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A Letter from the Editors Business is hardly a universally studied field. While some know how the corporate world works or have insight on the bustling world of small business, many people find themselves with a more narrow understanding of the topic. This magazine was made to give a deeper dive into the business world and shed some light on businesses and the people who run them, hopefully educating the masses on the intriguing inner workings of the corporate economy. We will dive into the exciting world of nonprofit organizations, small businesses and multinational corporations and their inner workings. This magazine will show you the gears ticking away inside our economy and explain just what it is that makes a business such a special thing. Our team decided to make something special and new. This is no run-of-the-mill publication, but rather a fresh take on business like never seen before, meant for anyone who cares about money whether young or old. This magazine, dear reader, will give a glimpse into the lifestyle, language and livelihoods of those in a business-oriented economy. The diverse selection of outlooks will enhance your knowledge on the business world, from the bottom to the top, and will ensure you know more about the inner workings of our economy once you have read what we have to say.
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The pursuit of knowledge leads us to learn more about our world, but many people still find themselves with too little information on the very businesses that drive the flow of money around the globe. Whether you learn about a small business focused on a somewhat niche market or a massive corporation that serves an entire country’s needs for a good or service, countering that lack of knowledge and learning about what goes on in the ever-important world of business is always a good use of time for the dedicated learner. We hope that our humble publication may provide some of the essential information that we so often lack when concerned with business matters and economics. Within these pages you will read stories coming from each writer’s heart, written with the utmost of dedication with the intent to inform you, dear reader, of the often mysterious goings-on inside the structure of businesses big and small that constitute our economy. It is our deepest hope you find pleasure in reading our magazine and find some new knowledge you come to relish. Without any further ado, we welcome you to read our publication, Capital Review. Sincerely,
The Capital Review team
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MAKING SOMETHING OUT OF NOTHING
Pages 8-11 THE PICTURE PERFECT PITCH
Pages 12-13 IN THE BRAIN OF A NONPROFIT
Pages 14-15 NONPROFITS IN A NUTSHELL
Pages 18-19 BUSINESS ETHICS IN A COMPLEX WORLD
Pages 20-23 TIPS ON TAXES
Pages 24-25 MATH RUNS THE WORLD
Pages 26-29 AN INTRODUCTION TO PROBABILITY AND MAXIMIZATION
Pages 30-31 TECH MERGERS: QUALCOMM AND NXP
Pages 32-35 THE FIVE GREATEST BUSINESSES STILL STANDING
Pages 36-37
TABLE
OF CONTENTS Capital Capital Review Review - Spring - Spring Ezine Ezine 2019 2019 | 7 |7
Making
Something Out of Nothing
By Aidan Costell
The Subvrsive team poses for a photograph to test their augmented reality photo booth for South By Southwest Image courtesy of Subvrsive
Born from just an idea, hard work and the generosity of strangers, tech startups are revolutionizing the technology business sector with new products, methods and company structures never seen before. 8 | Capital Review - Spring Ezine 2019
T
he economy is a fickle thing which is not easily predicted by most people. When thinking of what the future of business holds, many may imagine bankers in sky-high office buildings or giant technology companies like Google or Facebook with millions of daily users. Others might imagine that service-oriented businesses are the thing that are going to affirm their place as the dominant form of business and stay on top. One of the most promising fields of business may prove to be a surprise, though.
focused on virtual and augmented reality services. “One of the benefits I’ve found running a startup over a normal business is as a young person, it’s really hard
“
There’s lots of drawbacks to running startup over a regular business. And it’s definitely not for everyone. And that’s okay People can be entrepreneurial in other parts of their life .
Austin Mace, founder of Subvrsive, said. “Whereas, running a startup you’re kind of your own boss, and you’re able to do things and try things that you wouldn’t really be able to do in corporate structure.” Mace explained the draw of a startup company and how it offers a greater degree of freedom and more opening for creativity than a typical corporate job may provide an ordinary worker. Mace said that for a typical worker, especially a young person entering the job market for the first time, it can be difficult to rise the ranks of an established company and gain status in the corporate ladder. Becoming part of a startup company or starting one of your own circumvents this barrier and allows for a newer worker to make a place for themselves within the space of a company.
