Inside MBA April 2015

Professor Jitendra Singh Dean of the School of Business and Management HKUST Business School

APR

Inside MBA Banking and Finance - Finance MBAs broaden scope to offer skills for a changing industry - Customer-funded business: lessons from Indian entrepreneurs - HKUST inspired by Asia’s triple alliance

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CONTENTS Cover story

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Finance MBAs broaden scope to offer skills for a changing industry CHRIS DAVIS

Brightest mind

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Q & A with Charles-Henri Larreur CHRIS DAVIS

Talking to the top Insights

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HKUST inspired by Asia’s triple alliance JOHN CREMER

Dean’s desk

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MBA offers road map for challenges of a new financial world MICHAEL FERGUSON

Course

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HKMA offers new Fudan University programme JOHN BRENNAN

Inside MBA is published by Education Post, South China Morning Post Publishers Ltd. All rights reserved.

ISBN: 978-962-8148-39-4

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Customer-funded business: lessons from Indian entrepreneurs JOHN MULLINS

MBA helpdesk

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To study or to work?

EMMA YIP

Out of class

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Want to play Quidditch? You can, in a former Hong Kong factory ELAINE YAU

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Cover story

Drivers of change in the finance sector, such as increasing levels of regulation, the need for improved efficiency, and a new generation of customers and technology, are creating a demand for professionals who can make a valuable contribution across an entire organisation.

Lawrence Chan, Administrative Director (Marketing and Student Recruiting) of MBA Programs, CUHK Business School, says MBA programmes play a vital role in helping professionals in the finance sector to move ahead in the industry by having the skills employers

Lawrence Chan

Finance MBAs broaden scope to offer skills for a changing industry Text: Chris DavisdDA Photo: EPA

are looking for. “Besides knowledge about products, technology and regulatory issues, employers are always looking for individuals with leadership, soft skills, people management, cross-cultural management abilities,” says Chan.

Alongside finance courses, Chan says CUHK MBA students study a variety of soft skills training programmes. They also receive training from consultants who work with multinational institutions. “Skills advancement and development are critical for long-term career development and help to strengthen the pool of talent working in Inside MBA

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Cover story

the finance sector,” Chan says. To keep pace with evolving needs, Chan says the CUHK develops new courses, such as project financing, which is related to the future of infrastructure development in the Asia-Pacific region.

As the finance industry works to integrate the latest technology into their operating and service activities, Dean Stallard, regional director of recruitment firm Hays in Hong Kong, says finance technology candidates with an MBA are increasingly sought after by employers in the financial services industry. “If two candidates have like-for-like technical experience, cultural fit and other qualifications, then an MBA could be a differentiating factor,” says Stallard. On the job front, Stallard says opportunities in front office technology positions are currently strong in the investment banking sector. “Chinese banks and the insurance sector also have large projects in the early stages, which are fuelling employment vacancy activity,” he says.

According to Tom Bain, adjunct professor of finance at CUHK business school, the significant increase in regulation of the financial sector has created an enormous burden for the industry. “Our MBA courses on financial markets must now include consideration of the significant loss in liquidity of certain instruments such as bonds, the increased role played by hedge funds, and potential risks to the execution of government monetary policy,” says Bain, adding that MBA students are still hungry to understand the movements of financial markets. Bain explains that financial markets are influenced by many factors including economic cycles, geopolitics, wars, technological developments, elections, weather, and natural disasters. “Students are keen to study these factors in order

MBA COURSES ON FINANCIAL MARKETS MUST INCLUDE CONSIDERATION OF THE SIGNIFICANT LOSS IN LIQUIDITY OF CERTAIN INSTRUMENTS SUCH AS BONDS

Tom Bain

to interpret their impact and the steps they should take as managers to adapt to them,” he adds.

Sean Ferguson An advocate of the potential a general MBA programme offers, Sean Ferguson, associate dean of master’s programmes and director of MBA programmes at the University of Science and Technology (HKUST) business school, says that instead of formal course work, the business school creates extracurricular activities around contemporary topics in the finance domain. He says a prime example involves students hosting a conference on Chinese capital markets sponsored by ANZ. “Our focus is to provide strong core general management skills and the ability to take traditional finance electives,” says Ferguson, who points out that in many cases, by the time a course is created the trend will have passed.

Ferguson also stresses that the finance industry looks for individuals with the ability to turn capital into growth ideas. “Evaluating growth ideas takes a comprehensive understanding of the various management disciplines including marketing, strategy and leadership, disciplines included in our MBA programme,” he says.

