K-State Entrepreneur

Chad Jackson
Associate Director & Instructor

With all of the recent hype regarding Facebook’s IPO, I feel the need to share my opinions on why I will not be one of those people rushing to get a piece of the company.

If you have had any of my classes, you know that I like to use Facebook to challenge students to determine “what’s next” in social networking.  Eventually the conversation turns to what opportunities will Facebook have in the future…

Facebook has proven that it is a leader in social networking.  We’ve heard the stat that 500 million people use the site.  It is the #2 most visited site in the world behind Google and just ahead of YouTube (a Google company…more on this later).  There is also press related to concerns about Facebook.  There are numerous articles about people (including college students) who don’t use Facebook (http://goo.gl/81KrQ), how Facebook is now sited in a third of all divorce hearings (http://goo.gl/qGraU), how GM is pulling advertising from the site (http://goo.gl/MOqiM) etc, etc.  Not even that is my primary concern…

My primary concern is that Facebook has proven itself to be good at one thing.  Now, to be fair, it is really really good at that one thing, but we all know that technology changes and consumer preferences change and to be a successful company in the long-term you must be able to continue to innovate and adapt.  Facebook has not done this yet.  Look at the myriad of products / services and regular innovations that come from companies like Google, Apple, Amazon, etc.  These companies continue to adapt to changes in the marketplace to produce value.  Facebook has not proven it can do this yet.  Aside from a few minor tweaks, how different is the Facebook you use today from the Facebook started at Harvard 10 years ago? So, will it be able to change?  Time will tell, but there is no evidence that the company has established a culture that will enable it to adapt to changes in the market.  Facebook is more like Yahoo! than it would like to admit.  Yahoo! was the internet darling 12 years ago, but failed to innovate and adapt to changes in the marketplace and it still struggles today.  In addition, Facebook has also aligned itself with Microsoft more and more (http://goo.gl/7ik6x), which, at this point, isn’t exactly the model for continuous innovation.

I also completely understand that Facebook is very profitable and will probably be a very good investment in the short term.  The stock will surely skyrocket from it’s initial offering of $38.  People will surely make money by investing in the early days and selling it quickly thereafter, but I won’t keep it in my long-term portfolio until the company proves it can be entrepreneurial and adapt.

Looking for a place to better understand social entrepreneurship?  Looking to start your first social venture but need some examples to help get you started?  Here are just a few links to recent articles to help you out…  PLEASE add to these suggestions by replying to the post below.  Thanks!

McKinsey is a great resource for strategic views of key issues:



The Washington Post recently created a separate section on SocEnt:



Forbes list of Top 30 Social Entrepreneurs:


I love these latest articles from Harvard Magazine:  http://harvardmagazine.com/2012/03/twilight-of-the-lecture and the Financial Times: http://www.ft.com/intl/cms/s/2/78ce0112-5243-11e1-a155-00144feabdc0.html#axzz1mGUKeAHk

Personal experience (as both teacher and learner) as well as pedagogical research tells us that active learning is the best way to transfer information from short-term memory to long-term memory. Students need to be able to ‘experience’ the information they are expected to learn.  ’Experiencing’ the information could come in the form of applied exercises, utilizing real-world challenges, and engaging the professional community to become a part of the learning experience.  Sitting in a lecture hall while someone reads information to you is not the best way to apply / retain the information.

Today’s generation of student is generally capable to seek out the information they need via a variety of online sources.  As faculty members, we need to find ways to add value to the student learning experience by facilitating applied learning opportunities to help students retain and understand this valuable information.

I have had the good fortune to be asked to be a part of a cross-campus initiative to help promote and advance the use of New Media Technologies in the classroom.  This group was created by K-State’s own Mike Wesh (http://mediatedcultures.net).  Mike clearly has developed an international reputation for his work in teaching and learning and I am thrilled to be able to listen and learn from his and this amazing group’s expertise!

