooms were packed. “Our biggest screen had
500 women inside. All of a sudden every woman thought she knew Whitney
Houston personally and started talking to the screen,” Johnson recalled. “So
Howard grabs me about 20 minutes in and says, ‘Earvin, I never had a
movie-going experience quite like this.’ Guess what happened? That got me
the deal.”
Frappuccinos, lattes and Pike Place Roast are on the menu at a Magic
Johnson-owned Starbucks, but there are subtle differences between the
former basketball star’s coffee shops and the chain’s other locations. Instead
of jazz standards and easy listening, R&B music plays on the stereo. There
is extra space for meetings of community and church groups, and bulletin
boards where local residents can post neighborhood news and events.
“People said there’s no way Latinos and African-Americans will pay $3 for
a cup of coffee. Yes, we will pay $3, but we don’t eat scones,” Johnson stated.
“I had to take scones out of my Starbucks and put in pound cake, Sock It to
Me cake and sweet potato pie—things that resonate with the urban
consumer. You have to know your customer and you have to speak to that
customer every day.”
The strategy to focus on inner city communities was developed by
Johnson when he was still playing basketball. Riding high after winning
back-to-back championships as a stand-out college, and then NBA, player
Magic Johnson: Dominating the Business 53
Arena After a Stellar Basketball Career
in 1979 and 1980, Johnson recalled returning home to neighborhoods of

crumbling storefronts, where residents had to travel long distances to shop
or eat at chains that were plentiful in the suburbs. “Most of the people who
own the businesses in urban America don’t live in urban America, so they
take the money to their communities and spend disposable income in their
communities. We have trouble in our communities because we do not own
the businesses,” Johnson noted. “Now that we put Starbucks there, those
same people that live in the community, they spend money there and Mom
and Pop stores have more traffic. Now they don’t have to close their doors
because people have money to spend at those stores.”
In addition to the Starbucks partnership launched in 1998, Magic
Johnson Enterprises has also entered into agreements to develop T.G.I.
Friday’s restaurants and 24 Hour Fitness locations in targeted markets. The
company in 2008 entered into an alliance with Best Buy to help the
electronics chain expand into urban areas and strengthen its appeal with
multicultural customers. A deal with food service giant Sodexo includes
contracts to feed employees of Toyota, John Deere and Disneyland, meaning
“Mickey Mouse and all of them eat my food,” Johnson said with a chuckle.
Johnson’s investments are run through a partnership with Bobby
Turner, managing partner of Los Angeles-based asset management
company Canyon Capital. Over two years beginning in 1998, the Canyon-
Johnson Investment fund raised an initial $300 million. But Johnson noted
that he achieved a 30% return on the initial fund and that it took a shorter
period to raise $600 million for a subsequent endeavor. “The returns are
everything, and when we returned them 30% on money spent on urban
America, when they did not want to invest it initially, it raised a lot of
eyebrows,” Johnson stated. “We just closed about a year ago on a billion in
cash. It [required] a year because the economy is so bad….There’s a lot of
deal flow out there, but a lot of bad deals.”
Earning His Nickname

Johnson retired from the NBA in 1991 after announcing that he had HIV.
His company’s interests also include a partnership with Abbott Labs to hold
educational events and offer free testing in cities with high HIV infection
rates. The business’s nonprofit arm, the Magic Johnson Foundation,
organizes job fairs, operates community “empowerment” centers and offers
college scholarships to minority high school students. “There have already
been people who have made millions, so you’re not doing anything that
anyone else hasn’t done before,” stated Johnson, whose net worth was
estimated at nearly $500 million in a 2008 Los Angeles Times story. “But can
you save and touch somebody’s life? Can you help a community get back on
its feet? That hasn’t been done before. You can set yourself apart from
everybody else if you can do something like that. That’s why I love what I do.”
As one of 10 children who “grew up poor” in Lansing, Mich., Johnson
often arrived home from late basketball practices to find that his siblings
had eaten all the food his mother had prepared for dinner. A high school
standout, the athlete was given his nickname by a local newspaper columnist
and went on to lead Michigan State to victory in the 1979 NCAA
championship. As point guard for the Lakers, Johnson earned three Most
Valuable Player awards, made nine appearances in the NBA finals, played
in 12 All-Star games and still holds the league record for highest average
assists per game. Johnson is the only basketball player to win championships
at the high school, college, professional and Olympic levels. Those successes
come with a responsibility to give back, Johnson said.
“Going down the street growing up, I knew if I turned left that trouble
was there. Every time I would come to that street, everybody would say,
‘You’ve got to go that way, young man. You’ve got to go right.’ So I kept going
right,” Johnson noted. “Just think of all the ballplayers and entertainers of
color—somebody told them to go right, too. So why don’t you come
back?...You’ve got to go back and you’ve got to help out. If you can touch
and bring 10 people with you, then they bring 10 and then they bring 10
and now the community changes.” n
Published: April 14, 2010, in Knowledge@Wharton
Entrepreneur Elon Musk:
Why It’s Important to Pinch
Pennies on the Road to Riches
A t 38, Elon Musk has been a co-founder of PayPal, which he and his
partners sold to eBay for $1.5 billion, and rocket builder SpaceX,
which aims to commercialize the launching of payloads into orbit. He is
also an initial investor in electric-car pioneer Tesla Motors, where he designs
cars in addition to guiding the business, and solar energy company
SolarCity, which sells and services solar energy equipment. Musk discusses
luck, innovation and the fundamentals of starting a business. In this podcast
interview, he tells Knowledge@Wharton the story of his entrepreneurial
beginnings and what he learned about the value of pinching pennies.
Knowledge@Wharton: Elon, thank you so much for joining us today.
Elon Musk: You’re welcome.
Knowledge@Wharton: I wonder if you could start with a question about

your entrepreneurial ventures. [To] name just a few of them: PayPal,
SpaceX, Tesla Motors, SolarCity. They cover quite a wide range—so varied.
And I wonder if there is some connecting thread among them or if there is
some process you use to think about what kind of ventures you like to take
up. What do you look for in these entrepreneurial activities?
55
Musk: I guess the common thread would be things that I think will affect
the world in some way—in a positive way. That has really been the basis for
why I have [been] involved with those areas. [It is] not from the standpoint
of ranking … the return on investment or anything like that; or even the
probability of success. But just from the standpoint of, “These are things
that I think are important and so I want to help make them happen.” That’s
how I got into the Internet initially and then electric cars and space and
solar power. But, yes, when I was in college there were three areas that I
thought [were important to] the future of humanity and those were: the
Internet, clean energy and space.
Knowledge@Wharton: Let’s … go back a little bit before you entered

college. I’ve read that your very first venture was at age 12 when you created
something called Blast Star. Was that the game?
Musk: Yes, Blast Star. It was just a computer game.
Knowledge@Wharton: Can you tell us about that experience? Did you

learn anything from the [effort] that has stayed with you through your
[entrepreneurial career]?
Musk: I would downplay that. My mother likes to talk about that, but when
I was growing up in South Africa, computers—personal computers—were
just starting to come out. This was in the late 1970s and early ‘80s. I had
actually one of the first computer game systems. It was pre-Atari, very
primitive. And then [I] upgraded to the much more sophisticated Atari. So
I loved playing computer games when I was a kid. My motivation to do
some software programming was [that] I also wanted to create games. So I
saved up money—some combination of saved money and bugging my
father—[and] I got to buy a computer, initially a Commodore VIC-20,
which had about eight kilobytes of memory along with some books on how
to [write] programs. So I taught myself how to program from those books.
And then I found out that you could make money by selling computer
Entrepreneur Elon Musk: Why It’s Important 57
to Pinch Pennies on the Road to Riches
programs. So I wrote and sold two—not for very much money but it was a
lot of money to a kid at the time … several hundred dollars effectively in
spending power.
Knowledge@Wharton: And were there any lessons you learned that sort
of stayed with you or was it just the thrill of that [first sale]?
Musk: Wow. I haven’t really thought if there are any lessons there. I can’t
think of any. If you make something that people want, they’ll pay you for
it. That’s probably it.
Knowledge@Wharton: That’s a really good lesson.
Musk: Apart from that—I had various odd jobs like delivering papers and
things….I also did a little bit of stock market stuff when I was about 15 or
16. I actually did pretty well just making bets on some stocks in South
Africa. But I just made a few bets that did pretty well. I tripled my initial
tiny stake and then that stopped because I just didn’t like it.
Knowledge@Wharton: Of course, multiplying your money many-fold is

something that happened very successfully with X.com, which became
PayPal. Could you help us understand how did you evaluate that business
opportunity and, again, what were some of the lessons that other entre-
preneurs could learn from your experience?
Musk: I need to think more about what lessons can be drawn from my
experiences. But I would mention that there is a company that I started that
predated PayPal, which was called Zip2. That’s the company that I started
in the summer of ‘95 and then decided to continue … and [so] deferred
graduate studies at Stanford. I thought that was a good sort of hedging bets
strategy. You know, worst-case scenario if the business failed [was] I could
just go to graduate studies. [That would have been] a pretty soft landing if
things didn’t work out. And I thought they probably wouldn’t actually. If
you had asked me, I would say the odds were likely that I would probably
not succeed and, therefore, I would be back. But I thought I may as well
give it a try.
[One] lesson [is], spend very little money. That was a case where I had
very little money, so there really wasn’t any choice. I only had a few thousand
dollars. And then my brother came down and he had several thousand
dollars. We just rented an office for $400 or $500 a month—some really tiny
little office in Palo Alto. [It] was cheaper than an apartment. And then [we]
bought futons that converted into a couch, which was sort of like a meeting
area during the day. We would sleep there at night and shower at the YMCA,
which was just a few blocks away. That was [an] extremely low burn rate.
[It was] way cheaper than a garage. Garages are … expensive. So we were
able to … putter along for several months until we got venture funding. I
think that’s a good lesson….When you are first starting out you really need
to make your burn-rate ridiculously tiny. Don’t spend more than you are
sure you have.
With Zip2, the idea was just to try to do something useful on the
Internet that other companies would find useful and would pay us at least
enough to keep the doors open. So we started off with maps and directions
and Yellow Pages. We branched that into publishing and interfacing with
heterogeneous legacy databases, particularly [those] that were of use to the
newspaper industry. [The] newspaper industry was mostly not online in
‘95 and was trying to get online. And they had these old mainframes that
had all the data and were very difficult to talk to. So what Zip2 essentially
did was this model evolved into helping newspapers get online and create
compelling web sites. So we had customers and investors—The New York
Times, Knight Ridder, Hearst [and] a number of others. And we ended up
being acquired by Compaq in early ‘99 for a little more than $300 million
in cash, which at the time was the largest of all cash transactions for an
Internet company. That was certainly a better outcome than I had ever
expected. But I felt there was still more that could be done with the Internet.
[This led to] X.com [and] evolved into PayPal.
The idea was, “Let’s make a really convenient site that combines all of
people’s financial needs into one seamless, easy-to-use location.” And then
we had a feature which was the ability to send money and securities from
Entrepreneur Elon Musk: Why It’s Important 59
to Pinch Pennies on the Road to Riches
one customer to the next. If you weren’t in the system it would just send an
invitation to join the system. At the time it was … a very [simple] thing and
we found people really responded to that feature. So we adjusted our focus
and started going more and more in the direction of payments and …
focused on creating a great payment system. Coincidentally], many of the
financial elements [developed for the original business plan] turned out to
be quite important in creating that payment system because the efficiency
of our payments increased dramatically if people kept money in the system.
So, by creating inducements to keep money in the system—such as a money
market fund that PayPal had with Barclays Global, and a debit card that
could directly access your PayPal account—[gave customers] reasons … to
keep money in the system and not take it out. And the cost of a transaction
to PayPal of somebody sending from their PayPal balance to another PayPal
customer was essentially zero. Whereas if somebody was sending money to
somebody else and funding it via credit card, it would cost us, inclusive of
fraud … somewhere between 3% and 3.5%. So it is a gigantic difference.
So those financial services elements ended up being quite important.
And eBay [which bought PayPal for $1.5 billion in 2002] really should add
some additional financial elements to that. In particular they should offer
people checking [accounts] so you can write checks off your PayPal account,
and direct deposit. And then why do you need a bank account. I’ve
suggested this many times, but they don’t seem to see the merit of that for
some reason. I don’t understand why.
Knowledge@Wharton: That’s a very good point. n
Published: May 27, 2009, in Knowledge@Wharton

Aramex’s Fadi Ghandour
Unfolds His Roadmap for Budding
Entrepreneurs in the Middle East
F adi Ghandour needs little introduction, if any, in the Middle East. The
founder of global logistics and transportation company Aramex is
arguably the region’s best-known entrepreneur, a mentor and role model
for many young Arabs, an angel investor, and one who is more than happy to
challenge traditional business and social values. Ghandour’s accomplishments
have been hailed by many, including New York Times columnist Thomas
Friedman who wrote in his book, The World Is Flat, that every Arab should
know the Aramex story.
Established in 1982 as an express operator for the Middle East and
South Asia, Aramex became the first Arab-based company to trade its shares
on Nasdaq in 1997. It returned to private ownership in 2002 and then went
public three years later on the Dubai Financial Market as Arab International
Logistics. It now has an alliance network of over 12,000 offices, 33,000
vehicles and 66,000 employees, providing freight forwarding, catalogue
shopping, magazine and newspaper distribution and other services.
Ironically, 2009 was probably the best year ever for Aramex. At a time
when most companies across the world were battling through the economic
downturn, it opened new businesses and reported a 25% increase in net
profit for the year. Ghandour’s no-assets, no-debt policy helped as the
business environment changed rapidly. Ghandour spoke with Arabic
Knowledge@Wharton in Dubai about addressing the region’s weak business
“ecosystem” and what needs to be done to help the next generation of
innovators down the often bumpy road to entrepreneurial success.
60
Arabic Knowledge@Wharton: What are the biggest challenges to

entrepreneurship and innovation in the region? Are they purely economic
or are there cultural, social and political reasons?
Fadi Ghandour: I don’t think there are any cultural, political or social
reasons. They are partly economic and partly developmental, like building
a “softer” loan structure, [having an] an ability to easily register companies
with very low capital, and securing intellectual property rights. On the other
hand, clearly there is a need to have venture capital, angel capital and early-
stage capital. There is a business culture, as you might call it, in the region
that focuses on oil and gas, government contracts, and trading—
representing overseas companies.
The story of entrepreneurship here is one without an ecosystem of capital,
private-sector support and angel investors. There is also no mentoring, which
is really important.
Arabic Knowledge@Wharton: You have been a mentor?
Ghandour: Yes, I do that. You are talking to me because I am an