Inside MBA

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Cover story

IT HAS HELPED ME TREMENDOUSLY TO UNDERSTAND THE PRINCIPLES AND PHILOSOPHY BEHIND THE DEVELOPMENT OF THE CHINESE GOVERNMENT

Abhishek Bakshi, director, equity capital markets CIMB and a HKUST MBA graduate, says the MBA studies offered a balance between academic rigour in finance, an in-depth examination of business concepts, and the opportunity to develop a long-term network of relationships in Asia. “I look at my MBA as a diverse experience,’ says Bakshi. “There were several courses, including global macroeconomics, corporate finance and entrepreneurial finance and private equity, which remain very relevant in my role today,” he says, adding that in addition, the summer internship and exchange programme gave a corporate and international flavour to the Asian financial sector.

Meanwhile, Alvin Tong, CUHK MBA director of sponsorship, corporate social responsibility (CSR) committee 2015, says his MBA programme provides comprehensive training in leadership development and strategic management, but also encompasses the flexibility for students to choose electives within concentrations that interest them.

“For students who have been in the workforce for a longer period like me, I feel that the MBA is more appropriate to enhance my leadership skills before progressing further into management positions,” says Tong, who also believes he is benefiting from his MBA programme focus on mainland China. “I feel that it has helped me tremendously to understand the principles and philosophy behind the development of the Chinese economy, and the government’s plans for gradual reforms and liberalisation,” adds Tong, who worked on a MBA project to understand China’s objectives in creating the Silk Road Fund and its involvement in the Asian Infrastructure Investment Bank. Moreover, Tong says the MBA programme has helped him develop tangible skills in financial modelling and valuation techniques, and determine the strength of cash flows generated by a corporation. Furthermore, in his role as CSR director, Tong has enriched his interpersonal skills by making presentations in a corporate boardroom setting.

CUHK MBA graduate Douglas Chan, who is an active member of the business school’s alumni, believes that becoming a successful leader in the global business world requires all-round knowledge covering many different areas. “From accounting and finance theories, to organisational management skills, I believe the CUHK MBA equips candidates with broader skills and knowledge and helps graduates apply them in many different situations,’” says Chan.

A good example, he adds, is the emphasis on teamwork. “A recent project I was working on involved colleagues from all over the world, which required a great deal of teamwork and excellent interpersonal skills,” says Chan. “My MBA experience definitely prepared me for this challenge,” he adds. With his pre-MBA career already in the finance industry, Chan says that joining the alumni has helped him further expand his connections across different industries. “Networking is another valuable asset for future career development,” he says.

Abhishek Bakshi

Inside MBA

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Talking to the top

When Professor Jitendra Singh took office as dean of the School of Business and Management at HKUST Business School in September last year, he arrived with clear plans and priorities.

Not surprisingly, with the school’s status and reputation already well established, those plans centred on incremental progress rather than root and branch reform. And, logically too, given his own background and experience, they also focused attention on broader themes such as the shift in momentum from West to East, the inexorable rise of China and India, and the opportunities Asia offers for people with a top-tier business education.

“The faculty and programmes are strong and the students are of uniformly high quality, so the school is on a very firm footing,” Singh says. “But you can always build on your strengths, and there are certain things I want to achieve, even though any timelines may be guesses at best.”

HKUST inspired

by Asia’s triple alliance

I HAD A VORACIOUS APPETITE TO LEARN ABOUT THE WORLD, A DEEP CURIOSITY AND A DESIRE TO KNOW

Text: John Cremer Photo: K.Y. Cheng

One objective is to be widely and consistently regarded as one of the world’s top 10 business schools. Another is to introduce new courses which offer something different for students at both undergraduate and postgraduate level. And a third is to step up direct engagement with the business communities in Hong Kong, mainland China and around the region.

Doing this has particular relevance at a time when western multinationals are looking to further expand in Asia, just as homegrown companies in the region’s fast growing economies are pushing for growth and acquisitions in global markets.

As an evolving theme, this also ties in neatly with Singh’s research interests, dealt with in two recent books, and his wish to continue a learning journey which, he hopes, can inform and inspire others.

“For whatever reason, from very early on, I had a voracious ap-

Inside MBA

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Talking to the top

petite to learn about the world, a deep curiosity and a desire to know,” says Singh, who was a championship-level chess player in his youth and developed a teenage interest in Camus and Sartre’s The Age of Reason. “I suppose I was rather precocious and used to like the attention of being the ‘genius-like’ kid in the family.

In particular, I remember going out in the front yard as an 11- or 12-year-old, looking up at the night sky, and thinking wouldn’t it be great to figure out how all this – the universe – works, and that still drives me today.”

