Wharton Club of New York Magazine - Summer 2011 by Wharton Alumni Club Magazine of New York

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SUMMER 2011 MAGAZINE

CLUB ACTIVITIES Letter from the President ��2 Executive Committee ��2 Improving Customer Engagement ��18 Membership Benefits ��22

2011 Wharton Alumni

Take the Call ��23 Calendar ��24

Business Showcase 63 entrepreneurs 64 investors

ALUMNI SHOWCASE Alumni Business Showcase �� 3 The Adventures of Zylie the Bear ��16

INDUSTRY: PUBLISHING Being Passionate about Media �� 8 Empowering People of Talent ��10 Helping the Independent Publisher ��12 Informing a Media in Transition ��14 Wharton Digital Press ��15

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Executive COMMITTEE

LETTER FROM

•

THE PRESIDENT

HIS May graduates walked across the stage to receive their diploma and applause from their family and friends. When they descended from the stage they became alumni of the Wharton School of Business, and if they live in this area, members of the Wharton Club of New York. I hope that they and you take advantage of this significant asset that you have earned with your degree! Wharton alumni are everywhere. The WCNY enables you to connect with your fellow alumni in many walks of life. In this issue you can learn about those working in the publishing and media industries, or in entrepreneurial start-ups. You can also read about them at our website, www.whartonny. com. We delayed our publication of this issue to be able to report on the Wharton Club of New York’s Alumni Business Showcase, perhaps one of the best examples of alumni TAKING THE CALL. The program which started as a business plan competition three years ago has grown beyond our wildest dreams. In this year’s program 72 judges evaluated submissions made by 63 teams – all Wharton alumni. Moreover when the program fully rolls out we are confident that thousands of accredited investors will be exposed to these 63 new businesses. I am proud to say that the Alumni Business Showcase committee, over 85 volunteers including judges, is our club’s largest committee and I would like to thank each and every one of them. They have truly taken our vision and have turned it into a reality. This issue focuses on the publishing and media industry, which is facing tumultuous times. Multiple perspectives are provided to the reader. Ellen

Desmarais, WG’02, a rising executive at Dow Jones, brings us up to date on how a news operation turns challenges into opportunities. Alberto Vitale, WG’59, the former CEO of Random House, informs us about the essence of publishing, David Steinberger, WG’91, as CEO of Perseus Books, and shares his perspective as one serving a growing assemblage of independent publishers. Our own Peter Hildick-Smith, WG’81, and WCNY Vice President of Marketing and Communications, helps book publishers make sense of it all. It seems that more alumni are choosing the entrepreneurial lifestyle. Mary Beth Minton. WG’82 tells the story of her adventure with Zylie the Bear, and how the WCNY helped make it possible. That is actually a theme common to all of these interviews, that at Wharton they learned, became inspired, made friends, and set a course for their life. Facebook has been in the news as a new conduit for business. But how does it work? Read what alumni found out at this club event organized by Robin Colner, WG’83. As always, don’t forget to TAKE THE CALL. Go to this hyperlink, (www.whartonny.com/forum.html) to review the postings from your fellow alumni and please post your own! Remember Wharton Alumni should help, hire, invest in, and buy from Wharton Alumni; and if a fellow alumnus calls … you take the call! It is this enlightened self-interest that is the ultimate power of the Wharton community.

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kbeck@ceoconnection.com Executive Vice President George Bradt WG’85 PrimeGenesis Executive Onboarding

gbradt@primegenesis.com

Vice President, Finance Rosemarie Bonelli WG’99 Chartis International Surety and ecoPractice

Rabonelli@aol.com

Vice President, Marketing & Communications Peter Hildick-Smith WG’81 Codex-Group LLC

hildick-smith@codexgroup.net

Vice President, Career Development Charles S. Forgang, Esq. W’78 Law Offices of Charles S. Forgang

cforgang@forganglaw.com

Vice President, Business Development Regina Jaslow W’97 Penn Club of NY

rjaslow@pennclubny.org

Vice President, Volunteer Services Diana Davenport WG’87 The Commonwealth Fund

dd@cmwf.org

Vice President, Programming Jennifer Gregoriou W’78 Jennifer Gregoriou, Management Consulting

jennifergregoriou@gmail.com Magazine Editor Kent Trabing WG’01 USP Development LLC

editor@whartonny.com Wharton Club of New York 1560 Broadway, Suite #1011 New York, NY 10036 Phone: (212) 463-5559 Fax: (917) 464-5977 Web: www.WhartonNY.com

The Wharton Alumni Network continues to be your most powerful tool for business, social, career and intellectual growth. Use it! Take the Call! xxz

Kenneth Beck WG’87 Chief Executive Officer | CEO Connection President | Wharton Club of New York T 646.416.6991 | F 646.292.5129 kbeck@ceoconnection.com | www.ceoconnection.com

President Kenneth Beck WG’87 CEO Connection

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• Cover Photo (from left): David Salas, PHD ‘12, Steven Dong, W’12, Markus Beissinger, M&T ’13, of OSUS Zoom in

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What the World Needs Now...

TEVE Shindler, W’76, knows that what the world of entrepreneurs needs now is love. It must be true. That’s all he had to give the 22 volunteer Committee members who toiled with him for six months, the 63 startups that put themselves through the rigorous evaluation process, and the 72 volunteer judges who spent days perusing the entrepreneurs’ business plans. It all culminated on June 13, at the WCNY 2011 Wharton Alumni Business Showcase (WABS), where twelve finalists in five industries presented their start-up companies to an audience of 200. The world of entrepreneurs also needs a big vision. The kind that inspired Marc Porter, W’82, Christie’s Chairman and CEO, to donate the world class venue at 20 Rockefeller Plaza for the Showcase. (Security guards were kept busy reminding young aspirants to “not to sit on that French 18th-century divan.”) It also inspired Ralph Gardner, Jr., of The Wall Street Journal to attend and cover the event, Network University. (WSJ June 16, 2011).

VISION

Jeff Mulholland, WG’86, Co-Chair of the Wharton Investment Resource Exchange, and Steve as newly appointed Chair of the Wharton Angel Network, relentlessly batted

2011 Wharton Alumni Business Showcase

Steve Shindler, W’76 ideas back and forth around the vision that angel investing can be made a lot friendlier and a lot more efficient. They wanted to run the program the same way people start companies — “You need a big vision, and you need to pay excruciating attention to details.” They felt it was critical that the Wharton brand name be associated with entrepreneurship, and looked to redefine how significant early-stage companies are funded. This vision was to bring past years’ successful club business plan competitions to a new level. Steve continued this conversation in a detailed white paper to the WABS Committee on January 16, reflecting on the comments of the committee’s sage volunteers. “Some of you,” Steve wrote, “have questioned the logic associated with calling it a ‘business plan competition,’ feeling that it implied more of an intellectual exercise. Fundamentally, some of you even

Mark Abramovich ,WG’03, and Jeff Mulholland, WG’86

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questioned if an applicant’s idea of ‘winning’ was the same as ours — that is to say, is the winner the team that receives the judges’ highest score, or the team that achieves its funding objectives facilitated by the program?” Steve concluded, “Fundamentally, I think we all agree that the applicants are seeking investment capital — more often than not, a near impossible task — requiring a process that is anything but efficient. While the program cannot promise a funding result, its goal is to facilitate, simplify and potentially accelerate the funding process. By participating in the program, applicants make available their profiles and executive summaries to accredited investors worldwide, including members of the Wharton Angel Network. Moreover, those companies making it to the final round will be accorded an opportunity to present to not only a prestigious panel of Wharton alumni judges, but also to a room filled with angel investors.” Thus, a vision, a team and a plan came into focus to create this true showcase of Wharton entrepreneurialism. TEAM

Three of the key Committee volunteers commented on their roles in the Showcase. Joon Shin, WT’06, Investor Co-Chair (http:// joonique.com) “I was tremendously happy with the strong turnout — even angels who were not Wharton alums were in attendance. The best part of all this was my Joon Shin, WT’06 opportunity to contribute in building this platform where courageous entrepreneurs get to meet with adventurous early-stage investors, so the energy level for the event was pretty high.” “By creating a quality platform for the entrepreneurs to showcase the “stuff that they’re made of” to a roomful of investors means that investor pitches get delivered with more

passion, answers to questions carry greater stake, and stage fright takes a backseat for the survival of a dream, especially if you know the right sets of eyes and ears are in front of you to witness them. “The response was large. We accepted 63 startups, and they each had to go through a very extensive vetting process. Then they were evaluated by first-round judges to help us whittle it down to 12 finalists — this part was very time-consuming but worth it in the end. Without a shadow of a doubt, I send out a big thanks to all the esteemed alums serving as the first- and final-round judges, who hail from different companies, such as ABB Technology Ventures, Accretive Capital, DJF Gotham Ventures, Edison Venture Fund, Founders Capital Management, Golden Seeds, HopStop, Hudson Clean Energy Partners, IA Ventures, Intel Capital, Inter-Atlantic Group, Investcorp, McKinsey & Company, MentorTech Ventures, Northeast Securities and Silver Lake Partners, just to name a few.” Natasha Tancjura, WG’10, Judge Co-Chair “My role was to coordinate some 70 judges who were involved in judging both the first round and the final round of the Showcase. That involved communicating the extensive judging criteria to the judges and being a point person for any questions they had on the process. We started out with 10 judges who participated in the program last year, but following the decision to expand the program, Kenny Beck reached out to all club members, soliciting judges with expertise in the fields of our Showcase-participating companies. We had very specific judging criteria and selected judges who were also investors. I then screened new judge applicants who responded to our solicitation to determine if their experience was relevant to what we’re trying to do, educating them about the program, the time commitment and effort involved. Working with the judges was an amazing experience. These very in-demand people read anywhere between 10 and 20 business plan summaries, rated them, and wrote comments and suggestions so that we could pass them on to participating companies. I am a recent Wharton MBA graduate, and while I knew that there is this great Wharton network out there, this proved to me that Wharton’s alumni network wants to stay involved with the Wharton community.”

