Cornell Business Review Spring 2019 Magazine

The Future of 5G

5G Connectivity Becomes a Reality

Featuring an Exclusive Interview With...

Pamela Dyson, EVP and CIO of the Federal Reserve of NY Keivan Shahida, Founder of Response and Cornell Student

Spring 2019 | Volume XVIII | Issue 2

cornellbusinessreview.com

Women in Entrepreneurship

At Cornell and Beyond

Women Entrepreneurs, Cornell University’s first-ever entrepreneurship program for women, strives to support women STEM entrepreneurs and close the gender gap.

Spring 2019

Letter From the Editor

I am honored to welcome you to the 18th issue of the Cornell Business Review. Since our birth in the Fall of 2010, we expanded every semester, looking always to discover how we can improve as an organization. Our online newsletter, CBR Now, surpassed the 1,000 subscriber threshold, and our analysis in both the magazine and newsletter hopes to encompass trends and provide opinions across all industries.

In our Spring 2019 magazine, our writers covered a broad range of topics, such as public perception of social media platforms, the implications of mergers between two corporations, and the expansion of 5G technology. This issue also carries a heavy focus on international affairs, emphasizing the importance of Colombia’s orange economy, instability within the Eurozone, and the economic impacts of global climate change.

In addition to the wonderful articles from our editorial team, our business team has helped us make meaningful connections with local small businesses, bolstering our relationship with the general Ithaca community.

Outside of this issue, CBR Now has progressed significantly since its inception. We added two weekly columnists, who were able to express their opinions on subjects such as the increase in pharmaceutical drug prices, the U.S. Federal Reserve’s portfolio, and the battle between the U.S. and Chinese tech giant Huawei. Moreover, we were able to secure an interview with Deepak Rao, the founder of the startup ThriveCash, who is reforming student loans to become more easily accessible and less debilitating from a debt standpoint. Rao was inspired to create this startup from his background as an international student in the hope of assisting students that may have difficulty repaying or even qualifying for typical bank loans.

I would like to thank every member from our editorial, business, and design teams for their consistent hard work and perseverance that helped not only build an exemplary magazine but also developed our organization as a whole. Additionally, I would like to thank our advisor, Deborah Streeter, and Cornell University for providing us with the financial and intellectual resources that are fundamental to our organization’s success. Special thanks go to our Editorial Manager, Ethan Wu, our Business Manager, Emily Shiang, our assistant Business manager, Manan Modi, and our Design Director, Meridien Mach. Their dedication and work ethic are integral in making our organization function.

nity to mester leading

Lastly, I want to express my gratitude for having the opportuhead such a unique and exceptional organization. In my first seas Editor-in-chief, I have learned the challenges and benefits of this incredible group, and I hope you enjoy reading our work.

Best wishes,

Evan Shields

Contents INDUSTRY Amazon:

04

Quest for Domination

By Karla Kim

A Wealth of Creativity:

06

Colombia’s Orange Economy

By Sebastian Fernandez

Mapping the Birth and Evolution of Successful Startups

08

By George Chai

$85.4 Billion for Your Thoughts

10

By Robyn Bardmesser

FEATURE ARTICLE Fostering Female Founders

12

How One Cornell Program is Fighting to Close the Entrepreneurship Gap

By Nicole Zhu

SPOTLIGHT 14

Pamela Dyson An Exclusive Interview with EVP and CIO of the Federal Reserve Bank of NY

TECHNOLOGY The Future of 5G

16

How Social Media Giants are Failing Users

18

Green Power

20

Practical Uses and Competitive Uses

By Derek Kartalian

By Steven Romero

SPOTLIGHT 22

Keivan Shahida An Exclusive Interview with Accomplished Entrepreneur and Cornell University Student

Why We Need Better Batteries to Fight Climate Change

By Rubin Thomas

INDUSTRY

Amazon: Quest for Domination

By Karla Kim

I

magine a company that, within 24 years, is the second U.S. company to have briefly met the $1 trillion market cap threshold, is founded by the richest man in the world with a $131 billion net worth, is the second largest employer in the U.S., and is the biggest e-commerce marketplace and cloud computing platform in the world. Amazon’s extraordinary path from an online bookstore in Jeff Bezos’s garage to an empire of online retail and cloud computing exemplifies the success of a small startup with a visionary mission. However, as Amazon continues expanding, there are increasing concerns about Amazon’s dominance and the implications for many traditional companies. Through Amazon’s domination of the online marketplace and integration into other industries, Amazon’s unparalleled growth poses a threat to traditional retailers and corporations in their respective industries and is supported by Amazon’s strategy emphasizing international expansion, logistics, technological growth, and changing consumer behavior.

An overview of Amazon’s present market share and influence reveals the enormous scope of Amazon’s disruptive business model. Currently, Amazon captures almost 50% of all U.S. e-commerce retail sales, with eBay trailing behind in second place with 6.1%.

What is striking about Amazon’s sales, which are projected to be over $282 billion in 2019 alone, is that 60% runs through its Marketplace—the online Amazon platform for third-party sellers. Amazon supports its growth with a wide range of business activities from developing in-house brands, to acquiring Whole Foods, to drone technology, and autonomous vehicles.

This expansion will continue as Amazon strategically focuses on international expansion, higher efficiency and development of logistics, technological innovation, and alignment of changing consumer behavior.

Geographically, Amazon is far ahead of the competition in North America and Western Europe. However, Amazon faces challenges expanding into other international markets as it competes with Chinese internet giant Alibaba Group. Even though Amazon dominates the U.S. e-commerce market with a 50% market share, globally, Amazon only has a 13.7% market share, indicating that there are high growth opportunities internationally.

As Amazon goes head-to-head with Alibaba, India and Latin America are seen as key regions for expansion. According to a Morgan Stanley research note, international sales are projected to make up 105% of Amazon’s profit growth. This is important because much of Amazon Prime’s subscription growth is coming from international subscribers. With expansions already underway, Ama4 | CORNELL BUSINESS REVIEW

zon is looking to capitalize on its overseas influence. Logistics-wise, Amazon is developing numerous methods to lower its shipping costs and have faster, more accurate delivery. With over 700 operational facilities, Amazon’s distribution network is one of the key components of the firm’s ability to deliver its products to consumers quickly and efficiently. However, because operational expenses are estimated to reach $25 billion, Amazon has been looking into drone technology and autonomous vehicles for operational support. PrimeAir is Amazon’s goal to use drones to deliver packages in 30 minutes or less, and so far, Amazon has already been issued patents for its drone technology. Furthermore, recent investment in Silicon Valley startup Aurora, an autonomous vehicle company, represents Amazon’s efforts to cut shipping costs while increasing efficiency and safety of deliveries. In the middle between drones and future autonomous vehicles is Amazon Scout, a smaller delivery robot that is in the field-testing stage. Beyond autonomous transportation, Amazon continues developing its AI capabilities with Alexa and cloud computing software.

The goal of these innovations is central to Amazon’s core value proposition. Ultimately, the technological advances are meant to make life simpler, more convenient, faster, and more efficient for Amazon’s customers. Amazon is strategically investing and internally developing all these different technologies and strategies because of changing consumer preferences. More and more people are willing to buy retail items from Amazon, including clothes, groceries, and electronics that were traditionally seen as in the exclusive domain of brick-and-mortar retailers. As it becomes easier for people to order and pay online, the demand for online retail will continue to grow. This means that it is critical for Amazon to expand its technological and logistical capabilities to meet the growing demand for its products and services.

At the same time, Amazon’s aggressive growth strategies are threatening traditional retailers and companies in multiple industries. For instance, Amazon is looking into the pharmaceutical industry with its acquisition of PillPack, an online pharmacy that prepares and delivers prescriptions. The goal is to deliver medication for patients through an online delivery service to reduce the costs of medicine. Within one day of Amazon’s PillPack announcement, Rite Aid, Walgreens, and CVS lost $12.8 billion dollars in market value as their stocks tumbled. This is pushing pharmacy retailers to react as CVS announced its own one and two-day shipping plans.

The pharmaceutical industry is just one of the many industries Amazon is targeting: mass retailers, apparel and

INDUSTRY Amazon’s Whole Foods acquisition (left) and Amazon Go creation targets traditional brickand-morter grocery stores such as Walmart, Costco, Krogers, and Target.

fashion, beauty and cosmetics, electronics, and groceries.

For each of these industries, similar market reactions occurred. The key driver behind this is that Amazon is building its own in-house brands and finding ways to integrate products and services into its online ecosystem. For example, Amazon has recently launched its own in-house skincare beauty line called Belei, offering customers moisturizers, eye creams, and spot treatments for anywhere between $9 to $40. This directly impacted companies such as Ulta Beauty, which saw its stock drop 1.68%. Perhaps the biggest and most aggressive expansion Amazon is pursuing is its disruption of the grocery and supermarket industry. With its $13.7 billion acquisition of Whole Foods two years ago, Amazon plans to open grocery stores in key locations for more convenient pickup and delivery points for customers. As a result, Walmart, Costco, Krogers, and Target’s stocks dropped as Wall Street worries that Amazon’s 4% grocery market share will grow bigger at the expense of these companies. Furthermore, Amazon’s 140 in-house brands could be offered at a lower price in its grocery stores, competing on higher margins through lower cost of production and lower price points than Amazon’s competitors. Through Amazon’s expansion into other industries beyond its core areas, the threat of disruption and eroding market share for traditional retailers grows.

