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ISSUE NO. 19

TSINGHUA GATEWAYTHE OFFICIAL NEWSLETTER OF THE TSINGHUA-MIT GLOBAL MBA PROGRAM

TSINGHUA GATEWAY 1

Interview between Peter Thiel, Dean Qian, and CaixinPaulo Lopes, GMBA Class of 2016

Continued on 3

Fall/Winter 2016

In 2012, Peter Thiel delivered a course at Stanford about start-ups. Notes for the course, taken by student Blake Masters, led to a book titled Zero to One by Thiel and Masters, released September 2014. In 2016, Peter Thiel agreed to teach a two-week course about start-ups at Tsinghua University in Beijing.

Mr. Thiel is an American entrepreneur, venture capitalist, hedge fund manager, and social critic. Thiel co-founded PayPal with Max Levchin and Elon Musk and served as its CEO. He also co-founded Palantir. He was the first outside investor in Facebook, with a 10.2% stake acquired in 2004 for $500,000, and he sits on the company's board of directors.

Dialogue between Qian Yingyi, Dean of Tsinghua SEM and Peter Thiel, Partner of Founders Fund

Many people have different concepts of innovation. What is your definition of innovation?

It’s always hard to define, mostly you know it when you see it. A more naïve definition is that it clearly transforms our civilization and improves the living standards for many people in the years ahead. But there are also many innovations that can be very subtle and still make a very big difference over time.

Is it fair to say that you put innovation into 2 categories, one macro innovation and one micro innovation?

Yes, I am more interested in the macro, but it’s always hard to say. Most people would have said Facebook was a very small thing and did not matter that much although I think social networks have transformed the nature of communications. We have a website at Founders Fund that says, “We expected

On March 23, 2016, Mr. Thiel spoke with Tsinghua Business Review and Dean Qian. The transcript below has been edited for clarity.

TSINGHUA GATEWAY Fall/Winter 2016 3TSINGHUA GATEWAYFall/Winter 20162

ISSUE NO. 19 ISSUE NO. 19

THE GATEWAY TEAMThanks to

Ben ZengSub Editor

GMBA 2017

Joe WeiSub Editor

GMBA 2017

Putt Thanakrit Thavorn-amornsri

Sub EditorGMBA 2017

William LiuSub Editor

GMBA 2017

Yutong GuSub Editor

GMBA 2017

Wilson Wu Sub Editor

GMBA 2017

Juan Carlos Aguilar ArriazuContributor, GMBA Class of 2017

Wanvipa (Joob) Bandidwongpaisan

Contributor, GMBA Class of 2016

Daniela Yiting CaiContributor, GMBA Class of 2016

Christina ChongContributor, GMBA Class of 2016

Sunny Seon Hee JeonContributor, GMBA Class of 2017

Xing LiContributor, GMBA Class of 2017

Paulo LopesContributor, GMBA Class of 2016

Shana PennaContributor, GMBA Class of 2016

Eric Lawrence van VlietGuest Contributor, Visiting MBA

Exchange Student

Wendy WenContributor, GMBA Class of 2017

Saowanee (Muki) Xie Contributor, GMBA Class of 2016

Xiang XuanGuest Contributor, Tsinghua

University Class of 2017

Doris Duoduo XunMBA Office Advisor

Steven WhiteFaculty Advisor

Jessica YangMBA Office Advisor

Stacey Zhao Editor-in-ChiefGMBA 2017

Tim Hesler Editor

GMBA 2017

Daniel Cowen Editor

GMBA 2017

flying cars but all we got was 140 characters.” It is a critique of Twitter where Twitter is doing so much less than a flying car but I think that these new communications have had a significant impact even for companies like Twitter that look very small but have had a big impact and have been able to increase the GDP for the whole civilization. As a venture capitalist I look for innovations that can create great companies.

THE GATEWAY TEAM SEM HEADLINESEDITOR’S NOTE

Steve Jobs’ eponymous phrase “Stay Hungry. Stay Curious” so poignantly delivered at Stanford’s commencement over a decade ago, is especially relevant now that we step into our second year. Revisiting my favorite story of the speech about the absurdity of his own life, Jobs concluded that he was unable to connect the dots in his younger life looking forward, but rather only later when looking backwards. We soon face the same realities of connecting our own “dots”, whatever they may be. While reflecting upon my experiences at Tsinghua, like meeting Tim Cook at the Tsinghua Advisory Board luncheon, making these connections in a rather curiously unexpected way gave me profound trust in whatever lay ahead.

Having completed the toughest two semesters of our program, I can say how proud I am of the GMBA class of 2017 for our achievements, and the impact we have made at the Tsinghua SEM going into the summer. When arriving at Tsinghua, the Gateway magazine immediately impressed me with its quality, vivid photography and beautifully organized sections, thanks to

the incredibly talented editors, writers and SEM staff who had blazed the trail ahead of me. We are so honored to have dedicated alumni like Thomas Shie, whose generous financial support keeps us going and breeds a spirit of deep-rooted commitment from our alumni to carry forward these important extracurricular facets of the MBA. We also want to continue what previous editors Shana and Christina have strived to highlight: the perseverance, passion and creativity in what we do. Our writers act not only to keep historical record of our experiences, but also to pass to future classes a benchmark for progress by encapsulating as much as we could through the eyes of the student body.

This season, we had the great honor to receive Peter Thiel as guest lecturer in one intensive course, with others covering a range of topics by professors from MIT-Sloan, electives in family business management and more. Some students traveled to attend overseas modules, participate in company visits, complete projects or compete abroad to broaden their global perspectives. Meanwhile, students at home hosted club events and community outreach activities. Some bonded as they ventured out to explore

the great expanses of China, from icy tundra to desert. The Tsinghua experience wouldn’t be complete without a trip to the Great Wall, just a stone’s throw from our campus’s doorstep.

We look forward to highly esteemed editors Tim Hesler and Belle Low taking leadership of the new issue, knowing that they will continue to bring you the sorts of enjoyable stories that bring our program to life.

Cheers!Stacey Zhao

GMBA Class of 2017

So there is a perception problem here where we use everyday cell phones and it feels the world is changing so much but if you look around it has not changed that much.

One of the challenges in Silicon Valley is that the people are biased to be very bullish. If you are starting a company, you want to say it is going to be very different. If you are a venture capitalist, you want to say there are all those extraordinary technologies that are happening that you can invest in. It is a natural bias.

It has also been exacerbated by the bubbles in the late 1990s, and when it collapsed, all people outside of Silicon Valley said the whole thing is fake. So when people say there is not a lot of financial reward, they think there is no technological innovation. This is what makes people in Silicon Valley very defensive. There is always this link between the rate of innovation and financial valuation. I believe these can be decoupled. Even in a world of moderate innovation it can actually be quite lucrative financially. If you do come up with something new, it is very hard for other people to come up with something else. If you come up with a new search engine like Google, there is no innovation in search – nobody is coming up with a dramatically better search engine. As a result, there is this monopoly that is very powerful. If we look at disk drive manufacturing in the 1980s, you could come up with a better disk drive than anybody else in the world and then two years later someone else would have one that is better than yours. Therefore, your company would go out of business. There has been large transformation in terms of disk drives, but not so good for the companies. The inelasticity for technology in a world of slow technology innovation may be far more lucrative than in a world with a lot of technology innovation. If you are a farmer in the middle of a famine, you may actually do better than if you are a farmer in a period of extreme plenty where so many people are doing things and the price is getting depressed.

You may want to say micro-innovation for macro-impact?

Yes, sometimes macro-innovation has micro-impact, and sometimes micro-innovation can have macro-impact, so it is difficult to predict in advance. Sometimes things that look small turn out to be very big.

In terms of macro-impact in the civilization, what do you think are the most important innovations in the past 40 years?

In the last 40 years, it has been mainly around computers, internet, software, semi-conductors. I think we had a lot of progress in that area and somewhat less in other areas. There is a big debate whether there is more innovation or relative stagnation of innovation. The word technology has a different meaning today compared to 50 years ago. Technology would have meant rockets, very fast airplanes, the green revolution in agriculture, nuclear power and computers. Today, technology usually means information technology. We have narrowed the definition. The fact that the definition has narrowed tells us something about the reality. I think it is a challenge because it would be good for our civilization if it happened in other areas as well. Most people in Silicon Valley think the opposite, most people are very optimistic about it.

Productivity growth is not going as fast as it used to be. There has been a slower rate of productivity growth in the U.S., Western Europe, and Japan since the late 1970s. People have debates on, “Is productivity not being measured properly,” but also one could argue it has been measured too much. I believe we tend to exaggerate the productivity because we use a lot of information technology. We have the screens in front of us all the time, but the smartphones that distract us all the time also distract us from seeing that our environment has not changed. In the U.S. or Western Europe, the subways are 100 years old, the cities have not changed that much, and there has been limited progress made in other dimensions.

Innovation is very valued around the world and in China. Why do you think this is the case?

I would say it is even more recently, especially in the last ten years or so. I think there are differences in the developed world and in China perhaps. Starting with the visit of Kissinger in China in 1971 until 2007, there was a period of globalization by copying things that work, and there was a lot that could be done just by globalization. In China, it did not make much sense



SEM HEADLINES SEM HEADLINESto innovate because there were so many low-hanging fruits that could be copied. In the U.S., the industries that were very linked to globalization l i ke f inance were t he ones t hat naturally did extremely well. Perhaps the globalization trend is not quite as strong as it used to be anymore. I think it peaked in 2007. Between 1971 and 2007 trade grew 2 to 3 times as fast as GDP; since 2007 it is about the same. It feels like it’s all going in reverse now. If globalization was a way for talented people to do things, and now it no longer is, then people need to move towards innovation.

There is a cultural indicator that i l lustrates this shift . In the 1987 anti-Wall Street movie Wall Street, investment bankers were shown as being all evil and thieves, but all the talented people at that time decided to become investment bankers. The movie had the opposite effect. People wanted to go and work at Wall Street.

There was a similar phenomenon with The Social Network about Facebook, which came out in 2010. We were extremely nervous at Facebook about the movie. In May 2010, we had a board meeting, and we spent the whole time talking about this horrible movie, that we should have stopped the movie, maybe sue them, maybe sabotage them. We spent 8 hours talking about how should we stop the movie. But it was too late: the movie came out in October 2010, and at that point we had to pretend that it was going to be good. We rented out a theater so everybody at Facebook went to see the movie and tried to put a good face on it. But the movie got interpreted the opposite way, just like the Wall Street movie. All those people watched the movie and said, this is so inspiring, I want to be part of it.

This is one of the signals for the culture change.

Why 2007? Is it because of the financial crisis?

Certainly the banks were central to globalization, so the banks were hurt the most from the financial crisis. You can also argue that the crisis was caused by too much globalization. Money was spent on projects that didn’t make sense. As globalization went too far, the financial sector ran into difficulty. But I think it is more my explanation than the standard one.

This is the first time I hear you saying that globalization went too far. Usually people on the left argue against globalization but for different reasons, but your argument sounds different.

The over-globalization is the product of a failure of imagination – there was nothing else you could imagine except globalization. The only future you could imagine was for the whole world to become the same. All the resources were spent on this global arbitrage.

But there are all sorts of globalizations. One is copying things that work. It can also be movement of people, goods, money, information and industries that are linked to these things. People and goods are under the most pressure. This is why we have all those crazy phenomena like Trump in the U.S. It is an underlying trend that somehow has reached its limit.

As a cultural description, NYC had this tagline, “If you can make it there, you can make it anywhere.” So people were told that if you go and conquer NYC, you conquer the whole world. That was the globalization story. But it turned out, this was much harder than people thought, and there were a lot of other people who were told the same thing. So you are competing with all those people, and after working for 10-15 years, you have not necessarily gotten your career any further.

So this is what the future looked like, but it doesn’t mean it has to be like that. Innovation can be key so the world doesn’t look the same everywhere.

You mentioned that in the past several decades, the Chinese economy has grown very fast by copying the technology innovations from other countries. Now the Chinese economy is slowing down; people say that innovation is the way out for the Chinese economy to recover. In your view, why is China valuing innovation so much today? What are the differences in innovation between China and the U.S.?

Germany is the strongest European country and strongest on manufacturing. How would you compare innovation from your home country to Germany?

I understand better the U.S. than I understand China. The really big gains from globalization have already happened in China. It doesn’t mean globalization shou l d s top but t he i nc re me nt a l g a i ns f rom globalization will not be as big as they were in recent years. Just like in the U.S. and Europe, there is a need to do more innovation to grow vertically and not just horizontally. The big difference in China is the scale. It is an enormous country, and businesses need to get to scale to succeed. A lot of innovation happened on business model innovation and a lot less on scientific or technical breakthrough.

