Belichick was right!

So all you second guessers out there - know you are on the wrong side of Bellman’s equation! Not a good place to be…

TALKS

Michael Hammer Memorial Event - A Conversation with Eric Schmidt, CEO of Google:

This event was actually being taped for broadcast for the “On Point” program on NPR. The conversation, hosted by Tom Ashbrook, was about an hour long and was pretty high level on the future direction of Google, its ethics, and its secrets to success.  The items that struck me from this talk were:

• The fact that Google considers its competitive advantage to come from its perspective on scale, especially in terms of the fact that they can detect patterns in data that nobody else can because they are capable of both collecting and analyzing this data better than anyone else. This is not an accident, the company was set up to think that way from the beginning. I actually blogged about Google’s perspective on scale a while ago, and it seems to actually be the core value/competency of the company.
• Schmidt thinks that the one thing that will prevent Google from “turning evil,” or using user data in an inappropriate way, is the fact that their business would eventually suffer because it is essentially a consumer product, and users would migrate to other services if Google started abusing their data.
• Google locates many of its data centers (a secret number in secret places) next to hydroelectric dams.
• Google sees the whole idea of getting paid to be a “publisher” as a as going away (think book publishers, music labels etc).   Only creative content will matter - the way you distribute it will be easy (and cheap). This is obviously a threat to the publishers.

The Aftermath of Deep Financial Crises - Kenneth Rogoff, professor of economics at Harvard Business School

This talk was at the Sloan Business School. In this talk, Prof. Rogoff spoke about his new book, This Time it’s Different, which is all about his research into deep financial crises from the past 300 years. His basic argument is that the title of his book is tongue in cheek - many of these financial crises look remarkably similar in terms of patterns of government debt, unemployment, and housing prices.

Some picked up pieces:

• Housing prices take about 7 years (on average) to get back to pre-crisis levels.
• Unemployment takes a decade to recover (on average).
• Government debt increases by 180% (on average).
• There was an argument made by Andrew Lo that we need MORE financial engineers, and that the government is subsidizing fields like aerospace despite the lack of demand. I found this argument unconvincing, but it was just a side note.
• Andrew Lo also argued that more MIT trained people need to enter accounting. His argument was that financial instruments have gotten so complex that current accounting standards do not correctly account for their risk. He called for a whole new field of “risk accounting” so that these instruments can be listed on companies balance sheets in a transparent and understandable way, beyond just as assets or liabilities (right now, some aren’t listed at all because they could be either assets OR liabilities). This was a very interesting suggestion - I’m taking accounting right now,  and “risk” is encoded in the way certain assets and liabilities are categorized. However this is completely up to the manager’s discretion and changing standards that are all too influenced by the politics of the day.

COMPETITIONS

MIT 100K Elevator Pitch Competition

I participated in this competition, pitching a mobile service created by a fellow LGO called SnapAsk (read about it on the website - I find it pretty useful if you’re too cheap to get a smartphone - like me).  This competition was pretty fun - the idea was that you had 60 seconds to convince an actual partner in a venture capital firm to set up a follow-up meeting with you to talk about your idea.

I was in the Mobile area - there were probably about 40 other people pitching as well. Ideas ranged from iPhone games to a service to order beer from your seat at stadiums using your phone (I liked that one…). It was really high energy - there was even a countdown before you gave your pitch and a ticking clock like in 24 behind you!  I didn’t know whether to pitch my idea or defuse a nerve gas canister.

I didn’t move on to the next round, but it was good practice to deliver a memorized speech and figure out how to describe a complex idea a very short time, which is good I think for interviews. This competition is also open to people outside of MIT, so it was cool to see a bunch of people from around the country come to MIT and compete.

American Airlines Case Competition - Sponsored by the Operations Management Club at Sloan

A case competition is basically where there is a “case” that relates to relevant and current business decision faced by a particular company, and various teams compete to devise the best solutions given the information in the case and present their solutions. Teams are judged on all aspects of their solution including not only the content but also the way the solution is presented.

