Acumen Fund – Moral Leadership for a more Inclusive Future – Design At The Edge

Moral Leadership for a more Inclusive Future
Jacqueline Novogratz, CEO, Acumen Fund

Opening Points
I. Dignity is more important to the human spirit than wealth.
Think more broadly about what poverty means.

II. Charity and aid alone will not solve the problem of poverty.

Charities “create dependency rather than dignity.”

Jacqueline Novogratz describes Acumen Fund as a “non-profit Venture Capital fund for the poor investing in companies, leaders and ideas.”

“Investing philanthropic funds.”
“Think much more seriously about our systems”
“At Acumen it always starts with the people.”
“Can take five to fifteen years for the [financial] returns to come back”

Acumen Portfolio Examples
Ex 1:
Husk Power Systems – Bihar in India

http://www.huskpowersystems.com/

Many of the people have been profiled as “economically impossible to reach economical means”
“gasifiy the rice husks”
“via minigrids that can reach 10,000 people”
made with bamboo sticks and “strings” as electric lines.
currently reaching about 170,000 people with Husk Power

Ex 2:

http://www.1298.in/

In India 90% of people in ambulances are dead.
Taxis are used more often for ambulances
Ambulances are not regulated,
It took private initiative an private capital to build it.

brand image differentiation – yellow color, unique phone number 1298
avoid corruption – not taking bribes.
ethos – service for all – patients are taken to free clinic
marking – subsidizing their costs, they display advertisements on the side
invested – started with 9 ambulances in 2007, a year before the Mumbai terrorist attacks, and will soon reach 1,500 ambulances

“create systemic change”
“We’re already seeing it replicated in other countries”

Ex 3: d.light

http://www.dlightdesign.com/

consumer product
instead of Kerosene lamps


“in the 80’s and 90’s it was top down.”
“you’d come in and” say “here’s this solar plant”
[hard to diffuse]

Ex 4:
Housing – Jawad Aslam
blank land
outside of Lahore Pakistan
Javat – a year to register the land because of the corruption
[diffusion problem] – no one trusted that there would be jobs around [meta-system problem]
-it’s connected to status, wealth, beauty [the opposite of Tata car]

Ex: 5 Western Seeds

http://www.westernseeds.com/

sells hybrid seeds in Africa

Acumen in Kenya
-fortified porridge
-public toilets – previous attempts at innovation here have not diffused

Future
“The Road of Fear”
-“evident in terrorism, business”
The other road…

“Road of Justice of Love”
-“the only road that takes us where we need to go.”
-takes us into a “single tribe”

This is a time of “great instability and great opportunity”

“Using the power of the markets and smart design”

Investing Model:
“Scale – we don’t want to invest in anything that will reach 1M people”
“typical capital commitments range from $300,000 to $2,500,000 in equity or debt with a payback or exit in roughly eight to fifteen years.” (AcumenFund.org)

Even though their investment period is about eight to fifteen years, Acumen Fund considers their investing to be venture capital because they invest in early stage companies.
Their exit may consist of: the management of the company they invested in buying back shares, or selling to a strategic investor, or continuing to earn dividends.

They also engage in what they call “Lab Investments,” which “are smaller-scale, high-risk experimental investments, where funding can be disbursed rapidly and lessons can be learned in the short-term.”

Primary Investment Criteria:
Potential for Significant Social ImpactCompanies need to make a product or deliver a service that addresses a critical need at the BoP in the areas of our strategic and geographic focus. Delivery of the products or services should generate social outputs that compares favorably with products or services either currently available on the market or through charitable distribution channels.
Potential for Financial SustainabilityA clear business model that shows potential for financial sustainability within a five to seven year period, including the ability to cover operating expenses with operating revenues. This period corresponds to the tenor of most commercial loans, and positions entrepreneurs to access commercial finance in the future.
Potential to Achieve ScaleAn objective of reaching approximately one million end users within a five year period with the benefits of the product or service. If the entrepreneur’s business model does not aim to reach one million consumers, does it have:

* The potential to grow by an order of magnitude (i.e., 10x) within five years?
* Potential for material impact on the social problem it is trying to solve?
* A position as one of the leading service providers in the market in which it operates?
* A strong and experienced management team with the skills and will to grow a sustainable enterprise at the BoP?
* The presence of a strong management team that has the requisite skills to execute the business plan and a clear and compelling vision?
* A management team with the will to work with the market to achieve the goal of serving the BoP?
* A management team with positive ethics?
(via AcumenFund.org)

Insurance Models
-does not work if when everyone gets sick.

Working at the macro-mezzo and micro level
-to set up a much more robust system.