In due course, the spirit of inquiry combined with the need to find a career which would provide variety, intellectual challenges and a decent living. Initially, academia wasn’t even considered, but after obtaining a BSc in physics, mathematics and statistics from hometown Lucknow University followed by an MBA from the Indian Institute of Management (IIM) in Ahmedabad, the possibilities began to crystallise.

“One of my professors at IIM had a very profound influence on me,” Singh says. “You only run into one or two people like that in a lifetime and I was very fortunate to meet him. Imitation is the sincerest form of flattery, and he became my role model. I wanted my life to be like his.”

So, after a period of reflection, during which he reached a quite senior and lucrative position in the influential Tata Group, Singh decided to leave corporate life behind and, instead, head to Stanford Business School to pursue a PhD.

AT THIS STAGE OF MY CAREER, I WANTED TO BE BACK IN ASIA TO HELP BUILD GOOD INSTITUTIONS

Subsequently, a first teaching post at the University of Toronto led to a long-term stay at the prestigious Wharton School where, from 1987 on, he lectured and published on subjects ranging from emerging economies and organisational evolution to corporate governance and entrepreneurship. Along the way, he also advised start-ups, venture capital firms, public bodies and overseas academic institutions.

For a number of reasons, though, moving to HKUST seemed to make perfect sense.

“At this stage of my career, I wanted to be back in Asia to help build good institutions,” Singh says. “Also, I’ve always been attracted by the notion of leadership and view it almost as a sacred responsibility to be able to work for the good of the many. Here, it is not about me and my agenda, but about how I can serve the school as someone who has been fortunate enough to receive the best of the East and the West.”

A personal priority now is to learn more about China, seeing it, along with the United States and India, as one of the world’s three economic pillars in the years ahead.

“I started coming to Greater China in the 1990s, but I need to deepen my knowledge and the deanship will be the perfect opportunity for that,” Singh says. “How things go on between these three counties will be an intriguing theme to follow.”

Inside MBA

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Dean’s desk

MBA offers road map for challenges of a new financial world

By Prof. Michael Ferguson Associate Dean (Graduate Studies) and Director of MBA Programs CUHK Business School

The banking and finance sector has always been an important Hong Kong economic pillar. The sector has undergone tremendous change since the financial tsunami in 2008. In the years since, considerable new emphasis has been placed on risk management and compliance in nearly all financial institutions. Major investment banks, commercial banks and investment houses have all invested significant resources to deal with this challenge.

As a leading business school in the Asia-Pacific region and the world, the CUHK (Chinese University) Business School MBA Program has responded to the dynamic needs of the financial industry with the introduction of several new courses including risk management for banks, a new course taught by seasoned, prominent bankers and chief risk officers from major institutions that blends theory with practice to equip our students with the necessary skills to excel in this area.

The CUHK MBA has also launched a new course on project finance, something of particularly strong relevance to Asia. The

course will help students tap into the many career opportunities resulting from the formation of the Asian Infrastructure Investment Bank (AIIB) and the “One Belt, One Road” initiative proposed by Beijing. Finance professionals equipped with the relevant skills and knowledge in this area will make significant contributions to Asia in the coming decades.

As the pioneer in business education in Hong Kong and the region, the CUHK MBA also puts a strong emphasis on providing students with education and development opportunities in venture capital and private equity. To do so, we have worked with prominent industry professionals to develop the Pan-Asia Venture Development Platform (PAVD, http://mba.cuhk.edu.hk/pavd/), an independent, self-funded platform with a mission to engage CUHK MBA students and graduates in the development of quality high-growth ventures in Asia. Under the unique PAVD platform, our students work together with existing new ventures to re-think and present their business plans to our network of 35 registered early-stage investors, some of whom also co-teach with our faculty and provide live-project opportunities for our students.

Supplementing recent curriculum developments with the generous support of our alumni, we also offer the region’s only Elite Mentorship Program for MBA students. This offers invaluable one-on-one coaching and guidance to our full-time students, helping them to maximise their personal and career development. Our mentors – all of whom are senior alumni of our MBA and EMBA programmes and who include chairmen, CEOs, managing directors and general managers of leading local and multinational companies – are paired with full-time students based on their career interests and aspirations. For the students, gaining access to the insight of elite business leaders is a long-lasting and invaluable asset in today’s increasingly complex and competitive world.

Inside MBA

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Course

For 55 years, the Hong Kong Management Association (HKMA) has been striving to improve the effectiveness and efficiency of management, both in Hong Kong and regionally.

One of its main means of achieving this goal has been providing and promoting educational and training opportunities for members.

