Innovation Aus Deutschland: The Case Against Thiel’s Europe

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3D printed mesh created at the Technical University of Munich

I’m willing to wager that the majority of American entrepreneurs, VCs, and startup enthusiasts have come into contact with Peter Thiel’s Zero to One: Notes on Startups, or How to Build the Future, at some point in their careers.  It is required reading in Owen Davis’ Launch your Startup class and for founders, such as myself, the book is somewhat of holy text that must be close to arms reach at all time.  Underlying Thiel’s lessons on building monopolies, selling products, and nihilistic consultant haterade*, however, is a deeply American ideal to innovation.

*haterade – excessive negativity in the form of a beverage

He writes, “Even the Great Depression failed to impede relentless progress in the United States, which has always been home to the world’s far-seeing definite optimists.”Thiel Quote Thiel argues that it is bold planners (definite optimists) who truly innovate: “A startup is the largest endeavor over which you can have definite mastery…it begins by rejecting the unjust tyranny of chance.  You are not a lottery ticket.”

Now I’m not one to drape myself in red, white, and blue, shouting “Amuurricaa!” at a Toby Keith concert, but something about Thiel’s words evokes a strong sense of American pride (along with a montage of Michael Bay explosions, Top Gun theme music, and Steve Jobs).  Particularly, this the case when Thiel juxtaposes this depiction of American innovation with what he calls European “Indefinite pessimism.”

He writes, “Europeans just react to events as they happen, and hope things don’t get worse.  The indefinite pessimist can’t know whether the inevitable decline will be fast or slow, catastrophic or gradual.  All he can do is wait for it to happen, so he might as well eat, drink, and be merry in the meantime: hence Europe’s famous vacation mania.”  Thiel’s depiction serves to inform the foundation of the stereotype that Europe does not innovate like its American counterpart.

With all due respect to Mr. Thiel, I believe it is time for him to take a trip back to Germany (ironically, the country where he was born).

Let’s start by highlighting our trip to the Technical University of Munich (TUM), whose MakerSpace rivals any found in the United States.  TUM is the epitome of the German effort to innovate through agile practices, supplying entrepreneurs with the resources to rapidly prototype ideas and build “Minimum Viable Products.”  3D printers, laser/water jet cutters, textile and electrical facilities, and machine and woodworking shops are at fingertips of TUM students.  At this point, you may be thinking tuition must be out of control at this University (especially those of you who paid 200k+ for those English BAs) and you are right…the number is astounding.  A German citizen pays 0.00 Euros to attend the Technical University of Munich.  Moreover, there is no application process, and all are accepted!

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At this point, you may have just dropped your iPhone, so take a second to collect yourself.  Let’s reiterate, “GERMANS PAY $0 TO ATTEND TUM AND HAVE ACCESS TO MILLIONS OF DOLLARS WORTH OF EQUIPMENT!!!”  As our TUM guide Dominik Böhler stated, “We believe people should be able to kickstart their ideas…and we have a 100 million EUR fund to invest in entrepreneurs.” TUM students are working on a variety of innovations including creating a prototype of Elon Musk’s famous hyperloop.

Taking a bus ride from TUM to closer to the heart of Munich, we arrived at HYVE – the innovation company. HYVE is an innovation consultancy firm in the same vein as IDEO and Frog in the U.S., a.k.a. innovation as a service (IaaS?).  Many are familiar with design workshop magic, but something unique about HYVE is their emphasis on crowd sourcing innovation. Dr. Volker Bilgram walked us through how HYVE used posts on forums and blogs to design an IoT package locker known as PaketButler.  PaketButler is basically a virtual “doorman,” (doorperson…it’s 2018 folks), that allows a package provider to deliver goods, informs the user of the delivery via smart phone application, and securely locks the package until the user is back at home.  The iterative prototyping process was continuously informed by feedback from customers online.