“Kenny Beck, President of the Wharton Club of New York, has created a culture at the Wharton Club that inspires events like the Alumni Business Showcase. More important than inspiring events, Kenny inspires alumni to help alumni. I’d like to thank Kenny and all of the officers, trustees and volunteers of the Wharton Club.” — Steve Shindler in his opening remarks

Kenneth Beck WG’87

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Eric Ewald, WG’03, Entrepreneur Co-Chair “My role was to invite start-up companies to apply. We focused on a few areas to attract applicants. First, we sent emails out to about 30,000 WCNY alumni. We promoted it through Wharton clubs around the world, and we advertised through LinkedIn and Facebook groups that Joon created. We went after personal networks. It took a lot more work and coordination than you might think. A lot of people put in a lot of effort into this. But these 63 companies that applied — it was interesting to see how passionate they are. You appreciate what it takes to be a successful entrepreneur, the perseverance and hard work.” THE STARTUPS

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Program) have pushed recently to link the Wharton Angel Network with entrepreneurs on the campus. Thanks to their help, the Wharton Angel Network invited us to apply.” Lozo is a boon for budget- and time-constrained Americans. Lozo’s proprietary aggregation and matching technology tracks all sources of digital grocery coupons and finds matches with your grocery list, making it easy to save on the groceries that you are already planning to buy. Lozo even sends out the relevant coupons by email or mobile. Benjamin Franklin (“a penny saved is a penny earned”) would have loved this. Jeff Kaplan, W’96, Lozo Founder and CEO, commented on the event: “This Showcase was a terrific

Steve Shindler expressed pride in all the applicants: “You’re not going to get great angels if you don’t have great companies. Even though this Showcase is being run by the Wharton Club of New York, it is truly a global program. We received applications from alumni as far away as Beijing, London, the Netherlands, Cupertino, San Francisco, Atlanta, Miami, Seattle and even Brooklyn, New York!” Below are a few of the Showcase finalists and winners who shared their thoughts after the Showcase: Osus was the youngest company in both the business cycle and the age of its team, composed of Steven Dong, W’12, and four Penn students. They invented a proprietary method to integrate metals into synthetic fibers to increase the weight of a fabric. Surprisingly, there are a lot of people who want to wear something heavier — athletes in training and scuba divers, to name a few. I asked Steven Dong to speak to his team’s preparation for the Showcase. “I think if we weren’t such good friends, we would probably have never gotten to the presentation stage of the event. So the thing is, we are a group of student engineers, and so, we never really wrote a business plan in the beginning. We just developed our technology. When this Showcase application came around, and we had to submit our one-pager to apply to the event, it was the first time we had to sit down and comprehensively think about our business. Jeff Kaplan, W’96 (LOZO) There were so many things we hadn’t thought about and that we didn’t agree on! The one-page summary of our business took about a week to write — I literally mean from 7 p.m. to 7 a.m. for a week. That was the only time when we didn’t have opportunity to tell our story and connect with potential investors class and we could all be together, in my small apartment, who can help us grow rapidly talking over the business and writing the summary. The best part? That was just the one-page summary of our business, and and bring our service to the millions of American households it was barely the first step of the preparation process.” who will most benefit from the Steve Shindler added, “By participating in the WABS, Osus savings we’ll find for them. was forced to define its core competency and business model, Helping early-stage companies two critical ingredients in starting a business.” Catapulter strives to be the Kayak.com of ground transpor- connect with funding partners is both noble and extremely useful tation. Its beta website (www.catapulter.com) is up, so you for businesses like ours. The can go and calculate the fastest and cheapest ground transporincredible amount of work and tation between major cities in the Northeast! I asked its CEO, energy from the team and all of Adam Waaramaa,WG’11, how he came to participate in the volunteers really underlined the Showcase? Adam explained, “Megan Mitchell and Emily Wharton’s commitment to supCieri from Wharton Entrepreneurial Programs (who sit down porting its alumni.” the hall from Catapulter’s HQ at Wharton’s Venture Initiation

CONGRATULATIONS to the following six winners of the 2011 Wharton Alumni Business Showcase: Web Nonconsumer Panel VitalTrax Life Science Panel Clinical Silica Technologies XiGo Nanotools Environmental Panel TerViva Consumer Products and Services Panel RelaxZen Web Consumer Panel Lozo

Judge Ray Sobieski, WG’02 and Natasha Tancjura, WG’10,

Sudhir Rani, WG’11 (Terviva) and

Michael Last, WG’05 (Intellitoys)

James Chin WG’83 and Emilio Echave (VitalTrax)

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ENTREPRENEUR Q&A

XiGo Nanotools is a post-revenue venture providing a patented device that enables scientists to measure the critical properties of nanoparticles. Measurements are 500 times faster than conventional methods; require no sample preparation; and are suitable for research, QC and production. Sean Race, WG’94, answered my questions. Why did you participate in the WAB Showcase? “I think you should take every opportunity to talk about your business. The feedback that you get from these events can be invaluable. It isn’t all that often that you get to pitch your company to a crowd of 200 Wharton alums, including 64 investors.”

Clinical Silica Technologies (CST) Surgeons need to visualize early cancer spread intraoperatively to remove all malignant tissue that could lead to a recurrence. The Company’s nanoparticle (C·Probes) is FDA IND approved for the first-in-human clinical trials at Memorial Sloan-Kettering Cancer Center, prior to equity Brent Sonnek-Schmeiz funding. WG’03, L’06 (Relaxzen) Kenneth Wang, WG’84, presented for CST and shared his thoughts. Why was CST

Can you say something about your preparation?

motivated to participate in

“Yes. You can never prepare enough. It takes some time to craft a nine-minute pitch about nanotechnology that a nontechnical audience can grasp: ‘Scientists are working hard to leverage the promise of nanotechnology in their respective industries. In order to do that, they need better tools to measure what they make, and we make a very important tool to do just that.’ It took a while to distill our pitch to that level.”

the

Showcase?

“The Showcase was one of the catalysts for our emergence from stealth mode; not long ago, we were focused on meeting internal milestones and What are your thoughts on the Showcase’s Michelle Bradbury, MD, PhD; Kenneth Wang, raising government methodology, communication, judging? WG’84 (CST) funds to continue ”I liked the fact that the entire investor audience our clinical work. had the opportunity to listen to all of the pitches. This Thanks to the Showcase, we adopted a broader perspective was a very friendly, supportive event. I think the message here and turned our attention to how third parties from the business was, “These are good business ideas; let’s help you get some community would view our approach.” investors.” That isn’t the same message as other angel venture meetings I have attended. I have been to events where the What are your thoughts on the Showcase itself and speaker’s mike was switched off midsentence at six seconds its methodology? over the time limit. That is a bit draconian. I would have liked “The week of the Showcase was a terrific one for CST. In more time to speak with some of the angels at the conclusion addition to being named a Showcase winner, we received a of the event. Word of mouth is important in finding money.” very high score on our joint five-year funding proposal, so we expect substantial non-dilutive funding.” “Each step leading to the final round helped us focus on pulling together our investor pitch. The timing and increasing levels of work required between each successive round were perfect. Of course, the Showcase was educational too — we learned from all of the investor comments and from the presentations of other participants, especially the recent Wharton grads. Wharton admissions is evidently doing a great job!” THE INVESTORS/JUDGES

Sean Rice, WG’94, Cara Meskill, and David Fairhurst (XIGO) “You can never prepare enough. It takes some time to craft a nine-minute pitch about nanotechnology that a nontechnical audience can grasp.” — Sean Race, XiGo Nanotools

