Serendipidade Paulistana

A CBS student decides how much meat he can handle at the opening dinner.

On Sunday, the GIP team arrived in São Paulo: Brazil’s economic powerhouse boasting a 20M population and a cosmopolitan vibe to rival New York’s. We were immediately welcomed with an all-you-can-eat meat festival (churrascaria) and rounds of caipirinhas exploding with lime. After dancing the night away to the Brazilian beats of samba and funk, we woke up bright and early the next day to begin our company visits in the city. We spanned diverse industries, ranging from finance and footwear to the emergent startup ecosystem. As we listened to presenters and volleyed them with questions, we noticed certain themes about the business landscape in Brazil…

Brazil is a continental country with a vast internal market.

First, Brazil seems to be a self-contained market. Domestic factors such as consumption mostly shape monetary conditions. This partly explains why Brazil was relatively insulated from the global financial crisis in 2008; in fact, their economy was strongest around 2010 only to later fall into recession in 2015. Moreover, while the importance of foreign trade to the Brazilian economy is growing, it is still relatively small compared to the entire economy. In 2018, exports were $239B USD and imports $181B USD versus $2T USD GDP. Where it’s large, it’s mostly in primary products. Finally, many Brazilians never travel out, very few Brazilians speak English, and the country doesn’t share a primary language with the rest of Latin America. Combined with the enormous size of the country (209M), the remaining room for economic development and ensuing market potential, it’s not hard to imagine why the economy is relatively inward-looking.

Professor Singh shows off his wares at the Havaianas store with a cheerful employee.

Companies stay local in Brazil. One impact is that with the large companies we’ve visited, globalizing has either not been on the table or is a complex challenge approached very carefully. Cielo is Brazil’s leading payment processing company (processing 10% of Brazil’s GDP annually) yet faces rapidly eroding market share due to loss of previously held concessions. As they fight to remain the leading player, they’ve chosen to innovate on their core business model rather than consider expanding into other countries. For Havaianas, the iconic Brazilian flip-flop company, domestic sales represented 98% of total, which is remarkable since Havaianas started selling in 1962. But why would they, since 73% of Brazilians touch Havaianas at least once a year? The wildly successful globalization of the brand is a major source of pride for Brazil, since they are one of very few Brazilian companies that has successfully globalized, and Havaianas brand seeks to embody the Brazilian spirit and values. Havaianas accomplished this by moving piecemeal country-by-country and establishing regional offices to accomplish something new.

Another impact seems to manifest in the distribution of sizes and types of businesses we see in Brazil. Many industries exhibit an oligopolistic structure historically dominated by a few large Brazilian companies. While the formal (and informal) MSME market is enormous, the market for start-ups is small and treacherous especially as they try scaling into mid-size companies. We learned from Redpoint Eventures, a formidable player in the nascent venture capital scene here, that lack of available financing is the biggest challenge for scaling: even more so than navigating the Kafka-esque systems required to launch a business. There is a lack of local investors with a VC-level appetite for risk. Even when there is foreign interest in investing, the available check size doesn’t match the real stage of development of the company in a Brazilian context. This makes it very difficult for start-ups to flourish and scale into mid-size companies with potential to disrupt large incumbents. More optimistically however, those start-ups that do survive the brutal incorporation and financing process at the beginning tend to emerge bullet-proof and extremely cash-generative. We were excited to learn how Redpoint Eventures took matters into their own hands by partnering with Itaú, a major bank in the country, to build an incubator and nurture the emerging start-up ecosystem in Brazil.

A sign at Cubo encouraging us all to take a chance on something.

Which brings us to another theme: serendipidade, or serendipity/luck/chance. When we visited Cubo, Redpoint & Itaú’s incubator, we all wondered why a bank and a VC firm would partner to launch such project without taking equity in the businesses there. Among other reasons, they simply want the multiplicative effect of bringing innovators under one roof. Cubo provides entrepreneurs the chance to meet someone and do something. Just like the simple production error that spawned a thousand SKUs at Havaianas, Cubo believes that the unexpected combinations of interactions there will spur growth of the Brazilian start-up ecosystem.