I always think the difference between California and Germany is this big contrast where people in California are very optimistic but very desperate, and people in Germany are pessimistic but comfortable. The question is always how will those places do going forward. People in Germany are very nervous about the future. There are no real IT companies in Germany, apart from the Rocket Internet which is less innovative than any other company in China. People in Germany and Europe tend to be very anti-technological. Although there is this critique from the U.S. about China’s firewall from American companies, people in China are not hostile to technology, whereas in Germany and Western Europe, people are quite hostile to technology. If Mark Zuckerberg comes to China, people are actually love him. In Germany, it is always quite tough to him. There is a constant negativity around those companies like Google, Facebook, Amazon in a way that is very different from China. In China, it is a political issue, but in Europe it is a cultural issue.

What will happen in the next 10-15 years?Where is the value being captured in the value chain?

My view is that it will be less different from the U.S. than it has been in the past. The need to do new things will be greater in China. One could argue that China has still a much lower GDP per capita, and therefore there is a lot of room to grow without innovating.

For example, think of Foxconn and Apple. Apple has a market capitalization of around $550bn, and Foxconn has around $90bn. Usually, this would be a duopoly, where Apple designs and Foxconn manufactures. It is strange how Foxconn is only able to get so little of the value. I think a lot of the value gets captured in Japan and in Germany where they build the machines used by Foxconn. So there is a lot of the hidden value capture going on in Japan and Germany. It is very difficult to anticipate how it will change over time.

Peter Thiel engages in thoughtful dialogue with Tsinghua SEM Dean Qian.

Mr. Thiel shares his insights on Startup Thinking with a standing-room only crowd of Tsinghua students and faculty.



SEM HEADLINES SEM HEADLINESThere is a very famous curve called the “smiling curve” of the value chain where the X is the type of value and Y is the profitability. A smiling curve shows Design and R&D capture more value, followed by manufacturing where less value is captured and then back to marketing and services where more value is captured. This shows a smiling face. Most businesses in China are in the manufacturing part and therefore capture little value, compared to the U.S., Germany, or Japan where they focus on Design or services and manage to capture more of the value. This could be the future of Germany without embracing the internet.

You were mentioning how Western Europeans are not embracing technology. Do you think this could hamper their future?

In this debate about innovation and education, it is always interesting to compare with India. Both have around 1 billion people and limited resources, and therefore countries have to rely on tests. But then, India and China used to be at very similar income levels 40 years ago, and now China is in a better position. But in Silicon Valley, Indians are better at software and Chinese at hardware. There was a question in the class about why many Indians are promoted, but not Chinese. Your answer was that founders have a much greater impact to change this reality. There are many differences between the Chinese and Indians, but let’s focus only on the education. Do you think there are many differences between the Chinese and Indians’ education?

It is always a challenge, but in general I don’t think it is a healthy attitude because it can easily slip into anti-innovation. But there are things that work much better in Europe than in the U.S. The governments work much better. The U.S. has a government that works very badly. Basic services don’t work. The education system in California is poor; the public school system is catastrophic; the roads in San Francisco are completely broken. So governance is much better in Europe than in the U.S.

There is a politically incorrect argument that I always do in Germany that makes people very uncomfortable: there is no innovation because there are not enough Jewish people. There was something about German culture in the late 19th early 20th century where Germany was the country that had the closest link with Jewish people, and there was a very symbiotic relationship, and it was an incredibly generative dynamic that produced a lot of science and technology and that was completely destroyed with WWII.

I think Israel would do better if there were more Germans, and Germany would do well if there were more Jewish people.

There is some connection, but it is very complicated. I do think there is a knowledge base that people need to get to. Most people that did well in technology were reasonably smart and reasonably well educated. But then the danger with education is that people are trained to do well on tests. There is always the danger

What is the connection between innovation and education? Can education help boost innovation?

to make people too good at repeating existing knowledge and not at the expense to try to do new things.

People often say that Chinese schools do too much tracking of students. I think it is also true in the U.S. I had a very unusual education background. I went to an elite college at Stanford, but I went to public high school in California, and it was not that intense. I had three months’ vacation in the summer, and I could do whatever I wanted. I was interested in math, so I got better at math. This freedom to explore ideas is good. I think it is hard to achieve when education is too intensely tracked. On the other hand, most people didn’t do anything with that free time.

I think there is some difference, but I can’t locate it in the education system. The education systems look very similar. I had not realized this, but do Indians actually do better in Silicon Valley than Chinese?

I think you are right, there is something with Silicon Valley about this. This is a very important question that people in Silicon Valley don’t ask. In the U.S., it is very taboo to make distinction on groups or nations. This is actually the first time I ever heard this question; therefore, I am inclined to think this is a much more important question, because I know it never gets asked.

I think the interesting question would be to compare Chinese and Jewish people. Israel is very entrepreneurial just like China, but there is a premium on being different from other people. Back in 2004 in Israel, I met the mayor of Jerusalem Ehud Olmert. He told me as a joke to break the ice: during a conversation between Eisenhower and Ben-Gurion in the 1950s, Eisenhower told Ben-Gurion, “You have no idea how hard it is to be the President of a country with 180 million people.” Ben-Gurion replied, “You have no idea how hard it is to the President of a country with 3 million Presidents.”

I think this sums up quite well the Jewish culture.

I am so far from the system that it is quite hard to answer. As a very abstract answer, it is good to see that China thinks innovation is important. The questions around innovation seem to be more intense in China than in Western Europe or the U.S. More specifically, it is important to understand if there are too many regulations that make it more difficult for companies to innovate. Culturally, it is important to understand if it is culturally acceptable for people to fail. I don’t think failure is a good thing, but it shouldn’t be so catastrophic that it discourages people to take risks. I am always uncertain about how much you can do directly. For example, it would not be a very good idea for the government to set up a VC and just give money to everybody and try to be successful.

A few examples: the CEOs of Google, Microsoft, Pepsi, and Visa are all Indians, but there are no Chinese at that level. Also, the Deans of Harvard Business School, Cornell, and Chicago Business School are all Indians and no Chinese. I don’t think there is discrimination, but it is a fact. Harvard Business School has 200 faculty members, 32 Indians and only 2 Chinese. In Silicon Valley, there are 10,000 Tsinghua graduates, 5,000 from Peking University.

I think language is the first reason people think about the difference in success between Indians and Chinese in the U.S. But I think there must be deeper reasons. I think it goes as deep as a mindset or philosophy. I met Indian economists who had backgrounds in both economics and philosophy. This is something that would never happen in China. I think it is because India might be more spiritual. People say India is part of Asia, but philosophically it is more similar to the West.

What should the government do to promote innovation?

Some background information: China has two aspects that are

not seen anywhere else in the world. First, there is a strong government. Second, a very enthusiastic government. They are eager to make innovation successful. They set up industry funds, they build huge science parks, they subsidize incubators. They even created the Chinese equivalent of DARPA in the U.S.

Presentation by Dean Qian of Tsinghua SEM's token of appreciation for Mr. Thiel's contributions.

A raptly attentive audience soaks in Peter Thiel's unique, and at times contrarian, entrepreneurial perspectives.



SEM HEADLINES

You have been here in Beijing for two weeks at Tsinghua and came

to China several times before. Do you see Beijing becoming a new Silicon Valley? What do you think will happen in the next 10-15 years?

I think DARPA worked extremely well in the 1950s and 60s but has been much less innovative in the last 30-40 years. The way DARPA worked at the beginning was one person giving money to 30 people they knew were extremely smart and talented scientists. They didn’t have to write any papers. It was quite top-down, but also with not much process or bureaucracies. In the 1970s, they started to include more procedures to make it more fair, and as the regulation was getting more intense, the money ended up going to people who were good at gaming the process but were not necessarily the good scientists. So the people who are good at filling up grant applications get the money. That’s my theory about what has gone wrong with government-driven R&D in the U.S. The challenge is how to avoid this and get the money to the good scientists. This issue in the U.S. has not been solved yet.

A lot of founders were students at Stanford, so there is definitely some link to Stanford, but it was not something that could be pushed. For example, Stanford works much better than Harvard. I think it is because Stanford is quite good at creating an environment for people to create relationships. Many of the founders had good relationships while at college. Harvard is somehow a much more hostile place. MIT and Caltech are also very hostile places. People have to fight really hard, and there is less teamwork. Building good relationships is very important to create start-ups.

I am never sure it is possible to do it directly. Stanford did not do this directly. There was flexibility for faculty members to be advisors to companies.

I think there is both more of a possibility and of a need. The big trend of globalization is going to be less powerful. So there is a need for more innovation, including in China.

Beijing will probably be the most innovative city in the world after Silicon Valley. The most innovative and technological companies are here in Beijing. Innovation has been very concentrated in Silicon Valley for the last 10 years, and I think it will be less concentrated in the next 10 years. So I think innovation will not only happen in Silicon Valley, not only in Beijing, but in many other places. There is no magic soil for innovation to happen. People exaggerate this about Silicon Valley.

There is the illusion here in China that Stanford plays a major role in creating this innovation, but you are saying that this happened only indirectly.

Do you see the potential for Chinese companies to create synergies between Beijing and Silicon Valley and go from 0 to 1?

How to think Tsinghua can help new entrepreneurs going from 0 to 1?

I think these technologies are quite important. I also think they can be quite dangerous, so we need to think about it very hard. My guess is that the generalized AI is very far in the future. AI is an ambiguous concept; it can mean the next generation of computers, or it can mean the last generation of computers. If there is generalized AI, humans don’t need to do any more thinking, because computers would be so smart that all the innovation would happen through AI. I think our intuition about generalized AI is very poor. I think people have no clear answers to this, so it is very confusing. On the other hand, narrow AI is only focused on one task, just like the AlphaGo from Google. I think narrow AI is just the continuation of the information age where computers get better than humans at specific tasks, and it is simply positive. Generalized AI is very strange – could be dangerous – but I think it is very far in the future, and I am not that worried about it.

Ray Kurzweil says the singularity will be reached by 2045. It is hard to know when one has good intuition about it. I think it has been over-predicted for a long time. In the 1970s people predicted we will be having AI 20-30 years later. There is a tendency for people to overstate it. There is also the tendency to understate it because it is so strange that we have no good models for it.

I know Tsinghua has a big incubator, and this is much more difficult to replicate in the U.S. In the U.S., there is already a clear leader with Y-Combinator, and therefore it might be hard for American universities to compete. In China, the situation is different: there might be a place for an incubator at Tsinghua to establish itself as the leader in the market, especially in the harder science or technological fields.

I don’t want to exaggerate the role of universities. Because if you say that it was all driven by Stanford, then you would copy all sorts of things that didn’t even work. It’s not obvious why Silicon Valley worked. I think sometimes it has to do with history, where there are some role models to follow, and this helps a lot. Both Silicon Valley and Beijing have many role models who can attract people. This is very powerful. For example, this is completely missing in Germany, and I am not sure who they would be choose as an entrepreneur role model.

You are investing in Artificial Intelligence, and you don’t seem as worried as Elon Musk about it. What are the differences and when will we reach the singularity?

SEM HEADLINES

Peter Thiel and Dean Qian join an enthusiastic audience for a post-dialogue photo-op.

Mr. Thiel graciously engaeges students in individual-level conversation.



MBA NEWS

The SEM Career Development Center (CDC)Ben Zeng, GMBA Class of 2017

The MBA students at Tsinghua SEM are very fortunate to have Prof. Ji Bo (季波) give a course on family business management, succession, and conflict. Prof. Ji has extensive experiences in family business as he was in the senior management team of several global family enterprises including Cargill and William Wrigley Jr. Company, and was Chairman & CEO of BOR International Business Consulting Ltd. Prof. Ji is also a guest lecturer at many MBA and EMBA programs such as INSEAD and CKGSB.

The course was organized into two parts, “The vigor and challenge of family business” and “family business conflict”. In the first part, Prof. Ji illustrates different aspects of family business by presenting rigorous data. For instance, family businesses create an estimated 70% to 90% of global GDP annually, have a significantly longer life span than non-family firms (37 years vs. 22 years), have 40% in global top 500 companies, and create 50% to 60% of American GDP while providing 80% of the jobs in the United States. Moreover, Prof. Ji stated that more than 90% of family business owners wish to pass their family business to their next generation, yet only 30% of family business owners have succession planning. Family business succession is one of the toughest topics in family business management, as Prof. Ji quoted American managerialist Randel S. Carlock that “keeping the vigor of family businesses may be the world’s toughest management task”. In the second part of the course, Prof. Ji illustrated common sources of family business conflict: among family members, between family and non-family members, and conflict of ideology and goals. Prof. Ji demonstrated all of those situations with real life cases and all of the

cases showed one thing in common – those conflicts could jeopardize the family business operation and succession, resulting in a disastrous outcome.