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Steve Shindler in his opening remarks at the Showcase said, “Great angel investors are not only check writers, but also individuals who become immersed in the businesses that their capital has empowered. I can think of no better way to facilitate the success of a young significant company than to infuse it with Wharton alumni DNA. What stage a company is within its business cycle usually determines what type of investor will be interested. At the Wharton Angel Network,

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Judges, (L. to R.): David Straden, WG’90, Andrew S. Lerner, WG’91, Michael Kopelman, C97, WG’05, Greg Borchardt, WG’03, and Co-Founder of Catapulter Jen Chang, WG’11

we strive to bring deal flow to mostly angel investors and VCs with early-stage funds. We do some seed stuff, but most of the companies in WAN have already gone through a seed round. In fact, the companies you will see tonight average about a quarter million each in seed capital.” JUDGES’ OBSERVATIONS

Gregory Borchardt, WG’03, is a senior VC executive for early-stage, consumer technology ventures, with specific expertise launching new, consumer product lines at retail. “I was extremely impressed by the caliber of the companies in the Showcase, and I feel that it is our duty to support our Wharton classmates’ ventures in any way we can.” Thatcher Bell, WG’05, is a venture capitalist at DFJ Gotham Ventures in New York, and is Co-Chair of the New York chapter of Wharton Private Equity Partners. “I thought the event was well-organized and showcased some great new companies founded by Wharton alumni.” William Gordon III, WG’86, is a serial entrepreneur and angel investor currently invested in biotechnology and online travel. “This year, judges in the final round had much more advance knowledge about the companies we were going to judge — 25- to 40-page business plans! This year’s final group was made up of 12 really good companies from a broad array of industries. The presentations were all excellent and gave very compelling pitches. As an angel, there were a good number that I would consider investing in if I had sufficient cash on hand at the moment.” “I am convinced that Steve has created a vision for the WABS that will allow the event to continue to gain momentum and be a real source of pride for Wharton alumni around the world. To create a strong global network of Wharton alums interested in early-stage companies being formed by other Wharton alums is a really good thing that will feed on itself.” Sam Hamadeh, WG ‘97, L’97, is a media entrepreneur based in New York, with experience in Internet, publishing and film. Sam co-founded Vault.com and is founder and CEO of PrivCo.com. “This year’s lineup, and format, was the best so far. The final-round business teams were remarkably polished in their presentations and demonstrated confidence and poise, especially considering that they had been selected, based solely on written business plan submissions. We had a final-round

lineup Wharton could be proud of. Hats off as well to my fellow judges, especially fellow return judgers Thatcher Bell and William Gordon. Clearly, having done it before allowed them to ask the right, pointed questions and make rapid judging decisions in the very short time allotted for Q&A and scoring each team.” Gene Rothkopf, W’56, once owned the largest knitting factory in the world. Today, coming out of his third retirement, he is a licensing maven, as a Director of Jassin Consulting Group. “Some of the businesses I understand too much, which makes it tough on the entrepreneur. One of my favorite companies was Storied, which writes stories packed with SAT vocabulary for students, but it didn’t make it to the finalist stage. The fruit juice company (RelaxZen) could work, depending on how it markets it.” “Some of the companies I mentored. Who knows … some of them may succeed! Overall, the evening and venue were fantastic.” Carol Curley, CFA, WG’81, is a sophisticated angel investor and Managing Director of Golden Seeds. LLC “I was a first-round and a final-round judge. I was very impressed on several fronts. First, the Showcase was very wellorganized. Great communication from the staff. As a judge, I was provided with very specific guidelines on the process and had access to the entrepreneur information on a timely basis. In terms of the startups, I was impressed with the caliber of the presentations and the diversity of industries represented. It is very exciting to me that we had teams that included current students, as well as much more experienced entrepreneurs. Finally, the judges were a very diverse mix of the private equity industry, from angel investors to venture capitalists, as well as seasoned entrepreneurs. I would definitely attend and participate in future Wharton Showcase events.” HOW ABOUT YOU?

If you are considering bringing your brilliant idea to the market, it is empowering to know that there exists this team of volunteers, judges, and investors, this resource here for you, the Wharton Alumni Business Showcase! Remember — All you need is hard work, a good team and, as Steve Shindler reminds me, “of course, capital, which is why we are running the program!” xxz —KT

Two judges: Carol Curley, WG’81, and Michael Aronson, W’78

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Being Passionate About Media support of the Career Services Office. It sets up opportunities for MBA students to come to New York City and visit different companies, through alumni.) SO HOW DID YOU GET FROM WHARTON TO THE WALL STREET JOURNAL?

An Interview With Ellen Desmarais WG’02, Executive Director of Strategy at Dow Jones & Co.

HE Wall Street Journal is read by people who run the country, goes the adage, which may be true. What is certainly true is that the Journal is run by people who have figured out how to remain profitable in print, while earning new profits online. One of those people is Ellen Desmarais, WG’02, who personifies the paper’s can-do attitude and thrives on the neverending challenges presented to her. Ellen shares her perspective on advertising in newspaper publishing today, and the role Wharton has played in her career. ARE YOU SURPRISED AT HOW MANY ALUMNI WORK IN THE PUBLISHING/MEDIA SECTOR?

I think it’s timely that you’re focusing on this sector in your magazine. Even though we think of it as a nontraditional career for Wharton, there has been a significant increase, both in those coming out of Wharton to choose this field, and those entering Wharton who have worked in the field. We just had the Media Trek in here last November, and 75% of the students who came had prior media experience. That wasn’t the case at all in 2002! (Note: The Media Trek is organized by the Wharton School’s Media and Entertainment Club — with the 8

I sought out Wharton with an idea to make a career change from consumer finance to the publishing/media space. While at school, I had an intern experience at AOL, post-merger with Time Warner, which made it quite interesting. Graduating in 2002, well, we were the class that applied to Wharton during the dot-com boom and graduated after it had busted, so it was tough. Fortunately, I got my job through campus recruiting at McGraw-Hill, in its post-MBA rotation program, and then spent another 18 months at its school education group as Director of Strategy and Planning. As I discovered that selling school textbooks was a business-to-government model, I realized that I wanted to get involved in the business-to-consumer side of publishing. So, I have had a few lucky strikes in my career, and one of them was that, just as I began looking for a new opportunity, I was contacted by Dow Jones, through LinkedIn. I’m a good testimonial of why people should have profiles on LinkedIn. They were hiring for a Director of Strategy in the Consumer Media Group, and so they contacted me to see if I was interested. It wasn’t even the official recruiter; it was the hiring manager herself. They were having a hard time finding someone, so she decided to go and find someone herself. THAT’S A GREAT STORY. THEN, WHAT WAS YOUR FIRST JOB AT DOW JONES?

So I started with Dow Jones in January 2006, as Director of Strategy for

the consumer media division, which involved The Wall Street Journal as our flagship brand, but also MarketWatch. com, All Things Digital and Barron’s magazine. I was responsible for doing strategy projects across these brands — for example, analyzing free/paid content models. Then, in 2008, I became Director of Dow Jones Ventures where I helped to launch a new careers website, FINS.com. In June 2009, I took on a P&L role as General Manager of Vertical Markets for The Wall Street Journal. In February of this year, I became Executive Director of Strategy for Dow Jones at the corporate level. CAN YOU SHARE YOUR OBSERVATIONS ABOUT BEING OWNED BY NEWS CORP.?

I was at Dow Jones two years pre- and, now, three years post-News Corp., and being a stand-alone public company is different from being a division of a larger one. During this era of significant downsizing in the industry, we’ve been blessed to have an owner who still really believes in newspapers and news products. We’ve invested in our print products over the past two years in a way that nobody else has been able to, including the Greater New York section and WSJ Magazine, as well as aggressively moving forward with new digital products, such as our iPad applications.

THE WALL STREET JOURNAL HAS

AN EXTRAORDINARY BRAND FRANCHISE AT THIS POINT – WHAT OTHER CHANNELS DOES THE WALL STREET JOURNAL PUBLISH THROUGH?

We have placed our content on as many platforms as consumers want to access it by. A user can interact with our content through the newspaper, the monthly WSJ. and Smart Money magazines, WSJ.com, mobile, tablets, conferences, radio, podcasts, and out-of-

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home. Through all of that we estimate that over 40 million people globally interact with The Wall Street Journal on a monthly basis. Some will use only one platform – for example, we have some users who only read us on WSJ.com – and others are power users, reading the paper on their morning commute, using online and mobile throughout the day to keep on top of breaking news, and then reading the magazines on weekends.

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When I interview people, if they don’t have that prior work experience, then I look for them to be a passionate consumer of media. People who go into the media industry do so because they love it. We’re the graduates who opted not to go into finance. So even if you don’t have that professional experience, talk about it from a consumer aspect — understand what works and what doesn’t work, and what are the trends occurring in the industry.

WHY IS THE WALL STREET JOURNAL SUCCESSFUL BOTH IN PRINT AND ONLINE? IS CONTENT KING, OR IS IT YOUR STRONG FOCUS ON CATEGORIES LIKE REAL ESTATE, FASHION, EDITORIALS?