The case competition I participated in was sponsored by American Airlines. It had to do with the optimal seat configuration for their new fleet of Boeing 787 Dreamliners. As the case described, AA bought a fleet of 787’s to serve primarily new US-Pacific routes. The case asked our team to propose the optimal seat configuration (meaning number of seats in each class) to AA executives.

The winning team proposed a configuration that did not include 1st class, because their model showed that the highest earning seats per capita were business class. Our team came up with a similar conclusion based on an optimization model we constructed, but we thought it was important for strategic and qualitative reasons to continue to have 1st class options. The AA executives did not agree. This was an interesting lesson in business - trust the model, even if it goes against “conventional” wisdom! We’ll see what they use in the actual routes in the coming years…

CONFERENCES

LIDS: Paths Ahead in the Science of Information and Decision Systems

As I have been writing this post I have been watching talks at this symposium which is occurring right now. In fact, I decided to write this post as a result of seeing some panel discussions.

I was basically struck by how I was able to walk downstairs from my business ethics class, walk into an auditorium, and see some of the worlds leading researchers in optimization methods and decision science engage in a panel discussion about the future of research in this area to an auditorium packed with professors and leading industry thinkers. (And yes, I realize that just sounded incredibly nerdy).

Moreover, one of the speakers on the distinguished opening panel was Prof. Bertsekas, who is teaching one of my classes (Dynamic Programming). In addition, one of my former teachers at Harvard was there as well, Roger Brockett (I didn’t do so great in his class…Abstract Algebra…shudder). It was just a little surreal for me, but that’s the type of thing that goes on here.

This list is far from exhaustive. There are tons of company presentations and seminars that are being put on both inside and outside of classes that are also educational and make you think in different ways (and sometimes include free food).

Rather than try to explain what it is like as an LGO, I thought I’d just do a diary (kind of like Bill Simmons) of what I did today (and maybe that will get the point across)

• 6:30 AM: Wake up, ugh. Least favorite part of the day.
• 8:00: After commute from Watertown, arrive at E51.
• 8:00-9:00: Read the paper, check the upcoming week’s calendar.
• 9:00-10:20: Met with my Intro to Marketing (15.810) team to talk about our analysis of Cialis‘ marketing strategy. Make a lot of inappropriate jokes.
  
• 10:20-12:00: Arrange interviews for our Organizational Processes (15.311) term project. We decided to analyze a startup company I used to work for, and how a strategic partnership changed the organization.
• 12:00-1:00: Attend company presentation from Apple.  Learn that apparently they have something called an Ipod that appears to be pretty popular. Also important: free food.
• 1:00-2:30: Intro to Marketing (15.810). Discuss Cialis strategy. Make more inappropriate jokes.
• 2:30-4:00: Networks (6.207). Listen to Dr. Danah Boyd, guest lecturer from Microsoft Research talk about the history and societal implications of social networking sites. Really cool stuff, check out her site!
• 4:00-5:30: Pro-seminar in Manufacturing (15.792). More Apple!  The speakers (who are operations managers at Apple) took us through a fictional but very cool supply chain case discussion that involved the Iphone.  Strictly confidential stuff (no, seriously - we couldn’t take notes or keep the handouts!)
• 6:00-7:30: Sales training course sponsored by the Sales Club at Sloan. Learned: 1-when is the best time to call CxO’s (late Friday before a long weekend when they are sleepy); 2-how to get anybody’s email (call general reception and be as annoying as possible); 3-How to write an email that will get answered by a CxO 30% of the time (short and sweet, talk about THEM, and no attachments or links). Among other things - it’s a great course actually.
• 8:15: Arrive home and eat dinner with Erika (my fiancee)
• 9:00-10:30: Finish up my Dynamic Programming (6.231) homework.
• 10:30-10:50: Write this blog post.  (Wow - meta)

Now I will wrap up my day by going to bed. If you are exhausted after reading this, just imagine how I feel right now after living it!