A startup is a business made by crowdfunding, a term which means that the business is funded in its infancy by donators on online platforms such as KickStarter or Indiegogo. When a startup company is focused on hardware or to get your leg up in a big software you get the famed corporate company,” “tech startup” that has been the subject of so much buzz as of late. The technology startup scene has proven to be a fast-growing community. With the rise of websites focused on funding startup companies and products like the ones mentioned before, it’s no wonder that the number Austin, Texas, is the city where of tech startups have Subvrsive was founded, and been able to grow so continues to be a hotbed for startups much. Austin Mace is the and crowdfunded businesses. founder of Subvrsive, an Image courtesy of the City of Austin Austin, Texas tech startup Capital Review - Spring Ezine 2019 |9
”
Subvrsive’s newest logo, replacing their original version. Courtesy of Subvrsive
“What drew me to [running a tech startup] is that there are no experts, or there were no experts [in virtual reality] when
“
The whole thing is an ecosystem. you have big companies, small companies, medium companies, and while there [are] competitive forces at play... more times than not there’s collaboration between them
”
Subvrsive was founded, and because of that we’re able to compete against people who may have years of industry experience in film or television or the advertising world,” Mace said. “But at the end of the day, we’re all starting at a level playing field in virtual reality. So I found that really exciting to be able to
compete with people that have had careers longer than I’ve been alive.” Mace’s story is one of innovation. With companies starting up and providing new products and services every year, the tech startup industry constantly expands to fill in the expanding number of niches and capture a greater opportunity to compete with more established companies in all corners of the industry. This chance to share a market with larger competitors manifests itself positively and negatively for the smaller startups hoping to gain a larger consumer base. “There’s lots of drawbacks to running startup over a regular business. And it’s definitely not for everyone. And that’s okay,” Mace said when asked about the downside of having a startup company rather than a normal business. “People can be entrepreneurial in other parts of their life. And one of the biggest drawbacks is definitely in the early days stability. So, one of the reasons I started the company I is that I
don’t have a wife or kids or anything like that. So, it’s... easier for someone like me to make this decision and roll with it at this point my life.” While the allure of independence may draw aspiring entrepreneurs to the startup scene, the risk of failure in a company’s beginning stage provides a significant barrier to running a successful tech startup. The fragility of a smaller and less established business can lead to a company being swept away by any number of issues that can leave it effectively dead in the water. In addition, the financial risk associated with running a small business can drive away potential entrepreneurs with family or other dependents who may be affected negatively with the financially fickle situation of operating a startup. As risky as it can be to own a tech startup, the employees who make a decision can also take a chance in working for a smaller company with less reliability and available
funds. “As a start up, it’s always hard to compete for talent. So you’re going up against the old guard with a massive war chest [who] throw out all these different perks and ways to incentivize people to come work for them that you don’t have as a startup, but that’s where the duty comes down to the founder and the executive leadership team to really get people excited about the company vision and mission and get people that buy into that truly believe it to come work for you,” Mace said. “There are people that work for me, that definitely took a pay cut to be here. That’s because they believe in our mission and vision, what we’re sending out here. So it’s definitely always a risk to work a for less established company there’s also the potential of an immense upside professionally, personally and financially.”As Mace said, the chance to work at a smaller and newer company can be something of a gamble.
volatile employer comes a higher risk of losing one’s employment in the event the company fails. With that in mind, however, being a member of a company in its early days and riding through to its
The logo of kickstarter, a crowdfunding website
reality, resulting in recognition as the image courtesy of established experts kickstarter in the United States when the virtual reality spectrum is involved. “The whole thing is an ecosystem,” Mace said, “You have big companies, small companies, medium sized companies, and while there [are] competitive forces at play amongst all of them, more times than not, there’s collaboration between them. So a Google Indiegogo is a competitor to Kickstarter might find a better way in crowdfunding services of doing things than a Image courtesy of Indiegogo subvrsive will and vice versa. So, while there’s success will likely result risks, being so open [and] in positive consequences collaborative, the upside down the road. The almost always outweighs question arises, however, that risk.” if the company will be able to find success on its own. Mace explained Subvrsive has the benefit that though his company of working with larger and other companies may companies with disposable income who may otherwise share their place in the technology sector, the be its competitors. This is interplay between them is the result of their status as not exclusively competitive. one of the few companies And while the major to be in the field of virtual companies may retain the With a less most significant place in established and more the corporate technological world, there is still potential for cooperation and mutual benefit through the variety of services and products offered by Gofundme is yet another company focused on enabling users to crowdfund their the diverse world of tech projects. startups. Image courtesy of Gofundme
The
Picture Perfect Pitch By Aidan Costell
Whether you’re selling a car or an idea for a bestselling book, it’s rare to have a product that can speak for itself. With these five handy tips, you can get one step closer to being able to sell anything to anyone with ease.
1 Eye Contact
Eye contact often proves to be one of the most crucial elements in any pitch. The difference between a timid glance and a confident gaze can make or break a sale. Don’t glare and intimidate but don’t take a submissive role in the sale. Make your eyes scream confidence. (Information provided by American Express corporation)
tation image courtesy of presen
load.com
2 Hand use Your hands are one of your most important tools when selling to a client. Using gestures the right way is an imperative. While having arms crossed in front of you can convey disinterest and discomfort, an open stance with arms to the side or used for gesturing can greatly increase the engagement of the potential customer. Wide sweeps with open hands or other use can help the client better understand what you say, so use them well.