While innovation and disruption are generally seen as positive forces, Amazon’s unprecedented growth and wide scope of expansion raises a dilemma: is this increasing or stifling competition? Arguably, Amazon is accomplishing both through the “Amazon effect,” a term used to describe the influence Amazon is having on consumer behavior and the shopping experience through online marketplaces and fast delivery. In a 2018 McKinsey study of more than 2,500 consumers worldwide, results showed that more than 70% of consumers engaged in some form of online buying behavior. Amazon’s capitalization on the online marketplace has changed the way people perceive and engage in online retail, and increasing numbers of people are subscribing to Prime and ordering their products online. This has direct impacts on competition.

In 2017, more than 6,403 retail stores closed, and in 2018 that number was 3,800. In this way, Amazon’s domination of the market has hurt many traditional retailers and mass-market stores. The key difference between Amazon

and any other company is that Amazon’s growth is spreading into multiple industries, whereas other companies generally try to dominate within their respective industries.

Therefore, many industries that were thought of as safe, such as pharmaceuticals and grocery, are now being disrupted by Amazon. This decreases competition as Amazon gains more market share in other industries. However, on the flip side, Amazon’s Marketplace platform and Amazon Business, the business-to-business (B2B) program for businesses, government, and education organizations, enables companies to sell their products online and develop their businesses through greater audience outreach and low fixed price relations with Amazon. Furthermore, Amazon is changing the way investors have traditionally valued companies. Now, the factor of online presence and capabilities is a major component in company investments and growth. For example, as a demonstration of their interests in technology, JPMorgan and Berkshire Hathaway are the leading partners with Amazon for its pharmaceutical venture. This means that new and innovative companies that possess technological abilities and products will have more opportunity in investments and growth.

Ultimately, the Amazon effect and its disruption model will continue to push the boundaries of the business landscape; however, this kind of change has more positive, lasting effects on society. Whether it is the Prime ecosystem, new technology, or the Amazon Marketplace, the most essential function of Amazon is being the facilitator between producers and consumers. Amazon earned its success because it introduced a new and viable way for consumers to have easier access to a wide spectrum of products. This is beneficial for both Amazon and consumers because consumers increase efficiency in shopping and producers can broaden their audience reach. Even though this hurts traditional retailers, new technologies and the disruptive ideas underpinning Amazon force businesses to innovate in order to meet changing consumer needs and behaviors. Therefore, the end impact is a positive change to society as people progress their relationship with technology to make traditional activities easier and more efficient.

Despite this, there are still many factors that are coming into play, and until we see how traditional retailers and businesses pivot, the full effects of Amazon are uncertain.

CORNELL BUSINESS REVIEW | 5

INDUSTRY

A Wealth of Creativity: Colombia’s Orange Economy I

By Sebastian Fernandez

n 2013, Colombia’s incumbent president, Iván Duque Márquez, co-wrote The Orange Economy: An Infinite Opportunity, an economic manual that advocates for the development of creative and cultural industries (CCIs).

Duque uses the term “Orange Economy” to refer to CCIs as a whole. He attributes the necessity of the term to the ambiguity that has existed when discussing CCIs due to the copious number of redundant labels with similar meanings—such as leisure industries, cultural economies, and so forth. The new term solves this problem by taking all of these labels and sectors and “squeezing” them together like an orange into the compact title of “Orange Economy.”

The convenient new title will prove useful for Colombia, as Duque wants to ensure that its Orange Economy will be a topic of frequent discussion in the coming years. Since assuming office, Duque has remained focused on furthering the pro-CCI ideas expressed in The Orange Economy, making the development of Colombia’s CCIs a primary economic objective. Developing the Orange Economy is a step in the right direction for Colombia, which has historically been dependent on industrial sectors. Increasing the output of its CCIs represents a valuable opportunity for Colombia, as CCIs have been a consistently growing contributor to Colombia’s GDP in the past, and CCIs aid in diversifying Colombia’s markets—especially away from overdependence on oil.

The growth of creative sectors in the decade leading up to Duque taking office has been a boon for Colombia’s

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output, providing a contemporary example of the type of economic growth that he hopes to achieve with the Orange Economy. In 2005, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) held its Convention on the Protection and Promotion of the Diversity of Cultural Expressions, a convention intended to examine the global cultural sector and outline a “framework for [the] governance for culture.” In 2018, over a decade later, UNESCO published the report Re|Shaping Cultural Policies, which aims to catalog progress on the goals originally outlined in 2005. In the report, Mariana Garcés Córdoba, Colombia’s current Minister of Culture, states that Colombia is aiming to improve its “development of cultural entrepreneurship” and “[strengthen] artistic training and [elaborate] long-term plans in the field of performing and visual arts.” The content of the report supports Córdoba’s claims, enumerating the sizable growth of Colombia’s CCIs.

A primary sector of CCIs covered in UNESCO’s Re|Shaping Cultural Policies report is the Colombian film industry. Robust film industry policies have been enacted, such as the Location Colombia Act of 2012, which provides tax incentives for investments in film projects.

Additionally, UNESCO reports that the number of feature films produced in Colombia increased from 5 in 2003 to 41 in 2016. Over the same period, box office sales skyrocketed from 351,000 to 4.79 million, far outpacing Colombia’s natural population growth. Moreover, Ciro Guerra’s 2015 film Embrace the Serpent recently became

INDUSTRY the first Colombian movie ever nominated for the Best Foreign Language Film Academy Award, another indication of the industry’s advancement.

Now, as would be expected from this advancement, Colombia’s film industry makes up roughly a third of the state’s CCI output. This increased output has benefited the nation’s overall economic growth, as well. Colombia’s National Administrative Department of Statistics (DANE) reports that CCIs grew consistently from 2008 to 2017. So much so that Colombia’s creative industries grew faster in the last decade than the nation’s overall output and some more traditionally profitable industries.

The World Bank recorded that Colombia’s GDP grew 38.7% from 2008 to 2017, and over the same period, DANE reports that manufacturing industries grew 50.1%. However, CCIs outpaced both GDP and manufacturing over this stretch, growing 88.6%.

Furthermore, the Americas Society/ Council of the Americas (AS/COA) noted in 2018 that Colombia’s CCIs account for approximately 3.3% of its GDP. In comparison, CCIs account for roughly 6% of global GDP, implying high potential for further growth.

These recent trends provide credibility to Duque’s focus on the Orange Economy as a future driver of economic growth for Colombia.

Duque argues that CCIs have historically been overlooked due to the uncertainty of the creative process and the resulting difficulty that comes with turning a nation’s culture into a

profitable venture. Duque also cites the broadness of the variety of economic sectors that fall under CCIs as a reason for their historical omission from much discussion. In The Orange Economy, Duque defines the sectors that fall under Orange Economy using three widely overlapping categories: arts and culture as productive ventures (such as film and music), products related to intellectual property (all copyrighted content), and any services in the value chain that work to convert ideas into consumable products. Given that these categories include everything from architecture to crafts, and also newer products like software, the broadness of CCIs will help shift the country’s economy away from industrial and raw material sectors—providing essential diversification that has long proved elusive.

Colombia should be eager to make Córdoba’s statements to UNESCO about its development of creative industries a reality. According to OPEC, an international oil cartel, Colombia doubled its crude oil exports between 2004 and 2015, increasing from about 340,000 to 736,000 barrels per day. As of 2017, OPEC reports that exports have fallen closer to 580,000 barrels per day, but this quantity still rivals Colombia’s past export peak of 610,000 barrels per day in 2000. Colombia’s increased crude oil exports put its economy at risk of overdependence on the stability of the global oil market. Additionally, the AS/COA states that one-fifth of the Colombian government’s revenue came from oil profits in 2018. Diversifying the source of Colombia’s GDP away from crude oil is therefore a national priority.

Not only has Colombia already experienced the impact of their dependence on the oil market, but it also borne witness to an economic crisis right in its backyard; Venezuela experienced a crisis in 2014 which was exacerbated by a decline in oil prices. In 2016, OPEC estimated that 96% of Venezuelan exports came from oil, making it the single most oil-reliant nation in the world.

The severe results of reduced oil prices on Venezuela’s economy serve as a warning to Colombia; the same 2014

decrease in oil prices that impacted Venezuela was reported by DANE to have caused a 25.9% reduction in Colombia’s oil profits from 2014 to 2015.

Further arguments against reliance on oil were published in a 2016 study by the National University of Colombia. The study warns against the dangers of being too reliant on

“the export of natural raw materials without added value,” a trend related to stagnating growth of “the knowledge pool from which [a] society as a whole can benefit in terms of the production of innovation.” To stabilize economic growth, avoid Venezuela-style economic collapse, and ensure productivity levels continue to grow, Colombia must develop new industries with even further potential for expansion, as Duque seems to plan on doing with Orange Economy.

The Orange Economy was one of Duque’s central proposals during his first 100 days in office. Still, new policy remains in its infancy. In November 2018, an auction for “orange bonds” representing creative infrastructure was held. Duque has big plans for the Orange Economy, however, including the establishment of a free-trade zone for cultural products in Latin America. Although the long-term impacts of Duque’s plans are yet to be seen, CCIs have recently exhibited potential for significant growth in Colombia, and developing the nation’s CCIs would serve as an effective diversification of Colombia’s outputs other than raw materials. The future looks bright for Colombia’s Orange Economy.