Like you say, content is king. As technology and publishing businesses integrate, the Journal has done extremely well, because we have a

When I interview people, if they don’t have that prior work experience, then I need them to be a passionate consumer of media. People who go into the media industry do so because they love it. We’re the graduates who opted not to go into finance. WHAT CAREER ADVICE CAN YOU GIVE TO STUDENTS OR ALUMNI INTERESTED IN PUBLISHING?

Look for internships or even unpaid consulting projects, particularly if you are a career switcher, because the media industry is more difficult to penetrate when you don’t have relevant experience.

Lastly, students tend to get fixated on the digital side, because that’s where the growth is happening; however, they should not lose sight of the core business. Our newspaper revenues still exceed the revenues on the digital side. So we look for people who not only understand where media is going, but also have a healthy appreciation for the core part of the business.

I felt that having an internship at AOL on my resume counted for a lot, when I was looking for my job coming out of Wharton.

reputation for very high-quality content that readers believe they can trust. We tell you not only what happened, but the impact of what’s happening as well. Not just the facts but also the analysis. That’s been the Journal’s stance for a very long time. As we bring our coverage into the lifestyle arenas, we don’t abandon that approach. Look, the Internet is only 15 years old; two years ago we were not talking about Twitter and iPads. Looking ahead, who knows what’s next? That’s what makes continued on page 20

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Empowering People of Talent An Interview with Alberto Vitale, WG’59, Former Chairman, President and CEO, Random House

HE much reported technological transformation of publishing, rapidly spreading new ideas and connecting people across the globe, occurred of course, in 1440, with the invention of the Gutenberg press. By the 1480s, hundreds of printers concentrated in the publishing capital of the world, that international city where trade and commerce flourished: Venice, Italy! One prolific publisher was Aldo Manuzio, who created italics and the paperback, and who had as one of his editors, Desiderius Erasmus.

Such is the cultural inheritance of Alberto Vitale, WG’59, who came to Wharton from Italy on a Fulbright Scholarship and eventually became the Chairman and CEO of Random House. A classic publisher, the good-humored Vitale witnessed and acted in many of the great publishing dramas during the past four decades in this country. In this interview, Vitale explains the pragmatic fundamentals of publishing that endure, as well as the positive effects of the eBook revolution. HOW ARE THE LARGE PUBLISHERS, LIKE RANDOM HOUSE, ABLE TO BRING TOGETHER AND SUCCESSFULLY OPERATE DOZENS OF MAJOR IMPRINTS? AS CEO, HOW COULD YOU MANAGE THEM ALL?

I was first at Bantam and then at Random House, and at both, we had a lot of imprints, which were organized under different publishing houses. The reason you have a lot of imprints is because publishing is only as good as the people you have to pick books. And you can’t go to college or graduate school to learn how to pick books. You either have it or you don’t have it. Most of the time, editors who have a career in publishing start by bringing coffee and filing papers for their bosses. Then, they start reading books, and then, they start working with the editor. After that, they start working with some authors, and they go to the editor and say, “Hey, Mr. Editor, I came across this thing, and it looks very favorable!” and the editor says, “You’re right — it does look favorable. Let’s buy 10

it!” Then, they buy another book and another book and another book, and maybe they become an associate editor and then an editor. That’s how you progress in publishing. Now, if you have a large publishing house like Bantam or Random House, it’s very difficult for one person to oversee 200 editors, because then it becomes a mediocre environment, and it’s hard to motivate people. On the other hand, if I say, “Kent, I think you have done well. I want you to have your own imprint, so we will give you an assistant and an editor, and you can publish up to 20 to 30 books per year. Go and try your luck!” Now you are empowered — you have a business within a business. You don’t have to worry about accounting, promotion, marketing and sales, because the larger organization provides these common services. And so, you develop your imprint, and if you are successful, you get another editor, and another editor and another assistant, and so your imprint grows. The whole idea with imprints is to empower people of talent to have their own business and be the master of their own destiny. Of course, in a publishing house, you have rules and a budget. Normally, the head of an imprint reports to someone who oversees three to ten imprints. That way, you don’t have an organization that stifles your imagination, but instead, one that puts you in front of your own responsibilities. The way you keep these things going is by picking the right people, never trying to second-guess them. If they perform well,

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you are 30 or 40. Having said that, I did it. I came into publishing on the business side of things, in my early 40s, but I was an exception to the rule. Speaking of your career, what was due to being at the right place at the right time, and what was the result of your conscious choices?

you have them expand, and if they don’t, I’m afraid you’re going to have to make a change. FOR ALUMNI CONSIDERING THEIR FUTURE, WHAT ARE THE CAREERS IN BOOK PUBLISHING?

For any career in publishing, you must have a love of books, and you must appreciate what authors do. As I explained, the most creative career is in editorial. Then, there is a career in marketing, which is very important, because a company like Random House publishes as many as 3,000 books per year, which is a lot of books. To get customers to know about these books, and to get booksellers to be anxious to sell your books, is not an easy task. If you are selling Kleenex, and you heavily advertise Kleenex, then, eventually, people are going to buy Kleenex. But a single book is a finite undertaking — it has its own life, and it is a business unto itself. There is no residual value to advertising from one book to another. Advertising is expensive, and books can’t support heavy advertising, because the economics of the book don’t allow it. Basically, marketing is a very sophisticated set of skills — that go from word of mouth, to how your books are sold and displayed in the marketplace, to, recently, the use of the Internet — but these don’t entail high out-of-pocket costs. This kind of marketing you don’t learn at school, but it is something you develop from the time you are a junior rep. For example, at Bantam, I had a young

fellow who started as a telephone sales rep at maybe 19 years old — can you imagine? He became the best telephone sales rep, then a great sales rep in the field, then a sales manager, and eventually, he became the head of sales at Random House, and now, he’s head of children’s publishing at Penguin. You start from the ground floor up. It’s almost like a trade. You cannot write down that you have to have these 12 skills of marketing.

Publishing is only as good as the people you have to pick books …. The whole idea with imprints is to empower people of talent to have their own business and be the master of their own destiny. Rather, you have to develop them as you go along. The skills that one person develops are different from the skills that another person develops, which is why in publishing, there has to be crossfertilization between various people and functions. Nobody has the right answer or the only answer for the success of the book. Another career is in management, where you must be able to relate with editors and the marketplace. But to get into publishing, you have to start early in the game — it is very difficult to start when

When I finished my Fulbright scholarship at Wharton, I returned to Olivetti in Italy. It was one of these enlightened companies that had fantastic products, as well as being a leader in design, human relations and community relations. Shortly thereafter, I was involved in the acquisition of the Underwood Corporation by Olivetti. After Olivetti, I went to work for the holding company of the Agnelli family (IFI), and in that environment, I was head of all its holdings except for Fiat itself. Among those holdings were some very important Italian publishers, who had a fantastic reputation, but making money was not their priority. So as I was working for IFI, word came that Bantam Books came on the market and was looking for a buyer. At that time, 1974 to 1975, Bantam was perhaps the most profitable book publishing company — it published paperbacks, making 22% profits on its sales — can you imagine? So I came to the States and bought Bantam for IFI. About three months later, the CEO of Bantam called me and said, “Our COO is retiring on his houseboat, at age 52. Would you come and take his job?” I said, “Fine,” and that’s how my career in publishing got started. So there is an element of chance. The only conscious choice I made from the time at Wharton until today was to stick with publishing. But the other choices, it is really life itself that takes you places. Can you share a memorable experience publishing a particular book?

Yes, 90 Minutes at Entebbe. On July 4, 1976, in response to a hijacked airline, continued on page 19

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Helping the Independent Publisher An Interview with David Steinberger, WG’91, CEO of the Perseus Books Group

MAGINE that you’re doing well in your career. You enjoy your work. What you do matters. You’re the Deputy Commissioner of Bridges for New York City, overseeing the engineering, safety, and efficacy of over 1,000 of its bridges and tunnels. Wow! Yet, you’re eager for a new challenge. A smart place to turn would be the Wharton Executive MBA program. David Steinberger, WG’91, did exactly that, and today serves as a protagonist in the ever developing world of book publishing. As CEO of Perseus Books Group, David leads over 300 independent book publishers to discover, package and deliver words to us, in an increasing array of channels. The disruptive effect of the digital revolution on book publishing has been widely reported. How do you see it?

The publisher’s job is to bring the book to wherever you find readers. Our role is to market the book, choose its title and book jacket, publicize it, and sell and distribute it. One effect of the digital revolution is to create new opportunities, by lowering the barriers to sales, marketing and distribution. We can connect to consumers in ways that were not possible in the past. Take a book that is not a blockbuster bestseller. In the past, it was hard to get that book distributed to everywhere its more targeted audience is, because the super blockbuster occupies the shelf 12

space in every supermarket, newsstand and airport. Now, with the advent of online selling of both printed books and eBooks, the more targeted books can be available to people, even if it is not in stock at their store. As with any disruptive change, there will be winners and losers. Change is hard. But if you embrace it, there is a lot of potential for growth, because you can reach consumers in a new way. If you step back, you will see ways to succeed. How did Perseus Books’ strategy develop to meet the digital revolution?