The course has given the MBA and exchange students an in-depth understanding of family business management, planning, and succession. Prof. Ji concluded with useful conflict management principles and some of them focus on task conflicts rather than emotional conflicts. One principle that resonated with me the most is “stay positive, forget and forgive”, which I think can be applied beyond family business, and used commonly in our daily life.

MBA NEWS

Ten Years of STEP: THU Students’ Experience at Stanford GSB

Yiting Daniela Cai, GMBA Class of 2016

The academic lectures were all given by remarkable professors, who were able to provide deep and insightful analysis of the current American and global markets: Prof Ge Wang, Co-Founder of Smule, shared his research, which includes programming languages and interactive software systems for computer music, mobile and social music, new performance ensembles (laptop orchestra and mobile phone orchestra) and paradigms, and musical visualization. Professor Lindy Greer, who teaches Organizational Behaviour, focused her lecture on the impact of team composition on intra-group conflict and team performance. She has a strong interest in how start-ups are composed in terms of power, status and leadership structures. Lecturer Keith Hennessey, who spent more than 14 years in economic policy roles, advising senior elected U.S. officials, explained American economic policy and the policy-making process. Professor Robert A. Burgelman, whose research is focused on the role of strategy-making in firm evolution, demonstrated the importance of strategy-making processes for companies that enter into new businesses and exit from existing ones to secure continued adaptation. Lecturer Robert E. Siegel, General Partner of XSeed Capital, discussed his VC firm and its investment areas, which include enterprise software, business operations and computing platforms.

With respect to company visits, since Stanford is close to Silicon Valley, going to companies such as Facebook, Google or Uber was a “must do”: THU STEPers met with Facebook’s Growth and Corporate Development teams at its new headquarters; they talked about go-to-market strategy, customer acquisition and retention. With the Uber Growth team, we learned about international expansion and regulation. We had the chance to see the balloon-based Internet service (Project Loon) at Google X. Tsinghua students also visited AXA Lab, which is the digital innovation-sourcing unit of AXA, a French global leading insurance firm founded in 1817. AXA Lab has the goal of accelerating the digital transformation in its group. The last but not least stimulating company visit was at StartX, which is a non-profit organisation with the mission of helping Stanford’s top entrepreneurs

and their start-ups by charging zero fees, taking zero equity and offering customised programs.

Despite the full schedule of lectures and company visits, thanks to GSB students as guides, THU students were also able to enjoy San Francisco and experience life in Palo Alto: we went to see an NBA basketball game at the Oracle Arena, where the Golden State Warriors were playing a home game (and won); we went sightseeing at San Francisco’s Fisherman’s Wharf and walked through the Golden Gate Bridge; in Palo Alto, we experienced GSB student life by having small group dinners hosted by GSB peers, which is a typical social activity that most GSBers do every week in the first year of their MBA.

In the Town Square is inscribed a quote that invokes the spirit of GSB, which reads: “There comes a time in every life when the past recedes and the future opens. It’s that moment when you turn to face the unknown. Some will turn back to what they already know. Some will walk straight ahead into uncertainty. I can’t tell you which one is right. But I can tell you which one is more fun.” – Philip H. Knight, MBA 1962. THU students felt inspired by STEP 2015, and after this adventure they all knew not only their right path, but also “which one is more fun”.

Tsinghua SEM is looking forward to hosting GSB STEPers in the fall and for many more years to come.

Time flies. The Stanford Tsinghua Exchange Program already has a history of 10 years. Over the span of the last decade, both universities have endeavoured to narrow the distance between China and the U.S. by connecting their students through this unique experience.

After hosting Stanford GSB (Graduate School of Business) students in Beijing at the end of November 2015, Tsinghua students were given the opportunity to fly to Palo Alto, the

tech centre of the U.S., to experience Stanford students’ lifestyles and continue forging enduring cross-border relationships. Our GSB MBA counterparts, who ensured that Tsinghua students’ stay was both extremely pleasant and incredibly interesting, welcomed us enthusiastically during the week’s academic activities, company visits, and social activities.

The adventure at Stanford GSB was truly unique; the academic activities were inspiring

and fascinating. This year, the Stanford GSB STEP team not only organised lectures around topics such as Management of Organisational Conf l ic ts , American Economic Policy, Venture Capital in Silicon Valley, and Strategic Thinking, but also welcomed us to attend core MBA classes, such as The Paths to Power, High Performance Leadership, Entrepreneurship and Venture Capital, and Managing Growing Enterprises.

Professor Ji Bo, former Chairman and CEO of BOR International Business Consulting Ltd., delivers a course on family business management.

Tsinghua MBA students enjoy time with their Stanford MBA counterparts at the Graduate School of Business (top) and on a local site visit (bottom).



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China Lab and the Sloanie ExperienceShana Penna, GMBA Class of 2016

The China Lab, a program that facilitates the collaboration of students from Tsinghua University and MIT Sloan, provides students with a China-focused project. The program concluded in April ’16 at MIT’s Cambridge, Mass achus ett s campus . Students w ho participated were able to attend classes while visiting MIT, and one of these classes was Professor Kurzina’s Managing in Adversity. The class was just one of the highlights of the week at MIT, as it showed Tsinghua students the significance of being a “Sloanie”, as Professor Kurzina called MIT Sloan students, in addition to letting them interact directly with business leaders and students, all while introducing students to the strength of the MIT Sloan teaching method.

Professor Kurzina began his class with a recap of the prior lesson, provoking students to think about their take on the class. Students cooperated, reaffirming the lesson’s content. After the review, the professor picked a random student to present the new case. The cases for the two classes focused on Crane & Co. and Verizon, New England. Both companies went through challenging times, with Crane & Co. ultimately serving as a success story, and Verizon seeking assistance with a current challenge. As the student explained the case, as well as the corporate decision process, the business leader looked on, listening intently. Current Crane & Co. CEO Stephen Defalco was present, while board member and BCG female pioneer Sandra Moose looked on during the Verizon, New England case discussion.

After the student presented the case, the CEO/BCG Partner stood up and gave their takes on the respective situations. In both instances, they turned it back on the class, asking students to give ideas on what they would do to solve the issues. Crane & Co. was a luxury card manufacturer from the Berkshires (western Massachusetts) who also made paper for government-issued currencies; their dilemma: losing money in the card manufacturing plants. Stephen Defalco, former McKinsey consultant,

had an ingenius solution. He contacted Hallmark Cards and acquired them for a mere 5 million dollars, thus diversifying Crane from exclusively luxury markets. Once that division was no longer operating at a loss, he gave the card division of Crane & Co. directly to the employees, with the company only to maintain the currency plant. He may have diverged Crane & Co. from their initial product, but in so doing he also saved the company for the family, who retained a 49% stake.

Verizon faced many challenges in the United States, from fierce competition to a lack of infrastructure in cities for its FIOS product. FIOS is a fiber optic solution for phone, internet, and cable. Verizon introduced this into the market and soon realized the infrastructure of many older c it ies , l ike B oston and Philadelphia, was not conducive to the product. In turn, Verizon focused its efforts in the suburban residential areas. Just recently, Boston announced that to continue to be an innovative and technological leader it must overhaul its infrastructure, meaning Verizon could now enter the Boston market. The problem was that Boston is a diverse city, and Verizon did not know how to attract its low income users, so Sandra Moose was at MIT asking for advice. Students provided insights from their own experiences into what would attract low-income users to Verizon FIOS, while the BCG Partner also made attentive note of their perspectives.

Professor Kurzina’s c lass provided an understanding of the Sloan method of teaching, while also introducing Tsinghua students to the resources and strengths of an elite U.S. business school. Watching the interactions amongst the students helped us to understand the thought process developed by an MIT Sloan education. In the end, it also made us as Tsinghua students proud to be affiliated with such a sister program and, ultimately, thankful to be enriched by both the Tsinghua and MIT dimensions of the China Lab experience as a whole.

China Lab Experience - Team AXAChristina Chong, GMBA Class of 2016

China Lab has always been a very popular module at the GMBA program. Not wanting to miss the opportunity to work with world class companies and students from MIT, I submitted the application for the AXA project with no hesitation, knowing that I was up against very strong candidates, and I was proud to be selected to work on the project with my fellow classmate, Tanya He.

The project started with a kick-off conference call with the AXA top management team from France, China and Korea in late January 2016, then a video conference with our fellow team members from MIT, Lawrence Wei and Michelle Shih in February. The Tsinghua and MIT team worked closely together with routine conference calls, and took advantage of the time difference between Beijing and Boston to form a round-the-clock efficient working partnership and carried out extensive research for the first stage of the project.

In mid-March 2016, the team flew to Shanghai and spent two weeks working full-time at AXA Tianping’s office. During the on-site period, we worked closely with AXA’s multi-cultural teams from various departments and AXA Lab team to analyse the existing AXA Tianping auto insurance operation model and came out with a series of recommendations targeting each step of the customer journey process, starting from the pre-purchase period through to the renewal period, in order to develop its online marketing strategy focused on WeChat

and enhanced customer experience. During the evenings, the team was happy to explore the vibrant Shanghai food and nightlife.

The project entered into the final stage as the team met again at MIT in late April. We worked with AXA Tianping to identify the final focus of the project recommendations, and developed the prototype of the WeChat interface. During the one-week on-site period in Boston, we put together the final presentation materials for AXA, and were excited to showcase our project outcome at the MIT action learning event along with 24 other MIT China and India Lab teams. Besides working on the project, we also attended different classes, such as, “Managing in Adversity” by Professor Peter Kurzina, “Global Branding of Chinese Companies” by Professor John Grant, “Session on Blockchain (Cryptocurrencies)” by Professor David Birnbach, and “Session on Social Enterprise” by Professor Charles Kane. The lectures were truly insightful and it felt great to be learning with the MIT students. An evening watching a Red Sox game at Fenway Park made our MIT experience complete.

It has been my great pleasure to work with such amazing team members from Tsinghua and MIT. We have not only formed a great working partnership and friendship but were also able to learn from and empower each other. I am so thankful to have this project opportunity and have enjoyed every moment of it. China Lab has provided an invaluable experience for me and a great way to mark the end of my two years in the GMBA program.

China Lab teammates pose on the storied MIT Sloan staircase.

Professor Peter Kurzina welcomes China Lab students to an immersive Sloan case experience.

China Lab's Team AXA during its on-site consulting assignment.

Tsinghua China Lab members pose with some of MIT's most defining campus architecture.



MBA NEWS MBA NEWS

Coca-Cola 21st Century Marketing Overseas Module

The Coca-Cola 21st Century Marketing overseas module is a primary component of a larger marketing program sponsored by Coca-Cola corporation for MBA students at Tsinghua SEM. Launched in 2016, the program is aimed at polishing Tsinghua MBA students’ strategic marketing thinking, planning, and execution through the case study of Coca-Cola, one of the world’s most valuable and respected brands in Packaged Mass Consumption Goods (PMCG). Supervised by Professor Lucy Liu of SEM, the one-week overseas module was composed of varied courses, site visits, and activities in Atlanta and New York City from June 27 to July 2. A total of 30 students from both the GMBA and part-time MBA programs were selected to join the module, and I was fortunate to be selected along with 29 of my schoolmates. A series of pre-departure activities were carefully arranged to prepare students for the trip, including lectures given by senior leaders in marketing and corporate affairs at Coca-Cola China, as well as an information-sharing class delivered by the Tsinghua MBA office. As a result, before we physically arrived in Atlanta, we had already been substantially engaged in the culture of Coca-Cola and were excited to explore more in the upcoming journey.

The first day in Atlanta began with an eye-opening tour at Coca-Cola global headquarters, where we were warmly welcomed by Coca-Cola’s global marketing team. The day was tightly scheduled with a series of lectures given by passionate Coke marketers, who shared with us the company’s experience and practices in branding, public relations, and product development. The most memorable impression to me was Coke’s unique

strategy and efforts in cultural integration, which played an instrumental role in expanding its business across the globe. It’s not by chance that a great brand is hailed as “great”, there are indeed massive, highly orchestrated efforts invested behind the scenes. Prof. Timothy Halloran from Georgia Institute of Technology afforded us an unforgettable experience on the second day through his lecture about why the Coca-Cola Company has achieved unmatched success in developing and growing its brands with consumers. Divulging on the tactics Coca-Cola adopted, he shared five major factors: (1) developing passionate relationships with the right customers; (2) developing a laser-focused value proposition/brand proposition; (3) creating a memorable consumption experience; (4) staying sharply attuned to emerging trends and reacting accordingly; and (5) learning from mistakes. The presentation was highly engaging and substantive. Tim himself had spent ten years at Coca-Cola, leading multiple beverage brands. His successes at Coke include the national launch of Powerade sports drink and its sponsorship of the Olympics, co-development of Dasani bottled water, and the development of Coke's first Internet marketing initiative with his work on Cherry Coke.