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A short trip downstairs led us to the pinnacle of German engineering.  The ICAROS.  The ICAROS is a VR enabled work out machine, or as I like to call it, the Peloton for flying.  Priced at an extremely reasonable 8,000 EUR (yeah, it’s primarily B2B), the ICAROS combines your fantasy of flying with your nightmare of dying in a horrible plane crash into the side of a mountain.  I personally was pretty terrible at the game, but definitely felt it in my core afterwards (which was good considering all the Paulaner Salvators I have consumed).

The most fascinating aspect of the ICAROS is that it was developed internally by HYVE for HYVE.  This may seem weird that a consultancy firm would use its profits to develop its own innovations (that have a high chance to go bust), but this speaks to the German sense of the pride that one has no right to advise if one cannot do it on his or her own.  The ICAROS has gone on to win multiple awards and has been included in the German Accelerator – a program by the Federal Ministry of Economic Affairs and Energy (BMWi) that helps German start-ups to get to know the US market.

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With our trip to Munich wrapping up, I think it’s safe to say that Germany has a lot to offer in terms of entrepreneurship and innovation.  I recommend that Mr. Thiel update Zero to One to reflect this (but please don’t Gawker me!  You are still right about most things…unfortunately).

Next stop is Berlin, the home of a booming startup scene!  Until then, stay classy, CBS.

-Chris Russell

Tips for CBS Capitalists Coming to Cuba

Cuba: the land of cigars, rum, and pre-conceived notions.

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A group of 28 CBS students are venturing to Havana this Saturday. Despite what many Americans may think, Cuba is a “low” travel risk country, and you can still visit despite President Trump’s travel restrictions. If you don’t know the first thing about actually living in a communist nation (or perhaps if you’ve just heard Camila Cabello’s song “Havana” and are feeling particularly inspired), I’m here to give you a few pointers we learned in our pre-class sessions prior to departing for Cuba.

  1. Cuba has two currencies. If you’re not Cuban, you have to bring cash. There are two currencies, the CUC (Cuban Convertible Peso, or “kook”) and the CUP (monida nacional, 1.00 CUC = 25.00 CUP). The CUC is not traded internationally and is used in all the enterprises that use hard currencies such as: stores, hotels, privates and state restaurants, bars, cafeterias, taxis and car rental agencies. You can only access CUC as a non-Cuban citizen, and the official exchange rate for dollars is $0.873. If you’re changing money, expect to pay a 10% tax on USD that Euros, CAS and other currencies don’t have. The US credit cards and ATM cards will not work. fullsizerender-3-copy
  2. Don’t expect your iPhone to work. Though telecom in Cuba has vastly improved, it is still at times slow and unreliable. Internet is limited to hotel lobbies and public Wi-Fi hotspots scattered throughout major cities. You can roam in Cuba with your cell phone, but rates are very high. Try downloading Maps.me or OSMAND for functional offline map apps of Cuba.
  3. Don’t forget your papers! The US currently has a comprehensive set of trade and travel restrictions in place with Cuba (the “Cuban Embargo”). Under this embargo, only certain types of travel is authorized to Cuba. Entities are granted permission to organize educational tours, business trips, research delegations, and conferences. We are visiting under the educational visa, through Cuba Educational Travel. The Cuban government and citizens open their arms to visitors, but at times we may receive questioning about why we are visiting (especially at US customs when coming back).
  4. Tipping well is a social good. Cuba is a communist country. Doctors and engineers sometimes are motivated to work as hotel attendants or taxi drivers, because they have contact with hard currency. If they worked in their normal professions, they could be paid $20 a month – versus $100+ a day that can be earned from foreign tips! tippingincuba04
  5. You don’t need to worry about getting ill when you’re in Havana. Well – to some extent! It’s never good to get ill, but Cuban doctors are best in class. Cuba infant mortality rate is lower, at an estimated 4.76 deaths per 1,000 live births in 2013, compared to 5.90 for the United States. The life expectancy in Cuba about the same if not greater than the US. The Pan American Health Organization found in 2012 that life expectancy was 79.2 years in Cuba, compared to 78.8 years in the U.S.