You could see this transformation coming for about 10 years. With online bookselling, the sales profile was skewed heavily to books that sold more modestly, meaning that a bestseller makes up a smaller percentage of online sales than it does of brick-and-mortar sales. This makes sense, because an online retailer can carry every book, and the consumer has the ability to search for every book. That combination makes the digital channel a “long-tail” channel (selling less quantity per title of a larger volume of titles), and we shaped our strategy because of what we saw coming. When I arrived at Perseus, we already had acquired independent publishers that were operating creatively, independently in different cities, such as Basic Books in New York, Running Press in Philadelphia and Da Capo Press of Cambridge, Massachusetts. We realized that we had developed a core capability

David Steinberger, WG’91 in providing services to enable our publishers to be successful, and we began to extend those services to other independent publishers that we didn’t own. Where does Perseus Books fit in the book publishing industry?

The industry of getting books to consumers in the United States is $10 billion to $15 billion. Roughly one-half of the books are sold by six conglomerate-owned players. The other

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half is everybody else, and we are the largest service provider to everybody else. The leading book retailers tell us that we are the seventh largest in sales volume, and first in the number of titles that we make available. Within the Perseus Books Group are 300 independent publishers, which include those we directly own, as well as clients and joint venture partners. Our clients include publishers that have been around a long time, with a rich tradition, such as Grove/Atlantic — a literary publisher, Harvard Business Review Press, Gallup and Zagat — the restaurant guide. But some of our clients are small young publishers, such as Bellevue Literary Press, which recently published “Tinkers,” a Pulitzer Prize-winning novel by Paul Harding that sold 400,000 copies, physically and digitally. We were able to get it in every bookstore in the country and on every eBooks platform. That’s an example of a publisher that has not been around for long and yet has had a huge impact. Our joint venture partners include Weinstein Books, which has the bestseller, Veganist, by Kathy Freston. Why do independent publishers want to work with Perseus Books?

Our core services are the scale-sensitive parts of the business — pick and pack, warehousing, billing, collections, sales, back office, and distribution. The independent publisher can then handle the part of the business that is not scale-sensitive and that it does best — acquiring the books, selecting the books to publish, editing the book, marketing and generating demand for the book. During the past few years, we evolved our offerings so that we are the leading digital service provider in the industry. We can take an author’s book content and make it available on all the digital platforms, and make the content

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searchable. When the economics don’t support offset printing, we can keep long-tail books in stock through digital printing, using our branded industryleading service, Constellation. An independent publisher’s book may be as good as or better than any book published by the “big six,” but does it have the marketing muscle, the digital

…an online retailer can carry every book, and the consumer has the ability to search for every book. That combination makes the digital channel a longtail channel (selling less quantity per title of a larger volume of titles), and we shaped our strategy because of what we saw coming sophistication and sales strength to take advantage of the opportunities to commercialize that book, to reach as many readers as it likes? Our core competency is to enable independent publishers to meet their potential by leveling the playing field with the big six houses. Do you provide market insights to your independent publisher clients?

We do provide information, again, a scalable service, to our independent publishers. Because we distribute to thousands of different types of booksellers — Urban Outfitters, Pottery Barn, Costco, Target and so on — we can provide intelligence as to what is going on in the bookselling environment, as well as how to succeed in the digital world.

Is it an American trait that we want to read the “new Lincoln biography,” instead of the 20 old ones in the library?

Fortunately, they want to read both. A publisher’s “backlist” — books that have been published previously — is extremely important, because a publisher has the right to the book for the life of the author, plus 75 years. A huge portion of our revenue is from books published in back years, such as Roots — which won the National Book Award, and Gödel, Escher, Bach: An Eternal Golden Braid, which won the Pulitzer Prize. What kind of people does your industry attract today?

It has always attracted those who love reading. But for those interested in interactive media, it is a great time to enter the industry — because you can create products that have never been created before. From a strategic standpoint, new alliances are taking place. In fact, this past Christmas, we created a bestseller “book app” called JFK 50 Days for the Apple iPad, based on a print book that we did. We collaborated with NBC News for archival footage and with Vook to create an interactive product. How did Wharton figure into your getting where you are today?

My Wharton education has been a key factor in my career. Before Wharton, I worked for New York City in a crisis management role, which eventually led to my becoming the Deputy Commissioner for Bridges. I realized that I was very interested in management and in turning around organizations, which pointed me toward Wharton. I went for the Executive MBA program, traveling to Philadelphia on the weekends, while I continued to work in the city, and was tremendously interested in what Wharton taught. Some of the key things I learned have continued on page 20

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Informing a Media in Transition this very fast changing market. In 2004, when I founded Codex, book publishing was the only major media industry with no audience information. The TV industry has a ton of tracking data on what programs people are watching, which celebrities they like, you name it. The movie industry looks at celebrity preference, ad testing, theater testing and demand forecasting. The Internet generates a tremendous amount of audience data every time a consumer visits a site, from user experience to purchase conversion rates. Codex was founded to fill that gap in the book market. We’ve now worked with every major U.S. publishing house and many of the leading book retailers. An Interview with Peter Hildick-Smith, WG’81, Founder of CODEX-GROUP

N addition to co-chairing the Wharton Club of NY’s Media and Entertainment Network, Peter Hildick-Smith, WG’81, and his firm, Codex-Group, have been providing the market insight needed to guide publishers through publishing’s digital transformation. Peter shares his insights into publishing, and what he gained from Wharton.

What are some of the book industry’s key challenges?

Since 2009 book publishers have made digital distribution of books a priority. This has put the consumer book industry in direct competition with all other entertainment media for consumer attention. Once a consumer is on an iPad, they’re just one click away from updating their Facebook page, enjoying a film, reading breaking news or a book.

With books no longer sheltered by their unique format and store distribution channel, both book publishers and booksellers have to be far better informed to win customers and survive in an industry that’s now changing virtually on a monthly basis. New technology always appears to hold great promise for any industry that adopts it. But a digital transition has to be managed carefully to minimize the phenomenon of “analog dollars to digital pennies”. Simply put, digital distribution not only reduces cost to deliver it also opens up consumer access to a tremendous amount of very low price or free content. Books are the last media industry to digitize. Newly released bestsellers listing for $25 in hardcover are also available for $9.99 or less in eBook format, with millions of additional book titles also available for free digital download. The resulting loss of bookstores like Borders makes it far more challenging for publishers to launch, and for consumers to discover new books or new authors that don’t already have established brand names. continued on page 21

What service does the Codex Group provide?

Book publishing is a consumer medium — just like movies, the Internet or music. When the consumer is your end customer, you best meet his or her expectations and needs if you take the time to understand their behavior, and how they respond to what you’re offering. Codex-Group is a consumer strategy firm that provides book publishers, tech companies and retailers with the audience research and digital insight needed to make the right business decisions in 14

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NY Alumni Help launch Wharton Digital Press

OT off the press! The Wharton School just launched an innovative all-digital publishing venture, Wharton Digital Press (WDP) which aspires to become the world’s leading all-digital business publishing imprint. WDP will publish eBooks, enhanced eBooks, and print books available through print-on-demand technology. In partnership with Knowledge@Wharton, the School’s online journal of research and business analysis, WDP will take advantage of the Wharton School’s global reach to communicate relevant business knowledge from experts throughout the world to readers wherever, whenever and however they need it. Stephen J. Kobrin, WG’62, is Publisher and Executive Director of the new press and Wharton’s William H. Wurster Professor of Multinational Management. Stephen described WDP’s innovative partnership with its authors as offering “an innovative risk-sharing arrangement. Instead of a traditional advance,

the author and the Press will share the revenue from sales of the books. With shared risk and shared reward, both parties are fully committed to making the book a success. Together with our readers we will establish a community to share bold and insightful thinking and help managers meet the challenges of today and tomorrow.” Stephen Kobrin notes that “Wharton Digital Press is an essential part of a large community of readers, authors and thought leaders that includes 1.7 million subscribers of Knowledge@ Wharton; 90,000 alumni, 4,800 active undergraduate, MBA, executive MBA, and doctoral students, and more than 9,000 annual participants in executive education programs. WDP’s areas of interest include management and strategy, innovation and entrepreneurship, finance and investment, leadership, marketing, operations, human resources, social responsibility, business-government relations, and more.” Each book is reviewed by an Editorial Board composed of Wharton senior faculty, many who are published authors. Many alumni are familiar with Professor Mike Useem, Director of the Center for Leadership and Change Management at The Wharton School. Some of you may have participated in one of his leadership expeditions, ascending Mount Everest. Mike has authored the first book for the WDP, The Leader’s Checklist, which is available wherever eBooks are sold for only $6.99. Now there’s a good present for yourself. In its initial promotion as a free book, it reached #1 on the Amazon Kindle Free Book’s List. Two local alumni featured in this issue, actually helped to plan and give rise to the WDP. Peter Hildick-Smith, who sits on WDP’s advisory board,

provided valuable advice and data to the Press from its inception. David Steinberger, the CEO of Perseus Books, also on WDP’s advisory board, was instrumental in the launch of WDP. Perseus Books Group’s Constellation subsidiary provides distribution and sales of WDP’s digital books (eBooks and print on demand) to leading retail outlets, from Apple to Amazon to Barnes & Noble and beyond. Through Constellation’s extensive global partnerships, Wharton Digital Press aims for a global reach to tap the extensive market for business books internationally. Hear Stephen speak further on the origins and vision of WDP at http:// wdp.wharton.upenn.edu/ xxz —KT