The program reached a third peak when we stepped into the office of Ogilvy’s headquarters in New York. Created in 1948, today Ogilvy & Mather is one of the world’s largest PR groups, renowned for its success in building strong and lasting brands, among which is Coca-Cola. For the entire day, we were accompanied and skillfully directed by Ogilvy’s account managers for Coca-Cola, giving us a window into how a

Wendy Wen, GMBA Class of 2017

creative marketing campaign is built through the joint efforts of varied teams, including account, planning/strategy, creative, production, and media. The new marketing communication theme of Coca-Cola for 2016 — “Taste the Feeling” – was shared as an example to illustrate the entire process, which is full of challenges as well as excitement. The culture of Ogilvy was very impressive; working in an industry filled with constant changes, Ogilvy’s team is obsessive, never content with the status quo, always trying to bring together the best services from across all of the team members’ different disciplines. Ogilvy aims to use creativity, originality, and thorough research to ignite sales and help build enduring brands.

There were numerous other interesting and inspiring aspects of the program, including visits to the World of Coca-Cola and the headquarters of CNN. It was indeed a great pleasure both to participate in the program and also to travel together with my Tsinghua faculty and fellow schoolmates. Now back in China, we’re currently preparing for the second phase of the program — visiting the Coca-Cola China office and plants, as well as working on our team research project. Phase Two looks to be just as intense as Phase One, but we hope it will also be just as rewarding!

Coca-Cola 21st Century Marketing Program: Doing Marketing the Coca-Cola Way

Sunny Seon Hee Jeon, GMBA Class of 2017

Starting from May 2016, I had an opportunity to participate in the Coca-Cola 21st Century Marketing Program. As part of the Global Immersion program of Tsinghua SEM, the Coca-Cola 21st Century Marketing Program is delicately

designed to provide extensive learning about the dynamics of the global beverage industry as well as the marketing practice and in-depth knowledge for how a multinational corporation effectively integrates marketing and innovation together into its business model. To achieve these goals, the program consists of two parts: (1) a series of lectures by senior executives from Coca-Cola at Tsinghua's campus and (2) field study in the United States including visits to Coca-Cola headquarters in Atlanta, marketing courses at Georgia Institute of Technology, and visits to Coca-Cola's public relations agencies based in New York.

Prior to the field study in late June, all participating students attended two lectures held at Tsinghua's campus in May. Those lectures also have several open slots for MBA students, and therefore some of our classmates also joined. The first lecture was given by Jiantao ZHANG, the Vice President of Coca-Cola Greater China & Korea. His speech was focused on the public communication of Coca-Cola and how to deliver irresistible happiness through Coca-Cola's brand. It was very intriguing to learn how Coca-Cola values 3Ps

(People, Product, and Planet), especially in the communication landscape. Several compelling examples that Coca-Cola executed were mentioned, from delivering free water from Coca-Cola's facility in Sichuan province to developing the sustainability scorecard Coca-Cola has been operating.

In the following week, the second lecture was conducted by Shakir Moin, the Vice President of Marketing at Coca-Cola China. During the lecture, Shakir explained how Coca-Cola developed its way of Marketing; he defined it as ‘a delicate fusion of Science and Art.’ Since consumers in this era need a "wow!" moment every single time there is a new product launch, Coca-Cola deciphers what consumers actually highly value and lets consumers consciously and unconsciously relate Coca-Cola products to their own personal values.

Through these two lectures provided by Coca-Cola executives, I indeed enjoyed their speeches. Taking the insights from these marketing veterans, I excitedly prepared myself for the upcoming field trip.

Coca-Cola 21st Century Marketing participants pose at Coca-Cola headquarters. Program participants sport their new Coca-Cola fashionwear (left) and take in a company visit (right).



MBA NEWS

For many members of the Tsinghua-MIT Global MBA Class of 2017, one of the true highlights of the first-year elective curriculum was Entrepreneurial Strategy, a course that brought together the best of both Tsinghua SEM and MIT Sloan resources. As an aspiring entrepreneur myself, I found Entrepreneurial Strategy to be especially beneficial in preparation for my post-MBA path. The content was not simply a rehashing of conventional entrepreneurial wisdom; instead, it presented fresh frameworks through which to consider both age-old and emerging challenges and decisions.

The course is delivered in intensive sessions across both the fall and spring semesters and led jointly by Tsinghua SEM and MIT Sloan faculty. Structured in a “sandwich” model, Entrepreneurial Strategy consists of intensive classroom sessions held during two weeks in January and May as well as corporate visits and analyses in the intervening months. Professors Scott Stern and Pierre Azoulay of MIT Sloan conducted the majority of the classroom lectures and workshops in January and May, respectively. Meanwhile, as teams grappled with the application of course concepts in real-world business settings in China, Tsinghua SEM’s own Professor Gao Xudong, himself an alum of MIT Sloan, coordinated corporate visits and spearheaded dialogue and analysis.

From the first day of class, Professor Stern emphasized the distinction between an entrepreneurial idea and an entrepreneurial strategy. Entrepreneurial strategy, he would argue, is an integrated and act ionable choice-oriented framework that is especially critical for start-up companies. For any given entrepreneurial idea, there may be multiple, seemingly equally viable potential

strategies. However, since not all strategies can be pursued at the same time, Professor Stern pointed to what he calls the resulting Paradox of Entrepreneurship: “Choosing between equally viable alternative strategic commitments requires knowledge that can only be gained through experimentation and learning … yet the process of learning and experimentation inevitably results in (at least some level [of)] commitment that [forecloses] particular strategic options.”

Consequently, Professor Stern suggested that from the earliest strategic stages in an entrepreneurial endeavor, it is important for the entrepreneur to proactively choose his or her (1) competition, (2) customers, (3) technology, and (4) identity. These four choices, in combination, shape the entrepreneurial strategy and, ultimately, the extent to which a venture is able to both create

Entrepreneurial Strategy: Nexus of Theory and Practice

Tim Hesler, GMBA Class of 2017

MBA NEWS

MIT Course Series: Window into a Western MBA Juan Carlos Aguilar, GMBA Class of 2017

Throughout the first year, Tsinghua-MIT Global MBA students were visited by professors from MIT who traveled from Boston to Beijing to offer lectures in a variety of disciplines, including finance, accounting, and operations, among others. Among the participating MIT Sloan faculty were Pierre Azoulay, Scott Stern, Jacob Cohen, Ofer Sharone, Neal Hartman, and others. During the MIT mini-courses, GMBA students had the opportunity to learn theory at the hand of reputable professors and to put this knowledge in practice through different business case studies. Most of the cases we studied were focused on American companies, which was an enriching experience for students, as they had the challenge of putting their minds in different environments than that of their daily life. It was a prime opportunity to mix and compare different ways of doing business in the two leading countries of the world, which hold some remarkable differences.

Several of the classes focused on offering students a range of strategic approaches to varying business contexts and challenges. We learned how to make critical decisions in such scenarios and how to proactively develop a coherent strategy. One particularly practical course was Art of Negotiation. During this mini-course, we practiced facing various types

of negotiation scenarios through simulated exercises in which students role-played to defend the interests they were assigned. Other courses emphasized value chain strategies, cross-cultural communication, financial report analysis, and managing innovation. Having the luxury of comparing the Western lens on these topics with the Eastern one was especially worthwhile for both Chinese and international students.

The enthusiasm from students during these courses was a clear indication of the value proposition afforded by the series of MIT courses. Perhaps the most rewarding dimension of the Tsinghua-MIT Global MBA program is the opportunity to gain deep perspective regarding different business practices from different parts of the world. The MIT Sloan visiting faculty gave students the opportunity to share and overlay their unique international experiences and ultimately cultivated an environment in which each student could learn something new from both the faculty and fellow cohort members.

Professor Neal Hartman provides students with their first MBA introduction to the case study method.

MIT Sloan Professor Scott Stern pauses for a moment from an experiment exploring GMBA students' entrepreneurial strategic instincts.

Tsinghua-MIT Global MBA students cap off the Entrepreneurial Strategy course with a token of appreciation for MIT Sloan Professor Pierre Azoulay and Tsinghua Professor Gao Xudong.

Professor Scott Stern asks students to consider longstanding business questions through the lens of new frameworks.



MBA NEWS MBA NEWS

In late June, the Tsinghua-MIT Global MBA Class of 2017 had the opportunity to experience MBA life across the Pond. In the wake of the semester’s conclusion, approximately half of the GMBA class trekked to Cambridge, Massachusetts to participate in an elective module at MIT Sloan School of Management. Joining the first-year students were two distinguished SEM alumni as wel l as Tsinghua SEM Associate Dean and Professor Qian Xiaojun, Senior Manager of Global Collaboration and Admissions Doris Xun, and Corporate Relations Director Fany Chen. As Tsinghua School of Economics and Management and MIT Sloan marked 20 years of a tightly knit relationship, four of MIT Sloan’s top faculty and several other members of the broader Sloan community challenged the thinking of the GMBA cohort along a variety of dimensions, with a particular emphasis on innovation and entrepreneurship.

During the first two days of the course, Professor John Akula facilitated a discussion of key legal tools and frameworks essential to the aspiring entrepreneur’s tool kit . Himself a practicing attorney of many years, Professor Akula injected a particularly prac t ice-b as e d l ega l p ersp e c t ive into classroom dialogue. Professor Akula walked the cohort through a variety of frequently litigated corporate contractual provisions a n d t h e i r i mp l i c a t i o n s a s c o n s t r u e d by courts in various U.S. jurisdictions. Meanwhile, he also solicited cohort expertise for comparative purposes between judicial interpretations in China and those in the U.S. Ultimately, he brought those observations to bear in the context of early-stage agreements with corporate partners and new employees – both extremely sa l ient for star tups , especially those planning to predicate their ventures on the cross-border marketplace.

After laying a foundation of legal analysis, the cohort continued to expand its view

MIT Module: A First-Year CapstoneTim Hesler, GMBA Class of 2017

and capture value. In combining those choices, entrepreneurs must consider where on the spectrum between collaboration and competition they will fall as well as whether they are more concerned with quick execution or retaining control. Ultimately, the answers to these questions help inform an entrepreneur whether to adopt an intellectual property (collaboration-control), value chain (collaboration-execution), architecture (competition-control), or disruption (competition-execution) strategy.

In a continuation from Professor Stern’s discussion of early-stage strategic choices, Professor Azoulay’s May module focused largely on the next piece of the entrepreneurial chronology: scaling up a venture. Through a variety of pointed case studies, we analyzed the successes and failures of multiple companies in scaling and related those narratives and outcomes to the framework being constructed over the two module sessions. We were then tasked in teams with allocating resources to a hypothetical venture, based – as in real life – on imperfect information regarding expected returns and strategic coherence.

Between Professor Stern’s module and Professor Azoulay’s, Professor Gao coordinated local corporate team visits. My own team met with a company focused largely on the interior hard fixtures segment of China’s residential real estate industry. Although the company is now growing after a bit of a sluggish start in its early history, one personally striking observation was how initially difficult it was for our team to cleanly categorize a chosen entrepreneurial strategy from the four options: IP, value chain, architecture, or disruption. A deeper analysis, however, led us to conclude that our company’s founders had lacked a clearly

defined strategic vision at the start of their venture (even though they had some clear entrepreneurial ideas). We found a correlation between the company’s early performance troubles and this strategic confusion. However, after absorbing some early bumps along the way, our company’s choices had – whether consciously or not – become much more closely aligned, in our analysis, with a disruptive (competition-execution) strategy. Corresponding to that alignment was a noteworthy uptick in performance along a variety of metrics in the midst of substantial regional expansion.

For many members of my cohort, the course structure was unique in that it prompted us, by design, to slide between theory and practice with a fluidity uncommon in many academic settings. As many of us prepare to embrace emerging entrepreneurial endeavors within the next year, that fluidity will be indispensable as this pivotal two-year period influences much of our respective careers. In that sense, the Entrepreneurial Strategy course itself was not only a valuable academic experience but also, perhaps more importantly, a chance to more tangibly bridge the opportunities before us in the present with the inevitable demands of the future.

After being pushed by Professor Scott Stern to consider new strategic tools (top right), GMBA students celebrate the conclusion of the course's first module (top left). Course participants reflect on their corporate visits and consulting work with sponsors (middle left and bottom left).

Stuart Krusell, MIT Sloan Senior Director of International Programs, gives students the insider tour of noteworthy Sloan (top) and broader MIT (bottom) campus landmarks.



MBA NEWS MBA NEWSof entrepreneurship as a process with the insight of Professor Bill Aulet, author of Disciplined Entrepreneurship: 24 Steps to a Successful Startup. One of Professor Aulet’s most striking points was perhaps the logic behind an economic downturn constituting a statistically good time to start a new venture. As Professor Aulet noted, a downturn creates an ideal season for pulling in relatively inexpensive labor while developing “frugal corporate muscles.” Once those frugal muscles are built, if coupled with an other wise appealing corporate culture, then even as the economy recovers, much of the existing inexpensive labor force will remain loyal without forcing a company to abandon those frugal muscles that have built the company’s success. Retaining a lean operational orientation, Professor Aulet noted, can be critical not only to survival in downturns but also to fully thriving even in more forgiving economic seasons.