entrepreneur and I understand what they do. I am an angel investor and I
find that while capital is important, what they need the most is advice. They
need time. It is so much more important if you can tell them how to do
things, what my experience has been—all that is not measured in terms of
money.
Arabic Knowledge@Wharton: Did you get that kind of advice when you
started?
Ghandour: I did and did not. The easiest way of getting a mentor is if your
father understands what you are doing, understands business well and is
willing to mentor you. I was mentored by a father who was an entrepreneur,
Aramex’s Fadi Ghandour Unfolds His Roadmap 62
for Budding Entrepreneurs in the Middle East
but did not have time because he was a traveling man. You have to seek [out
mentors]. Some of the networking events, some of the associations popping
up for angel investors, etc., are a good step and helpful.
You need to make the private sector and businessmen aware of how
important it is for them to give their time. It is like talking to your son or
daughter. They need advice and eventually they will run, but you have to
help them take those first few steps.
Arabic Knowledge@Wharton: How much time are you able to give them?
Ghandour: Just before [this chat], I was emailing a brilliant lady entre-
preneur, telling her that I was traveling but will be in touch to do a
conference call. You have to get back to them because they are young. If you
believe in this, you have to give it time.
Arabic Knowledge@Wharton: Do you see a lot of young people in the

region taking the entrepreneurial route these days?
Ghandour: Yes, I see a lot. The Internet has created all sorts of possibilities
that people of earlier generations did not have. [Young people] see what the
world is doing. They see the low cost of developing businesses online. They
learn from others. There are some businesses that have already been
developed in other places, but need to be customized and “Arabized.” You
will have the copycats and you will have the innovators. That is the nature
of the beast.
Arabic Knowledge@Wharton: You once said the governments in the

region are like mothers and the citizens are like their spoiled children. Do
you see that changing quickly?
Ghandour: (Laughs) Yes, I stick to my position. An overprotective father

is going to ruin the future of his child. He will not let him fail [and] he is
not going to let him try or expose him to the world. It’s a vicious world out
there and you learn only when you fail. A mentor, father or mother can tell
you a lot of stories, but the best way to learn is to fail. You have to stumble.
Arabic Knowledge@Wharton: But failure is not taken too kindly in this

part of the world, is it?
Ghandour: No, it’s not. Maybe it is in the U.S., the mother of all entre-
preneurial countries. It has created that thing about an underdog. It is easy
for people there to fail because that is seen as learning. If you tell people
that it’s fine to fail but to get [back] up and run, you have to create the
ecosystem that helps. Mothers can never take failures, families can’t.
An entrepreneur, who has just started, was telling us about what his
family had to say about the Maktoob-Yahoo deal [in which Yahoo bought
the Arab portal in 2009]. His mother or father said they did not know what
Maktoob does, “but why don’t you try and do something like that?” It
catches on. It slowly becomes legitimate to try, which means that you don’t
work for the government or a big company that gives a secure job, but try
something on your own. That, by definition, means that it might work or
it might not, and possible failure means I am at least trying.
Arabic Knowledge@Wharton: Are people in the region averse to risk

because of the fear of failure?
Ghandour: Entrepreneurship is something that is learned. I am a product

of that process. Entrepreneurship is not something you are born with. You
learn not only by doing, but also by having the skills—making financial
statements, the discovery, logical thinking. This is stuff you have to learn in
schools. That’s where you get exposed to these things. You can throw
somebody in the water and he can only become a good swimmer if he
knows how to breathe. You have to give people the skill sets. You can teach
people the rules of football and they can understand and enjoy it, but they
can only play when they experience it themselves.
Aramex’s Fadi Ghandour Unfolds His Roadmap 64
for Budding Entrepreneurs in the Middle East
Arabic Knowledge@Wharton: How do you find the right idea?
Ghandour: A right idea is a product of exposure, learning and curiosity,

which are essential for any entrepreneur. The status quo has to be
unacceptable and that’s what I keep saying in the organization. I tell people
they need to question things. You can always do better by questioning
anything that is in front of you. You can do something that is totally
different if you have a plan that is acceptable. A new product can change
the face of an industry.
Entrepreneurship is all about questioning because that’s where ideas
come from. You also have to look closely at what is happening in your
industry and learn from it. Any technological advancement in an industry
can have a huge impact. For example, with the arrival of email, a whole
industry around sending letters from one place to another almost vanished.
Arabic Knowledge@Wharton: Do you believe that entrepreneurs have

only one good idea and tend to lose interest in innovation once they have
achieved the first goal?
Ghandour: No, there are many serial entrepreneurs. They exit one thing
and start another. It depends entirely on your skills, exposure and mind. I
started my business 28 years ago, but I do a lot of intra-department
entrepreneurship. But there are some who make their money and go on a
vacation. Human beings make their own choices. You don’t always have to
be an entrepreneur.
Arabic Knowledge@Wharton: What are the better entrepreneurial stories

in the region?
Ghandour: You have Orascom, which is a fantastic story, Maktoob,

Consolidated Contractors Company—one of the biggest [diversified
construction firms] in the world today—and Rubicon, one of the best
animation companies. The region needs more but there are examples and
role models. We need to document and celebrate them, and make people
aware of them. There is nothing to be ashamed of in highlighting entrepren-
eurship stories in the region.
But the more relevant story to our youth is the small entrepreneur. You
don’t need to be worth hundreds of millions of dollars. At $2 million or $3
million, you can create jobs and value that is attainable. I don’t want to scare
people [by saying] entrepreneurship is about creating mega companies. It
is about innovating the value and product you offer. You create wealth for
the people who work for you, and [for] yourself.
Arabic Knowledge@Wharton: Are governments in the region doing

enough to encourage entrepreneurship?
Ghandour: No, they need to do much, much more. They need to start with
education, the regulatory environment and the enabling environment
putting up seed money. The Arab world is facing a huge challenge of
unemployment and the only way you can create jobs is by partnering with
the private sector so that it becomes a public-private partnership. All those
young people graduating from universities need to become job creators.
That means creating companies and changing the tradition of working for
governments.
Arabic Knowledge@Wharton: What are the three things you would tell
a budding entrepreneur?
Ghandour: I would tell them they are in it for the long run, watch out for
your cash and find a mentor. Finally, stop complaining. Don’t worry about
government regulations. Go and do it. I know it is an issue, but it should
not stop anyone. Just do it, as Nike would say. n
Published May 4, 2010, in Arabic Knowledge@Wharton
Shokay’s Carol Chyau: Weaving
Connections Between Herders
and Knitters in China
T he notion of social enterprise gained popularity after Muhammad

Yunus of Bangladesh’s Grameen Bank impressed the world by serving
the rural poor through a sustainable banking business. Although
understanding of the term varies, “social enterprise” is usually defined as a
business that makes a social contribution while still remaining profitable.
“The idea of social business is that investors have invested the money not
for their own benefit, but to achieve a social objective. In the case of [joint
venture] Grameen Danone, the objective is to bring nutrition to mal-
nourished children,” Yunus said in an interview with Knowledge@Wharton
in May 2009.
For Carol Chyau, co-founder and CEO of Shokay, the goal is to improve
the lives of poor herders in remote Western China and women knitters in
rural Shanghai by directly sourcing yak fiber and then selling finished
products to the international market. Chyau and Mario So started Shokay—
which means “yak down” in Tibetan—two and half years ago. She is seeing
her idea become a reality in China.
“Social enterprise is an innovative, profit-making but not profit-
maximizing solution to a social problem,” said Chyau. “I became interested
in the concept of social enterprise during my years at Wharton. I was in
Peru and Chile for one semester doing international development work
when I realized that there is so much more you can do when you apply
business concepts in socially impactful ways. And because I am from
Taiwan, and my partner is from Hong Kong, as much as I was interested in
66
Latin America, I thought we might be able to make a better contribution

and manage faster growth in Asia.”
But it’s not easy to achieve social objectives, especially when the business
is in its start-up phase. “You have got to have a sustainable model even
though profit maximizing is not your target. But social enterprises also have
their own metrics. For us, we look at how many employment opportunities
we could offer to herders and farmers and how much income growth we
could bring to them,” said Chyau.
In the highly competitive textile industry, for-profit companies often
find it difficult to survive. What happens when good intentions enter the
equation? How does Shokay manage to achieve its social objectives, and
what kinds of challenges does it face as a growing business in China? China
Knowledge@Wharton interviewed Chyau about her experience as a social
entrepreneur.
China Knowledge@Wharton: Based on your definition of social

enterprise—“an innovative, profit-making but not profit-maximizing
solution to a social problem”—what is innovative in your business model?
Chyau: No one bought yak fiber before. That’s the most innovative part of
our business. Eighty percent of the world’s yak population is in China. In
theory, it should be Chinese local companies who are the first to bring yak
fiber into the market. But Chinese textile companies are not that forward
thinking and customer focused; they are more traditional and reactive, so
they just react to what their customers demand. But customers in Europe
and the U.S. are not going to know about Yak fiber if textile companies don’t
promote it. Historically, there has not been good information on this
product so the market didn’t exist until we started it.
Some people even use yak [fiber] to [make] fake cashmere, which
traditionally is a luxury fiber. Anywhere in the world, when you say
“cashmere,” you expect it to be expensive. But it’s very hard to sell yak
Shokay’s Carol Chyau: Weaving Connections 68
Between Herders and Knitters in China
because nobody knows what it is. On the other hand, yak itself has some
limitations when compared to cashmere. Its fiber is shorter than cashmere
and it’s not easy to weave. In addition, its natural color is brown while
cashmere is white, so it’s not easy to dye. But we think we can overcome
these challenges, so we created a brand focused around the yak. Shokay is
“yak down” in Tibetan. We are the first yak lifestyle shop in the world. And
we [operate as] an integrator, because we work from raw material all the
way to retail.
China Knowledge@Wharton: How is the business going now? Could you

tell us a little bit about your operation?
Chyau: We started the company two and a half years ago, and our major
customers are in Europe and Japan. We sell to more than 130 stores in the
world, most of them knitting yarn stores. We didn’t sell to the Chinese market
until late 2007, and we only directly manage two stores in China so far. All
the rest of the products are sold to corporations for corporate gifts, other
fashion brands for co-branded projects, wholesale boutiques and distributors.
I have 13 people on my team here in Shanghai and two staff in Xi Ning
[the capital of Qinghai Province, West China], who are local Tibetans
managing fiber sourcing once a year.
China Knowledge@Wharton: What were the challenges you encountered

after starting the business?
Chyau: We ran into some challenges….In the beginning, we only sold

knitting yarn to the U.S., but that market was too small. It did not grow as
fast as we needed it to grow to sustain the company.
On the other hand, you can’t just sell knitting yarn, you have to create
patterns. When customers came into the store, they needed to see the
pattern for the finished products—“Oh, this hat is so lovely and cute,
therefore I need to buy the yarn.” We had to provide some finished products
and add them to our collections.
We were also weaving the fiber into scarves and throws because it didn’t
require as much design work. However, it’s hard to only have scarves and
throws, because they actually belong to two different markets—one is home
furnishing, one is accessories….You can’t enter the market with only one
product and only one fabric….Your clients will expect different things every
year when they buy from you, so we had to quickly expand our product line.
And we did; we started to add in a lot of products to our collection—like
pillows, handwarmers, hats, etc.—and we also entered the children’s market.
China Knowledge@Wharton: I have visited your Shokay store in Taikang

Lu, and it looks like you are now in the fashion business?
Chyau: It wasn’t the original plan, but very quickly, we turned from a textile
company into a fashion company. It’s a trade-off, too. Once you are in
fashion, you need to have at least two seasons—Spring-Summer and Fall-
Winter—although most fashion brands have at least three to four seasons.
For us, it’s hard because most of our products are for the winter season.
Initially, we wanted to make our collection very full, but because we are
new to the market, customers were ordering very little of each product.
Orders essentially became customized. The good thing is that most of our
products are hand knit, so we can still make orders without very high
minimum requirements. But we have gone too far in that direction. It’s very
hard to make only customized items.
It’s much easier to produce in greater quantities to achieve economies
of scale. If everything is customized, it’s very hard to manage production.
Now, we are standardizing our processes.
For example, for one product, we used to offer 24 different colors for
people to choose. Now we encourage our customers only to order from five
featured colors. If they want something customized, we will still do it. But I
think when you offer a lot of choices, most customers actually can’t handle it.
We now have to learn how to be a fashion business—from design,
colors, quality control, inventory management, all of that.
China Knowledge@Wharton: Back to the mission of a social enterprise:

How do you measure your social impact?
Chyau: We are measuring it ourselves—for example, how many employ-

ment opportunities we have provided and how much income growth we
have been able to achieve. We also work with Qinghai Bureau of Animal
Husbandry to organize training courses for herders. For example, we train
them to do combing; if the herders do combing in a particular way, we will
pay them more. And we also train the knitters in Chongming County [in
rural Shanghai] in our specific patterns, quality and standards.
China Knowledge@Wharton: But if I were a for-profit company, wouldn’t

I still do these things?
Chyau: It’s actually higher cost to directly source and organize trainings in
such a remote place. So if I were just a textile company, I may not [be
involved with the] raw material. Instead, I would just buy from man-
ufacturers who source from suppliers or other traders, because they actually
have an existing network for raw material. And it would be so much easier
and cheaper for us. Actually, when we go to the manufacturers, they are
pretty surprised to hear that we source directly from herders. Their usual
response is: “Why? Isn’t that more challenging? I can give you materials….”
There are also a lot of uncertainties in the manufacturing process. If I buy
the raw material, it becomes my inventory, which is quite a burden for any
company, especially a start-up.
If I were purely a fashion brand, I would just design a product, give it
to a factory to make it, and then sell that to the market. And I probably
would not organize my own hand-knitter team, either, because we could
just outsource that. But we want to work with herders and knitters because
it is their income that we want to raise, so we have to start from the very
beginning. These are the subtle differences between our social enterprise
and the traditional business model.
However, this kind of model creates a couple of challenges. In any country

and in any industry, when you work all the way from raw materials to retail
of finished goods, it’s actually pretty challenging. It may not be very efficient.
Usually, vertically integrated companies are large companies who can
achieve economies of scale, but it’s very challenging for a small company
like ours.
China Knowledge@Wharton: Are there any unique challenges when it

comes to doing business in China?
Chyau: One specific thing is that it’s very hard to work with manufacturers
in China. Because China is good at mass production, there is a high minimum
requirement to order from factories. For example, if I want to dye a color with
an Italian mill, I may only need five kilos to start. In China, I need 50 kilos.
Italian mills are used to working on small orders and their mills are smaller.
In China, the mills are large, so the minimum requirement is very large.
The second thing is it’s hard to find good, ethical local partners who
can deliver on international standards. A lot of them don’t know what it
means to deliver on time, or sometimes they lack quality control. You have
to go there yourself and monitor. In the beginning, we visited over 30
factories and tried to find good partners. Now, we have narrowed them
down, but it’s hard because we continuously need to look for more good
manufacturers to be our partners.
And sometimes, even if you find a very good partner, that partner is
usually very busy, so you have to have your back-up partners. And because
we are small, they will put off our orders. We have no bargaining power
because we are a small company—we order small, and we order something
they don’t usually make, so we really have to try to convince our partner
that we are opening a new market with big potential. Even though we are
ordering small now, yak has huge potential.
China Knowledge@Wharton: Do you have to explain to them that you