CORNELL BUSINESS REVIEW | 7

INDUSTRY

Mapping the Birth and Evolution of Successful Startups

By George Chai

W

hen considering data from Startup Genome indicating that 90% of startups fail due to any number of internal complications, we are better able to relish those that succeed. More importantly, we should learn, study, and analyze these startups to gain a better understanding of the different paths that lead to entrepreneurial success and attempt to shed light on what patterns these paths share. Since success can be found in diverse forms and stages, chronicling the stories of different categories of startups will be crucial to this analysis.

Therefore, I will take an in-depth look at three types of companies in different phases of their respective lifecycles. The first type will be a big “household name” startup that is recognized by most people, emphasizing the importance of the path to market leadership and brand name recognition. The second type focuses on unicorns (private startups valued over $1 billion), showcasing the brilliance of utilizing private status and capital as a means to drive innovation in a particular vertical. Finally, the last type will be an analysis of a small startup that mimics the patterns of its household and unicorn counterparts, highlighting the driving seeds of achievement that may one day bud into long-term competitive advantage.

Our first startup is Airbnb. You have probably heard of this one, and because of that, we will consider Airbnb as a household name startup. As with many other success stories, Airbnb’s is one filled with idealism, trouble, and realization. The story begins when the two founders, Brian Chesky and Joe Gebbia, found themselves in San Francisco in late 2007, lacking money but filled with optimism. Their inspiration for the concept of a “bed and breakfast” was their recognition that during busy moments in the city, hotel rooms were booked and lodging options were limited for many travelers. In fast response, Chesky and Gebbia bought some airbeds and launched the first version of the Airbnb website titled, “Air Bed and Breakfast.” The idea gained some traction, with visitors coming in and out, but the concept needed more refinement. More precisely, the concept failed to provide a sense of security to its customers, slowing the pace of Airbnb’s initial product push. The pair tried to fix this problem by revamping their website right before the 2008 Democratic National Convention held in Denver, and found some degree of traction. Over 600 people stayed in Airbnbs during the convention, and it seemed Airbnb had finally received the recognition it sought. As a result, Y-Combinator, a top startup accelerator, took notice and gave them $20,000 in funding, an amount that seems like a far cry from today’s venture capital funding, but it kept Airbnb

8 | CORNELL BUSINESS REVIEW

afloat. Unfortunately, the awareness generated over the course of the Democratic National Convention dissipated. Chesky and Gebbia used the Y-Combinator funding to travel to New York to meet users of their biggest market.

Door-by-door, Chesky and Gebbia conversed with their users and discovered one commonality among them: the pictures of their listings were ineffective at convincing guests to stay. The pair decided to buy a camera and take the photos themselves, hoping to better capture the essence of the properties. Soon after, with the help of more venture capital funding, Airbnb took off to 10,000 users, and more recently, to hosting over 40 million guests.

Airbnb’s success suggests that business-oriented thinking is not necessarily the answer to reaching success as an entrepreneur. For Chesky and Gebbia, it was highly impractical to travel all the way to New York, do user interviews door-to-door, and ultimately curate the design of each listing one by one. Nonetheless, it provided them with the solution needed to become a market leader in their field, emphasizing how the path to turning points necessitates forward, creative thinking.

What evolved Airbnb into the actual market leader it is, however, was scalable, business-oriented thinking. After securing funding of $7.2 million in November 2010 and $112 million in July 2011, Airbnb hired more staff, standardized its policies regarding the quality of its listings, and entered the rapid growth stage of its lifecycle.

This combination of driving innovation via risky inventiveness and maintaining scalability through strategic positioning has transformed Airbnb into what it is today.

Stripe is a unicorn startup that develops software that enables businesses and individuals to send payments over the internet. For example, when consumers take a Lyft, the financial transaction to pay for the service is handled by Stripe. What makes Stripe unique and a unicorn in its field, however, is not the service that it provides, but rather the simplicity of its delivery. Due to its code design that emphasizes removing extraneous details, businesses can implement its services within minutes of installation.

Stripe, however, was not always at this point in its field.

The driving force behind the founding of Stripe comes from the ingenuity of the work of the Collison brothers.

At age 16, Patrick Collison was the recipient of the Young Scientist of the Year award, while his brother John was the highest scorer ever for the Irish Leaving Certificate. Patrick then founded his company Auctomatic, which was later acquired when he was only 19 years old. The next year, John began his education at Harvard University. In 2010, Stripe began as a side project between the broth-

INDUSTRY

ers after Patrick wondered why it was so difficult to transfer payments over the internet. After 6 months of prototyping, creating new iterations, and recognizing the importance of control over the entire payments process, both brothers began working on Stripe full time. They eventually started spreading the word by inviting friends onto the platform and gained enough traction to receive funding from Y-Combinator. Since then, Stripe has grown into a behemoth, valued at $22.5 billion dollars.

Stripe’s journey demonstrates the crucial element of the product-market-founder alignment between a startup’s management team to the fluid development of an enterprise. While some startups succeed without having a technical founder at the helm of management, the inherent nature of Stripe’s product necessitates a deep understanding of the industry players in financial services, the intersection of design and programming, and the direction of corporate strategy Stripe may pivot toward. Combined with Patrick’s prior experience as founder and Director of Engineering at Auctomatic, and the brothers’ natural brain power, Stripe’s success was fundamentally driven by its ability to develop a solution that capitalized on the flexibility of the internet.

After being the first to market with this solution, Stripe was able to solidify its competitive advantage by way of partnerships with Visa and Amazon to improve its transaction volume do-

mestically and internationally. Stripe’s success began with an aligned management team with a curious vision, and it is important not to forget that.

Although it is less known than Airbnb and Stripe, Docker has made a huge impact in the operating systems space. More specifically, Docker provides operating system virtualization services for businesses that want to use software packages called containers—allowing companies to run otherwise incompatible programs all on one computer system. What is interesting about Docker is that it never truly was on a path to market leadership with its original product, but rather pivoted to one instead. Docker’s original polyglot solution was tailored for the service market, but the market itself never popularized to the extent of Docker’s expectations, leaving a very small addressable market associated with the company’s services.

Instead, Docker recognized the value of its own product over the value of the market it served and decided to change paths by open sourcing its container technology for developers that were in desperate need of it. As a result of this pivot, Docker popularized its product and ultimately helped develop its platform as a service market.

The most exciting part of Docker’s success is that it is not yet finished. It is currently in a phase of growth mimicking the earlier growth of its household and unicorn status counterparts. Its evolution, however, is one-of-a-kind, as it operates in a highly

complex platform as a service market.

Only time will tell the future of Docker and its path to becoming an IPO.

The most intriguing aspect that all three companies share is that their stories do not follow one particular path. While Airbnb began on a path of continuous experimentation and unfilled answers by two college graduates, Stripe’s story quickly fast-forwarded to success after two undergraduate brothers sought to address a problem they encountered.

Moreover, while Docker sought to address one problem, it realized that a pivot was necessary to compete in the operating systems space, deviating from the paths its household and unicorn startup counterparts took.

What truly defines all three of these startups, however, is their ability to identify “critical moment” periods in their development phases. For Airbnb, it was the moment that Gebbia and Chesky traveled to New York and realized how crucial the host photo was in attracting people. For Stripe, it was the moment the Collison brothers recognized the need to ensure simple backend maintenance for their users, ensuring Stripe’s software only needed a few lines of code to get started. And for Docker, as mentioned previously, it was their crucial pivot into open sourcing their container technology and popularizing their innovation. Ultimately, without any of these moments, these startups might not have ever made it to the point they are at right now.

CORNELL BUSINESS REVIEW | 9

INDUSTRY

$85.4 Billion for Your Thoughts

By Robyn Bardmesser

S

ynergies: the buzzword reverberating across every corner of the business community whenever a new merger or acquisition comes down the pipe. Yet amid the buzz, the harmful effects of mergers and acquisitions (M&A) on industry are often ignored.

Each M&A deal professes that the newlywed companies will together produce synergies, ultimately creating value for shareholders without harming consumers.

Take one recent high-profile example: the AT&TTime Warner tie-up. The merger of AT&T and Time Warner comes on the heels of a long history of M&A deals across industries, setting the stage for the following litigation with the Department of Justice. This $85.4 billion deal was announced in 2016 and is unprecedented in terms of its combination of scale and vertical nature, combining the content maker and content distributor. This potentially gave AT&T anti-competitive access to Time Warner’s content, including CNN, TNT, HBO, and all of Warner Bros. Through this merger, AT&T can use Time Warner’s content to market itself to other cable companies and create a digital advertising business.

This merger comes in the wake of tech’s rising dominance over the media industry, a trend popularized by Netflix.

In addition to the sheer scale of this meger, the power this gives AT&T over the pricing of Time Warner’s content sparked significant antitrust concerns. It is one of several mega-mergers swirling in the business world— along with CVS and Aetna, Disney and Fox, Comcast and Sky; each deal on the order of tens of billions.

