Haas NewsWire

Haas NewsWire, February 26, 2001

***Haas School Marketing Professor Emeritus David Aaker speaks on Brand Leadership at Haas on Wednesday, February 28, at 4:15 p.m. in Arthur Andersen Auditorium. Although the lecture is aimed primarily at the MBA Class of 2001, other members of the Haas community, including alumni, are welcome. ***

Thirty Teams Make First Cut in the Business Plan Competition
MBA Students From Across the Country Participate in Haas Social Venture Competition
Haas Accounting Study Finds Predictable Price Patterns Around Internet Firms' Earnings    Reports
E*Trade's CEO to Speak on the Future of Dot-Coms on March 9
The C4C Auction Raises Funds for the Special Olympics
A Taste of Asia at Haas: the Asia Business Conference
Haas Hosts UC Berkeley's Second Annual E-Business Case Competition
Haas in the News
Happening at Haas

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Although the dot-com frenzy has slowed, the interest in entrepreneurship remains strong at the Haas School, where 30 business plan teams are competing this spring in the third annual UC Berkeley Business Plan Competition.

While the actual number of submissions to this year's competition is down significantly from last year's, the entries seem to reflect the current trend in the venture capital world: fewer plans, but stronger ideas, according to the majority of the 54 judges who evaluated this year's entries. Of the 65 executive summaries that were submitted this year, judges selected the strongest ideas to advance to the semi-final round of the competition on April 12.

"The history of Silicon Valley suggests that the biggest innovations tend to be produced when times are the toughest," said competition co-chair and MBA student Robin Jones-Mendoza. "Today's market conditions seem to have had a positive effect on the quality of this year's submissions." Jones-Mendoza also noted that there is a wide range of industries and sectors represented among this year's plans, including biomedical devices, wireless platforms, advertising media models, and innovative chip manufacturing processes.

The UC Berkeley Business Plan Competition builds on the strengths of UC Berkeley's leading academic departments and local professionals. While half of teams represent the Haas School's strong imprint on the competition, the other half is equally divided between students from various engineering departments, Berkeley alumni teams (with degree backgrounds ranging from Philosophy to BioEngineering), and a cross-disciplinary mix of Berkeley students.

Teams not only compete for prize money, they also gain access to more than 100 successful entrepreneurs, venture capitalists, and technology business leaders who are actively involved as competition judges, mentors, or workshop presenters. At each competition round, teams gain invaluable written feedback from their judges.

Throughout the spring, the competition hosts workshops and guest lectures for participants. For example, on March 21, John Doerr, partner of Kleiner Perkins Caufield & Byers and one of the world's best-known venture capitalists, will speak to competition participants and students at the Haas School.

Eight of the 30 teams will be selected for the final round after presenting their plans to judges on April 13. These teams will compete for $90,000 in cash and prizes, including a $50,000 first-place award. Winners will be announced following public team presentations on April 25 at the Haas School of Business.

For more information on the UC Berkeley Business Plan Competition, visit the competition web site at http://bplan.berkeley.edu/.

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The 33 participating teams in the second annual Haas Social Venture Competition hail from 15 US business schools, including Cornell, Columbia, Kellogg, Michigan, Stanford, and Yale. Once again, the competition has attracted passionate and serious aspiring social venture entrepreneurs for its annual competition.

This year's plans focus heavily on the environment and health, followed by human capital development, capital development, and education. Plans include:

This year's teams will compete for a $10,000 first prize. All three winners will have their plans circulated to 150 social angel investors that belong to the Investor's Circle. All competing teams will receive written feedback from the judges at the semi-final and final rounds of the competition.

Launched in 2000, the Haas Social Venture Competition is the only business school competition focused solely on the creation and promotion of social ventures. The purpose of the competition is to help aspiring entrepreneurs launch new social ventures and to create a platform where social investors and aspiring social entrepreneurs can meet.

The 2001 competition started with a Rules Forum in November at which social venture leaders from across the US discussed how best to calculate Social Return on Investment (SROI). Participants included Will Rosenzweig, CEO of Hambrecht Winery and Vineyards and founder of the Republic of Tea; John May of New Vantage Partners; and Jed Emerson of the Roberts Enterprise Development Fund and a Bloomberg Senior Research Fellow in Philanthropy at Harvard University. Emerson is the author of a groundbreaking paper on defining metrics for social return on investment (SROI), called "The Nature of Returns."

The competition organizers - all MBA students at the Haas School of Business - have secured top social venture investors, philanthropists, venture capitalists, and social venture practitioners to judge the business plans. Sponsors of the competition include The David and Lucile Packard Foundation, Juma Enterprise Center, Community Foundation Silicon Valley, Flatiron Foundation, Mitchell Kappor Foundation, Calvert, Sustainable Jobs Fund, and Walden Asset Management. Honest Tea, Investor's Circle, and John Bishop contributed in-kind donations. For more information, visit http://groups.haas.berkeley.edu/socialventure/home.html.