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3 Voice volume How loud you present can speak volumes about the quality of your pitch. Too loud and you’ll be too aggressive or too soft and you’ll be uncertain and timid. Ideally you should find a perfect middle where the customer is engaged and excited but not too intimidated by you. If you’ve had acting lessons, remember your lectures on projecting. A good salesman is a good actor, after all. (Information provided by Hermes Costell)
4 Know your product It’s hard to convince a client that your product is the best option when you can’t answer their questions about it. Always make sure to know the advantages and drawbacks of your product when compared to competitors. Knowing more about what you’re selling gives you more confidence as well. Fewer pauses, “ums” and “ahs” are a pleasant side effect of having the details of your product down by heart.
5 Love your product Your opinion matters when you’re selling something. You may not realize it at the time, but your genuine enthusiasm shines through when you sell a product you love, and your lack of enthusiasm shows when talking positively about it is like pulling teeth. Try becoming acquainted with what you’re selling and eventually your opinion might change. (Information provided by Maureen Delaney)
In the Brain of a Nonprofit What it feels like to be a part of a nonprofit. By Nayan Kondapalli Billions of men, perspective and see women and how it differs from children suffer that of a corporal everyday, constantly business. wondering about where their next Non-profits are meal comes from, very different if there will be organizations school today, if compared to profit they have enough based businesses. money to pay rent. Being a nonetc. Even the richer profit organization countries have means that the internal struggles. organization Someone is always receives no direct, unemployed, and constant flow financially struggle of money from to stay in a home, selling products to or even tend for accomplish one’s their child’s well goals. This makes being. Luckily, non-profits go organizations called through extra work non-profits exist, to find this money. companies that work hard everyday The best to ensure that no nonprofits survive human being has to by proving their suffer what they do, efficiency of money and this time, we’ll used to accomplish 14 Capital Review - Spring Ezine 2019goal. Three be| taking on their their
non-profits will be used as an example. Action against hunger, an international nonprofit has a 93% efficiency. I Live Here I Give Here has a 88% efficiency, and lastly, Tab For A Cause, has a 30% efficiency. The larger the nonprofit, the more likely their efficiency will be higher. This can be attributed to the fact that
Courtesy of I Live Here I Give Here
larger organizations have more money, making costs such as salaries, marketing and etc, very minimal to their annual budget. While Tab For A Cause has a very low efficiency, 30%, the amount of money raised in its lifetime is only 700 thousand dollars, compared to the jaw dropping amount Action Against Hunger may have raised: more than a billion dollars in its lifetime. On the basis of making money, one organization has hit gold for supporting themselves. A nonprofit called I Live Here I Give Here started organizing a major event called the Amplify Austin Day, in which they raise money to help them accomplish their yearly goals by supplying them with millions of dollars every year. Being a non-profit that focuses their money
on helping other local Austin nonprofits, this income is crucial. “We hit our forecasting goal every year, ten million dollars and we raised ten point three million [in 2018]...and it keeps on exponentially increasing” Morris said. Our mission is to
important, as it fuels the rest of the projects of the year. I Live Here I Give Here has well planned marketing strategies. “We’ve never had an altogether canceled program.” Morris said. “We are usually on the other end of ‘oh we performed better this year than we expected.’”
But this efficiency has had a huge impact on Austin non-profits and comes with some sacrifices. To run these organizations, costs have to be cut in some places, and do affect the generally harder working Courtesy of Action Against Hunger employees. Keenan make Austin the most McDonald, works generous community for another local in the nation. We Austin non-profit have member called Explore Austin. organizations “Explore Austin we have over 700 works to ensure that nonprofits in Austin everybody has a that participate.” Amy chance to experience Morris, the Director the outdoors” of Finance at I Live McDonald Here I Give Here; said explains.Their Capital - Spring Ezine 2019 |15 Amplify Austin Day is Review nonprofit
focus on helping them with social and may seem like that financially knowledgeable skills. these employees are disadvantaged forced into this, this children in Austin They also collaborate is a very agreed upon by organizing with the Travis method. “[Explore events that allow County to improve Austin] doesn’t get the children enjoy the conditions, or too much money, so outdoor activities even set up new we all agree to take that really help Austin parks. These cuts on our salaries” them with social and constant programs McDonald said. “We knowledgeable skills. also involve Mr. still take this happily, some places, affecting McDonald training because we know our the generally harder others to host these work helps others, working employees. programs. All of this and that is enough Keenan motivation.” McDonald, “ works for Due to this We still take this another local though, the happily, because we Austin nonemployees do profit called know our work helps have to work a Explore Austin. little bit harder others, and that is “Explore to make sure enough motivation. Austin works they can make to ensure that a living. ” everybody has a chance to experience requires extensive “I do have a second the outdoors” amounts of money, job” McDonald said. McDonald explains. and unfortunately, “I don’t make enough Their nonprofit focus Explore Austin money to sustain on helping financially doesn’t receive too myself, so I also work disadvantaged much of this. As a as a teacher to make children in Austin conserving method up for the missing by organizing to save thousands, salary.” Non-profits events that allow the small staff of this have taken tolls on the children enjoy organization doesn’t others, but everyone outdoor activities get paid very well. works knowing that that really help Though at first it they are working for a 16 | Capital Review - Spring Ezine 2019
higher cause.