Professor Nelson Repenning, meanwhile, offered an introduction to dynamic work design, considering response mechanisms when things don’t go as planned – as is often the case in a startup context. As Professor Repenning noted, a body of neuroscience research has distinguished two processing modes of the brain, conscious and automatic, and suggests that humans tend to save their conscious processing capacity, which is limited, and offload as much responsibility as possible to automatic processing.

In the context of dynamic work design, Professor Repenning suggested that work done by humans, no matter how automated, is stil l a fundamentally human activity. Thus, he put forward four principles for dynamic work design: (1) reconci l ing action with intent, for example with pattern matching; (2) structured problem solving; (3) using optimal challenges with reasonable targets (How much gap between activity and intent can we successfully manage, and is there sufficient time to tackle gaps when people fall short?); and (4) connecting the human chain. As one simple application of the final principle of connecting the human chain, Professor Repenning suggested that in well-designed work, people know and

Ceremony for Tsinghua SEM MBA Donation from Alumnus Thomas Shie

The ceremony for Tsinghua-MIT GMBA program donation from alumnus Thomas Shie was held in Shunde on May 20, 2016. After his first donation of 1 million RMB in 2015 to support the development of the Tsinghua MBA program, Mr. Shie made this second donation of 1.2 million RMB for overseas Tsinghua MBA brand promotion.

Among the attendees of the ceremony were Professor Qian Xiaojun, Associate Dean of Tsinghua SEM; Zhang Lei, Executive Director of Tsinghua MBA Programs; Tang Yunduan, Deputy Director of SEM’s Cooperation and Development Office; Yu Honglei, head of Tsinghua MBA development and alumni relations; Doris Xun, head of Tsinghua MBA global cooperation; and Chen Fang, head of Tsinghua MBA business cooperation. Prior to the ceremony, a short video about Thomas Shie’s study and life at Tsinghua SEM was displayed. The ceremony was hosted by Doris Xun.

Professor Qian Xiaojun recalled in her remarks

Wan Jun, MBA Office

the days when Mr. Shie studied at Tsinghua. As the vice-monitor of the IMBA class of 2012, Mr. Shie made great contributions to class cohesion and solidarity as well as to the integration of Chinese and foreign students, as recalled by Professor Qian. At the start of the program, Mr. Shie took the lead among new MBA classmates to take an oath of corporate social responsibility. He was the host for several important events at school, including the MBA New Year’s Party, MIT China Lab Day, and the graduation ceremony for the IMBA Class of 2012. As the student representative with outstanding performance, he also shared what he had learned during the two-year MBA study at Tsinghua at the school presentation for Tsinghua MBA programs in 2014, noted Professor Qian. As the professor for Mr. Shie’s Business Ethics course, Professor Qian said she was still impressed by his politeness, gentility, articulate speech, and high standards for himself, all reflecting his well-preserved external and internal self-cultivation and down-to-earth character. Professor Qian expressed her hope

that Mr. Shie would continue to shine in his career as during his MBA study, and to follow and support the development of Tsinghua and cohorts that follow.

Executive Director Zhang remarked that as the first young alumnus to donate at such an early stage of his career, Mr. Shie had made donations from his work bonus to the development of Tsinghua MBA programs. Tang Yunduan has seen a rise in MBA alumni support for Tsinghua SEM. Examination of data from previous donations made by alumni suggests that Thomas Shie was the youngest large-sum benefactor, and that the donation was made so soon after his graduation reflects his sense of belonging and love for his Chinese heritage. Ms. Tang also reported the growth of SEM alumni donations from alumni in construction of new buildings and support for research and education at the SEM. Alumni donations have played a critical role in the tremendous achievements by the SEM to date, which also reflects alumni’s deep regard for their alma

have regular contact with those who supply the inputs to their work as well as those who receive the outputs.

As Profe ss or Ja ke C ohe n op e ne d t he morning of the module’s f inal class on Friday the 24th, he temporarily dispensed with the scheduled M&A case discussion in order to address a global development of emerging importance. Just a few hours prior, the UK’s decision by popular vote to withdraw from the European Union had become official as the votes were tallied. Professor Cohen explored the potential ramifications of “Brexit” alongside the class, offering not only answers but also open-ended, thought-provoking questions on the future of European and global commerce.

The cohort also welcomed a variety of guest speakers throughout the module and in turn conducted several local site visits. Professor Akula introduced a variety of MIT alumni, including Wan Li Zhu, a leading figure in the Boston angel investing community. Wan Li graciously offered two solid hours of insight into angel financing and witty exchange with students. Panel discussions with players from MIT spinoffs Woobo and XtalPi offered unique angles into technology commercialization. Finally, the cohort was

also treated to site visits at: (1) 11-year-old Carbonite, a cloud-based data backup and security company; (2) the Martin Trust Center for MIT Entrepreneurship, complete with its full range of resources for MIT affiliates across a spectrum of stages; and (3) CIC Cambridge, an entrepreneurially oriented workspace that offers the advantage of b e ing home to more s t ar tups t han anywhere else on the planet.

As the cohort engaged with MIT faculty, s t a f f , a n d t h e g r e a t e r i n s t i t u t i o n a l community over the course of the module, students grew in their appreciation for SEM’s long-standing relationship with our sister school in the Tsinghua-MIT Global MBA partnership. The module’s heavy emphasis, even in its classroom components, on moving beyond theory to application and stepping outside the traditional confines of academia, was refreshing and inspiring. Ultimately, the module served as both an apropos capstone to a year of integrated MBA study and an optimal pivot point for students returning to Beijing for a second year of increasingly focused immersion in China’s own hotbed of innovation.

Global MBA student Putt Thavorn-amornsri struggles to contain his photo-journalistic enthusiasm while exploring the hallowed MIT halls.

Associate Dean and Professor Qian Xiaojun commemorates Thomas Shie's alumni gift by presenting a certificate of donation.



MBA NEWS MBA NEWSSeminar, where a majority of mentors returned to campus to join students in the Shunde building, each introducing themselves to the class and meeting students face-to-face for the first time. After the introduction, students were divided into three sector groups, namely, Finance, IT, and Consulting & Industry, based on their individual interests. In each of the groups, students talked directly with alumni whose backgrounds in those sectors offered a more nuanced understanding for students to refine their career objectives.

Another well-received event was the career counseling workshop. To open the workshop, two mentors, Li Pandeng and Yang Ning, held a talk covering general job search and career development advice. Afterwards, six mentors offered one-on-one meetings with students to discuss their career choices and strategies. Students were matched with alumni whose experience aligned with their own career goals; during the meeting, students were able to pose direct questions and receive personalized feedback from alumni on how to best achieve future success. Many students felt that this workshop helped them gain further clarity regarding their career plans.

For the forty international students in the Global MBA program, many of whom are living and studying long-term in China for the first time, there is no doubt that life and career can sometimes hold confusion and difficulty as a foreigner. Given his own background of shared experience, American Jonathan Krive held a seminar reflecting on his own past experience in China as an international MBA

and he is grateful to be in a position to make his own contribution to the development of his alma mater.

At the conclusion of the ceremony, Thomas Shie

mater and sense of unity. There is a mutually beneficial link between the development of SEM and the success of its alumni.

According to Yu Honglei, Thomas Shie was also an excellent representative in the Alumni Council. She mentioned that after 25 years of Tsinghua MBA program development, alumni have been playing an increasingly influential role. They have gained substantially from their MBA study at Tsinghua and demonstrated a spirit of gratitude to their alma mater by their continued support of the MBA program upon their successful career development.

Doris Xun, as one of the SEM administrators who had greatest contact with Mr. Shie at school, noted his family origins from Fujian Province, although he grew up in Canada. After obtaining his bachelors degree with distinction from New York University, Mr. Shie began an exclusive real estate agency in New York. After he graduated from Tsinghua, Mr. Shie co-founded a financial services company in Hong Kong. Ms. Xun said she was impressed by his youthful, yet mature energy.

Thomas Shie spoke of the Tsinghua MBA as the best platform for students of Chinese origin to return to their country of ancestry, learn about Chinese culture, accumulate essential knowledge, and expand their social networks. Thanks to the education and inspiration from Tsinghua, Mr. Shie is now integrated into Chinese society and ready for future challenges,

and Professor Qian Xiaojun signed an official agreement of donation. Professor Qian also awarded Mr. Shie with a certificate of donation.

From One Generation to Another: Alumni Mentoring Program

Yutong Gu, GMBA Class of 2017

student at Tsinghua SEM and as an expat working in a large Chinese investment firm. After the seminar, many of the international student participants expressed being impressed by Jonathan’s ability to relate to their own shared experiences and challenges.

Over the course of the school year, apart from on-campus events, other gatherings such as dinners and company visits were also organized. AMP was positioned to provide first-year GMBA students a direct troubleshooting channel to vet many of their concerns; conversely, mentors were also afforded a means of engaging with new and emerging talent at Tsinghua SEM, spurring a number of meaningful alumni investments of time and attention. As AMP continues to develop, it serves as a key avenue for Tsinghua’s MBA programs to reflect the larger community’s shared dedication to student and alumni growth as well as an abiding tightly knit culture across generations of SEM stakeholders.

SEM’s MBA Office, which is responsible for inviting and selecting representative alumni for each year’s cohort, and the class committees for each of the GMBA and part-time MBA classes, who are responsible for working with alumni to host value-adding events for students.

For the Tsinghua-MIT Global MBA class of 2017, a total of 17 mentors currently working in a wide range different industries and

positions, from a manager at GE to an HR director at an investment firm, were assigned to the cohort. The alumni engagement team of the GMBA Class Committee, led by Yutong Gu and Wayne Ma, organized a dozen events during the first academic year of the MBA program. Those events included industry information seminars, a career counseling workshop, and company visits. The first major organized event was the AMP Kick-Off

The Tsinghua MBA Alumni Mentorship Program (“AMP”) is a jointly coordinated project that helps connect current MBA students with alumni to foster personal growth. AMP offers an opportunity for alumni to contribute to the MBA program by providing mentorship to students and gives students a channel to receive guidance on their studies and career development by interfacing with alumni. AMP is organized by both Tsinghua

Ceremonial signatures memorialize the alumni donation.

Ceremony participants included (left to right, top row) Yidan Zhu, Rikki Zhao, Allison Shi, Jun Wan, Fang Chen, and Joe Wei as well as (left to right, front row) Honglei Yu, Executive Director Eunice Zhang,

Associate Dean and Professor Qian Xiaojun, alumnus Thomas Shie, Yuduan Tang, and Doris Xun.



STUDENT LIFE STUDENT LIFE

Giving Back to Nature: Planting Trees in the Huairou District

Ben Zeng, GMBA Class of 2017

On April 16, 2016, a perfect day for outdoor activities, we organized a tree planting event in Huairou (怀柔) where both GMBA Class of 2017 and 2018 had a chance to spend the weekend in the countryside with their family and mingle with classmates at the same time. It was a great chance to take a break from the busy workload of the second semester and enjoy the early summer breeze.

After driving for an hour north of the Tsinghua campus, we arrived at the tree-planting site where parents get to plant a tree with their children and teach them the importance of preserving the nature for future generations. Such events do not only shape the values for the children in their early years, but also an enjoyable experience for the adults to remind ourselves of the significance of the environment. In the afternoon, we hiked up the Hong Luo Si (红螺寺) temple nearby. Hong Luo Si, one of the historic temples well preserved in Beijing, is known to bring love ones together. The temple was first built in 338 A.D. and served as the royal temple during the Yuan Dynasty when the Mongols ruled the whole of China. Hong Luo Si is now a tourist attraction where people would do a 60-minute hike to visit the Buddha sculptures for blessings. During the hike, one can oversee Beijing on the elevated slopes. At the end of the tour, the temple offers a roller-coaster cart, which is an alternative way of getting off the mountain, that took us down within a few minutes. With the blessing that we remain strongly connected outside of campus, we wrapped up the day with a group photo in front of the main entrance.

GMBA India Trip: MumbaiChristina Chong, GMBA Class of 2016; Wanvipa (Joob) Bandidwongpaisan, GMBA Class of 2016;

Ben Zeng, GMBA Class of 2017; Saowanee (Muki) Xie, GMBA Class of 2016

I. Dharavi Slum Tour by Christina Chong, GMBA Class of 2016

India has always been at the top of my list of countries to visit, and the GMBA program has given me the chance to make that dream come true. Unsure of what to expect from the trip, I travelled to Mumbai with an open mind and was excited to see the city with my own eyes.