Speaking about the current insurance model in the US.
“in some ways, we’d have to burn down the health insurance system”

Resources and people mentioned:
Innocent Anthropologist
Buckminster Fuller


This lecture is part of Bruce Nussbaum’s Design At the Edge lecture series.

Notes on CBS China Business Conference :: 中国式增长 pt2

Private Equity and Venture Capital Panel: New Cycle, New Paradigm, New Landscape

Anla Cheng of Sino-Century

  • increase in PE fund managers – going for pre IPO deals
  • increase in general partners
  • “There’s too much money chasing for too few good companies.”
  • this may be the reason for an “increase in art sales” and other luxuries
  • as the gov’t is trying to cap the impending real estate and stock bubble
  • An increase in RMB funds
  • US dollar GPs are creating RMB funds
  • there are over 2,000 RMB funds
  • adjusted the hukou system to help people move in quicker
  • Fund Sources
  • US dollar GPs are creating RMB funds
  • gov’t (ex: solar sector : ¥400B
  • fund to fund
  • Sino-Century Investment Examples
    Women’s Healthcare
    In China, women’s healthcare is just beginning
    ex: A product to scan for cervical cancer

    • “There isn’t a clinic they can go to, so they have to go to the hospital.
    • “The co. has to go an extra layer to create a servicing network.”
    • “But even the doctor might not know how to use it.”
    • This company was sold to a Fortune 500 company
    • “In the US, this makes a lot of sense,”
    • “Translating that to China is hard”
    • [Service Design problem and opportunity]

    Food
    ex: logistic systems – complicated

  • 40 built(?) in China [recording inaudible]
  • 6,000 SKU
  • the complexity of the business “made the company unique”
  • What is the EBIDA – “should you build the [same scale and complexity of a] company” or just buy it?
    [blend of backstage logistics (critical path, sourcing, BPM) and front end user experience]
  • Alternative Energy
    ex: a pure play solar company

  • IPOed on the Shenzhen stock exchange.
  • It now has #2 brand recognition
  • and also sells in Germany
  • Sustainable Energy
    ex: wind turbine blades made out of bamboo

  • “we’re not just focused on alternative energy.”

  • “we’re focused on sustainable energy.”

    Andrew Hudders

  • mostly deals with flow of finances from US -> China
  • sees an increase in Chinese capital and Chinese investing in the US
  • PIPE – Private Investment in Public Equity
  • Gov’t influence – encouraged to invest outside of china
  • ex: food sources, alternative energy

    Problems and Differences

  • The small PE funds are inefficient, they are more like stock investors
  • doing deals overnight is not PE
  • What is occurring in China is “not what we traditionally consider PE in the US, which are arguably more skill intensive.”
  • They’re not to be “fe generating at the beginning, but to wait for the payout (3-5 years later). -Roger Leeds
  • Monita

  • Parallel funds can be created – going through the Ministry of Finance
  • RMB: Domestic Side can be created quickly – 2 days
  • US side: can take 9 months
  • -Chinese currency is not convertible
  • Government

  • In China it’s not “the government.”
  • There is: provincial, city, and above city level
  • ex: The provincial gov’t may invest maybe 20%into a company that is in a city [see sketchnote]
  • 20% “for that business’s fund for that business in the city
  • Gov’t support (via Anla)
  • she focuses on the three areas of the 35 year plan
  • is given funds by the gov’t to manage
  • ex: cooling towers – approaching provinces to purchase Xinbei Cooling Towers
  • Gov’t approval
  • very rarely do you get gov’t approval to create a financial entity
  • gov’t can’t support purchasing new technologies
  • deal flow involves the provincial government
  • creates a tremendous opportunity for the PE
  • use of local currency takes up some of the saving of RMB
  • ex: “Wind” (company – the “Bloomberg of China”) gained support from the mayor of SH
  • Growth Capital

  • small to mid size companies where you buy a significant but not controlling stake
  • The term “buy out” is different and focuses on a “significant stake” but not controlling and does not require loans and debt
  • Exit Markets

  • US timeline: invest—disinvest (sell) (five year) (via IPO)
  • CN timeline: invest—disinvest (sell) (18-3year) (via IPO, but or often by trading or selling)
  • time horizons are different
  • Often “No due diligence is done as the wire transfers are encouraged to be done very quickly.”
  • “In the next few years, a bubble will burst because the valuations are too high.”
  • The funds are “not run by real PE professionals” and are “just looking to get in before an IPO.”
  • Trends & Future of PE
    Average entry multiple is 6-12 times.
    the multiples can be 60-100 times.
    “I don’t know if this is sustainable” – Anla

    “deb structures that Chinese use are unsophisticated”
    “it will become more and more of a domestic industry…more and more Chinese.”

    this will cause

  • tougher regulation on companies
  • speed of growth and amount of money going into
  • How do you use foreign tech to fuel traditional business?