Our group has coined the term Ed Parkour and claimed it as our battle cry!  Ed Parkour is takin from the sport of Parkour (the activity of using traditional environmental obstacles in new and different ways in order to move around the obstacles with speed and efficiency).  Therefore in Ed Parkour we are examining the traditional classroom and learning environments and attempting to look at it in new and unique ways in order enhance and facilitate student learning.  What a great view!

I’m looking forward to being a part of this amazing team and learning how to advance my own learning environments!

Our final business visit of the trip brought us to Concha Y Toro - the second largest winery in the world!  The firm is also the subject of a Harvard Case Study the students read and analyzed as a part of this course.

After arriving at the winery, we took a guided tour of the grounds.  This included a brief history of the company as well as an up close look at the different variety of grapes grown at the winery; several students learned that these grapes are not very tasty to eat!

After a wine tasting, where we were able to sample a couple of different types of wines the firm produces, we met with Martin Bustos - head of tourism for the company.  Martin shared with us that the firm has had an average annual growth rate of 18% over the past ten years and is responsible for 36.6% of all Chilean wine exports.  The company has worked hard to reposition its brand as a premium wine in the industry.  Much of this has been done through a mass marketing campaign, but also through the sponsoring of the Machester United Football club as well as the acquisition of quality companies in the industry.  For example, the Concha Y Tora acquired the Fetzer wine company in order to gain entry into the California market and to enhance the company’s reputation in sustainable practices (Fetzer has been the leader in sustainable wine practices for the past 20 years).  The company offers wines with prices ranging from $6 per bottle to $150 per bottle (many of which are available in the U.S.)!

This brings us to the end of our business visits for the class.  Tomorrow, during what was scheduled to be an off-day, the group decided to take a trip to Valparaiso, Chile - the primary shipping port of the country and a popular vacation destination for Chileans.  We are then scheduled to board our flight back to the U.S. tomorrow evening and arrive home on Friday morning, just in time to start classes next week!

Three business visits with companies in Santiago was the focus of our day.  We first met with John Rojas, CFO of Dole Chile.  Mr. Rojas shared with us that Dole is the largest exporter of fresh fruit in Chile (revenues of $250 million), but with only 6% market share this is certainly a very fragmented market.  Dole’s strategy is to differentiate itself in the market by focusing on reliability (consistency of fruit) and quality.  The firm is primarily a buyer and seller of fresh fruits, so as you can imagine, currency exchange rates are the biggest concern for the company.  Looking ahead, the company plans to expand into the blueberry market in the U.S. because of the increasing awareness of the health benefits of the fruit; Dole just acquired a blueberry company in Chile in order to acquire the know-how for shipping the delicate fruit to the U.S.  Other key initiatives for the company include:  leading the industry in nutrition research and education, expanding value-added products (including prepackaged fruits and salads) and an increasing focus on emerging markets in Latin America and Asia.  In addition to sharing with us delicious grapes, pineapples, bananas, and peaches, Mr. Rojas took the time to share with the students what it is like to have a career in international business including the challenges of raising a family in a foreign country, career advancement opportunities, and the value of having a network.

The next stop was to Banco Santander Chile where we met with Andre Bergoeing Reid, the head of strategic planning.  We had the unique opportunity to hear the investment pitch made by the firm just a few months earlier while raising $4billion in a second offering.  Banco Santander Chile is a subsidiary of Banco Santander Spain and trades as ADR on the NYSE.  The bank is #1 in total assets, total loans, deposits, equity and net income with about 20% market share in Chile.  The bank’s strategy is to continue to pursue growth in commercial loans and consumer deposit accounts.  It was a great opportunity for the students to hear an investment pitch and learn more about the financials of the banking industry in Chile (right after a big lunch none-the-less).