One of the most memorable parts of this trip

for me was the slum tour. Led by Professor Steven White and our local guide, Akash, from Reality Tour, an NGO which focuses on helping local development and invests its profits in running education programs for the slum community, the group set off by train from Matunga Road station to Dharavi on the first day of the trip. With a population of more than 1 million dwelling in an area of 535 acres, the Dharavi slum is one of the largest in the world.

Walking along the crowded market, we first visited the industrial part of the slum, consisting of recycling, leather, textiles and pottery businesses which produce goods for the local market as well as export internationally. Some areas are heavily polluted due to the poisonous fumes and waste produced from burning paint, resins and metals. Following Akash through the narrow maze-like alleys, we entered into the residential area where the families of the workers live. The area had a

limited supply of utilities, but the businesses and residents have learned to maximise their resources in this cluttered space.

The 3-hour slum tour was an eye-opening and unforgettable experience. I was fascinated to see how the population has created its own ecosystem within the slum. Despite the hazardous working environment and poor living conditions, the slum is organised, the people are productive, and it was refreshing to see the children playing with smiles on their faces.

Mumbai has impressed me in so many ways: from arriving at a large modern airport, to taking city strolls surrounded by beautiful architecture, to meeting many inspiring MBA students from Somayia Vidyavihar – not to mention all the delicious Indian food. India is a country full of culture and potential, and I cannot wait to go back and explore the rest of the country.

II. Visit to Tata Group by Wanvipa (Joob) Bandidwongpaisan, GMBA Class of 2016

It was a pleasure to have the opportunity to visit the Tata Group during the Mumbai trip. I have learned a great deal about the business in its home environment and the company’s strategic move outside India’s territory.

Within India, Tata is the largest corporate entity in operation since 1868, founded by Jamsetji Tata. The company operates within a number of well-known sectors across industries from agriculture services to telecom products and solutions. However, outside India, Tata has found difficulty establishing a strong local presence, particularly in China, where the emerging market is considered to be one of the largest markets for the company. To my surprise, despite the increase in revenue from its part in Jaguar & Land Rover, many locals have yet to recognize Tata as the power engine behind their success. The company has continued with great effort to establish a strong local presence, not only for higher market valuation but also for identifying top local talent to help facilitate growing demand in China.

Tata Group not only has risen within the ranks of leading global companies in its corporate responsibility but also exemplifies a well-managed family business, with Tata Sons having successfully passed through multiple generations. As a member of a family business myself, I am truly inspired by the Tata Group to develop my family’s business in a similar fashion, with the hope that it would serve its customers globally across national borders.

I l e a r n e d a g r e a t d e a l f r o m b e i n g proactively engaged in exchange with Tata’s representatives, especially regarding Tata’s India-China strategic move. We give special

thanks to Professor White for arranging such an informative visit to the company and thank Tata’s representatives for such a warm welcome despite the national holidays.

III. Mumbai Trip – Bombay Stock Exchange Visit by Ben Zeng, GMBA Class of 2017

As the next emerging market, India has been under the spotlight and has received much attention in the international community in recent years. Mumbai is the financial hub of India with two stock exchanges both located in Mumbai, the National Stock Exchange of India

Global MBA students and families join tree-planting activities in Huairou (top) before enjoying a leisurely hike to nearby Hong Luo Si temple (bottom).

Together with Professor Steven White, GMBA students from the Classes of 2016 and 2017 (bottom) gain a deeper appreciation for the economic and social challenges facing

by visiting Dharavi slum (top).



STUDENT LIFE STUDENT LIFE(NSE) and the Bombay Stock Exchange (BSE).

The Bombay Stock Exchange is the 11th largest stock exchange in the world, with an overall market capitalization of $1.7 trillion. Established in 1875, the BSE is Asia’s first stock exchange and the world’s fastest stock exchange with a median trade speed of 6 microseconds. BSE is situated in the financial community in Mumbai, where there is a no-car and no-motorcycle policy with strict security measures. There are currently 5500 companies listed on the BSE; however, foreigners are not allowed to invest or trade in the stock market. Similar to China in that respect, one would have to invest into an institutional fund in order to invest in the Indian stock market.

During our visit at the BSE, we were welcomed by a senior executive and were given a lecture from the Bombay Stock Exchange Institute. The Bombay Stock Exchange Institute is a training institution set up and led by the BSE as an initiative to cultivate financial knowledge for anyone who is interested in the Indian financial market. In early 2011, the BSE Institute launched the country’s first 2-year full-time MBA program specializing in Financial Markets.

In conclusion, the visit, led by Prof. Steven White, gave us deeper insight into the Indian stock market. As the oldest stock exchange in Asia, the stock market and the Indian economy as a whole pose great opportunity as they open their doors to foreign investments.

IV. SIMSR Visit by Saowanee (Muki) Xie, GMBA Class of 2016

Debraj Ghosal, the chairperson and lecturer at K.J. Somaiya Institute of Management Studies and Research (SIMSR), invited Professor White to deliver a speech on China’s economic transactions and the country’s innovative challenges. Professor White offered an overview of how supply chain works in China, factors contributing to China’s cost competitiveness and challenges in product innovation. SIMSR students showed strong interest in these topics, allowing for an

insightful Q&A session afterwards. After class, a mixer was also held between Tsinghua MBA students and students from our host university, during which we further exchanged our thoughts on innovation and assisted SIMSR students in evaluating their start-up projects for the Indian and Chinese markets. We were fascinated to see start-up projects from one of the best universities in India and also thrilled at the prospect of ongoing cooperation between Tsinghua SEM and SIMSR in the near future.

Victory @ HKUST: Tsinghua GMBA Team Finds Case Competition Success

Daniel Cowen, GMBA Class of 2017

In mid-April, four GMBA students found ourselves in Hong Kong, invited to attend the inaugural Baume & Mercier Business Case Competition at Hong Kong University of Science and Technology. This competition, organised by the students themselves, brought together teams from across mainland China and Hong Kong, Europe and the USA, 40 MBA students altogether to compete for cash prizes while grappling with real business problems.

Having been the only team selected from a Beijing MBA program, Wendy Wang, Roy In, Mike Rosenthal and I were all proud to be representing the SEM. We had our sights mainly set on getting to know other MBA students – and of course, in a spirit of friendly competition, doing better than CEIBS, the only other mainland Chinese business school present. What struck us first was the real diversity of the other MBA programs; the committee at HKUST had chosen teams based on background, business experience and language, and it was fascinating to meet peers from all over the world, the majority of whom were also getting their business education outside of their home countries and, in many cases, home continents.

The competition itself was centred around Baume & Mercier, a Swiss watchmaking company with a rich history, mainly focused on the lower end of the luxury watch market. Despite its best efforts, the Hong Kong-based team had been unable to achieve the iconic status and business success of Rolex and others, particularly in the Chinese market. Baume & Mercier’s regional CEO and head of marketing were both heavily involved in preparing materials for the competition and acted as judges, along with HKUST professors and alumni.

The competition was divided into three rounds, with a main business case round, which we had a few days to prepare for, a flash case round, which we had one night to prepare for, and a

negotiation competition, for which teams were given no preparatory materials. Holed up in the Holiday Inn close to HKUST’s beautiful campus on the bay, many teams were gathered in the lobby overnight, preparing their pitches for the main case round the next day. Finishing our pitches around 3:00 am each night, we would see teams from London Business School and UCLA get up to start working on their slides just as we completed ours, everyone taking a different approach to deal with the jet lag or lack thereof.

We were pleased with the accounting we gave of ourselves in the competition, steadily improving our pitches as time

Trip participants visit India's top two stock markets in an endeavor to better understand the country's financial markets.

Professor Steven White provides an overview of supply chain operations in China.

GMBA teammates commemorate their participation in the inaugural HKUST Global MBA Challenge (bottom) and their successful

performance together (top).

Tsinghua team members Daniel Cowen, Wendy Wang, Mike Rosenthal, and Roy In pose with their coveted Negotiation Round trophy, now on display in Tsinghua SEM's Shunde Room 116.




The Tsinghua University Experience and Journey to the Great Wall of China

Eric Lawrence van Vliet, Visiting MBA Exchange Student

Leaving Canada and coming to Beijing to continue my MBA education has been an eye-opening experience. Five months have passed since I arrived at Tsinghua and joined the orientation, but it still feels like it was only yesterday. So many amazing things have happened during this exchange that the time has flown by.

Although traveling to a completely different country is nothing new to me, as I had spent considerable time studying abroad in Europe, the language barrier made this experience extremely interesting. Before coming to China, I had taken a year-long Chinese language course to prepare myself for this exchange opportunity.

One very notable experience that stands out was the trip organized by local Tsinghua students to visit the Great Wall of China at Badaling. Badaling is about 80 km northwest of Beijing, and getting there required a lengthy bus trip, but it was absolutely worth the effort. As one of the great wonders of the world, it felt like a dream seeing the Great Wall in person. As a Westerner, I had always heard stories about these grandiose monuments in the news, but to actually experience it in person was unreal.

passed and as presentation nerves wore off. We presented confidently as a team and benefited greatly from having Wendy on our team, who represented precisely the kind of target customer Baume & Mercier would desperately like to attract in China. Our feedback after the competition indicated that we had given the marketing team at B&M genuine food for thought and that they would be implementing some of our ideas in the near future.

The three-day competition culminated in the final dinner and awards ceremony, during which the winning teams from each round of the competition were announced. Huge rounds of applause and tremendous praise were offered to the HKUST MBA committee and the student volunteers, who put their own time and effort into making the competition an enormous success. Tsinghua SEM was announced as the winner of the negotiation round, validating the pride we had taken in our team’s shared culminating

performance, and we were rewarded with cash (yay) and a trophy (now in Shunde Room 116). It was also noteworthy that our head-to-head opponents from CUHK also scored well in the challenge, meaning that not only did we out-negotiate other teams, but we perhaps out-cooperated them as well. From this fantastic experience, we would highly recommend Tsinghua students to involve themselves in future business case competitions and to branch out and explore similar competitions around the world.

Badaling is the most visited section of the Great Wall, and it is easy to see why. It’s absolutely breathtaking to see it in the mountains, stretching as far as the eye can see. The section of the Wall at Badaling was reinforced during the Ming Dynasty and has seen some major historical events in its nearly 500-year life. It was a major defensive fortification meant to protect Beijing from attacks coming out of the north and also acted as a very long highway through the steep mountains. Climbing all the steps up the Wall came

as a huge shock, as it was incredible to believe this amazing piece of architecture was built so long ago. After the visit to the Great Wall, we were all treated to some famous Peking duck at a top-notch restaurant near the wall.

There have been many more extraordinary experiences during the semester, and the entire exchange in China has been

an incredible learning opportunity. The classes at Tsinghua have been some of the best I have had the chance to take, covering an impressive range of topics that have provided me with deep insight in some of China’s most successful businesses.

If I can give my fellow exchange students a piece of advice, it would be to get involved

with the local students as much as you can and attend every event organized on campus in order to fully maximize your exchange!

Harbin: Journey to the ColdThanakrit (Putt) Thavorn-amornsri, GMBA Class of 2017

For the past four months of the MBA life together, we had been through a fruitful learning experience. Now, as the winter break begins, what else can someone originally from a tropical region like me do apart from enjoying the winter (some might not agree with me though)?!

Harbin – the fascinating capital city of Heilongjiang well known for its ice and snow sculpture festival in the winter – had always been my travel destination. If you want to know what living your day way below the freezing point is like, you have to visit Harbin once in your lifetime! Harbin is pretty close to Beijing, only two hours by plane, yet the Beijing winter feels like a breeze compared to Harbin. It was not difficult to get eleven adventurous Global MBAs together for this trip. Eleven people, six different nationalities, and four days together – we were ready for the journey to the cold!

We all agreed that our first impression of Harbin was literally “freezing” with daytime temperature reaching as low as -18°C. We started our first day by strolling along the Central Street (中央大街) where we could see Russian-style buildings lining the big pedestrian street, as Harbin was once home to Russian refugees before the 1930s. Sold

along the street were various kinds of street foods such as Harbin-style smoked savor y red sausage (红肠) , candied fruit (冰糖葫芦), and tasty ice cream, which we actually found tasted

much better in such cold weather. Not so far from the street is St. Sophia Cathedral – perhaps one of the most significant Russian remnants in the city. The orthodox church stood at 53 meters

Visiting student Eric Lawrence van Vliet takes a day away from his exchange studies to enjoy a trip to the Badaling section of the Great Wall (top) and a nearby Peking duck dining experience (bottom).

Just a short plane ride removed from Beijing, participants exhibit unbridled enthusiasm for the winter wonderland offered by Harbin.