I hope that Brazil will continue to open up and invite more serendipidade through increased exposure and international exchange. There is a trend: exports have actually doubled since 2005 and imports have nearly tripled. While I was writing this post, Brazil eliminated US visa requirements. In my opinion, the more random combinations, the better. There is even some serendipidade in our own Chazen trip to Brazil. Who knows how the connections we’ve made and the learnings we’ll export back to our own countries will manifest in the future?

GIP Brazil: the experience is in our hands

On a cold March Wednesday night last week, our class met for the last time as a group before we all flew south for winter. Instead of Professor Medini Singh, the class was led by our TA and a program director from the Chazen Institute. Chazen calls these sessions “Pre-Departure Meetings”. They take place shortly before a group departs for their in-country visit. Not only do they provide a crucial information download about logistics and day-to-day realities of life on the ground, but they also require that students come together to author a social contract among themselves.  I helped lead one of these sessions when I organized a Chazen study tour to Indonesia this past January, so I am newly and deeply admiring of the people who led our Brazil GIP session.

“Roberto Burle Marx’s Copacabana Beach Boardwalk in Rio de Janeiro Brazil.” (from

To kick off the social contract process, our TA challenged us to define what kind of expectations we have of each other. How can we co-create an experience that is pleasant for all of us? What are our individual and group goals for the trip? We came up with the following three principles:

  1. Understanding the local culture: by being participative and asking good questions to everyone we meet
  2. Understanding the political and economic context: by engaging with company visits before, during, and after the visit itself
  3. Always being inclusive: demonstrating an open-minded, welcoming attitude, as well as looking out for each other  

Professor Medini Singh said it best when he reminded us later in the session that “what we get out of this experience is in our hands.” I can’t emphasize this strongly enough: study tours with the Chazen Institute at Columbia Business School are incredibly powerful components of a global education. Our GIP class and CBS in general are both internationally very diverse. To dig into the trajectory and complexities of a country that we’ve been studying and discussing for weeks together is a beautifully unique and valuable opportunity to learn about the world.

And there is no better place than Columbia Business School for this. In our professor’s words: “…given our different perspectives, even our background, in the same meeting we see different things. What is our reflection of what has happened? I’m always interested. And that’s where most of my learning comes from.” I could not be more excited to spend a week unraveling the web of a country so beautiful and complicated as Brazil with Professor Singh and my diverse cohort of thoughtful and respectful classmates.

Até a próxima!

-Diana McKeage

In 33 #pictures – São Paulo & Rio de Janeiro

Reuben Gan, CBS ’16

São Paulo (Jan 17-20, 2016)

Day 0 – Visiting the quickly gentrifying neighbourhood of Vila Madalena.

Pop-up block parties in the neighbourhood of Vila Madalena.

Company #1 – Natura Cosmetico’s headquarters in Cajamar, Sao Paolo.

Glass is abundant at Natura’s HQ, promoting one of the company’s key values & principles – Transparency.

Laura Burkey, CBS ’16 tries on the Natura’s cosmetics line.

Samar Estephan, CBS ’16 tries out a Natura hand lotion.

Andy Zheng CBS ’16 browsing the fragrance section of Natura’s mock retail store.

Men, a natural target market.

Company Visit #2 – As we learnt, Azul’s competitive advantage as Brazil’s no.3 carrier is owning networks of connecting flights that GOL & TAM can’t compete with.

Fun Fact – Azul is known for their gummy candy planes. Children often ask their parents for this when they know they’re flying. How is that for a cost-effective CRM strategy?

Company #4: Donning safety hats & goggles to tour the Suzano Paper & Pulp factory, the global leader in producing Eucalyptus tree-based paper products.

Company #5 – B2W, Brazil’s leading e-commerce company, furnished with plenty of entertainment.

CBS-ers taking last shots at Sao Paolo. Will one of us win the Chazen Travel Photo contest?

Rio de Janeiro (Jan 20-22, 2016)

Company #7 – BNDES takes us through what it takes to work at Brazil’s leading development bank.

The Famous Cathedral de San Sebastian in Rio De Janeiro.

The iconic PetroBras building in central Rio.

Lunch at the historic Confeitaria Colombo, a taste of colonial Rio.