  • a company where you can increase the profit margin (by brining in new tech)
  • uncover crown jewels or diamonds”
  • most companies don’t want to be listed for financial reasons: they do it for the status symbol to say they’ve arrived.”
  • We’re in the process of creating brand names in China
  • Takeaways

    Q: Diff btw merchant banks and PE?
    A: Merchant banks – at a very high level
    PE – the real work begins after you invest
    In the US, we tend to think of VC as a subset of PE.

    Q: To what extent do you manage [and do more] than just stay on the bard?
    A: We get involved in every level
    -Anla Cheng
    As an equity investor, can you actually get involved in every level? What are ways for you to see insights form deep at the operation and level and consumer side?

    My Question:
    How can you that insight without having to spend excessive time there?

    What form do these deliverables take place?

    This is harder for multiple reasons.
    1. The time between initial investment and sale, trade or IPO is shorter than it is in the US.
    2. The companies that help transition to a service economy operate and exist differently.
    -The have different metrics of success and often those metrics are not well defined

    How do you translate not only technology to a new physical location, or management to a new cultural environment, but how do you translate success to future “industry” and future “companies.”


    Event Info

    Now the second-largest economy, having recently eclipsed Japan, China is becoming the anchor for a new cycle of self-sustaining economic development. The VC/PE industry, regarded as one of the major drivers of China’s innovation and industrial progress, will play an increasingly important role during this cycle. China’s VC/PE industry has reached a critical point in its development, with opportunities for explosive growth of the industry itself on the one hand and overall structural transformation on the other.
    Key Topics:
    How will the newly unveiled government policies such as “Opinions on Further Optimizing Usage of Foreign Capital” and the “New 36″ affect the equity investment industry? Along with the establishment of large-scale industrial funds backed by state assets, what will the pattern and prospects of Chinese VC/PE market look like? Will the rapid rise of RMB-denominated funds trigger new bubbles or cause supervision problems? What are the hot areas for VC/PE investments in 2011?
    Roger Leeds
    Chairman of Emerging Markets Private Equity Association (Moderator)
    Dr. Roger S. Leeds is the Chairman of the Board of Directors of EMPEA, and a Professor at the School of Advanced International Studies (SAIS) of the Johns Hopkins University, Director of the School’s Center for International Business and Public Policy, and an Adjunct Professor at the Wharton School, University of Pennsylvania. Prior to SAIS, Dr. Leeds worked as Managing Director and co-head of the emerging markets practice at Patricof & Co., Partner at KPMG, senior staff member at the International Finance Corporation, and, Associate at Salomon Brothers in New York. A renowned expert in the field, Dr. Leeds has worked in 100 countries in Latin America, Asia, Eastern Europe and the former Soviet Union, and Africa, and is a member of Council of Foreign Relations in New York. Dr. Leeds has a bachelor’s degree from Columbia University, and a M.A. and Ph.D. from SAIS.
    Monita Mo
    Founder and President of Ascend Capital Partners (Panelist)
    Ms. Monita Mo, the founder and president of Ascend Capital Partners, is a Chinese-American with sino-US bilingual cultural background. She graduated from Baruch College of CUNY with Master degree in Taxation and is a CPA licensed to practice in NY, NJ and California.
    Monita has a total of 30 years of experience in private equity, financial restructuring, and operating/financial management in China and the United States, engaged to help Chinese and American corporations to raise fund or go public in overseas market. She started her consulting experience with Arthur Andersen NYC participating in mega M&A deals in the 80’s primarily in the media and financial industries. She then started her accounting business in 1992 based in US and focusing in China. She is currently the consultant for 18 banks from China and Taiwan who conducting business in the US. She helped the first wave of abroad students in US come back to China to set up their business and assisted the earliest US investors investing directly in China. Meanwhile, she participated in the earliest online times investment, such as: 8848, Tongtech, PRC EDU and so on.