are a social enterprise?
Chyau: No need, they don’t care. Their mindset is more of, “Will you give
me the order or not?” Or, “Show me the money.” If you tell them you are a
social enterprise, they will even become worried whether you will go bankrupt.
China Knowledge@Wharton: Looking at the future, will you continue
your efforts?
Chyau: Yes, I think our business model is challenging, but it’s not impos-
sible. It should become easier and easier as we go. As we become larger, we
will have more bargaining power with the manufacturers. So we are doing
two things at the moment: We are growing our market as fast as we can,
and we are growing our community [of herders, knitters] as fast as we can.
We will need to find a good balance between supply and demand.
China Knowledge@Wharton: Who are your investors?
Chyau: A lot of our capital came from various competitions. We won a lot
prizes and gained PR exposure, networks and capital through these
competitions. We have met various donors, too. Shokay is a for-profit
[venture], but our shareholder is actually a non-profit organization,
Ventures in Development (ViD). ViD is a non-profit organization that seeks
to incubate and launch social enterprise ventures. We experimented with
setting up this hybrid structure.
Our original vision was not just Shokay; it was the concept of social
enterprise. We are hoping that ViD will eventually become an incubator of
social enterprises and Shokay is just the first one.
Many people are interested in social enterprises, but very few people
have real experience in running a social enterprise in this region. So, by
learning from the success and failure of growing Shokay, we will have
practical experience, rather than theories from books, to become a better
incubator in the future.
We had a vision and a blueprint in the beginning to build a house. In
the past two and a half years, we have been exploring how to build this
house. Lots of the initial designs have been changed, but now we at least
know what kind of house we are going to build and what it should look like.
So now it’s time to begin the foundation work.
China Knowledge@Wharton: What is the most important element in the

foundation work?
Chyau: The most important thing now for us is team building. Originally,
[Shokay] was only the idea of two people, but it takes much more effort,
time and capability than just two people to achieve our goal. This is essential
for any enterprise – to be able to sustain beyond the founders.
My partner, Marie So, is mainly responsible for the export market and
community development. I am running the operation and retail in China.
My team is very motivated and they love the work. We are like a family.
Because they have watched the company grow, everyone has a sense of
involvement and ownership, but it still takes time and effort to reach the
kind of level that we hope.
China Knowledge@Wharton: Are there more women running social enter-

prises than men?
Chyau: Yes. Some people have asked me what’s the difference between male
and female entrepreneurs. According to some survey results, for men, the
driving force to start a business is power and money. Women care more
about meaning.
Social enterprise fits women well because it has meaning and it’s still
good business. More and more well educated women do not prefer
traditional philanthropic activities, such as just donating money. They
would like to get involved by contributing their professional knowledge. n
Published: May 8, 2009, in China Knowledge@Wharton
Joss Whedon’s Plan to
Monetize Internet Content
(Watch Out, Hollywood)
Kendall Whitehouse
T V and movie writer-director Joss Whedon wants to change the way

Hollywood does business. While Whedon works inside the studio
system on major projects, he also hopes to blaze a trail on the Internet for
creating and monetizing independently produced content. In doing so, he
is confronting what he terms the “homogenized, globalized, monopolized
entertainment system.”
One of Whedon’s projects is “Dr. Horrible’s Sing-Along Blog,” an online
musical comedy starring Neil Patrick Harris, Nathan Fillion and Felicia Day,
written by Whedon, his brothers Zack and Jed, and Jed’s fiancée Maurissa
Tancharoen. Conceived during the 100 day Writers Guild of America strike
74
in late 2007 and early 2008, “Dr. Horrible” was, in part, intended as an
experiment to explore options for creative content. The subject of revenues
for online content was a timely one, since a major point of contention that
spurred the strike involved payment to writers for content distributed online.
“Dr. Horrible” was released on the web in three parts in July 2008, and
Whedon’s plan was to remove the free online versions and sell all three
episodes as video downloads through Apple’s iTunes Store. A week after the
series moved to iTunes, it reappeared online on advertising-based sites such
as Hulu, a joint venture of NBC Universal and News Corp. In December
2008, a DVD version became available on Amazon.com. With these various
distribution channels (and the lack of a traditional advertising budget), “Dr.
Horrible” serves as something of a case study for marketing independently
produced content.
Joseph Hill (“Joss”) Whedon is a third-generation television writer. His
grandfather, John Whedon, wrote episodes of such late 1950s and 1960s
staples as “Leave It to Beaver,” “The Donna Read Show” and “The Andy
Griffith Show.” His father, Tom Whedon, wrote installments of “Alice,”
“Benson” and “The Golden Girls.” As Whedon said to Knowledge@Wharton,
“I was raised by a tribe of funny people.”
After graduating from Wesleyan University with a degree in film studies,
Whedon moved to Los Angeles and found early work writing for television
programs such as “Roseanne” and editing scripts for feature films. His
screenplay for Buffy the Vampire Slayer achieved modest success and
Whedon received an Academy Award nomination for his screenplay work
on Toy Story.
Whedon’s science fiction series “Firefly,” produced for Fox television,
debuted in 2002. But he tussled with Fox over aspects of “Firefly”: The
network insisted on a new pilot episode and aired several episodes out of
sequence. The show was cancelled after 11 of its 14 episodes aired, and
Whedon and Fox parted ways. Whedon told Knowledge@Wharton that he
was “heartbroken” by the show’s demise. Driven by his desire to keep the
characters alive—and brisk DVD sales of the original series—Whedon
wrote and directed Serenity for Universal Studios, a feature film based on
Joss Whedon’s Plan to Monetize Internet Content 76
the “Firefly” characters and storyline.

Despite the contentious issues with Fox over the network’s handling of
“Firefly,” Whedon’s next television series, “Dollhouse,” a science-fiction
thriller starring Eliza Dushku, debuts on Fox television on February 13, 2009.
Knowledge@Wharton spoke with the 45-year-old Whedon about the
lessons learned from “Dr. Horrible” and what he believes needs to happen for
the Internet to serve as a platform that can sustain original creative content.
Knowledge@Wharton: To what extent was the original impetus behind

“Dr. Horrible” to serve as an experiment for how web-based content can
generate revenue?
Whedon: It was equal parts that and the love of the silly. The concept
originated as an audio podcast that I would do myself because I was hungry
to write some songs and I liked the idea of the character.
And then the Writer’s Guild went on strike. I tried to make some deals
with Silicon Valley companies and song studios to create jobs and put out
product. But it took so long trying to make a deal with these companies up
north, that I missed my window. So I said, “I’ll just do it myself—if that’s
okay with my wife.” And because I could not afford to do a huge, lavish
production we did it with a ton of favors.
We were, at the time, very much in the spirit of the strike. By the time
we finished writing [“Dr. Horrible”] and had everyone lined up, the strike
was over and we all had shows to scramble to do. But we found a window
to shoot it. It became us goofing around and just having a great time making
a piece of art that we all enjoyed.
Once we finished … it was equal parts ethos and capricious glee. We
said we were going to roll it out for free and then put it on iTunes. We just
steamrolled past everybody’s idea of how you market and of how long it
takes to do these things. We had people [drawing up] contracts in days that
usually take months, because we were tired of people sitting around.
Ultimately, though, we were still in the mind of: This is a bit of a lark. The
strike was over and so we wanted to do right by everybody, but we weren’t
thinking it would be a grand statement. We thought it was going to be cool.
Knowledge@Wharton: Several numbers have been quoted regarding the

overall cost of “Dr. Horrible”—“low six-figures”; “around $200,000”—can
you set the record straight?
Whedon: We got so much of this done through people doing us favors—

department heads and people who have access to things. But you’ve got to
pay your day-to-day crew. The actors all did it for nothing. And we all did
it for nothing. So, the production costs alone—the basic costs of filming
the thing, and getting the locations, props and everything—ran a little over
$200,000.
We had a secondary budget drawn up in case of a profit, wherein we
were trying to find rates for Internet materials. In some cases they didn’t
exist. We used models that had been created by the guild for repurposed,
or reused, material that we used for original [content], because this had
never come up before.
We didn’t want to leave a sour taste and say, “Well, we made some
money off of you guys being kind.” It was like: No, everybody has to benefit
from what they’ve done, obviously not enormously—it’s Internet money
we’re talking about—but as soon as we got in the black, we paid every-
body off.
So that budget was probably about twice what the original budget was.
Knowledge@Wharton: You’ve now earned more than twice the original

cost?
Whedon: Yes.
Knowledge@Wharton: Which members of the production shared in the

profits on the backend?
Whedon: The crew that got paid, got paid. [Those] who didn’t get paid
[included people like] department heads who had jobs and could afford to
do this as a lark.
As we go forward into profit, there are also residual schedules and
payment schedules for all of the creative people. We’re trying to figure out
how that works.
From the start I also laid down a gross participation scheme for my
three key actors and the other three writers. While the guild was negotiating
for one-tenth of a yen, I said, “How about we just get into some percen-
tages.” It was an opportunity to say to the guilds, “Guess how much better
we can do”—which, in the case of the Internet, is the only way for the guilds
to survive.
We can’t accept anything remotely like [our current situation] with the
studios.
When the studios talk about the difficulty of monetizing the Internet,
they’re not lying. There are a lot of paradigms wherein you aren’t making
that much money. But it’s all pure money for them because they have these
libraries they can just put on. They’re really not interested in putting on
original stuff because they can just throw the libraries on and make free
money off of that. None of us is in that position.
For [the studios] not to offer the creative community a percentage of
what they make—they say, “oh, it’s too difficult” and “we’re not going to
make any money”—is disingenuous to the point of criminality. What
they’re making is pure profit. For them to shut out the people who actually
created the content is something that should be looked into by a federal
investigatory committee.
Knowledge@Wharton: It sounds like you want what you’ve done with

“Dr. Horrible” to serve as a model for similar original content.
Whedon: I do.
Knowledge@Wharton: What do you think the likelihood of that is?

Whedon: That largely depends on a number of people—one of whom,

sadly, is me. This could just stand out as Camelot and disappear. Or it can
be a model that is built on. And I’m one of the people who needs to be
building on it. That’s something I’m looking into right now.
I’m not a business man. I’m also not a techie. My ideas on how to
monetize the Internet for independent productions are ideas that other
people have already had. But I am in a position to try to take advantage of
them in such a way that we get a toehold in this medium and [establish] a
system of creating some original content before the giant companies sweep
in and fence it all off.
The movies, TV—everything is melding, everything is shifting. If you
saw it on a movie screen, it’s going to be on your phone. That territory is
moving … now in a destructive way because we’re losing residuals. But
eventually it’s just going to be an inevitability that … the studios are going
to have to rethink how they monetize [content]. Obviously TiVo makes their
relationship with advertisers different. And that’s going to become more
and more the case. A lot of it can’t be predicted—at least, not by me.
But if somebody isn’t out there creating a system wherein independent
production can thrive, it will wither.
We are now in such a homogenized, globalized, monopolized enter-
tainment system where studios are swallowing all independent producers
and productions. And they’re swallowing each other. Eventually there will
just be Gap films and McDonald’s films. And that will be it.
The worst thing that’s happened in this community is the death of the
independent television producer. We have to make sure that that doesn’t happen
on what is, right now, a public forum, and not a privately owned forum.
Especially with the economic disaster that the last bunch of presidents
has left us with, independent film production is shutting down. The film
and television industry is finding itself in the position the music industry
found itself in [a few years ago]. The difference is they have a chance not to
do what the music industry did, which was to ossify and to basically lock
themselves in their fortress until they ran out of food.
They have an opportunity to try to stop the revolution by making
evolutionary deals. They’re not inclined to do that right now. So the trick is
to create a venue that becomes attractive to them and [where] there is still
an independent voice that can partner with them.
Ultimately, they have the power. They have the advertising dollars, they
have the distribution systems and they’re a force to be reckoned with. I
would like to [sit] at the table as an equal, and not as one of the goddamn
serfs who is giving them all my goddamn grain.
Knowledge@Wharton: You’ve made “Dr. Horrible” available through a

number of different distribution channels. It was free for a short period.
Then it was available for purchase as a video download through iTunes. The
soundtrack can also be purchased online. It’s now available once again for
free, streamed over the web with advertising. And now there’s a DVD. Can
you give us an idea of how successful each of those has been?
Whedon: iTunes has been a great boon for us. And the DVD has done quite
well—although I’d love to bump that up more. Streamed [online video]
with advertising is probably the smallest revenue. Whether that’s a viable
monetization scheme … is the question. In some ways it acts as an
advertisement and in some ways it might be pulling people away from
bothering to download it or to buy the DVD.
In the case of the DVD, we went so ballistic with extra content that it
took twice as long to make as the movie [laughs]. It wasn’t just a question
of: Here’s another potential revenue stream. It was a question of: Here’s
something new, so that you don’t feel like this is something you already
have. We were trying to protect the monetization stream there and give
people a new experience.
Knowledge@Wharton: You’re a third generation television writer. Was it

easy to land your first writing job in Hollywood?
Whedon: Well, it was definitely easier for me in the sense that someone
would read my script. My father’s agency said, “Look, we don’t do any favors.
We’re not interested in this guy. But because he’s your son, we will read the
script.” And that’s a door that doesn’t open for a lot of people.
Plus, I’d seen television scripts my whole life. I was raised by a tribe of
funny people. Those things help. I understood the rhythms of the thing.
Those advantages I never take for granted. But, ultimately, I still had to do
the thing. And they read the script and I got an agent, and several spec
scripts later—a job.
So, it always comes down to: Can you do it? Can you write it? I’ve made
my way for a long time. But was I halfway down the track when the starting
gun went off? I was.
Knowledge@Wharton: You’ve created content for television, for feature

films, for the web. Do you view these as fundamentally different media or
as merely different distribution channels for similar content?
Whedon: I see them as different media. They are connected and connecting
in ways that I find both fascinating and appalling in the sense that
everybody’s trying to make every story work on every platform. Sometimes
you’re like, “Can you just make a frickin’ movie! Can it not be a franchise
and a comic book and a bobblehead? Can the characters just matter?”
Part of it is absolutely respecting that the media are different. That
doesn’t mean that you can only make things on the Internet that are two
minutes long, like a lot of people believed. But it does mean that a movie
and a television show and a limited Internet series are going be positioned
differently, responded to differently and experienced differently. Ultimately,
it’s always going to boil down to: Did I [care]? Was I having a good time?
But the integration of the things can be exciting, if it’s approached the
way everything needs to be approached—which is artistically.
The problem now is the form that the integration takes. When I’m
shooting my TV show I have to shoot it for 4 by 3 television ratio and
widescreen—which means I can never compose a true frame. I’m always
splitting the difference between frames. And that is destructive. So you do
have to make a choice at some point.
Like when we did our commentary musical [on the “Dr. Horrible”
DVD]. It’s ridiculous. It’s sophomoric, it’s silly, it’s off-topic. But, ultimately,
we were striving to make a commentary musical, not just to pile on content
for the sake of clocking more hours on the extras DVD. We wanted to use
the idea of a commentary musical to at least have fun with the concept. Even
if we didn’t really break huge ground there, we were professionally silly.
Knowledge@Wharton: What do you think the media landscape will look

like in another five or ten years?
Whedon: [Sarcastically:] I am exactly the kind of visionary who is so

brilliant that he doesn’t want to share that with other people. Meaning: I
have no idea.
I still call my iPod “my Walkman.” OK? I am old. I have gray in my
beard—which, by the way, is terribly sexy. I’ve never been a maverick.
If you look at “Dr. Horrible,” it’s a very old-fashioned story. And it’s a very
old-fashioned presentation. What I was going for was, basically, a television
event. It’s going to be on at this time, and this is going to be your
opportunity to see it, because it’s not going to be on after that. Tune in this
night, this night and this night when it premieres.
Obviously, it was slightly different than that. But that’s the ethos I was
going for. I’m a very old-fashioned story teller. I am not, in any way, a
visionary. I just try and make whatever I do good enough that people let
me do it again. That’s pretty much my scheme.
So, five years from now, we will all have antennae. I got nothing.
The challenge for me now is to create some kind of formula for creation
and monetization on a medium that may be completely different.
Right now, DVD is a great revenue source for an Internet-based venture.
Most people are saying that in five years, DVD will be over. Sales are already
way, way down from what they used to be. I don’t understand how I’m going
to ride that change. I’m just trying to make as much fun stuff as I can and
stay, if not one step ahead of it, then not caught under the swell.
Knowledge@Wharton: Can you recall the first piece of popular enter-

tainment—a TV show, a movie, a comic book—that really made an
impression on you as a child?
Whedon: Umm … all of them?