In 2016, the Department of Justice began a renewal of their

antitrust efforts in light of swelling, unchecked M&A activity. Litigation between the DOJ and AT&T took center stage as the first time in decades that the government went to court against a vertical merger. This court case attempted to prevent the merger but ended with AT&T winning after a judge declared that it is only possible, rather than necessarily likely, that this merger will result in price increases. This long litigation battle underscores how antitrust law focuses on the wrong factors in evaluating a merger, demonstrating its myopic tendencies. It focuses on the potential effects of a given merger on prices, rather than on the broader economic context from which the merger arose. Such merger myopia prevents courts from incorporating a fuller understanding of anti-competitive behavior’s effects on both industry and consumers.

Much of economic theory hinges on markets being perfectly competitive, yet the modern American economy fails that assumption in almost every industry.

As firm concentration increases in an industry, companies use rent-seeking behavior to increase barriers to entry, thereby enabling their business to continue rent-seeking behavior. This behavior has been apparent in the American economy, which, as a result, has seen market power grow more concentrated across all industries. The Fortune 500 share of US GDP increased interview from 58% to 73%, led an has exclusive with

by Fortune 100 companies.

The aerospace industry once had 80 firms; now it has four. Between 1980 and 1994, there were over 6,000 bank mergers, with the top 10 banks controlling half of the nation’s financial assets. Weakening competition produces greater profits for companies for a

Mort Bishop III

10 | CORNELL BUSINESS REVIEW

the Chairman and former CEO of Pendleton Woolen Mills

INDUSTRY host of reasons. Companies are able to price their products higher without any substantial improvement to their products, as in the airline industry. New, competitive companies have incentives to join bigger, established companies for a plethora of reasons, including access to their customer base, resources of the parent company, in addition to the reality that if new companies do not join bigger companies, they may get beaten out of the market. This has all corresponded with a fall in initial public offerings, where companies issue public shares to raise funding and garner attention, which indicates that instead of going public, companies are rather seeking M&As to keep their business running.

Whereas M&A was originally used as a tool against globalization, allowing American companies to compete internationally, it now dominates the domestic economy.

The tech industry itself is mired with anticompetitive behavior—with the FAANG (Facebook, Amazon, Apple, Netflix, Google) bloc dominating the stock market and swallowing up all of its smaller competitors. Netflix pioneered online video content and then later video creation, with Amazon and Hulu and a host of other companies following suit in their successful business model.

The merger with Time Warner will enable AT&T to compete with this business model, which would allow the media industry to once again compete with tech giants.

The DOJ estimated that, as a result of this merger, the price of cable bills could rise for consumers by $0.45 per month, since AT&T could now charge more for Time Warner content, which would total up to $400 million annually. Antitrust law requires a high burden of proof on the DOJ—they must prove that it is not only

possible but likely for the consumer to be hurt. AT&T and Time Warner agreed to an anti-blackout clause, i.e. AT&T could not hold back (“blackout”) any content produced by Time Warner from its competitors.

This case has highlighted antitrust law’s myopic nature.

The ramifications of the AT&T-Time Warner merger go beyond an increase to cable bills. The history of M&A activity shows that although one merger may not have a large effect on industry, many mergers will compound on themselves. Furthermore, antitrust law does not deal with the fact that often companies use M&A to expand into different industries and bolster their revenues. Elizabeth Warren’s latest initiative includes antitrust elements, which would include breaking up the tech companies that have been giving companies like Time Warner and AT&T competition. Her plans involve a novel approach to antitrust and would present a viable reinvigoration of these efforts, that, instead of blocking mergers, could scale industries back to being competitive.

If the DOJ had succeeded in blocking the AT&T and Time Warner merger, that would have not fixed anything either; paradoxically, by letting this merger go through, there is now more competition for the tech giants. One merger alone, even of an $85 billion magnitude, does not have the power to make an industry substantially less competitive. Without a holistic approach to M&A that considers anti-competitive behavior within the industry, rival industries, and the overall economy, antitrust will continue to lack the teeth it needs to protect consumers and small businesses.

CORNELL BUSINESS REVIEW | 11

FEATURE ARTICLE

Fostering Female Founders How one Cornell program is fighting to close the entrepreneurship gap

By Nicole Zhu

E

very two or three Wednesdays, twenty students gather in Collegetown’s eHub. Among these are a computer scientist specializing in computer vision and artificial intelligence, a Ph.D. student researching animal science, a fashion-minded materials science student pursuing a master’s degree, and an electrical and computer engineer. The youngest are Cornell undergraduate students, while others are seasoned Ph.D. students well into their 20s.

What do these individuals have in common? They are all women and burgeoning entrepreneurs, each with their own individual project seeking to change the world: an AI-powered crop irrigation system to maximize water conservation, a mentorship program for underrepresented minorities in science, technology, engineering, and math (STEM), and software to identify biases against women in STEM, to name a few. Together, these twenty women, under the guidance of director and entrepreneurship faculty member Andrea Ippolito ’06, M.A. ’07, make up the inaugural class of Women Entrepreneurs (W.E.) Cornell, the university’s first-ever entrepreneurship program for women in STEM.

Launched this year, the semester-long program is a primer on the basics of starting a business, teaching participants—most without any prior entrepreneurship experience—“building blocks” like networking, locating funding opportunities, navigating the investment world, and finding mentorship. It is the newest addition to Cornell’s plethora of entrepreneurship programs, and the only one with a female focus.

Despite record-high enrollment of women in Cornell’s STEM programs—Cornell’s School of Engineering famously achieved gender parity this academic year—Ippolito, who already taught entrepreneurship in some of Cornell’s existing offerings such as eLab, quickly recognized the need for a women-focused program.

According to a report released by the think tank Third Way, women are pursuing higher education at the undergraduate, graduate, and doctoral levels in greater numbers than ever. But despite such gains in education, the

12 | CORNELL BUSINESS REVIEW

gender disparity in business ownership remains daunting.

There are approximately two male entrepreneurs for every female entrepreneur, with female-led companies comprising only 36% of all businesses in the United States.

“Despite the fact that we have incredible percentages of women in our STEM programs at Cornell, there weren't that many STEM women in our entrepreneurship programs,” Ippolito said. As an eLab instructor, Ippolito decided to practice what she taught in her classes, which involved going out and talking to “customers”—in this case, her prospective female students.

“We interviewed a number of women across our university, and we heard a lot of this sentiment of, ‘Oh, I've always been interested in entrepreneurship, but my idea isn't fully fledged out yet,’ or ‘I have this idea, and I feel very passionate about it, but I don't think I'm the right fit for it.

I think I need to work on it a little bit more,’” Ippolito explained. “You see this a lot in women, this “imposter syndrome” that they feel the need to be perfect before they apply for something.”

In a roundtable discussion with three W.E. Cornell participants, Brianna Tate, Wanlin Li, and Sharon Deng, each of the women present largely agreed that entrepreneurship had not always seemed like an open career path.

Tate, a doctoral student, said, “I never thought I’d take an entrepreneurship class, nor ever identified as an entrepreneur because I didn’t even know how to begin to start my own business. The idea I’m working on now is something that I’ve had for years now. I never knew how to go about making it an actual product.”

A 2008 report by the Tinbergen Institute found that women are simply less likely to start their own businesses.

Another report by the Kauffman Foundation discovered three factors to be the worst contributors to this problem: the short supply of female mentors, implicit biases against female entrepreneurs, and a lack of access to venture capital (VC). Entrepreneurship is widely seen as a technology-based field, as many of the most prominent startups rely on technological innovation, and is thus a “masculine”

FEATURE ARTICLE activity. The masculine-coded nature of the field, the study

Not even industry leaders are immune. Google, said, discourages women from pursuing entrepreneurship the search engine behemoth and Silicon Valley fixture, and prevents those who do pursue it from receiving the same currently faces a class-action lawsuit alleging systemic support as male counterparts. Motherhood is also an importcompensation discrimination against some 8,000 past ant factor, as women still bear the brunt of the caregiver role and present female employees. when raising children.

A vital source of funding for startup companies,

“I think a lot of [the problem] with women in entreventure capitalists, directed just 2.2% of total investment preneurship is not like explicitly men targeting women. It’s to female-founded businesses in 2017, Fortune Magamore implicit stuff, like maybe I don’t see a lot of women in zine reported. Although the figure represents an increase entrepreneurship, so growing up, I don’t feel like it’s a path from the 1.9% of all VC investments given to women in that I should pursue even if my characteristics align with that 2016, the wild and often unpredictable frontier of startup path,” said Deng, an undergraduate junior and W.E. Cornell VC remains remarkably skewed toward male-founded participant. firms.

