Category Archives: MBA

2nd Year Reflections: Financial Innovations != Student Financing

In our economy there’s been so many financial innovations. Some for the better, some for the worse. But one area where I feel there could be more creative solutions is financing education.

On this topic, taking a SIP (Sloan Innovation Period) class from one of my favorite professors (Professor Paul Asquith), he gave us a quick introduction on corporate structured securities and went over dozens and dozens of unique examples. In the aftermath, it made me think about my MBA and how I’m currently financing it. Right now I’m pretty much taking a loan from the US Government and other private banks, getting the capital upfront, then paying them back with interest after I graduate. Essentially it’s similar to me issuing a bond, and then paying it back over a number of years. Shouldn’t there more options to finance education?

BOND STRUCTURE

Another alternative is to change the way the current bond-like structure is done. Instead of banks issuing loans based on co-signer, credit score, etc, then selling their student loans so that other banks can group them together to sell securities based on that, why not make more specific securities. An an example, group together MBA student loans, where one might say has a high guarantee of re-payment. Or, you could group together different majors, different schools, and try to differentiate based on that.

Recently Business Week had an article that combined a variety of data to examine the ROI of a degree, seperated by undergraduate university. What if, based on that (and other data), a student would be able to get a better loans rates by proving that they have a higher chance repayment rate. Further, this would an excellent way for Alumni to stay connected. More than just donators, they could be INVESTORs of their alma mater.

This particular idea has recently been explored by INSEAD. Individual investors would be financing the educations of a specific graduating class of INSEAD MBAs. This topic has been explored by my classmates over at “The MBA Show.”

This to me is a very interesting idea. I would think alumni in general would be very supportive of following the students were come after them, and makes the idea of financing education much more community based.

STOCK STRUCTURE

Why not try to mimic a stock structure instead of a bond structure? Why not do something interesting like selling a percentage of your future earnings for a set number of years?

One might argue that this incentives the student to not make money, instead doing Peace Corp or Teach for America or going off and being a teacher. Then EVEN more I think this financing structure should be done. Instead of banks, the government could do the financing to encourage this behavior.

Further, the structure (payout, percentages, years, etc…) could be different depending on program; MBA, Architecture, Engineering, Graduate or Undergraduate.

As an undergraduate, going into college at 18 it is a very unlikely that the student knows that they’re doing in the next 4 years. This might be an excellent opportunity to take a risk for both parties.

I know for myself, what % and years I would consider reasonable at 18 going into college would be very different than the what I felt at the end of college, or even at the beginning of business school.

Thinking about all this…it brings me back and helps me better answer a more fundamental question: What is the value of education?

MBA MIT Sloan First Year Recap – Treks!

Business school is funny. Though you have no income, there are so many opportunities to travel. Hence another reason Bschool becomes a very expensive two years of your life.

Looking back at my first year, here are some of my favorite treks/trips.

1. Iceland – Toured the country, visited their central bank, took a dip in Blue Lagoon, went to a geothermal plant, and ate some famous Iceland hot dogs. Awesome.

2. NYC Sports Trek – I was one of the directors for this trek and we visited NASCAR, NHL, NBA, and NFL, learning about the sports industry and how to break into it.

3. NYC Finance Day – Spent the entire day visiting investment banks in the NYC area. A great opportunity to hear from MIT and Sloan alumni about working in this ever changing industry.

4. MediaTech Trek – Spent a week in the Bay Area visiting Tech companies from major players (Google, Apple, Yahoo, Cisco) to growing companies (LinkedIn, Zynga, VMWare) to startups (Dropbox).

5. Tuck Winter Carnival – A gathering of Bschools from all over the nation. This was especially fun since MIT Sloan brought home the hot dog eating trophy for the 2nd year in a row!

6. Luxury Study Tour – A week in Europe learning about the luxury good industry. Learned about how a brand, by itself, can have so much influence.

 

I will be posting highlights on individual ones in the future.

MBA MIT Sloan First Year Recap – Favorite Classes

 

MIT has a lot of good professors and classes. In terms of teaching, I’ve been impressed with what MIT Sloan has had to offer so far. Obviously well renowed in their respective fields, but also great teachers, enthusiastic about their subject, and so open and willing to work with the students.

My personal favorite classes from the past year:

15.012 Applied Macro and International EconomicsRoberto Rigobon + Tavneet Suri. This was the most entertaining course I’ve ever taken at MIT. Together they do a great job teaching the class, and Prof. Rigobon’s energy is especially amazing. If I have half that energy when I’m 30, I’d be very happy. I did not think that I could ever have this much fun learning economics at 8:30am in the morning. It’s a great Sloan experience.