Amongst the range of new and world-class management programmes the HKMA has recently launched is an MBA programme delivered by the Fudan University School of Management. “The introduction of this programme goes hand in hand with our vision and mission,� explains Glover Chan, senior manager in the HKMA marketing department. “Our vision is to be the leading professional organisation advancing management excellence in Hong Kong and the region. Our mission is to promote best prac-

HKMA offers new Fudan University programme Text: John Brennan Photo: Reuters

tice in management, to nurture human capital through management education and training at all levels, and to provide members with a platform for the exchange of ideas, for networking and for personal development.

“We offer a broad range of training and education opportunities for executives in Hong Kong. To help achieve this, we bring in overseas university programmes such as those from Britain and from Australia, to be delivered in Hong Kong. Yet, being an international city, and being SAR of China, Hong Kong also needs to look to the mainland, where the future potential is most abundant,” Chan adds.

The MBA programme HKMA will run in conjunction with the Fudan faculty is part-time. “Professors from Fudan will fly to Hong Kong to deliver the programme, except for a few sessions that will take place in Shanghai,” Chan explains. “These include an introInside MBA

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Course

duction at the start of the programme, a study tour in the middle, and the graduation at the end.”

Taught mainly in Putonghua, the MBA programme will place equal stress on both theory and practice, as well as the parallel concepts of internationalisation and localisation. In other words, it will help participants develop both an outward-looking approach towards the global economy, as well as a deep understanding of China.

The programme is structured around 14 compulsory courses.

Alongside these, scores of electives, grouped into four “tracks”, are offered. The tracks are finance, marketing, e-commerce and entrepreneurship.

Together the electives cover such areas as macroeconomics, marketing, finance management, operations management, HR management, strategic management and information technology.

As well as bringing Fudan University to Hong Kong, introducing its faculty members to the city’s business environment and facilitating its teaching activities, the HKMA will, over time, help in developing case studies related to Hong Kong.

Chan says the reputation of the Fudan University School of Management, which has been running an MBA programme since 1991, sets it apart from many of its peers. “It has a strong faculty with an international outlook and, not only was it ranked the best business school in mainland China, its MBA is ranked among the top 55 in this year’s global MBA league, according to the Financial Times,” he says.

The School currently has around 5,000 MBA alumni, working not only across the mainland but around the globe, in a wide range of fields.

Chan explains that this HKMA MBA programme is suitable for executives with an equivalent bachelor’s degree recognised on the mainland, plus at least three years’ full-time work experience.

“Also, they will need to understand, and be able to speak and write, Chinese,” he adds.

HONG KONG ALSO NEEDS TO LOOK TO THE MAINLAND, WHERE THE FUTURE POTENTIAL IS MOST ABUNDANT

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Brightest mind

Q&A

Text: Chris Davis

Charles-Henri Larreur, managing director, head of asset & capital structuring at Santander, is in charge of the leasing and infrastructure business at Santander for France and Benelux. He is also an adjunct professor of finance at HEC Paris, where he teaches MBA topics, and a guest speaker on matters related to structured finance at various universities worldwide. Larreur is the author of Financements structurés. Innovations et révolutions financières, a book about structured finance published in French, and is now working on a second book, in Chinese, with a more specific focus on structured finance in Asia.

As someone who teaches MBA courses, what are the key insights and knowledge benefits students are looking for?

The truth is that looking for a job in your area of expertise after a MBA is miles easier than switching careers, especially if you want to work in a different country. MBA candidates should be aware of that. These changes are possible but require a lot of effort and in this case, the job-hunting should start when the MBA begins.

Otherwise, the risk is that students will end up in the same industry they wanted to escape from when applying for their MBA. What has changed over the last five years in the MBA areas you teach and the MBA programme you are involved with in general?

One noticeable trend is that competition between programmes is fiercer. On top of that, MBAs tend also to be a more accepted norm outside the US. HEC Paris is responding to these two new challenges. The school has been an elite university since its inception in 1881, having for instance the current French president as a member of the alumni, as well as the current CEOs of AXA, L’Oréal, Orange, Michelin, Kering (Gucci, YSL, Puma) and Sodexho.

Charles-Henri Larreur

In a fast-changing and demanding global business environment, have the MBA areas you teach become more relevant?

My main area of interest is structured finance. This covers a large variety of topics: securitisation, structured credits, asset finance, project finance and leveraged buyouts. Structured finance is just as relevant as it was before 2007, but for other reasons. In the past banks and companies were using structured finance techniques to obtain a higher level of financial leverage whereas today they use structured finance techniques to obtain better securities and adapt to the new regulatory environment.

What are the current hot topics talked about among professionals like yourself who teach MBA programmes?

What is clear is that education is becoming a global market. Step by step, the market is slowly becoming more mature. We can see mergers of universities that do not have critical size, internationalisation of curriculums and the use of English as the main teaching language everywhere in the world. Of course, MBA programmes lead the way in this evolution but it is a global trend that is affecting lots of other areas: engineering, medicine and social sciences.