The gender imbalance is particularly acute for female

“The percentage of women that have venture entrepreneurs in STEM fields. Even as computing industries capital funding, STEM women or not, is extremely low,” have flourished, fueled by technological innovations and digsaid Ippolito. ital startups from Silicon Valley, powered by new waves of

Venture capitalists rely heavily on their pre-excollege students who code, female representation has fallen isting networks of contacts to make connections and short. introductions to the most promising entrepreneurs, dra According to a report by the American Association matically limiting who gets funding. So when few womof University Women, women make en are already venture capitalists up just 12% of all engineers and 26% or business owners, the effect of computer scientists, a shocking “snowballs,” according to Ippolidecrease of 9 percentage points from to. “It’s all done by networks and 1990. The numbers are even more introductions.” drastic for women from underrepre- I always knew I was interested One of the most essential assented minority groups, who make up in entrepreneurship growing pects of W.E. Cornell, its comjust 2% and 4% of the engineering and munity and network-building computer science workforces respec- up, but I was scared to take component, aims to address extively. actly that by creating a system

The disparity is striking, even the risk. I'm still shaping my that pairs female entrepreneurs in higher education. Although Cor- idea, but now, I want to see it with mentees and mentors to ennell may have achieved gender parity, courage continued growth, even in 2016 only 18% of computer science through. after participants graduate from majors across all American univerW.E. Cornell. sities were women—a paltry figure Sharon Deng, W.E Cornell Participant “What we wanted to do was when compared to 1984, when womcreate an on-ramp to our other en made up an astounding 37% of entrepreneurship programs to get computer science students.

STEM women energized, excited,

Gendered perceptions are amped up for pursuing a career in rooted in the history of computers entrepreneurship, whether that's themselves. When personal computers first become housestarting their own company, joining a startup, whether hold items, they were largely marketed as toys for boys, said that's licensing their graduate research to a company,” journalist Steve Henn. said Ippolito.

“This idea that computers are for boys became a

When Tate, Li and Deng were asked if they saw narrative,” Henn said. “It became the story we told ourselves themselves as entrepreneurs even after finishing the proabout the computing revolution. It helped define who geeks gram, the women were unsure. Tate was mainly occupied were, and it created techie culture.” with her doctoral research, while Deng still had another

Indeed, the imbalance has led to industry-wide isyear of college ahead of her. But one thing was for sure: sues regarding the treatment of women in mostly majorinow that they had the tools, entrepreneurship felt like a ty-men STEM workplaces: a 2018 Pew Research Center surdefinite possibility—and for Ippolito, that was more than vey reported that 36% of women in STEM agreed that sexual enough. The whole point of W.E. Cornell, she said, was harassment was a “problem” at their workplace, while half of not to create entrepreneurs with full-fledged business all women in STEM had experienced gender discrimination models, but to foster confidence and provide support for at work at least once—behaviors that include being treated as her students. if they were not competent, getting paid less than male coun “I always knew that I was interested in entrepreterparts, and receiving less support from superiors. The issue neurship growing up, but I was scared to take the risk,” is especially pressing in “computer jobs”—including the tech Deng said. “I’m still shaping my idea, but now, I want to industry—where a whopping 74% of women said they had see it through.” experienced discrimination based on their gender.

"

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CORNELL BUSINESS REVIEW | 13

An Exclusive Interview with an exclusive interview with

Pamela Dyson

EVP and CIO of the Federal Reserve Bank of NY

Given that you have more than 30 years of experience in enterprise infrastructure and operations, customer relationship management, and business solutions delivery, how do you utilize these different skills and aspects into your everyday work life?

Being the accountable official for critical IT infrastructure and support services in various organizations for nearly three decades has shaped my management style in many ways. First, I have learned to take a risk-based management approach to most tasks and initiatives—prioritizing those that would have the most impact to the organization. As a technology partner, as well as a service provider, there is always a disproportionate amount of demand versus resources to accomplish the work. I have learned over time that, through building strong coalitions based on common goals and objectives at the enterprise level, and effective influencing to gain consensus on priorities, everyone’s needs can be met—just not all at once.

Second, I have learned the invaluable benefits of collaboration, face-to-face engagement, and transparency in communications. I manage from the position of there always being “middle ground.” A critical component of being an information technology executive is customer relationship management. I have found that communicating effectively and transparently not only builds trust, but also facilitates the collaborative process of creative thinking and the innovation of exceptional solutions.

What is the one most gratifying part of your job?

The most gratifying part of my job is delivering technology solutions that transform the way an organization does business—both with its internal users, as well as its external stakeholders and constituents.

The digital transformation movement is a confluence of where business meets technology, with technology being the catalyst of sweeping changes to workforce cultures, as well as employing emerging technologies to unlock all the possibilities of business enablement. I find great accomplishment and gratification in my ability to have had the opportunity to significantly influence technology transformations throughout my career.

I am motivated by developing the strategic vision and 14 | CORNELL BUSINESS REVIEW

leading the enterprise-level discussion of reimagining what’s possible using disruptive and emerging technologies to advance organizational goals and priorities.

You’ve spoken about some of the challenges and experiences you’ve encountered as an African American woman-- can you recount the most defining experience?

Still today, significant gender parity issues exist in the field of information technology. And still today, and all too often, I am the only woman and most definitely the only African American woman who has a seat at the table when discussing the technology vision and roadmap or most other emerging issues for organizations. This is not satisfactory, and those of us in influential positions must lead and encourage the initiatives to close the race and gender parity gap in underrepresented career groups.

Over the course of my career, there have been numerous instances where I know that I was overlooked for opportunities or my ideas were not embraced.

Frankly, those experiences help me to be more outspoken and determined, because I was well aware of the fact that if I had made it to the organization, to the position, and to the discussion, I was qualified to be heard.

I believe that the one thing that really helped me gain my voice and stand up was when I would present an observation or solution that did not get the attention of the room until a male colleague would take my perspective or idea, repackage it, and receive accolades or recognition for the suggestion. In those moments, I learned to stop the conversation and thank the room for adopting or accepting the suggestion I had actually put forth. I learned to reclaim my ideas and the value I brought to the group. When I learned to professionally and confidently assert my value, it was a game-changer in my career progression.

As EVP and CIO of the Federal Reserve Bank of New York with a lot of technology background and experiences, how has working in the intersection between technology and the U.S. economy affected your view on the growth of the technology industry?

In my experience, technology has been the cornerstone of ensuring a sound and stable economy in two very distinct

ways. First, over the past two to three decades, dating back to the dot-com revolution, technological advancements have led global economic growth. Technology companies continue to lead in global markets.

Second, the use of emerging technologies among economists and researchers have revolutionized the speed, accuracy, and efficiency of how they do their jobs. Everything from high-power computing environments for analytics, research, and big data management platforms and tools to machine learning and predictive analytics to forecast economic trends, has contributed to the reliance on technology among economists, as well as in other areas of the financial sector.

What has compelled you to stay in the government for your entire career?

I was compelled to stay in the Federal Government for the majority of my career because of the public service aspects of the organizations which I have had the privilege to serve.

My Federal career began at the United States International Trade Commission (USITC), where the mission included ensuring stability in the U.S. economy through the administration of fair trade laws and providing independent analysis on international trade and U.S. competitiveness on a global stage. As an IT executive for the USITC, I was able to influence the strategic direction of technology to enable the mission.

Following a 23-year career at the USITC, where I served in numerous information technology leadership roles of progressive authority and accountability, I moved on to the United States Securities and Exchange Commission (SEC), which has a similar mission that touches every American citizen through its mandate to protect investors, and to help them make informed decisions about their short- and long-term investments—albeit a car loan, savings plan, or retirement plan.

is. Her story includes past experiences—both successes and challenges-- that have shaped who she is and why it qualifies her to be at the table. Her voice is needed. Her creativity is needed. Her perspective is needed. Because that voice, that intellect, that “magic” makes every team more diverse and creative, every goal achievable, and every organization better. Find your voice and bring your talent and your story to your careers.

Who in your life would you consider to be your role model? How have they impacted your growth as a person?

Actually, I would have to say that it was my parents who really influenced me the most. Neither of my parents had formal education beyond high school, and both were two of the wisest, most pragmatic, and most determined people that I‘ve known.

My mother instilled in me the importance of education.

She taught me reading and math and even how to write in cursive prior to kindergarten! She demonstrated the essence of strength and overcoming obstacles. She was also confident and did not hesitate to speak up in defense of herself and those principles that were important to her.

My father instilled in me the importance of character and commitment. He taught me the values of hard work and being authentic and credible. He also taught me the principles of faith and optimism, and the understanding that there was nothing I could not achieve if I put in the work and the commitment to meet our goals.

I have carried these values with me my entire career. And though both of my parents are now deceased, I continue to live my life every day in a manner that I know would make them proud. And I do think they would be proud of the woman that I have become.

The mission of the Federal Reserve also has commonalities with my experience at the USITC and the SEC. At the New York Fed, we have a public service mission, and share responsibilities with the other Federal Reserve Banks, to create a stable economy by conducting economic research and supervising and regulating depository institutions, formulating and implementing economic policy, and supporting international financial operations.

In the role of Executive Vice President and CIO for the New York Fed, I lead the Technology Group in support of the mission of the New York Fed. This includes developing the information technology strategy and managing the delivery and use of technology solutions and services for the New York Fed while contributing to the development of IT solutions to the Federal Reserve System as a whole.

As a female in the finance industry, what advice do you have for women working in the financial sector who are struggling to get their voices heard?

Be relentless. Be bold. Be influential. Be heard.

Every woman has a story that creates the fabric of who she CORNELL BUSINESS REVIEW | 15

TECHNOLOGY

5G connectivity can improve safety in driverless cars because of a lower latency network. (above)

The Future of 5G: Practical Uses and Competitive Uses

Wireless connectivity is finally getting an upgrade.