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Internet stock prices generally rise before earnings announcements and fall afterwards, regardless of the earnings and revenues that are reported, according to a new study by Haas Accounting Professors Brett Trueman, M.H. Franco Wong, and Xiao-Jun Zhang.

This first-ever academic study of Internet stock fluctuations surrounding earnings announcements found a predictable price pattern with a 10-day return of more than 11 percent from January 1998 to August 2000. "We were surprised by the size of these returns, and by the fact that they occurred quarter after quarter...whether the market was going up or down," said Professor Zhang.

The researchers also found that, in general, neither the announced earnings nor the announced revenues are related to the pre-announcement price run-up or post-announcement decline. "This rules out the possibility that these returns are due to news leakage in advance of the earnings announcement," said to Professor Wong. Rather, the evidence points to excessive demand for shares in advance of the earnings announcement that temporarily drives up prices.

"It appears from this evidence that small investors were buying just before Internet firms' earnings announcements in the hopes of good news, which would drive the prices up even further," said Professor Trueman. Given the subsequent stock price declines, this is clearly an unprofitable strategy, he said. Overall, the study's results suggest some degree of irrationality in the pricing of Internet stocks around earnings announcements.

Trueman, Wong, and Zhang emphasize that their findings hold on average, and that not every individual stock exhibits the same pattern around earnings announcements. "Internet stocks are very volatile. Trying to exploit our findings by taking a position in just one or two stocks is very risky. Diversifying across a large number of Internet stocks reduces that risk," said Zhang.

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The self described "Head Honcho and Chief Visionary" of E*TRADE, Christos Cotsakos, will speak at the Haas School on March 9 at 4:00 p.m. in the Arthur Andersen Auditorium as the final lecture of the Business Faculty Research Dialogue series. He will bring his take on "The Shakeout in Cyberspace: What's Next for the Dot-Coms?"

Cotsakos, the CEO and chairman of E*TRADE, has become known for a lively management style. He has challenged his new hires to stand on a chair in a meeting and share something about themselves, sent his executives to spend a day racing cars, and asked staff to wear propeller beanies, or attend cooking school. All of this has ostensibly been a team building exercise. Haas School professor Jennifer Chatman, who was quoted in a February, 2000 Business Week article on his management style, said that this sort of company ritual helps employees understand company objectives and make decisions.

E*TRADE is a leader in online personal financial services, offering value-added investing, banking and research features, premium customer service and a redundant, proprietary Stateless Architecture infrastructure.

Prior to taking the reins at E*TRADE, Christos was a senior executive at Federal Express, as well as ACNielsen Corp. He also serves on the boards of several leading-edge technology companies. He's a decorated Vietnam War veteran. He received a BA from William Paterson College and an MBA from Pepperdine University. In his spare time he is pursuing a Ph.D. in economics at the University of London.

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Vegas comes to Berkeley next Friday for the Eighteenth Annual Challenge for Charity Auction on March 9 in the International House. The Viva Las Vegas auction is one piece of the MBA Challenge for Charity, a competition between the Haas School, Stanford, UCLA, UC Irvine, USC, and the University of Washington, to see which school can raise the most money and volunteer the most time for the Special Olympics.

This auction is the major fundraiser of the year for C4C, raising over half of the total year's donations. Last year's live auction was a huge success, bringing in more than $37,000. In 2000, the top bid of the evening was a dinner for six with Dean Laura Tyson and her husband for $2,400. Other hot items of the night included dinner with Economics Professor Janet Yellen for $1,100, a coaching session with a group of angel investors from the Angels' Forum for $750, and a day of surfing lessons followed by a pool party for twelve with Paul Tiffany, senior lecturer in the business and public policy group, for $1,800.

Items on the auction block this year include:

There is still time to come up with a creative donation for this year's auction. Contact Sara Smolek smolek@haas or Paul Dyson pdyson@Haas.berkeley.edu for more information.

Haas is not just competing in fundraising against the other schools, but also in volunteering to help at Special Olympics events (which was a weakness for Haas last year). There are still two more Special Olympics events this spring on March 10 and April 29, which provide opportunities for MBA students to earn volunteer hours for C4C. "It's for a great cause," says Linda Ng of her volunteering at a Special Olympics bowling event in Sacramento. "It's rewarding to be able to support the Special Olympics and be a part helping the participants have fun." Contact Leora Zabusky at saacksza@Haas.Berkeley.edu for more information on volunteering at the final events for the spring.

The entire C4C competition culminates in a C4C Sports Weekend held at Stanford University on April 20 to 22. The weekend's events are the third aspect of the competition and the winner of the overall competition is announced at the end of the weekend. For tickets to the auction, contact Linda Ng at lng@haas.berkeley.edu. A silent auction precedes the live event and will be held from March 7 to 9 in the Helzel Boardroom. Tickets to the live auction are $25 in advance and $30 at the door.