supporters behind them. They have Yet, not all local money coming in nonprofits have from large companies struggled so much. with plenty of deep “Never in the history pockets, and have of our organization, put their CEO’s on have we struggled to the organization’s get money” Sticker board of members. said. “In fact, we The largest always have a surplus supporter, Cayetano for anything we have Construction, to do.” Scott Sticker is millions of dollars the Communications in profits every year, Manager at the and has no problem Colorado River sharing it. “We Alliance, and involves feel very lucky that with marketing. such a company has decided to help us to “We work towards do the right thing” keeping our great Sticker explains. river clean, so that “If it weren’t for its ecosystem can them, and other survive, and so we can companies like them, live in peace” Sticker this organization said. “These project definitely would require much more have had problems money compared to sustaining itself.” other nonprofits, and a surplus of money Not only does the is exactly what we organization itself need.” benefit from this, but so do the employees. The Colorado River “I have worked in Alliance has been other nonprofits in fortunate enough the past, but none to have enormous have paid me as
well as a corporate business, and I think it’s due to the fact that we have amazing supporters” Sticker explained. “But I, and also my colleagues, definitely have to work harder than usual to get that much money, but we all are okay with it.” Nonprofits are a lot harder to run than one may think. There’s more than just taking money from provided donations. Behind every non-profit are people, and those people take risks everyday, and sacrifice a better life, just so that they can help those who genuinely need it the most.
Non-Profits IN A NUTSHELL By: Nayan Kondapalli
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I Live Here I Give Here is a very efficient non-profit, with roughly 88% of the money going towards their goal; a whopping $17.6 million going towards helping local Austin non-profits almost every year. Though the salaries portion of the chart seems miniscule, due to the low number of staff, employees make almost the same amount of money if they were to sign up with a corporate business.
Courtesy of Amy Morris
10 Employees
$150 million Raised 18 | Capital Review - Spring Ezine 2019 All-Time
700 Charities Affected
Tab For A Cause is a non-profit organization that uses adds displayed on a downloadable home screen, in which opening a new tab gives you one heart, in which you can choose which charities get the money donated. Due to this system, this organization only raised roughly $700,000, making this charity have a lower efficiency rate for donations. Being an online only charity also makes this have other major costs, like for websites and servers.
Courtesy of Tab For A Cause
Action Against hunger is one of the most efficient non-profits to ever exist. With an efficiency of 93% going towards their goal of ennding world hunger, their impact is huge, especially when they raise more than 50 million dollars a year; thats at least 46 million dollars a year being used to end hunger. Their huge volunteer base and minimal salary employee bases lets them cut off salary costs, which total for less than 1 percent if their total costs. Management (including salaries) make 5% of total costs, while almost 2% is used Capital Review - Spring Ezine 2019 |19 for marketing. Courtesy of Action Against Hunger
WHICH
WAY IS HT THE RIG
WAY?
BUSINESS ETHICS IN A
COMPLEX WORLD BY MINE ULKER
THE KNOW-HOW OF ETHICS IN
BUSINESS AND THE WORKPLACE. PHOTOS BY MINE ULKER 20 | Capital Review - Spring Ezine 2019
T
he scenario begins in what many would call an average working situation, but as it unfolds, that seems to be slightly misleading. Many would imagine that, because they have not, or no one else has noticed it to be explicitly wrong, it must be ethical. Business ethics, a necessary component of every business, is not quite as black and white, but it can be structured into something concrete and knowable. The term ‘business ethics’ is a fairly modern invention, though the idea itself has been practiced since long before the 1970s. Ethics and law have dissociated over time to protect contemporary rights. Today’s movement, in which globalization has accelerated commerce,
oriented, without and businesses can ideal experience, to no longer assume accommodate social ethical employees, relationships within but must assume the company or at the responsibility for each expense of competition ethical transgression, surrounding the job; on has become a popular the other hand, someone topic. It was then— with vetted knowledge when competition and and skill, but immoral management became ideology could be too more abstract than in expensive to handle. simpler, older times— Nonetheless, business that ethics became ethics itself includes tangible. its own competitive “Business ethics advantage. This prompts is doing the right a question: How could thing,” University of a particular business Texas Professor Kristie maintain business Loescher said, speaking ethics when, for all one of different people’s knows, said employees capacity to become are diverse in nature? ethical within the work What of the ethically environment. ambiguous? It all boiled Many down to whether that organizations have person was smart supplemented enough to pick out the dependability gaps with right decision as well rules and expectations. as act on it; that was “The best the important part. In examples will have her ethics research, she already fostered a identified her subjects culture of what the right based on their SAT thing is,” Joel Coffman scores, measuring their said. ability to make ethical Coffman is decisions rather than executive director their aptitude to take of Recognize Good, action; many would be an Austin-based surprised, education organization working often had little to no to edify and illuminate impact on ability. the community “You can teach and workplace. a skill all day long,” Their program Loescher said. “You Ethics in Business can’t teach somebody recognizes examples to be a better person. of organizations and If they won’t follow people who practice best the rules, and they business ethics, and can’t be a better organize several annual person, then you’ve got events as well as ethics to let them go.” speakers. When errors The workplace would areReview made, organizations keep someone ethicallyCapital - Spring Ezine 2019 |21
often provide training opportunities, allowing employees to learn from their mistake. Companies that follow best practices nurture their “best ethics environment” by providing services such as hotlines and other reporting solutions, advocating, and leading the ethical movement in business. And what of the others, those organizations that decide to instill fear and construct an unforgiving environment? “Purpose and authenticity is a better motivator than fear and negativity for sure,” Coffman said “That’s scientifically proven.” Business ethics encompasses not just workers, but everyone involved in business, including those at the very top. Decisions made as a leader determine the business’ lenience.