ADR Stock Price

Our final stop for the day was the Bolsa Comercio, the Chilean Stock Market, where we learned about the history of the stock exchange in Chile as well as the state of the market today.  The exchange started in 1893 primarily to facilitate the purchase of equipment for the mining industry (still a dominant industry today).  232 stocks are traded on the exchange today (about 15% of total volume) in addition to money markets and bonds.  The exchange has also developed a relationship with markets in Peru and Columbia to form the MILA; a system for stock exchange between the three countries.  This gives individuals an opportunity to diversify risk through the broader Latin American market and further supports the integration of the economies.  Finally, we were able to visit the trading floor.  The Chilean stock market is completely electronic, so there is no activity on the trading floor anymore.  Computers are available for brokerage houses to use, but most of the activity is done in individual offices, so the trading floor is primarily used for tours.

Today was our first full day in Santiago, Chile!  Our new guide, Franchesco, gave us an excellent tour of the city and told us about the history, culture, and economy of Chile.  We were able to watch the changing of the guard at the Presidential palace; this ceremony occurs every other day and there was still a big crowd in attendance.  We also walked through the busy business district and took in the beautiful architecture of the city.  Finally, we did our part to help out the local economy by visiting several local artisan markets.  In observing student interactions with local merchants, there is a noticeable improvement in everyone’s Spanish language skills! 

Franchesco shared with us may important facts about Chile’s economy.  Chile has been on a vigorous economic recovery primarily fueled by huge increases in copper prices (the country’s leading export) and the reconstruction from the 2010 earthquake.  The unemployment rate is currently about 7% and the economic growth is projected to slow a bit to 4.5% with an inflation rate of 3% in 2012 as the Chile begins to feel the effect of the global economic slowdown. Chile’s export destinations are primarily to the U.S. and Asia.  We also learned about the recent student protests where the college students demonstrated because of increases in tuition prices (the students were able to reach some agreements but are planning more protests for next year).

The nine hour trek through the Andes (including a two hour stop with immigration/customs) in a public double-decker bus!

Our time in Mendoza has been very short, but a great experience!  Tomorrow we take a bus over the Andes Mountains to Santiago, Chile - the ride will take us close to seven hours but is only 120 miles!

For our final day in Mendoza, we took a bike tour of the city.  The tour was lead by local guides who explained to us some of the history of the city (and about the seismic activity of the region).  The ride was eventful….but we all made it through safe and sound!

In the afternoon, students divided into smaller groups to explore the city shops, local market fairs, etc.  This has been a great experience for students to test out their language skills and interact directly with merchants to learn more about the small businesses and culture of the Mendoza region.

Bike tour through Mendoza, Argentina!

Today was our first day in Mendoza.  While Buenos Aires is extremely beautiful, it was nice to leave the really big city (Mendoza’s population is only one million).  Our focus today was on the wine industry; a very important product for Argentina and the subject of another case study for the students.  The country is one of five countries for new world wines; others include Northern California, South Africa, New Zealand, and Australia.  The Mendoza area is actually a desert and similar in climate to Arizona.  The region only gets about 8 days of rain a year (although it rained today).  The community, and the wine industry specifically, are extremely dependent on the snowmelt from the neighboring Andes Mountains. 

We toured three different wineries and learned not only how they make wine, but also the business behind the production.  The wineries we visited indicated they have a 25% profit margin on their lower level wines and higher-end wines could be 200% or more.  We discussed several key business strategy implications for companies in the industry.  For example, these wineries import French Oak barrels to age the wines.  These barrels can cost close to 900 Euros each and are only used 4 – 5 times by the wineries before they are no longer suitable.  Currently, these wineries try to sell the old barrels to distilleries (where the aged barrel doesn’t impact quality) or they try to make the barrels into furniture or other items, but they still do not recover much of the original cost.  Seems like an opportunity ripe for an entrepreneur to improve this problem.

We toured two large wineries and one family-owned business.  While each of the wineries was interesting, I am sure it is not hard to guess that my favorite was the small entrepreneurial company, Carena.  A husband and wife team originally from France owns the company.  The couple moved to Mendoza because of the husband’s work with an electric company and when the company wanted to move him back to France, the couple decided to stay and pursue their dream of starting a winery. 

Now we are getting ready to find some place to cheer on the Cats! We’re not sure we will be able to watch the game live, but we will be following the score closely and will still be yelling loud from South America!