Let’s go with “Help, Help, The Globolinks,” a horror opera that I saw
when I was five. It terrified me. They drove a van on stage—which was
awesome. And then the van broke down, the Globolinks came, and the only
thing that would keep them away was music. A young girl had a violin and
she would play the violin at them and they would go away.
It just terrified me. But, at the same time, I adored it.
Knowledge@Wharton: Speaking of opera and musical theater, what are

the chances that “Dr. Horrible” is going to make it to Broadway as a full-
blown Broadway production?
Whedon: We talk all the time about all the possible venues for “Dr.
Horrible.” And then we go back to our day jobs that we’re supposed to be
doing in the first place.
Broadway is something that we’ve talked about. I had a very funny
experience talking with a Broadway veteran who basically said, “Oh, yeah,
come to Broadway because there you’ll have complete control and be treated
with respect, and it will all go really easily.”
[Sarcastically:] Right. And I was like, “Hmmm, I think I’ll go back to
the Internet, where you just put it on for free!”
I would love to do it. Broadway is a dream that we all have. But I’m not
terribly interested in repurposing things I’ve already done. Obviously, I
made a TV show out of one of my movies and a movie out of one of my
TV shows, so it sounds like a crazy thing to say—except that I didn’t tell the
same story in either of them. I just took the story I had further.
And that’s what I’m concentrating on with “Dr. Horrible.” It’s not so
much like: “How can I squeeze another media out of this story” but: “What
happened to him after?”
Knowledge@Wharton: You felt that Fox didn’t handle your TV series

“Firefly” particularly well. I’ve heard that you swore to never go back to Fox,
and yet you’re working with them on “Dollhouse.”
Whedon: That is not, in fact, the case. I never swore not to go back to Fox.
I left my deal at Fox because I couldn’t think of any TV shows, and I didn’t
want to be paid to not do anything. Looking back—I can’t imagine why I
didn’t want that [laughs]. It sounds so cool.
I was heartbroken, but I never swore not to work at Fox. The production
people had not done anything bad. They let me make the show the way I
wanted to. And the network—well, they’re constantly changing, aren’t they?
If it had been the same people running Fox now as it was then, I would not
have come back. But you don’t swear, because the ground is shifting under you
constantly. It was doing that even before the new media made everyone cranky.
Knowledge@Wharton: What advice would you give to someone starting

out that wants to make an independent film or web content? How can
they get their work seen? How can they generate enough revenue to do
another one?
Whedon: The fact of the matter is, if somebody has a story to tell there is
no reason at all that they should not be telling it. The quality of the material
that exists—I’m talking about the physical [equipment] like the cameras—
[allows you to do] things that could not be done when I was a kid for
almost nothing.
People aren’t going to the Internet to look for IMAX [large screen
movies]. They’re going to look for things that shock and delight and surprise
and upset and all that good stuff. They’re going for the most basic story.
A lot of people sit around and go, “How can I get this made?” The only
answer is: By making it. By borrowing someone’s camera. By buying a
camera. They come cheap and they work well. And if you know where to
point them—and the person that you point them at is saying something
interesting—that’s it! That’s how it works.
I can’t stress enough that I believe the best thing in the world is for
everybody who feels like they have a story to tell, to tell it.
If they want to sell it, if they want to make a lot of money, they can
do that—and they can kiss their story goodbye. Because, in general, that’s
the last they’re ever going to see of it, because somebody else will own it
and they will either not make it, or make it very differently than that
person hoped.
So, if you really have a story you think you’re ready to tell, what are you
doing talking to me? n
Published: February 4, 2009, in Knowledge@Wharton
Vivek Ramaswamy: Breaking
Down Barriers to Entrepreneurship
A s a student at Harvard University Vivek Ramaswamy realized that even

in Cambridge, Mass., which boasts of two world-class universities—
Harvard and the Massachusetts Institute of Technology—students with
entrepreneurial aspirations had difficulty connecting with potential
partners and investors. He decided to do something about it. In 2007, his
final year at Harvard, Ramaswamy partnered with fellow student Travis May
and co-founded StudentBusinesses.com, a website to connect students with
the entrepreneurial ecosystem. The duo also developed two supporting
software products. In 2009, they sold their business to the U.S.-based Kauffman
Foundation, which is focused on advancing innovation and training future
business leaders (Kauffman later rebranded StudentBusinesses.com as
iStart). In a conversation with India Knowledge@Wharton, Ramaswamy,
who is a student at the Yale Law School, shared his views on entrepren-
eurship and his own business ventures. Ramaswamy describes himself as
an “accidental entrepreneur” and says that the experience of starting
something new can be a valuable in itself.
India Knowledge@Wharton: What are your views on entrepreneurship

in America?
Vivek Ramaswamy: This may sound trite, but I believe it to be true:

Entrepreneurship is the fabric of what America is all about. The recent
resurgence in entrepreneurship is a resurgence of something quintessen-
86
tially American. It has been responsible for driving this country in years past
and will drive it forward in the future as well. The shift of the entrepreneurial
age towards a younger age bracket indicates a potential uptick going forward
as these younger, aspiring entrepreneurs gain more experience.
India Knowledge@Wharton: How do you see the current entrepreneurial

resurgence as being different from earlier?
Ramaswamy: I would think the correlation between an era of increased

globalization and an increased desire to participate in an entrepreneurial
endeavor is not a coincidence. When interconnectedness is at a peak due to
technological advances, the ability to spawn something new is slightly easier.
India Knowledge@Wharton: In your view, how are American universities

adjusting to this new trend?
Ramaswamy: Today, with the Internet, social networking, and other

media, people are [becoming increasingly] interconnected, making the
original hotbeds of entrepreneurship not as distant as they once were. The
emergence of web-based tools to achieve that interconnectedness is
spawning entrepreneurship programs at universities across the country. Our
business, StudentBusinesses.com, was focused on the issue of university
entrepreneurship. The number of universities in the past five years that have
added either business plan competitions or entrepreneurship education
programs has dwarfed the same five-year trend in any period before it, at
least to the extent that I am aware. Most of these [programs] are actually at
universities that are outside of the typical so-called “hotbed” regions. I think
a big part of the reason for this is what the Internet and other technology
and media have accomplished in connecting those places that are more
geographically distant from the traditional hotbeds.
India Knowledge@Wharton: Are you suggesting, for example, that while

a place like Silicon Valley would have been geographically or academically
Vivek Ramaswamy: Breaking Down 88
Barriers to Entrepreneurship
inaccessible to people one to two decades ago, it is now possible to connect

folks in disparate geographies to work collaboratively?
Ramaswamy: Exactly. It is an ability to access what is happening in those

places typically known for entrepreneurship and to use that to plant a seed
in a wide range of other places.
India Knowledge@Wharton: The objective of StudentBusinesses.com was

to connect young students with the entrepreneurial ecosystem and tap into
their energy. Some research however shows that the majority of successful
entrepreneurs have had years of experience and also industry know-how
before they went out on their own. How did you envision bridging that gap?
Ramaswamy: It is a distinction we were acutely cognizant of at the time

we started StudentBusinesses.com. Some folks we approached at the initial
stages to join us as advisors and consultants told us that they didn’t believe
in our concept because they [felt that] a person needed to have substantial
industry experience in order to become an entrepreneur.
We viewed it a little differently. [We felt that] young people, including
those coming out of the university programs, are at a stage in their lives
when they are able to take the biggest risks. They [also] have a fresh
perspective that’s not colored by industry experience. That inexperience or
freshness can be catalyzing. Of course, it could potentially impose limit-
ations on the types of things that young students may envision themselves
doing. We wanted to tap into that innovative lens [that] younger people at
universities possess. Recognizing the value that experience could add, one
of our major initial theses was that the experience of starting something
new can be a valuable experience in itself.
India Knowledge@Wharton: Even if the venture doesn’t result in anything?
Ramaswamy: Absolutely. That act of trying can be its own experience and
that was part of our thesis from the very beginning in terms of the value
created for a student by founding his or her own startup company.
India Knowledge@Wharton: You launched StudentBusinesses.com in

2007, the semester before you graduated from Harvard. Times were good
then [economically]. We didn’t think about the world as we do today. How
did you and your co-founder Travis May manage to get ahead of the curve?
Did you see this coming?
Ramaswamy: [Actually] it was a very difficult time to start a business. Even

though the message of entrepreneurship becoming all the more important
was not lost on people, the conditions of fear that existed at that time were
somewhat of an adversity that we faced in launching the company.
India Knowledge@Wharton: StudentBusinesses.com paired up entre-

preneurially-minded students with people who were interested in their
concepts. Can you tell us more about it?
Ramaswamy: The site—StudentBusinesses.com—had two searchable

databases—“Businesses in the Game” and “Students on the Roster.” Aspiring
and current entrepreneurs could join either of these for free. While
entrepreneurs could post a profile that described their business and what
they were looking for on “Businesses in the Game,” those interested in
joining a start-up could [sign up on to] “Students on the Roster.”
Over time, our site also expanded to include two software-as-a-service
products—B Plan Studio and Start-Up Space. B Plan Studio enabled
university entrepreneurship programs to conduct a business plan compe-
tition in a seamless fashion and in a way that preserved the data and the
information that was gained in that competition. Start-Up Space enabled
universities, and in particular business schools, to create internal networks
of aspiring entrepreneurial students on their campuses.
India Knowledge@Wharton: StudentBusinesses.com built these propri-

etary software platforms?
Ramaswamy: Yes, we built that software, which was modeled on some of

the same aspects as our website.
India Knowledge@Wharton: In the StudentBusinesses.com model the

students sign up for free, while the external professionals who are interested
in tapping into these students pay [for] a subscription. How were you able
to convince people to pay for another site subscription?
Ramaswamy: The primary users of the site, from the non-student

perspective, were actually professional service providers who were seeking
to expand their businesses to include start-ups. [For instance,] law firms
that were looking at targeting a new clientele, or web development and IT
consulting firms that were generating revenue by serving large corporations
but were interested in taking a little bit more risk in working with younger
companies.
[But] it was never our main objective to market this aspect. We wanted
to build a strong database and network of student entrepreneurs. We were
acquired within two years of our launch [so] the process of going beyond
that first step perhaps lies in the hands of our acquirer, the Kauffman
Foundation.
India Knowledge@Wharton: Could you talk a little bit about the

acquisition of StudentBusinesses.com by the Kauffman Foundation?
Ramaswamy: One of our objectives from the very start was to not only
succeed in our own right as a business, but also from a more social
entrepreneurship perspective to enable other businesses to do the same
thing. It is that spirit that led the Kauffman Foundation to be the best
acquirer. They are the world’s largest foundation devoted to entre-
preneurship and one of the largest foundations in the United States. I think
one of the [reasons] that Kauffman looked at us was to find a platform
around which to organize some of their activities including, but not limited
to, their expansion into the university entrepreneurship space. At the end
of the day, our consideration was not just a financial one, but the knowledge
that our platform would be taken in the direction we had in mind from day
one—fostering entrepreneurship among young people across this country.
India Knowledge@Wharton: Can you tell us about the experiences that

have shaped you as an entrepreneur?
Ramaswamy: From a personal standpoint, I consider myself much more

of an accidental entrepreneur. I was involved in the entrepreneurship club
at Harvard but I heard of it only because it was new on campus.
India Knowledge@Wharton: But the club obviously didn’t fulfill what

you wanted it to.
Ramaswamy: I saw so much potential among the aspirations of the

students who were [at Harvard]. I suspected [it would be the same] at
universities across the country. These aspirations weren’t being served and
harnessed.
India Knowledge@Wharton: Is there an example of something frus-

trating that happened or a specific point when you and Travis said, “We can
do this better.” What was the spark that made it into something more?
Ramaswamy: We observed, for example, that there were a lot of people at

Harvard who were idea-driven but didn’t have technical skills to accomplish
what they wanted to accomplish. They were always looking among their
own community for people who had technical skills to help them launch a
new idea that they had.
India Knowledge@Wharton: The next Facebook?
Ramaswamy: Exactly. And the fact that Facebook was launched during my
time at Harvard probably impacted other people’s aspirations. Students had
these great ideas. They didn’t have the technical ability to do it themselves,
but they knew what they wanted to accomplish and all they needed was to
find the right persons, except that Harvard was filled with a bunch of similar
people. However, right down the street you have Massachusetts Institute of
Technology (MIT), which has a higher concentration of people with world-

class technical capabilities. Though separated by only two subway stops, this
distance was enough of a barrier to limit the type of communication that
should have been taking place. If that barrier existed within Cambridge
among these two heavyweight institutions, one could only imagine the gulf
at a national level. n
Published: November 18, 2010, in India Knowledge@Wharton
Seth Goldman: Brewing Organic
Tea with a Mission-based
Business Model
Seth Goldman
I n 1998, social entrepreneur Seth Goldman founded Honest Tea, the

nation’s best-selling and fastest-growing organic bottled tea company,
with a business professor from the Yale School of Management. Honest Tea
sources from organic and fair trade tea estates, and has partnered with
community development groups ranging from the Crow Reservation in
Montana to organizations in South Africa and Guatemala. Goldman talked
with Knowledge@Wharton for a podcast about carving out space in the
competitive beverage market, helping consumers embrace organics and how
tea became the catalyst for following his life’s passion.
93
Knowledge@Wharton: Were you entrepreneurial as a teenager?
Seth Goldman: I was. I used to run a lemonade stand near the golf course
near my house. And my friends and I would find the golf balls that the
golfers had hit out into the woods. We would collect those, and we would
sell used golf balls and lemonade.
Knowledge@Wharton: Why tea?
Goldman: Tea is an amazing product. It’s the world’s second most popular
drink. Water’s the first. And it is produced by some of the poorest cultures
in the world, but enjoyed by some of the wealthiest. So you have this ability
to create wealth at a community level without sort of subsidizing or paying
anything economically inefficient. But more importantly, tea can taste great
if it’s made right. It has wonderful, healthy properties to it, antioxidants and
other great benefits for the circulatory system. And so we wanted to make a
product that was all natural. And tea turned out to be the perfect ingredient.
Knowledge@Wharton: What’s your philosophy for surviving and even

thriving in the fiercely competitive beverage market?
Goldman: The key is to be different. You know, we never came out with
just another “me too” product. From the start, our product was less sweet
than what everyone else was offering. And that was why we felt it was
relevant, because everything out there was much more like soda than it was
like tea. And it’s grown. Our differentiation has grown. So now everything
we offer is organic. And a great deal of what we offer is also Fair Trade
certified. And we’ll continue to raise the bar and find new ways to set
ourselves apart. But we’re too small to compete directly with the big
companies on their terms. We have to do it on our terms.
Seth Goldman: Brewing Organic Tea with 95
a Mission-based Business Model
Knowledge@Wharton: Talk a little bit about Fair Trade. How is Honest