Now, onto packing… looking forward to this forecast!

-Jill Wang, 18

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First Day in Brazil- Downtown Sao Paulo & Best Steak in town

Joe Qiao ’17

After 6 hours of flight from Bogota, I arrived in Sao Paulo International Airport. It was 12am and I found the ATM machine in the airport charging an eye-opening 24 $R fee for withdrawing cash… Not a good first impression, at least not yet.

Our group met up at 2pm and went on a city tour. I have to say that Sao Paulo is far more calm and charming than I expected. Maybe the Bogota experience was too hectic but I found Sao Paulo is like a relaxing giant. The streets are busy but not overly crowded for a city with 20 million population. I will have to confirm my feeling tomorrow since today is Sunday.

The downtown Metro Catholic Church is a landmark. I was surprised that such a beautiful historical district is deserted. It is different from many of the “Plaza de Armas” in other Latin America countries. It is calm and beautiful. Our tour guide Lee did a great job explaining the history and how coffee made a huge contribution to the wealth of people in Sao Paulo.

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We also went to the Batman Alley (Beco de Batman). Many street arts, bars, and tourists gave Sao Paulo a more lively image and strong contrast to downtown area. We spent half an hour taking the perfect pictures here.

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We had dinner at well-regarded Figueira. The steak was amazing and I really regret having had a heavy lunch. I still managed overdosing both beef and watermelon though. The dinner ended with a few of us playing some high-intensity drinking games. Overall, a great start and we look forward to the first day of company visits (not so excited about getting up at 6am).

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Chazen Brazil GIP Read more

Mounting Anticipation…

Adam Norris ‘17

¡Bienvenidos!

So begins a multi-post blog on the Global Immersion Program (GIP) trip to Cuba. For some background, Professor Kogut’s GIP Cuba course consisted of six 90-minute classroom sessions filled with guest speakers, relevant readings, and student presentations aimed at answering the question: Is Cuba the next transformation economy? After examining nations who have previously gone through similar transitions and evaluating Cuban business and political progress in the post-revolution era, the course culminates in a week-long trip to the Caribbean Island in an attempt to answer this question. By visiting Cuba, we will better understand what the future will look like, and what influence and opportunities foreign investors might have.

As a self-proclaimed travel junkie, I have never been so unsure what to expect from visiting a different country. Sure, there will be amazing food, a rich and vibrant culture, and vintage cars from the mid-20th century, but what else will I encounter? I have been told that there will be limited internet (if any), no cell phones, no use of credit cards, a 10% fee when exchanging USD to Cuban Convertible Pesos (CUC)…but how will we be welcomed by Cuban professionals and government officials after over 50 years of travel sanctions? How will our ability to experience Cuba be molded by a country whose government is deeply involved in everything from real estate to healthcare to tourism?

While I don’t know the answers to these questions yet, I can’t begin to tell you how excited I am to find out; how excited I am to enjoy Cuban food and cigars, to interact with the locals, to learn from business owners, to immerse myself in this time capsule of a place before its transformation occurs.

And before I signoff, I wanted to pass along a few travel tips for anyone out there who’s looking to go to Cuba in the near future. This is what I know from research so far, but I look forward to passing along ‘pro’ tips from the island.