Unethical behavior in the workplace is commonly influenced by authoritative leniency, environmental pressure and “bad apples”, other people, often other coworkers or employees, who indulge in dishonest activities. “The word ethics actually comes from an ancient Greek word that means habits, so it’s what you do all the time. Yes, you can make one ethical decision, but to me it’s about a kind of recursive culture of doing the right thing and not having to ask yourself each time a dilemma may present itself should I, or should I not do the right thing? It’s a habit,” Coffman said. Occasionally behaving ethically does not balance the scale. Ethical culture is all about taking action and building those decisions as a habit; it incorporates every aspect of business. “In unethical conditions, all other efforts to run the program efficiently are not likely to be fruitful,” Olga Ovcharenko, Quality Assurance Coordinator with the City of Austin said. Not only do best ethics provide benefits, they keep a business running 22 | Capital Review - Spring Ezinesmoothly 2019
and unhindered. The officeperforms audits to identify risks. There are several: operation effectiveness, safety risk, legal risk, financial loss, fraud and a few others with Austin programs. They, like company ethics teams,
Ethics ... it’s what you do all the time. investigate instances of bad ethics to correct and facilitate each program. One of the most common misconceptions of business ethics is that “there’s kind of a sense that all nonprofits are doing good, they’re not doing it for the money, they’re doing it for the mission ...‘This non-profit is helping veterans get care that they need, so they must be ethical’, that’s not really what we’re going for, it’s: how did they do it, is really the question,” Coffman said. Community service is not ethics. Nonprofits may cultivate community and environmental welfare in general, but their means of doing so
e businesses, mid-siz could be flawed. businesses, small e People often assum businesses, and that doing good individuals. for or supporting “So we’ll say, what’s ethical always ‘Here’s one way a constitutes as being company did it,’ ethical or somehow or, ‘Here’s counterbalances ct it mistakes, when in fa does not. Mistakes can blemish es; careers and compani a lesson: learn from der those mistakes in or fits ro np No to make less. ed as bi tend to culminate ethical standards as opposed to other organizations, one of cs the reasons the Ethi m ra og pr s in Busines recognizes five categories rather than one: nonprofits, large
at everybody’ is kind an even better way th of our approach.” a totally successful As business company did it in ethics continues a different way,’” so to become more Coffman said. “So al g rin ha prominent within what we do is ‘s d businesses, it will examples an s everyone ha be necessary to something recognize where it to learn begins and where from it ends. Companies are becoming more proactive, creating more accessible hotlines and services than ever. Take action!
A white charcoal drawing is concealed by a wooden hand and globe. Business ethics is a global concept actively debated and thought upon. Capital Review - Spring Ezine 2019 |23
By MINE ULKER
a folder ready to put receipts 1. Have in year round. When it’s time for
taxes, you’ll have physical evidence of your transactions.
Enjo
yac omp lete ters list to r for of ead tax y y s e o a u sure son rsel . Ma f to c k h e e grap ck o ut e hic and ach asso i d enti ciat fy it ed t ax. s poin
your taxes early. It’s 2. Start like a project, the longer you
leave it, the harder it becomes.
3.
Use your tax return filing to make sure you’re withholding enough taxes from your paycheck throughout the year. You can request for a certain amount of money to be withheld from your paycheck (it’s normally a percentage).
4.
Check to see if you would be better off itemizing rather than taking a standardized reducation.
5.
Make sure to set up your tax alotment properly, so you can pay enough around the year.