Tea socially responsible?
Goldman: You know, the key starts with the product itself. So number one,
soft drinks are the single largest source of sugar in the American diet. And
we’re offering a product that has a third to a sixth of the calories. So we’re
just putting out a healthier product. That alone is a good thing. But the way
the product has grown, because it’s organic, there’s no synthetic chemicals
or pesticides or any other artificial ingredients going into the bodies of the
people who consume the product, going into the ecosystems where the
product is cultivated, or going into the bodies of the people who were
involved in the processing and picking of the ingredients. So that is also an
important thing.
But on top of that, we do have Fair Trade certified teas, which means
we pay a portion back to the communities where we source the product.
And then even the way we conduct our business, we do marketing partner-
ships with the Saturn VUE Hybrid. We have a marketing partnership with
Jamis Bikes. We give away 1,000 bikes a year to encourage more sustainable
transportation. So even the way we communicate and connect with our
consumers, we feel, is part of our whole mission-based business approach.
Knowledge@Wharton: Have consumers embraced the concept of organic

eating and drinking?
Goldman: They are starting to. It’s really growing very quickly. I think
organic has increasingly become about health concerns. If you asked people
15 years ago, “Why do you buy organic?” They’d say, “Well, I don’t want all
those chemicals going into the ecosystem.” If you ask them today, they’ll say,
“I don’t want all those chemicals going into me or my children.” And that
is a much more powerful motivation.
And as a result, just a few years ago, the U.S.D.A. started putting their
seal, the U.S.D.A. Certified Organic seal, on the bottles. And this really
helped set us apart, helped brand organics as a whole. And it’s growing. It
is absolutely—I’m convinced. Right now, organics are three to four percent

of the whole food business. I believe that within three to five years they’ll
be 10%. And some categories, like yogurt, are already10 percent. Bottled tea
is less than one percent. So we have a huge opportunity in the next few years
to get 10 percent of the bottled tea market to be organic.
Knowledge@Wharton: What about the price differentiation?
Goldman: Honest Tea, in general, costs 20 to 30 cents more than another

bottled tea product. So it’s really not that much more. Especially when we
can help share the story. What a lot of cultures don’t realize is that tea is one
of the few products that’s never rinsed. Tea leaves are picked and dried. And
if there are any chemicals on those leaves, they stay on the leaves until hot
water’s poured on the leaves. And so they just get washed into the drink.
And so I think as consumers become more aware of the value and benefits
or organics, I think we’ll continue to grow.
And for that matter, as we grow now with Coca Cola, because they’re a
partner and distributor of ours, I don’t see our prices going up. And I do
see other prices going up. So I think we’re going to be right—we’ll still be a
little more expensive, because our leaves are more expensive. But I think
we’re going to be within a very affordable set. We’re not talking about twice
as expensive, or even 50 percent more. We’re just talking about maybe ten
or 20 cents more expensive than the other options.
Knowledge@Wharton: Have you traveled to the communities around the

world where your teas are harvested?
Goldman: Yes. I’ve been to Africa, to India, to China. And they’re all
amazing communities. One of the great things about tea is that it doesn’t
need an industrial agricultural complex. They’re bushes. And so they can
grow in wonderfully diverse climates. The diversity of plant and animal life
can be very robust in these communities. And so they’re just some of the
most beautiful places in the world.
Seth Goldman: Brewing Organic Tea with 97
a Mission-based Business Model
Knowledge@Wharton: Have you found the youth market to be loyal to

the Honest Tea brand?
Goldman: I think we’re starting. I think, in general, our product is for a

slightly older consumer. But it’s striking, even on college campuses, that
we’ve seen students react to our product. And just last year, we launched a
line called Honest Kids, which isn’t a tea line, it’s a line of lightly sweetened
pouch drinks for kids. And it’s been so exciting to see how that line has taken
off. And I believe that that will actually fuel, eventually, the growth of
Honest-Ade and Honest Tea.
Knowledge@Wharton: Are you planning to pursue the youth market?

And if so, what ways would you go about that?
Goldman: You know, I think that’s not our core target market. In general,
that market responds better to the highly sweetened drinks, just because of
where they are. And obviously, we hope they evolve away from that. But our
target consumer’s a little older, a little more discerning. And like I say, as
that market becomes more socially conscious, I think they’ll be drawn to
our products.
Knowledge@Wharton: What motivates young people today, do you think,

to be more socially responsible?
Goldman: Well, the environment clearly is something that is of concern.

And a lot of us saw, whether it was Al Gore’s movie, or sort of read about
the environmental problems, and then feel, “What can we do to have an
impact?” And so then it’s, “Well, you can ride a bike or you can try to change
your habits. But you also should be thinking about what you purchase.” And
as an example, organics have a much lighter carbon footprint than not
organic products, because you don’t have to sort of get engaged to the whole
production of the other chemicals. And obviously, they’re better for the
ecosystem, as well. So I think environmental concerns can be something.
And I’d like to think health concerns will grow among the youth market,
but I’m not betting on that one.
Knowledge@Wharton: We’re always directed to follow our passion for

our careers. How have you done that?
Goldman: Oh, for me, this is a complete connection between what I care
about and what I’m working on. So I care about health issues, I care about
environmental issues, I care about issues of economic opportunity in both
the developing world and in this country. And this enterprise has allowed
me to address all three of those things in a really substantive way. It’s also a
wonderfully creative and energizing activity. We just had our company
meeting last week, and our employees are so excited about what we’re
building. My wife, who works in the non-profit sector, is saying, “People in
the non-profit [sector] don’t get excited like this. What’s going on here?
They have drunk the Honest Tea.” n
Published: December 23, 2008, in Knowledge@Wharton
Kareem Abdul-Jabbar:
“The Things That You Achieve,
You Achieve As a Team”
I mmortalized for his “sky hook” shot on the basketball court, Kareem
Abdul-Jabbar is recognized as one of the best players in the history of the
National Basketball Association. During his 20-year professional basketball
career with the Milwaukee Bucks and the Los Angeles Lakers, Abdul-Jabbar
scored more points than any other player in the history of the league and
racked up six NBA championships and six MVP awards. He continues as a
special assistant coach for the Los Angeles Lakers. Off-court, Abdul-Jabbar
has authored several books and appeared in television shows and films,
most notably “Game of Death” and “Airplane!” Born Ferdinand Lewis “Lew”
Alcindor Jr. in 1947, Abdul-Jabbar changed his name when he converted to
Islam. After being diagnosed with a rare form of leukemia in 2008, Abdul-
Jabbar said publicly the illness would not prevent him from living a normal
life. The former basketball star sat down with Arabic Knowledge@Wharton
to talk about being a role model, figuring out one’s work ethic, and
leadership.
Arabic Knowledge@Wharton: Kareem, thank you very much for joining

us today in Abu Dhabi. A really big theme at the Festival of Thinkers event
is role models for young entrepreneurs. Who has been important for you
in terms of being a role model as you were growing up?
99
Kareem Abdul-Jabbar: Probably the most important role model in my

life was Jackie Robinson [the first African-American Major League baseball
player and a member of the Brooklyn Dodgers baseball team beginning in
1947], both as an athlete, and then also as a student and scholar. He went to
UCLA (University of California, Los Angeles), and he is one of the reasons
that I went there.
Arabic Knowledge@Wharton: Tell me more.
Abdul-Jabbar: After he was finished playing professional baseball, he was

involved in … a bank in New York called Freedom National Bank, which
encouraged people in Harlem to go and patronize this bank. He was also
working [as an executive] at Chock Full o’Nuts; they make coffee.
Arabic Knowledge@Wharton: So you had personal contact with him?
Abdul-Jabbar: Not really personal. One of my good friends was his

godson. But my own personal contact was just that I’ve been a baseball fan
my whole life and I have rooted for the Brooklyn Dodgers and I admired
him. So, throughout my lifetime I saw him as someone who really pointed
the way in terms of pursuing an education and those types of things.
Arabic Knowledge@Wharton: How does your experience since you

retired from basketball help you serve as a role model?
Abdul-Jabbar: I think the whole idea of understanding what to do after

you’ve had a professional career as an athlete [is important]; you get such a
great opportunity to accumulate some capital, and then if you don’t have
an idea of what to do at that point, things can all fall apart. That’s a very
unfortunate aspect for many American athletes. They don’t get it in terms
of the opportunities that are there until it’s too late and they’ve lost the
access, and just the whole chance that they had to make a transition into
the world of business.
Kareem Abdul-Jabbar: “The Things That 101
You Achieve, You Achieve As a Team”
Arabic Knowledge@Wharton: Keeping the momentum and the transition

—that’s interesting.
Abdul-Jabbar: Right, and just having a plan, having an idea. I can think
of two gentlemen that I played professional basketball against [who are]
doing very well entrepreneurially. One, Junior Bridgeman, owns a number
of fast food restaurants, and he used his basketball career to launch that.
Another person would be Dave Bing. He has a very successful company in
Detroit that produces machine parts, etc. He is presently the mayor of
Detroit. There are many aspects to being a professional athlete that the
average young man does not understand. When he enters [the world of
professional sports] he says, ‘Hey we have an opportunity to make a lot of
money, let’s jump on it,’ and beyond that they don’t get it.
Arabic Knowledge@Wharton: I’m sure your height was one of the assets
that helped you succeed as a basketball player. But what are some of the
other attributes that you think contributed to your success in this area?
Abdul-Jabbar: Well, I think you can’t be a success in anything unless you

have some type of work ethic, and that you understand that as a professional
person you have to be prepared and know how to consistently deliver on
whatever it is you are supposed to deliver, whatever profession that’s in.
Whether it’s information, or if you’re a plumber, you have to consistently
know what you’re doing.
Arabic Knowledge@Wharton: What sort of work ethic did you have as

you were getting into basketball and learning how to become a professional
athlete?
Abdul-Jabbar: I learned a lot in terms of understanding my work ethic …

from my father. My father had to go to work when he was 9 or 10 years old
during the Depression. He delivered ice into people’s homes when they used
to have little things called iceboxes. Very few people remember that but that’s
what my father did. And he had to help support his family. Then after World
War II, he was a musician and he didn’t really get an opportunity to play
music for a living, so he became a police officer and supported our family
on his salary as a police officer. But he always felt that he had a duty and a
responsibility, and he always fulfilled that and I absorbed it. He never sat
me down and told me these things in words, but just observing his life and
what he did for my family then, that’s how the message got through.
Arabic Knowledge@Wharton: When you think back about your career as

a basketball player, what lessons in teamwork and leadership did you learn?
Abdul-Jabbar: I think professional sports teach you a lot about teamwork

because you can’t achieve anything just by having talented individuals
involved; you have to have people who can work together. The things that
you achieve, you achieve as a unit and it’s done as a team. It’s not done
because one individual was very extraordinary, had some type of
extraordinary talent and that’s why you won. You won because everybody
was able to help each other and make the group effort successful.
Arabic Knowledge@Wharton: That’s great. Just one final question: What

do you think of role models for the current generation? How pivotal are
they, and how might have they changed since you were young and needed
role models?
Abdul-Jabbar: I don’t think there’ll ever be any difference in terms of the

influence of role models. Leaders are very few and far between, and their
contributions to group efforts are always crucial. It doesn’t really matter
what context you’re talking about; if it’s a group effort, there’s usually a
leader or two in there who enables whatever goals the group is seeking to
be attained. It doesn’t really change that much, no matter what you’re
talking about—business, sports, or any other effort. n
Published: June 1, 2010, in Arabic Knowledge@Wharton
Maria Mahdaly: Succeeding
as a Female Entrepreneur in
Saudi Arabia
W ith nearly 40% of Saudi Arabia’s population under the age of 14,
analysts have long been warning that the country’s biggest challenge
lies in opening up new career paths for its younger generations. Spotting
an opportunity, 22-year-old Maria Mahdaly and a group of fellow Saudi
Arabian women launched Rumman Company in 2007, a firm that now
fosters young entrepreneurs. One of its own businesses is a social media
website for Saudi youth, called Fainak.com, which means, “Where are you?”
in Arabic. Now boasting roughly 30,000 subscribers in the Kingdom, it has
also become an advertising platform and a local events organizer. Rumman’s
other business is Destination Jeddah, an events and lifestyle magazine.
Coming from a family that embraces female entrepreneurs—her
mother was one of the first to open a women’s fashion shop in Jeddah—
Mahdaly says she is lucky to have grown up in the household that she did.
But she has also relied on her understanding of Saudi culture to ensure
Rumman’s social media site and other ventures respect sensitivities and gain
local support, something that is critical in a conservative society in which
Facebook has been denounced by vocal clerics as misleading youth.
In an interview with Arabic Knowledge@Wharton at the 2010 Middle East
North Africa ICT Forum in Amman, Jordan, Mahdaly talked about the
challenges female entrepreneurs have overcome in Saudi Arabia, the
successes and missteps she has learned from while running a business, and
being a role model for other young entrepreneurs.
103
Arabic Knowledge@Wharton: Tell us about your business projects.
Maria Mahdaly: When I started, I was 19, and one of the things I found
was that there was no platform supporting young people in Saudi Arabia.
There was nothing that guides them and tells them, “This is what you do
with your talents, and this is how you do it.” So we created Rumman
Company as the parent company with two ventures. One is Destination
Jeddah magazine, which is kind of like the Time Out of Jeddah, and the other
is Fainak.com. The youth make up more than half the population in Saudi
Arabia, so this is what we can do for them.
Arabic Knowledge@Wharton: How did you figure out the business