    Ascend Capital Partners was founded in 2002 by Monita, expanding the concept of consulting + investing primarily in privately owned enterprises in China (www.ascendvp.com.cn). Ascend has completed several exits in its investment and onto raising a fund to increase each of its investment size. The successful cases of Monita in recent year are Acorn International (listed in US), NVC Lighting (listed in HK), Changfeng Agricultural, TCT Medical, YOYI Media, Sinodis and so on.
    Anla Cheng
    Partner of Sino-Century China Private Equity (Panelist)
    Ms. Cheng is partner at Sino-Century China Private Equity, a mid-cap growth capital China PE RMB Fund focused in Financial Information and Services, High End Manufacturing and Sustainable Environment. She has spent more than 25 years in the field of investments and finance. She began her career at Goldman Sachs on the GNMA bond desk after completing the company’s training program. She joined Citibank, first as a Pacific Basin analyst, and later as Asian portfolio manager. She then moved onto Prudential-Bache where she headed the Japanese Institutional Desk.  She subsequently joined Robert Fleming, New York, eventually becoming senior vice president and head of the Japan/Taiwan/Korea Institutional Sales Group. Ms. Cheng ran a Family Office focusing on Asia hedge fund of funds which included PE funds before joining Sino-Century.
    She has an MBA from The Wharton School of Business at the University of Pennsylvania and has a magna cum laude B.A. from Pratt Institute. Ms. Cheng grew up in Japan and is proficient in English, Mandarin and Japanese. She is a member of the Committee of 100. She is also a Trustee of The Riverdale Country Day School and was honored at MOCA in 2009.
    Christian Giannini
    Director of ChinaVest (Panelist)
    Mr. Christian Giannini now serves as director at ChinaVest, a leading merchant bank founded in China by Americans over a quarter century ago and one of the oldest and largest private equity firms exclusively targeting the rapidly growing Greater China market. Prior to joining ChinaVest, Christian worked in the M&A and Corporate Finance groups at Robertson Stephens & Co. His transaction experience in China and the United States spans Infrastructure, Manufacturing, Energy and Distribution.
    Christian graduated from the University of San Francisco with a B.S. in International Business and he received his MBA from The University of Chicago, Booth Graduate School of Business. Outside of the office, Christian is an avid sailor, telemark skier and chef.
    Andrew Hudders
    Partner, Golenbock Eiseman Assor Bell & Peskoe LLP (Panelist)
    Mr. Hudders is a partner in the Firm’s securities and corporate departments. He regularly represents companies and placement agents/underwriters in public and private offerings, including private placements, IPO’s, 415 transactions, PIPE’s and secondary and resale offerings. He has extensive experience in SPAC offerings and SPAC business combination transactions as well as reverse merger transactions and related financings, typically PIPE transactions to finance the acquisition of and working capital for an acquisition target. He also advises and assists companies with their SEC reporting obligations, annual meeting requirements, corporate governance and securities compliance. He has substantive experience representing smaller underwriters and placement agents in underwriter compliance and compensation under FINRA regulation and blue sky issues.
    Mr. Hudders’ corporate practice includes the general representation of well-established, emerging growth, and start-up companies as outside general counsel. He represents these companies in a variety of matters, including equity and debt financing transactions, venture capital and private equity transactions, stock option plans, SEC reporting, executive compensation and employment related matters, strategic alliances and mergers and acquisitions. He also advises on listing requirements for issuers.
    The issuer clients that he represents operate in such diverse industries as computer services, on-line services, alternative energy, oil and gas exploration, mining, media, film and television production, beverages and food distribution, and medical devices. Clients are both United States based and have headquarters and operations in Canada, China, Hong Kong, Singapore and the the United Kingdom, among other locations.