On March 24th, the Net Impact club at Tsinghua University invited Miss Fiona Lang – CSR Director of Corporate Affairs, Walmart China – to come and share about Walmart’s CSR endeavors and social impact in China. Walmart China is committed to helping Chinese people live a better life through CSR initiatives in four main categories: Women's Economic Empowerment; Education Initiatives; Nutrition, Health & Wellness; and giving back to communities. At Walmart, Fiona oversees the CSR practices, NGO partnership maintenance, as well as CSR related communication. With over 12 years of experience in strategic corporate communication and CSR in various sectors, she spearheaded Women's Economic Empowerment (WEE) Program and many other initiatives that promote gender equality and career development for Chinese women in rural areas.

Walmart China was founded in 1996 and has since successfully expanded nationwide with 434 retail units as of 2015. It employs over 1,000,000 associates in China, 60% of which are female. Walmart China strives to become the most trusted retailer by 2017 – seeking to expand 115 additional stores in tier-1 and -2 emerging cities and provide 30,000 jobs for local Chinese. Given a majority of the workforce is female, Walmart China understands the issues of gender inequality and job opportunities of women; hence, Women's Economic Empowerment (WEE) was founded by Walmart and Walmart Foundation in 2011 in order to improve the lives of women by providing skills training, market access and economic opportunities.

With over USD $1 billion in grants, WEE focuses on three areas: sourcing, training, and diversity inclusion. First, it aims to increase sourcing from Women Owned Business (WOB) to more than 50%. Second, WEE aims to train and provide jobs for one million women by 2016 through 4 key areas: farming, factory, business support, and retail business. As Fiona explained, one significant portion is the Apple Farming Project which provides opportunities for unemployed women in the countryside. The project raised RMB 91 million in funding and worked with 210,000 Smallholder Apple Farmers to improve the efficiency of apple farming through research collaboration with UC Davis and Cornell University, i.e. lower water usage and more competitive apple yields. In addition, WEE is also involved in providing skill training and financial planning for women in the factory; empowering women for their entrepreneurial business through the WEConnect international marketplace; and promoting retail businesses that aim to provide jobs for 36,000 women.

And lastly, WEE aims to promote diversity inclusion to address the social issue of gender equality. WEE believes that through its practice it can help women build their own brands by leveraging on what they are good at,

in height topped with a green-tipped dome. I realized it was very hard to tell that Harbin is actually a Chinese city when all the architecture and streets look so European. We ended our first day with the highlight of the trip – the Ice and Snow World (冰雪大世界). This annual winter festival is considered the largest ice and snow sculpture festival in the world, displaying more than 2,000 ice sculptures, ranging from man-sized statues to ice sliders and huge full-scale ice castles, all decorated with colorful lights. Although it could get very cold at night, the festival still offers a joyful and lively experience and attracts thousands of visitors per day.

Eager to experience something even more local, we decided to spend the second day out in the wood at the Snow Village (中国雪乡) in the Mudanjiang (牡丹江) neighborhood, which took us another 4 hours by van from Harbin. The village is still young as a tourist destination, as it only gained attention several years ago after being featured in famous TV shows and films. At an elevation of 1,500 meters, the village can be covered by 2 meters of snow during the winter with an average temperature dipping below -30°C. Of course we were well prepared for this with five layers of winter clothing on top and three on the bottom! The village consists of about forty local traditional wooden houses surrounded b y h i g h m o u n t a i n s – c r e a t i n g a beautiful white scener y. Especial ly when the sunlight shines on f luffy-snowy roofs of the houses, it is like a winter wonderland!

The next day, we headed off for skiing at Yabuli (亚布力) ski resort, which is often said to be the best ski resort in China. It is okay if you do not know how to ski, because there are easy slopes where beginners can learn – and have a blast, just like I did! On the way to the ski resort, we were fortunate enough to pass by a lookout point near a big valley. Despite the abnormally short

battery life of phones and cameras in subzero conditions, we still managed to capture breathtaking panoramic shots of mountains and forests covered with white snow.

We spent our last day of the trip in Harbin city. We visited Snow Sculpture Art Expo on Sun Island (太阳岛雪博会), which features enthralling snow sculptures and architecture. We drank hot chocolate (best dr ink for cold weather), played icy slider, and ate our last meal in Harbin at an authentic

Russian restaurant. The fun continued on our overnight train back to Beijing, where we played cards, laughed, and relaxed after such a long journey. This trip was one of my favorite memories of time spent with my Global MBA classmates. Indeed, Harbin is a place worth visiting, especially with friends and family – and was for me, “a warm journey to the cold.”

Net Impact Lecture Series – Walmart China’s Corporate Social Responsibility: Women’s Economic Empowerment (WEE) Program

Thanakrit (Putt) Thavorn-amornsri, GMBA Class of 2017

allowing for diversity in the workplace. Since 70% of Walmart’s customers are women, these initiatives not only improve lives of women, but also allow Walmart to better understand their customers as well. Indeed, business helps society and society helps business, and so must all of us future business leaders!

The Net Impact club at Tsinghua is a club for like-minded people who want to make a difference. Net Impact is a network of 60,000 students and professionals who share a goal to create positive social and environmental change in the workplace and around the world. Net Impact at Tsinghua is the first Mainland China student chapter under the global Net Impact organization, which includes key business schools such as Harvard, Wharton and INSEAD. Our mission is to develop top leaders who seek to improve the world and society through best business practices in corporate social responsibility, sustainable development, social enterprises, and non-profit organizations.

GMBA students find a bit of sunshine while braving the bitter Harbin cold (top) and take in the Russian-style architecture of the pedestrian-filled Central Street (bottom).

Male and female MBA students alike join together in support of Net Impact's lecture series on the Women's Economic Empowerment program.

Fiona Lang, CSR Director of Corporate Affairs at Walmart China, outlines four cornerstones of Walmart's CSR efforts, headlined by the WEE program.



STUDENT LIFE

5th Championship Cup Asia Pacific Business School Desert Challenge

Stacey Zhao, GMBA Class of 2017

Standing in the middle of the desert, with no sign of civilization and camp gear weighing a ton on my back, suddenly a gunshot rang out. Sand f lew in every direction. Only visible were the tiny specks of people already miles ahead. Then there were just dunes and scarabs and the wind. I was reminded of weekly practices around the Tsinghua track and the mandatory trip to practice at a man-made desert a few hours outside of Beijing. There were months to prepare, but not for this. We had already f lown hundreds of miles into Yinchuan and driven far into the desert, so there was no turning back.

Rolling back a few months, Tsinghua SEM announced students could sign up for a three-day, 70 km race through the desert. Although it would be the ult imate test of endurance, I knew it would also be an incredible way to bond with my classmates, as well as part-timers and MBA’s from all over China and internationally. In the 5th year since it was founded, the event planners had forged a reputation for themselves, returning this time with 1200 students from 54 universities and 6 different countries.

The three days through the desert offered lessons about teamwork in the midst of competition. Not breaking from the larger group was a critical survival tool in the face of beckoning fatigue and the loneliness of our own voices in the desert. I heard from my teammates who took the lead that other runners could help them reach for a salt pack or put water back into their backpacks. Making friends helped them get valuable information about directions and distances to the next coveted check point.

We pitched our own tents and set out to celebrate at our camps with concert and drones before nightfall. There was no signal and no toilets. The next day we awoke sore and demoralized by exhaustion. I was not feeling well after the second day and had left something important a few miles back. Unquestioningly, my classmate ran back with me to retrieve it. Thanks to his persistence and loyalty, we miraculously caught back up with our separated teammates after the long detour.

I walked out of the desert that week utterly

STUDENT LIFE

Lean In MBA Reflections: Life & Wine TastingXiang Xuan, Tsinghua University Class of 2017

(translated by Stacey Zhao, GMBA Class of 2017)

the Sauvignon Blanc from Chile's central valley region of South America with a screw cap seal, she dispelled the misbelief that corking offers a superior seal for fully maintaining the wine’s taste. Furthermore, she noted, with changing habits of wine consumption, long-term storage for investment and collection of wines has diminished, and twist cap packaging is quite practical and useful. Furthermore, Ms. Masüger explained that wine storage is critical, because it is vulnerable to oxidation and must be stored in a dry, cool, underground wine cellar. To keep wine longer, one should seal or twist on caps that will discharge air from the bottle to maintain its taste.

Beginners have the ability to mold and refine their own wine preferences. Wine can numb the tongue, reducing sensitivity to taste. Thus, before transitioning into the finale of red wine tasting, Ms. Masüger asked everybody to have some cookies and water in order to refresh their taste buds. She explained that red wine is best experienced at room temperature.

Within two hours, participants had gained a deeper understanding of wine and associated customs, better appreciating its remarkable cultural value and versatility as a complex pastime intersecting with the everyday dining experience.

On the afternoon of April 9, 2016, Lean In MBA, the Women’s Leadership Club, and the Family Business Club jointly sponsored a wine tasting. The bilingual English-Chinese event was led by honorary guest speaker Claudia Masüger from Switzerland, CEO of Cheers wine importers. Ms. Masüger brought Cheers success in the wholesale and retail wine business through both B2B and B2C channels, with the ambition to make good wine available at reasonable prices to young consumers from all over China. Claudia’s expertise and background in wine made her the perfect speaker to lead the event.

Ms. Masüger opened by explaining the basic process of assessing sparkling, white, and red wines as well as wine tasting’s role in daily life. After the hostess’s introduction, the event commenced with the opening of sparkling wines. Ms. Masüger noted sparkling wine’s mood-livening capacity at leisurely parties and during holidays. She then demonstrated the two most commonly used techniques to open sparkling wine. The first is to remove the plastic, then push one’s thumb against the bottle while slowly twisting open the wire. A more sophisticated approach is to tear the plastic top off and tilt the bottle at a 45° angle while unwinding the wire; with one clean flick of a knife blade, she popped off the cork. Ms. Masüger then brought out a variety of sparkling wines for further demonstration.

Ms. Masüger also explained how to appreciate wine varieties such as champagne, suggesting that it is best chilled and served in narrow wine flutes. The shape of wine flutes keeps the wine in its optimal condition. When holding the glass, she explained, one should grip the slender part of the glass, keeping the wine cool.

White and sparkling wine tasting starts with holding the neck of the flute, then slowly rotating the flute, letting the wine’s full fragrance spread, then lifting the flute to observe the reflection of the wine, and finally tasting the wine. With Ms. Masüger’s guidance, we smelled the wine filled with fragrant hints of fresh lemon, peach, fruit, and just the right acidity. Ms. Masüger asked everyone to take a nibble of lemon before tasting the white wine, to experience the sweetness of the wine by bringing out the contrasting flavors.

While attendees enjoyed the champagne, Ms. Masüger shared the story of her love affair with wine. Despite being a fourth-generation wine expert, her journey was not all easy sailing. She arrived in Beijing with two cases of wine, and for three years she found herself constantly putting out fires left and right while acclimating to the local environment and market.

As Ms. Masüger’a assistant poured a grape variety adopted by

beaten and ever so proud of these brave men and women, holding a special admiration for those who made it in record time among us. I did not make any notable time. I barely made it to the end-line. No matter the result, however, it was the journey that made it all worthwhile.

Desert Challenge participants traverse the hazards of the desert (top). Global MBA teammates bask in the glory of their conquest (middle). Team Tsinghua Desert Fox sports its colors (and medals) as one (bottom).

Under the insightful guidance of Ms. Claudia Masüger, CEO of Cheers wine importers (bottom), Tsinghua students share a toast (top) and a deeper

appreciation for wine's cultural context.



BEYOND CAMPUS ALUMNI STORIES

X-Lab on Silicon Valley Innovations & Entrepreneurial Shifts

Xing Li, GMBA Class of 2017

On March 11, 2016, the X-lab held a seminar provided by Ms. Jessica Lessin, the founder and CEO of The Information. Before starting The Information in December of 2013, Jessica spent 8 years at the Wall Street Journal (the “WSJ”) covering the technology and media industries, following her graduation from Harvard University in 2005. At the WSJ she wrote more than 1,000 articles and news stories while covering Apple, Google, Yahoo, Facebook, Twitter and other global technology and telecom companies. She was part of the team that was a 2012 Pulitzer Finalist for a series on digital privacy. The team won a public service award from the Society of Professional Journalists for the same series.

During the seminar, Jessica explained the shift of business models of those high-tech startup companies in Silicon Valley, which previously focused on more advertisement-driven business models. This change is primarily due to the further development of new technology (e.g., Voice Tech and Virtual Reality). The percentage of ads-oriented startups dropped from 11% (2013) to 3% (2015). On the other hand, Jessica shared the insight of Facebook’s further development plan to promote its own instant communication service as well as its value-added functions like online payment service and news pushing. A typical ads-

oriented high-tech company is now moving towards the value-creating business model, just as Wechat is doing in China, capturing new business opportunities.