You can make an agreement 6.
with Internal Revenue Service to pay in installments, but it’s better to pay upfront. Otherwise, you’ll have to pay interest. Have a folder ready to put receipts in year round. When it’s time for taxes, you’ll have physical evidence of your transactions.
7.
Save enough money for a deficit on tax filing day.
9.
Use the IRS Withholding Calculator to make sure your tax is being properly withheld from your paycheck. The withholding calculator determines whether you need to turn in another Form W-4 to your employer.
Information courtesy of the Internal Revenue Service, Forbes magazine and The New York Times Co.
math Schulz (back right) and his team at startup Dacs Labs have fun at a meeting Courtesy of Frank Schulz 26 | Capital Review - Spring Ezine 2019
runs the world These quantitative businessprofessionals are using math and computer science to shape the corporate world By Saskia Solotko
Perhaps the greatest effect the digital age has had on the corporate world is found in the rise of big data. Where business decisions were once about instincts, now they are driven by data and it’s analysis. As everything we do and buy is recorded and utilized more efficiently than ever, quantitative business professionals are able to explore explore possibilities unimaginable a decade ago.
“ We’re using math and analytics to help run the bank in order to grow revenue, reduce costs, make better decisions, and then deliver better customer experiences digitally,” Data Analyst Andrew Curtis said, “With the rise of cheap storage, with Hadoop, which is sort of big data and cloud...along with increasing computing power we’re allowed to do a lot of really cool things with a lot of data
Curtis and other data analystsat at Northern Trust Financial Services work in their Chicago office.
in order to crunch a lot of numbers and make better decisions.” “It used to be that the data that you could run a company with really limited resources: It was sort of the bank, it was sort of what you transacted at the teller it was sort of what you got from an ATM machine,” Dacs Labs CEO and former CFO Frank Schulz said. “Well, with the rise of digital banking, the amount of data that you can click: Think of everything that a person looks at on their website, everything they click on, all of that data is being collected. And so we’re analyzing that data to better understand what customers want and what they’re doing.” Data analytics is the utilization of large amounts of stored data to find behavior patterns.
These patterns can be simple, like analyzing sales data to see that red apples sell better than red socks, or complicated, like pricing a product based on profit per item and expected demand. The process that leads to business decisions begins with data. And in an age where most transactions are either online or recorded electronically, the necessary data is readily available. One important tool used in data analytics is a Markov chain, or a probabilistic model in which the probability of some event in a sequence can depend on the outcome of previous events: A transition matrix, which describes the interconnected probabilities in a Markov chain, is a particularly useful tool. A transition matrix can be used for
modeling the behavior of one customer, as well as large subsets of a company’s customer base. “You can see how your customer base evolves over time by understanding the sort of the transition matrix i’ve used for companies from startups on the west coast to a large retailer here,” Kevin Brand, a data analyst at Northern Trust financial services, said.“If you can understand how a customer population gets from period one to period two then you can predict what it’s going to look like three to five years in the future.” Regression is another important part of data analytics. Once the data analyst has identified a trend, they can use a matrix to regress it into a mathematical function. Once they have these functions, they can
use algebra to find the input value, or X-value that outputs the desired Y-value. “A lot of what I do is regression. At a higher level, analysis is a lot of maximizing some likelihood (like they probability of a customer buying a product) and complicated optimization over data,” Kevin Brand said. Much of data analytics is modeling real life processes with mathematics, both big and small. “my first client was JC Penney and that’s back when they had the thousand page catalog and through it was about a billion dollars of revenue that I was helping drive, or select where the marketing went based on my statistical model,”recounts Dr. Curtis, “for Walt Disney...we pulled all the data from the stores, from the parks, from the
movies and pulled it into one place...they thought that the parks were driving the relationship and what we found was that the relationship started with the plush that parents were putting into the cribs. In the digital age, computer programs such as python and R are becoming increasingly important to higher level analysis, programs Andrew Curtis and Frank Schulz first saw in high school and college. Both remarked on how many of the business professionals working in data analytics found their passion for applied math in high school. “I went the University of Chicago and I tried theoretical math but it kicked my butt,” Frank Schwarz says, “It was no longer just trying to do a derivative or an integral it was trying to prove epsilondelta proofs... I got lost in the theory but I found that I could apply the math very well...I sort went from trying to prove math to using math and it’s been really cool,” A decade ago, the software
necessary to work with big data was only available if you were at specific universities or businesses. Now, it’s mostly available for free on the web. “Pick a language and start programming in it. Both [Python and R] are good,” recommends Curtis to students interested in data analytics, “I would also get on a public cloud, be it Google Cloud or Asher, and start playing with the tools... Just start programming and start creating projects.” Frank Schwarz, on the other hand, advises that is is important to always take in the whole picture, not just the data: “Know your goal, always know your goal know. It’s very important you don’t get distracted. Curtis poses with Ronny Woo Woo in Chicago. If you just understand the Courtesy of Andy Curtis data alone, you will not get anywhere. You need to understand the business model. You need to understand the market dynamics, the risks, and the whole environment.” Data analytics is a powerful and constantly evolving tool: But it does not replace
Schulz’s city of Cologne is a center of business innovation and startups in Germany. Courtesy of Frank Schulze
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Probability A Problem in
and Maximization
By Saskia Solotko Explore the math quantitative business proffesionals use to back up big decisioins.