How do you see MBA programmes developing in the future? For instance, more use of technology or programmes evolving to meet specific business needs.

The best European and Asian schools should continue their progress and compete even more with the top US programmes. Look at the FT rankings now and 10 years ago. The changes are impressive and I see no reason for this trend to stop.

That being said, US programmes are still very strong and will adapt to the new environment. The fact that some of these universities now have campuses outside the US is certainly one of the reasons behind this evolution.

Do you have any advice for those considering studying for an MBA? MBAs are clearly a gateway to entering the corporate world, but not the only one. Think about it before applying to an MBA. Then think about your programme, and choose the one that is best for you in terms of location – US, Europe or Asia – specialisation and duration.

Inside MBA

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Insight

Customer-funded business: lessons from Indian entrepreneurs Text: John Mullins Photo: EPA This very day, millions of entrepreneurs are actively engaged in starting a business in India. Sadly, many of their ventures will never get off the ground. Of those that do, the majority will fail. Of those who submit business plans to venture capital investors, less than 1 per cent will get the money they seek.

Despite the challenge of raising money, there is a widespread notion that for an entrepreneur to build a high potential business, he or she needs to come up with a great idea, write a business plan, raise some venture capital, and then – voila! – get rich. But this is basically wrong. The vast majority of the world’s fastest growing companies have never raised any venture capital. So why are we so focused on raising money and putting the investor at the centre of entrepreneurial endeavour?

Instead let’s consider the numerous examples of large, successful companies that started and grew by putting the customer at

THERE ARE FIVE DIFFERENT TYPES OF CUSTOMER-FUNDED MODELS the centre of the business and, perhaps surprisingly, using their customers’ cash to fund it – Microsoft, Banana Republic, and Dell, to name but a few. Even better, let’s consider some of India’s unsung but inventive entrepreneurs, who have seized on customer-funded principles to develop some of the nation’s fastest growing businesses.

Five Ways to Build a Customer-Funded Business There are five different types of customer funded models – each surprisingly familiar when you think about them carefully – through which India’s founders, alongside others elsewhere, have ingeniously persuaded their customers to, in effect, fund their start-ups (See Table).

Customer-Funded Models – Five Types

Type

Category-Defining

21st Century Examples

Examples Service-to-product Microsoft MapmyIndia.com

models

Pay-in-advance models

Consultants, architects,

Via

Dell Subscription models

The Wall Street Journal,

TutorVista

Netflix, Cable TV Scarcity-based models

Zara

Vente Privée

Matchmaker models

Real estate brokers,

Airbnb

eBay, Expedia.com

What these models have in common is that each of them gives the company what accountants call negative working capital: that is, the company has the customer’s cash in hand before having to produce or pay for the goods (or service) it has sold.

Inside MBA

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Insight

Service-to-product models: MapmyIndia.com It was 1995, and the Coca-Cola Company had just re-entered India after an aborted earlier effort, this time by acquiring the maker of ThumsUp. Along with the deal came a thick book describing each of the ThumsUp bottlers’ territories in plenty of legal jargon, but without a single map. Coke needed a way to locate and understand its newly acquired territories.

Alas, no one had maps that could show Coke where its bottlers were located. Into the breach stepped Rakesh and Rashmi Verma.

The Vermas began to build a digital mapping business by scanning what rudimentary paper maps they could find, and then overlaying demographic and other data to enable Coke – and soon, other commercial customers – to do in India what they took for granted in other parts of the world. CellularOne’s joint venture with Essar, entering India as its telecommunications industry was liberalised, was their next client. “Where should we put our cell phone towers?” CellularOne asked, from both a technical perspective (Where is the high ground?) and from a marketing perspective (Where are sufficiently dense concentrations of customers we can economically serve?).

By 2004 the Vermas’ business had grown into what many regarded as India’s premier service provider for navigable, accurate bespoke digital maps of all kinds. On a visit to the US that year, the Vermas observed that MapQuest had built a product it could offer online, wherein consumers or others could obtain maps anytime, anywhere, simply by going online. “Could we do a MapQuest for India?” they wondered, and MapmyIndia was born. The Vermas’ services morphed into products.

Fast forwarding to today, the company offers consumer navigation devices for the auto aftermarket à la TomTom; fleet-tracking solutions for the taxi and logistics industries; licensed content for automobile manufacturers’ in-dash infotainment systems; locator content via the web; and even a nifty app to turn your iPhone into a navigation device. And the original services business keeps humming along too.