    Event info and bios via http://www.columbiachinaconference.org/panels1.html

    Notes on CBS China Business Conference :: 中国式增长 pt1

    Opening Keynote – Frank Newman
    Spoke on how he turned Shenzhen Development bank into a highly profitable organization. He notes it is one of the few banks that is not state owned.

  • Main changes he made
  • -sent out bonus plans to have the branches vet them.
    -printed a formal code of conduct.
    -code of conduct iterated into “user friendly cartoons” for the second version.
    -verified via feedback surveys
    -created a way to define bonuses on “merit” not on “favoritism” or other means.

  • Crowd Questions
  • Q: Concerns for others than just shareholders.
    A: success of the bank was focused on: serving the economy, serving society.

    Q: What were the main challenges?
    A: “culture, trust, team management with language separatism.”

    Takeaway – he said he improved “efficiency and customer experience” – they’re two areas that I focus on (see my “About Page”).

    “Frank Newman has recently completed 5 years as Chairman of the Board of Directors and CEO of Shenzhen Development Bank, China (“SDB”). In 2005, SDB, a national listed bank with operations in 20 major cities of China, was seriously troubled. After a US-based private equity firm purchased about 20% of the bank’s shares, Mr. Newman led a team that turned the bank around substantially, to become healthy and highly profitable — with no government funding or guarantees. At the end of June 2010, after the successful sale of the major interest in the bank, Mr. Newman announced his retirement, and became an independent Senior Advisor to the bank.
    Mr. Newman also served as an active director of Korea First Bank, then controlled by a US-based private equity firm, as the bank recovered from substantial problems to become healthy and profitable. Previously, Mr. Newman served as Chairman and CEO of Bankers Trust Corporation, a major international bank based in New York. When Mr. Newman was asked to join BT, it was in a difficult, unprofitable position, facing substantial business, regulatory, and legal challenges. Mr. Newman led the program of resolution of the legal and regulatory issues, and recovery to a broader, profitable business base. Mr Newman then led the successful sale of the bank to Deutsche Bank, with a strong return for shareholders.
    From early 1993 through late 1995, Mr. Newman served as Undersecretary, then Deputy Secretary of the United States Treasury Department. As Deputy Secretary, Mr. Newman was the number two official of the Treasury Department and represented the Treasury on a broad range of issues domestically and internationally, including economic and banking policy. He also served as Chief Operating Officer of the Department. Upon completion of his service with Treasury, he was awarded the Alexander Hamilton Award, the Department’s highest honor.
    Prior to his government service, Mr. Newman served as Vice Chairman of the Board and Chief Financial Officer of BankAmerica Corporation, San Francisco. Mr. Newman earlier served as Executive Vice President and CFO of Wells Fargo Bank.
    Mr. Newman has also served as a director of a number of corporations in the US and other countries, including Dow Jones & Company. He is a member of the Board of Trustees of Carnegie Hall, and a member of the Investment Committee. Mr. Newman graduated from Harvard University with a BA, magna cum laude in economics.”

    Bio via Columbia China Business Conference Site. http://www.columbiachinaconference.org/keynote.html
     

    Ned Cloonan
    A great speaker, and Columbia alumnus
    He gave the history of AIG (AIG, American International Group) starting in Shanghai in 1919 and a background of CV Starr.

  • 4 Fundamentals to Succeed:
  • 1. Committed – long term, commitment has to come from the top, “The example starts at the top.” (speaking with regards to an organization)
    2. Relevant – be seen as the solution to their problems (China’s problems/ Chinese people’s problems).
    3. Informed on the differences between local, regional, versus Beijing
    4. Strategic

  • Skills you need

    -_________ of the secretary of finance
    (diligence with quantitative data that can scale and have large impact)
    -the cultural sensitivity of a sociologist
    -the tact of a diplomat
    -the eye of an art historian

  • Examples:
  • commitment – Post Mao, it took 17 trips to Shanghai to ask for a license for AIG to start again. The business must bring something to China.
  • cultural sensitivity and appreciation of culture – AIG top level employee notices Chinese works of art are for sale in a US antique store. Those works of art were from the Summer Palace and were stolen during the Boxer Rebellion. AIG returns them to China.
  • Relationships with people – even if they’re in a different group (age, industry etc). He stress the importance of relationships and notes “China is a country driven by relationships, not rules.”
  • IBLAC (International Business Leaders Advisory Council) – engaged with other, economic reform to make SH a financial center, and worked on air traffic in addition to more
  • See beyond the normal business framework, beyond bilateral US-China relations, but the relations that shape your country’s relation with the world.
  • Edward “Ned” Cloonan
    Retired Global Vice President, American International Group
    Mr. Edward “Ned” T. Cloonan held the position of Vice President of Corporate and International Affairs for American International Group (AIG).  He was responsible for developing and executing business development strategies, as well as strategic corporate giving.  He helped build AIG’s global businesses, including playing a leading role in successful market access strategies in China, India and Vietnam.
    Mr. Cloonan had a 30-year career with AIG.  As Vice President for Corporate and International Affairs, he worked closely with CEO Hank Greenberg in expanding the firm’s international business, with an emphasis on China, India, Vietnam and Latin America.  Mr. Cloonan led efforts in five key areas: Political Management, Market Access, Issue Management, Business Development, and Philanthropy.  Some of his accomplishments include: he attained the first ever 100% foreign owned license to operate in China; defeated legislation in Russia that disallowed foreign life insurers from operating there and developed strategies that resulted in AIG being the only foreign life insurer allowed to operate in Russia; led winning strategy to overcome India’s previous thirty years of insurance industry nationalization and secured operating license in India; developed $75M global corporate giving program that promoted entrepreneurship, innovation, diversity, and empowerment.
    Mr. Cloonan is a member of the Council on Foreign Relations, and serves on the board for the Asia Society, National Committee on U.S. China Relations, the Americas Society/Council of the Americas and the American Indonesian Chamber of Commerce.  Mr. Cloonan was named a “C.V. Starr Partner,” the highest form of recognition within AIG, for his outstanding leadership and performance.  As Hang Greenberg once said, “Ned is simply the best at what he does.”