15.014 Global Economic Challenges – Kristin Forbes. Another excellent economics class, and is amazingly taught by Prof. Forbes. In 2003, she was the youngest ever member of the President’s Council of Economic Advisors, and so along with her academic work, she has a lot of experience to share as well. The class is great and so relevant especially with the current recession as a backdrop.

15.402 Finance II (Corporate Finance) – Paul Asquith. I was privileged to have been able to take this class. It was packed to the brim with students, wait list over 20+ long. All the second years told me that I cannot miss this class, and it was well worth it. Prof. Asquith is an amazing teacher with the knowledge of the entire history and working of corporate finance, with an incredible passion for teaching…if he did not, he would not go through the pain and effort to teach and could’ve been very rich on wall street. (as someone with zero finance background) This class changed the way I looked at finance.  Applying the principles of the class…Is my personal capital structure optimal for me (100% debt)?

15.810 Marketing ManagementMark Ritson. Prof. Ritson was a visiting professor to MIT Sloan last year, and this class was a treat. Even though I was taking 7 other classes, I made sure to sit in every class. One of my classmates stated this class was “life-changing.” This was one of the best taught class I’ve ever taken in my life. With his deep experience in marketing, working with the top brands around the world, he had so much  to bring to the classroom. It’s a shame that other Sloanies won’t have a chance to be taught by him.

Having never taken a business/accounting/economics/finance/marketing class EVER, the MIT Sloan MBA program so far has been worth while. It has allowed me to learn the theory behind a variety of subjects I’ve never had the chance to dive into, as well as understand the mechanisms used in business today.

MBA MIT Sloan First Year Recap – 2010 Sports Analytics Conference

One of my favorite things that I did the past school year was being an organizer for the 2010 MIT Sloan Sports Analytics Conference.

http://sloansportsconference.com/2010/

This was our 4th year of the conference, and we started organizing it the second we walked onto campus in September. My task was to organize two panels, which eventually combined with the other panels, and run logistics/operations for the conference. I say it went pretty well, thanks to @danschanoff for the complement:

In terms of marketing, we did an excellent job with no budget, at one point being the top trending topic in Boston on Twitter. My classmate Justin Jensen, MBA ’11, wrote how we got there here. And further, we got plenty of media attention this year. Some of my favorite links were:

Our panelist list was ridiculous. They were amazing and made the conference special. They came from all over the sports world – players, media, coaches, researchers…amazing. A few of my favorite panelists:

  • Michael Lewis – Author of Liar’s Poker, Moneyball: The Art of Winning an Unfair Game, The Blind Side: Evolution of a Game, and others.
  • Mark Cuban - entrepreneur and owner of the Dallas Mavericks
  • NBA GMs (at the time) – Kevin Pritchard (Portland Trail Blazers), Steve Kerr (Phoenix Suns)
  • Bill Simmons – ESPN’s Sports Guy
  • Bill Polian – President Indianapolis Colts
  • Matt Silverman – President Tampa Bay Rays

And of course, many props to our co-chairs (Daryl Morey and Jessica Gelman) and our organizing team.

The 2011 conference will be even better!

TechCrunch Disrupt…disrupted my life (in a good way)

From a recommendation from a classmate (Thanks Ernest), last minute I was graciously allowed to volunteer for the TechCrunch Disrupt conference held in NYC. Aside from a variety of interesting speakers and panelists, famous people walking around, Yahoo! CEO Carol Bartz getting angry, Major Bloomberg talking startups in NYC, and a showcase of a bunch of cool startups, I had got to hang out with a large volunteer base from a lot of other schools and companies (MIT Sloan had 10+ volunteers, great representation).

If I were to sum up the future of where technology is going, as I personally gleaned from the conference, it would be three words (and it probably won’t surprise anyone):

  1. Mobile (everything is going mobile)
  2. Social (apparently we’re not social enough already)
  3. Local (location, small businesses, communities, etc…)

As an aside, as we heard news about Apple surpassing Microsoft in market cap, just by observation, it was amazing to see the number of iPads being used at the conference. Many of my personal friends can’t even buy one because of the shortages, and yet this conference was full of them. As a rough rough estimate, I’d say about 10% of the attendees had them, and the number would jump to 30% for those that were a part of startups. And of the laptops being used, I’d gander a majority share were Macs (I can’t say the same about my MBA class). Again this is just by my personal observation. I guess for this crowd, it’s not too surprising, but still…is this an indication of an even bigger trend to come?