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The Adventures of Zylie the Bear

FTER a twenty year hiatus to raise children and run nonprofits, Mary Beth Minton, WG’82, began looking around in 2007 to do something different, such as starting a small company. This epiphany happened to coincide with her 25th Wharton reunion, during which she had lunch with a Wharton Entrepreneurial Program staff member. As they talked, Mary Beth realized that she had access to enormous resources. Enthused, she returned home, joined the WCNY and began to make plans. Those plans have borne fruit, including becoming a finalist in the Wharton Alumni Business Showcase! Mary Beth’s idea was that young girls fell into two separate categories: those who prefer to play with dolls, and those who like to dress and play with stuffed animals. She observed as her own daughter received dolls as gifts but promptly removed their clothes, pitched the dolls aside, and then dressed her bears in the doll clothes. Of course the clothes didn’t fit well, as a doll’s body is quite different than that of a teddy bear. She always wondered why no bear was designed to be dressed like a doll, wear fashion16

able clothes, have a personality, and be imbued with the typical characteristics of a doll: friends, clothes, and accessories. By January of 2008, finding that no one was manufacturing what she had in mind, Mary Beth set out to build a prototype. Luckily, she had sewn all her life, giving her the advantage of creating the prototype herself. She researched where to buy fur, safety eyes and joints, and created her first prototype: a bear with the shape of a standard 18” doll. Mary Beth answers a few questions about her new enterprise. Once you made a prototype, what did you do?

While I was thrilled with how the body turned out, I wasn’t particularly happy with the face. I found a puppet maker who also designs stuffed animals and hired her to make up a number of prototypes for the face so I could test market the concept before I went to mass production. The body has not changed since my first prototype but the puppet maker helped to perfect Zylie’s face. We test marketed it, and resoundingly, we found that kids liked it!

How did you test market it?

We did informal and formal focus groups with children of the right age. We also used Amazon’s Mechanical Turk to test market the bear’s name. With Mechanical Turk, you pay a small fee for people of various known demographics to answer multiple choice questions. We tested several different names and Zylie percolated to the top of the list. How do you see social media fitting into your marketing plan?

When we first started, I had that same question! I had developed the prototypes, performed the test marketing, and believed in the concept and yet almost gave up at that point because I didn’t know how to go about establishing a brand, which is essential for a toy. How do you get the word out without a $5 million advertising budget? Fortunately my son, Matt, who is now my business partner and handles the website and marketing for the company, had just graduated from Vanderbilt University. He reassured me: “Mom, it’s all done

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through social media now.” He came up with a detailed plan for viral and digital marketing. One big piece is the Mommy Bloggers, women who have followings of up to 20,000 mothers. They write blogs that other women turn to for advice on parenting, and as it turns out, on toys as well. They even run contests on their sites, so it is a great viral way to get the word out. Another piece is through the various toy awards, which all have a social media aspect. We have won six toy awards in a short period of time. The Oppenheim Toy Portfolio Awards, for example, is highly revered in the toy industry. They review thousands of toys every year and about 50 are selected. After receiving our first batch of inventory last spring, we submitted our sample bears for consideration in their awards program. As it turned out, we won their Platinum Award for Best Toy, and Zylie made her debut on the Today Show in the roll-out of the 2010 Oppenheim Awards. It was a big deal for us. People search on the web for these awarded toys. I’ve had people call me up and say, “I saw the Oppenheim Awards, and that’s how I buy my grandchildren’s gifts. I know it will be a good toy.” So we definitely depend on social media to build on our credibility. While the toy awards and press help us establish ourselves as a brand, social media allows us to establish ourselves as the humans behind that brand, and that’s really important to us. How did Zylie’s back-story come to be?

Actually my daughter Sarah had the initial idea that Zylie should be a traveling bear, and from there the plot sort of snowballed into what exists today. Each of the bears in the product line comes in a kit with accessories and a book. Zylie’s story starts on Park Avenue in Manhattan with her brother Theo. Accidentally, they find themselves on an airplane to China, where they meet a Shen, a Panda Bear, who has another kit of clothes and accessories. Next, they will embark on a trip to Australia, and perhaps they’ll encounter a Koala! Meanwhile, we are working with a

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learning scientist who’s affiliated with a learning center at Stanford University to develop an interactive website. Our mission is to present Zylie and her friends as compelling characters who inspire learning for both girls and boys.

Most recently we were a finalist in the Wharton Alumni Business Showcase, a business plan competition for early-stage companies. It was an incredible experience to present to a room full of investors and the feedback we received What would they has been Our mission is to present Zylie invaluable. learn? and her friends as compelling We’ve been With Zylie’s globefine-tuning trotting persona, there are characters who inspire learning our pitch ample opportunities to based on that for both girls and boys. learn culture, language, feedback and geography, bear conservagetting closer tion, and map skills. The to raising the money we’ll need to take potential goes well beyond even those Zylie to the next level. obvious learning points. We recently held a contest through a ‘tween website What encouragement can to create designs for the bears. We reyou offer alumni coming ceived submissions for some really cute back into the marketplace, outfits. We would like to inspire girls or those thinking about to design, to sew, to make things. It’s starting their own company? enlightening when I speak to girls, when they find out that I’m the lady that creMany people have incredible ideas. ated Zylie, they ask me “How did you The question is how do you go from know how to do this?” Five year olds having an idea to actually creating a are very interested in that story. Then company out of it? I encourage people I tell them: “It’s because I knew how to just start and then put one foot in front to sew.” And I can almost see the little of the other. wheels turning in their minds. I remember a conversation I had with I believe that building and creating a woman who had started an extremely has been somewhat lost as a skill in successful business. I shared with her our world today. But people thrive on that I was terrified of someone takcreating; they feel good when they have ing my idea. She said “Sit down and something tangible in their hands that write down each detailed step of what they have made. If we can inspire girls it would take to bring yourself from the to be creative then that is a good thing. idea stage to a full blown business.” I laughed and said, “It’s probably 2,000 Now what age will these steps or more.” appeal to? She said: “That’s my point. Very few people have the fortitude to do that. It is We’ll know better after we have easy to have a good more market data to digest, but we beidea. The hard part lieve our target market for girls is from is to stick with it. 3 to 9, and for boys is from 3 to 5 for The barrier to entry the Panda who is a male character. The is really how hard tweens are 9 to 13 and are challenged by it is to bring it from creating the outfit. the idea to become a business.” So How did your connection that was exciting to to Wharton help you? me, the thought of Through the WCNY Leads groups, building something especially the Fairchester Leads group from scratch and right here in Greenwich, I met alumni seeing every step who were fundamental to helping me get along the way. xxz this off the ground. —KT

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Want to Improve Customer Engagement on Your Brand’s Facebook Page?

ORE than 65 club members and their guests did as they gathered at a large conference room in the offices of Skadden, Arps, Slate, Meagher & Flom on April 12 to attend a sold-out social media seminar. We all know that Facebook is at the center of the fast-moving social media revolution. It adds more than 500,000 new users daily. With more than 600 million users, Facebook would rank as the third largest country in the world. Considering all this, Robin Colner, WG’83, Founder and President of DigiStar Media, initiated a Digital Media Series for Wharton alumni. The event featured Jeff Ragovin, Chief Revenue Officer of Buddy Media, and Danielle Trencher, Marketing Manager for Scripps Networks Interactive. Buddy Media has quickly become the Facebook management system of choice among the world’s top brands to drive their busi-

ness on Facebook. This platform enables brands to launch, manage, grow and measure their Facebook presence in any country at any time and in any language. Ragovin shared case studies on leading companies, such as HGTV, Domino’s, Budweiser, Zappos.com, Starwood, Target and L’Oreal, as they use social media and Facebook to listen to their clients. Ragovin explained that the key is building engagement. First, companies should focus on building their communities and establishing content. Then, they can begin to push their products. Ragovin said that companies are no longer driving consumers to their websites but are driving them to their Facebook pages. Ragovin gave the following tips: • Make the most of your assets. • Provide compelling fans-only content. • Keep the page busy with fresh content. • Get fans to guide your content. • Ask questions! • Don’t ignore your fans: They love you, so love them back.