After years of planning and development, 5G connectivity has started to become a reality. Once fully operational and implemented on a wide scale, this new form of connectivity will allow for far greater data transfer speeds across all mobile devices, transform the use of current technologies, and spur technological innovation. Several emerging industries, including driverless cars, virtual reality (VR), and augmented reality (AR), are expected to greatly benefit from the steep increase in data transfer speeds.

Currently, each iteration of wireless technology is given a designated number as well as a generation. As such, the progression throughout the history of mobile devices has been 1G, 2G, 3G, 4G and LTE, and is now being followed by 5G. As has been the case for the creation of previous networks, large telecommunication companies have been independently developing proprietary 5G networks to serve their respective customer bases. Each company’s network varies in frequency, coverage, and usage. Some networks focus on either mobile or home connectivity, while others provide service to both. For example, T-Mobile’s mobile 5G network is expected to achieve full national mobile coverage by late 2019 or early 2020.

4G, or LTE, networks—currently the fastest type of mo16 | CORNELL BUSINESS REVIEW

By Derek Kartalian

bile network—can transfer data at speeds up to around 100 megabits per second. HD movies take about 15 minutes to download on the fastest LTE networks. In comparison to this existing capability, 5G networks will be able to provide data transfer speeds around 10 gigabits per second, nearly 100 times faster than LTE networks.

In addition to far superior data transfer speeds, 5G networks also have much lower latency, or momentary delays, in service. While these upgrades have yet to become widely available, with current technologies remaining incompatible as devices are replaced, upgraded, or outfitted with new antennae bands, 5G networks and the data transfer speeds they provide will drive innovation.

Many new technologies will be enabled by and benefit greatly from 5G connectivity. One of the largest barriers to the implementation of self-driving cars is available mobile data transfer speeds. In order to load the algorithms, navigation systems, and location tracking capabilities required to have functioning autonomous vehicles, faster and more reliable networks are required. The implementation of 5G networks is thus essential to the development and use of such vehicles. Additionally, the safety concerns associated with driverless cars have the potential to be mitigated with a lower latency network;

TECHNOLOGY gaps in service could mean fatal crashes due to systems that rely heavily on continuous data transfer. Presently, mobile networks take around 100 milliseconds for information to travel from end-to-end, while 5G networks are estimated to have latency delays of only 1 millisecond.

In addition to self-driving cars, virtual reality is another early-stage technology for which 5G can facilitate growth.

Virtual reality media content is essentially a large rectangular image that is stretched and available to view at any angle, creating an immersive 360-degree experience of content unlike any other form of entertainment. However, since required media files are very large, the data transfer speeds required to effectively stream and experience virtual reality are extremely high. To experience high-quality VR content, devices require speeds near 600 megabits per second.

By contrast, the average high-definition television operates on speeds around 100 megabits per second. This massive difference in operating network speed limits VR to home entertainment systems running on high-speed home WiFi networks. Once implemented, new 5G networks would enable high-quality VR content for mobile devices, offering the opportunity for new forms of entertainment and communication. With the use of 360-degree cameras allowing for the capture of VR-like video, 5G networks have the potential to provide a more immersive experience for various forms of digital communication, including video chatting.

Utilizing VR technology for communication breaks down technological barriers and creates a far more immersive experience. On the consumer side, video chatting in VR allows for people to feel the human presence of the other person without them actually being there. The ability to view gestures and all the subtleties of human emotions remove the disconnected feeling of calling someone on a phone or just seeing a face on a screen. This communication potential can be applied into other industries, such as the medical field. Doctors could soon have the ability to fully view patients from the comfort of their home, remov-

ing the inefficiencies of the medical and hospital system.

While virtual reality is primarily focused on engaging and immersive experiences, augmented reality merges virtual objects with the real world. AR technology already exists, and it is used in several phone applications such as Snapchat and the game PokĂŠmon Go. Each app has features that allow users to project, or superimpose, small graphics onto real world surfaces through the camera of their smartphone. AR is progressing towards holograph-like entertainment and navigation systems, and has the potential to be applied in nearly every industry. Similar to VR, AR could be used by doctors to more effectively view patient health data and anatomy or provide extremely detailed guides for certain procedures. These more advanced forms of AR require the constant uploading and downloading of data, so these forms will also require lower latency networks to effectively transfer data and operate.

Although 5G is progressing domestically, there is an international competition to be amongst the first adopters of this new technology. On April 3, 2019, Verizon launched 5G service to parts of Chicago and Minneapolis, and the two largest South Korean telecom companies deployed 5G connectivity to half of the country’s population. These moves forward demonstrate how 5G is starting to make its way around the globe; however, consumers have not begun adopting 5G-compatible devices en masse, as current devices are not compatible with this upgrade in connectivity.

The creation of 5G networks will be a large step forward for technology, which will have massive impacts on society.

Many emerging technologies rely on available connectivity networks, and newer ones are likely to appear following the widespread implementation of 5G. These new technologies will improve aspects of life, ranging from communication to the creation of smart and technology-infused cities. The entire world is becoming progressively more interconnected, and the deployment and use of 5G technology will continue to bridge gaps between different parts of the globe.

Doctors can use virtual reality technology, supported by 5G, to improve communication with patients. (above) CORNELL BUSINESS REVIEW | 17

TECHNOLOGY

How Social Media Giants Are Failing Users

By Steven Romero

I

f you were to stand on a street corner in the 1970s and shout about how the United States never actually landed on the moon but instead pulled off the most elaborate scheme in history, you probably wouldn’t attract a large crowd. But if you were to do the same thing in 2019 using social media, you would have the ability to spread the exact same rhetoric to a larger group of people, increasing the audience that would have to decide whether to ignore your message or investigate it further. The spread of misinformation on social media is just one reason why there has been a dramatic decline in overall trust towards these giant corporations.

The oversaturation of content, growing alienation of users, and constant overreach into personal data have also contributed to this distrustful sentiment. It is clear now that social media companies must make significant changes to their strategies in order to avoid losing many of their users permanently.

The sheer amount of content amassed by these platforms is stagger-

18 | CORNELL BUSINESS REVIEW

ing, and it continues to grow. Perhaps the most mind-boggling of them all is Facebook, whose 2012 IPO revealed that it was storing over 100 petabytes of media information. For reference, 1 petabyte is equivalent to 100 million gigabytes, and just a single gigabyte is enough to store a standard-definition movie or several hundred songs. Unsurprisingly, this enormous library of data is not limited to family vacation photos and forwards from grandma.

With an unprecedented user base of over 2 billion (and growing), the platform is constantly flooded with misinformation, propaganda, and hate speech. It is harder than ever to scroll through your personalized feed without encountering political commentary or a far-fetched conspiracy theory. As more people from different age, social, and economic groups converge on multiple platforms, these concerns become more alarming. It is one thing for a conspiracy to cycle within a closed group; it is entirely different for a 12-year-old to stumble upon it. While the rate of information flow continues to skyrocket

without an equally intense rise of the importance of checking source credibility, this issue will continue to enter the radar of the young, old, uneducated, and many more.

Although many platforms are struggling to regulate the high volume of data that is shared by their users, Facebook is having perhaps the most difficult time. In February, The Verge’s Casey Newton broke an explosive story on how Facebook tries to scrub inappropriate content from the news feeds of its 2.3 billion monthly users. It is, of course, no easy task to moderate such a large amount of speech. Newton’s piece reveals how Facebook employs an “army” of low-paid workers under constant, intense supervision as they sift non-stop through content reported to Facebook as problematic, much of it overtly violent, disturbing, or conspiratorial. Newton’s story underscores that the sheer volume of content on Facebook, as well as on other platforms like Twitter and Instagram, is proving difficult to regulate and shows no signs of slowing down.

TECHNOLOGY Beyond the information overload flying at users in a constant stream, there have been other ways that social media companies have failed to strengthen their relationships with users. One possibility for this growing alienation is an increasing level of similarity between platforms, stemming from the borrowing of ideas and

"Only time will truly tell if social media companies will respond with momentum to satisfy users in the future." even acquisitions of entire platforms by larger companies.

According to Suzie Shaw from Ad News, many of these social media platforms first reached a wide audience due to their uniqueness. She says: “platforms used to be distinctive, and had a very clear role in consumers’ lives.

Facebook showed updates from your friends and family, Twitter was news at the speed of culture, Instagram was a portrait of the life you wish you had, and Snapchat was for salacious behaviour that left no digital footprint.” But finding the next big thing proved increasingly difficult, so companies began to borrow popular features from other platforms. While this allowed users to do more than ever before on some of their favorite apps, it also took away a part of what made the platform enticing in the first place.

If all platforms were slowly becoming more similar, what was the purpose of using any one platform in particular?

Not only were features being exchanged, but some of the bigger fish in the pond were swallowing their competition instead of fighting them. The biggest example of this behavior remains Facebook’s massive $1 billion purchase of Instagram in 2012, a key turning point in the social media industry. A flurry of mimicry has progressed over recent years; Instagram added “stories” that were nearly identical to the feature first found on Snapchat, Twitter added live photo and video capabilities to compete with Instagram, and Facebook improved its search engine to compete with Google. The race to profit off the maximum amount of content has only been accelerating. With so many platforms in the market, each company is locked in a never-ending attempt to capture as many pieces of the overall population on social media.