model? What kind of support did you have?
Mahdaly: When we started the company, we were working from home. We

didn’t sleep. We were in the living room working day and night. We talked
to a lot of our friends and they helped us understand what the business plan
needed. Once our ideas and vision were clear, we approached investors, and
right away one accepted. We had an investor for four months, but then we
started making our own money and we put it back into the business. Soon
enough, we could sustain ourselves.
Arabic Knowledge@Wharton: As a local entrepreneur, did you receive

support from the Saudi government?
Mahdaly: There’s definitely been more support for start-ups here. The week
of November 21, for example, is [a national] entrepreneurship week. For
the first time, even government sectors are [holding] workshops to build
skills. Also, two years ago, a fund was established for start-ups. When we
started, there was nothing to help us. A lot of individuals recognized the
importance of entrepreneurship, and because of that, a lot of government-
sponsored initiatives have sprung up.
Maria Mahdaly: Succeeding as a Female 105
Entrepreneur in Saudi Arabia
Arabic Knowledge@Wharton: What’s the motivation for young people

to do something innovative in Saudi Arabia, where many come from
privileged backgrounds?
Mahdaly: Young people in Saudi Arabia are not just well off. They are also
open to the world. They travel, they’ve seen a lot. They see a lot of changes
happening around the world. They have started thinking that they want to
part of the change and do something for their country. That’s why Saudi
Arabia is one of the most innovative places in the Middle East. There are
young people all over the country starting businesses and being innovative.
Arabic Knowledge@Wharton: Your venture is run entirely by women. Is

that easy?
Mahdaly: I always say that being an entrepreneur is not easy for either a
man or a woman. But it definitely has its ups and downs if you are female.
There are a lot of limitations, a lot of things that you need men to do for
you. For example, with legal work, you have to have a man represent you.
We did have a couple of obstacles, but now in Saudi Arabia, you feel a huge
amount of support for women. That is because a couple of women took the
steps to become leaders and put out the challenge: We can do something
great, so why aren’t you supporting us? The culture is accepting it; the
government is accepting it. King Abdullah bin Abdul-Aziz is a huge
supporter of women nowadays. It’s definitely getting better.
Arabic Knowledge@Wharton: How is Saudi Arabia changing its perspec-

tive on women being in the workplace?
Mahdaly: The most important change is in accepting women in leadership

roles. Women in the past few years in Saudi Arabia have showed they can
take leadership roles and be successful. People have accepted that they can
have women in the workforce and as leaders. We have men working with
us in the office.
When we started the company, we felt men wouldn’t accept a female

boss: They wouldn’t accept tasks from, or listen to, a woman who has
authority. But the culture has changed a lot in the past three years. I don’t
think we face that problem now. Since there are a lot of female entre-
preneurs and women who are leaders now, men aren’t as intimidated.
Arabic Knowledge@Wharton: What’s been your biggest success, and how

are you trying to improve that?
Mahdaly: The biggest success is the impact we are having on our young
people. A lot of Saudi youth have joined us, even on a part-time basis. We’ve
built up character in these young people. Now, 60% of the youth who joined
us have started a company or initiative [of their own]. For example, one
started a production house, and another an event management company.
Seeing young people using their experience with us to start their own
businesses is the main success.
When we started to invest in young people, we did it out of passion and
goodwill, but now we want to do it in a sustainable way. We want to do it in
a way that gives them strong experience before they graduate, which they
can take to the professional world.
Arabic Knowledge@Wharton: What’s the biggest misstep so far, and how

did you learn from it?
Mahdaly: Our biggest challenge was with Fainak.com. We were very

successful in the first six months. We didn’t expect so many people to join
us and be part of the company. We weren’t ready for it. We didn’t have
enough people working in the office. We didn’t know how to control
everything, and it was getting chaotic. We paused to examine the structure
of the company and started figuring how to control everything. The
organization of the core of the company was key. Now, we are very stable
and gradually reaching our goals.
Arabic Knowledge@Wharton: How did Fainak.com achieve its growth?
Mahdaly: There is no other platform specifically targeting young people

in Saudi Arabia. In our first event, we said, “What we do is we support you
guys.” Someone stood up and said, “What kind of things can you do for us?”
I asked, “What do you have?” He said he was studying finance but produces
movies as a hobby. I said, “Let’s put you in contact with our people.” We
guided him and got him training. Now, he owns his own production house,
and he hasn’t even graduated from school yet. As soon as we did that, a lot
of people started to trust us. We work in a fun and innovative way. It’s not,
“Come to the office and we’ll interview you.” It’s very fun and entertaining,
but there always is a message behind it.
Arabic Knowledge@Wharton: Fun and entertaining in what way?
Mahdaly: We do a lot of social work. We encourage young people to give

back to the community. For example, we started a car wash campaign to
help the poor. Usually when you think of a car wash, you think of girls
washing cars and guys walking around. We had a lot of volunteers, and a
lot of guys came. Within three hours, we had reached double the target we
had set.
Arabic Knowledge@Wharton: But your company is not solely philanthropic?
Mahdaly: We call ourselves a for-profit social enterprise. Our impact is not

only social; we also have a financial impact. We have the only platform for
young people in Saudi Arabia, so a lot of businesses and brands tell us that
they want to reach this target audience and be a part of our brand.
We connect companies with the target audience in a way that [the
brands] can invest in [youth]. For example, most companies are trying to
engage young people through something they can benefit from. We get a
young person, who has an idea that the company can support and be part
of. Or, if an company wants to do an event, we can create a program. We
create an event and a social media campaign, which reaches the target
audience in a way that benefits them as well.
Arabic Knowledge@Wharton: What effect is social media having on

Saudi Arabian society?
Mahdaly: Social media is a whole Internet culture. We are connecting with

others in a way that wasn’t possible before. People are just getting into it.
They started to notice how important conversation is online. They can
express their opinions and thoughts, without the boundaries of a physical
meeting.
With any new idea, such as social media, there are supporters and
opponents. The important thing when starting something is to make sure
it’s compatible with your culture. Respect all people, including the religious
groups. I’m not promoting or doing anything out of [line with] the culture.
That’s why we haven’t had any problems.
Arabic Knowledge@Wharton: You’re now traveling to events to speak

about entrepreneurship. Is it overwhelming?
Mahdaly: It is overwhelming. I still don’t get it. I’m like, “I’m getting invited
to this conference, wow….” I don’t see the impact I’m making. Sometimes
I meet someone who says, “You are my role model. Can I learn from you?
Can I be an intern?” These things usually shock me. I would have loved to
have met people when I was starting out and been around them while they
worked. I always give them a chance and treat them the way I would have
wanted to be treated when I was starting out.
Arabic Knowledge@Wharton: Do you have a role model?
Mahdaly: My only role model is my mother. She started being her own
boss a long time ago, and I’ve seen her struggle through the experience.
When I was young, she started a retail shop, one of the first retail shops in
Saudi Arabia. She was selling women’s fashion. It was difficult from a
cultural point of view. People didn’t get that a woman could start her own
company. They would ask her if her husband was running the store, and
she would have to explain that this was her project alone. I’m lucky to be in
a family that accepts entrepreneurship.
Arabic Knowledge@Wharton: What would you say to young entre-

preneurs looking to start a business?
Mahdaly: Be innovative and never try to create something that already

exists. Look at best practices and see if you can do something better. Don’t
just create another Facebook or Twitter….Also, getting investments can be
difficult. So, try to build your concept and what you want to do. Show your
passion. I’ve always believed that doing something you love makes you
successful. Once you find that, you’ll be able to reach the goals you set out
for yourself. n
Published: November 30, 2010, in Arabic Knowledge@Wharton
Under Armour’s Kevin Plank:
Creating “the Biggest, Baddest
Brand on the Planet”
Kendall Whitehouse
K evin Plank admittedly perspired a lot back in the early 1990s when he
was a special teams player on the University of Maryland football team.
After finishing his football career, Plank decided to find a solution to the
problem. He spent the next several months going back and forth between
his final classes as an undergraduate and a nearby tailor shop, where Plank
tested fabrics for their sturdiness, water repellent qualities and comfort.
The result was the first form-fitting, moisture wicking Under Armour
shirts—the iconic product of what is now, a little more than a decade later,
a billion dollar company. Under Armour still sells those shirts, but it has
expanded into many corners of the athletic/casual wear market, from
110
compression shorts to sports bras, innovative mouth guards and basketball

shoes. During a presentation co-sponsored by Wharton Leadership Lectures
and the Jay H. Baker Retailing Initiative, Plank, the company’s founder and
CEO, said he was proud of what he and Under Armour have accomplished
in such a short span, and predicted significant growth for the company in
the future.
“Great companies have to manage the cadence of what they do. ‘Chapter
One’ [of a business’s growth trajectory] has to relate right to Chapter Two
and Chapter Three and Chapter Four,” Plank noted. “Every great brand is
like a great story. Every commercial we run, every product we make, is like
a chapter in that book. If we don’t manage the cadence, though, we will get
too far ahead of ourselves.”
Becoming an entrepreneur was not a given for Plank. He acknowledged
being a mediocre student during high school in Maryland, and went to a
prep school for a fifth year of high school instruction before enrolling at
the University of Maryland and making the football team as a walk-on.
Plank’s father was a real estate developer and his mother served as mayor
of Kensington, Md., for 13 years before working in the Ronald Reagan and
George H.W. Bush administrations.
But the mission of creating a no-drip T-shirt inspired Plank and, after
college, he set up shop at his grandmother’s townhouse in Washington D.C.
Thirteen of Plank’s high school teammates and a dozen more of his college
buddies had become professional football players, so he started sending
them sample shirts. He made the rounds calling on athletic equipment
managers at different colleges and relying on $16,000 in savings to tide him
over while pursuing his dream. “I was always … naïve enough to not know
what I could not accomplish,” Plank said. “If I had been out in the industry
instead of being a college kid who had an idea for another T-shirt, I would
have been too scared to do anything. I was just looking at how to [make]
the best T-shirt, so I almost willed it to happen.”
A former teammate, Jim Druckenmiller, became a back-up quarterback
for the San Francisco 49ers and talked up Plank’s shirts to teammates. Soon
the quarterback across the Bay, Jeff George of the Oakland Raiders, was on
Under Armour’s Kevin Plank: Creating 112
“the Biggest, Baddest Brand on the Planet”
the cover of USA Today wearing an Under Armour shirt. Plank thought
that was his big break, but he only received three phone calls that day—one
from his mother, asking him to come home and clean out his childhood
bedroom. Plank said the experience made him realize that every day was a
new one—one which required real work.
Under Armour started slowly. In 1996, Plank accrued $17,000 in sales,
and had to tap into credit cards to get by. The next year, sales increased to
$110,000. In 2009, a few years after the company’s initial public offering,
sales hit $1 billion, and the brand is now a household name, especially
among those consumers Plank covets—the youngest ones.
“Organic growth is happening everywhere, no matter what,” Plank
noted. “Our object cannot be to try to convince 25-year-olds to change
brands, though that is always something good. But now 8-, 9- and 10-year-
olds have a relationship with Under Armour [and say] it is their brand. I
tell them that their great-great grandfather [bought products from] the guys
from Germany [Adidas] and their grandfather grew up with the guys from
Oregon [Nike]. But you will grow up with Under Armour.”
Accordingly, Plank has gone after young athletes to become the faces of
Under Armour because they have great potential for marketing into the
future. The athlete he believes best represents the company may be NBA
point guard Brandon Jennings, who is in his second year playing for the
Milwaukee Bucks. Jennings bypassed college ball and instead played
professionally in Italy before being drafted by the Bucks. Though he only
averaged 15.5 points per game in his rookie season, Jennings is flashy and
personable, Plank noted. He blogs on the Under Armour website and
attends a lot of kid-oriented events and special equipment sales in malls.
He uses Twitter and Facebook, connecting with young people daily,
sometimes hourly, with the Under Armour brand name never far away.
“We want to be a legitimate number two [after Nike] in the basketball
market, and that may take time,” Plank said. Under Armour did not produce
any kind of footwear until introducing football cleats in 2006. Running
shoes came in 2009, and only this year did the company start selling
basketball shoes. “We need 5% or 6% [of the market] to start attracting the
best young talent. It is a $1.3 billion market just in the United States, so that
would be big.”
Passion, Vision and People

Ubiquitous in Plank’s talk and accompanying Power Points were the words
“Passion,” “Vision” and “People,” a set of principles for success in business
that he learned from a Chinese businessman whom he met early in his quest
to spread Under Armour globally. “My passion is to build the biggest,
baddest brand on the planet,” Plank said. “My vision is that I want to stay
focused….We want to make sure there is nothing that prevents us from
doing what we want to do with our brand. Finally, we want to have the best
type of people—team, team, team. I can’t underscore that need [enough].”
Plank also abides by what he called “four pillars of greatness”: “Build a great
product.” “Tell a great story.” “Service the business.” “Build a great team.”
The 38-year-old Plank likes his team young. He said the average age of
his more than 3,000 employees, about half of whom work in the company’s
Baltimore headquarters and the rest at regional offices around the world, is
32, “and we want to keep [the work environment] young and fresh.” Under
Armour’s advertisements, in addition to spotlighting Jennings, tend to
include other young athletes in action—competing in extreme sports “X
Games” events, snowboarding, soccer, wall-climbing, ultimate fighting and
beach volleyball.
At least one athlete signed to an endorsement deal, however, falls at the
high end of the Under Armour employee age range—33-year-old New
England Patriots quarterback Tom Brady. But Plank noted that Brady
epitomizes another aspect of Under Armour—the company’s against-the-
odds aura. Upon entering the NFL, Brady was a low draft choice—picked
in the sixth round and 199th overall—who became a standout quarterback,
winning three Super Bowls and marrying Brazilian model Gisele Bündchen.
“Unfortunately, we don’t have Gisele,” Plank kidded. “But Tom signed with
us not because we had the biggest check, which we didn’t, but because we
had the same, right-minded values.”
For the moment, Plank is not anxious to move Under Armour into the
leisure wear market. Instead, he plans to solidify the company’s growth in
Under Armour’s Kevin Plank: Creating 114
“the Biggest, Baddest Brand on the Planet”
the women’s sports apparel market, which he said now accounts for about
30% of sales. He is also looking to create more of a presence for the brand
in Europe and Asia—an effort that will take time because the company has
to break into the soccer and, to a lesser extent, basketball markets.
Under Armour’s advertising makes full use of two of Plank’s favorite
slogans—often together: “We must protect this house” and “We will.”
According to Plank, both are necessary strategies to build a viable company.
“Under Armour begins with a vision that we are making athletes better,”
and every product, Plank noted, can’t just be fashionable: It also must
enhance the athletic experience. The company’s mouth guards, for instance,
have back-bites that level the head and improve posture. “You do something
so you can get a quick buck and that may look good on the revenue chart,
but only for a little while. What you do must protect your brand or you will
ultimately fail. If you slap a logo on it, it might sell right away, but the brands
that will endure are the ones that respect the consumer.”
The “we will” slogan is important as well, Plank added. “Nothing is
really God-given. You have to embrace the things you feel are important and
work hard—will it to happen. “What I do know is that we have not yet built
our defining product at Under Armour. We are not living in the past. Our
larger competitors are 20 times our size. There is running room all over.” n
Tal Dehtiar: Looking for “Profit
with a Purpose” from Socially
Conscious Footwear Customers
C reating an international company that sells shoes made in Africa has