Pay-in-Advance Models: Via In 2006, India’s travel industry was abuzz with the potential for on-

line and mobile travel solutions, as had already happened in much of the rest of the world. Starting in a small garage in Bangalore in early 2006, Vinay Gupta saw a fragmented and inefficient travel industry that was ripe for change. But the change he had in mind was not what the rapidly growing number of online travel agents was pursuing.

On July 28, 2006, having secured IATA membership, Gupta launched Flightraja.com as a way to book air tickets via mobile phones, of which there were 170 million in India at the time. Simultaneously, and out of the glare of industry publicity, Gupta was signing up local travel agents who previously had been unable to offer real-time ticketing to their customers because they had no real-time connections to airlines or aggregators.

In exchange for a 2.5 lakh rolling cash deposit against which tickets would be issued in real time, Gupta gave the agents a computer and connection that provided them with IATA-certified real-time ticketing capability – and better commissions, too. By September, his venture – funded by his customers’ deposits – had signed up 110 travel agents in Bangalore and another 70 in Chennai, and was booking 200 tickets per day. Do the maths: their deposits taken together totalled nearly US$1 million to fund the business. By De-

Inside InsideMBA MBA

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Insight

cember, Flightraja had achieved break-even, and by June 2007, it had enrolled more than 3,000 agents in 290 Indian cities and was issuing 5,000 tickets per day.

Today, Via has established itself as the “Intel Inside” of the Indian travel industry. Annual revenue tops US$500 million, and Via has expanded into the Philippines and Indonesia. Not bad for a company that hardly anyone has heard of!

Subscription Models: Tutor Vista In 2005, a US cartoon showed an irate father telling his son: “No! You can’t outsource your homework to Bangalore.” Outsourcing homework hasn’t happened just yet, but outsourcing some of the learning has, thanks to the power of the internet and Krishnan Ganesh’s observation that education – in mathematics, in particular – was suffering in the US and elsewhere.

In October 2005, Ganesh took a small space in a business incubator in Bangalore; in November, he hired three Indian teachers, who began tutoring US students more than 9,000 miles away. With a headset and webcam at each end, a VOIP connection, and an “erasable whiteboard” on their computer screens on which both teacher and student could write – one in red, the other in blue – TutorVista was born.

Initially charging students an hourly rate, Ganesh soon discovered that a subscription model – US$100 per month for all the tutoring you want, 24/7 – enhanced customer adoption, not to mention cash flow.

By June 2006, to keep pace with growing demand, Ganesh’s roster of tutors had grown to 50, most of them working from their homes to serve 400 students, mostly in the US. With this early success as evidence that he had discovered a huge opportunity, he raised US$2 million in venture capital from Sequoia Capital to beef up his online marketing budget. Growth took off, and more venture capital funding soon followed.

In June 2009, Pearson PLC, the world’s largest education company, acquired a 17 per cent stake in TutorVista. A year and a half later, in January 2011, it upped its stake to 76 per cent, buying out the early investors, giving them handsome returns. Pearson, which later acquired the remaining stake, valued the company, with its

TODAY, VIA HAS ESTABLISHED ITSELF AS THE ‘INTEL INSIDE’ OF THE INDIAN TRAVEL INDUSTRY

2,000 tutors serving 10,000 online students per month, at US$213 million. Said Ganesh: “We are the largest employer of teachers in India. Together with Pearson, we can make this happen even faster, and help millions of students achieve their educational goals.”

The Rest of the Story There’s more to the customer-funded story than easier – albeit later – capital raised on better terms. Firstly, waiting to raise capital forces the entrepreneur’s attention onto his customers, where it should be. Customers matter, and as the late Peter Drucker noted, if there’s no customer, there’s probably no business either.

Secondly, making do with the modest amounts of cash your customers give you enforces frugality, rather than waste. Wasting investors’ money is not a good recipe for cordial investor relations.

Thirdly, when capital is raised later, less of it is put at early-stage risk, meaning the terms and valuation are better, making the founder’s stake – and perhaps control – more substantial, too.

Finally, and perhaps best of all, focusing your efforts on getting customers to buy from your yet-unproven company is likely to mercifully put to rest a half-baked or not-quite-right idea that requires more development – a pivot, in today’s lexicon – in order to hit the mark. Putting such ideas to rest, or altering them earlier – thus failing early, and failing small – and moving on to better ideas, is a defining characteristic of many of today’s most successful entrepreneurs.

John Mullins is an associate professor of management practice at London Business School and author of “The New Business Road Test: What Entrepreneurs and Executives Should Do Before Launching a Lean Start-Up,” 2013. He is also co-author (with Randy Komisar) of the widely acclaimed “Getting to Plan B: Breaking Through to a Better Business Model,” 2009.

John Mullins

Inside MBA

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MBA helpdesk

To study or to work?