Using big data, data analysts will regress data into functions using matrices, a useful mathematical tool which is used to turn data points into an equation. Once they have equations, they use algebra to find the information businesses need to make big decisions. Capital Review - Spring Ezine 2019 |31
Tech Mergers: Qualcomm and NXP The Merger that Changed the Whole Economy By: Chitraksh Pandey Many people go to their offices or workplaces, expecting nothing of it. Just another mundane work day. However, today there isn’t the usual quiet, there aren’t people silently sitting in their cubicles, trying to finish their tedious tasks. There isn’t the usual vibe of frustration and exasperation of fellow coworkers as they keep on running into one problem after the other, and their isn’t the usual annoyance of the cowerkers bosses as they try to figure out how to solve this problem. Courtsy of: Sarah Parker
Handshaking. An important symbol of the completion of a deal. Also used to symbolize two entities coming together to work as one.
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Today there is something special. There is an unusual buzz in the air and there is a vibe of excitement, as everybody realizes that something special is happening. The company that they work in is being bought by another company, a more bigger and prestigious company, bringing along with it hopes of new solutions and better work environments. Business deals may not strike anyone as interesting or eventful, but there is one that many people know of and is one that seriously impacted the world economy as a whole. Qualcomm and NXP are one of the biggest semiconductor companies standing, and the deal that struck between them is one of the most influential deals ever, and its outcome is even more surprising. Even though Qualcomm and NXP are both very well known companies, it is important to first start off by describing what both of these companies do. Qualcomm and NXP both work in the semiconductor industry, but there are plenty of differences between them, as they are both “pioneers in their own feet”, NXP employee Mr. Amar Areysh says.
Qualcomm Building in Austin, Texas. One of the Biggest Qualcomm buildings.
“Qualcomm is an American multinational semiconductor and telecommunications equipment company and is a known leader in wireless communication, and it has always worked in that area of the semiconducting business,” Mr. Areysh concludes. Qualcomm’s fame comes from inventing Code Division Multiple Access (CDMA) Technology. CDMA technology allows for wireless communication to flow through several devices using only one central server. Many of the United State’s most famous wireless communication companies--Sprint, Verizon Wireless, AT&T
etc.--use this technology. “It is inevitable not to see any of Qualcomm’s products in almost all the phones and tablets, and essentially anything which has to do with wireless communication. However, Qualcomm has lately been following into new markets, whether it has to do with servers or graphics processors” Mr. Aryesh says. As a matter of fact, right now they are the pioneers in 4G and 5G technologies, which is ultimately extremely fast data speeds flowing through a device, which allows for the user of the device to download and access multiple gigabytes of information just in
seconds, conclusively LTE. Data speeds are ten times as fast as they are in 3G, which is why 4G and 5G technologies are so important to the wireless communications sector of the semiconductor industry.
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Courtsy of: July Rhoades
NXP plays an important role in the semicounductor undustry. Their chips can be found anywhere from a small Nest Thermostat to a huge Tesla car.
NXP however, works in a completely distant part of the semiconducting sector, or at least, they are now. NXP Semiconductors is a Dutch global semiconductor manufacturer headquartered in Eindhoven, Netherlands. “NXP is a Dutch company has a rich legacy of Philips and Motorola. NXP started out as a telecommunications company as well, as they have a rich legacy of Philips and Motorola”, Mohit Arora says, a fellow NXP employee. As mentioned, NXP was into wireless communication once, but lately is a pioneer into the automotive world and is also into application processors and the Internet of Things devices. “Vehicles, and home appliances that contain electronics, software,
sensors, actuators, and others similar to these devices are all part of a whole network of connectivity known as the the Internet of Things, and that connectivity is what allows those ‘things’ to tether to each other in a very complicated manner, and this allows them to interact and exchange data amongst each other. Because of NXP’s deep understanding of the Internet of Things, NXP products would be found in things like a small food processor to a self driving car” Mr. Arora says. However, one question remains: why did NXP decide to leave the telecommunication sector of the semiconducting business and decide to start again in the automotive sector? Well, NXP saw that it was spending heavily on microchips. The company realized
that it would be more profitable for it to start making those microchips rather than purchase them. “A big market of automatic cars was rising just around the corner, and NXP saw that opportunity and took it. It was a big risk, but for NXP it looked that the risk was worth it. Of course, in order for NXP to transition into the automotive domain, it needed the experience of another company, as it had no previous experience with microchip processing. There was a big electronics market that existed in the automotive market called Freescale, which had acquired Motorola in its past. NXP knew that Freescale was its key to venture into the automotive segment and purchased Freescale and to enter into the automotive domain” Mr. Arora concludes.