    Bio via Columbia China Business Conference Site. http://www.columbiachinaconference.org/keynote.html
    ————

    China Business Conference :: Growing Like China 中国式增长

    Columbia Business School is hosting a conference on business in China.
    I am most interested in the talks on venture capital, entrepreneurship, and cleantech.

    My Goals:
    Understand more about entrepreneurship (and VC) in the context of China.
    Understand more about VC (and how that can be blended with IB).
    Identify opportunities for (devel and implementing) alternative energy application.

  • Specifically – networked cleantech + alternative energy where the users are co-creators.
    (area where Shell is not interested in see URB CN outline)
  • Highlight current discrepancies and problems w energy usage
  • Id specific geographic markets.
  • Id new technologies (that have been engineered, but the way they interface with local users needs to be designed.)*


  • This will help me understand how to refine my capabilities of:

  • a. Researching and understanding how these technologies (some of which currently exist and some of which are being devel’d can engage in user-specific scenarios – culturally, and usefully.**
  • b. Designing the services to be implemented and operated with metrics that can be appreciated with the likes of a tangible product or physical environment.***


  • *[obviously in an iteration, the specs will need to be re-engineered.]
    **[see Future Perfect – efficiency 50-100% (delivery to consumption) vs 5-10% improvement (manufacturing) for products – exponentially or at least increased figures with co-created svcs].
    ***[see Doblin 10 Types, Continuum’s Rajesh on new metrics etc.]


    See the following details from their website.

    Macro-Economy Panel: China’s Economic Restructuring – Challenges and Opportunities
    Since China’s economic opening in 1978, the Chinese economy has been enjoying rapid growth. China has come to a point where it is reevaluating its economic model focused on growth in order to counter current inequalities and destabilizing factors. Looking ahead, the Chinese economy will embrace great opportunities as well as encounter some potential challenges. Thus, social and economic restructuring needs to be taken into consideration by both policy makers and all the other economic participants. The direction of the Chinese economy will also have a significant impact on the global economic landscape.

    Key Topics:
    What does China’s macroeconomic environment look like at present? What challenges and opportunities will China’s economy face in the future? What key factors will influence China’s future macroeconomic development, both domestic and international? What direction will China’s economic restructuring take in the next decade?

    Private Equity and Venture Capital Panel: New Cycle, New Paradigm, New Landscape
    Now the second-largest economy, having recently eclipsed Japan, China is becoming the anchor for a new cycle of self-sustaining economic development. The VC/PE industry, regarded as one of the major drivers of China’s innovation and industrial progress, will play an increasingly important role during this cycle. China’s VC/PE industry has reached a critical point in its development, with opportunities for explosive growth of the industry itself on the one hand and overall structural transformation on the other.

    Key Topics:
    How will the newly unveiled government policies such as “Opinions on Further Optimizing Usage of Foreign Capital” and the “New 36″ affect the equity investment industry? Along with the establishment of large-scale industrial funds backed by state assets, what will the pattern and prospects of Chinese VC/PE market look like? Will the rapid rise of RMB-denominated funds trigger new bubbles or cause supervision problems? What are the hot areas for VC/PE investments in 2011?

    Investment Banking Panel: Cross-Border M&A – The Next Wave
    As China has gained increasing economic power and prowess in the global economy, we have witnessed the first wave of Chinese outbound M&A deals, led by the country’s huge state-owned enterprises and aimed at securing critical natural resources such as oil and minerals. The ranks of Chinese companies executing cross-border transactions are swelling, and the latest wave is led by auto-makers looking to acquire technological know-how and brand equity. What is next? As Chinese companies look overseas to maintain their stellar profit growth and compete with global enterprises, M&A becomes an essential and critical part of their strategic decisions. Similarly, plenty of opportunities exist for foreign companies looking to establish or grow their presence in China through M&A.

    Key Topics:
    How do Chinese anti-monopoly law and other legislation impact deal flows? What current obstacles prohibit foreign companies from making strategic acquisitions in China? What will the M&A landscape in China look like over the next 10 years?

    Capital Markets and Investment Panel: The Outlook for Chinese Capital Markets
    Since the economic liberalization of the late 1970s, Chinese capital markets have been through rapid developments and expansion. Today, the markets have become the driving force shaping the ecosystem of modern Chinese business society. With more sophisticated legal and regulatory systems, bigger and more efficient markets, and improved international competitiveness, China’s capital markets, with their unique dynamics, have attracted more and more world attention and academic studies as an engine for the global financial system.