confronted Tal Dehtiar with a series of unexpected challenges. Among
them: the color blue.
“The only colors the factories are used to working with are black and
brown,” said Dehtiar, who came to Wharton as the first speaker in the 2009
Levy Social Impact Lecture Series. “They have never had to make shoes that
are gray or purple or blue or light blue. It still happens once in a while. They
will give us a pair of shoes and one is light blue and one is dark blue, and
they will say, ‘What’s wrong? It’s blue.’”
Dehtiar, who lives in Ontario, Canada, is founder and president of
Oliberté, a start-up that hopes to produce casual footwear in Africa and sell
it to socially minded consumers in the U.S., Canada, Europe and beyond.
Oliberté—a name Dehtiar made up by combining the “Oh” in “Oh
Canada!” with the French word for freedom—is a for-profit company, but
Dehtiar believes it is “profit with a purpose.” To Dehtiar, that means building
the company using fair trade principles such as guaranteeing factory
workers a fair wage, paying farmers above market price for raw materials
and keeping environmental impacts in mind.
“I personally don’t care about shoes,” said Dehtiar, 29. “I personally care
about building jobs in Africa. We just want people to have jobs for the rest
of their lives so that they have good pay and they can take care of themselves
and their families.”
Dehtiar envisions a shoe company that uses natural rubber from Liberia,
harvested from hevea trees and processed locally. The company would then
115
ship the rubber in sheets to Ethiopia, where workers in factories would cut
it into soles and combine it with cow, sheep and goat leather from Ethiopian
farmers. Shoes would be sold online and in exclusive shops in cities
worldwide. As sales grow, Dehtiar hopes to expand operations to as many
as 10 African nations.
Dehtiar believes his target market will be affluent adults between 18
and 45 who are part of the so-called LOHAS movement—consumers
focused on “Lifestyles of Health and Sustainability.” According to
www.lohas.com, the LOHAS market in the U.S. is a $209 billion market of
about 41 million Americans—approximately 19% of the U.S. population—
who focus on health, the environment, social justice, personal development
and sustainable living. “There are about 60 million North American adults
who care about and are willing to buy [products] that are fair trade,” Dehtiar
says. He anticipates an even bigger buzz about his product in Europe and
Japan, where the LOHAS movement is stronger.
A Very Patient Wife

It is too early to tell if Oliberté (www.Oliberté.com) can profit from its
purpose. After an exhaustive search, Dehtiar has found three factories he
likes in Ethiopia, but he is still struggling to set up the rubber processing
plant in Liberia, and has been forced to use rubber from Sri Lanka for his
first 3,000 pairs of shoes. Oliberté launched officially on October 1, 2009,
and hopes to have shoes on store shelves in New York, Philadelphia, Chicago
and Seattle by February or March of 2010. Still, he has yet to find an investor
willing to provide the $250,000 to $300,000 he needs to keep the company
humming. So far he has spent more than $100,000 in personal savings, loans
from family and small lines of credit to get the company off the ground.
“The bank says, ‘We’re not going to help you out. Africa is too risky,’”
Dehtiar noted. “So I’ve been putting a lot of my money—luckily, I have a
very patient wife, so it’s ‘our money,’ not ‘my money’—into this. But I love
my job. I love my life. Yes, we’re broke but we’ll make our money. I’m not
worried about that.”
Tal Dehtiar: Looking for “Profit with a Purpose” 117
from Socially Conscious Footwear Customers
If he remains undaunted, it may be because Dehtiar has a history of taking

on big challenges. In 2004, he and Michael W. Brown co-founded the charity
MBAs Without Borders using seed money from Wyeth Canada, where
Dehtiar worked as a medical sales rep, and DeGroote School of Business at
McMaster University in Ontario, where he got his MBA. “When I was
running MBAs Without Borders, for the first year, I didn’t take a single
[penny in] salary. We just didn’t have the money. Then the second year, I
brought in about $1,000 a month,” he said.
MBAs Without Borders sends young MBA volunteers to the developing
world to provide guidance and expertise for business development. Over
the past five years, the organization has sent more than 100 MBAs to
projects in 25 countries, mostly in Africa. Projects have ranged from a
handicraft cooperative for HIV-positive women in Swaziland to a product
placement campaign in Nigerian films for mosquito nets.
Five years of extensive travel through Africa and conversations with
people across the continent sparked Dehtiar’s interest in starting a business
there, he said. People told him, “Look, Tal, we don’t need another … charity.
We need jobs.” Charity “is not the real way to solve poverty,” Dehtiar said.
“You cannot keep giving people things. Over and over again it is a mistake
we see, these handouts. You give away T-shirts. You give away money. You
give away food. I believe in an emergency, in a crisis, you do need emergency
aid … but once a country is stable enough, you don’t need handouts. You
need to build jobs. You need to create a middle class. You need to create
small businesses.”
Although he knew little about the shoe industry itself, Dehtiar knew a
lot about working with international companies—and a lot about his target
market. “I understood the kind of consumer who wanted something socially
responsible. I knew what they wanted both from a charitable point of view
as well as from a materialistic point of view.”
Dehtiar also wanted to build a company that would endure over time.
Shoes have been worn for thousands of years and will continue to be worn
in the future, he said. Choosing to make an existing product in a new way
appealed to him. Entrepreneurs can be successful if they do their homework
and capitalize on what they already know best, Dehtiar stated. “Everybody
wants to reinvent the wheel, but there’s nothing wrong with doing what’s
available and doing it better.”
Skipping the Bribes

He got the chance to pursue the idea after CDC Development Solutions, a
Washington D.C.-based nonprofit, acquired MBAs Without Borders in
January 2009.
At first, he wanted to build a shoe factory in Liberia, which has a large
supply of natural rubber but exports most of it unprocessed. An exploratory
trip proved that idea would be too expensive. “When I left Liberia, I realized
I couldn’t afford to build a shoe factory. And yet, there was this rubber.”
Dehtiar decided he would try to set up a small-scale rubber processing plant
in Liberia and ship the rubber to Ethiopia, which already had tanneries and
a budding shoe industry. He researched the rubber-making process and
ordered the equipment: custom stainless steel drums from Portugal and
heavy rollers from Thailand. “Talk about challenges,” Dehtiar said. “We
shipped that in March. It just cleared customs last week. Why? For the last
three months, there have been a couple of officials who wanted a bribe. I
refused to pay it. That’s not how we do business, because if you pay one
bribe, you’ll have to pay another bribe. I don’t feel right about that.” He
remains optimistic that his contact on the ground in Liberia will get the
plant running within the next six weeks. “We’re hoping to show others that
you can do something with this resource.”
Factories in Ethiopia posed different challenges. “A lot of times, they
don’t follow the design,” he said. Quality of samples could vary even within
the same factory. In one case, Dehtiar severed a relationship with a factory
after finding out the owner employed underage workers and didn’t pay as
high a wage as he said he would. Dehtiar looked at eight factories and ran
competitions between four of them before choosing three. “When we finally
launched the company, I think we were on version number 45” of the
business plan, he said.
Dehtiar has made three trips to Africa so far and plans to make another
before the end of the year. In the process of setting up the company, he relied
heavily on contacts he had in Africa to interview factory owners and
Tal Dehtiar: Looking for “Profit with a Purpose” 119
from Socially Conscious Footwear Customers
workers, including one former intern from MBAs Without Borders who
stayed for six months in Ethiopia to help. Dehtiar now has four people on
his team: a part-time designer in Canada and three locally-hired contacts
in Ethiopia and Liberia who oversee operations full time.
He is looking ahead to a positive cash flow sometime between November
2010 and February 2011. The goal: $1.5 million in sales in 2011—or 15,000
pairs of shoes at about $100 per pair. Those numbers are conservative, based
on about half of what shoe companies such as Toms and Veja sold in their
first three years, Dehtiar said. “Based on those numbers, we can thrive.”
Oliberté has kept marketing costs low so far. “We don’t do a lot of trad-
itional marketing. We only spend our money on going to trade shows. We
don’t do billboards, we don’t do radio ads.” He plans to focus on online sales
and ramp up the brand’s exclusivity by selling through small boutiques and
select chain stores. “We like to work with [only] one retailer in every city,”
Dehtiar said. In the U.S., the company has secured spots on the shelves of
Solefood in Seattle, the Bus Stop in Philadelphia, Hanig’s in Chicago, and David
Z in New York City. Europe may soon follow: Dehtiar says he receives four to
five emails per week from people in Europe who want to distribute the shoes.
Still, it’s a hard sell to investors. His costs are three times that of shoes
produced in Asia, so margins are tight. He hopes for $2.5 million in revenue
in five years, but investors want to see at least $10 million. Dehtiar has
approached more than 35 potential benefactors, with little success. “They
say, ‘I can’t give you that kind of money because you’re only giving me a
12% return over the long run, and I want 20% to 25%.’”
Over time, he has learned to focus on sales, orders and celebrity interest
in his product when talking to investors, rather than playing up the African
connection. “For us to be an African brand would be a huge marketing
mistake. As much as people love the story, they care about the numbers.”
His advice to start-ups: Find the capital ahead of time. “You can’t expect
somebody to give you a million dollars just because you have a good idea.” n
Published: November 24, 2009, in Knowledge@Wharton
Seth Berger’s Full Court Press:
Building a Company from the
Ground Up
S eth Berger is founder and former CEO of AND 1, a company special-

izing in basketball shoes and apparel. Started by Berger and several
classmates while they were students at Wharton in the early 1990s, AND 1’s
original product line featured t-shirts targeted at young basketball players;
the company later expanded to offer a full line of apparel. Under Berger’s
leadership, revenues increased from $1 million in 1993 to more than $200
million in 2001. In 2005, Berger sold AND 1 to American Sporting Goods,
a private footwear company based in Anaheim, Calif. Berger spoke with
Knowledge@Wharton in a video interview about what it takes to build a
successful company.
Knowledge@Wharton: To start off, successful entrepreneurship is all

about seizing the right opportunity at the right time. Where did you get
your idea for the business and how did you know that it was the right time
to pursue that opportunity?
Berger: My idea came while I was here at Wharton. When I was in grad
school I did an advanced study project for a business plan called The Hoop,
a basketball retail store, in a class with Miles Bass, who teaches undergrads.
He’s a great teacher. In my second year of grad school I morphed that
business plan into a database business targeted at basketball players. I
actually left school when I graduated to do the wrong business at the wrong
120
time, which was a basketball database business. In about three weeks I

realized that I was broke. I was going to stay broke unless I changed my
business idea very quickly.
In the sports and footwear apparel industry, there are lots of companies
that did multi-sport. Nike, Adidas, Reebok at the time would do basketball,
football, tennis and soccer, whatever it might be. But no one was focusing
just on the basketball player. We thought we could [find a] niche … in
basketball.
The second part of your question in terms of knowing when it’s the
right time: I don’t think we ever knew. I also think we got lucky with a few
things that happened: Michael Jordan retiring, Lattrell Sprewell making a
great playoff run just after they had signed him….When the ball bounces,
you say in hindsight, “Oh; that was the right time.” But when you’re sitting
there, you’re crossing your fingers saying, “I really hope this is the right time.”
Knowledge@Wharton: After launching AND 1, what challenges did you

and your business face, and how did you overcome these challenges?
Berger: That’s a hard question, because I think everything was a challenge.

When we started, we had no experience first and foremost. None of us had
experience in clothing or footwear. The biggest challenges for us were
figuring out what the right questions to ask were.
Once you know what the right questions to ask are, you can always find
the answers. But I had two or three partners and they were really smart kids.
One was a Wharton undergrad with a 3.96 GPA. The other kid had gone to
Stanford. Then you had me. I was looking at these guys for the questions,
and then we’d figure out the answers. So, the first hurdle we had was lack
of experience.
The second hurdle we had was that we were young. We’d walk into a
room at 25 years old and say, “We’re here to show you a product that we
can produce over in China; we can deliver it to your factory within four
months.” They would look at us and say, “No, you can’t do that. You’re kids.”
Once you get past the hurdle of, “Hey, we deliver when we say we’re going to
deliver,” people trust you. We got past that challenge of being young.
Seth Berger’s Full Court Press: Building 122
a Company from the Ground Up
On the flipside of the challenge of being young, I think it’s a huge

opportunity. Whenever I speak with [students], I always try to tell them,
you should start your business now, before you have a bunch of experience,
because what your experience will tell you is what you can’t accomplish.
When you graduate at 21 or 25, you have no idea what you can’t do. You
think you can do anything. That’s the best time to go start a business. When
you’re 40, you’re looking back saying, “Wow. How did we get that done?
That was insane.”
Knowledge@Wharton: You mentioned that part of entering at the right

time was Michael Jordan’s retirement. Why was that such an opportunity
for you and your company?
Berger: It was in the fall of ‘93. I remember we were riding to a friend’s

high school to give a talk about what the first couple of months of starting
a business had been like. I heard over the radio that Michael Jordan had
retired from basketball. Jordan at the time [was] a dominant player in
basketball, so immediately retailers had hundreds of millions of dollars of
Jordan clothing that they wanted to replace, because they thought no one
was going to buy it.
Actually, the first time Jordan retired, his sales [dropped]. Since his
second retirement, Jordan has continued to grow. But for the first couple
of years after Mike stepped out, it created a huge opportunity for us when
consumers and retailers wanted something different. If Mike had not decided
for whatever reason to retire, you wouldn’t be interviewing me today.
Knowledge@Wharton: How did you seize the industry opportunity and

provide products that consumers wanted?
Berger: We knew our consumer extremely well because we were consumers.