Company #9 – The Operational Centre of Rio De Janeiro, a world class live database tracking weather, traffic and crime to mitigate tim-sensitive issues such as mudslides. (picture by Vitor Selles, CBS ’16)

Company #10 – Beleza Natural prides itself for serving the needs of communities of Brazilian women with intensely curly hair, giving it their signature “relaxante” treatment for more relaxed, softer and shiner hair for better confidence 🙂

Co-Founder of Beleza Natural, Leila Veliz – “Working at McDonald’s was my first MBA”, on understanding the need for a continuous flow system in running an operations-based service business.

“Be beautiful and free!” Fun fact – All Beleza Natural models are either customers or staff; the company believes in realistic, everyday beauty. All smiles @ Erin Williams, CBS ’16

Lesson #1 (from Core Operations Class) – An “assembly-line” (Ford model) process in action. In case recruiting doesn’t go according to plan…

Operations Strategy lesson no.2 – some assembly lines are less efficient than others..

And some others…

Bonus: Post-Chazen Hangout @ Rio de Janeiro (Jan 23-25, 2016)
(conveniently-timed as Hurricane Jonas hurled through NYC)

#Advice for future Chazen travelers – book the latest flight back! You won’t regret it 🙂

The Christ Redeemer. Photo courtesy of Johnny Yaacoub, CBS ’16

Panoramic chill by Ipanema beach.

The Selaron Steps, the famous work of a Chilean-born artist in the artsy neighbourhood of Santa Teresa.

Parque Lage. Brunch with a beautiful botanical backdrop.

The Orquestra Voadora – world-renowned marching brass band practicing for the Rio Carnival. If we could only stay another week..

IMG_5014 (Edited)
Breathtaking view of Rio De Janeiro from Sugar Loaf mountain.

On the very last day, with the Sugarloaf Mountain as the backdrop.

Tchau Tchau! (bye bye)

#Brazil2016 – In Anticipation


Reuben Gan, MBA ’16


As the child of travel entrepreneurs, I’ve had the privilege to visit many countries from an early age. Yet with that comes a slight lack of awe and wonder with revisiting previous destinations. The same cannot be said for BRAZIL – a country that I’ve never set foot in, the stuff of films and popular culture and with its own set of stereotypes.


“Brazil is one of the only countries in the world where I truly feel that I am not being seen for my colour” – Professor Medini Singh, our Chazen tour lead. Indeed, what we’ve learnt in the 6 weeks of in-class discussions leading up to this trip is that Brazil is a melting pot and spectrum of ethnicities that like America, stems from a past of slavery. What differed in the development of the two countries (of similar geographical size and population) was the ethnic ratio, level of cultural integration and development since their respective industrial revolutions.


As we learnt, understanding this socio-cultural context is crucial to understanding all of Brazil’s business and political issues – from the fluctuation of the Real currency (vôo da galinha, “flight of the chicken”), the contrast of Sao Paolo and Rio’s riches with that of its poor Northeast, to Lula’s successful reign vs. Dilma’s more challenging tenure. (Status: Dilma is currently fighting back corruption charges against her, against a backdrop of political uproar and protests for democracy)


To understand a country in its entirety requires more than a week in Sao Paolo and Rio de Janeiro. But with our trusty TA and SP native Vitor Selles as well as our Chazen in-class learnings we’ll certainly have a better lens to observe the country with.


In the words of our immortal TA, “As the weekend approaches, I start to imagine people arriving in Brazil and being dazzled by Rio’s beauty and Sao Paolo’s ugliness” – Vitor Selles, MBA ’16



Farewell Sao Paulo, HELLO Rio!

Brazil Flag

We’re halfway through our global immersion visit to Brazil and have had an AMAZING first few days in the bustling business center of Sao Paulo.

For those who have never visited Sao Paulo, here are some fun facts about the city…

  • Contains 19 million people.
  • Is the 3rd largest city in the world.
  • Contains the 3rd most high-rise buildings.
  • Ranks 6th in the world in number of Billionaires.
  • Is the 10th wealthiest city in the world.
  • Contains the largest Japanese population (1 million Japanese) outside of Japan.


On Sunday morning we kicked off our Global Immersion program with a tour of the Mercado Municipal where we sampled exotic fruits and local sandwiches. Hundreds of local restaurants visit the Mercado daily for fresh ingredients.

The Mercado Food Market in Sao Paulo
The Mercado Municipal Food Market in Sao Paulo

Exploring the stands of exotic fruits at the Mercado
Exploring the stands of exotic fruits at the Mercado

Followed by a visit to the Museum of Football where we learned about the legends of Brazilian soccer.