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Along with a full host of international business people discussing opportunities in the Pacific Rim, the Haas Asia Business Conference is bringing some of the Bay Area's best Asian cuisine and a chance to play with a bevy of high-tech gadgets to Haas on Saturday, March 3.

Ta-Lin Hsu, chairman of Hambrecht & Quist - Asia Pacific (H&Q's Asian venture arm), and John S. Wadsworth, honorary chairman of Morgan Stanley Asia Pacific, Ltd., will be keynote speakers at the conference. Dean Laura Tyson will give the opening remarks.

At the product fair, Toyota (http://www.toyota.com/) will park a Prius in the Haas Courtyard, Creative (http://www.creativelabs.com/) will bring the latest MP3 players, and Kivera (http://www.kivera.com/) will show off its mobile, location-based services.

Student organizers are working to bring in local restaurants to provide a spectrum of Asian cuisine for the event. Cooking demonstrations at lunch are also in the works.

The HABC is the second in the Haas International Business Conference series, and the first that is student-run. For updates or further information, check the web site at www.haas-abc.org or contact info@haas-abc.org. Tickets are still available at www.haas-abc.org.

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Imagine flying all the way from Jakarta just to hear what four college students had to say about your company? This happened last year at the first E-Business Case Competition at the Haas School, when representatives from the Cardig Group came to hear the students' solutions at the final event. The 2nd annual E-Business Case Competition is just getting started and promises to attract just as much attention as the first.

The competition is hosted by the Haas School in association with the Schlinger Family Foundation, Cisco Systems, and Deloitte Consulting. All UC Berkeley students are welcome to form teams and enter the competition. To date, over 50 teams have entered the competition.

Last year's case concerned an Indonesian supply chain management company called the Cardig Group that is based in Jakarta. Each team devised a new market entry strategy for the company that integrated its service offerings. Last year's winner included one business major on the team of four UC Berkeley undergraduates: Alexandre Jost, Alex Kaplenko (Haas), Theresa Kingston-Bonney, and Christopher Zobrist. Several representatives from the Cardig Group attended the final competition to hear all of the presentations.

This year's case materials and instructions will be available on Wednesday, February 28, 2001, at noon in the Haas Undergraduate Office (S450). The exact nature of the case for the competition has not been announced, but Cisco Systems will be the subject of the case. Deloitte Consulting and Cisco Systems have specially designed this case based on a currently unsolved e-commerce situation they are facing.

Students form their own teams to participate in the competition. The recommended team size is four and there must be at least one team member who is not a business major.

The timeline for the competition is:

February 28 -- cases available for pick-up at the Haas Undergraduate Office (S450) March 21 -- completed cases have to be submitted in person at the Haas Undergraduate Office (S450) by 3:00 p.m. April 6 -- finalists will be announced April 16 -- final presentation

The E-Business Case Competition is sponsored by the Haas School of Business, Schlinger Family Foundation, Deloitte Consulting, Cisco Systems, Alpha Kappa Psi and Delta Sigma Phi. For entry information, stop by the Haas Undergraduate Program Office.

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Severin Borenstein, E.T. Grether Professor in Public Policy and Business Administration and director of the UC Energy Institute, was quoted in the San Francisco Chronicle on February 26 in the article "Governor Calls for 10% Cut In Usage." The complete text can be read at http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/02/26/MN44189.DTL.

Borenstein was also heard on KCBS radio and KGO radio on February 26. He was quoted in the San Jose Mercury News on February 19, in the Sacramento Bee on February 22, in the American Prospect on February 26, and in the Arizona Republic on February 25.
The Arizona Republic: http://www.arizonarepublic.com/news/articles/0225dereg-overview25.html
Sacramento Bee: http://www.capitolalert.com/news/capalert02_20010222.html

Haas Alumnus Warren E. "Ned" Spieker, BS 66, was mentioned on the front of the San Francisco Chronicle Business section on February 24. "Chicago Realty Giant Moves In" is about the acquisition of Spieker Properties, Inc. by the Equity Office Properties Trust.

Brett Trueman, the Donald and Ruth Seiler Professor of Public Accounting, chair of the Haas Accounting Group, and director of the Center for Financial Reporting and Management, was quoted in the San Jose Mercury News on February 22. Trueman stated that some of the same factors that drove the stock market higher in good times are now creating a downward cycle. Read the full text of "Stocks Hammered by Fears on Prices, Tech Inventories" at http://www0.mercurycenter.com/premium/business/docs/markets22a.htm.

Sara Beckman, senior lecturer, was quoted in BusinessWeek's cover article on February 19 in "The Radical: Carly Fiorina's Bold Management Experiment at HP."

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