So what needs to change for these companies to reverse this downward trend? Despite lucrative profitability, the landscape of these platforms has changed to the point where they can no longer sustain their users’ trust over

the long term. A 2018 survey published in Axios reveals that just 40 percent of Americans believe that social media helps democracy and free speech, down from 53 percent the year before. This change is concerning because social media’s foundation was built on connecting people and ideas across the world as an avenue for speech, not as an authoritative presence. Facebook’s under-the-radar approach, which involves delegating incoming content to an underpaid contract company in order to save profits, demonstrates how they are failing to properly represent appropriate speech on their platform. A larger team with high compensation, as well as better employee services to deal with difficult reactions to content, would go a long way in keeping Facebook protected from hateful and heinous content. Other platforms would equally benefit from holding their content teams in as high of a regard as their software engineers, who sit in cushy offices and take home some of the biggest paychecks. Furthermore, companies would do well to return to their roots, either by removing features and simplifying their platform or by emphasizing what drew their dedicated user base in the first place. Both of these solutions are easier said than done, however, due largely in part to corporate greed and the difficulty of integrating change into an increasingly complicated application.

Only time will truly tell if social media companies will respond with enough momentum to satisfy users in the future, but it seems clear that as long as they remain highly profitable, not much will change. If it is more practical in the short-term for YouTube and Facebook to promote questionable content in exchange for higher payouts from advertisers, then the trend will continue. If Twitter sees continuous revenue growth and an expanding user base, will they care if a lot of the new accounts are robots that exist only to spread propaganda? They most likely will not. In the modern world, social media can make people feel like they are vulnerable and disconnected from the content creators themselves.

For many users, social media has shifted away from an intimate way of sharing their thoughts and feelings or connecting with others to a cash cow for greedy giants who fail to look out for users’ best interests. As long as money is the primary motivator, these platforms will continue to lose traction until they eventually fall out of favor with even the most dedicated of users.

CORNELL BUSINESS REVIEW | 19

TECHNOLOGY

Green Power: Why We Need Better Batteries to Fight Climate Change

By Rubin Thomas

F

or many, 2018 was a wake-up call for the threat that climate change poses to human safety. Countless natural disasters hit hard, from Hurricane Michael in October to the disastrous California Camp fire in November, the deadliest wildfire ever recorded in the state. According to the National Oceanic and Atmospheric Administration (NOAA), the estimated total damage from all U.S. natural disasters came out to around $91 billion in 2018. 2017, meanwhile, was the costliest year ever for climate-related disasters around the globe, according to the United Nations; the NOAA estimate for damages in 2017 hit $306 billion.

Although perhaps not the primary cause of these disasters, climate change certainly played a significant role in exacerbating their destructiveness and increasing their likelihood. Research shows that factors which can amplify natural disasters, including rising global temperatures and rising sea levels, have worsened due to human activity. According to the International Energy Agency (IEA), cumulative carbon dioxide emissions over the next 25 years will amount to three-quarters of the total emitted over the past 110 years, leading to a long-term average temperature rise of 3.5 degrees Celsius, or approximately 6.3 degrees Fahrenheit. Such a drastic rise in temperatures could be catastrophic in many ways: entire cities could disappear underwater, agricultural outputs could become highly uncertain, and billions of dollars worth of damage could be incurred from more frequent natural disasters.

Combating the rise of carbon dioxide and methane emissions will require a fundamental shift in our approach to producing and consuming energy. According to the Environmental Protection Agency (EPA), the energy production sector was the second-largest CO2 emitter in 2016, contributing 28.4% of U.S. carbon dioxide

20 | CORNELL BUSINESS REVIEW

emissions. This represents less than a 15% decrease from the year 2000. Approximately 68% of our electricity still comes from burning fossil fuels like coal and natural gas, mainly because we do not currently have the capability to optimally utilize the power we get from renewable sources.

This fossil fuel usage is why we have not seen a wider shift towards renewable energy sources, despite the falling cost of capturing renewable energy. In California, for example, the price that energy utilities paid for solar energy fell by 77% in the last 20 years, and the price for wind energy similarly decreased 47%, according to the California Public Utilities Commission. Such technologies are even becoming so cost-effective that in some cases individual households can purchase them.

Take Tesla, which introduced its solar roof, a mainstream and affordable solar energy capture device that mimics the appearance of a traditional shingle roof, in 2017.

The reduced cost of such energy capture devices can be misleading, however. We still disproportionately depend on fossil fuels for our energy supply, and our current grid is not equipped to handle a wider shift towards renewable energy. The main problem lies in our inability to store such energy in an affordable or efficient way so that energy is available throughout the year on demand. In the solar and wind case, for example, we would need to store large amounts of energy in the summer that could later be used during the rest of the year when there is less sunlight and wind. Moreover, in places where there is little sunlight, we would need to be able to transport and store large amounts of energy. Essentially, we need better batteries.

Just looking at the California case, the Clean Air Task Force estimates that generating 80% of California’s energy from renewable energy will require 9.6 mil-

TECHNOLOGY lion megawatt-hours of energy storage. Similarly, 100% would require 36.3 million megawatt-hours. For context, the state now maintains just 150,000 megawatt-hours of energy storage, comprised mostly of pumped hydroelectric energy storage, which is expensive and impossible to implement in flat areas or in areas without an adequate water source.

The alternative energy storage medium, lithium-ion batteries like those found in cell phones or electric cars, is not sufficient on a large scale because batteries are still far too expensive and do not hold energy long enough to last across seasons.

Tesla and Dynegy Inc., which have already begun connecting lithium-ion batteries to the grid, can only supply electricity for about four hours.

We need a better alternative, but no compelling option has emerged. Investors remain content with further upgrading and perfecting lithium-ion battery technology despite its fundamental limitations. Massive factories are popping up across the world, and this expansion is only bringing down the cost of lithium ion. As a result, competing technologies have struggled to keep up despite promising benefits. For example, Form Energy, a startup, has had success with a new type of battery called the aqueous sulfur flow battery, which could potentially bring costs down by around 95% compared to lithium-ion batteries because it relies on two readily available compo-

nents: sulfur and air. In addition, it could hold its charge for months at a time. Although it is far from being fully developed, such a breakthrough is what will be necessary to shift towards widespread use of renewable energy.

Investing in better batteries could also impact emissions in another important sector: transportation.

At 28.5%, transportation is the biggest contributor to carbon dioxide emissions around the globe, according to the EPA. Over 90% of the fuel used for transportation is currently based on petroleum, the burning of which emits carbon dioxide into the atmosphere.

Companies such as Tesla have been able to effectively utilize current lithium-ion battery technologies to create compelling vehicles that are in many ways comparable to gasoline-powered competitors. However, one area that has seen little progress is aviation. The New York Times estimates, based on EPA data, that a single person taking one round-trip flight between New York and Los Angeles generates about 20% of the greenhouse gasses that they emit with a car over an entire year, assuming daily use. The EPA also states that aviation accounts for 11% of all transportation emissions, or about 4% of world greenhouse gas emissions. This amount of emissions is sizeable, and it is only projected to grow in the coming years.

Why has progress in clean, electric aviation been so slow? Firstly, our batteries currently do not contain enough capacity that would make them possible energy sources for efficient air travel. An equivalent mass of jet fuel currently contains forty-three times the energy contained in an equivalent mass lithium-ion battery. Second, there is the problem of charging. Most domestic airlines aim to keep the time between consecutive flights under 60 minutes, but having to charge or swap out batteries could greatly increase this time and cost airliners millions of dollars. These are some of the issues that are being investigated

by NASA’s Electric Aircraft Testbed (NEAT). NEAT currently estimates that the earliest stages of electrified aircrafts, gas-electric hybrid aircrafts, will only be available by 2035 with current levels of funding.

Innovation in the transportation sector, then, also seems highly dependent on finding an effective and efficient energy storage medium. As with the case of electricity production, the consequences of not finding a suitable method for storing large amounts of energy for long periods of time could prove devastating to both the climate and benefits given up. We need to be investing significant amounts of money into battery research because the stakes are so high—billions of dollars worth of damage will occur from natural disasters, and billions of people will be subject to climate change effects that we are only beginning to learn about.

CORNELL BUSINESS REVIEW | 21

an exclusive interview with

Keivan Shahida The Intersection of Tech and Entrepreneurship

Could you tell us about yourself? What inspired you to attend Cornell?

My name is Keivan Shahida. I’m from New York, and I wanted to attend Cornell because I was looking for schools with strong Computer Science programs. I wasn’t looking for just that, as I was also interested in schools that had a strong focus in entrepreneurship and where those programs were really growing -- because in high school one of the things I was introduced to that I really enjoyed was product development: building apps (mobile app, web app, or a physical product). I always thought that was super interesting, so I wanted to go to a school where it wasn’t just theory. I wanted a school where it was actually applied as well.

We saw that you’re currently a member of Cornell AppDev. Could you tell us more about your work?

On AppDev, I am the product lead, so I oversee the five different products we’re working on now. First, there’s Eatery, which is used by a few thousand students everyday to find out where they want to eat. There’s Ithaca Transit, which is also used by a few thousand students to go to class or to work. Uplift is used for finding fitness classes and how busy the gyms are on campus.

There’s also Pollo, which is an iClicker replacement they’re working on. Lastly, there is this mobile ordering app we’re building for Chatty Cathy, a small acai bowl business here in Ithaca.