Playing in a virtual soccer field
Playing in a virtual soccer field

Posing with the soccer balls of the past 9 world cups
Soccer balls of the past 9 world cups

Before settling back at the hotel, a number of us joined over one million Brazilians in a country-wide protest demanding the impeachment of President Dilma Rousseff.

Joining the protests on the streets of Sao Paulo
Joining the protests on the streets of Sao Paulo

"Forza Dilma" which means "Dilma Out" protesting that President Dilma should be kicked out of office
“Forza Dilma” which means “Dilma Out” protesting that President Dilma should be kicked out of office

Monday afternoon the entire class met for a session with Strategy & PWC where we took a look back at the past 40 years of the Brazilian economy and a look ahead to Brazil’s role as a major exporter and growing economic power.

Strategy& PWC offices in Sao Paulo
Strategy& PWC offices in Sao Paulo

The next two days featured three more company visits including an amazing behind the scenes tour of Suzano Pulp and Paper company…

The entire class ready to take a tour of the Suzano Pulp and Paper factory
The entire class ready to take a tour of the Suzano Pulp and Paper factory

Touring the Suzano factory
Touring the Suzano factory

The factory runs day and night with 5 shifts of workers
The factory runs day and night with 5 shifts of workers


Participation in the drum banging and energizing morning sales ritual at Am Bev beer company…

And a discussion on economic trends in Brazil with one of the largest banks in the world, BNDES.

Along with the business lessons, of course a huge part of being in Brazil is experiencing the culture first hand through amazing dinners and nights out on the town.

The whole class out for some Sao Paulo style Italian!
The whole class out for some Sao Paulo style Italian!

Having fun at a Kareoke bar
Night out in Sao Paulo

Karaoke night!
Singing the night away


We look forward to continuing our immersion experience over the next three days as we take on Rio de Janeiro! To follow along the journey be sure to check out #CBSChazenTravel #GIPBrazil #ChazenBreadBasket on social media.


Andrew Zalk, MBA ‘15

One Week Until GIP Brazil Begins!

Ilha Grande is a quiet island, two and a half hours by car then twenty minutes by boat from the city of Rio de Janeiro. It is a place of wild dogs, no cars, but thankfully plumbing and electricity! Lying in a hammock surrounded by mountainous greenery, shade of tall trees and looking out upon an inlet of the ocean speckled with parked water taxis and sailboats I cannot believe that we are really here. We are really in Brazil!

Ilha Grande

It is about one week before the travel portion of the Global Immersion class will kick off in Sao Paulo and for the past four days a handful of us have been venturing around the state of Rio de Janeiro, exploring some of its most beautiful neighborhoods and sites.

Ipanema Beach
Ipanema Beach

Neighborhood of Santa Teresa

Christ the Redeemer
Christ the Redeemer

Thus far the food has been amazing, the coconut water revitalizing, the caipirinhas epically delicious, and the views… Well, it is Rio 🙂

View of Rio de Janeiro from Sugarloaf Mountain
View of Rio de Janeiro from Sugarloaf Mountain


This semester in the classroom we’ve learned about Brazil’s codependence with China for their growing economies, Brazil’s geographic relationship to west Africa and their similarities in terrain and natural resources, and the story of Brazil’s origins as a mix of Portuguese settlers and slaves from Africa. For next week we are all really looking forward to learning more about both the cultural and business landscape of this incredibly large and diverse country. It is especially amazing how eclectic our list of company visits are that Professor Martinez has planned for us across Sao Paulo and Rio, covering a wide variety of industries including beer, entertainment, finance, energy, consulting, pulp & paper, and an NGO.

Looking forward to meeting up with the rest of the class in Sao Paulo. To follow along the journey be sure to follow #ChazenBreadBasket #GIPBrazil #CBSChazenTravel #GreyMonday #BlueDayTuesday #WhiteTeeWednesday #StraightStraightLeft on social media. Saúde!