Danielle Trencher heads social media campaigns at Scripps Networks Interactive, including those of the Food Network. She explained that its online social media plans and brand launches include guidelines for measuring effectiveness and ROI. She described the community, consumers and various holiday programs that the Food Network has developed to create unique content experiences that engage users. Discussions were lively, and everyone walked away with something. One man who was 75 years old left with new ideas to drive revenue and build his brand, while another left with tools and solutions to launch a Facebook page. I, myself, walked away with a Starbucks gift card, one of the many gift cards that were given out throughout the evening to reward customer loyalty. Many thanks to Robin for an awesome event! xxz Contributed by Jennifer Gregoriou, W’78, Chair of the Speaker Series

Robin Colner, WG’83

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CONTINUED FROM PAGE 11 the Israeli Mossad flew 2,500 miles through the night, mostly very low to the ground, and rescued 105 hostages from Idi Amin’s Uganda. America was excited to understand the story in depth, so at Bantam, we assembled a team and had our book “90 Minutes at Entebbe” in the stores within two weeks, and sold 1.5 million copies! What endures in publishing, despite all of the technological transformations?

That is the simplest question of all. What remains the same is the picking of good books that people want to read. That is the beginning and the end. That is the common denominator, whether

a service for the publishing industry and, at the same time, allow Wharton to become an innovator in this field because no one else was doing it. Universities should be drawing a path to the future, rather than following the path that the future makes for itself. They need to welcome the insights that the students can bring to the fore.

experiment with pricing. Once you start with a price of $29.95 on a hardback, then you are stuck. But with eBooks, you may play with the price to find what sells best. So the publisher will have to live in a very dynamic environment.

How have the factors that drive pricing in book publishing changed?

In 1996, in a FAST COMPANY interview, you proclaimed that Amazon.com is “the beginning of a completely new way to buy books.” That was fairly prescient as Amazon.com was founded only months before.

A major factor affecting pricing is the advent of eBooks. While they have only 9% of the business today, a year ago, it was only 1%. So it is a big improve-

All my life, I was very close to computers. When I saw what Jeff Bezos wanted to do, it dawned on me that he was a genius, that his formula was a winning

THE FUTURE OF PUBLISHING The Future of Publishing: Technology, Publishing and Academia Build a Forum for Solutions you’re publishing them in paper or in e-format. What is your involvement with Wharton today?

I was on the Board of Overseers of Wharton for five years. After that, I went to the Board of Overseers of University Libraries of the University of Pennsylvania for nine years, and then said, “Enough is enough,” so I stepped down. Recently, I received a letter from the President of the University congratulating me on returning to the board of the library. So I’m back! You recently co-sponsored a major Wharton conference in New York City, The FUTURE OF PUBLISHING. Why did you make such an investment?

I wanted to give Wharton a chance to be at the cutting edge of innovation in a field that will be with us for eternity, publishing. Especially at a time when technology is coming along in such a powerful way, I hoped that we could do

ment. In the future, eBooks could be 30% to 40% or more. Of course, the economics of eBooks are a helluva lot more attractive than the economics of printed books, in which you have the costs of paper, printing, binding, warehousing, transportation, pilferage, returns and inventory obsolescence. For just a few positives for printed books, you have tons of negatives. What I would like to say to you is that the way publishing will evolve is that books printed on paper will be a luxury item, so their quality will be better, but the price will grow. And eBooks will be what paperbacks used to be. And then eBooks will have to evolve into something different — you may have to add a lot of enhancements. For example, if you look at George Bush’s eBook “Decision Points” — take a look at the Kindle copy — you will see that it is interspersed with pictures that make it more interesting. This is only the beginning — with digital technology, you can add audio and video as well, and can

one. In late 1995, I was at the Association of American Publishers meeting, one of the most boring meetings I ever attended, and there was a reporter from The Wall Street Journal who asked me, “Alberto, what am I going to write?” I said, “I don’t think you are going to write much, because nothing is going on here — but if you want to write about something interesting, write about Amazon.com.” He said, “What?” and looked at me like I was crazy. I said, “Look, you’re the reporter. You can write about what you like, but if you look into Amazon.com, you are going to be impressed.” Two weeks later, the reporter calls me and says, “I’m on my way to Seattle.” The next thing I know, there is a feature story on Amazon.com in The Wall Street Journal. What are you reading now?

Mostly nonfiction in the fields of finance and current affairs, and books dealing with the geopolitical situation of the world we live in. xxz — KT

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CONTINUED FROM PAGE 9 this industry so exciting. There are multiple access points for people to reach their news, so it is an interesting challenge — how can we continue to engage and develop our new readership populations? How do these changes affect your ability to innovate and grow your business?

It’s important to understand what our advertisers and readers want and need, because both groups are our customers. As an example, let’s look at the category of “careers.” A few years ago, there was a significant shift in the careers space, where readers transitioned to reading careers content and looked for jobs online. As readers moved online, so did our advertisers. This meant that our competitors for recruitment ads shifted from companies like The New York Times to companies like Monster. com or Hotjobs.com and we had to

think how we could effectively compete in this market. Our response was to launch FINS.com. We knew that the Journal already had great career-oriented content; we just needed a better home for it, and we needed to make that content even more useful. So we broke the traditional career model by combining industry-specific job boards with high quality content, industry news and relevant career advice that keeps readers coming back. FINS.com has its own editorial team to write the news content, which is divided into finance, technology, and sales and marketing, because we noticed that the content on other career websites was too generic. For example, how you write a good resume differs whether you are applying for an I-banking job vs. a sales and marketing job. The feedback we received has been convincingly positive. Advertisers tell us that, because we do have a more niche

focus, they are getting higher-quality applicants. What do you enjoy about your work?

I like change. I get bored easily, so I love working in this industry that’s constantly changing! And it is crossfunctional. In both the GM and strategy roles, I engage daily with groups across the business. I talk a lot with editorial about our content, with the sales team about revenue opportunities, with legal regarding contracts, with marketing about reaching our customers, and with technology and operations about making sure our ideas are feasible. It’s all about developing a successful franchise-wide, multi-platform push to grow the business. Most of all, I enjoy the intellectual challenge – because the media landscape is changing so rapidly, no one has it all figured out. But as The Wall Street Journal and Dow Jones, we’re expected to lead. xxz — KT

CONTINUED FROM PAGE 13

stayed with me, especially from my basic strategy class, my basic finance class, key principles of what enables an organization to succeed and what constitutes good leadership. So I appreciate what I learned at Wharton. When I graduated in 1991, I decided to make the transition to the private sector, and felt like management consulting was the right step. I worked at Booz Allen, helping media and entertainment companies. One of our clients was News Corp., which asked me to join HarperCollins, and I became part of the senior management team that turned that business around. Based on that experience, I was given this opportunity by a private equity firm. 20

You are running a very diverse organization in a disruptive environment, using a nontraditional business model. What kind of discipline and focus is required to do that successfully? It must be a real balancing act.

That is a great question. The balance is between items that need immediate attention and those that need long-term attention. I start every week with a piece of paper listing the long-term items that I don’t want to lose sight of. Right now, I have seven items that will determine whether we will be successful one year or two years from now. Meanwhile, I attend to the 100 short-term decisions, such as major book acquisitions. You did mention team. Obviously, you will only be successful as your team. We

have a mix of people — inside experts with deep industry expertise, and an outside group of people who bring process skills and a fresh perspective. From Booz Allen, I brought my chief operating officer and chief marketing officer — those are outside guys, whereas my sales director has been in the industry for 35 years. It’s the same with my key editors; you try to get a team that has the combination of deep industry knowledge and outside process skills. What writing do you admire?

Friday Night Lights by Buzz Bissinger. The Happiness Hypothesis by Jonathan Haidt, which I have here on my desk, is extremely insightful and fun to read. Also, I’m a history buff — Lion of Liberty: Patrick Henry and the Call to a New Nation by Harlow Giles Unger. All published by members of the Perseus Books Group, so if you like reading, this is a good place to be! xxz —KT

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CONTINUED FROM PAGE 14 It sounds like you’re trying to influence an entire industry.