Courtsy of: William Thompson
This image represents the hopes that Qualcomm and NXP might once work together as one.
Now, it comes down to the question: why did Qualcomm want to buy NXP? Qualcomm had always been interested in extending its own wings in the automotive sector, and by purchasing NXP it would be doing just that. It would be leading telecommunication services as well as the automotive sector, two of the most beneficial domains in the semiconducting business as if now. “Because of the introduction of the self-driving cars now, microprocessors that support this have become more popular than ever, and of course, Qualcomm wanted to be a part of this. Also, now looking at this deal economically, it would have made the Qualcomm market bigger, and their shares more expensive than ever, making it one of the most profitable businesses ever to be established. Of course, this would have meant less competition between other companies working in the same sectors as NXP and Qualcomm, as their merger would
have overpowered them all, and set some of Qualcomm’s shares, but them all in ruins” NXP employee it did not benefit as much as it Mr. Abhishek Kumar says. could have in the long run” Mr. It can be deduced by Qualcomm’s Abhishek Kumar says as he shares competitive nature that it may have his perspective of the deal. also been trying to eliminate more Of course it is important to note competition, though it certainly that the trade war between China did not state so as any of its reasons and the USA may have also had a to purchase NXP. huge role to play in this, and many Qualcomm had valid reasons for believe that this particular deal was purchasing NXP, but the deal was both, a victim of the trade war as not able to go through. The deal well as another spark that enraged had earned regulatory approval the already ongoing economic from every country except for war between China and the USA. China, who feared that the Because of this deals termination, two companies merger may be the United States decided to tax sufficient to take over the whole any electronic supplies from China semiconductor industry, decided an incredible amount, but it later that it was better for the two resolved to electronic supplies companies to stay individual. from the United States being taxed “Many Qualcomm and NXP fairly the same amount in China. employees had wanted for the However, the conclusion of the merger to take place, as it would story is that Qualcomm is still have meant an extreme rise in the recovering from its loss, and is stock market. However, because of not likely to “come back with the the deal’s termination, Qualcomm deal”, NXP employee Mr. Abhishek lost a lot of shares and money along Kumar says. with it. NXP may have benefited short term because of earning Capital Review - Spring Ezine 2019 |35
TOPIC BUSINESS Top 5 Buisnesses that Stand Today
1.
By: Chitrash Pandey Apple is the biggest business that still stands today. Founders Steve Jobs and Steve Wozniak created Apple Computers on April 1, 1976, and incorporated the company on January 3, 1977, in Cupertino, California. Apple has been profiting from multiple things, but its core production includes a brand of smartphones called iPhones. Courtesy of: Jacob Black
Courtesy of: Jacob Black
2.
Amazon is the world's biggest online retail store founded by Jeff Bezos. Amazon started off as an online bookstore selling books, primarily competing with Local booksellers and Barnes & Noble. By being an early player, it eventually dominates the cloud computing scene, allowing it to control much of the physical infrastructure of the Internet. As its business grew, Amazon started to also provide media and music for its "prime" members, and it became what it is today. Amazon also purchased a local food retail store known as Whole Foods on August 28, 2017. 36 | Capital Review - Spring Ezine 2019
Courtesy of: Micheal Mann
3. Courtesy of: Sarah White
Microsoft Corporation (MS) is an American multinational technology company with headquarters in Redmond, Washington and was founded by Bill Gates and Paul Allen. It develops, manufactures, licenses supports and sells computer software, consumer electronics, personal computers, and related services. Its best-known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers. Microsoft started on April 4, 1975, as a local electronics store in Albuquerque, NM. Courtesy of: Jeffery Wells
ExxonMobil were two companies--Exxon and Mobil--who merged on November 30, 1999, and was founded by John D. Rockefeller. The company is the biggest standard oil company today and makes millions of dollars in retail every day.
4.
5.
Samsung Electronics was founded as a grocery trading store on March 1, 1938, by Lee ByungChull. He started his business in Taegu, Korea, trading noodles and other goods produced in and around the city and exporting them to China and its provinces. After the Korean War, Lee started the largest woolen mill in Korea. He focused heavily on industrialization with the goal of helping his country redevelop itself after the war. During that period his business benefited from the new protectionist policies adopted by the Korean government. The company soon expanded its wings to modern electronics and became one of the biggest electronic companies that exist today. Capital Review - Spring Ezine 2019 |37 Courtesy of: Christopher Biggs
THE
MONEY
IS
EVERYTHING
SINCERELY, CAPITAL REVIEW.
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A RARE FLOWER AS SEEN BY OUR WILDLIFE PHOTOGRAPHER
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“My own business always bores me to death; I prefer other people’s.” - Oscar Wilde
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