Wireless connectivity is finally getting an upgrade.

After years of planning and development, 5G connectivity has started to become a reality. Once fully operational and implemented on a wide scale, this new form of connectivity will allow for far greater data transfer speeds across all mobile devices, transform the use of current technologies, and spur technological innovation. Several emerging industries, including driverless cars, virtual reality (VR), and augmented reality (AR), are expected to greatly benefit from the steep increase in data transfer speeds.

Currently, each iteration of wireless technology is given a designated number as well as a generation. As was when Isuch, attended program called “Make School, ” whichof mobile the this progression throughout the history was this eight-week long summer program that took you from devices has been 1G, 2G, 3G, 4G and LTE, and is now beessentially ing knowing nothing about building apps to eventually followed by 5G. As has been the case for the creation launching of an previous app on thenetworks, App Store.large That telecommunication was my first taste of compaproduct development and launching a product.

I got toproprietary build nies have been independently developing 5G this app that was basically a game.

It was a super simple game--I networks to serve their respective customer bases. Each launched itcompany’s on the app network store and varies then it in became a “Topcoverage, 100 Free and usfrequency, Sports Game”, that was a superfocus cool experience me. In age.soSome networks on either for mobile orthe home conprocess, because Make School is funded by Y Combinator, a top nectivity, while others provide service to both.

For examstart-up incubator and accelerator, got network to meet a is lotexpected of interest-to achieve ple, T-Mobile’s mobileI5G ing people full thatnational got me into entrepreneurship. got to meet mobile coverage by Ilate 2019 orthe early 2020. founder of4G, Reddit and spend the afternoon with him, as well as of moor LTE, networks—currently the fastest type get to know the founders of Codecademy. At the time, I had no clue who these people were, but it was exciting to hear about how - from their computers - they were able to build something that then was used by millions of people.

What made you decide to try “Make School”?

I was looking for a program in New York City just for the summer because I was interested in app development. There weren’t any programs for people my age, as most of them were for students attending college and beyond. Make School was actually for these older college students, but they allowed me to attend, as I wanted to apply my skills further.

What motivated you to begin your career as an app developer and decide to do Computer Science?

Seeing that you applied to LaunchX twice to get in, what have you learned from initially being rejected and how has that shaped your work ethic and motivations moving forward?

Fortunately, growing up, the school that I was a part of had computer science courses in middle school, so I was introduced to computer science through that. What really got me interested

I applied to MIT Launch that same summer I went to Make School; although I didn’t get in, I took it as an opportunity to sit down and work on projects that were meaningful to me and

22 | CORNELL BUSINESS REVIEW

develop my skills in product development and computer science.

What ended up happening was that when I applied the next year, I was able to show that I hadn’t been sitting around. I was able to apply and say, “Here’s everything I’ve done in the meantime.” It showed that I was willing to not just sit around but actually keep pursuing my interests with or without the program. Now, I want to learn how to build these products that are actually viable - I don’t want to just build games, I want to build things that actually deliver value to be and can be used by people around the world.

Given that your startup has been in the works and has garnered some attention from within the Cornell community and beyond, could you tell us a little more about your startup?

We’ve been working on this project called “Response,” which is a web application that automates purchasing for non-profit procurement teams -- so the idea is that whenever someone in the field needs to purchase something, Response makes it easier for them. Right now, there is this very tedious and manual labor-heavy transfer process indata which they have up these very bile network—can at speeds uptotowrite around specific Theytake have to post those contracts 100 megabits pertechnical second.contracts.

HD movies about 15 minpublicly foron suppliers to bidLTE on, and most of the bid collection is utes to download the fastest networks.

In comthrough email and paper.5G These NGOs,will non be governmenparison done to this existing capability, networks tal organizations, and non-profits often have to hire data clerks able to provide data transfer speeds around 10 gigabits to essentially translate to Excel spreadper second, nearly 100 timesinformation faster thanfrom LTEPDFs networks. sheets so you end up speeds, with this5G long and tedious, In addition to for farevaluation, superior data transfer netandhave quite much frankly,lower antiquated process that actually delends itself to works also latency, or momentary being heavily So we’vehave beenyet working on this web aplays, in service.

Whileautomated. these upgrades to become plication. We joined eLab last semester, and eLab requires that widely available, with current technologies remaining we do as over 70 customer interviews, and one or of the incompatible devices are replaced, upgraded, out-main challenges weantennae face is thatbands, our customers are all over fitted with new 5G networks and the theworld. Because of that, we’ve to people in over 40 countries. Whendata transfer speeds theyspoken provide will drive innovation. evertechnologies we are on the will phone someone, they benefit come from a new Many new bewith enabled by and country, it was really difficult get largest ahold ofbarrithese people for greatly from 5Gand connectivity.

One oftothe about halfway through the semester.

We kept telling ers to theinterviews implementation of self-driving cars is available ourselves that we were not be load able tothe hit 70, so we had to mobile data transfer speeds.

In going ordertoto algosit down andsystems, reevaluate.

Thelocation only waytracking for us to get 70 interviews rithms, navigation and capawas to go to to have a conference specifically for humanitarian bilities required functioning autonomous vehi- aid and relief. foundreliable this conference in Brussels, Belgium, cles, faster andWemore networks are required.

Theand one of our mentors in the JohnsonisSchool us wastothat implementation of 5G networks thus told essential thethe school was initially sending one person.

Our mentor development and useonly of such vehicles.

Additionally, theadvised us and gave associated us a strategy.with He told us to overshoot andthe make people safety concerns driverless cars have first. Afterwith that, we wouldlatency backtrack from there to ask potentialsay tono beatmitigated a lower network; for the most ideal situation possible. Our “overshoot and backtrack” strategy led us to sending the entire team to Brussels, free of cost. The head of eLab just forwarded it to reimbursement, and we ended up doing over a hundred interviews by the end of the semester.

What are some of the challenges you’ve faced in founding your startup? Furthermore, as a full time student, how do you balance school-work with your pursuits outside of the classroom?

The main thing I’ve been doing is trying to make sure that everything is complementary. For example, the classes I’m taking are very similar to what I’m working for in Response and AppDev. I can take advantage of a lot of different resources to learn different skills I might need. For example, I knew nothing about back-end development for software engineering, so this semester, I decided to join the back-end team for AppDev. Now, I’m developing that skill set that I can use for building that component within Response. As for Response, we treat aspects of our project almost like a class. We meet every day from 4 - 7 PM, so that creates a solid work session to do a lot of work.

As the Product Lead for Cornell AppDev, you’ve helped develop several successful apps -- are there any notable leadership skills that are vital to the success of your team and ultimately yourself?

One of the biggest takeaways is that when you’re in a position of leadership, you are a servant of the people. Your job is to be there for them and to help them with anything they need, and that’s something that wasn’t intuitive when I was first introduced to these leadership roles. Because everyone says “you have to be a strong leader, and you have to tell people what direction they need to be going in.” The reality is though that a lot of people have the answers, and your job as a leader though is to help them realize what those answers are. It’s your job to be more like a sounding board, as someone that’s there for them and making sure that they can always openly communicate with you. One of the biggest problems that was coming up when I was first taking on leadership roles was I thought that you have to lead everyone.

Once you start to say it’s my way or the highway, people don’t necessarily talk about the risks they are facing or potential roadblocks, and they are not as open. This is because they are afraid it doesn’t align with the things you think should be done, and at the end of the day, it’s counter-productive because you set these goals, but you don’t know what’s going on behind the scenes -- so there is a total misalignment

How do you accept feedback and other commentary, and go about incorporating input into product development or software updates?

We’ve been really systematic about how we do this, and there a few different resources we’ve been using for our overarching process.

One is a book called “Discipline Entrepreneurship.” It’s written by the Managing Director of the MIT center for entrepreneurship, and other books we’re using are the “Lean Product Playbook” and “Running Lean.” Basically, these books are a framework for how can you set up tests for a key hypothesis that you have, take input, and objectively look at that input and say “okay, do we have an answer to this question?” When we did those 100 interviews, we were very methodical about having Google Forms with the same set of questions, and then every 10-15 interviews, we updated our form based on which questions were answered and which need to be answered. Each piece of evidence from these interviews gets tagged and documented and gets implemented into an equation. We could actually calculate at the end of the semester, based on many factors, what the biggest pain points nonprofits and suppliers are facing in procurement. It was a very data driven process in terms of how we approach in a way that’s as objective and actionable as possible.

These people had very limited time, and we had to be aware of that. It was not uncommon for us to reach out to someone and then say -- “sorry, I have to deal with an Ebola outbreak and can get back to you in a week, but send me the questions.” It’s crazy. We’ve spoken to people in regions of the world with malaria, drought, famine, civil wars -- it’s been crazy for us because we are very removed from the emotional aspect. At the same time, it makes us realize that all this is happening on in the same world we live in. That’s been the most fascinating thing, and the stories these people tell us are out of this world.

What is your favorite thing to do at Cornell?

I love running. I used to run alone, but recently I used the Nike Running Club App -- all of a sudden there is a leaderboard within the app. Now, we created a group, and there is like 20 of us running and competing.

CORNELL BUSINESS REVIEWCORNELL | 19 BUSINESS REVIEW | 23

WHAT DOES HAPPINESS TASTE LIKE?

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AZO M A ON S U FIND

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