Digital publishing is a completely different business model than print publishing—our goal is to give publishers the information they need to successfully make that transition. We’re trying to make sure book publishing benefits from the digital transition by answering questions about the key consumer and competitive behavior driving this extremely dynamic new market. The film industry has done the best job of managing technology transition to protect their revenue base, but then they’ve also had the most experience, doing it since the 1950’s. When TV was created, the pundits said, “TV will be the death of the movie industry.” The movie studio execs instead developed a strategy (“windowing”) that allowed them to prosper in the face of the TV technology transformation, and in each following wave of new technology— from cable to VCR to DVD, from Netflix to RedBox to digital download and beyond. Each new technology format gets a later release date and a different price point consistent with the quality of the experience, so each new movie format adds to individual movies’ total sales. Book publishers however, are betting their business on digital distribution. They release the ‘discount’ eBook format of a new book on the very same day they release the premium price hardcover format. This not only cannibalizes print revenue, it also has a bigger domino effect—bookstore traffic falls, fewer books reach stores, fewer new books and authors get discovered, and bookstores close. Our goal is to help book publishers answer the question— what will their new business model be in a digital market without bookstores? This new market will be dominated by Amazon’s 55% market share, where any author can self-publish digitally and even earn much higher royalty rates.

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Based on our latest book consumer research, nearly 40% of book buyers are now reading digitally, and another 35% will make the switch as soon as eReader device prices drop below $80. We believe publishers’ new business model will look much more like that of an advertising agency, earning revenue based on their ability to get consumers to not only discover their new books, but to convert them to buying those books. Digital publishing is a completely different business model than print publishing—our goal is to give publishers the information they need to successfully make that transition. As a result Codex not only measures the brand equity and sales potential of individual author “brand” names, but also has a database of over 1,500 individual books and bestsellers that have been digitally tested to quantify the effectiveness of their message and design to convert book browsers to book buyers. By improving the browsing appeal and purchase conversion rate of book message, presentation, cover design, title and jacket copy before publication, publishers and authors can increase both book discovery and book sales in an all digital market.

What is a recent book you’ve done research on?

Much of our work for publishers is confidential. On one of our most recent bestseller projects the publisher and celebrity author couldn’t agree between two radically different versions of the book’s message and design. They asked Codex to secretly test both with book consumers to measure which approach would sell the most copies—without it leaking to the media. The winning approach not only landed the book at #1 on the New York Times bestseller list, it remains on

the Top 10 Amazon bestseller list for all of 2011. Another example was the first book in Chris Reich’s new series, Rules of Deception. We tested 4 very different book positionings for Chris, and the winning approach landed at #3 on the New York Times list. How did Wharton figure into your getting where you are today?

Wharton not only gave me a great marketing education, it also connected me with some great professors I’ve kept in touch with ever since. So when I had the idea for Codex, I knew the best place to go for start-up advice! Professors Dave Reibstein, Josh Eliashberg and Pete Fader all gave me great suggestions based on research work they’d done in related digital, music and film media, and helped validate the Codex idea. Wharton Ph.D. student, Jeff Larson GRW’06 (now a professor at Brigham Young University) also helped develop our statistical models. The Wharton connection was essential to Codex’s development as a business. And you volunteer for the Club?

I’m the Marketing VP, and also co-chair the Media and Entertainment Network with Chuck Forgang, W’78. There are a lot more Wharton alumni in media than most people realize—the group has over 300 members from every media sector you can imagine, even Broadway performers and comedians! It’s a very fun, supportive, cool group of people, and senior media alumni like Mark Aronson W’81 (National Basketball Association), Salil Mehta WG’92 (NBC Universal), Matt Blank W’72 (Showtime), among others, have contributed great industry and career insights to members at our events. Ironically, the only reason I first joined The Wharton Club of New York was to get discounted health insurance for this start-up—I had no idea I’d also meet many new friends, and get new business opportunities as well! xxz

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Did you know… As a Wharton alumnus in the New York Metropolitan area, you are automatically a voting member of the Wharton Club of New York. You are invited to all of the Club’s events, have access to the Club’s website, can post job notices on the Career Development page of the website, and take advantage of our “Take the Call” forum. But why not consider increasing your benefits and further supporting the Club by upgrading your membership? Doing so will give you greater savings (including discounts to events) and more access to your peers at WCNY. The Club offers several plans for membership, based on the benefits you consider most valuable. Read the front page of ‘Greater New York’ section of July 6th’s Wall Street Journal for an article on the pioneering health insurance provided by the Wharton Club of New York: WSJ.com - Alumni Ties Get Healthier Basic Membership: $95 per year Standard Benefits: Discounts to all events plus access to group health insurance plan Patron Membership: $250 per year Benefits: Standard Benefits plus free admission to 3 WCNY events Supporting Alumnus: $1,000 per year Benefits: Standard Benefits plus free admission to all events. Receive invitations to private briefings. You will also receive recognition on our website and in the WCNY newsletter. Corporate Membership (up to 10 employees): $300 per year Benefits: WCNY Members with companies of up to 10 employees can pay this annual fee (in addition to your own membership fee) for your employees to be eligible for the Club Group Health Insurance Plan. Note: Employees will not be eligible for other Club benefits. Corporate Membership (more than 10 employees): $500 per year Benefits: WCNY Members with companies of more than 10 employees can pay this annual fee (in addition to your own membership fee) for your employees to be eligible for the Club Group Health Insurance Plan. Note: Employees will not be eligible for other Club benefits.

Upgrade your membership today on www.whartonny.com Back

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Take the Call Forum

HE Wharton Alumni community is one of the most exclusive and powerful networks in the world. One of the key elements of our success is the willingness of alumni to help other alumni. Take the Call is a simple concept: Wharton alumni should buy from, hire from, and help Wharton alumni; And if a Wharton alumnus calls us for any reason we Take The Call. The “Take The Call Forum” allows you to reach the Wharton Alumni Community directly. Just post your message at www.whartonny.com/forum.html and it will be promoted to the 30,000 alumni in the NY Metro area. Find opportunities offered by your fellow Wharton Alumni. Help an alumnus find answers; Get ideas and useful information. TAKE THE CALL.

and Private Equity Investor looking for co-investors in real estate, entertainment, tourism, banking and beverage sectors. Contact: Eric Kaufman, CFO, Plaza Capital Management, LLC. 212444-9117. ekaufman@plazacap.com

London & Partners needs passionate champion of the city of London in New York to source and develop business contacts into long term business relationships. gsanchez@whartonny. com

TerViva is a platform for advanced biofuels that uses proprietary, low cost feedstock to produce biodiesel for $1.00/ gal. Our proprietary trees are varieties of Pongamia. We are in the process of raising a Series A-1 seed round for $2.5mm. Please contact sudhir.rani.wg11@ wharton.upenn.edu.

CEO Connection is looking for “Membership Co-Chairs” to make phone calls to CEOs to encourage them to join CEO Connection. This is an independent, flexible, commission-based selling role, perfect for someone who wants to work 4-6 hours a day. kbeck@ beckenterprisesllc.com xxz

We have a wide variety of mortgage products available. Contact Larry at 212-244-4450 or LJacob@CalConMutual.com for a free analysis. You can also find us on the web at www. calconmutual.com Can anyone recommend a competent accountant/CPA firm that can handle (multi-state) investment partnership tax accounting? marcus.banjo.wg03@wharton.upenn.edu What if we could make your firm the first stop on the internet for every business person every day for FREE? Scott.Burd.wt99@Wharton.upenn. edu My partners and I have crafted a plan to acquire the original baseball training center franchisor, Frozen Ropes, and increase sales and profitability through improved operations. Please contact me at 302-379-0848 or rdigisi65@gmail.com for executive summary. Rob DiGisi

As a Wharton friend and SPIRE member, I have led and continue to host joint networking events with Wharton professionals working in real estate for SPIRE. I understand the unique needs of the Wharton demographic and have worked with Wharton alumni in a challenging market to find their ideal apartment--whether for a primary residence or an investment property.

Why go anywhere else? Ann Kim

Lic. Assoc. R. E. Broker REBNY Member Halstead Property, LLC t: 212.381.2324 c: 973.650.0796 f: 646.775.2324 akim@halstead.com

Successful Commercial Real Estate

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WCNY – CALENDAR

Check website for details: http://www.whartonny.com/events.html

Monday, Jun 13, 6:00pm

2011 WCNY Alumni Business Showcase Christies, 20 Rockfeller Plaza

Facilitating investment in early-stage Wharton alumni businesses Wednesday, Jun 15, 6:00 pm

Perpetuating Success Workshop:

The Six Cs of Career Advancement Career Speaker Series Wednesday, Jun 15, 6:00 pm

WHFN: Larry Robbins

Affinity Group 38th Event Tuesday, June 21, 6:30 pm

New Career Opportunities— Next Gen Organizations

Wharton Non Profit-Social Impact Group Harry Weiner (WG’06) Thursday, July 14, 7:00 pm

Summer Happy Hour

Special & Social Events Committee

The Penn Club, 30 West 44th Street Friday, July 15, 12:30 pm

Long Island Leads for Lunch

The Mill River Club, Upper Brookville Wednesday, July 20

Special & Social Events Committee From Russia with Love

Mari Vanna Restaurant Thursday, October 6, 6:00 pm

Joseph Wharton Awards Dinner The Metropolitan Club

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