Jessica also shared some personal experience as an entrepreneur in Silicon Valley. She explained that the fundamental difference between working in a big institution and operating one’s own business is the target client base. In a large organization, like WSJ, the value created by the journalist is provided to massive readers. Therefore, more resources are allocated to gigantic companies, such as Apple, Google, and Facebook, as most clients are concerned with the information directly linked to the stocks trading in the market. The service provided by The Information, although packed as a Bloomberg Terminal, is access for a small group of clients who expect fast and in-depth news about Silicon Valley. After years of growing, The Information’s subscriber base has included executives, entrepreneurs, and investors from tech, media, and finance, and they hail from more than 65 countries.

Regarding quest ions of copyright and intellectual property protection, Jessica expressed her view that even though this issue can pose pesky challenges, she is at this stage focused more on increasing client volume and

is inclined to focus on network building as a priority that may at times trump airtight IP protection.

Lastly, Jessica left her audience with her own golden rule formed out of personal experience as a young entrepreneur in the Silicon Valley, advising her fellow entrepreneurs to maintain a constant stance of openness to adopting new solutions while collaborating more openly, even outside their own organizations, around shared problems.

Tsinghua MBA: Pathway to Optimized Career TransitionOriginal report by Fu Haijing (student reporter)

In the summer of 1995, after graduating from the Mechanical Engineering Department of the University of Science and Technology Beijing, Sun Wenhai began his work at China Metallurgical Equipment Corp. and was assigned to Baoshan Iron & Steel Co., Ltd. in Shanghai, with primary responsibility for facilitating imports of technology and equipment. Given the opportunity to visit enterprises in the U.S., Japan and Europe, he was able to expand his horizons and accumulate first-hand experience with advanced technology. Through these experiences, Wenhai acquired the necessary knowledge to progress from engineer to project manager. After working in the state-owned enterprise for three years, he began to reflect on his life and career development and found himself inclined to break from what he perceived to be a pre-ordained future. Although he knew that it would not be easy to make a career transition, Wenhai began to consider what a new career path might look like.

The Road to a Tsinghua MBA

During the summer of 1998, Sun Wenhai was on a business trip in Shenyang when he happened into the Xinhua Bookshop on Taiyuan Street. He saw a series of MBA books published by Higher Education Press, one of which introduced the history and development of MBA education overseas and in China. The book noted that in the post-WWII U.S., one-third of the senior executives in the global top 500 enterprises had an MBA education. The

book also introduced the admissions processes, curricula, and career trajectories associated with MBA programs. After skimming through the book, Wenhai made a decision to apply for a top Chinese MBA program, and the preparation process began.

On a hot summer day in 1999, Wenhai rode along Chengfu Road and entered the East Gate of Tsinghua University, heading directly to the (at the time) newly constructed Weilun Building at Tsinghua SEM. As he stepped into the building, he saw a letter written by then-Premier Zhu Rongji, also the Dean of Tsinghua SEM, to the faculty and students at Tsinghua. The letter profoundly moved Wenhai. He had always admired Premier Zhu’s character and passion for learning, and the thought of studying under Dean Zhu was inspiring. He then decided to apply to Tsinghua for his MBA.

In 2000, Wenhai was admitted to Tsinghua’s IMBA program. At dinner on the last day of school orientation, Wenhai and his new classmates, still filled with exhilaration about their new school life, were confronted with a question from their senior schoolmate: “What would you like to do in the future?” The question caused Wenhai to consider that his two years at Tsinghua would fly by quickly. He and his classmates began to reflect more proactively on their post-MBA futures. For Wenhai, one dimension of this reflection was to recognize the meaning and challenges of the Tsinghua MBA experience itself.

Tsinghua MBA: Realization of Career-Shifting Aspiration

There were two keys to Wenhai’s career transition. T h e f i r s t an d m o s t f u n d am e nt a l on e w a s obtaining the requisite knowledge. Wenhai’s MBA coursework was a critical means to this end. As he had previously studied mechanical engineering during undergrad and knew very little about finance, accounting, economics, and management, he had to compensate for such knowledge gaps. The International MBA program was truly one of a kind at the time: adopting English as the language of instruction and drawing on MIT’s curricular inputs and expert faculty via an unprecedented collaboration. Many of the program’s Chinese teaching faculty had also received their doctoral degrees abroad, and almost all of the faculty had studied abroad in some capacity. Among them were such highly regarded Tsinghua SEM faculty

members as: Qian Xiaojun, then-director of the program, who taught Managerial Communications; Chen Guoquan (Organizational Behavior); Wei Jie (Macroeconomics); Chen Jian; Chen Guoqing; Chen Zhangwu; and Chen Taotao. As the Class of 2002 was the fourth IMBA class since the launch of the program, Wenhai and his classmates were so proud of their Tsinghua SEM heritage that they referred to themselves as the fourth cohort of Whampoa Military Academy, a famous military academy that had produced a litany of prestigious commanders from many of China's 20th-Century conflicts. Wenhai’s horizons were expanded by the IMBA program’s open teaching style and practice-based orientation, all of which laid a solid foundation for his transition towards finance.

The second key to Wenhai’s career transition was an internship opportunity at China International Capital Corporation Limited (CICC). Wenhai had resigned from the state-owned enterprise after matriculating at Tsinghua. In June 2001 at the end of his first academic year, CICC came to Tsinghua to recruit some interns. After several rounds of interviews, Wenhai was offered a three-week internship. His responsibility was related to Sinopec’s A-share IPO. On the same day as his final interview, as soon as he finished the interview at 4:00 PM, he started his work of collecting information and typing away until midnight. He was so excited about the opportunity to work at the best investment bank in China and participate in the biggest IPO of that year that he couldn’t fall asleep at night. More importantly, he also made the decision to work in finance in the future. Through this internship, Wenhai also met Mr. Teng Weilin, a managing director of CICC who appreciated Wenhai’s talents. Mr. Teng was both a good teacher and a helpful friend and provided much guidance for Wenhai, even counseling him as he navigated some of his life turning points. After three weeks, Mr. Teng acknowledged Wenhai’s outstanding performance and agreed to extend his internship. Between the middle of June 2001 and April 2002, Wenhai worked on significant projects involving state-owned enterprise reform and pre-listing preparations. It was a challenging period for Wenhai. For many nights, when he came back to his dorm at Building 34 via taxi from CWTC, where CICC was located, it was frequently 1:00 or 2:00 AM. When his roommates were sound asleep, he was still doing his homework. In only a few hours, early morning arrived with the onset of another long workday.

Sun Wenhai, Tsinghua MBA Class of 2002, is the Managing Director of Shining Capital Management.

Jessica Lessin, Founder and Editor-in-Chief at The Information, describes recent shifts in entrepreneurial business models in Silicon Valley.

TSINGHUA GATEWAYFall/Winter 201636

ISSUE NO. 19

ALUMNI STORIESCapital and came to Shining Capital. The three funds in which Wenhai has worked differ. DFJ focuses on early-stage investment with the high-risk, high-return proposition typical of technology-based VC firms. GGV Capital concentrates more on B-round investment and emphasizes enterprises in expansion phases with relatively good returns. Shining Capital prefers B- and C-round investment opportunities and is adept at selecting the investment phase and direction based on its enduring business advantages.

Wenhai believes, despite similar principles in making investments, that practices vary widely depending on investors’ differing understandings, which may lead to distinct investment results. More concretely, he suggests there are two major types of investors, namely, those with tendencies towards risk-preference and risk-aversion. He views himself as the risk-averse type, willing to take returns as high as possible only on the condition of manageable risks. Wenhai compares himself to martial arts students learning from grandmasters who have perfected the art, noting that he still has a great deal to learn before himself becoming a “grandmaster.” Whereas investment banks used to be popular in finance, now VC and PE tend to take the lead, which is increasingly reflected in the paths of graduates from most top universities. However, Wenhai suggests this may not be a good phenomenon. For one thing, the VC and PE industries will go through a sifting process in which many players will be knocked out. Furthermore, the industry requires people to possess relatively high versatility and is not necessarily suitable for everyone. Comprehensive analysis capability is highly valued in investing, though there is a balance of art and science involved, and many journalists, actors, pilots and even athletes have become successful investors.

Wenhai has his own understanding of successful and failed entrepreneurial enterprises. First, he identifies the critical importance of choosing the right market. Second, he points to selection of a good team and properly valuing people. To Wenhai’s thinking, focusing on these two keys accounts for a majority of the success of entrepreneurial enterprises, balanced, of course, with other factors such as business model, technological barriers, and strategic timing. Based on his years of work experience, Wenhai has his own observations of the emerging trends towards student entrepreneurship. First, starting up a business is difficult, especially for students without much social experience, so students should be prepared for the possibility of related failures and have reasonable expectations. Second, student entrepreneurs have their own advantage in their openness of mind. There are numerous examples in the U.S. of university students who have dropped out and started their own businesses: Mark Zuckerberg, Bill Gates, and Steve Jobs, to name just a few. Wenhai

believes that in 10 years’ time, Chinese students could do as well as U.S. students in entrepreneurship, as the improvement of economic conditions, social safety nets, and basic living standards will reduce their worries about survival and will provide support for their startup endeavors. Meanwhile, students with expanded horizons will also care more about philosophical and social impact issues and will more fully exhibit their potential once they obtain freedom of mind from many traditional pressures, which Wenhai believes will also lead to a higher quality of startups.

Wenhai views an MBA education as a major boost to the growth of entrepreneurship. Although he himself is not an entrepreneur in the traditional sense, he notes that many people come to business school with questions about startup endeavors. MBA programs provide timely help for them. Exchanges among classmates and integration of resources are exceptionally beneficial. Compared with students who received their bachelor, master and doctoral degrees consecutively with minimal work experience, MBA students, with their incoming access to technology and social networks, are perhaps more likely to succeed as entrepreneurs.

Wenhai believes that the Tsinghua MBA program facilitated his successful career transition in that it not only provided a critical foundation of knowledge but also expanded his social network. Tsinghua’s alumni resources in finance and other industries are extensive. “What year did you graduate from Tsinghua,” is an instant comradery-builder among business partners. Alumni networks have played a critical role in Wenhai’s job search process and proven even more valuable on the job itself. As he reflects on his experience at and beyond Tsinghua, Wenhai acknowledges the fork Tsinghua presented in his life’s path as well as his desire to pass his experience on to successive generations: “The most important turning point of my career and even my life was my joining the Tsinghua MBA program. I am so grateful for Tsinghua and am very willing to contribute to the development of Tsinghua’s future students.”

Supplementary interview by Chen Fang and Wan JunSupplementary editing by Wan Jun

Career Transition to Investment: A Vibrant New Life

In 2002, Wenhai graduated from Tsinghua’s MBA program. Prior to his graduation, Draper Fisher Jurvetson Ventures (DFJ), a leading venture capital (“VC”) fund in Silicon Valley, was in the planning process to expand its investment in China. A senior Tsinghua schoolmate asked Wenhai whether he would like to work in VC, a relatively new area in China at that time. Although there were not many courses covering VC available at the time, Wenhai had some understanding of the field by virtue of having taken Professor Gao Jian’s VC courses at Tsinghua. On April 22, 2002, after five rounds of interviews, he became DFJ’s first local employee in China. In the following six years, he participated in the establishment of the fund’s Beijing office and rose from Associate to Executive Director of DFJ Global Entrepreneurial Investment Fund and eventually Head of China. His leadership and participation contributed to the completion of dozens of domestic investments and the overseas listing of several enterprises, including Kong, Longcheer, Focus Media, HiSoft, Spreadtrum, and iKang.

“Sense and caution are necessary for venture capital,” cautions Wenhai. From a resource allocation point of view, VC allocates scarce capital and resources to the most active link among efficient enterprises. It involves examination of hundreds of projects each year, including all the upstream and downstream components of relevant industries, but only a few investments can ultimately be selected. VC also makes some people rather emotional. A sense of achievement is easily felt at the sight of the meteoric rise of shares of the portfolio company. Wenhai still remembers the sleepless night of August 5, 2005, when Baidu was listed on NASDAQ in the U.S. Due to the time lag, he and his teammates had to carefully monitor the stock price at their computers all through the night. They witnessed the shares rise from $29.00 all the way to $125.00. They sent one another emails to express their exultation at how the predicted price had been beaten time and again from $30 to $50 to $80 to over $100. Even after a stock split, Baidu’s shares have now risen to $200. However, Wenhai also dealt with enterprises that went bankrupt after years of poor management. This is quite common in the world of investment, but he still feels a genuine sense of loss for these companies. He also feels regretful about some strong projects that he was unfortunately unable to invest in.

VC and PE Industr y Analysis and Student Entrepreneurship

In early 2008, Wenhai joined GGV Capital as a Shanghai-based partner and participated in several investment projects. In early 2013, he left GGV

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