    Key Topics:
    With the rampant inflation threats looming in emerging economies, is the China Story still intact? How can investors invest in China both strategically and rationally? What are the latest developments in China’s investment management industry? How does the Chinese capital market introduce and implement innovative financial instruments such as futures and ETFs? How does the emerging derivatives instruments affect market trading behaviors? What are the priorities and concerns for Chinese policy and regulatory authorities to manage the high growth and capital inflows? What is the next potential step for the RMB liberalization, given the successful offshore market? What are the major risks investing in China compared to other Asian emerging market? Will the fear raised by the Japanese nuclear meltdown impact the nuclear industry and the renewable energy development in China?

    Green Energy and Cleantech Panel: Charging Ahead on the Sustainable Energy Road

    As one of the world’s highest energy consuming countries, China is making a great effort to increase energy utilization efficiency. The promotion of new energy applications has been widely recognized as one of the most promising strategies. The January 2010 establishment of the Chinese National Energy Commission, headed by Prime Minister Wen Jiabao, was regarded as an extremely important step. The government’s New Energy Industry Development Plan (2011-2020) has also entered the final stage before its public announcement; it is expected that the Plan will include 5 trillion RMB investment during the next 10 years.

    Key Topics:
    Will China truly create another miracle along the road to new energy sources and then migrate to a more sustainable development pattern? What role will China possibly play in this global game of new energy? Which new energy will be most promising in China?

    More info on www.columbiachinaconference.org
    Text via Columbia China Conference.
    Connect with Columbia Business School www4.gsb.columbia.edu

     

    Thoughts:
    The conference webstie somehow looks so Chinese.  Not in terms of “Ancient Chinese aesthetics,” which is what most western people think of in terms of Chinese style and visual design.  But the color pallete of light blue and green, as well as the gradients and borders with thick white space between columns looks like a lot of Chinese websites.  I do appreciate how the business school can set up their own site for each conference, and has a consistent online presence.  That says something quite positive about their efforts.  That is in addition to having a conference since 2008 (maybe earlier?) on the impact of China.

    Continuum – More than Money – – Design At The Edge

    Rajesh Bilimoria, Vice-President of Continuum

    Rajesh presented on some of the current intricacies of how money is used and ways to create new offerings for consumer financial products and services.

    Case studies
    Rajesh cites case studies like Kenya’s M-Pesa, Visa’s black card (which he says the concept actually existed as a myth among aspirational users before it was a real Visa offering), and the work Continuum did to improve the online banking of BBVA. Rajesh mentions samples of their research process and method of moving from concept works to usability testing in order to validate are the right user tasks can be executed.

    Their wireframe was unique, as it highlights the user’s priorities, not just the functional aspect of what it means for BBVA, but what it means for BBVA’s users.
    It’s similar to what Monica Bueno presented at the Service Design Conference in Cambridge last year on the visibility of service design hierarchy by a website’s layout.



    layout shows the importance that the business places on their own offerings and depts.

    Context and needs matter. Highlight the opportunity.
    “Context and needs of how people live” frame the opportunity. He stresses the discrepancy between priorities, where “what’s important to the company often isn’t the most important thing to real people.” “We have to shift” that way of thinking so that, “the consumers’ focus is our focus.”

  • ex: “Consumers are not after a mortgage, they’re after a home.”
  • [imo Reframing those priorities can make the interaction much smoother when the consultant can let their client know what the client’s consumer expects.]

  • We should strive to create “a  much more humanistic experience even when you’re dealing with something like a mortgage.”
  • “We can easily ignore the complexities of our interactions, but it is these complexities that create the opportunities for real innovation.”

    For example, the mobile telecom industry is focused on driving ARPU (average revenue per user). If that is the driving priority of the business, it is does not create a very positive user experience. See more on what Umair Haque dubs “fake costs” in the telecom and banking industries. http://www.managementexchange.com/blog/why-business-brain-dead-and-how-wake

    Experience
    Rajesh places emphasis on pursuing experience as a driver for improving offerings, and revenue.

    Metrics
    I am interested in how you develop metrics for an experience that you’re not yet sure what it will bring.

    New system of metrics


    Rajesh mentions “If we just use the metrics we have now as metrics of success, that’s a good way to kill ideas. And if we use yesterday’s perspective and yesterday’s lenses, we don’t give today’s ideas time to breathe.”
    One method is to use experiential metrics that initially framed your prototyped idea. The parameters that define how are you delivering on it can be turned into dimensions for new metrics. That will help the client keep fidelity after it is implemented.


    Bruce Nussbaum notes that “a good way to kill innovation is to apply one set of [existing] metrics to a new experience.”

    Application from different domains
    (possibly look into Doblin Group’s Ten Types of Innovation for measuring impact)
    Are today’s measurements relevant to what we are implementing? Another way is to look to a competition’s metrics as well as other domains, offerings that are experientially similay may have metrics that are similar.