When we created basketball apparel and footwear, we thought we knew what
a ball player wanted. At 25 I was just on the edge of the target consumer—a
16- to 18-year-old ball player...
The most important thing for us was knowing our consumer, and then
putting out a product that we thought he would want….Our first shipment
in November [was] a disaster. We did shirts, and the colors were lime green
and purple, so [they] didn’t really sell.
They gave us another chance. We came back in the spring and fixed the
colors, and our stuff flew off the retailers’ shelves. Within three weeks they
were completely sold out. [In 1994], we went from being in 10 Foot Lockers
in February [to] 1,500 Foot Lockers in June across the country. We went in
four months from being zero in the t-shirt market to being their number
two basketball supplier.
Knowledge@Wharton: As you mentioned, AND 1 targets a very specific

market, the niche market of 16- to 18-year-old basketball players. How did
you cater to this market? What kinds of strategies did your company employ
in order to market to this very specific group of consumers?
Berger: Our product was our biggest marketing. As a small company with
a limited budget, the [best] way to message to your consumer is actually
your product. Our product had to be great to wear and actually say
something to the consumer [so that] he could represent himself as a
basketball player….Also, we would conduct focus groups. We would take
our stuff out to the basketball courts all across the country and ask kids,
“Which of these shirts do you like? Which of these shorts do you like? Which
of these shoes do you like?”
As we grew, we continued to hire young basketball players in our
product and marketing area. We hired kids from Penn, from Stanford, from
Haverford, [all of whom] played ball. They would be our first filter. If our
stuff can’t get by them, it is not getting out the door. [Next] we go to the
kids who are going to be buying our products six or nine months down the
road. In the end, it doesn’t really matter what I like the best….It matters
what that 16-year-old kid likes.
Knowledge@Wharton: Given your company’s success in the competitive

retail industry, how did you distinguish AND 1 from other brands?
Berger: The most important thing was that AND 1 was a basketball-only
brand. We felt that we couldn’t occupy the consumer’s mind for all of
footwear and apparel in athletics. We wanted to make sure that when you
thought of basketball, you thought of AND 1 first. If you thought about
soccer or tennis, we didn’t want you thinking about our brand. In fact, some
folks would say, “I don’t know what AND 1 means. I am not going to buy
that.” We would say “great. If you don’t know what AND 1 means, then you
shouldn’t be buying our product.”
[Targeting that niche customer] started us on the right path, kept us
going. Actually, when we veered away from that path later, it really screwed
us up as a company.
Knowledge@Wharton: I know that your company developed an enter-

tainment division that managed several promotions for the brand. Can you
tell us a little bit about that?
Berger: Yes, that is fun. Rafer “Skip to my Lou” Alston is an NBA player. I
knew Skip back in the city when he was seven, but everyone started to know
him when he was 17. He had been around a bunch of different high schools
before he went to Fresno State. He was a great basketball player.
We actually had sponsored the Rocker all-star game, which is a great
game in New York City for playground ball players. We had these tapes of
Skip and some other great ball players. There is one all-star game that had
Conrad McRae, Skip, Kareem Reed, a kid named the predator; it was an
unbelievable all-star game.
We had these tapes, and actually, a kid was working at an ad agency. He
said, “Why don’t you make a mix tape of those games, put it to music. You
may see this all the time because you are from New York, but folks outside
the city have never seen this kind of basketball.”
So we made a tape. We gave 50,000 tapes away. It was the most success-
ful promotion in a weekend that Foot Action had ever had. Then the ball
players actually said, “Why don’t we host some games?” The first game we
hosted at Hunter College, and Mos Def did a concert after the game. It was
jammed pack in the summertime. Then from there, we approached ESPN
and said, “Look, we have this idea for a tour for a TV show.” It was early on
in the reality thing. They ran with it.
Actually, in its second or third year, street ball was a better performer
for ESPN than SportsCenter among teen males.
Knowledge@Wharton: You mentioned that moving away from your core

product was actually detrimental to your business. Could you explain that
a bit further?
Berger: Sure. When you start to grow as a business, [you want to] keep
growing and be as big as you possibly can be. That conflicts with continuing
to be true to who you are as a company and servicing the same consumer.
As a basketball brand [targeting young males], we started to feel like there
was only so big that we could get. So we started to do other products. We
did a slip-on shoe. We did a training shoe. We started to do training
clothing. I really feel that it diluted our brand. We started to alter our logo
so it wasn’t so basketball-only. The idea was, “Hey, we need to enable more
consumers to feel that they can buy our product.”
I actually think that started our slide down when we really should have
said, “Look, you know what? If we can be a $200 million, $300 million, $400
million, $500 million company, and it might take us 10 years to get there,
that is as big as we can be.” That is doing the right thing for the consumer
versus saying, “I want to be a $500 million company in two years. We need
to expand our product line.” You forget why the consumer likes you.
Knowledge@Wharton: Instead of expanding vertically, what did you do

to ensure that your business had scalability in your target consumer market?
Berger: When we went vertical, we realized that this business has a limited
size. At our height in 2001 with our licensees, we were about $285 million….
[But] we are in an industry where we are competing with $1 billion,
$2 billion, $12 billion companies and they can spend so much more in
marketing. So we felt like we needed to generate more money so we could
spend more money on marketing.
I think the mistake we made was saying, “You know what? If we can be
a very profitable $300 million company, that is great. Let’s do that. If we
want to grow, what we should be doing is buying other brands that have
different meaning to their consumers. So let’s buy a running brand. Let’s
buy a fashion brand, as opposed to trying to make AND 1 broader to the
consumer.”
Nike is probably the only brand in the footwear and apparel industry
that has done a really good job of being true to itself as an athletic brand
and yet somehow being able to bridge the fashion gap. Adidas tried it; they
failed. Reebok did it; they failed. Under Armour is going to try and I hope
they succeed, because Kevin is a good friend of mine. But I am not so sure.
But Nike has always said, in terms of their marketing, all they will say is athlete,
athlete, athlete, athlete, athlete. That enables people my age to wear a swoosh
and think, “Ah. I look like an athlete now.” Yet somehow, that has become very
fashionable. I think they are the only ones that have been able to do it.
Knowledge@Wharton: What would you say is your best and worst

experience while building AND 1?
Berger: Wow. I don’t know that I had a worst experience. I can give you a
moment of horror. We had signed Stephon Marbury from Georgia Tech
who left as a freshman and played for the Minnesota Timberwolves. He was
our first sneaker endorser. He was number four or five, I think, in the NBA
Draft. I think Rayon was fourth. So we are invited by the Timberwolves to
sit court side to watch Steph play his first regular season game. We had done
a massive national TV campaign. We gave away 10,000 t-shirts at the Target
Center. The campaign was called, “Breaking Ankles with Stephon Marbury”.
He was supposed to break an ankle; someone is supposed to cross you over
and they are breaking ankles.
So he is having a good first quarter. He is starting. Him and Garnett,
they are playing relatively well. About five minutes into the first quarter he
comes down on Cadillac Anderson. Now Cadillac Anderson is seven feet
tall and he is not a great player. But his foot makes Shaq look small. He
comes down on Steph’s foot, rolls his ankle, breaks it….They pick up Steph,
carry him over and sit him down right next to us because they had sat us
down at the end of the Timberwolves bench.
Steph looks at me. I look at him. He is thinking, “These shoes stink.” I
am thinking, “What the heck were you doing trying to drive on Cadillac
Anderson?” We have $6 million of shoes on order at that time. The shoes
are due to hit our warehouse the next week. Then get shipped out to
retailers. I literally called my director of marketing back home and I say
“Aaron, it has been a great run. Just so you know, there is a really good
chance we are going to go bankrupt, because we can’t float these shoes if the
retailers ship them back to us; Marbury ain’t going to be on the court for four
months.” But it all worked out. He actually was out for four months with a
broken ankle. We got ripped in the media for our campaign “Breaking Ankles.”
I really don’t know if there is a best moment; there are so many. I mean
the whole experience with AND 1 was incredible. Twelve years with great
people and way more success than we had ever imagined. If I thought of
one moment though, it was the first time I saw a kid wearing our t-shirt. It
was actually a 12-year-old girl at a “hoop it up.” I was out that first summer
and hadn’t seen anyone really wearing it….It was like “Oh, perfect. Our
target consumer is right here; a hard core basketball player wearing AND
1.” She had cut the sleeves off and was trying to look diesel. It was great.
Knowledge@Wharton: Clearly you have experienced a lot of success in a

very competitive industry. If you were to start another company today, what
would it be?
Berger: [laughs]. I don’t know. I really don’t think I would do that actually.
We sold the business in 2005. I’ve got three young kids. I have been coaching
high school basketball. I’ve had three or four opportunities to do really cool
things; each time I have decided that the time with my kids and the time that
I am spending with the kids from my high school, because I coach them six
months during the year, are more valuable than starting another business.
Knowledge@Wharton: What do you think is the next big thing in the

athletic apparel industry?
Berger: I think it is going to get even more vertical. Towards the end of our
run, the dynamics of the industry got very difficult. You had sneaker
factories that were squeezing the vendors, the retailers and the consumers;
then everyone is squeezing back. So it is very difficult these days to be a
successful vendor, meaning a Nike or a Reebok. The margins are too slim.
I think [we] have seen a lot of consolidation.
At a certain point there is going to be some funky combination of
Internet, retail and manufacturer. Nike, Adidas or UA is going to say to Foot
Locker, Champs, and JC Penney: “We are going to open up a thousand of
our own stores. We no longer need you as a pass through to the consumer.”
The Internet, I think, has [increased] the availability of information to the
consumer; at this point the consumer must know that for that $100 shoe,
they are spending an extra $40 that they don’t need to spend because it is
passing through too many hands.
[Companies] might even start [looking] over in China because they are
beginning to lose some business to other nations. They might say, “Look.
You know what? We are going to buy a brand, have the vendor, and we are
going to own a retailer so that we can deliver a shoe that a kid would be
spending $100 on for $60.” That has to happen. I think that is probably the
next stage.
Knowledge@Wharton: Speaking of China, in terms of brand marketing,

there has been a lot of hype in the business world around advertising during
the Beijing Olympics. What is your take on marketing athletic products
through this event? Given that there is so much competition for advertising,
do you think that it is a worthwhile pursuit for athletic brands?
Berger: I think it is worthwhile for Nike, and I think everyone else is
wasting their money.
Knowledge@Wharton: Why is that?
Berger: At the end of the day, athletes are associated with the brands that
they wear. Kids don’t really care who put the commercial on. At the end of
the day they know LeBron James wears a Nike shoe. So Adidas, Reebok or
anyone else can “sponsor” the Olympics. Actually, it happened it Atlanta….

In Atlanta, one of the other brands sponsored the Olympics and Nike just
flooded the Olympics. Michael Johnson was wearing a golden shoe when he
broke the record running the 400. No one knew that Reebok had sponsored
the Olympics. No one cared because the athletes were wearing Nike.
So for Nike, and to a lesser extent Adidas, I think it makes sense for
them to invest. Everyone else, they should take their money and go put it
on number eight on a roulette wheel. It is better spent.
Knowledge@Wharton: As a successful entrepreneur, what advice do you

have for students who are interested in starting a business?
Berger: Start a business before you go get a job. Here is the reason. If you
go get a job, you are going to succeed….If you come out and work, what
are you going to make? 50K to start? You tell me.
Knowledge@Wharton: I don’t know. [laughs]
Berger: If you work for a bank or something like that?
Knowledge@Wharton: 60K.
Berger: OK, great. So let’s say you are 21 and you get out of school making
$60,000. You do real well and three years later they say, “I am going to send
you back to grad school. I am going to pay for you. Then, come back to
work. When you come back you are making $175,000.” Five years after that,
you are going to be making a half million bucks. You are going to have a
husband or a wife, two kids, nice car, summer home, country club. At what
point are you going to say, “I am going to go start my own company”? The
answer is never.
What you will do is work until you have made enough money, some-
where in your 50s, to go do something you really want to do, instead of now,
when you are broke….When I got out of graduate school and I drove a
Honda Civic Hatchback. I was broke. I didn’t care. It just didn’t matter. But
once you get used to the good life, you won’t go back. So if you are thinking
about starting a business, start the day you graduate. You don’t need
experience. You don’t need money. You don’t need someone else to tell you
that you can do it. Just go start it before you get used to making all that money.
Knowledge@Wharton: Great. Thanks for joining us, Seth. n
Published: October 1, 2008, in Knowledge@Wharton

About Knowledge@Wharton High School
Knowledge@Wharton High School, or KWHS, is a global initiative of the

Wharton School at the University of Pennsylvania that promotes financial
literacy, entrepreneurship and leadership among high school students and
teachers through articles, lesson plans and an innovative video glossary.
KWHS is the newest member of the Knowledge@Wharton network.
Knowledge@Wharton is the online business analysis journal of the Wharton
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School editions, has more than 2 million subscribers worldwide.
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Millionaire at 25: Jack Abraham on What It Takes

About Knowledge@Wharton High School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

J ack Abraham, 25, is a successful entrepreneur. In 2008, he left Wharton to

An edited transcript of the conversation follows.

Knowledge@Wharton High School: How long have you been interested

Jack Abraham: Since I was pretty young. I grew up in an entrepreneurial

KWHS: What businesses did you start in high school?

KWHS: Why did you start Milo.com?

Abraham: I wanted to start a big, consumer-based business that solved a

was a scary time to be running a business. It went from everything getting

KWHS: Has it been difficult to give up some control of Milo to a bigger

Abraham: It’s really hard to go from a team of 25 or 30 core people to a

KWHS: What are your top three qualities of a successful entrepreneur?

Abraham: Persistence is one. The second would be resilience. Bad stuff

KWHS: What about risk-taking?

Abraham: I think entrepreneurs take very calculated risks. They understand

KWHS: Where will you be in five years?

Abraham: I enjoy building products that solve pervasive, everyday

C harlie Javice, a rising sophomore at The Wharton School, University

An edited transcript of the conversation follows.

Knowledge@Wharton High School: We’re here today with Charlie Javice,

Charlie Javice: Thank you, Diana.

KWHS: Please tell us about PoverUp.

Javice: PoverUp is a student microfinance and social business action

Knowledge@Wharton: When did your interest in global awareness and

Javice: Throughout my life, I’ve been involved in community service. At

And I started thinking, ‘How can we make something sustainable so

KWHS: At what stage of development is PoverUp right now? How has it

KWHS: Busy year!

KWHS: Microfinance has come under a microscope recently, particularly

Javice: Microfinance, in my mind, is giving the opportunity to someone

to a previously unbanked population. So obviously, you look at me as

Javice: That’s a tough question. I started in high school, and I went to a

classes—from classes in the law school to an MBA class last semester—and

KWHS: What is the biggest mistake you’ve made in developing PoverUp,

Javice: The biggest mistake was technology outsourcing. I think that is a

manage their relationship networks. They sold Connected to LinkedIn, an

An edited transcript of the conversation follows.

Knowledge@Wharton High School: Why are relationships so important

KWHS: What is relationship management?

Rekhi: Social networking is by far the most exciting thing in terms of

KWHS: How have relationships helped advance your career?

KWHS: So there is something to be said for keeping past relationships

KWHS: Were you entrepreneurial in high school?

Rekhi: In middle school and at Pittsford Sutherland High School near

I t’s a classic variation of the American success story: An aspiring entre-

maintain his fastidious French chef-style control over ingredients and

Lords of the Rings

The result, he added, was that turnover went up as managers looked to

An edited transcript of the conversation follows.

Friedman: So did it become harder to draw those limits?

Kevin: The amazing thing is that as we empowered the kids to make

Friedman: So you go through this process of making a decision ultimately

Friedman: Why is that?

Friedman: This is truly a remarkable example of giving and of sacrifice,

Kevin: To me, it is amazing how we set out to do a little bit of good in

transformative. At a time when our teenagers are supposed to be going in

Friedman: Including the elevator to your bedroom?

Hannah: Especially in this tough economy. We understand that people

Friedman: You must encounter a great deal of skepticism from people