Text: Emma Yip Photo: Bloomberg Question: I am worried about investing two years of my time and money to do an MBA and not being able to find a good job afterwards that pays off my debt and opportunity cost of two years. Should I still go for it? How is the job market for fresh MBA graduates?

Emma: Unlike many years ago, when the majority of freshly graduated MBA students opted for going into consulting or investment banking, MBA graduates now have many more options. Start-ups all over the world – and not just in Silicon Valley, but also in Israel, Hong Kong and other parts of Asia – are welcoming MBA graduates to join their teams and can afford them. Meanwhile, multi-national companies are also gearing up their management talent

pipeline with new MBA graduates in the light of the retirement wave of baby boomers. As the economy (especially in the US) gets stronger, corporate recruiting is back on track. Many companies cut back too deep a few years back during the financial turmoil and now need to refill their pipeline in order to maintain and grow their businesses. Therefore, this is a great time to be a new MBA graduate.

That said; there are also more MBA graduates than ever – so competition for these jobs is still intense. The quality of different MBA programmes also vary greatly and thus it is important to pick a good programme that suits your goals and needs. Don’t go for it just because the job market is good. Pick wisely and do your homework well. Also, make sure that “finding a job after MBA” is NOT the only reason why you are doing it. Tides and waves often turn without much warning – many things can happen during two years while you are doing your MBA and you won’t be able to “hedge the risk” entirely to ensure you that you graduate at the most opportune time.

THERE ARE ALSO MORE MBA GRADAUTES THAN EVER - SO COMPETITION FOR THESE JOBS IS STILL INSANE

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Out of class

Want to play Quidditch? You can, in a former Hong Kong factory Text: Elaine Yau Photos: SCMP A game of bubble soccer in the dark at Wong Chuk Hang.

Industrial plants have become fun palaces where you can play Harry Potter’s favourite game, or try bubble soccer, indoor skiing, archery tag and other serious indoor fun With big trucks offloading goods at the front and back entrances, and laundries and (smelly) food factories taking up some of the floors, ageing factory buildings hardly seem like cool hangouts for hipsters and fun seekers. But with the exodus of the city’s manufacturing industry to mainland China in recent decades came an influx of artists and chefs who have been making use of these industrial venues, staging edgy exhibitions and offering cooking classes.

Now, professional athletes are moving in on the trend, turning once drab warehouse spaces into gleaming ski slopes, verdant baseball lanes, sprawling soccer pitches and even a sandy beach complete with bouncy beds. Outdoor sports are so yesteryear. Inside these new well-equipped activity “hubs” visitors can really work up a sweat and have some serious fun - come rain or shine.

Indoor skiing coach Natalie Lai at 321 Play in Kwun Tong.

321 Play Said to be the largest venue for indoor skiing in the city, the twofloor venue in Kwun Tong has three artificial skiing slopes imported from Holland. Built for skiing and snowboarding, the HK$1.5 million platform resembles a gigantic treadmill with varying gradients and speeds to simulate gliding down a snowy slope.

A one-hour lesson for individuals or groups with coaching costs about HK$1,000. Self-practice costs HK$700 per hour. Hailey Chan Chi-lam, marketing and events manager, says they cater to both beginners and advanced skiers: “Novices can warm up here before they get on a real snow slope. Then they won’t feel totally out of their depth. Three or four lessons should be enough to master the basics. Veteran skiers can further hone their skills,” Chan says.

On the second floor is the Formula One racing zone. In the middle of the zone there is a gleaming life-sized Formula One car imported from Budapest. Surrounding it are nine simulators with either two or three screens which can be networked together for a group of friends to race each other.

“The Budapest race car is for training by professional racers who set the level of difficulty to advanced. Players can feel the effects such as screeching to a halt and the jolts and bumps from racing at top speed. The only thing they can’t feel is the forceful impact after they crash.” The F1 Budapest simulator costs more than HK$300 for 30 minutes.

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Also on the second floor are three baseball lanes which are equipped with ball-throwing machines. The balls fly at speeds ranging from 50km/h to 140km/h, the speed of professionally pitched baseballs. A round of 18 balls costs HK$30.

1/F and 2/F, Kras Asia Industrial Building, 79 Hung To Road, Kwun Tong, tel: 2797 9323, 321play.com.hk (http://www.321play.com.hk/) Bubble Soccer Hong Kong There appears to be a theme running through the activities at this Wong Chuk Hang indoor sport venue that opened last November.

It recently launched Quidditch, the game prominently featured in JK Rowling’s Harry Potter series. But before you get too excited, there is no flying around at breakneck speed during matches. Instead, players run around a 2,600 sq ft pitch with a broomstick between their legs.