Andrew Zalk, MBA’15

Brazil: Land of the future

Our Global Immersion Program kicked off on Sunday night with a group dinner, where we ate a lot of cheese bread (pao de queijo) and a steak the size of my head (since arriving in Brazil I’ve learned that Brazilians love to eat meat). Our wonderful Paulistano TA, Lucas Sancassani ’14 then showed us a snippet of the local nightlife: he took us to a lively neighborhood where we drank Brahma and caipirinhas whilst the locals watched soccer and danced samba. More of that to come later this week we hope!

Our first meeting was with the consulting firm, Booz & Co, where Partner, Luiz Vieira, gave us a detailed overview of the Brazilian economy. Brazil has the 5th largest population in the world at 200m and has the 7th largest economy with GDP of $2.4tr. It is predominantly a commodity based economy and is the world’s largest producer and exporter of sugar, coffee and orange juice. Social programs implemented in recent years have drastically improved income inequality, reducing the number of people living on less than $1.25 per day from 15% in 2003 to only 5% in 2012, although Luiz also pointed out of the office window to the neighboring favela, so clearly there is still some way to go.  Additionally, the middle class segment has expanded from 18% of the population in 2004 to 32% in 2012 presenting huge opportunity for businesses.

Booz & Co

Overall, the takeaway for me was that there is a great deal of opportunity and potential for growth in Brazil. However, there are many things that could derail the country, in particular the rise of a populist government similar to that which is causing havoc in Argentina at the moment. Other challenges include the lack of infrastructure, low levels of education amongst the poorer segments of society and the bureaucratic barriers in place that make it difficult for international firms to operate in Brazil.

We spent our afternoon touring the campus of cosmetics company, Natura. The site is absolutely stunning, with very unique architecture framed by the beautiful Brazilian landscape. Natura operates on a model similar to Avon, employing 1.5m ‘consultants’ (mainly women) across Brazil and Latin America, who sell products on to consumers. Natura places a lot of emphasis on biodiversity and sustainability since it sources many of its ingredients directly from the Amazon rainforest. It has an extremely flexible factory, which allows production to change according to demand, requiring from 15 minutes to 2.5 hours downtime as the machines change between products.

Natura’s campus is a huge ecopark

We ended the day with drinks at Skye Bar at the Unique Hotel, overlooking the sprawling Sao Paulo skyline and where we also met with another group of CBSers who are in town for the PE/VC trek. A quick Lebanese dinner with Professor Martinez, then early to bed since we have an early start in the morning…

Clare Skirrow ’14, Sao Paulo, Brazil

The GIP and PE/VC students meet at Skye Bar in Sao Paulo

Brazil | Round up

Robert Habib ’13 | Brazil

A few weeks back in NY have provided a good time to reflect on the Global Immersion Program to Brazil. One of the benefits of the GIP is to see businesses operating in ways and in markets different to what students are used to. As such it was no surprise that all of the students on the trip were from outside Latin America.

However, from a personal perspective, it also provides an insight into how life could be in a country different from one’s own. To me this is where Brazil stood out. Of the BRIC countries, Brazil is way ahead on quality of life and happiness indices. For MBA, living in Brazil offers the coveted benefit of riding a growth wave coupled with envious quality of life. Democracy, enduring national security, stable banking and delicious fruit mark out Brazil from the BRICs.

I spoke at length with a carioca about how her perceptions of Rio had changed over the last decade. The change in GDP/capita was unequivocal to her, evidenced by tangible changes in her own daily life.

I’m sure I’m not the only European questioning whether successive generations will inherit the welfare state and quality of life that I enjoyed. In Brazil, there is no need to ask.

Reflections on Brazil’s Real Estate Market

After one week, two cities, fifteen meetings, four site visits, and an ungodly number of caipirinhas, I think our REA/Chazen group has gotten a basic handle on the Brazil real estate market.  From what we’ve seen, it is clear that Brazil continues to develop on the back of a large and young population, a strong consumer culture, and the opening of credit markets.  Yet, the country’s built environment will need to catch up quickly in order to support the next phase of Brazil’s growth and economic development.  In the two cities we visited, Sao Paulo and Rio de Janeiro, the existing infrastructure, commercial buildings, hotels, etc were clearly being taxed by the growing demands placed on them.  As this process of infrastructure and real estate upgrade takes place, there appear to be significant opportunities for both local and international investors alike.