  • ex: Netflicks didn’t look to Blockbuster for metrics, but may have looked at
    for different interactions that can provide metrics about what the next ideas is.
  • [Blockbuster did charge a lot of “fake costs.” For example “late returns” used to always charge the renter a fee, but how often did that late return cause a film to be “out of stock.” A title with less copies, but not empty, may actually have helped encourage browsers (people that were browsing) to think that it was a hot film.]

    Rajesh says that “Not that everything in the past that is bad,” but says “starting with experiential metrics as business metrics have to support that.”

    Continuum “looks carefully to understand, think about what things mean, create new ideas that build on our understanding and thinking.”
    Like Jason Severs of frog design, Rajesh also suggests taking the client out into the field. He also notes the importance of story telling. This isn’t just used to show the client the existing conditions that a user encounters, but also envisioning a future scenario.

    ———————

    Organizations
    An increasing part of our work is figuring out how an organization needs to adapt.
    Nothing can kill an organization that is advserse to change.

    Embrace Complexity
    SImplifying problems can help us meaningfully address human complexity and our world.

    Rajesh’s thoughts on currency

  • People will spend more time and more money to purchase intangible things.
  • Previously , social networks were invisible.
  • [Now there with SNS there’s] the excess of numbers, with connections [potentially] being currency.
  • “In a lot of the luxury [industry], time is currency”
  • “alot of services are around time managment”
  • “quality of life is a metric.” “happiness is going to be a currency”
  • “things of value that are not currecny bc they can’t be traded.”
  • “money is going to be less impotant thatn it has been in the past.”

  • CONCEPTS
    for developing a new financial services system for Gen-Yers
    “It’s not the saving that’s hard, it’s starting the habit of saving that is hard.” – Rajesh
    “And it’s reducing your debt” – Bruce
    Rajesh spoke about the concept of a model where instead of a service offering a you a deal to pay and recieve something (Groupon-eseque), you may get a deal for future (with investment appreciation).

    My thoughts on the presentation
    While the main case study, BBVA, was a website, I really appreciate Rajesh speaking about experience outside the context of just web and digital services. He did not even have to specifically define that he was talking about people, users and their lives. He framed the presentation well and spoke broadly with specific examples where the main points were about human behavior. Even when showing the case study for BBVA, he showed research photos of user’s physical desk setup, videos of users engaging with digital prototypes and images of users working with paper prototypes.

    I am excited to see what design consultancies can offer in terms of service design and designing pathways for experience that are not solely web based.


    This lecture is part of Bruce Nussbaum’s Design At The Edge lecture series.
    additional
    mapping user habits

    Luxury Design Strategies LEF Final Presentations

    LUXURY DESIGN + STRATEGY
    For the past 16 years Parsons students have collaborated with MBA students from Columbia University to develop brand-strengthening design solutions for luxury companies.

    This year, teams were chosen to research and design for Hermès, Bulgari, Maclaren, Loro Piana, Haviland. Each company had a unique case, requirements and goals. It is good to see more professionals and people from different backgrounds change their view of design from something of decoration to a force of actual function and meaning. Increasingly I notice more business schools getting involved in design. Like Carnegie Mellon, Harvard, Stanford and Columbia.


    SITE
    Students meet at Parsons, Columbia University, and the offices of the companies’ chief executives for discussion and working sessions.

    BOARD OF DIRECTORS:
    Barbra Cirkva, Chair
    Ketty Maisonrouge, President

    ADVISORY BOARD:
    Assouline: Prosper Assouline, President & Founder
    Bulgari: Veronica Trenk, Managing Director
    Cartier: Emmanuel Perrin, President & CEO
    Chanel: Barbra Cirkva, Division President, Fashion, Watches and Fine Jewelry
    Christian Dior: Pamela Baxter, President & CEO
    Graff: Henri Barguirdjian, President & CEO
    Gucci: Laura Lendrum, President & CEO
    Hermès: Rober Chavez, President & CEO
    Lalique, Haviland, Daum: Maz Zouhairi, President & CEO
    Loro Piana: Fabio Leoncini, Managing Director, Luxury Goods
    Louis Vuitton: Geoffroy van Raemdonk, Acting President
    Luxottica: Andrea Dorgio, EVP of Wholesale North America
    LVHM Perfumes and Cosmetics: Pamela Baxter, President and CEO
    Maclaren: Farzad Rastegar, President

    Special Thanks to Heico Wesselius and Andrew Cornell Robinson of the Design+ Management department of Parsons The New School for Design

    links + sources:

    http://www.newschool.edu/parsons/luxury-education-foundation/
    http://www.luxuryeducationfoundation.org/