“A game of Quidditch is played for just six minutes. It’s enough to get people exhausted. After the games, they can chill out at the bar at the back,” says one of the founders, Jason Fung Chun-hei. The use of the pitch for the first hour costs HK$2,500.

Quidditch is basically a handball game with props. The two opposing teams have to race to the goalpost and throw the ball through

A game of quidditch - the game Harry Potter and his mates play in the J.K. Rowling books and films.

Impact Force in San Po Kong offers a game based on the hit Korean variety show Running Man.

one of the three hula hoops hanging from the ceiling to score a point. To spice up the game, a golden snitch - in the shape of a drone - will fly around during the last two minutes of the game.

The team who catches it will end the game and get extra points.

Also on offer is “Archery Tag” imported from the US. Think The Hunger Games. Two teams, armed with bows and arrows, have to shoot all their opponents to win. Players can hide behind plastic bunkers and various inflatable barriers.

To keep the game that lends its name to this venue fresh, you can now play bubble soccer (and dodgeball) here in the dark. Players get into a glowing inflated bubble before kick-off. The rules are the same: players need to either defend their own goal or to score against their opponents by knocking players on the other team to the ground. With fluorescent-painted walls (similar to Tron) this game is as much fun for spectators to watch as it is for fans to play.

5/F Remex Centre, 42 Wong Chuk Hang Road, Wong Chuk Hang, tel: 3462 3318, quidditch.hk (http://www.quidditch.hk/) Impact Force This warehouse space in San Po Kong offers a game based on the hit Korean variety show Running Man in which guests complete missions on different “maps”. The 10,000-plus sq ft venue has four themed zones: the wizard’s chessboard, secret garden, the mystery maze and the witch wardrobe.

The set-ups and decor are stunning. Sculptures of knights and Inside MBA

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Soccer Cages in Tsuen Wan.

their rearing horses surround the wizard’s chessboard. The castle room has gold-rimmed mirrors, a fireplace, classic paintings and antiques. There are multifarious challenges including navigating around green laser beams on a chessboard, jumping up and using your head to hit a brick to get gold coins like the video game franchise Mario, and finding your way out of a pitch-black maze.

A minimum of six people are divided into two teams that race to finish all the tasks in the four zones. Coaches are on hand to explain the rules and give a helping hand when players are at a loss over the puzzles. The game takes 90 minutes and costs HK$2,200 for two teams of three. In spite of the complexity of some of the challenges, founder Billy Chong Wai-fung says 98 per cent of players can complete all the missions.

“Company employees engaged in teambuilding exercises make up a large part of our clientele. We want to give them visual excitement and the chance to exercise their brains at the same time. Our team came up with the themes in the challenges, such as Mario and Harry Potter. Those who want pure action can go to our [more than 30,000 sq ft] war game zone upstairs,” Chong says.

7C, Chung Hing Industrial Mansions, 25-27 Tai Yau Street, San Po Kong, tel: 6687 7422, hkrunninggames.com (http://hkrunninggames.com/) Soccer Cages Opened six months ago, Soccer Cages in Tsuen Wan features a pitch surrounded by metal grids and wire mesh; check out Nike’s

commercial “cage match” to get an idea of the set-up. The venue’s Michael Mak Ting-cheung says the game can be played by teams of three or four.

“Compared with the usual football game with 11 people on a team, each player here gets a lot more chances to interact with the ball and enhance their dribbling and scoring. Apart from that he rules are basically the same as ordinary soccer,” Mak says.

Peak hours at night and on public holidays cost HK$700 per hour and HK$1,800 for three hours.

Room 2, 1/F Sun Fung Industrial Building, 8-12 Ma Kok Street, Tsuen Wan, tel: 6339 9266, facebook.com/Soccercages(https:// www.facebook.com/Soccercages?_rdr) Sand House Opened last July, Sand House is the first indoor beach in Hong Kong of this scale. Next to the 2,500-q ft sandy area is the children’s playground with several big bouncy beds. People can play bubble soccer and other ball games on the sand. Founder Peter Chong says he got the idea of opening an indoor beach after a trip to Taiwan.

“Taiwan, Japan, Britain and the US all have indoor beaches. We keep sprinkling water onto the sand to avoid it getting too dry.

The sand was imported from China, and people can use it to build castles like on a real beach. While we don’t get sunlight, we offer other things such as party rooms and all kinds of games.”

Renting the whole venue for four hours costs HK$9,888. Myriad other renting options are available.

6D, Phase 1, Yip Fat Factory Building, 77 Hoi Yuen Road, Kwun Tong, tel: 5593 9711, sandhousehk.com/ (http://www.sandhousehk.com/)

Archery at the Sand House.