Brazil’s real estate market is still very much dominated by local developers and investors, although sources of capital for institutional quality real estate are still scarce.  Established sources of real estate capital in other countries, such as pension funds and insurance companies, have not traditionally invested in real estate in Brazil due to the legacy of high bond yields resulting from rampant inflation.  Now, although some of these institutions are moving into real estate investment, the learning curve is extremely steep, with many of these institutions unaccustomed to the private equity promote structures and limited control rights employed by the fund GPs.

By the same token, there has only been limited investment in the Brazil real estate market by international institutions (save for Sam Zell and Equity International, who own or formerly owned significant stakes in several of the most successful Brazilian real estate companies).   A few major developers and investors, such as Tishman Speyer, Hines, and GTIS, have penetrated the market.  However, large international institutions have traditionally been at a disadvantage compared to smaller, local players who know the region and can make decisions very quickly.

This dynamic would appear to be changing quickly, though.  First off, the allure of strong returns in the Brazilian market – several of the companies we talked to spoke of achieving mid-20s IRRs with minimal leverage – and the growing acceptance of Brazil as a destination for institutional real estate investment should attract foreign capital in significant quantities in the coming years, especially given the low yields in the US and other developed markets.  Secondly, as the local institutions become more sophisticated in their investment strategies, an enormous source of capital for real estate investment will be released.  The continuing development and opening of Brazil’s real estate credit markets will further support the flow of funding to the industry.

Against this backdrop, which of the two cities we visited offers a better investment environment?  I’m glad you asked.  Sao Paulo is clearly the more established business and commercial center of the two cities.  There are several brand new Class A office towers under construction and at the moment office rents are at the same level as those of Midtown Manhattan.  However, the city is a sprawling metropolis and has very few barriers to entry.  The city’s core commercial center seems to shift every few years as new, higher quality offices are built.  The constantly shifting spatial dynamics result in little long term certainty regarding the investment value of a building.  Furthermore, the onslaught of new office supply may be cause for concern if tenant demand cannot keep pace.

Rio, by comparison, has served as more of a leisure destination in recent history.  However, overcrowding in Sao Paulo and the infrastructure investments for the upcoming World Cup and Olympics have been attracting increased commercial demand.  As it stands, there is very limited Class A office property in Rio, and top offices also command prices on par with Midtown given the shortage of supply.  The city is undertaking a redevelopment of an old port, Porto Maravilha, that will provide a sizeable amount of modern commercial development.  The natural constraints on the city imposed by its geography reduce the likelihood of unconstrained development, and the presence of an attractive commercial district following the port redevelopment could provide a big boost to Rio as a real estate investment destination.

                Thanks for tuning in to the blog.  Hope it has been interesting, informative, insightful and even more.  I’ll leave you with a few pictures from our trip.

James Hoeland ’13

The group meeting with Tishman SpeyerPhoto by Andrea Sulyanto
The group meeting with Tishman Speyer
Photo by Andrea Sulyanto

The group on the roof of a newly completed building by Tishman SpeyerPhoto by Andrea Sulyanto
Group shot on the roof of a newly completed building by Tishman Speyer
Photo by Andrea Sulyanto

The building we affectionately called
The building we affectionately called “The Watermelon”
Photo by Gary Hack

Group shot at an abandoned hotel projectPhoto by Andrea Sulyanto
Group shot at an abandoned hotel project
Photo by Andrea Sulyanto

The obligatory Christ the Redeemer shotPhoto by Andrea Sulyanto
The obligatory Christ the Redeemer shot
Photo by Andrea Sulyanto

Group shot on Sugarloaf MountainPhoto by Andrea Sulyanto
Group shot on Sugarloaf Mountain
Photo by Andrea Sulyanto

Brazil Real Estate in Pictures

To give you all an idea of what the local real estate market looks like, I’ve attached some pictures below.

Sau Paulo's neverending skyline
Sau Paulo’s neverending skyline

Largest model ever (mixed use development by Odebrecht)

JKIguatemi (high end mall in Sao Paulo)

Amazing distressed hotel in the middle of the jungle

Amazing distressed hotel in the middle of the jungle (Sao Paulo)

City Operations Control Center (Rio de Janeiro)
City Operations Control Center (Rio de Janeiro)

Hillside favela (Rio de Janeiro)
Hillside favela (Rio de Janeiro)

That’s it for now.  I will be back in a couple days with some broader reflections on our trip.

James Hoeland ’13