  1. Visa: While CBS helped me get an Educational Visa, you’ll need to get one of the 12 approved categories for Visa before you go (and a supporting itinerary). Full list here.
  2. Hotel: Had CBS not booked the Hotel Melia Cohiba for this trip, I would have used Airbnb or Four Points By Sheraton Havana to book a vacation rental.
  3. Money: Stick with CUCs over the Cuba Pesos (CUP) because CUPs have government controlled prices and are not intended for tourists (not to mention CUCs are 25x more valuable than CUPs). In case you get confused. CUCs have monuments on them, while Cuban Pesos feature the faces of local heroes (or check the links I provided above. Also, your best bet at exchanging money is at the airport, so to avoid the 10% tax on converting USD to CUC, bring Canadian dollars, British pounds, or Euros. Additionally, as noted above, credit cards probably won’t work yet so bring enough cash to cover your entire trip. Finally, there is a 25 CUC exit fee to leave Cuba, so don’t forget to store this money in your passport to ensure you don’t miss your departing flight.
  4. Internet and Cell Phones: You should be able to buy internet cards from your hotel’s reception desk, but understand that the speed will be slow (good luck streaming video) and the front desk may be closed or out of these cards when you need them (unless you stay at Hotel Melia Cohib, which offers free internet). While other providers may have plan options, AT&T did not for me, so I’m planning to be mostly incommunicado during my trip.
  5. Souvenirs: Previously, you could only bring back $400 worth of souvenirs, of which $100 could be Cuban cigars, rum, or other alcohol. However, as of October 2016, those limits have been lifted, so just don’t bring back enough to seem like you’re planning to sell them when you return.
  6. Health: Upon arrival at the Havana airport, you may be asked to show proof of insurance, so don’t forget your insurance card (even though it probably won’t cover any care you’d need in Cuba). If you do forget, you can buy a policy through the airport for a few CUCs per day. Once through customs, Cuba is fairly safe in terms of food, but I would recommend avoiding tap water and being careful when trying new foods. To be safe, check the CDC website.

 #CBSChazen #CBSChazenCuba #GIPCuba

Economic, Cultural, and Ethnic Diversity in Emerging Indonesia

With a full week back in New York to reflect on my experiences in Indonesia, I can’t help but dwell on the implications of the stark differences between our time in Jakarta and Bali. The more I reminisce on our robust economic discussions with the Minister of Finance and breadth of market leadership of the Lippo Group, the more the contrast with the rich cultural adventure we had in Bali begins to crystalize into several interesting takeaways about Indonesia.

  1. Despite its size and potential, Indonesia faces difficult challenges to establishing itself as an economic powerhouse. If a visitor saw only Jakarta, he might walk away thinking Indonesia needs just an investment in infrastructure to establish itself as an economic power. However, the night and day contrast with Bali highlights the geographic fragmentation of the nation, which is much more daunting challenge nationwide than the infrastructure in the capital. For instance, e-commerce is a tremendous area of interest, but can a company like Amazon truly offer two-day shipping to 6,000 inhabited islands each with its own infrastructure issues?
  2. That said, Jakarta may be poised to compete as a regional center of business. I left Jakarta with a strong interest in visiting Singapore and seeing how a more developed Southeast Asian city economy operates. While there are geographic hurdles for the nation as a whole, Jakarta’s infrastructure challenges seem manageable with shrewd planning and wisely-utilized investment. It seems, anecdotally, as though Indonesian talent may be staying or returning home more than in recent history, indicating that the minds may be there to make Jakarta a player in the region.
  3. The challenges Indonesia doesn’t face are as interesting as the ones they do face. Indonesia is a country that is very ethnically diverse and features a tremendous array of cultures and dialects. In addition, it has the largest population of Muslim people in the world, as about 88% of its 250 million people practice Islam. In the 21st century, many other countries that fit these profiles are facing issues of disjointed populations, civil unrest or violence, religious extremism, and other cultural challenges that prevent economic issues from being addressed. This is not the case in Indonesia. Despite cultural differences, Indonesia is largely a unified, harmonious country whose issues are economic, not civic. This speaks volume about the people of this country and its future prospects.

This trip was a great first experience for me in Asia. The opportunity to learn so much about the business environment in an emerging market combined with the utterly unique cultural experience of the Balinese New Year celebrations made for memories I will cherish for years to come. If current or prospective students reading this blog have any doubts about the Chazen experience, I can promise it is among the most enriching I have had.